RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/85 
14 September 2006 
 
 (06-4409) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
12 JULY 2006 
 
Chairperson: H.E. Ambassador Yonov Agah (Nigeria
) 
 
 
 The meeting of the Council for Trade in Goods was convened by airgram WTO/AIR/2862 and the proposed agenda for the meeting was c ontained in document G/C/W/557.  The meeting 
proceeded on the basis of the following agenda.  
_______________ 
 
I.
 REVIEW OF THE OPERATION OF THE AGREEMENT ON TRADE-
RELATED INVESTMENT MEASURES (TRIMS) UNDER ARTICLE 9 ........................2  
II. REGIONAL TRADE AGREEMENTS ..................................................................................2  
A. FREE TRADE AGREEMENT BETWEEN EL SALVADOR AND MEXICO ..............................................2  
III. UNITED STATES – REQUEST FOR WAIVERS FOR AFRICAN GROWTH AND OPPORTUNITY ACT, CARIBBEAN BASIN ECONOMIC RECOVERY ACT, AS AMENDED, AND ANDEAN TRADE PREFERENCE ACT, AS AMENDED........................................................................................................................ ........3
 
IV. EUROPEAN COMMUNITIES – REQUEST FOR AN EXTENSION OF 
ARTICLE XIII WAIVER FOR THE TARIFF RATE QUOTA FOR BANANAS 
OF ACP ORIGIN.................................................................................................................. ....8 
V. EUROPEAN COMMUNITIES – REQUEST FOR A WAIVER FOR THE 
APPLICATION OF THE EUROPEAN UNION AUTONOMOUS PREFERENTIAL TREATMENT TO THE COUNTRIES OF THE WESTERN BALKANS ........................................................................................................................ .......14
 
VI. CANADA - REQUEST FOR AN EXTENSION OF THE WAIVER FOR THE 
CARIBBEAN INITIATIVE (G/C/W/555)............................................................................14  
VII. CONCERNS AND QUESTIONS RAISED TO COLOMBIA REGARDING CERTAIN CUSTOMS MEASURES APPLIED TO IMPORTS OF GOODS FROM PANAMA AND OTHER WTO MEMBERS ..........................................................15
 
VIII.  EUROPEAN COMMUNITIES ENLARG EMENT:  PROCEDURES UNDER 
ARTICLE XXVIII:3 OF GATT 1994...................................................................................18  
IX. ISSUES RELATED TO TRADE IN TEX TILES– SUBMISSION OF TURKEY............20  
X. OTHER BUSINESS................................................................................................................2 4 
A. KIMBERLEY PROCESS CERTIFICAT ION SCHEME FOR ROUGH DIAMONDS ..................................24  
B. DATE OF THE NEXT MEETING ....................................................................................................25  
 G/C/M/85 
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  I. REVIEW OF THE OPERATION OF THE AGREEMENT ON TRADE-RELATED 
INVESTMENT MEASURES (TRIMS) UNDER ARTICLE 9 
1.1 The Chairman
 recalled that at the July 2004 meeting the Council had received a joint proposal 
by Brazil and India concerning a study on the impact of TRIMs and their elimination.  The terms of reference for this study were contained in documen t JOB(04)/93.  Members had taken up this issue on 
repeated occasions but had been unable to reach a consensus on the desirability of conducting the 
proposed study.  As far as he understood, there ha d been no new developments  in Members' positions 
since the last CTG meeting.    
1.2 The representative of Brazil
 expressed his delegation's disappointment with the lack of 
progress on this issue.  The review of the TRIM s Agreement was mandated under Article IX and was 
one of the pending implementation issues to which his delegation attached great importance.  Two 
features of the Hong Kong Declaration pertained to  the TRIMS Agreement, recognising implicitly the 
need to assess the interest of developing countries vis-à-vis  the Agreement.  His delegation looked 
forward to concrete engagement on his delegation's joint proposal.   
 
1.3 The representative of Argentina  also expressed his delegation's disappointment that there had 
been no progress on this issue.  A number of developi ng countries were effected and, therefore, his 
delegation would encourage movement on this point.  1.4 The representative of China
 expressed his delegation's support for the review of this matter.   
 
1.5 The Chairman  proposed that the Committee take note of the statements made and agree to 
revert to this item at a future meting.  1.6 The Council so agreed
. 
 II. REGIONAL TRADE AGREEMENTS 
A. 
FREE TRADE AGREEMENT BETWEEN EL SALVADOR AND MEXICO  
2.1 The Chairman  drew Members' attention to the Agreement listed under this item that had been 
notified under GATT Article XXIV.1  The text of the Agreement and its notification had been 
circulated in the documents listed.    
2.2 The representative of El Salvador
 informed the Council that on 23 May 2006, her delegation 
notified a free trade agreement between Mexico and El Salvador which entered into force on 15 May 
2001.  It established a free trade area between El Salvador and Mexico pursuant to Article 24 of 
GATT 1994.  Her delegation hoped to provide Member s with more details on this agreement during 
its examination and review. 
 
2.3 The representative of Mexico  said that the decision to notify this agreement now was taken by 
El Salvador.  His delegation would have liked to include the agreements with Guatemala and 
Honduras in that notification, and planned to make a jo int notification in that regard.  The fact that El 
Salvador had notified the agreement on its own, did not alter, in any way, its legal status. 
 
2.4 The representative of Guatemala  informed Members that Guatemala also made a notification 
with Mexico and hoped it would be on the agenda of the next meeting. 
                                                      
1The texts of the Agreements and their notifications had been circulated in documents 
WT/REG212/N/1, WT/REG212/1. 
  G/C/M/85 
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2.5 The representative of Honduras  said that his delegation would also notify the agreement that 
was drawn up this week.  2.6 The Chairman
 proposed that the Council take note of the statements made and that the 
Committee on Regional Trade Agreements carry out the examination of the above-mentioned 
Agreement in accordance with the following terms of re ference:  "to examine, in light of the relevant 
provisions of the GATT 1994, the trade agreement ju st referred to and to submit a report to the 
Council for Trade in Goods.  It is understood that the understanding read out by the Chairman of the 
Council for Trade in Goods under item 7 of the age nda of the meeting of the Council for Trade in 
Goods on 20 February 1995, as contained in docum ent WT/REG3/1, will apply mutatis mutandis to 
the examination of the agreement.  It is also unders tood that, during the examination, due account will 
be taken of the intrinsic differences be tween customs unions and free trade areas". 
 2.7 The Council so agreed
. 
 
III. UNITED STATES – REQUEST FOR WAIVERS FOR AFRICAN GROWTH AND 
OPPORTUNITY ACT, CARIBBEAN BASIN ECONOMIC RECOVERY ACT, AS AMENDED, AND ANDEAN TRADE PREFERENCE ACT, AS AMENDED 
3.1 The Chairman
 recalled that, at the 11 March 2005 CTG meeting, the United States circulated 
three requests for waivers in documents G/C/W/508  and Add.1, G/C/W/509 a nd Add.1, and G/C/W/510 
and Add.1.  The first document consisted of a requ est for a waiver for the Caribbean Basin Economic 
Recovery Act (CBERA), the second  a request for a waiver for the A frican Growth and Opportunity Act 
(AGOA), and the third a request for a waiver for the Andean Trade Promotion Act (ATPA).  This matter 
had been discussed at the 11 March, 15 June, 15 Ju ly, and 10 November 2005 meetings of the Council 
as well as in three informal meetings.  The Gene ral Council agreed, at its meeting of 27 and 29 July 
2005, that the CTG should continue its considerati on of this matter and report back when it had 
completed this work.    3.2. During the informal consultations a series of questions and answers were exchanged.  The 
questions were circulated in doc uments G/C/W/516, 519, 520, 527 and 534, and the responses circulated 
in documents G/C/W/518, 526 and 531 and 540.  At the 10 March 2006 meeting of the Council the 
Chairman circulated draft decisions on each of these requests.  Document G/C/W/541 contained the 
draft decision for the renewal of the US waiver for the Caribbean Basin Economic Recovery Act;  
document G/C/W/542 contained the draft decision for a waiver for the African Growth and Opportunity Act;  and document G/C/W/543 contained a draft decision for the renewal of the waiver 
for the Andean Trade Preference Act.  These thr ee draft decisions stimulated a large number of 
statements, the majority supporting the adoption of th ese decisions at that meeting.  However, a few 
delegations voiced concerns with certain aspects of the Decision.     3.3 The Chairman informed Members that he ha d held an open-ended informal consultation on 
this matter on 6 July 2006.  Members were encourag ed to learn that considerable consultations had 
been on-going between the United States and the few Members which maintained concerns on the 
waiver draft decisions, as well as between beneficiary Members and the Members with concerns.  
Although no definitive progress was reported at this  informal meeting, both the US and China voiced 
their optimism that continued consultations woul d yield some agreed language for these draft 
decisions that would relieve the concerns.  On th e other hand, the US was more circumspect with 
respect to its consultations with Paraguay, which a ppeared to be yielding little progress.  Additionally, 
a number of beneficiary Members once again urged those Members with concerns to put them aside 
in the interest of securing the necessary legal cove rage for the economic and social benefits these 
programmes bring to their developing economies.  G/C/M/85 
Page 4  
 
  3.4 The representative of the United States
 informed Members that his delegation continued to 
consult with interested delegations since the last meet ing so that this issue might be brought to closure 
with approval of the requests.  At each of the Coun cil's formal and informal meetings on this issue 
many WTO Members emphasised the important contribution of these programmes to the economic growth and development of their countries and expr essed support for approving these requests.  With 
deep disappointment, however, he reported that th ere was not yet consensus.  His delegation was 
working on a way forward regarding the concerns ra ised by a few Members about the possible impact 
of these programmes on the trade of other Memb ers and hoped to report back favourably on these 
efforts in the near future.  Regrettably, his dele gation could not report progress in its discussions with 
one Member who was blocking approval on grounds th at it may have been harmed in some way.  
Despite repeated consultations in Geneva and in capitals, his delegation failed to uncover any specific 
damage caused by these programmes.  His delega tion was prepared again to state that these 
programmes were not designed to raise barriers or  create undue difficulties for the trade of other 
WTO Members.  Rather, they aimed to foster the further integration of developing country beneficiaries into the global trading system.  He em phasised that his delegation took seriously the text 
of the waiver decision that stated that the United States would enter into consultations on request with 
any interested WTO Member with respect to any di fficulty that may arise as a result of preferential 
treatment provided under these programmes.  Shoul d any delegation believe that benefits of WTO 
Membership were being impaired as a result of these programmes, his delegation fully understood 
that such consultations would consider how to resolve the particular matter or difficulty in a 
satisfactory way.  The United States sought co mpliance with its WTO obligations including 
obligations related to consulta tions with other Members and satisfactory resolution of specific 
difficulties as an essential element of Membership in the WTO.  The United States stood by these 
programmes as an important element in its coll ective efforts to increase developing country 
participation in the global trading system.  Today, again, it asked that Members join in signalling the 
WTO's critical endorsement of this goal through approval of these waivers. 
 
3.5 The representative of Benin,
 speaking on behalf of the African Group, encouraged parties 
involved in the consultations on the waiver requests for the three prefer ential schemes, particularly for 
the AGOA, to more towards a consensus.  At an informal session a few days ago, the African Group 
stressed the considerable potential that AGOA ha d in the economies of the African countries who 
benefited from this preferential re gime.  He reiterated the strong recommendation made a few months 
ago that a speedy and appropriate solution to this item, which had been on the agenda for over a year, 
be found.  His delegation was convinc ed that through efforts on all sides the problems could be solved 
to benefit all economies.    3.6 The representative of Costa Rica
 expressed his delegation's support for the approval of the 
three waiver requests.  These three programmes we re temporary but would assist developing countries 
to bring their economies more into the internationa l system.  His delegation viewed these programmes 
positively as they were not inconsis tent with Costa Rica's position w ith regard to preferences in the 
multilateral trade negotiations of the Doha Round.  The fact that these programmes existed should not 
have any negative effect on multilatera l trade liberalization in the Round. 
 
3.7 The representative of Chile  regretted the lack of progress on this matter since the last meeting.   
The US preferential treatment to a group of countri es would improve their conditions for entry into 
the US market, increase trade, and consequentially the level of development.  On the other hand, 
another WTO Member, Paraguay, was negatively eff ected and had requested similar or equivalent 
treatment.  His delegation appealed to the parties concerned to continue the consultations to find a 
solution to the problem allowing for the approval of the corresponding waivers.  He hoped that the 
Chair could intervene to find a solution to this impas se.  Creative solutions could be found so that in 
one way or another Paraguay would have its claims  met or satisfied.  The WTO was not a forum for 
justice but for negotiations in favour of free-trade.   Quite often, satisfaction of parties did not 
necessarily involve compensation in the same areas that were under debate.  G/C/M/85 
 Page 5 
 
 
   
3.8 The representative of Swaziland  associated her delegation with the statement made by the 
delegation of Benin on behalf of the African Group.   Swaziland was greatly c oncerned about the delay 
in granting the 3 US waiver extension requests, particularly for AGOA.  AGOA had made substantial 
contributions to the economies of beneficiary S ub-Saharan African countries.  Her delegation was 
concerned because the delay was having a negative impact on investment flows and expansion and 
had created uncertainty among investors.  She plea ded with other Members to show solidarity and 
understanding in dealing with these requests.  3.9 The representative of the Dominican Republic
 said that her delegation also supported the 
waiver requests, in particular for the CBERA as am ended.  Her delegation ha d broadly benefited from 
this programme which had contributed decisively to  the economic development and diversification of 
its exports.  It hoped that a decision could be taken on this issue as soon as possible. 
 3.10 The representative of Ecuador
 said that her delegation also s upported the waiver requests.  
Her delegation regretted that no fu rther progress had been made in this matter.  Her country's free 
trade negotiations had virtually halted.  It w as, therefore, essential that these preferences be 
implemented because they gave security to investment , production and trade.  It was important that 
Members overcome their difficulties and reach an ag reement with the developing country that had 
concerns so that the CTG could approve these waiv ers which were important contributors to growth 
and development in beneficiary countries.  Ec uador understood the difficulties inherent to the 
adoption of these preferential schemes for some developing countries.  However, her delegation 
believed that there was a shared international commitm ent to fighting and alleviating trade narcotics.  
which had been recognised in many international fora.  The ATPA was a response to these problems 
because any individual action was limited in scope  to fighting a problem with international 
dimensions.  Neverthele ss, Ecuador was contributing a proporti onate amount of economic resources 
to fighting this endemic problem.  The US requ est was for a programme which was clearly pre-
established and fell within the criteria for the granting of tariff preferences.  It did not effect systemic parts of this organization and was of a temporary nature.  Finally, her delegation was confident that 
the Members would, as in the past, work to main tain consensus for the sp eedy adoption of these 
waiver requests.  
3.11 The representative of Trinidad & Tobago
 recalled that her delegation had, in previous 
meetings, highlighted the importance it attached to  CBERA in terms of economic development.    
Today, her delegation underscored the importance of  legal certainty which approval of the waiver 
extension would provide for goods traded under the preferential arrangement.  While the resolution 
was still outstanding, in her delegation's view there appeared to be greater willingness to find common 
ground.  She urged Members to build upon this spirit with a view to resolving this matter in the near 
future.  3.12 The representative of Uruguay
 said that, while her delegation was not against the waivers in 
question, it wished to, nevertheless, point to the negative externalities of preferential agreements. 
 
3.13 The representative of Colombia  joined other Members in expressing the importance attached 
to granting the US waiver requests.  Each of the three programmes had its own importance to its 
beneficiaries.  As stated previously, Colombia  had completed the negotiation of its Free-Trade 
Agreement with the US under Article XXIV of GAT T 1994 and, perhaps, when the FTA entered into 
force, Colombia would no longer make use of ATPA's  benefits.  However, fo r the time being, it was 
important given its objective - the shared responsibili ty of fighting drug trafficking.  Colombia would 
be grateful if greater flexibility could be shown by the countries who had stated difficulties in approving the waivers so that positiv e results could be achieved shortly. 
 G/C/M/85 
Page 6  
 
  3.14 The representative of Kenya
 voice her delegation's support for the statement made by Benin 
on behalf of the African Group.  She expressed he r delegation's support for the 3 waiver requests, 
especially for AGOA, and appealed to those Members that had expr essed concern to show flexibility 
in the consultations.   Given the negative effect s the delay was costing on the socio and economic 
growth to the beneficiary countries, especially  her own country, her de legation hoped for a speedy 
solution as soon as possible.   
 3.15 The representative of Honduras
 supported the waiver requests.   His delegation was no longer 
a beneficiary of the preferences but had been up to a short time ago and, therefore, was aware of  the importance of these preferences.  He stressed that the waiver requests did not effect the rules or 
understanding of the WTO and hoped that a decision could be taken as soon as possible. 
 3.16 The representative of Uganda
 supported the statement made by Benin on behalf of the 
African Group. The benefits of AGOA to African countries and other poor countries could not be 
emphasised enough.  AGOA was the first entry poin t of our goods to North America and therefore 
called upon all other Members to show flexibility.  He thanked China for the flexibility it had shown 
and hoped that this could be imitated by others.  He appealed to those who still had concerns to 
continue to engage in the consultations and ca lled upon the Chair to continue consultations until a 
solution could be found.  3.17 The representative of Mauritius
 associated his delegation with the statement made by Benin 
on behalf of the African Group.  Hi s delegation regretted that so far there had not been a satisfactory 
resolution of the issue given the socio-economic importance of the AGOA pr ogramme for Africa and 
the negative consequences resulting from the continued delay.  He appealed to Members concerned to 
show the necessary flexibility so that these waiver de cisions could be agreed at the earliest time. 
 
3.18 The representative of Bolivia  said that, as a beneficiary of one of these programmes, her 
delegation hoped that the CTG would manage to find  practical solutions to Paraguay's objection.  Her 
delegation supported the three waiver requests, partic ularly that for ATPA which was a mechanism to 
deal with the shared responsibility in the fight agai nst narcotics trafficking.  It was temporary and 
subject to periodic review.  ATPA would end on 31 December 2006 and the systemic concerns and 
objections that had been put forward would be overcome once these mechanisms were no longer in 
force.  Her delegation would be grateful for a pr ompt solution to enable adoption of these waivers. 
 3.19 The representative of China
 urged every party concerned to reciprocate the flexibility shown 
by his delegation.  His delegation had explained its position and reasons at lengt h and in detail at other 
meetings.  He invited Members to examine the report s of previous meetings for further details.  His 
delegation had demonstrated recent flexibility by its  suggestion to reinsert a sentence into the draft 
decisions which was in the previous waiver d ecisions for CBERA and ATPA but was missing from 
the current draft decisions.  The sentence read, "suc h duty free treatment shall be designed not to raise 
barriers or create undue difficulties for the trade of ot her Members".  He added that the draft decisions 
for two other waiver extension requests being consid ered by the CTG included this same sentence.  
This confirmed his delegation's belief that this sente nce or one of a similar nature was essential and 
normal for these waivers.  The fact that the US accepted such language in previous waivers also added 
similar proof.  Therefore, his delegation  encourag ed the US to show flexibility and give positive 
consideration to China's proposal.  In the meantime, China would continue its efforts in working with 
the US and the beneficiaries of the programmes and a ll other parties concerned in the expectation that 
a satisfactory solution to all would be reached soon. 
 
3.20 The representative of Argentina  said that his delegation would also like to see the adoption of 
the draft decisions for the 3 waiver requests before the CTG.  Nevertheless, it reiterated a number of ideas expressed at the last meeting.  In 2000 , AGOA was adopted and implemented without any 
waiver.  The waivers for the ATPA and CBERA ende d in 2001 and 2005 and, since then, those three  G/C/M/85 
 Page 7 
 
 
  programmes for which waivers were being requested  had been applied without any consequences.  
Given that these programmes had continued to be  implemented without waivers meant that the 
beneficiaries were not being depriv ed of the benefits of the programmes.  Secondly, he considered 
that the CTG had not received a clear reply from the US on the legal difficulties it had with the sentence suggested by China.  In  the draft decision for the EC's waiver request for the Western 
Balkans this sentence was included.  Why could the EC include this phrase without any difficulty 
while the US had difficulty with the same sentence in the draft decisions for its waiver requests? 
 3.21 The representative of Paraguay
 confirmed that this delegation was not yet able to provide its 
support to the draft decisions.  Since the last m eeting of the CTG, Paraguay had intensified its 
consultations both in Asunción and in Washington in order to find a satisfactory solution.  His 
delegation believed it was on the ri ght track because it have received certain encouraging signals to 
continue with its efforts.  It was important to reiterate that Paraguay was not seeking compensation for 
the application of these preferential schemes.  For so me years it had been requesting treatment similar 
to that accorded to Members in situ ations similar to Paraguay.  Furt hermore, it had cited its condition 
as a land-locked developing country with a small an d vulnerable economy in order to back its request.  
It was impossible to withstand blatant regional vari ations when, for example, countries in Paraguay's  
region and in similar circumstances received pref erential treatment for their exported products and 
produce.  Paraguay was not setting out pre-conditions  for dialogue;  it was trying to find a solution 
and was open to exploring many different ways of  resolving this problem.  Paraguay and the US 
maintained excellent relations, sharing many of the same interests and working hand-in-hand on so 
many programmes beneficial to all.  It would be  impossible to imagine not finding an understanding 
on this particular issue.    3.22 It would be unfair to say that Paraguay was being opportunistic because its opposition to these 
waiver requests was not only the consequence of a position which had been adopted long ago, it was 
coherent with concrete proposals which had been proposed on special and differential treatment in the 
Committee on Trade & Development in Special S ession.  Indeed, in TN/CTD/W/5 dated 24 May 
2002 the delegation of Paraguay proposed "that we no t use waivers to Article 1 of the GATT in order 
to provide advantages or privileges to devel oping countries when those advantages clearly 
discriminate against other developing countries".  It's position also was in line with Paraguay's 
position with regard to the waiver  regime in favour of least-devel oped countries in the Doha Round 
where it was set out that those waivers would be authorised "without prejudice to the rights of other 
Members".  The Paraguayan delegation had been asked to discriminate between those preference 
schemes which may injure their economy and those whic h were not prejudicial to their economy.  The 
fact was that, as a point of principle, injury was not the cause but more a consequence of a situation 
which gave rise to its inability to approve these waiv ers.  It would be odd for Paraguay, when it was 
trying to fight against discrimination, to act in a discriminatory fashion.  Paraguay understood the 
position of Members who benefited from these prefer ential schemes and was trying to do all that it 
could to find a solution.  It hoped that those Members could understand Paraguay's position as well, 
especially taking in to account that preferences were al ready being applied.  Fina lly, he added that this 
was a position being held at the highest level in Paraguay.  Recently, during a Presidential Summit, 
the President of the Republic of Paraguay explaine d clearly Paraguay's position on this subject to a 
number of Heads of State.  He asked for the support of those countries.  Also, this position was fully 
supported by the private sector and the government must respond to the private sector.  3.23 The representative of Nigeria
 reiterated her delegation's position in support of the extension of 
the AGOA waiver.  Nigeria associated itself with the statement made by Kenya, Uganda, Swaziland, 
Mauritius and Benin on behalf of the African Gr oup, and requested all Members to engage in 
consultations in order to ensure the approval of the AGOA waiver.  3.24 The representative of Nicaragua
 supported all initiatives to improve the situation of 
developing countries and their participation in th e world economy and improvement in market access G/C/M/85 
Page 8  
 
  to promote development.  This was why it suppor ted the US waiver requests and hoped that under the 
skill and guidance of the Chair, Members would be  able to find a creative solution which would 
satisfy all parties.  3.25 The representative of Pakistan
 believed that such initiativ es contributed towards the 
integration of the beneficiary countries into interna tional trade.  With this spirit, his delegation had 
shown flexibility and continued to do so.  At the same time, it would like this flexibility to be 
reciprocated in such a way so as to reach an agreement on language acceptable to all countries.  His 
delegation was actively and constr uctively engaged in consultati ons with the US delegation. 
 
3.26 The representative of Jamaica,  while noting Paraguay's concerns, urged Members' flexibility, 
bearing in mind the importance of these programme s to the beneficiary countries, including Jamaica 
under CBERA.  She urged these Members to continue th eir consultations with a view to arriving at a 
satisfactory resolution as soon as possible so th at the draft decisions may be adopted. 
 
3.27 The Chairman , noting that objections still existed, proposed that the Council take note of the 
statements made and revert to this matter at its ne xt meeting.  In the meantime, he urged Members to 
consult directly with the US to address their con cerns and that he was available, as necessary, to 
consult on the matter.    3.28 The Council so agreed
. 
 
IV. EUROPEAN COMMUNITIES – REQUEST FOR AN EXTENSION OF ARTICLE 
XIII WAIVER FOR THE TARIFF RATE QUOTA FOR BANANAS OF ACP ORIGIN 
4.1. The Chairman  recalled that the European Communities had submitted a request for an extension 
of its Article XIII waiver for the TRQ for bananas of ACP origin which was circulated in document 
G/C/W/529, dated 11 October 2005.  In this document,  the EC requested an extension of its GATT 
Article XIII waiver concerning the tariff rate quota (TRQ) for bananas of ACP origin which was 
contained in document WT/MIN(01)/16 of 14 Novemb er 2001.   At the CTG meeting in November 
2005, the Council agreed to defer consideration of th is agenda item to its 10 March 2006 meeting.  At 
the March meeting, the EC proposed  to postpone consideration of its  waiver request until after the 
monitoring and review process of its new banana regi me was concluded.  This was met with statements 
by concerned Members who did not agree with th is proposal.  At the May 2006 meeting, the EC 
maintained its proposal to postpone consideration of its waiver request which was again met with 
disagreement by certain concerned Members.  4.2 He reported that he had held an informal c onsultation on this matter on 6 July with concerned 
Members.  At this meeting, the EC stated that its position had not changed and was well reflected in 
the minutes of the 9 May 2006 meeting.  Among the concerned Members, there were some which continued to view the EC waiver request as unfounded  and with no legal basis.  They did not believe 
that the request met the terms of the Understandi ng In Respect of Waivers, nor that there was 
sufficient information to assess its merits.  Some ot her concerned delegations, in the spirit of seeking 
a peaceful resolution of the matter, appeared interest ed in considering the EC request.  For a few, this 
consideration remained premised on having all info rmation at hand, including the rebound tariff.   
 4.3 He understood that the EC was still requesti ng a postponement of the consideration of the 
waiver request that they presented initially to th e Council in October 2005.  In this context, one 
delegation asked if there was any preliminary sta tistical information emanating from the monitoring 
and review process to which the EC referred in  its postponement proposal.  The EC representative 
replied that the statistical information was public ly available but that he would seek, through his 
delegation, a means to bring it to the attention of interested Members.  Another Member also proposed grouping the entirety of the banana issu es into an inter-disciplin ary discussion mechanism.   G/C/M/85 
 Page 9 
 
 
  One Member voiced his view that this would not serve to resolve the substantive differences and 
might simply be an empty exercise.  However,  other Members were silent on this proposal. 
 4.4 The Chairman reiterated that he was in Memb er's hands on this matter.  However he noted 
two observations.  The first was that while certain Members had stated that they did not agree to 
consider this waiver request given the lack of full  information and legal basi s, the request had been 
circulated and those Members had provided the Counc il with their analyses of why the request did not 
fulfil the requirements of the Understanding In R espect of Waivers.  Secondly, the next scheduled 
meeting of the CTG was in November.  If this matter was not resolved at this meeting and reverted to 
at the next meeting, the EC request would have  been on the CTG agenda for a year.  He was 
conscious of the 90-day period prescribed in Article  IX(b) of the WTO Agreement for consideration 
of waiver requests before submission of a repor t to the General Council.  He noted these two 
observations because, whether or not Members agreed that the EC waiver request merited approval or 
further consideration, it was incumbent upon this  Council to report on this  matter to the General 
Council.  He was aware that some Members had voiced their refusal to entertain consideration of this 
waiver request, while there had been some analy tical discussion of the content of the request, in 
particular, whether the request and substantia ting documentation met the requirements of the 
Understanding.  However, he pointed out that th ere was no requirement for the CTG to formally 
approve or disapprove a waiver request within the 90 day period, but rather only to report.  In this 
context, he suggested that he report, on behalf of the CTG, to the December 2006 General Council on 
this matter.  He intended to provide delegations w ith an oral version of his report at the November 
meeting.  The report would be entirely factual a nd along the lines just set out, indicating that the 
matter remained inconclusive.    4.5 The representative of the European Communities
 recalled that the minutes of the 9 May 2006 
meeting showed that Members were divided as to  how to proceed with his delegation's waiver 
request.  Some Members insisted that the EC withdr aw the request allegedly on the basis of the lack 
of sufficient information for such a request.  Ma ny, understandably, sought a clearer picture of the 
overall EC banana import regime mo st particularly the rebinding of the MFN tariff.  Others seemed 
ready, even with the lack of clarity, willing to c onsider the request as it stood, for which his delegation 
was grateful.  He concluded that this delegation was in the hands of the Chair and the Council.  It had 
originally proposed to delay the discussion of th e waiver request until such time as the Members 
concerned considered that they had sufficient elemen ts to properly examine the request.  However, his 
delegation was flexible and realised that the debate had started to unfold anyway.  It equally remained 
ready to hold further consultations on this issue with  all interested Members informally, bilaterally, in 
groups and in this formal session as necessary.    
4.6 He cited 4 comments and questions that were ra ised at the 9 May meeting.  The first was that 
the EC request was not justified by exceptional ci rcumstances, as required according to the Banana III 
jurisprudence.  The second was th at since the EC had argued that it did not need an Article XIII 
GATT waiver, which raised  the legal necessity versus  the legal certainty question.  The third was that 
the EC request was incomplete since it did not describe the trade measure concerned, the policy 
objectives pursued or the reasons for not using GATT- consistent measures.  And finally, a fourth 
comment was that the new ACP tariff-rate quota increases  the preferential market to the detriment of 
MFN access.  The minutes of the 9 May meeting accu rately reflected the EC responses to these 
comments and a number of others.  He summarised that  the EC had always inte nded to make a neutral 
move to the new import banana re gime and, with this in mind, established a TRQ for ACP banana 
imports that merely reflected the effective prev ailing preferential access of ACP imports during the 
representative period of 2002-2004, taking into account the EC enlargement.  Secondly, the new EC 
regime provided for unlimited MFN access to the EC market, i.e. a tariff-only regime, without prejudice to the EC's right to establish a quantitative limit of the preference granted to ACP bananas.  
Thirdly, by maintaining a quantitative limit to the ACP preference the EC sought to ensure that the 
ACP preference would not be detrimental to the objective of obtaining or maintaining total MFN G/C/M/85 
Page 10  
 
  access to the EC market.  The TRQ did not in crease the ACP preferential access, it aimed at 
maintaining preferential access to ACP suppliers in such a way so as to  ensure that total market access 
for MFN suppliers to the EC market was also ma intained.  The waiver would help provide legal 
certainty for both ACP and MFN operators.  His dele gation stood ready to continue the consultations 
and would take note of all questions and comments raised. 
 
4.7 The representative of Honduras
 said that his delegation considered that the examination of the 
waiver request had not started, hence the 90-day period in Article IX(b) had not started either.  
Therefore, a Chair's report to the General Council could not be on the basis of the 90-day rule.  With respect to the suspension of the debate, Honduras ha d already stated its point of view.  Honduras 
regretted that the Council had not yet touched upon the legal points and that the DSB continued to 
ignore the points regarding extensions of obligations  and other fundamental standards of practices and 
policies of the WTO, including the Understanding Re garding Waivers.  Certain ACP rules were not 
described adequately, particularly the bound MFN levels from which the ACP margin of preferences 
could be determined.  Likewise the EC ignored the Understanding since it did not explain the need for 
ACP preferences which obviously were broader than the ones granted under the previous extension of 
the Article XIII waiver.  The EC also did not e xplain why the disciplines regulating WTO procedures 
would have to be influenced by a monitoring pr ocedure which was alien to this matter, lacked 
transparency and was reserved for only a few WTO Members.  It also ignored the WTO requirement 
that an Article XIII waiver had to be justified by exceptional circumstances.  These were important 
disciplines that regulated the granting of waivers.  Therefore there was no basis to start a review of the 
request.  With respect to the comment about setting up another forum to discuss bananas, his 
delegation simply noted that this would constitute a seventh forum to address th is issue in the WTO.  
Would this new forum respond to the problem of the EC ignoring the WTO rules?  4.8 The representative of Colombia
 understood that the EC, today and on previous occasions, had 
expressed its desire for a neutral banana importing regime and that any preferential treatment for 
exporters from ACP countries meant that this neutra lity would be altered.  However, it had to be 
recognised that the present banana regime, at least for Colombia, did not really show any detriment to 
banana exporters.  Colombia had a growing share in the EC market and th is was the case for the 
majority of Latin-American countries that produced and exported bananas, particularly to the EC.  
That is why Colombia clearly would like peace in  this matter and it seemed that the EC had made 
suggestions in this regard.  First, the EC invite d concerned Members to participate in a system of 
monitoring.  This would be a multilateral monitori ng mechanism, because it wa s a result of the Hong 
Kong Ministerial meeting, in which all the producers and exporters of bananas could participate.  It 
was important to determine first whether the ne w regime was neutral before seeking change.  
Colombia participated in this monitoring mechan ism, withdrew from it and now returned.  The new 
banana regime did not have dram atic impacts as far as Colombian exports were concerned.  Of 
course, her delegation would like to see a lower tariff but  this was part of the elements for review.  In 
conclusion, Colombia was ready to support the EC's  waiver request under certain conditions.  First, 
the tariff must be bound and the binding be in line  with the arbitration and with the Doha Round 
modalities.  Second, the EC must not increase the TR Q which must be related to the negotiations of 
the association agreements between the EC and the ACP and other groups, incl uding banana exporters 
such as Colombia. 
 4.9 The representative of Panama
 said that his delegation also opposed consideration of the 
waiver requested by the EC on the basis of several legal points.  Panama and other countries had made 
every effort to have a constructive exchange of vi ews and to identify and clarify these legal points.  
On various occasions, his delegation had asked the EC to explain the totality of the trade agreement  
under discussion, the goals pursued, why these discrim inatory measures were necessary and why they 
considered them exceptional circumstances.  Th ese questions remained unanswered.  The EC  
admitted they could not clarify the trade agreement on bananas.  The EC said that it was not necessary 
to demonstrate the need or to justify the discrimin ation in any other way, even to the developing  G/C/M/85 
 Page 11 
 
 
  countries of Latin America which suffered most.  Th e EC said that the waiver would lead to legal 
certainty, making the discrimination even worse.  Th e EC did not provide legitimate arguments for the 
waiver to be approved.  The lack of legal clarity  and justification surrounding the EC request meant 
that it was not in compliance with the Understandi ng Regarding Waivers and his delegation could not 
consider it.   
 
4.10 The representative of Nicaragua  considered this issue of systemic importance.  The WTO 
rules for waiver requests were strict and inflexible  and required a coherent description of the request  
in question.  Without this information, Members c ould not know what they were to consider nor the 
reasons for granting the a waiver.  The request should also contain a coherent description of the 
exceptional circumstances that would justify the waiv er.  Otherwise the granting of the waiver would 
be an ordinary occurrence.  The EC request did no t contain a coherent and reliable description of the 
preferential rule at issue.  According to the EC, they  could not provide this at this time.  The request 
did not offer an explanation either of the excepti onal circumstances justifying the waiver.  On the 
contrary, the EC insisted that this request had nothi ng to do with need but would be useful to provide 
certainty.  The EC seemed to admit there were  no exceptional circumstances.  The EC request 
responded to its desire to disregard the legal discrep ancies with Latin America and this justification in 
no way constituted an exceptional circumstance.  If th e Council were to accept this waiver request, it 
would not only effect the banana interests of some countries but also would establish a systemic preference which this institution could not afford  to accept.  Nicaragua asked those Members which 
did not have a direct interest in the banana disput e to consider the systemic implications of permitting 
a review of a waiver request wh ich contained such defects.   
 4.11 The representative of Ecuador
 said that banana exports was a sensitive issue for her country 
since it was its main export prod uct.  Long negotiations on this sector culminated in the 2001 
Understanding.  Ecuador had agreed to work cons tructively once the tariff had been bound at a level 
which did not affect MFN suppliers in an a dverse manner.  Her delegation was against the 
proliferation of bodies and considered that this i ssue should be addressed in the WTO with a just and 
fair solution which would give fair access for deve loping countries' banana exports.  Her delegation 
reserved its recognized legal rights and was read y to defend its trade and economic interests. 
 4.12 The representative of the Dominican Republic
 requested that his country be invited to 
participate in future informal cons ultations on this matter as this was a matter of great interest for the 
Dominican Republic.  His delegation regretted that an agreement had not been reached on the EC 
waiver request because the EC was simply seeki ng to provide legal cert ainty to all those who 
participated and traded in this product in the EC ma rket.  It was obvious that the preferences to the 
ACP countries had not been increased.  The fact that the ACP countries had to have quantitative 
restrictions and that MFN countries would have unli mited access showed that this regime only sought 
to maintain the level of preferences for ACP countries.    4.13 The representative of St. Kitts and Nevis
 said that this matter was important for many 
Caribbean countries and in particular the ACP count ries.  As a broad point, he noted that the 
multilateral trading system should be based on at least the presumption of fairness.  His delegation, 
therefore, appreciated the efforts made by the EC to  ensure that within the current system there was 
equal access for ACP suppliers.  It was important to underscore that this waiver request only asked for 
the provision of legal certainty and that this was of  no disadvantage to either MFN or ACP suppliers.  
It sought only to establish clear rules which would guide trade between the EC and the ACP in this 
very important commodity.  In addition, MFN export s seemed to have increased.  It was important for 
the WTO to ensure that its outcomes had clear benefi ts for all the participants, including the small and 
vulnerable Members.  4.14 The representative of Jamaica
 said that her delegation wished to see favourable consideration 
of the waiver request.  This would ensure legal cer tainty and predictability which were important in G/C/M/85 
Page 12  
 
  ensuring investment, organization and continued viab ility of the banana industry in her country.  The 
sector was of considerable importance to the Jamaican economy and other CARICOM countries in terms of employment and exports.  Her dele gation hoped that there would be constructive 
consultations leading to a solution that took fully into account all parties' interests. 
 
4.15 The representative of the European Communities
 was encouraged by Colombia's statement 
because it reflected movement in the right direction by  at least one Latin American delegation.  With 
respect to the question raised of whether the exam ination of this waiver request could be made 
contingent upon the conclusion of a monitoring process of which not all MFN suppliers were part, he 
again stressed that the door had been open to an y producer willing to engage in good faith in this 
process.  This door and communication lines still remain ed open even if a supplier wanted to consult 
informally, bilaterally or as a group.  With respect to  the critique that the EC request was not justified 
by exceptional circumstances as required by Bananas III, he repeated that the re quest,  similar to that 
which was agreed in 2001, was justified by the need to reconcile the interests of the various Members, 
both Latin American and ACP, in the banana disp ute.  The TRQ aimed at maintaining preferential 
access for ACP suppliers, which was required by the EC under the Cotonou Agreement and allowed 
under the Article I waiver approved in 2001, in a wa y that ensured that total market access for MFN 
suppliers was not impaired.  His delegation believed that it had achieved that difficult balance.  
Regarding the points made by Honduras and Panama. i.e. that the request was incomplete, did not 
describe the trade measure concerned, the policy objective pursued or the reasons for not using 
GATT-consistent measures, he stated that this delegation was ready to discuss the details of the 
management of the ACP TRQ with any delegation that  was interested.  In terms of policy objectives, 
the ACP TRQ essentially aimed at ma intaining preferential access fo r ACP suppliers in a way that 
ensured total market access for MFN suppliers to the EC market.  He reiterated that his delegation did 
not consider the measures GATT-inconsistent.  The obj ective of the waiver request was not to fulfil a 
legal requirement but rather to provide legal cer tainty for both ACP and MFN operators.  He was 
aware of the importance of bananas to quite a numb er of Members and his delegation intended to try 
to find a mutually satisfactory solution.    4.16 The representative of Costa Rica
 concentrated on the trade aspects of the issue because 
agreement would not be reached on the legal aspects at  this meeting.  It seemed that the TRQ enabled 
ACP countries to have higher levels  of exports than those which they had before, higher than that 
which the EC had been justifying with its enlarg ement to 25 Members.  There was no doubt that ACP 
countries had benefited from the new regime.  Since the implementation of the new tariff only regime 
some Latin American countries' exports had increased but others had not.  He believed that ACP exports had increased more than exports from Latin American countries.  In trade terms, the waiver 
was limited to a preference of 75,000 metric tonn es, and there was an MFN tariff rate.  But ACP 
countries, particularly the African countries, had the necessary competitivity and capacity to export 
beyond those 75,000 tonnes and pay the MFN tariff rate.  Last year they demonstrated they could pay 
the MFN rate and that the preference was not ab solutely necessary for them but more so for the 
Caribbean countries.  The point was to maintain pr eferential access to the ACP suppliers.  The TRQs 
were capable of maintaining and enabling a sma ll increase of exports from ACP countries probably 
beyond the TRQ for African countries.   
 
4.17 He considered that Caribbean countries s hould be concerned with regard to this position vis-
à-vis  the African countries.  In the future the risk  was that the African countries would take up the 
quota that was being provided for the Caribbean countri es as well.  Over the year s used as a basis for 
the reference rate, a solution speci fically for those Caribbean countries that were genuinely dependent 
on the export of bananas and whose competitivity mean t they could only compete in a limited way in 
the market could have been found.  He drew Members' attention to this point because he did not believe that the TRQ was a solution for the Caribbe an countries but more for African countries which 
slowly and clearly were increasing their exports under  the quota.  This case was similar to that of 
some Latin American countries in the 1990s which we re not exporting their market share of bananas  G/C/M/85 
 Page 13 
 
 
  because Ecuador was more competitive.  He concluded that his delegation was available to participate 
in consultations with the EC in order to tr y to come to an agreement as soon as possible. 
 4.18 The representative of Honduras
 asked when the EC was going to request an Article I waiver 
for bananas?  The fact was that after the two arbitr ations, the Article I and Article III waivers were not 
in effect any longer.  He also stated for the r ecord, that since the new regime was established on 1 
January 2006, Honduras had lost market share in Europe.  4.19 The representative of Panama
 said that his delegation was fearful of what the effects of the 
new regime would be on his country's exports.  Si x months provided a short-term view and it was 
difficult to interpret what the market would do wi th regard to bananas.  The EC had requested 
examining a 1-year period under the monitoring process.   There was a cycle to the banana trade so it 
was necessary to look at a reasonable time period to  genuinely determine what the effects of these 
measures would be.  With regard to the  statement by Costa Rica, he commented that Panama was on the positive side of the effects but not enough time ha d passed to tell what would happen in the future, 
what its market shares would be, and how prices would be effected.  Therefore, the debate was 
whether or not the waiver request complied with the WTO rules.    4.20 The criteria, the requirements, and how th e EC had submitted its waiver request should be 
examined first.  It was not clear whether this w ould justify the measure con cerned, nor provide legal 
certainty.  For exporters to the EC market, ther e was no legal certainty without the bound tariff rate 
for banana exports to the EC market.  In an impor tant market for these countries, exporters needed to 
know for certain what the bound rate was going to be.  The EC claimed that th e measures were legal, 
but that it was still seeking legal certainty.  If the measure was not illegal why were they asking for a 
waiver?    
4.21 The representative of Colombia
 said that the banana issue was such a unique and specific 
trade issue different from all goods and services ne gotiated in the WTO.  The discussion dealt with 
the applied tariff rates whereas for most other goods  or services discussion focused on bound rates.  
Applied rates were being discussed without any pr ejudice to needing the legal certainty of a bound 
rate.  The EC's banana regime included the waiver which had legal as well as trade aspects.   The EC was trying to distinguish between the two which was how they enabled the ACP to have this 
treatment.  It was important to state this because it enabled a distinction to be  made between countries 
that produced and exported bananas which had an inte rest in the European market.  Other countries 
produced but exported to other markets even though they had legitimate interests in the EC market.  
Their participation in the European market could then lead to a change in the regime.  She was 
concerned with the notion of putting all the ACP countries in the same basket.  Island countries 
simply did not have enough land to produce more bananas and may be exporting all of them to the 
EC.  But, it could be a different story for othe r countries which could plant more banana trees and 
increase production for export.  They would increase their market share over another country simply because they had more land and could produce more bana nas.  As had been stated, for example, in the 
Aid for Trade discussions, if a country was not comp etitive in producing one product, it would have to 
change and produce another product.  This was an i ssue for a number of countries.  She was part of 
the Aid for Trade task force which, in the discussions, invited a number of countries with 
competitiveness difficulties to make the transition to  production which enabled them to successfully 
participate in the international market.  Other products could be produced from bananas, such as 
banana fibres and alternatives.  These might add va lue to the Caribbean market, provide them with 
more independence and help th em with productivity problems. 
 
4.22 The Chairman
 summarized that there were significant divergences in Members' positions on 
this matter.  Some Members did not want to cons ider the EC request, one Member was now ready to 
support the request, while others were simply urging its adoption.  The EC did not wish to withdraw 
its request so the reality was that this request was still on the table.  He believed that there was a need G/C/M/85 
Page 14  
 
  to inform the General Council in a factual manner of  the proceedings while not changing the status of 
the Council's treatment of this request which was fo r Members to decide.  He would report that the  
matter remained inconclusive a nd he would request further time for the CTG to continue its 
deliberation of the EC request.  He did not want to draw the CTG into an interpretation of the 
provisions of the Marrakech Agreem ent regarding waivers.  He proposed, then, that the Council take 
note of the statements made and that the CTG revert to this matter at the next meeting when he would 
provide  more detail of the report that he intende d to make to the December meeting of the General 
Council.    4.23 The representative of Honduras
 requested that, in the Chair's report to the General Council, it 
be clearly stated that the consideration of this waiver had not begun.  He agreed that the Council 
should not enter into legal consider ations and interpretations.  Neve rtheless, each decision that was 
taken had legal implications.  4.24 The Chairman
 proposed that the Council take note of a ll statements made and revert to this 
matter at its next meeting when he would provide more detail of the report he would make to the 
General Council.  4.25 The Council so agreed
. 
 
V. EUROPEAN COMMUNITIES – REQUEST FOR A WAIVER FOR THE 
APPLICATION OF THE EUROPEAN UNION AUTONOMOUS PREFERENTIAL 
TREATMENT TO THE COUNTRIES OF THE WESTERN BALKANS 
5.1 The Chairman  drew Members' attention to documen t G/C/W/552 which contained the request 
of the European Communities for a waiver for the application of the Euro pean Union Autonomous 
Preferential Treatment to the Countries of the West ern Balkans.  He recalled that this request was 
submitted at the May 2006 meeting of the CTG.  He  proposed that the Council approve this waiver 
request by the European Communities and that the draft decision contained in document G/C/W/556 
be forwarded to the General Council for adoption.    5.2 The Council so agreed
. 
 VI. CANADA - REQUEST FOR AN EXTENSION OF THE WAIVER FOR THE 
CARIBBEAN INITIATIVE (G/C/W/555) 
6.1 The Chairman
 drew Member's attention to document  G/C/W/555 which contained a request by 
Canada for an extension of its existing waiver  for the Caribbean Initiative, CARIBCAN.   
 
6.2 The representative of Canada  said that, through document G/C/W/555, his delegation was 
requesting a five-year extension of the waiver in respect of Canada's Commonwealth Caribbean 
Countries Initiative known as CARIBCAN. He outlined br iefly the main reasons for this request.  
Canada's trade and foreign policy had long recognised its special relationship with the 
Commonwealth Caribbean countries stemming, in la rge part, from trade and commercial ties which 
pre-dated the confederation of Ca nada and continued to the present day by the joint-membership in 
the Commonwealth and similar international institu tions.  In 1986, in reco gnition of this special 
relationship, Canada responded pos itively to the request of the Commonwealth Caribbean countries to 
institute CARIBCAN.  The main objectives of  CARIBCAN were to enhance Commonwealth 
Caribbean trade and export earnings, improve the tr ade and economic developm ent prospects of the 
region, promote new investment opportunities and en courage enhanced economic integration and co-
operation within the Western Hemisphere.  Canada was granted a waiver to unilaterally extend, from 
15 June 1986, duty free access to the Canadian ma rket for most commodities originating in 18 
Commonwealth Caribbean countries.  The CARIBC AN waiver was extended and would remain in  G/C/M/85 
 Page 15 
 
 
  effect until 4 September 2006.  The duty free tr eatment provided under CARIBCAN had been shown 
to promote the expansion of trade and economic de velopment of the beneficiaries while not raising 
barriers to the trade of any other WTO Member.  Between 1986 and today no CONTRACTING PARTY to the GATT nor WTO Member had requested consultation with Canada  with respect of any 
difficulty or matter arising out of the implementation of the provisions of CARI BCAN.  In light of the 
continuing relevance of the considerations underl ying CARIBCAN, Canada was asking the Council 
for Trade in Goods to approve its request to rene w, for a 5-year period, the Commonwealth Caribbean 
countries initiative waiver that extended duty -free access to the Canadian market for most 
commodities originating from the 18 Commonwealth Ca ribbean countries.  Canada would be happy 
to discuss this matter with all interested Members. 
 
6.3 The representative of Jamaica
 expressed support for the Canadian request.  As a CARIBCAN 
beneficiary, Jamaica emphasised the importance of th is programme to its economy, in particular in 
light of its stated objectives to facilitate economic development through increa sed expansion of trade 
and investment opportunities and enhance economic  integration and co-operation within the 
Caribbean region.  Of importance to Jamaica wa s the continuation of this centrepiece of the 
CARIBCAN arrangements which entailed preferentia l access to the Canadian market for products 
from Jamaica and other CARIBCAN beneficiaries.  Other elements of the programme included the 
provision of investment and industrial co-opera tion between Canada and CARIBCAN beneficiaries 
which facilitated an enhancement of local pr oductive and export capacity and private sector 
development.  As a small, open economy with a limited natural-resource base, the absence of 
economies of scale, and proneness to natural disast ers, the challenges of globalization and trade 
liberalization were more acute.  Programmes such as CARIBCAN facilitated the beneficial integration 
of economies such as Jamaica into the global eco nomy.  Against this background, her delegation 
urged favourable consideration of the request for a further extension of th e waiver in order to arrive at 
a decision as expeditiously as possible. 
 
6.4 The representative of St. Kitts & Nevis , speaking on behalf of St. Kitts & Nevis and Trinidad 
& Tobago, both beneficiaries of CARIBCAN, under scored the importance of this arrangement in 
meeting the legitimate policy and de velopmental objectives of these count ries.  It should be noted that 
the beneficiaries were small and vulnerable economies which accounted for an insignificant 
proportion of global trade.  While his delegation re mained committed to the work of the WTO, it was 
also important to note and make it known that  such Members suffered from vulnerabilities which 
made it difficult to globally compete as efficien tly as these Members would like.  CARIBCAN, like 
other non-reciprocal trade agreements, had, therefor e, facilitated these Members' integration into the 
multilateral trading system and also assisted them  in addressing some of the existing social and 
economic concerns.  His delegation, therefore, fu lly endorsed and supported Canada's request for the 
extension of this waiver. 
 6.5 The Chairman
 proposed that the Council take note of th e statements made and revert to this 
matter at its next meeting.  6.6 The Council so agreed
. 
 
VII. CONCERNS AND QUESTIONS RAISED TO COLOMBIA REGARDING CERTAIN 
CUSTOMS MEASURES APPLIED TO IMPORTS OF GOODS FROM PANAMA AND OTHER WTO MEMBERS  
7.1 The Chairman
 recalled that at the previous meeting of the Council, it had been agreed to revert 
to this matter at this meeting.  Prior to the la st meeting, the delegation of Panama had circulated 
document G/C/W/548 outlining its concerns over certain customs measures by Colombia that were affecting trade from Panama, and specifically, the tr ade generated by the Colón Free Zone.  Panama 
stated that Colombia had issued a number of resoluti ons that affected its trade as well as the trade of G/C/M/85 
Page 16  
 
  other WTO Members, including the People's Republic of China;  the Republic of Korea;  Hong Kong, 
China;  India;  Indonesia;  Malaysia;  Pakistan ;  Thailand;  Chinese Taipei;  Singapore;  and the 
Philippines.  The document also contained a list of questions for Colombia to which Colombia had responded in document G/C/W/554.    
7.2 The representative of Panama
 did not wish to repeat in detail the reasons which motivated the 
questions to Colombia but only to recall that th e measures imposed by the customs authorities of 
Colombia fixed indicative prices to certain goods originating in/or imported from Panama and other 
Members of the WTO affecting significantly export and re-export activities.  The application of 
indicative prices by Colombia covered a large vari ety of products and their effects had a selected 
impact on China;  Korea;  the Philippines; Hong Kong, China;  India;  Indonesia;  Malaysia;  
Pakistan;  Singapore;  Thailand and Chinese Taipei .  At the same time measures had been taken 
restricting the ports for entry into Colombia fo r imports coming from Panama and China.  These 
restrictions impeded the free movement of goods on ce they entered Colombian territory and effected 
the principle of non-discrimination since they app lied selectively.  Finally, additional measures 
required that invoices had to be presented for goods  coming from the Colon free-zone in Panama.  
 7.3 Colombia tried to justify its customs measur es in the responses it provided to his delegation's 
questions.  Although Colombia had provided these responses and there was an exchange of views 
between the two countries, he regretted that there w as no solution on the horizon, particularly because 
of the recent publication of two new Resolutions by  the Customs authorities which further aggravated 
the situation.  Resolution No. 4953 of 18 May 2006 established indicative prices for stuffed toys and 
other toys from Panama and other countries;  and  Resolution No. 06691 of 22 June 2006 which 
extended the previous Resolution of May 2006 rest ricting the ports of entry for goods from Panama 
and China.  As the situation had not been resolved a nd, in fact, worsened since the last meeting of the 
Council, and in view of the economic damage to  Panama and restricted activities of other WTO 
Members, his delegation requested that this matter  be maintained on the agenda of the CTG until a 
solution was found.    7.4 The representative of Colombia
 explained that her Government attached considerable 
political value to the Central and South American region and to Panama with which it had an obvious 
need to maintain the best trade and political rela tionships.  As an example, the President of the 
Republic of Colombia, Alvaro Uribe, was in Panama  City, Panama the prior day to discuss one of the 
most important energy integration projects for Central America and South America, the Puebla 
Panama Plan.  Colombia applied these measures consis tent with its international obligations including 
those of the WTO.  However, Colombia was a count ry punished by the production and trade of illicit 
drugs and narcotics.  Hence, Colombia's national secu rity interests were involved in this issue.  Her 
country, therefore, called for the understanding of  Panama and other Members so that Colombia 
would not be alone in its struggle which required he lp from all Members.  Unfortunately, Colombia's 
struggle to eradicate the production of narcotics meant that it had to eradicate the economic component of drugs in the trade of the country.  While her country was not against this matter being 
on the CTG's agenda, she noted that there was a Comm ittee of the highest level in Colombia with the 
President of the Republic together with the Presi dent of Panama discussing these points. These were 
not just trade or customs issues, but involved the security of the Republic and all countries joined in 
the international fight against drugs.  Therefore, he r delegation was ready to continue to discuss this 
matter but wanted it to be clear that the issue i nvolved the security of her country which comprised 
concerns much broader than those discussed in this forum.  
7.5 The representative of China
 took note of Colombia's intervention.  His capital was still 
studying the replies provided by Colombia to the questions posed by Panama.  It would keep a close watch on this issue and looked forward to  a satisfactory solution on the matter. 
  G/C/M/85 
 Page 17 
 
 
  7.6 The representative of Hong Kong, China  said that his delegation had an interest in this matter 
since it was one of the Members affected by Colo mbia's customs measures.  He noted Colombia's 
reply that the indicative prices were reference prices and not minimum prices and that Colombia applied these measures to imports only when a risk of under invoicing was detected.  He also noted 
Colombia's statement that the measures were necessary  and that the issue was at the highest level of 
consideration.  However, in order to have a better understanding of the measures, his delegation 
would  be grateful if Colombia could provide more information on the implementation details of the 
measures.  In particular, how were the indicative pr ices defined;  how were they used for the purpose 
of detecting under-invoicing;  how was the list of ta rgeted economies worked out;  and how were the 
price levels determined? 
 
7.7 The representative of Indonesia
 fully supported the questions posed by Hong Kong, China.  
His delegation would also like to know about th e relationship between the imposition of indicative 
prices and illicit drugs.  Although Colombia responded in the previous meeting, the response was not 
to his delegation's satisfaction and it sought clarification. 
 
7.8 The representative of Chinese Taipei  said that his delegation also did not consider that its 
systemic concerns were properly addressed in Co lombia's responses to Panama's questions.  For 
example, his delegation was still not clear about which specific provision in the Customs Valuation 
Agreement was the basis for Colombia's claim that its application of indicative prices on imports was 
justifiable.  His delegation was especially concer ned that such measures were imposed on imports 
from certain sources only.  In the interest of great er transparency his delegation urged Colombia to 
provide WTO Members with more details of the indicative pricing system, including and limited to the full text of the relevant domestic legislation.  7.9 The representative of Malaysia
 said that his delegation shared many of the issues raised by 
other delegations in support of Pa nama's statement, in particular the questions posed by Hong Kong, 
China and Chinese Taipei.  While it appreciated th e points made by Colombia, including those about 
illicit drugs and national security, further informatio n was necessary in order to understand the basis 
for the measures introduced by Colombia.  His dele gation hoped that Colombia would be able to 
provide more information to allow a better appreciation of the circumstances surrounding the measures introduced, and reserved its right to  deal with the issue in the future. 
 
7.10 The representative of Thailand
 said that his delegation would also  like to have more detail on 
the specific workings of the mechanisms in questio n and associated itself with the statement by Hong 
Kong, China.  
7.11 The representative of Pakistan
 said that, as one of the Members interested in this issue, his 
delegation would like, despite the questions an d answers given by Colombia, to have more 
clarification.  He, therefore, associated his dele gation with the statement and questions by Hong 
Kong, China.  While Colombia said that the indica tive prices were not minimum prices, his delegation 
was especially interested to know the circumstan ces under which indicative prices would differ from 
minimum prices. 
 
7.12 The representative of Singapore  said that his capital was still studying the responses and 
might return to the Colombian delegation with mo re questions.  At the same time, his delegation 
joined other delegations in requesting more clarification.  
7.13 The representative of Colombia
 reiterated that the Customs Valuation Agreement was applied 
rigorously by Colombia.  The transaction value w as the predominant method of valuation and the 
price agreed between the buyer and the seller determined the amount of duty for imports.  She confirmed that 99.9% of imports strictly complie d with the Customs Valuation Agreement - a figure 
which she considered few Members could match.  Colombia did not apply minimum prices but used G/C/M/85 
Page 18  
 
  risk profiles for national security issues which, were  not just in the area of trade.  A Committee 
existed to assess sensitive products and these incl uded textiles and ready-made goods, leather or 
plastic shoes and other products which were internationally recogn ised as susceptible to smuggling, 
under-invoicing or similar procedures.  Colombia, in looking at these profiles, was not just protecting its domestic industry but its nationa l security and interests.  On this, Colombia could make no 
concessions.  If a good with a risk profile was impo rted, the price of the invoice was indicated to 
Customs, which then examined the risk profile a nd checked that the value announced on the invoice 
was the true value.  If Customs had doubts, they  apply the subsequent valuation methods in 
accordance with the Customs Valuati on Agreement.  As Vice-Minister of Trade for three years, she 
participated in this work.  Unfortunately, the pr oducts mentioned as examples often were imported 
into Colombia with questionable values.  Even if there was a problem with the value, the goods were 
cleared through customs in accordance  with the Agreement, and did not remain with Customs.  She 
briefly responded to questions from Indonesia and Malaysia by saying that the measures involved 
national security issues.  Acknowledging that they rai sed questions regarding the impact on trade or  
regarding the Customs Valuation Agreement, she conf irmed that her delegation was  ready to provide 
all the answers that were relevant to the questions posed.  It had to be recognized, however, that the 
agenda item involved issues broader than those of  the WTO involving Colombia's sovereignty and 
insertion in the world economy.  7.14 The representative of Panama
 thanked Colombia for the new information which had not been 
provided earlier and which gave rise to new questions, pa rticularly some from a legal perspective.  He 
reiterated that the problems raised by this issue we re not exclusive to Panama but, rather, affected a 
group of WTO Members which had real trade interests in the Colombian market.  Panama also valued 
the trade, political and legal relations which exis ted with Colombia which was why it was important 
to look closely at this issue.  While his delega tion understood that there was a global aspect to the 
issue, the problems needed to be resolved so that Panama could con tinue its relations with Colombia 
with the certainty which it had had over the last 50 year s.  He noted that this was not the first time this 
issue had been associated with Colombia.  In Ap ril 2000 Colombia requested a reservation from the 
Customs Valuation Committee for maintaining offici ally established minimum values for a certain list 
of products.  This could be found in WTO docum ent G/VAL/W/53/Add.2  At that time, Colombia 
stated that they needed these minimum values for some products including textiles, cotton, and 
footwear.  The Customs Valuation Committee, in WTO document G/VAL/26 of 18 May 2000, 
authorised Colombia to apply those minimum values until 30 April 2003.  Today, Colombia 
confirmed that they were using an indicative pri ce scheme for the same 58 tariff lines for which it had 
sought a minimum value reservation in 2000.  This rai sed questions which needed clarification.  For 
example, his delegation wanted to know more a bout the indicative prices and what were the 
consequences of these prices on the import tariff rate s?  His delegation hoped to find a solution to this 
issue that was mutually acceptable, not only to Pana ma, but to the other countries involved in this 
debate as well.  7.15 The Chairman
 proposed that the Council take note of th e statements made and revert to this 
matter at the next meeting of the Council for Trade in Goods.    
7.16 The Council so agreed
. 
 
VIII.  EUROPEAN COMMUNITIES ENLARGEMENT:  PROCEDURES UNDER 
ARTICLE XXVIII:3 OF GATT 1994  
8.1 The Chairman  drew Members' attention to docum ent G/L/695/Add.3 which concerned the 
accession to the European Union on 1 May 2004 of Cyprus, the Czech Republic, Estonia, Hungary, 
Latvia, Lithuania, Malta, Poland, the Slovak Republic  and Slovenia.  In this communication, the EC 
indicated that it would not assert that Members who had submitted a claim pursuant to Article 
XXIV:6 of GATT 1994 were precluded from withdraw ing substantially equi valent concessions under  G/C/M/85 
 Page 19 
 
 
  Article XXVIII:3 of GATT 1994 because this withdr awal occurred later than six months after the 
EC's withdrawal of concessions, provided that the claiming WTO Member withdrew concessions no 
later than 33 months after the EC's modification of concessions.    8.2 He recalled that the General Council had on f our earlier occasions, on the basis of similar 
communications from the EC, extended the deadline for withdrawal of concessions referred to in 
Article XXVIII:3 of GATT 1994, namely, at its me etings in October 2004,  March, June 2005 and 
December 2005.  Under the provisions of Article XX VIII:3 – and following the most recent extension 
of the deadline as agreed at the December 2005 me eting of the General Council – Members could 
withdraw substantially equivalent concessions no late r than 27 months after the EC's withdrawal and 
modification of concessions, in other words, no later than 1 August 2006.  Furthermore, these 
Members had to provide at least 30 days' notifica tion of their intent to withdraw substantially 
equivalent concessions – in other words, no later than 2 July 2006.  In light of these impending 
deadlines under Article XXVIII:3, and the ongoi ng negotiations under Article XXIV:6, the EC 
proposed that this deadline be extended a further six months for a total of 33 months following the 
EC's modification of concessions, in other words unt il 1 February 2007.  If this extension was agreed, 
Members would have to provide notification of in tention to withdraw substantially equivalent 
concessions by no later than  2 January 2007. 
8.3 The representative of the European Communities
 said that his delegation's proposal was 
motivated by the desire to maintain  an open door so that it could re solve any differences.  He assured 
Members that his delegation had been working ha rd and had completed ne gotiations with a large 
number of countries.  On the other hand, there were still some negotiations that needed to be finalized,  
some involving MFN banana suppliers.  In addition, his delegation needed to preserve the rights of those 
Members which, pending the signing of the agreement, were in need of a procedure of ratification.  
Finally, his delegation needed to preserve the right s pending the finalisation and the implementation of 
the agreements.  While there was considerable progress, for these three reasons, it was important to 
maintain an open door.  His dele gation's proposal was identical, mutatis mutandis,  to the one that was 
proposed in the General Council in December and adopted without an y difficulties.   
 8.4 The representative of Colombia
 requested Members to examine the document circulated by 
her delegation under the WTO symbol WT/GC/106 and G/C/45, of 31 May 2006.  In this document, 
Colombia outlined the points it wished to raise with the EC regarding bananas.  In the first column of 
the document, there was the single tariff regime which was discussed earlier in the context of the EC 
Article XIII waiver request.  The second column of the document dealt with the enlargement of the 
European Communities.  In this ar ea, several banana-producing countri es were affected as a result of 
the addition of 10 new members to the EC.  They expected to receive compensation as did other WTO 
Members for the damage caused to their exports as  a result of the changes brought about by the 
accession of these 10 new members to the European Comm unities.  In this area, Colombia wished to 
preserve its rights and enter a negotiation process.  Colombia did not believe that there was a positive 
or pro-active attitude on the part of the EC to negotiate this compensation with Colombia whose 
banana exports were effected.  Unfortunately, th is was the same product which was present in many 
discussions, but it was a product which Colombia had exported on a quota basis and without tariffs to 
many of the countries currently members of the EC.  As a result of the enlargement, Colombia had to 
start paying tariffs on these exports and this caused injury to Colombia.  Her delegation and the EC 
had quantified this injury and the compensation to be paid.  Her delegation had also quantified how 
much was not paid earlier and how much was paid in  2004/2005, and of course, the impact of the new 
regime on these countries as a result of the enlargement and the adoption of the single tariff regime in January 2006.  Therefore, she considered that th e request to withdraw concessions had a condition 
whereby if her delegation agreed to the EC request for a waiver, it wanted to negotiate with the EC 
and, like the big stakeholders in the WTO, be comp ensated as a result of the enlargement.   The EC 
had concluded agreements with some Members, in cluding the US, Japan, Canada and others, but not 
with the banana producing Members.  She conclude d that her delegation supported the EC proposal G/C/M/85 
Page 20  
 
  but wanted to negotiate compensation independent of  what was being discussed under the single tariff 
regime.  Concessions for damage caused by the EC enlargement was a different matter.    8.5 The representative of Ecuador
 supported Colombia's statement and reiterated he r delegation's 
interest in a process of negotiation with regard to  appropriate compensation.   Her delegation could 
agree with the EC proposed extension. 
 8.6 The representative of Singapore
 agreed with the proposed exte nsion and stated, for the record, 
that his delegation was still in the process of ne gotiating compensatory adjustments with the EC and 
remained committed, as necessary, to negotiate or consult with the EC. 
 
8.7 The Chairman  proposed that the Council take note of  the statements made and of the EC 
communication in document G/L/695/Add.3.  He also proposed that the Council agree on the 
extension of the deadline as set out in the EC's document G/L/695/Add.3.   
8.8 The Council so agreed
. 
 8.9 Before concluding this item, the Chairman dr ew Members' attention to the statement by the 
previous Chair of the General Council regarding th e future consideration of agenda items by the 
General Council and the sectoral Councils.  This was contained in the Annex to the report of the 29 
June 2005 meeting of the General C ouncil, document WT/GC/M/96.   In her statement, the previous 
Chair stated,  
 
"With regard to GATT Article XXVIII matters, for example, I note that the Council for Trade in Goods, operating under the gene ral guidance of the General Council, has 
responsibility for overseeing the functioning of the Multilateral Trade Agreements in 
Annex 1A of the WTO Agreement, including the GATT 1994.  As such, and as a 
body composed of the full membership of  the WTO, the Council for Trade in Goods 
has full legal authority – except as otherwise provided in the WTO Agreement and other relevant agreements , understandings and procedur es – to act on all matters 
relating to those agreements.   
 Consequently, any action by the Coun cil for Trade in Goods, taken in 
accordance with its mandate, would have th e same legal effect as the same action 
taken by the General Council, and would not  need to be approved once again at the 
General Council level.   
 
8.10 Following this statement, the Chairman  proposed proceeding on the basis of the 
understanding that the Council for Trade in Goods di d not need to seek the approval of the General 
Council on the matter of the extension of the  deadlin e for withdrawal of concessions referred to in 
Article XXVIII:3 of GATT 1994.    8.11 The Council so agreed.  IX. ISSUES RELATED TO TRADE IN TEXTILES– SUBMISSION OF TURKEY 
9.1 The Chairman recalled that at the meeting of the Council on 9 May 2006, the discussion on 
this item had focused on the new proposal subm itted by Turkey on 28 April 2006 in document 
G/C/W/549, which contained, in particular, the te rms of reference for a work programme.  At the 
meeting, even though progress had been made , there continued to be  no common understanding 
among the Members on the item raised by Turkey and, in particular, on the work programme 
proposed.  However, Members were ready to conti nue what was characterized as a "constructive  G/C/M/85 
 Page 21 
 
 
  dialogue".  Because of that, and bearing in mind th at many of the comments made on 9 May were of a 
preliminary nature, the Chairman had encouraged th ose Members who were particularly interested in 
the issue to engage in bilateral and plurilateral consultations.  He also proposed to hold open-ended 
consultations on the matter.  He ha d convened such open-ende d consultations on 6 July 2006.  where, 
despite divergent views, Members indicated willingn ess to engage on this subject.  While on the one 
hand several Members were willing to accept the pr oposal for a work programme, on the other hand 
some other Members opposed the proposal, at least at th at point in time.  He suggested, therefore, that 
Members consider any possible opportunity to discuss the issue further amongst themselves.  He also 
recalled that Turkey had clarified at the open-ende d consultations on 8 May that the work programme 
under consideration was the one contai ned in this document G/C/W/549. 
9.2 The representative of Turkey  said that there was no need to repeat the unique importance of 
the textiles and clothing sector for many countries a nd that he did not have any doubt that Turkey’s 
concerns, regarding this vital sector, were shared by most of the countries present, even the ones that 
did not support Turkey’s proposal.  Unfortuna tely, Members had spent more than enough time 
discussing this subject and it was now time to discuss ways to alleviate the current situation by 
looking into the options to facilitate the smooth functi oning of trade in the sect or. In this context, he 
believed that it would be useful to recall the essence of Turkey’s proposal. 
9.3 As Members knew, the proposal foresaw a wo rk programme that would enable Members to 
diagnose the problems faced by the sector through a comprehensive and objective analysis of the 
current situation, by means of a review of the global textiles and clothing production, trade and market circumstances. Having a well-prepared anal ytical framework would then lead to effective 
decision-making by governments regarding the sector, which would render any action based on that as 
being efficient and to the point. Through the work programme, the CTG would also assist governments’ decisions by proposing recommendations and policy options.  In the proposed work 
programme, the WTO would act as a coordinator to examine ways to develop collaborative efforts 
with international organizations, including the Worl d Bank and the International Monetary Fund, to 
direct resources under existing programs.  The main objective of the work programme was to foster a 
broader understanding of the unique needs of the te xtiles and clothing sector and to provide guidance 
for national and multilateral policies and measures to deal with related issues.  Turkey was looking 
forward to the active participation of all Members in the discussions regarding the terms of reference 
of the work programme. 
9.4 The representative of Indonesia
 recalled that this issue had b een discussed in both formal and 
informal meetings in which his delegation, having a great interest in this sector, had made many 
interventions.  The position of his delegation remain ed unchanged: any proposal to treat textiles and 
clothing differently from the other sectors in the WT O could not be accepted.  Therefore, the idea of 
establishing a work programme regarding the textiles and clothing sector under the structure of  the WTO was not acceptable to Indonesia. 
9.5 The representative of China
 fully supported the statement ma de by Indonesia.  The textiles 
sector had been integrated into the general WTO ru les and provisions and he was confused by the fact 
that the delegate of Turkey was now stressing the unique  needs of this sector.  He would be grateful if 
the delegation of Turkey could explain why, after its integration into the general WTO rules, this 
sector was still so exceptional.  For instance, th e need for employment, job creation, exports, 
development, growth, restructuring, existed in many sectors other than textiles and clothing.  
Therefore, he was not convinced of the uniqueness of the issue raised and of the particular need for a 
special work programme for this sector alone.  Th e nature of the request by Turkey fell into the 
category of adjustment, and he questioned the exte nt to which the WTO was empowered to handle the 
search for solutions to this type of adjustment .  His delegation understood that there were other 
discussions going on, such as Aid for Trade.  Howe ver, he was not sure whether this issue of 
adjustment or the solution for this kind of adjust ment issue fell into the function and ability of an G/C/M/85 
Page 22  
 
  organisation like the WTO.  He further stated that  given its systemic concern, China was opposed to 
any work programme targeting specific sectors, in cluding the textiles and clothing sector.  There was 
no change in China’s position on this issue. 
9.6 The representative of India
 stated that his delegation continued to believe that there was no 
adequate justification to treat the textiles and clot hing sector separately and shared the concerns and 
views expressed by the delegations of China and Indonesia. 
9.7 The representative of the United States  said that his delegation continued to believe that 
Members should ensure that any Member may raise an issue of concern regarding implementation of 
any WTO agreement to be considered in the CTG.  Therefore, the United States would be willing to 
work with Turkey and other Members to design a work programme, based on Turkey's proposal, that 
would ensure a productive and c onstructive debate and outcome. 
9.8 The representative of Jordan  said that his delegation supported the establishment of the work 
programme and the statement by Turkey.  His dele gation did not consider that the proposed work 
programme constituted special treatment for this sector .  This was a unique sector, due to the fact that 
it had been newly integrated into the multilateral tradi ng system.  There was, therefore, a need to look 
at the aspects of global textiles and clothing production and trade flows in the WTO. 
9.9 The representative of Egypt  stressed the importance of the textile sector to her economy and 
reiterated that her delega tion supported the establishment of a work programme within the framework 
of the CTG to help developing countries better face the challenges resu lting from liberalizing the 
textiles sector. 
9.10 The representative of Mexico  stated that his delegation recognized that there was indeed a 
problem in trade in textiles and believed that Members should discuss this issue. 
9.11 The representative of Tunisia  reiterated the importance that his country attached to the 
clothing and textiles sector, in particular in term s of employment, income and investment.  Tunisia 
had always expressed its interest in the issue in or der to give special treatment to the textile sector, 
and to examine the incidence of the end of the quota regime on multilateral trade.  His country had 
even presented a proposal on this issue.  His delega tion continued to support Turkey's proposal to set 
out a work programme.  Tunisia was convinced that  this work programme would assist developing 
countries in better evaluating the state of trade in textiles and clothing and in better preparing themselves to face the new challenges from the end of the quota regime. 
9.12 The representative of Morocco
 said that her delegation attached importance to the textile 
issues, and especially to the setting up of sp ecific criteria for the work programme.   
9.13 The representative of the Dominican Republic  supported the proposal made by Turkey to 
create a work programme within the CTG in order to  discuss the specific charac teristics of the textile 
sector, which she believed was of great im portance to many developing countries. 
9.14 The representative of Honduras  stated that this sector was important for job creation which 
contributed to the development of his country.  His delegation was of the view that each Member 
should have an opportunity to state within the WT O what the problems were and subsequently the 
Membership should try to find a solution to tho se problems.  Members should be open to discussing 
the establishment of a work programme that would deal with different options that may exist to 
improve competitivity of textile-producing countries.   
9.15 The representative of El Salvador  repeated that the textile and garment industry was one of 
extreme importance to her country’s economy because it was a source of employment and  G/C/M/85 
 Page 23 
 
 
  development.  It was an issue of specific interest to many other developing countries as well.  In order 
to meet the interests of all Members, she believed th at Members should be able to come to some sort 
of consensus on this issue, including establishing a work programme.  
9.16 The representative of Japan  stated that her country understood the importance of this sector 
for developing countries and essentially supported the idea of conducting a study to improve the 
competitiveness of developing countries in this sector , with the understanding that this proposal did 
not have any link with the sectoral proposal made in the NAMA negotiations. 
9.17 The representative of  Pakistan  fully agreed with Turkey and other Members who had said 
that textiles and clothing were important  for many developing countries.  His country had also 
struggled for more than 40 years so that this important sector should be given the same treatment 
given to every other sector of industry and trade.  All Members were convinced that liberalization as 
well as the MFN principle were the core objectives and principles for international trade.  His 
suggestion was that this important sector of interna tional trade be subjected to the same principles 
applied to all commodities.  For over 40 years, trade in this sector had not been conducted under 
market economy conditions, therefore the data were di storted.  Data for trade subjected to market 
conditions were only available fo r 18 months, and therefore any conclusion or result based on this 
limited period was going to be erroneous.  His de legation was of the view that there was no 
justification for any study on trade in textiles.  He was not sure what the way forward was, as 
Members had been discussing this proposal for more  than a year.  However, it was becoming clearer 
and clearer that there was no likelihood that there w ould be any consensus to go forward with a work 
programme.  His delegation suggested that this item be deleted from the agenda for the next meeting. 
9.18 The representative of Korea  was of the view that the Turkis h proposal for a work programme 
should be dealt with favourably and constructively in  the CTG.  Nobody could deny that the textile 
and clothing sector was in a special situation because it had been liberalised just one and a half years 
before, and the data indicated large movements in trade flows.  There was a need to for a work 
programme to take account the genui ne concerns of developing countries.  There was no conflict with 
the sectoral approach, since in th e present case Members were considering particular products but 
were not aiming at a special or different trading system for the sector.  The CTG could deal with this issue, because it covered all goods, including some sp ecial commodity issues.  It was, therefore, a 
reasonable task for the CTG to consid er a special study for this sector. 
9.19 The representative of Guatemala
 recalled that this issue was fundamental for her delegation 
and supported discussing the Turkish proposal in the CT G.  Members should be open to this idea as it 
would support developing countries. 
9.20 The representative of Nicaragua  reiterated the importance of the textiles sector for her country 
since, from a socio-economic point of view, it w as a source of employment.  Thus, her delegation 
continued to believe that the textile sect or deserved to be debated in the CTG. 
9.21 The representative of Kenya  stated that the textile sector was important for his country’s 
economy.  He believed that the proposal made by Turkey should be looked at properly and 
favourably.  This sector had only just recently been integrated into the multilateral trading system and 
there were many issues related to adjustment that  Members should examine.  If Members agreed to 
undertake this study, those countries which had con cerns could bring these issues into the terms of 
reference of that study. 
9.22 The representative of Turkey  stated that if the interventions  made by Members from the world 
over could not convince the Membership of the specia l nature of the textiles and clothing sector, he 
did not know what he could say that would do so .  Having heard statements by both developed and 
developing Members, it was obvious that there was strong support for a work programme which could G/C/M/85 
Page 24  
 
  deal with production trends and the international tr ade conditions of this sector, using recent data, and 
make objective analyses of this sector after the 40 years of different treatment.  He would not go 
through the details of why this sector was unique.  As  to what the WTO Secretariat could bring to the 
discussions, he observed that there had been more than enough examples to show how the 
collaboration between the Members and the other inte rnational institutions could be realized.  As 
Pakistan had said, Turkey was asking for nothing extra nor special, only a work programme.  Eighteen 
months of data would, in his view, be sufficient to  show the trends and the accelerating changes in the 
textiles and clothing sector.  After having heard all the interventions made at the present meeting, it would be unfair to delete this item from the agenda. 
9.23 The Chairman
 concluded that, from the interventi ons made, there remained no common 
understanding among the Members on the Turkey's proposal in G/C/W/549, or on the terms of 
reference of the work programme contained therein.   At the same time Members remained willing to 
continue to discuss this item.  Under these circum stances, he proposed that the Council take note of 
the statements made, and revert to this item at it s next meeting.  He also proposed holding further 
consultations to continue the discussion on the issue as proposed by Turkey in C/G/W/549.  At the 
next CTG meeting he would report on these consultati ons.  He also encouraged Members to seize any 
opportunity, in whatever format, to exchange views so as to try to dispel any possible misunderstandings that may remain. 
9.24 The Council so agreed
. 
9.25 The representative of Malaysia , asked the Chairman to clarif y to which documents he had 
referred, G/C/W/549 or G/C/W/522, as containing the proposal from Turkey?  
9.26 The Chairman  responded that his understanding was that , at the last Council meeting and in 
the last informal consultations, Turkey had clar ified that there was only one document before the 
Council for consideration, document G/C/W/549.  He asked the delegation of Turkey to confirm this. 
9.27 The representative of Turkey  said that if the design of the ag enda had been the only problem, 
the issue would already have been resolved.  The roots of the proposal for a work programme were 
summarized in document G/C/W/522.  However, Turkey had circulated document G/C/W/549, taking 
into account the considerations of other Members and underlining the essential proposal of Turkey.  
His delegation was ready to consult with all interest ed parties in this regard and to try to better 
understand how the elimination of G/C/W/ 522 would help move matters forward. 
9.28 The representative of Malaysia  confirmed that Turkey's explanation answered his question. 
 X. OTHER BUSINESS 
A. K
IMBERLEY PROCESS CERTIFICAT ION SCHEME FOR ROUGH DIAMONDS  
10.1  The representative of the United States  recalled that the CTG had approved a waiver for the 
Kimberley process (WT/L/518) which would expire at the end of 2006.  The Kimberley process was generally viewed as having been successful and, sinc e it was an ongoing process, there was a need to 
renew this waiver.  Since the CTG had only one mee ting scheduled in the fall, his delegation wanted 
to introduce this topic so that delegates were aware of the issue.  His delegation planned to address the 
matter in the fall with a view towards approving an extension of the waiver at the CTG's November 
2006 meeting.  10.2 The Kimberley process dealt with the issue of conflict diamonds.  It involved exporters as 
well as importers of diamonds and was generally r ecognised to have played a positive role in 
diminishing the flow of conflict diamonds into the international market and the consequent resources 
that provided a source of instability and conflict in Africa.  His delegation envisaged circulating to  G/C/M/85 
 Page 25 
 
 
  Members a draft waiver decision in September and,  under the Chair's auspices, having an open-ended 
informal meeting where questions and concerns could be raised, as well as any proposed modifications to the text.  This would start a pr ocess leading towards the November meeting of the 
CTG, where his delegation hoped the draft waiver could be approved by the CTG and forwarded to 
the General Council.  His delegation hoped that the ma tter would not be controve rsial.  He raised it 
now to help delegations prepare given that there was only one meeting of the CTG scheduled before 
the General Council meeting scheduled in December.  10.3 The Chairman
 proposed that the Council take note of the statement made. 
 
10.4 The Council so agreed . 
 B. D
ATE OF THE NEXT MEETING  
10.5 The Chairman  informed the Council that the next meeting of the Council for Trade in Goods 
was scheduled to take place on Tuesday, 7 November 2006.  The agenda would close on Friday, 
27 October 2006.   
 10.6 The meeting was adjourned.  
__________