WORLD TRADE ORGANIZATION  
ORGANISATION MONDIALE DU COMMERCE  
ORGANIZACIÓN MUNDIAL DEL COMERCIO  WT/TPR/M/136/Add.1 
18 January 2005 
 (05-0199) 
Trade Policy Review Body 
25 and 27 October 2004 Original:  English/ 
                 anglais/ 
                 inglés 
  
TRADE POLICY REVIEW 
THE EUROPEAN COMMUNITIES 
Minutes of Meeting  
Addendum  
Chairperson:  H.E. Mrs. Puangrat Asavapisit (Thailand) 
 This document contains the advance writte n questions, and replies provided by the 
European Communities.1 
__________________________________________________________________________________ 
 
Organe d'examen des politiques commerciales 
25 et 27 octobre 2004  
EXAMEN DES POLITIQUES COMMERCIALES 
COMMUNAUTÉS EUROPÉENNES 
Compte rendu de la réunion
 
Addendum  
Présidente:  S.E.  Mme Puangrat Asavapisit (Thaïlande)  
 Le présent document contient les questions écrites communiquées à l'avance et les réponses 
fournies par les Communautés européennes.1 
__________________________________________________________________________________ 
 
Órgano de Examen de las Políticas Comerciales 
25 y 27 de octubre de 2004  
EXAMEN DE LAS POLÍTICAS COMERCIALES 
COMUNIDADES EUROPEAS 
Acta de la reunión
 
Addendum  
Presidente:  Excma. Sra Puangrat Asavapisit (Tailandia) 
 En el presente documento figuran las pre guntas presentadas anticipadamente por escrito, 
junto con las respuestas facilitadas por las Comunidades Europeas.1 
 
                                                      
1 In English only./En anglais seulement./En inglés solamente.   WT/TPR/M/136/Add.1 
Page 3 
 
 
 ADVANCE WRITTEN QUESTIONS 
AND REPLIES  
  QUESTIONS FROM SWITZERLAND 
 
Q1. To paragraph 13
 on exchange rate developments: Current account imbalances among the 
main industrialised economies widened in the first half of this year. After a period when exchange 
rates had been adjusting in a manner that reflected existing international imbalances, they have been relatively stable since early this year in both bilateral and real effective terms. What is your 
assessment of the risk of imminent sudden ex change rate adjustments? How do you assess the 
sustainability of the prevailing external positio ns in the main industrialised countries? 
 
A. The US current account deficit has conti nued to increase, while many Asian economies 
continue to post large current account surpluses. The EU15 has a surplus on its current account, but a 
very modest one. This surplus has not evolved mu ch over the last few years. The growing global 
imbalances, namely the US deficit with a counterpart  in the Asian surpluses, are a cause for concern, 
as there is great uncertainty regarding the manner and speed of the eventual adju stment. So far, the US 
has had no problem in financing the deficit. Strong underlying productivity growth and a low level of 
inflation provide a good basis for continued solid gr owth. To maintain investor confidence, however, 
it is essential that public finances, which show a ge neral government deficit of above 4% of GDP this 
year, are brought back to a more balanced stance.  An abrupt adjustment of the US current account, 
involving a sharp depreciation of the US dollar,  could be detrimental to global growth 
  
Q2. To paragraph 15
 on the sustainability of public finances: Regarding the consequences of 
aging for EU Member States, the report states that  the shrinking working age population and the 
increasing old-age dependency ratio have "been th reatening the social cohesion and public 
finances of all member States". Among other meas ures, the report mentions that pension systems 
are in need of reform and the pace of debt reductio n needs to be quickenend in all member States. 
These statements stand in contrast to scenario s presented by DG EcFin. While challenges still 
remain, the latest DG EcFin scenarios describe public  finances in 6 or 7 EU countries as generally 
sustainable, due to low debt levels and/or past pe nsion reforms. We should like to have the opinion 
of the EC delegation on this point.  
A. The situation regarding the sustainability of pub lic finances in the EU varies widely across the 
Member States. Broad Economic Policy Guidelines for 2003-2005 included the following recommendations to improve sustainability: i) ensu re a further decline in government debt ratio 
(Belgium, Greece, Italy and Poland) and ii) design, introduce and effectively implement reforms of 
pension systems (Belgium, Germany, Greece, Spain, France, Italy, Austria, Portugal; Czech Republic, 
Poland, Slovakia).
1 
 The compliance with the BEPGs is annuall y assessed with the Implementation report. In 
2004, the report found that the sustainability of publ ic finances in view of population ageing is far 
from secured in Belgium, Germany, Greece,  Spain, France, Italy and Portugal.2  
 It was found that a stronger commitment to redu ce debt ratios is needed in several Member 
States, in particular where the debt ratio is still above 60% of GDP.   As far as pension reforms are concerned, the report notes that significant progress has been 
made so-far in several Member St ates, in particular in France and Austria, which adopted major 
                                                     
 
 1 For the new Member States, the guidelines were included in the 2004 BEPGs update.  
 2 The next BEPG Implementation report will be issued in the beginning of 2005.and will also include 
the new Member States. WT/TPR/M/136/Add.1 
Page 4  
 
reforms in 2003. Germany and Portugal introduced sev eral parametric changes. Greece put in place 
the operational reorganisation of social security funds enacted in 2002 and the Italian Government 
tabled a pension reform proposal.   The overall results from the 2004 long-term sustainability assessment of the stability and 
convergence programmes
3 show that risks to long-term sustaina bility are still present in nine countries 
of which in five (Belgium, Greece, Italy, Germany and France) the difficulties are more serious, 
although the sources of risks are different for each of them, while another four (Portugal, Spain, 
Netherlands and the UK) face some risks due to th e medium-term budgetary development or, as is the 
case for Spain and Portugal, due to the uncertain ties over the long term projections of pension 
expenditures. Finally, six countries (Ireland, Denm ark, Finland, Austria, Luxembourg and Sweden) 
seem relatively well placed to meet the cost of an ageing society4. 
 
Q3. To paragraph 46 : Is Switzerland right in the assump tion that the surveillance measures 
applied by the EU to certain iron and steel im ports will definitely cease to be applied on 
1 April 2005? 
 
A. The prior surveillance regulation on the imports  of certain iron and steel products originating 
in third countries will expire on 31 March 2005. 
 
Q4. To paragraph 90 : Implementation of the EC acquis standards with respect to SPS 
agreement by the ten new member states: Could the EC give some further information on the 
implementation progress?  
A. All ten new Member States of the EU were  required to bring their SPS measures into 
compliance with the harmonized body of legislation in place in the EU by 1 May 2004. This includes 
their obligations and reporting measures in relati on to the SPS Agreement. The European Commission 
has taken the necessary measures to ensure that th e new Member States fully respect these obligations 
under the SPS Agreement within the structure of the Community of 25 Member States. There have 
been no reported problems in this respect.  
Q5. At EC level, dissatisfied tenderers can lodge a complaint relating to a contract award 
procedure covered by the EC directives with the Commission services. Does the Commission 
services know how many % dissatisfied tenderers who challenged contract award procedures before 
national review bodies lodge a complain t with the Commission services? 
 
A. The Commission services estimate that the total number of national review procedures 
relating to the award of public contracts was 2715 in  2002. In the same year, the Commission handled 
403 complaints. Since the Commission does not regist er whether complainants have challenged the 
award of a public contract before national review bodies, it is not possible to provide an estimate of 
the percentage of complainants that have u sed national remedies before complaining to the 
Commission 
 
Q6. Can the Commission services comment on th e actions which will be taken under the 
Internal Market Strategy (2003-06) to increa se transparency in government procurement? 
 
                                                     
 
 3 The full assessment of long term sustainability fo r the new Member States will be done on the basis 
of the 2004 convergence programmes to be presented before the end of 2004.  
4 For a detailed assessment see « Public Finance in EMU-2004 » http://europa.eu.int/comm/ 
economy_finance/publications/publicfinance_en.htm and the Commission assessment and Council Opinions on 
the Stability or Convergence Progr amme of each Member State. WT/TPR/M/136/Add.1 
Page 5 
 
 
 A. The concrete actions to be taken under the Internal Market Strategy in the field of public 
procurement are set out in the annex to the Communication from the Commission on the Internal 
Market Strategy 2003-2006 (COM(2003) 238 final of 7.5.2003). The Commission regularly reports on the implementation of the Internal Market St rategy (cf. the Report on the implementation of 
Internal Market Strategy (2003-2006) (COM(2004) 22  final of 21.1.2004). With respect to the period 
after the completion of that report, the Commissi on can mention the following actions to increase 
transparency in the field of government procurement: 
• On 31 March 2004, the legislative package in th e field of public procurement was adopted. 
The legislative package consists of Directive 2004/ 17/EC of the European Parliament and of the 
Council of 31 March 2004 coordinating the procuremen t procedures of entities operating in the water, 
energy, transport and postal services sectors (OJ L 134 of 30.04.2004, p. 1) and Directive 2004/18/EC 
of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures 
for the award of public works contracts, public supply contracts and public service contracts (OJ L 
134 of 30.04.2004, p. 114). The EU Member States are required to implement these directives into 
national law by 31 January 2006 at the latest. 
• On 30 April 2004, the Commission presented a green paper on public-pri vate partnerships 
and Community law on public contracts and concessions . The aim of this paper is to launch a debate 
on the application of Community law on public contracts and concessions to the public-private 
partnership phenomenon. 
• On 23 September 2004, the Commission adopted  a green paper on defence procurement 
(COM(2004)608 final) to develop a debate on the gr adual creation of a European defence equipment 
market.  
Work on the other procurement-related topics incl uded in the Internal Market Strategy, such 
as the review of the procurement remedies directiv es and the action plan on e-procurement, is in 
progress (on 13 September 2004, the Commission launc hed, as part of the process of drawing up the 
action plan on e-procurement, an on-line cons ultation aimed at identifying opportunities and 
challenges in electronic public procurement) 
 
QUESTIONS FROM CANADA 
 
REPORT BY THE SECRETARIAT
 
 Part II. Trade Regime, (4) Trade Regulation s and Business Environment, Paragraph 21: 
 
Q1. Could the EC provide Canada with an update on the Statute for a European Company, due 
to have entered into force on October 8, 2004?  
 
A. The European Company Statute was planned to become available for use on 8 October 2004. A related Directive concerning worker involvement in  European Companies entered into force at the 
same time. However, only six of the 28 EU and EEA Member States have implemented the 
regulations at national level necessary to allow Eu ropean Companies to be set up on their territory: 
Belgium, Austria, Denmark, Sweden, Finland and Iceland. Until the rest do so, many companies operating in more than one Member State will be denied the option of being established as a single 
company under Community law and thus of being able  to operate throughout the EU with one set of 
rules and a unified management and reporting system. Therefore the Commission will use the 
instruments it has at it disposal to rectify the situation. 
 
Part II. Trade Regime, (4) Trade Regulation s and Business Environment, Paragraph 22: 
 Q2. Could the EC provide us with an update on the concrete steps and measures that have been 
taken so far to implement and follow up on the May 2003 action plan on “Modernising Company WT/TPR/M/136/Add.1 
Page 6  
 
Law and Enhancing Corporate Governance in the EC”, in particular with respect to cross-border 
issues such as voting rights?  
 
A. It is now eighteen months since the Company Law and Corporate Governance Action Plan was adopted by the Commission. Today, the implem entation of this ambiti ous programme is well 
under way. The measures recently undertaken or unde r way can be broadly grouped in 3 categories: 
 Facilitation of  cross-border mobility  and restructuring of undertakings
 
 In November 2003 the Commission tabled a re vised proposal for a directive on cross-border 
mergers. The proposal is now under discussion in Counc il and Parliament, and it is expected that an 
agreement on the social aspects of cross-border merger s could lead to final adoption of this instrument 
in a not too distant future.  Such a directive would be complimentary to the European Company 
statute in that it would offer all forms of limited lia bility companies the possib ility to achieve a cross-
border merger, without having to use the European Company Statute.   In the coming weeks (November 2004), the Commission should table a proposal for a directive on the cross-border transfer of the seat. Such a directive would again be complementary to 
the European Company statute, in that it would o ffer all other forms of limited liability companies the 
possibility to achieve a cross-border transfer of headquarters.   Promotion of sound corporate governance practices
 
 The ”harvest” of the month of October (2004) will include: 
• Adoption by the Commission of Recommendation aiming at promoting the role of 
(independent) non-executive or supervisory directors, in  particular through the definition of principles 
(and related guidance) applicable to the crea tion, composition and role of the nomination, 
remuneration and audit co mmittees – 6 October 2004; 
• Adoption by the Commission of Recommendation on fostering an appropriate regime for 
directors’ remuneration that will give shareholde rs more transparency and influence – 6 October 
2004;  
• Creation of the European Corporate Governance Forum to examine best practices in Member 
States with a view to enhancing the converg ence of national corporate governance codes and 
providing advice to the Commission – 18 October 2004. The Forum comprises fifteen senior experts 
from various professional backgrounds (issuers, invest ors, academics, regulators, auditors, etc.) whose 
experience and knowledge of corporate governance are widely recognized at European level. 
• Adoption of a Commission Proposal for amendments to the accounting directives with a view 
to confirm at EU level the collective responsibility of directors for financial statements, to introduce 
an Annual Corporate Governance Statement for liste d companies, covering the key elements of a 
company's corporate governance structures and practi ces, and to increase transparency in intra-group 
and related party transactions as well as in the use of Special Purpose Vehicles and offshore centres - 
end October 2004.  Furthermore, the Commission started preparati on work with a view to adopt the Proposal for 
a directive on shareholders rights by the end of 2005. In September it launc hed a public consultation 
on this subject, namely, the right to ask questions, the right to table resolutions, the right to vote in 
absentia (including in the cross-border context) and the right to participate in general meetings via 
electronic means.  
 Capital maintenance and alteration
 
 At the end of October 2004 the Commission w ill table a Proposal modernising the Directive 
on capital maintenance and alteration with a view to reduce the cost and procedural burden of certain 
measures taken by public limited liability co mpanies, their shareholders or creditors. 
For more information, please consult the Eu ropa-website:  http ://europa.eu.int/comm/ 
internal_market/company/index_en.htm.  WT/TPR/M/136/Add.1 
Page 7 
 
 
 Part III. Trade Policies and Practices by Measur es: (2) Measures Directly Affecting Imports, 
Paragraph 16:  Q3. The Report by the Secretariat mentions that for the purpose of the tariff analysis, ad valorem equivalents (“AVEs”) of non-ad valorem duti es were used when available and that data on 
the AVEs were supplied by the Commission of the European Communities (“Commission”) to the 
Secretariat for the year 2002.  Canada notes that  such AVEs for 2002 are not available on the 
European Communities (“EC”) schedule through the WTO Integrated Data Base.  Will the Commission be making these AVEs available?  If so, when will these AVEs be available? 
 
A. The European Community decided in 2002 to suspend its communication to IDB on AVEs 
due to the fact that there are many different methods of conversion of specific duties into AVEs 
giving very different results. Before 2002, a disclaimer was already included in the EC 
communications on AVEs to IDB to underline the lack  of reliability of such calculation. Moreover, 
AVE calculation methodology is an important issue that WTO Members are currently negotiating on. 
To communicate AVEs ignoring the method of c onversion which will be agreed under the DDA 
should be not serious.  
Q4. Paragraph 16 of the Report by the Secretariat notes that the “elimination of specific 
components of compound duties as well as the use of 2002 AVEs… is likely to provide a downward 
bias…”. Given the variability in annual AVE es timates, could the Commission provide three year 
averages of AVE estimates in order to impr ove the accuracy of the tariff analysis? 
 
A. See reply under point 3 above. 
 
Part III. Trade Policies and Practices by Measur es: (2) Measures Directly Affecting Imports, 
Paragraph 17: 
 Q5. Paragraph 17 of the Report by the Secretar iat mentions the use of “average applied MFN 
tariff rate”.  Could the Commission please elaborate on which, if any, agricultural product tariffs 
are m.f.n. applied at less than the m.f.n. bound rates?  
A. The EC does not apply m.f.n applied rates for ag ricultural products at less than the m.f.n rate.  
 
Part III. Trade Policies and Practices by Measu res, (2) Measures Directly Affecting Imports, 
(viii) Contigency trade measures, Paragraph 64:  
Q6. Paragraph 64 states, inter alia, that among the conditions that must be satisfied for the 
imposition of a countervailing measure, are: (i) a material injury to Community industry must 
exist; and (ii) the interest of the Community must  be taken into account.  Clarification would be 
appreciated on the following points:    a. Where material injury to a Community industry is found to exist, what is the causal link 
standard applied by the EC investigating authorities between the subsidization and such material 
injury?  
 
A: When subsidised imports have been found, it is examined whether or not these have had a 
significant negative impact on the selling prices a nd/or sales volumes of the Community industry. If 
such significant negative impact is found, it is then examined whether or not this impact has in turn 
had a negative effect on the situation of the Community  industry i.e. on its profits, sales, etc. If such 
negative effect on the situation of the Community industry is established (i.e. material injury is WT/TPR/M/136/Add.1 
Page 8  
 
established), known factors other than the subsidised imports are examined to ensure that any injury 
caused by these is not attributed to the subsidised imports. If other factors are found to have contributed to the injury, the causal link between th e subsidised imports and the material injury can 
only be considered as broken where it is established that  the injury attributed to the subsidised imports 
is not material.   b. Does EC law allow for regio nal industry determinations pursuant to Article 16.2 of the 
Agreement on Subsidies and Countervailing Measures?  
A: Yes (Article 9(1)(b) of Council Regulation (EC) No 2026/97). 
 c. In terms of process, is the “Community Int erest” determination made subsequent to, or in 
parallel with, the injury determination?    
A: The Community interest determination is set  out in EC Regulation imposing a duty after the 
injury determination. However, the investigation relating to Community interest is carries out in 
parallel to the dumping and injury investigation.   
d. Apart from the parties to the investigation,  does the “Community Interest” process afford 
other stakeholders (e.g., downstream users, consumer groups, etc.) an opportunity to be heard via 
written and/or oral submissions?  
 
 (The above questions in respect of countervailing measures are equally relevant to anti-dumping measures.)  
A: The Basic Regulations specify the procedural  aspects of the Community interest test, for 
instance the fact that any conclusi ons must be based on substantiated submissions made by interested 
parties and that these parties have extensive proce dural rights and obligations . Finally, the Community 
interest provisions also set out a non exhaustive list of  interested parties which are directly concerned 
by the product under investigation. The parties men tioned are the complainants, importers, traders and 
their representative associations, representative us ers and representative consumer organisations. 
Traditionnally, we also consider the suppliers as a pa rty for the Community interest test. Such parties 
may make written submissions a nd apply to be heard orally. 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (ix) 
Technical barriers to trade, Paragraphs 66-77:  
 [Comment
: The trade policy review process would be aided by an overview of the EC 
policy on voluntary standardization, including the role of standardization in supporting regulation for the internal market, both with respect to developmen t of specifications for regulated products and 
their associated conformity ass essment procedures. The overview should also address the role of the 
regional standards bodies in supporting the essen tial requirements (the European Committee for 
Standardization (“CEN”), etc.), the different ro les of government and voluntary accreditation in 
conformity assessment activities, and role of European Cooperation for Accreditation (“EA”) in 
facilitating recognition of conformity assessment be tween member States. As the EC approach to 
standardization system is relatively unique in order to support a common market, this information will 
be most useful to third country policy makers, as well as exporters.] 
 WT/TPR/M/136/Add.1 
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 Part III. Trade Policies and Practices by Measu res, (2) Measures Directly Affecting Imports, 
(ix) Technical barriers to trade, Paragraph 66:  Q7. Does the EC intend to develop a central databa se of Member States regulations, as a lack of 
sufficient transparency of different national regulat ory regimes places a particular burden on third 
countries?  
 
A. The EC would like to recall that in 1999 it submitted to the WTO information concerning the 
measures taken in implementing the Agreement. The relevant document is G/ TBT/2/Add.12/Rev.2 of 
5 November 1999.  
 According to this information the overa ll responsibility for the implementation and 
administration of the TBT Agreement lies with the Commission of the European Communities. A 
TBT Enquiry Point has been set up in the European Commission. Enquiry Points have also been set 
up in EU Member States.   In the harmonized area covered by Community  legislation, the EC TBT Enquiry Point is 
responsible for giving information about technical  regulations, standards and conformity assessment 
procedures under Article 10. The EC TBT Enquiry Point is also responsible for the notification of the 
relevant Community technical regulations and c onformity assessment procedures according to the 
provisions of Articles 2.9 and 5.7 of the same Agreement.  In the non-harmonized area covered only by na tional legislation, EU Member States Enquiry 
Points provide information under Ar ticle 10. Member States’ authoriti es also directly notify proposed 
regulations to the WTO secretariat. As local  government and non-governmental bodies fall under the 
regulatory competence of the Member State (MS) on whose territory they are situated, obligations 
provided for by the Agreement in respect of these bodies are carried out by the Member States, including notifications under Articles 3.2 and 7.2 where applicable.  The information given by the National Enquiry Points of its Member States provides 
sufficient, clear and precise information on their national regulatory regimes. 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (ix) 
Technical barriers to trade, paragraph 67:  Q8. What is the actual operational significance of footnote 96? 
 A. Even when a Community act aiming at harmoni sing MS legislation is adopted, it is possible 
that certain issues are left to the MS' regulatory co mpetence. In this case, the principle of mutual 
recognition applies. This implies that MS shall accept products originating from other MS of the 
European Community provided that they are capable of ensuring a level of protection equivalent to 
that which the national regulation seeks to provide. 
 
Q9. Are there plans to transpose products co vered under the old-approach directives to new-
approach directives since the specific technical requi rements of the former ar e more likely to create 
barriers to trade than the more objective based requirem ents of the latter?  To what extent is old-
approach products based on international standards and the use of performance-based rather than 
design criteria?   
A. The European Commission is currently review ing the horizontal elements of New Approach 
directives. In the context of this review it will be  examined to what extent it is appropriate and 
opportune to extend the application of this legisla tive technique to sectors currently covered by the 
traditional approach. “Old approach” directives ar e more geared towards harmonisation of national 
legislation and are therefore not always based on inte rnational standards. They operate more on design 
criteria and less on performance based criteria. WT/TPR/M/136/Add.1 
Page 10  
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (ix) 
Technical barriers to trade, Paragraph 69:  Q10. Could the EC explain the procedure for de monstrating that standards other than those 
developed by CEN, the European Committee for El ectrotechnical Standardization and ETSI meet 
the essential requirements of EU Directives. For example, would the use of an international 
standard suffice, including standards developed by United States-based SDOs? 
 
A. In Europe, products must meet the essential requirements which are defined by legislation. 
Voluntary harmonised European standards are one means to provide evidence for compliance with 
legislation. In this case compliance with the releva nt legislation is presumed. Nevertheless, producers 
are free to choose other technical solutions and to make use of standards other than European 
standards. In this case however, they must demonstr ate that the use of other standards does meet the 
requirements of the relevant legislation as well. 
 
Part III. Trade Policies and Practices by Measure,  (2) Measure Directly Affecting Imports, (ix) 
Technical barriers to trade, Paragraph 70:  Q11. We are confused by the use of the term “global”, which is used in reference to the EC’s 
approach for certification and testing, as we underst and the EC approach to be almost entirely EC-
based. Can the EC please explain the meaning behind its use of this word?  
 
A. This question goes back to the origin of th e “New” Approach, which was first agreed in 1985 
(Council Resolution of 7 May 1985). At this time the Council requested the Commission to come up with further proposals that would complement and co mplete the “New Approach” concept. This later 
became known as the Global Approach, simply becau se it was intended to complete the overall policy 
(covering issues such as certification, inspection and testing). The use of the word “global” was not 
intended in a “world-wide” sense.  
Q12. Are any of the bodies designated by EC me mber States for the purpose of conformity 
assessment of industrial products fo reign bodies based outside the EC? 
 A. In the New Approach field, Notified Bodi es must be established on the territory of the 
notifying Member State. The bodies may however have activities or personnel outside the Member State, or even outside the Community.  
Q7. What mechanisms does the Commission u se to monitor and assess the performance of 
member States with respect to mark et surveillance associated with u se of Supplier’s Declaration of 
Conformity?  Can the EC explain any variations that exist with respect to market surveillance 
methods, procedures and penalties in member States?  What procedures are in place to deal with 
non-conforming products?  Are member States requi red to report cases of non-conformance to the 
Commission?  Is this information publicly available?  
 A. Enforcement of the Community legislation is an obligation of the Member States. In fact, 
Article 10 of the Treaty requires Member States to ta ke all appropriate measures to ensure fulfilment 
of their obligations. Market surveillance is an essen tial tool for enforcing the community legislation, 
in particular, by taking measures to check that produ cts meet requirements of the applicable directives 
and, in particular, relevant conformity assessmen t procedures including the Supplier’s Declaration of 
conformity. The Commission has the obligation to  check that Member States have correctly 
implemented the community legislation in their natio nal law. Within the framework of the revision of 
the new approach, the Commission is examining th e means of ensuring greater coordination of 
Member States activities in this field and thus to an exchange of practices and greater transparency. It WT/TPR/M/136/Add.1 
Page 11 
 
 
 is not foreseen to put into place a monitoring system in general, but rather a new information system 
between the Member State and the Commission for the operation of the safeguard clause.  Market surveillance has the objectives of bri nging non compliant products into compliance, 
and of ensuring that sanctions are applied when n ecessary. Member States are obliged to organise it in 
a way that this surveillance is effective and suffi ciently extensive to discover non-compliant products. 
Market surveillance is under the responsibility of the Member State. Insofar as Community sectoral 
Directives are concerned, currently, each Member  Sate can decide upon to market surveillance 
infrastructure and penalties. The Commission under the review of the New Approach legislation has 
the intention to present proposals on this subject.  The relevant Community legislation foresee s a safeguard mechanism in accordance with 
Article 95, paragraph 10 of the Treaty. The pro cedure to be followed depends on whether the non 
compliance is considered substantial or non substantial.  Where a substantial instance of non compliance is found, the competent authority is obliged 
to take appropriate provisional measures and, where appropriate, restrict or prohibit the placing on the market or withdraw the product from the market. 
 Member States are obliged to inform the Commission and the other Member States of cases 
on non-conformance.  All the decisions taken by the Commission on non compliant products are notified to the parties concerned. The Commission does not make this information public, but Member States may 
do so.  Q8. At the TBT Committee special session on conf ormity assessment on June 29, 2004, the EC 
delegation noted that tests are not a necessary req uirement of the technical file which the supplier 
must maintain in support of the declaration. Thi s would seem to be not in accordance with FDIS 
ISO/IEC 17050 Part 2, which specifies that results (i .e., audit report, test report) are required along 
with evaluation of the results. Could the EC explain this apparent discrepancy?  
 
A. The EC’s stated position does not support this  view. We can only suppose that there was a 
misunderstanding or a problem of interpretation. The technical file does require the inclusion of test 
results, although the precise contents of the technical file are laid down in each Directive.  
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (ix) 
Technical barriers to trade, Paragraph 71: 
 Q9. What plans does the Commission have to follow-up on Communication 2003/C282/02?  
 
A. The Commission intends to address the issues  raised in the Resolution within a single 
horizontal legislative instrument which will group  together, and review, the various horizontal 
elements of the New Approach and complement the se by the development of a clearer framework for 
accreditation and market surveillance in the Europ ean Union. It is foreseen, in particular,  
• To consolidate the requirements for notified bodies and to establish reinforced administrative 
cooperation between the various bodies involve d in the process leading to notification; 
• To strengthen the status and role of accreditation as the preferred means of assessing the 
technical competence of notified bodies; 
• To update the conformity assessment procedures in the light of the revised ISO 9000 series of 
standards; 
• To clarify and promote the meaning of the CE marking and to consider how its protection can 
be ensured further; 
• To define common objectives for market surve illance and develop a legal framework for the 
relevant administrative cooperation; WT/TPR/M/136/Add.1 
Page 12  
 
• To increase the efficiency of the Community co ntrol of national measures restricting the free 
movement of products found to be unsafe. 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (ix) 
Technical barriers to trade, Paragraph 73: 
 
Q10. We note the significantly lower number of notifications by member States, which have been 
dropping each year since 1997, and ask the EC to off er an explanation.  What are the measures of 
control to ensure that notifications are made? Wh at are the consequences of a non-notification? 
 
A. The figures for 2004 shows that the number of EC  Member States' notifi cations is rising again 
and this is the result of the individual efforts of  the national authorities combined with those of the 
EC-TBT Enquiry Point to make sure that the obligations arising from the TBT Agreement are 
fulfilled. Furthermore, the fact that the number of the notifications was lower in the recent years may 
reflect the fact that the regulatory activities of the Member States was limited in comparison with their 
activities in previous years. As mentioned before , the EC submitted in 1999 to the WTO information 
concerning the measures taken in implementing the Agreement. The relevant document is 
G/TBT/2/Add.12/Rev.2 of 5 November 1999. In the non-harmonized area at EU level covered only 
by national legislation, EU Member States authorities directly notify proposed regulations to the WTO secretariat. The EC systematically reminds to the national Enquiry Points of the need to make 
sure that measures falling within the scope of the Agreement are notified. The absence of notification 
has the same consequences as the absence of notification of any measure by a Member of the 
Agreement. 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (ix) 
Technical Barriers to Trade, Paragraph 75:  
Q11. Has the EC considered alternative approaches to mutual recognition agreements 
(“MRAs”) to allow non-EU third party conformity  assessment bodies to take part in EC conformity 
assessment activities? If yes, please elaborate on th e process. If not, please provide the reasons why 
alternative approaches have not been adopted. 
 
A. The Commission has considered alternative approaches to Mutual Recognition Agreements. 
The Commission’s policy can be found in two work ing documents. The first is Commission Staff 
Working Paper produced jointly by the Directorates  General Trade and for Enterprise: 'Implementing 
Policy for External Trade in the Fields of Standards and Conformity Assessment: A Toolbox of Instruments' - SEC (2001) 1570. The second is Commi ssion Staff Working Paper produced jointly by 
the Directorates General Trade and for Enterprise:  'Priorities for Bilateral/Regional Trade Related 
Activities in the field of Mutual Recognition Agreements' - SEC (2004) 1072.  
 
Q12. The EC, through the EA, participates in the ILAC and IAF mutual recognition 
arrangements. What is the experience in acce pting tests and certifications from accredited 
conformity assessment bodies in third countries which also participate in these arrangements? 
 
A. At present, accreditation of conformity asse ssment bodies falls under the responsibility of the 
Member States. It is the Member  States’ national accreditation bodies which participate in the ILAC 
and IAF mutual recognition agreements via European  Co-operation for Accreditation EA. It is also 
the Member States which accept conformity assessment results issued by foreign bodies, whether the 
bodies who issued the results are accredited or not . The Commission does not have the experience 
asked about in the question. 
 WT/TPR/M/136/Add.1 
Page 13 
 
 
 Part III. Trade Policies and Practices by Measur e, (2) Measures Directly Affecting Imports, (x) 
Sanitary and phytosanitary measures, Paragraph 81:  Q1. Canada is concerned that member State impor t requirements are not always consistent with 
EC law.  For example, recently Canada experien ced grain trade delays caused when a member 
State introduced unique testing and inspection req uirements. As well, two other member States 
have added an eight day provision for local inspec tion of grain shipments. As Canada has been 
informed by the Commission that these member State measures exceed the requirements of EU 
Regulation 1110/2003 and are not consistent w ith the EU-Canada accord of December 2002 - 
would the EC advise when these Member State import requirements will be brought into conformity 
with EC law?  
A. The Commission has taken up the case of th e introduction of special import conditions for 
cereals by one Member State and asked this Member State to take appropriate measures to bring these in line with Community legislation and the SPS Agreement or to withdraw them. The complaint 
raised by the Canadian authorities have been followed up in this manner and the Commission has 
already succeeded in ensuring that some of the pr ovisions have ceased and is awaiting confirmation 
that all requested actions are completed and that any legislative provisions are amended correspondingly.  The Commission has taken notice of Canada’s complaint related to inconsistent inspection 
procedures of grain shipments by two other Member  States and will investigate and follow up on this 
issue. 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (xi) 
Government procurem ent, Paragraph 91: 
 
Q13. Paragraph 91 provides an estimate of tota l government procurement.  Please indicate the 
total value of GPA-covered procurement by the EC and its member States.  The GPA went into 
effect eight years ago.  Many GPA members have subm itted at least some annual statistical reports, 
but the EC has not.  Please indicate wh en the EC plans to submit its statistics. 
 
A. The Commission services are preparing the annual statistical reports for 1996 to 2001 of the 
EC for submission before the end of the year. 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (xi) 
Government procurem ent, Paragraph 95: 
 
Q14. Could the EC elaborate on the mechanism contained in the agreement between the EC and 
Switzerland on government procurement that allows service providers from Switzerland to 
challenge the award of contracts by EC entities?  In particular, can the EC elaborate on the type of 
reviewing authority created by that agreement to receive these challenges and make rulings thereon? 
 A: In Article 1 of the Agreement between the European Community and the Swiss Federation on 
certain aspects of government procurement (publishe d in the Official Journal of the European 
Communities L 114 of 30.4.2002, p. 43 0; hereinafter: the bilateral agreement with Switzerland), the 
EC undertook to amend its anne xes and general notes to Appendix I of the WTO Agreement on 
Government Procurement (GPA) so as to allow Sw iss suppliers and service suppliers to challenge, 
pursuant to Article XX of the GPA, the award of c ontracts by EC entities listed in Annex 2, paragraph 
2, of Appendix I of the GPA. This modification was submitted to the WTO Committee on Government Procurement on 12 D ecember 2002 (document GPA/W/226). WT/TPR/M/136/Add.1 
Page 14  
 
 Pursuant to Article 5(1) of the bilateral agre ement with Switzerland, the Parties must provide 
non-discriminatory, timely, transparent and eff ective procedures enabling suppliers or service 
providers to challenge alleged breaches of that agre ement arising in the context of procurements in 
which they have, or have had, an interest. Article 5(2) and (3) and Annex V of the bilateral agreement 
with Switzerland lay down specific rules for challenge procedures.  
 The requirements Article 5 of the bilateral agreement with Switzerland imposes on the EC are 
met by Council Directive 89/665/EEC of 21 Dece mber 1989 on the coordination of the laws, 
regulations and administrative provisions relating to the application of review procedures to the award 
of public supply and public works contracts (Offi cial Journal of the European Communities L 395 of 
30.12.1989, p. 33) and Council Directive 92/13/EE C of 25 February 1992 coordinating the laws, 
regulations and administrative pr ovisions relating to the application of Community rules on the 
procurement procedures of entities operating in the wa ter, energy, transport and telecommunications 
sectors (Official Journal of the European Communiti es L 76 of 23.3.1992, p. 14) and the legislation 
the EU Member States have adopted  to implement these directives.  
 The European Commission monitors the app lication of the bilateral agreement with 
Switzerland in the EU. 
 
Part III. Trade Policies and Practices by Measure, (2) Measures Directly Affecting Imports, (xi) 
Government procurem ent, Paragraph 98: 
 Q15. Could the EC elaborate on the concrete steps and measures it intends to take to insure: (i) 
that public purchasers, especially at the local go vernment level, are made fully aware to the extent 
of the rules, and (ii) a higher level of cross border procurement which have stagnated since 1998. 
 
A. The Internal Market Strategy 2003-2006 contains the actions the Commission suggested in 2003 to improve the functioning of the EU proc urement markets (document COM(2003) 238 final of 
7.5.2003). The Commission regularly reports on the im plementation of the Internal Market Strategy 
(cf. the Report on the implementation of Inte rnal Market Strategy (2003-2006) (document 
COM(2004) 22 final of 21.1.2004). The most important recent actions are the following: 
• On 31 March 2004, the “legislative package” that  consolidates and modernizes the current EU 
public procurement rules was adopted. The legisla tive package consists of Directive 2004/17/EC of 
the European Parliament and of the Council of 31 March 2004 coordinating the procurement 
procedures of entities operating in the water, energy, transport and postal services sectors (OJ L 134 
of 30.04.2004, p. 1) and Directive 2004/18/EC of the European Parliament and of the Council of 31 
March 2004 on the coordination of procedures for the award of public works contracts, public supply 
contracts and public service contracts (OJ L 134 of 30.04.2004, p. 114). The EU Member States are required to implement these directives into na tional law by 31 January 2006 at the latest. 
• On 30 April 2004, the Commission presented a green paper on public-pri vate partnerships 
and Community law on public contracts and concessions . The aim of this paper is to launch a debate 
on the application of Community law on public contracts and concessions to the public-private 
partnership phenomenon. 
• On 23 September 2004, the Commission adopted  a green paper on defence procurement 
(COM(2004)608 final) to develop a debate on the gr adual creation of a European defence equipment 
market.   Work on the other procurement-related topics incl uded in the Internal Market Strategy 2003-
2006, such as the review of the procurement remedies directives and the action plan on e-
procurement, is in progress.  WT/TPR/M/136/Add.1 
Page 15 
 
 
 Part III. Trade Policies and Practices by Measure,  (2) Measures affecting production and trade, 
(iii) Intellectual property rights protection, Paragraph 132:  
Q16. Canada notes the European Council =s decision to accede to the Madrid Protocol, and that 
new regulations have been adopted.  Would the EC please advise whether protection within the EC 
is automatically extended to ho lders of internationally registered trade marks who apply?  If not, 
what criteria are used in the decision-making process?  
A. Protection within the EC is not automatically extended to holders of internationally registered 
trade marks. In fact, an application for extensi on to the EC as a whole is a necessary requirement. 
Then that application shall be dealt as a direct application for a Community trade mark. Criteria for 
registration or rejection will be identical to the cr iteria applied for the registration or rejection of a 
Community trade mark. This means that examination of absolute and relative grounds is applied. In 
the case of registration, the protection conferred to th e international trade mark will be identical to the 
protection conferred to the Community trade mark  
Part III. Trade Policies and Practices by Measure,  (2) Measures affecting production and trade, 
(iii) Intellectual property rights protection, Paragraph 136: 
 Q17. With the accession of ten new countries earlier this year, the EC has indicated that these countries have taken over and implemented the EC’s intellectual property regime.  Community trademarks and Community designs have been “auto matically extended to the territory of the 
acceding countries, taking into account prior righ ts in the acceding country”.  Could the EC please 
explain how these prior rights are “taken into account”?    
A. On a certain number of grounds there will be a right to restrict use of the CTM in the territory of the new Member States. Holders of earlier right s in new Member States can enforce their rights 
against extended CTMs as provided by their national legislation, provided that the earlier right was 
registered, applied for or acquired in good faith in the new Member State prior to the date of accession 
of that State, pursuant to Article 142a(5 ) of the Community trade mark regulation 
 
Part III. Trade Policies and Practices by Measure,  (2) Measures affecting production and trade, 
(iii) Intellectual property rights protection, Paragraph 142:  
Q18. With respect to the EC’s Community-wid e rules for the protection of geographical 
designations of origin and indications (“GIs”), Canada has a number of questions: 
 a. Will the EC accept and approve applications from WTO Members for GIs on products of 
non-EC origin without regard to the conditions of  protection afforded in that WTO Member to 
corresponding GIs on products of EC origin?   
 
A: Yes. The acceptance and, if appropriate, approval of applications from WTO Members for 
GIs on products of non-EC origin is based solely on the merits of each particular GI application, 
based on the compliance with the conditions established in EC legislation and thus without regard to 
the conditions of protection afforded in that WTO Member to corresponding GIs on products of EC 
origin  
b. Does the EC offer alternati ve procedures for GIs on products of non-EC origin that meet 
the requirements of the regulations, but which originate in territories whose government, for 
whatever reason, does not offer the service of receiving, reviewing and transmitting the application 
to the EC on behalf of the applicant.  If so, what are these procedures?   WT/TPR/M/136/Add.1 
Page 16  
 
A: No. Applications for GIs on products of EC origin and of non-EC origin are subject to the 
same substantive conditions, includi ng always the transmission of the application for registration 
through the authorities in the country in which the geographical area is located  
c. It is Canada’s understanding that the EC’s GI protection regime contains, in some cases, 
higher levels of protection than are required by  the Agreement on Trade-Related Aspects of 
Intellectual Property Rights.  Given theses higher  levels of protection, and the accompanying 
higher eligibility requirements, how does the EC t reat GIs that do not meet the higher eligibility 
requirements?   
A: It is true that the EC’s GI protection regi me contains higher levels of protection than are 
required by the TRIPS Agreement. However, eligib ility requirements are those required by the TRIPS 
Agreement. No higher eligibility requirements exis t. Accordingly, any geographical indication for 
products falling under the Regulation can in princi ple be protected under the Regulation. Regulation 
2081/92 requires the existence of product specifications  and inspection structures. The requirement of 
inspection structures ensure that products marketed  using a protected geographical indication comply 
with the requirements of the regula tion, thus reflecting the higher de gree of protection of geographical 
indications provided by the Regulation.  Finally, it should be noted that GIs can be protected in the 
EC by other measures, including the EC legisla tion on labelling and mislea ding advertising and the 
laws of the EC Member States on unfair competition.  Part III. Trade Policies and Practices by Measure,  (2) Measures affecting production and trade, 
(iii) Intellectual property rights protection, Paragraph 143:  Q19. The EC has indicated that, as a part of its  amended regulations on GIs, it now grants WTO 
Members the right of objection to the registratio n of EC GIs.  Could the EC please advise whether 
there are any restrictions to the aforesaid right of ob jection and, if so, what those restrictions are?  
In addition, if interested parties reside or are established in territories whose government, for 
whatever reason, does not offer the service of transmitting objections to the EC on their behalf, does the EC offer alternative objec tion procedures for these parties to object to registrations in the 
EC, of GIs on products of both EC and non-EC origin?   
 A. Article 12d (1) of Regulation 2081/92 prov ides a right of objection to a registration 
application submitted by a Member State to any natura l or legal person that has a legitimate interest 
and is from a WTO Member. In accordance with Artic le 12d (2), the conditions for the admissibility 
of objections from outside the EC are those laid dow n in Article 7 (4) for objections from inside the 
EC. The admissibility conditions and the further pro cedure with respect to objections from outside the 
EC do not differ from those applicable to objections from inside the EC. 
The treatment acorded to persons resident or est ablished in the EC and persons resident or 
established in a WTO Member is identical, and involves always the transmission of the relevant objections through the authorities of the country wh ere the person who objects is resident or is 
established, as provided for in Articl es 7 and 12d (1) of Regulation 2081/92 
 Part IV. Trade Policies by Sector, (2) Agricu lture, (ii) Common Agriculture Policy (CAP), 
Paragraph 19:  Q20. The Report by the Secretariat notes that  the average filling ratio for agriculture tariff 
quotas is 67% but that there continues to be si gnificant under-utilization of several tariff quotas.  
For example, Canada notes that the tariff quota fo r high quality fresh or chilled or frozen bovine 
meat (Hilton beef) and for frozen buffalo meat, wh ich are subject to a prohibitive m.f.n. in-quota 
tariff of 20%, are consistently and significantly under utilized.  Can the EC indicate what steps, WT/TPR/M/136/Add.1 
Page 17 
 
 
 including in the context of current agriculture negotiations, they would undertake to reduce the 
high in-quota tariffs that discourage the utilization of their tariff quotas?   
 
A. The EC has a better record in the field of utilization of tariff quotas than the majority of 
Members using TRQs. The EC would like to improve  TRQs administration by the Members and is 
ready to participate actively to the negotiations  on this subject in the framework of the DDA. 
Part IV. Trade Policies by Sector, (2) Agricu lture, (ii) Common Agriculture Policy (CAP), 
Paragraph 26 and Box IV.1(1):  [ Comment:
 The description of the CAP reform deci ded in 2003, in some places refers to 
any decoupled nature of the Single Farm Payment Scheme (“SFPS”) in quotation marks, in other 
places decoupling is mentioned using the direct wording of EC documents.  Because of the 
uncertainty as to what constitutes decoupled in come support in the sense of the Agreement on 
Agriculture, a more cautious wording might be appropriate when describing the EU SFPS.]  
 See specifications in reply to US 
 Q21. The data used to analyze the CAP is all based  on OECD 2002 or earlier data.  Is it possible 
to update the data with more recent estimates? 
 
A. The impact of the 2003 reform of the Common Agricultural Policy, in particular of the single payment scheme, has been the subject of a series of analysis which are all based on information 
coming to a very large extent from the EC Commission (either from the statistical office of the 
European Commission or from the Directorate-Gene ral for Agriculture). These information sources 
have been complemented, when necessary for the medium-term ou tlook for some world commodity 
markets, with information from the OECD, th e FAO and FAPRI (Food and Agricultural Policy 
Research Institute at the University of Missouri).  These analyses focused on: 
• the Mid-Term Review proposals as presented in the July 2002 Communication from the EU 
Commission and the legislative CAP reform proposal s as published at the end of January 2003: all 
these studies – carried out within the EU Commission a nd by external organisations at the request of 
the EU Commission - were based on data available mid- or at the end of  2002 and published in 
February 2003 and March 2003; 
• the CAP reform decisions agreed upon in J une 2003: these analyses, published in March 
2004, are based on information available at the be ginning of December 2003 and constitute the most 
up-to-date analysis from the EU Commission on the impact of the Single Farm Payment. 
 Additional analyses of the CAP reform have been produced in 2004 in other EU Member 
States or international institutions (such as the OE CD) based on information available at the end of 
2003. These analyses provide for very similar impact an alysis results (both in direction and order of 
magnitude) to the EU Commission analyses. 
 
Part IV. Trade Policies by Sector, (3) Fisheries , (ii) Common Fisheries Policy (CFP), Paragraph 
54:  Q22. One element of the Common Fisheries Poli cy involves ensuring the “economic viability” of 
the European fleet.  Such support would seem to  go beyond merely ensuring the safety and 
environmental-friendliness of fishing vessels.  In pa rticular, among the elements of the Financial 
Instrument for Fisheries Guidance, which, with  a 2000-06 budget of € 3.7 billion, remains the 
leading form of financial assistance to the fish eries sub-sector, is assistance for fleet restructuring 
and investment, including fleet renewal and the modernization of fishing vessels.  Elaboration would be appreciated on the purpose of such restruct uring assistance, i.e., is it intended to improve 
the cost-efficiencies of the European fleet and/or its ability to operate outside those waters subject 
to EC conservation measures?      WT/TPR/M/136/Add.1 
Page 18  
 
A. As mentioned by the Secretariat’s Report, since 2003 the EC has undertaken a major reform 
of its Common Fisheries Policy (CFP). As from 2004,  aid for modernisation of fishing vessels will 
only be available for vessels that are at least 5 y ears old to improve safety, product quality or working 
conditions, switch to more selective fishing techni ques or to equip vessels with the VMS (Vessel 
Monitoring Systems).  
 When the modernisation is to improve safet y, product quality or working conditions, such 
modernisation must not increase the ability of the v essel to catch fish. EU aid will be restricted to 
Member States which have previously met thei r overall capacity targets set under the MAGP IV 
(Multi-annual Guidance Programme). Concerning aid for the renewal of fishing vessels, this is being 
phased out and will only be available up to the end of 2004, and only for vessels under 400 GT. 
 The above measures were adopted in the cour se of the reform of the EC Common Fisheries 
Policy, and have as major objective to ensure a su stainable development in environmental, economic 
and social terms.  In this context, the EC has addressed the issue of overall fishing pressure (fishing 
effort) on the level of available resources, taking in to account the social impact and the need to avoid 
overfishing.  Since this balance could only be achieved by capacity withdrawal, the Community 
measures for restructuring of the fleet will concen trate mainly on the scrapping of fishing vessels and 
the phasing out of public aid for fleet renewal by 31 December 2004.    The Community has made a proposal to the Negotiating Group on Rules based on the above 
core principles that could guide the Group when considering fisheries subsidy disciplines (doc. TN/RL/W/82 of 23 April 2003). 
 
Part IV. Trade Policies by Sector, (ii) Common Fisheries Policy (CFP), Paragraph 57: 
 Q23. Paragraph 57 indicates that the budget ed amount for price support interventions was € 
14.5million in 2003.  Was the amount budgeted totally  disbursed?  If not what amount of price 
support interventions were disbursed?  What was the value of the product subject to price support 
disbursement? 
 
A. The amount disbursed for the year 2003 was € 12.7 million. Concerning the value of the 
products subject to interventions, th is information could be provided at a later stage. Compared to the 
total value of landings for EU-15 in  2003, which amounted to an estimated € 6.2 billion, the disbursed 
amount for price interventions is negligible. Part IV. Trade Policies by Sector, (ii) Common Fisheries Policy (CFP), Paragraph 59: 
 
Q24. Are there conditions in the Community’s bilateral “Southern” agreements that relate to 
resource management?  Is any part of the a ccess fees that the Community pays under these 
agreements dedicated to measures that would cont ribute to the sustainability of the fishery? 
 A. 1. Stock conservation measures in the protocols to the agreements
 
 Each country has its own particular schem es for preserving fish stocks. The only rules 
common to all the southern agreements are those governing the mesh size of nets, although even these 
vary slightly between countries for certain species.   Other measures, more general in nature, are more commonly used. For example: · controls on 
by-catches, · the temporary suspension of fishing activity for reasons of "biological recovery".  
 Some types of measures, however, are specifi c to certain agreements: · the designation of 
protected species, · minimum size requirements for landi ng fish of certain species, · the exchange of 
information, and · the monitoring of discards. WT/TPR/M/136/Add.1 
Page 19 
 
 
  2. Arrangements for monitoring and inspecting the Community fleets  
 Measures for monitoring and inspecting complia nce with the rules governing the Community 
fleets feature in almost all the protocols. The signatory States (both Community and non-Community countries) promote greater compliance with the measures in the agreements by progressively 
reinforcing two facets of the system: monitoring of vessel presence and monitoring of catches.  
 A third measure focuses on monitoring compliance with the fishing rules of the different non-
Community countries.  all the southern agreemen ts make provision for on-board observers. Some 
southern agreements require vessels to undergo in spections, controls and technical inspections at 
different times: or, most frequently, randomly.   In addition, Member States have a specific re sponsibility to monitor the operations of their 
vessels in non-Community waters. The measures incl ude requirements on vessels to keep a logbook in 
which they note their catches, and to make a stat ement to their country of registration concerning 
products landed or transhipped in non-Community ports or onto non-Community ships. The information contained in these logbooks must be  notified to the Commission in electronic form 
every quarter.  
 In some cases, a joint scientific committee is set up to monitor the state of fish stocks in the 
waters coastal state and to provide advice on fisheries management.   3. Measures contributing to th e sustainability of the fishery
 
 The financial contribution paid by the EU cove rs the access to the fishing zones of the coastal 
states and establishes targeted actions with the partne rs with a view to supporting their fisheries sector 
and contributing to sustainable fisheries in their wa ters. A protocol attached to each lays down the 
specific conditions (technical, financial, type of r esources, etc.) for implementation of the agreement. 
A substantial share of the EU fi nancial contribution is  earmarked for measures designed to achieve 
sustainable fisheries. The measures that can be financed include, inter alia :  scientific research 
programmes;  support to the control and monitoring of fisheries activities and the establishment of a 
satellite vessel monitoring programme; improving fi sheries statistics; support to coastal state’s 
fisheries management institutions.  
 More information on the above can be obtained at the website of the Directorate General for 
Fisheries of the European Commission:  http://europa.eu.int/comm/fisheries/ 
 
Part IV. Trade Policies by Sector, (5) Ma nufacturing, (i) Overview, Paragraph 74: 
 
Q25. The Secretariat Report notes that the manufacturing sector remains a major beneficiary of 
state aid and that during 1990-02 an estimated € 45 billion was granted in specific “rescue and restructuring” aid to failing firms.  Please elaborate on the nature and principal beneficiaries of current state aid programmes for manufacturing incl uding beneficiaries of any continuing “rescue 
and restructuring” subsidies.    
 A. The Commission has devised a set of rules to assess aid granted to ailing companies, the 
"Community Guidelines for rescuing and r estructuring firms in difficulty".   
A company in difficulty is a company that is unable to stem losses which, without outside 
intervention by public authorities, will almost certainly condemn it to go out of business in the short or medium term.  In certain limited conditions, rescue or restructuring aid can be approved for such 
company. 
Rescue aid is by nature temporary assistance.  It should make it possible to keep an ailing 
firm afloat for the time needed to work out a restru cturing or liquidation plan and/or for the length of 
time the Commission needs to be able to reach a deci sion on that plan.  Aid for rescuing should be in 
the form of a short-term loan (not longer than six months) or loan guarantee at market rates of interest. 
The intention is that within that period the firm that receives the rescue aid should put in place a plan 
for restructuring that would bring it back to financ ial viability in the medium term (approximately in a 
five- years period). The original rescue loan  has to be repaid within six months. WT/TPR/M/136/Add.1 
Page 20  
 
 Restructuring, on the other hand, will be based  on feasible, coherent and far-reaching plan to 
restore firm's long-term viability. Aid for restructur ing may take various forms but it is usually either 
a long-term loan or an injection of new share capital.  Some times aid is granted in the form of tax or 
social security relief or loan write-off.  The guidelines provide three reasons why aid ma y be allowed. According to the guidelines 
“(t)he provision of rescue or restructuring aid to fi rms in difficulty may only be regarded as legitimate 
subject to certain conditions. It may be justifie d, for instance, by social or regional policy 
considerations, by the need to take into account th e beneficial role played by small and medium-sized 
enterprises (SMEs) in the economy or, exceptionally, by the desirability of maintaining a competitive 
market structure when the demise of firms coul d lead to a monopoly or to a tight oligopolistic 
situation”. 
 Towards meeting these three objectives, the Co mmission authorises restructuring aid only if 
the following conditions are all satisfied: 
• a viable restructuring/recovery programme is submitted to the Commission; 
• measures are taken to avoid undue distortions of competition (e.g. appropriate reduction of 
 capacity); 
• aid is limited to the minimum needed for the implementation of the restructuring measures. 
 Beneficiaries have to make a significant contribution; 
• the company has to implement the restructuring plan in full; 
• restructuring aid can be granted once only (“one time, last time principle”); 
• strict monitoring and annual reporting is required. 
 For SMEs and firms in assisted regions, the capacity reduction criteria and reporting 
requirements can be applied with a greater degr ee of flexibility.  The Commission also takes a 
favourable view of State aid to cover the social costs of restructuring.  The vast majority of aid for rescue and restructuring is awarded on an individual (ad hoc) basis. Member States may notify rescue and restructuring schemes for small and medium-sized 
enterprises but for large companies such aid is always assessed on an individual basis. 
 The same rules apply to manufacturing and other sectors.  During the period 1990-2002, 
individual rescue and restructuring aid was approve d to 120 ailing firms in the manufacturing and 
service sectors: 
• 90 cases in manufacturing (with 45 billion € in ex-GDR); 
• the rest mostly pertained to the banking sector (ca. 31 billion €). 
However, a comparison of the overall amounts of aid awarded for rescue and restructuring in 
each Member State over time is not particularly mean ingful. First, the very nature of the aid means 
that each individual case is examined on its own merits. As a result, one large award of State aid, as in the Crédit Lyonnais case in France, may outweigh all other cases. Second, recourse to rescue and 
restructuring aid has been influenced by the le vel of financial support afforded to the various 
economic sectors by each Member State (e.g., the long-standing State guarantees for public banks in 
Germany undoubtedly helped them to better stand competitive pressure) and, in particular, to the 
timing of and degree to which each sector has been  liberalised. Third, the overall economic climate 
also has an impact on the extent of aid for rescue an d restructuring. As a result of the recent economic 
downturn, the number of firms in difficulty has risen and hence there has been a greater tendency for Member States to resort to State aid for rescue and restructuring. This is reflected in the number of 
important cases involving ailing firms that the Commissi on has been dealing with in the last couple of 
years. The overall number of cases however remain s relatively small: 14 new registered cases in 2002 
involving the rescue and restructuring of firms in  the manufacturing and service sectors. The overall 
picture of aid for rescue and restructuring is thus  rather complex and varies considerably from one 
Member State to another and from one sector to another. It is however worth noting that while some Member States regularly award aid to rescue and rest ructure ailing firms, others clearly do not have 
such a policy.  WT/TPR/M/136/Add.1 
Page 21 
 
 
 In addition, it should also be noted that the sh are of rescue and restructuring aid in total aid 
has fallen, largely with the phasing out of the GDR aid and the major banking cases being resolved. 
 For further information on State Aids granted in the EU, please see the State Aids Scoreboard, 
which is available on the DG Competition part of the Europa web site, updated twice a year5. All 
individual Commission decisions on aids notified to it are also available on the State Aid register on 
the same web site6. 
 
Part IV. Trade Policies by Sector, (5) Manufacturi ng, (ii) Selected Industries, Paragraphs 84-85: 
  [Comment:
 Paragraph 85 makes reference to the aims of REACH, including (i) 
establishing a Chemical Agency to ensure consistent  application of the system, and (ii) managing the 
database of all registered chemicals and evaluation by the national authorities of substances and animal testing.  It is our understanding that th e proposed Chemical Agency will not have a strong 
oversight role, and will act largely as a clearing  house for the work performed by Member State 
Competent Authorities.  It is difficult to see how the Chemical Agency will achieve consistency in the 
application of the law.  The process of achievi ng a consensus among member States will be difficult 
and time consuming.  Ultimately we fear that the EC may opt for a checklist approach for most 
assessment requirements.] 
 
Q26. Canada seeks further clarification from the EC  as to why the draft legislation on chemicals 
has not made the proposed Chemical Agency solely  responsible for the risk assessment process (e.g. 
registrations and evaluations) and the Compet ent Authorities jointly responsible for risk 
management decisions (e.g. authorizations an d restrictions). The process would place the 
responsibility for policy decisions and enforceme nt with the member States, be more easily 
understood by registrants, work more smoothly an d be less likely to cause trade disputes. 
 
A. The Commission’s proposal puts the primary r esponsibility for risk assessment on industry. 
When there is a need for a risk assessment at Community level, for example in order to justify a 
restriction measure, the Agency h as an obligation to ensure consis tent application of the rules. 
Decisions would then be taken at Community leve l. This ensures consistent decision-making and 
makes best use of available resources. We do not see why such an approach should lead to more trade 
disputes. Enforcement remains the r esponsibility of the Member States. 
 
Q27. Canada would like to know if the EC inte nd to allow an applic ant to use pre-existing 
animal test data in their registration package even though they may not be the first to register the 
substance?   
A. The Commission’s proposal would allow the u se of pre-existing animal data in this case, 
given of course that they meet the data requirements.  
Q28. The proposed phase-in-process in REACH as  it is currently conceived will require lot of 
duplicative and repetitive testing.  What steps are the EC prepared to take to encourage the 
submission of all available data (regardless of the volume threshold reached by potential 
registrants) when the substance is first registered ?  This information could then be assessed to 
determine whether any data requirem ents could be waived or whether there are any gaps that need 
to be addressed by the registrants. Will the EC  propose an incremental approach to information 
collection based on their actual assessments needs to address this problem? An incremental 
                                                     
 
5 http://europa.eu.int/comm/competition/state_aid/scoreboard/ 
6 http://europa.eu.int/comm/competition/state_aid/register/ WT/TPR/M/136/Add.1 
Page 22  
 
approach to information collection at the registra tion stage would more likel y ensure that the EC 
be able to fulfill their legitimate objectives in  a less costly and trade restrictive manner. 
 
A. A number of measures in REACH act to reduce the chances of duplicative and repetitive 
testing for phase-substances.  
1. The low tonnage producers are entitled to join a Substance Information Exchange Forum 
(SIEF) and thus they may provide information that they have to others in the SIEF and benefit from 
the information supplied by others in the SIEF;  2. Companies are required to share data on animal testing and ma y choose to share non-
animal data; 
3. Companies are encouraged to form co nsortia for the purposes of registration. 
However, these issues are under discussion in th e Council of Ministers and in the European 
Parliament. The Commission is open to any ch anges to REACH which can reduce costs and 
bureaucracy while retaining its timetable, objectives and scope. However, the Commission wishes to ensure that the final regulation remains workable. 
 
Q29. The absence of clear rules on the fair allo cation of costs associated with animal testing 
could also be an unnecessary barrier to trade. Without enforceable data sharing rules and standard cost recovery practices, the EC should clarify the mechanisms they may use to curb potentially anti-
competitive practices of larger companies. Can ada has concerns that some companies could 
acquire a near monopoly for commonly produced su bstances as a result of the registration process. 
SME’s who are unable to register the substance on their own or new entrants could be frozen out 
of the EU market. Canada seeks further clarific ation as to how the EC intends to address this 
problem.  
A. The rules for sharing of costs are set out in Article 28 (for phase-in substances) and Article 24 
(for non-phase-in substances). We believe these rules to be, fair, clear and enforceable and so the 
concerns expressed by Canada will not materialis e. If a company pre-registers its substance, it 
automatically becomes a member of the SIEF.  
Part IV. Trade Policies by Sector, (6) Services, (ii) Financial Services, Paragraphs 95-97 and 
107-108: 
 
Q30. Can the EC clarify the extent to which the Financial Services Action Plan (“FSAP”) 
contemplates mutual recognition of securities regulation among EC Members.     
A. The following benefit from mutual recognition: 
• Entities providing investment services,  
• regulated markets, prospectuses,  
• UCITS and their management companies 
 
Q31. What role will the Commission play in th e regulation of securities, once all of the FSAP 
legislative measures are completed? 
 
A. The role of the Commission is  limited to its power to initiate  legislation (legislative proposals 
on level 1 Lamfalussy and adoption of implemen ting measures on level 2 Lamfalussy) as well as the 
monitoring of implementation and enforcement of EC law (Guardian of the Treaty). The Commission 
is not a securities supervisor: this role will rema in a task of the national regulators (cooperating 
through the Committee of European Securities Regulators). 
 WT/TPR/M/136/Add.1 
Page 23 
 
 
 Part IV. Trade Policies by Sector, (6) Services,  (iii) Telecommunication and postal services, 
Paragraphs 111 and 117:  Q32. The Report by the Secretariat notes that: “d espite privatization in the last decade, state 
involvement is over 50% in Austria, Belgium,  Finland, France, Greece and Germany, and 
continues to be minor but symbolically important in Ireland, Italy, Portugal, and Spain.” It also 
states that the fixed telecommunication market was liberalized by January 1, 2002 in the C-10 but 
that “in the majority of the C-10 the State still holds a controlling stake in the supplies of fixed services; competition is gradually increasing.”   
a. Do these countries intend to eventually red uce state involvement in undertakings that 
provide electronic communications networks or services?  If so, what are their targets, in terms of  
timing and objectives?  b. What steps are they presently taking to increase competition?  
 A. a. The WTO rules leave WTO members free to maintain state ownership in services 
sectors, provided that this does not nullify their ma rket access and related commitments. It is thus for 
each Member to decide, as a shareholder, if and when it wishes to sell its  shareholding in a given 
service supplier. In the EC, the telecom framework anyway ensures that regulators will take all 
necessary measures to promote competition, whatever the private or state shareholding in operators. 
That means in particular that, for Member States which retain ownership in a given operator, the 
regulatory functions will be exercised completely i ndependently from and will not be affected by the 
shareholding activities of the state  b.  The EC understand that the question rela tes to the ten new Member States. This is 
explained in details in the new implementa tion report which will be soon available at: 
http://europa.eu.int/information_society/topics/tel ecoms/implementation/annual_report/index_en.htm. 
 
Part IV. Trade Policies by Sector, (6) Services,  (iii) Telecommunication and postal services, 
Paragraph 12:  Q33. Canada is pleased to see that the EC’s ne w regulatory framework for telecommunications 
entered into force on July 2003.  Canada notes, however, that the deadline for implementing the 
main elements of the framework was July 25, 2004 but that, as of February 2004, only nine 
member States had taken action to incorporate th e new regulatory framework into national law. 
 a. Could the EC please update Canada on th e situation? How many member States have 
implemented the new framework? How many have taken steps to do so? 
b. Has the Commission initiated proceedings  against the others? Could the EC please 
describe these proceedings and the expected outcome?   
A. The new EU regulatory framework for electr onic communications was applicable for the EU 
15 from 25 July 2003 (as regards the Framework, Access, Authorisation and Universal Service directives) and 31 October 2003 (as regards the ePrivacy Directive) respectively, and for the new 
Member States as from 1 May 2004. 
Framework, Access, Authorisation and Universal Service Directives
 
A few Member States have not yet completed adoption of primary legislation to transpose 
these directives. Infringement proceedings against States which were EU Members before 1st of May 
2004were launched in October 2003 and reasoned opinions sent on 19 December 2003. On 20 April 
2004 the Commission decided to refer the relevant cases to the Court. Proceedings are now pending 
before the EC Court of Justice. WT/TPR/M/136/Add.1 
Page 24  
 
ePrivacy Directive
 
A few Member States have not yet completed a doption of primary legislation to transpose the 
ePrivacy Directive. Infringement proceedings against States which were members of the EU before 
the 1st of May 2004 were launched on 25 November 2 003 and reasoned opinions sent on 1 April 2004. 
On 7 July 2004, the Commission took the decision to refer the relevant cases to the EU Court of 
Justice, where proceedings are now pending. 
 
Part IV. Trade Policies by Sector, (6) Services, (iv) Transport, Paragraph 123: 
 Q34. The Report by the Secretariat states that “there is not yet cabotage in rail freight transport, 
nor is there market opening in rail passenger tran sport. Liberalization of cabotage in the other 
modes of transport in the EC-15 occurred in stages...”  Please explain when cabotage restrictions in railway passenger and freight transport services are likely to be lifted. 
 
A. The 2nd railway package adopted by the Eur opean Parliament and the Council in April 2004 
foresees the full opening of the ma rket for international and nationa l freight services by rail in the 
European Union by 1 January 2007; markets for in ternational rail freight services must already be 
open by 1 January 2006. In March 2004, the Europe an Commission has made a proposal to open up 
the market for international rail passenger transport including the right of cabotage by 1 January 2010. 
 
Part IV. Trade Policies by Sector, (6) Services, (iv) Transport, (b) Road transport, Paragraph 
126: 
 Q35. Paragraph 126 notes that the Commission made several proposals in 2003 on ways to improve the functioning of road transport.  Please provide an update on where these proposals 
stand to date. 
 
A. On 15 July 2003 the European Parliament and the Council adopted Directive 2003/59/EC on the initial qualification and periodic  training of drivers of certain road vehicles for the carriage of 
goods or passengers, amending Co uncil Regulation (EEC) No 382 0/85 and Council Directive 
91/439/EEC and repealing Council Directive 76/ 914/EEC. The initiatives on driving bans and 
charging are still under discussion in the Parliament  and in the Council. As regards the sectoral 
working time directive – Directive 2002/15/EC - this should be implemented by 23 March 2005 at the 
latest to mobile workers employed by enterprises,  and to self-employed drivers by 23 March 2009, at 
the latest. The Directive lays down a maximum weekly working time limit of 60 hours with an 
average weekly limit of 48 hours over 4 months. In addition a minimum of 30 minutes break should be taken after 6 hours work. 
 
Part IV. Trade Policies by Sector, (6) Services, (iv) Transport, (b) Rail transport, Paragraph 
128:  Q36 Paragraph 128 refers to the rail infrastruc ture package adopted in 2001, which only seven 
EC member States have fully transposed into the national laws. What is the status to date and when 
is the new deadline for the transposition of the package into national law by the remaining E-15 
member States? What is the deadlin e with respect to the new members? 
 
A. In October 2004, 4 countries among the old Member States had not yet notified the (full) transposition of the Directives of the rail infr astructure package. The Commission employs all 
instruments at hand to make Member States to implem ent the European Directives as fast as possible. 
Against all 4 Member States the Commission h as launched infringement procedures, which are 
currently dealt with by the European Court of Justice. The new Member States are obliged to 
transpose the provisions of the rail infrastructur e package by the date of their adhesion to the WT/TPR/M/136/Add.1 
Page 25 
 
 
 Community (1 May 2004) with the exception of Hungary and Poland to whom transitional periods 
until 31 December. 
 
Part IV. Trade Policies by Sector, (6) Services, (iv) Transport, (b) Rail transport, Paragraph 
129: 
 
Q37. What is the status of the second railway package introduced in 2003 and for which the European Parliament and the European Co uncil agreed in principle in March 2004?  
 
A. The second railway package was adopted by the European Parliament and the Council on 
29 April 2004 
 
Q38. With reference to the third railway package proposed in March 2004, what would 
liberalization of cross-border passen ger rail services by 2010 entail? 
 A. On 3 March 2004, the European Commission h as made a proposal to open up the market for 
international rail passenger transport by 1 January  2010. This proposal includes the right of open 
access operators to cabotage traffic (right to pick up and to drop passengers at stations along an 
international journey). 
 
REPORT BY THE GOVERNMENT
 
 
Part IV. The EC’s Trade Policy at Global Le vel, (2) The EC and the WTO, Paragraph 44: 
 Q39. The EC states that “The EC has thus atta ched the greatest importance to the timely 
implementation and compliance with the agreeme nts to which members of the WTO have bound 
themselves.”  However, in the context of the EC’s enlargement of May 1, 2004, the GATT Article 
XXVIII negotiations have not been able to pro ceed according to WTO time lines, due to the 
absence of a significant amount of necessary data and other information from the EC.  When does the EC foresee the submission to its trading partn ers of the missing material that is required for 
these negotiations? 
 A. We have notified to the WTO on 19 January that , in relation to the EU enlargement, we are 
ready to enter into negotiations with our WTO partne rs according to the rules of Art. XXIV.6 of the 
GATT, in order to address possible compensations.   Our notification to the WTO on enlargement, which is the result of an extremely complex 
work of trade data collection and analysis, is fully  in accordance with WTO rules and procedures, it is 
fully transparent as each WTO member can see its tr ade data with each of the 10 new Member States. 
The EC started negotiations with WTO partners ha ving introduced claims at the end of September 
2004. The EC has extended the negotiation peri od for all WTO Members who have claimed 
compensatory adjustment.  
Part IV. The EC’s Trade Policy at Global Le vel, (2) The EC and the WTO, Paragraph 52: 
 
Q40. Canada notes that the EC has linked the i ssue of GIs to increased  market access.  In 
particular, the EC has stated that its “approach to  the multilateral trade negotiations has been to 
complement further market opening with strong er rules and disciplines.”  Could the EC please 
clarify how it sees the completion of the GI negot iations for the establishment of a multilateral 
registry as increasing market access?  More specifically, how will the conclusion of such 
negotiations increase market access for exports of  Canadian and other WTO Members’ wine and 
spirit products into the European market? WT/TPR/M/136/Add.1 
Page 26  
 
A: The EC believes that lack of protection of geographical indications constitutes an obstacle to 
increased market access in third countries. Improved market a ccess demands fair competition 
opportunities for products whose quality and reputati on are linked to their geographical origin. The 
EC has made this clear notably in the context of the WTO agriculture negotiations where it has 
submitted a proposal to stop abuses of names by producer s other than those of the true place of origin. 
In the TRIPs context, the establishment of a multila teral register would avoid costly and burdensome 
administrative procedures, and unpredictable judicial d ecisions, which is bad for trade. In fact, today, 
under the current TRIPs rules, if a producer wants to pr otect his GI abroad, he h as to register it first in 
every
 WTO Member country through a costly pr ocess. This discourages producers from making 
investment decisions or launching expensive mark eting campaigns. All this contributes to slow down 
trade flows.  As regards the possible advantages fo r Canada in the wines and spirits sector, one could 
take as an example GIs such as Canadian Rye Wh iskey or Fraser Valley wines which could be 
protected in third countries through their inclusion in the multilateral register. 
 
QUESTIONS FROM COLOMBIA  
 
Q1: Sobre la Agenda de Doha, el desa rrollo y la liberalización comercial  
1. El informe de la Secretaría para el examen de las políticas comerciales de las Comunidades 
Europeas da cuenta del compromiso que tiene n a favor del desarrollo futuro del sistema 
multilateral de comercio y los diferentes medios que utilizan para lograr este objetivo, como también se reconoce el papel protagónico desa rrollado por las Comunidades Europeas para el 
lanzamiento de la Ronda para el Desarrollo en Doha en noviembre de 2001, como también lo 
detallan las Comunidades en su informe.  
2. En el párrafo 33 de la parte II del informe de la Secretaría se afirma que uno de los aportes 
que desde el territorio de las Comunidades Eur opeas se puede hacer para el desarrollo, y por tanto 
para el éxito de la Ronda, es aceptando que “las negociaciones deben ayudar a los países en 
desarrollo a obtener un mayor acceso en el mercado de los países desarrollados”. 
3. A su vez, en el párrafo 3 del informe de las Comunidades Europeas se dice que han seguido 
una agenda paralela de negociaciones a nivel bilat eral y regional para promover la integración de 
los países en desarrollo en el sistema mundial de comercio. 
En este orden de ideas y armonizando esta po sición con la expresada por las Comunidades 
Europeas durante el curso de las negociacion es de esta Ronda relacionada con apoyar un trato 
especial y diferenciado diferente para una categor ía de países, Colombia desea plantear los 
siguientes interrogantes:  ¿Tiene la política comercial de las Com unidades Europeas una visión general del 
Desarrollo para los países en desarrollo?  
A: The EC has always indicated that it full y is supportive of the DDA being a development 
round. In that context, in their letter of 9 Ma y 2004, Commissioner Lamy and Commissioner Fischler 
recognised that special and differential treatment was a key issue for a large number of developing 
countries. They also suggested moving forward c oncrete and operational objective for the Round and 
proposed that on NAMA and agriculture the least deve loped countries and other weak and vulnerable 
countries in a similar situation (essentially the G-90) –should not have to open their markets beyond 
existing commitments and that they should be able  to benefit from increased market access offered 
both by developed and developing countries. As re gards agriculture, this offer has been partly 
reflected in the Agreed Framework of 1
st August, which also contains particular provisions on special 
and differential treatment.  
¿Han pensado las Comunidades en la posibil idad de aplicar para los productos que 
eventualmente pudieran resultar afectados por la llamada erosión de las preferencias, un esquema diferente como alguna compensación o financiación de programas de reconversión productiva para los productores de países que pierdan margen de preferencia en el mercado europeo? WT/TPR/M/136/Add.1 
Page 27 
 
 
 A: The question put by Colombia concerns an i ssue that belongs to the negotiations under the 
Doha Development Agenda. As such it hardly belong s to the review exercise of any Member. Only 
discussions between all WTO Members will allow to ach ieve the solution that will be in keeping with 
WTO principles, amongst others those contained in GATT Article XXVIII bis.  
 
¿Han pensado las Comunidades extender un puente que permita balancear los intereses de 
los países en desarrollo que se benefician en su  mercado de preferencias de larga data, con 
intereses diferentes de un grupo de países en desa rrollo que producen los mismos bienes que los 
receptores de tales preferencias y que hasta ah ora tienen sus productos con acceso limitado al 
mercado de las CE, para los que la liberalización comercial es todavía precaria?   
 
A: The question put by Colombia starts from the assumption that some developing countries 
have their access limited because of the EU’s pr eferential schemes benefiting some specific DCs, 
including LDCs. In this respect it would be important  to note that the EU market is one of the most 
open in the world with very low levels of duties ove rall. Furthermore, through the GSP the EU offers 
preferential access to several developing countries not  included in other preferential schemes and for a 
whole range of products, including those in which they are not totally  competitive. With respect to the 
difficulties in market access for products originating in DCs, the EU notes that in some cases access to 
other DC’s markets is more difficult than access onto EU’s market. By way of example the duty paid 
by Latin American countries accessing each other’s markets is on average seven times higher than 
that paid to access the EU. 
 
Q2: Sobre las normas sanitarias, técnicas y ambientales : 
Nuestros exportadores encuentran problemas en  los dilatados trámites que emplean las 
Comunidades sobre requisitos sanitarios o técn icos, que deben cumplir nuestras empresas 
exportadoras. ¿Que están haciendo las Comunidades para aumentar la transparencia y reducir los 
tiempos que se toman para acreditar cumplimientos exigidos a las empresas exportadoras de países 
en desarrollo hacia las Comunidades? 
 
A: Transparencia: Los procedimientos y requeri mientos están  accesibles en http://europa.eu.int/ 
comm/food/international/trade/index_en.htm.  Vers ión española en http://europa.eu.int/comm/food/fs/ 
inspections/special_topics/guide_thirdcountries_es.pdf. 
La comunidad no comparte la opinión de que los procesos sean dilatados. 
 
En la nota de pie de página 98 del numeral 69 de la parte III.2 sobre barreras técnicas al 
comercio del informe de la Secretaría, se mencio na que los organismos de normalización como el 
CEN estiman en ocho años la elaboración de una norma, el CENEC entre tr es y cuatro años, y el 
ETSI dos años. Nos podrían informar las Com unidades: ¿Cuáles son los planes que tienen para 
reducir estos tiempos, a cuantos años y a partir de cuando aplicarán sus planes?  
 
A: Los plazos señalados son notablemente inferi ores a los usados por el Codex, ISO y otras 
organizaciones internacionales de normalización  
Existe una alta complejidad y dispersión de no rmas técnicas y ambientales a nivel de las 
Comunidades, los estados nacionales y el sect or privado que deben ser atendidas por nuestros 
exportadores. En el párrafo 72 de la parte III del informe de la Secretaria se afirma que existe 
incumplimiento del principio de reconocimiento mu tuo por parte de los Es tados miembros. En el 
párrafo 79 del informe de las Comunidades se di ce que están trabajando con Australia y Nueva 
Zelanda en acuerdos de reconocimiento mutuo de procedimientos de evaluación de la conformidad, 
y en el párrafo 75 de la parte III del informe de la Secretaría se informa sobre otros Acuerdos de 
este tipo firmados con países desarrollados.  WT/TPR/M/136/Add.1 
Page 28  
 
¿Qué prioridad tiene para las Comunidades la firma de este tipo de Acuerdos con países 
endesarrollo?  
¿Cuál es el interés de las Comunidades en av anzar en mecanismos de reconocimiento 
mutuo y equivalencia de las normas técn icas y ambientales con países en desarrollo? 
 A: Concerning mutual recognition agreements with third countries, in selecting priority 
countries/regions for the negotiation of bilatera l Mutual Recognition Agreements (MRAs) for 
industrial goods the EC takes into account diffe rent elements, such as the following: political 
commitment from both sides; c ontent of existing or under negotiation agreements with the 
country/region in question; current and potential future trade flows with the country/region in 
question; the country's infrastructure and capacity in  the field of standards and conformity assessment 
for industrial products; the country's rules for the industrial product sectors under consideration and its 
willingness to align them with EU or international rules.  
The Commission’s policy on Mutual Recognition Agreements can be found in Commission 
Staff Working Paper produced jointly by the Direct orates General Trade and for Enterprise: 'Priorities 
for Bilateral/Regional Trade Related Activities in th e field of Mutual recognition Agreements' - SEC 
(2004) 1072.  
En relación con las normas sanitarias establ ecidas por las Comunidades y las disposiciones 
establecidas en el numeral 2 del artículo 6 del Ac uerdo de Medidas Sanitarias y Fitosanitarias, 
sobre reconocimiento de zonas libres de plagas o enfermedades y zonas de escasa prevalencia de 
plagas o enfermedades, Colombia se permite preguntar: 
¿Cuáles zonas libres de plagas o enfermedad es y zonas de escasa prevalencia de los 
Miembros de la OMC han sido reconocidas por las Comunidades? 
 
A: Las Comunidades cumplen escrupulosamente las normas establecidas por CODEX, OIE e IPPC. La legislación comunitaria está disponible en Eur lex.
7 La CE notifica al acuerdo de la OMC 
sobre MSFS.  
¿A que países que no están declarados como libres en todo su territorio de una plaga o 
enfermedad, les permiten el acceso de sus productos?  
 A: La respuesta está en el apartado anterior 
 
Las Comunidades han reconocido en la OMC que el sector privado impone cada vez más 
altos requisitos ambientales que de hecho se co nstituyen en estándares obligatorios que deben 
cumplir nuestros exportadores para permanecer en este mercado.  
¿Que están haciendo las Comunidades para im pedir que los altos estándares sanitarios, 
técnicos y ambientales exigidos por el sect or privado no se impongan como restricciones no 
arancelarias y discriminatorias en contra de  las exportaciones de países en desarrollo? 
 
A: The EC cannot prohibit private actors (manufacturers, wholesalers, retailers, consumer etc.) 
operating within its territory from demanding given st andards in their commercial relations with other 
private actors, provided these are compatible with th e standards set by the regulator.  Private labels 
are, however, required to be able to prove any clai ms they make.  It should be noted that many goods 
which conform to standards over and above those provided by the regulator are often able to 
command premium prices.  Accordingly, such goods can provide a potential market opportunity for those who supply them, including developing countries. 
 
                                                     
 
7  http://europa.eu.int/eur-l ex/en/search/s earch_oj.html. WT/TPR/M/136/Add.1 
Page 29 
 
 
 ¿Cómo garantizan las Comunidades la trans parencia de los sellos ambientales y la 
participación de los países en desarrollo en los procesos de estandarización ambiental? 
 
A: Voluntary ecolabels, in the EC as in other WTO members, are submitted to the rules of the 
TBT Agreement, in particular to the Code of Conduct in annex 3. 
As regards the voluntary ecolabel « The Flower », specific measures are foreseen to facilitate 
participation by DCs : reduced fees, participation of DCs in the definition of the criteria, more 
generally transparency of the process and openness to  participation by stakeholders from the EU and 
from outside the EU (you will find more de tailed information via http://europa.eu.int/ 
comm/environment/ecolabel/index_en.htm ). 
Finally, the EC support technical assistance projects to help DCs benefit from ecolabels (you 
will find more information in the EC Submission WT/CTE/W/231 dated September 2003  to the 
WTO CTE -http://www.wto.org/spanish/tratop_s/envir_s/wrk_committee_s.htm )  
Q3: Sobre Agricultura
:  En cuanto a la reforma de la Política Agrícola Común las 
Comunidades afirman en el párrafo 15 de su inform e que reducirá las distorsiones en el comercio, 
y en el párrafo 14 del resumen del informe de la Secretaría se afirma que el objetivo de la reforma 
es reducir distorsiones y reducir el apoyo a la agricultura, a través de los pagos desconectados, sobre lo cual nos permitimos preguntar a las Comunidades: 
¿Cómo aseguran las Comunidades que los pag os desconectados no tendrán efectos en 
producción y comercio, cuando los pagos conectados a la producción no se eliminan totalmente? 
 
A: Some payments remain crop specific, for environmental reasons or because they cover 
traditional productions. In addition, Member States  have the possibility to keep some payments 
commodity specific, under given limits and conditions .  It is estimated that payments remaining 
commodity-specific are not likely to represent more than 15% of the total amount of direct payments 
for the EU when the reform will be fully implemented. 
 
 ¿Cuál es el presupuesto aprobado por las Comunidades para los próximos años en que esté vigente esta reforma que les permita asegurar una reducción de los apoyos a la agricultura? 
Agradeceríamos a las Comunidades nos informen el  presupuesto anual comunitario, así como la 
cofinanciación anual requerida que aportaran los estados Miembros, y el gasto total presupuestado 
de la PAC para cada año.  
A: The EU budget is fixed annually so that the preci se size of the appropriations to be devoted to 
agriculture in future years is not yet known.  Ho wever, the total budget appropriations for each of the 
major  spending groups (“headings”) of EU activity  must respect pre-determined annual expenditure 
ceilings, covering a period of up to seven years.  The present multi-annual financial framework has 
been fixed for the period 2000-2006 and discussions have begun on the next financial framework for 
the period commencing in 2007.  For agriculture  and rural development, the Commission has 
proposed the amounts shown in the attached annex for the period to 2013 and which take into account 
the impact of enlargement to include Bulgaria and Romania as from 2007. 
It is proposed that the amounts for agriculture  and rural development for 2007-2013 will form 
part of an overall heading entitled “Preservation and management and natu ral resources” which will 
also include expenditures on fisheries and environm ental measures.  The actual decision on the next 
multi-annual financial framework, which is not exp ected before 2005, is a matter for the EU Council 
of Ministers and the European Parliament. 
For rural development, the amounts which will fall directly on the budgets of the Member 
States is variable given that the proposed rates of  co-financing vary according to region and type of 
measure implemented under the rura l development programmes in each  Member State. The financial WT/TPR/M/136/Add.1 
Page 30  
 
participation of the Member State is only determ ined when the programme is approved and in any 
case their effective participation is on ly known on an annual basis ex post. 
 
Proposed Financial Framework 2007–2013  Amounts for agriculture and rural development within Heading 2 (Preservation and 
management of natural resources) 
Global appropriations for 
commitments (excluding 
administrative expenditure) 2005 2006 2007 2008 2009 2010 2011 2012 2013 
Million € at 2004 prices                   
1. CAP (current heading 1A) 43.724 43.735 43.500 43.673 43.354 43.034 42.714 42.506 42.293 
2. Rural Development 10.560 10.544 11.759 12.235 12.700 12.825 12.952 13.077 13.205 
 
 En el párrafo 28 de la parte IV, sobre la am pliación de 10 nuevos miembros y la reforma de 
la PAC, se informa sobre una propuesta de la Comisión para adaptar las Actas de Adhesión y la 
reforma de la PAC para asegurar su funcionamiento conjunto. 
¿Nos podrían informar las Comunidades sobre el estado en que se encuentra esta 
propuesta? ¿Si aún no se ha aprobado, cuando se estima que se hará? 
 
A: The 2 Commission proposals on adapting the Act of Accession and the CAP reform texts 
have both now been adopted by the Council, as Council Decision 281/2004 and Council Regulation 
583/2004 respectively.   
¿A pesar de que aún no se ha terminado el pr oceso de renegociación arancelaria  por la 
ampliación de 10 nuevos miembros iniciado en vi rtud del artículo XXVIII del Acuerdo General, 
podrían confirmar las Comunidades si desde 2004 se tiene previsto otorgar transferencias del 
presupuesto de la PAC a los 10 nuevos miembros, aunque el proceso iniciado no haya terminado? 
 
A: The WTO XXIV.6 negotiations are a WTO ob ligation for the EC as a consequence of 
enlargement and is not a pre-requisit for enlargemen t. So, the 10 new Member States have started to 
benefit from the CAP as of the date of accession, on  the conditions spelled out in the Acts of 
Accession. 
 
¿Cómo incide la ampliación y los compromi sos previstos con sus nuevos 10 miembros, en 
las concesiones actuales de las Comunidades Eur opeas en la OMC en cuanto a contingentes 
arancelarios, ayudas internas y subsidios a la exportación? 
 
A: The EC is following the same methodology as fo r the previous enlargement. As regards TRQs 
this means consolidation and netting-out of TRQs . The export subsidy commitments for agricultural 
products will be aggregated and netted-out, wher eas the domestic support commitments of individual 
New Member States will he aggreg ated to the EC15 commitment. 
 
¿Por cuanto tiempo se mantendría la opción para los 10 nuevos miembros de aplicar un 
régimen de pago por superficie en hectáreas? ¿C uántas hectáreas estarían cubiertas con estos 
pagos en cada uno de los 10 nuevos miembros? ¿Al estar vinculados estos pagos a los factores de 
producción, cuál consideran las Comunidades qu e será su efecto en producción y comercio? 
 
A: For new Member States the application of the Single Area Payment System (SAPS) is 
possible until the end of 2006, with the possibility of  renewal twice thereafter for a period of one year, 
meaning that application would continue until the end of 2008. All the agri cultural area of the eight 
new Member States concerned is eligible for the SA PS payments (see figures in the following table).  
 WT/TPR/M/136/Add.1 
Page 31 
 
 
  Cyprus Czech Rep Estonia Hungar y Latvia Lithuania Poland Slovakia 
SAPS area 
(000 ha) 140 3.469 800 4.355 1.475 2.288 14.843 1.955 
 
 The new Single Area Payment System (SAPS) is fully decoupled from production. Farmers 
will receive a payment for each hectare of land mainta ined in good agricultural condition and this will 
not depend on the type of crop or livestock produc tion employed. Equally there will be no obligation 
to produce. The SAPS will give farmers complete fl exibility to respond to market demand, and it will 
have no effect on farmers’ commercial decisions. For th is reason it is not expected to have any effect 
on production of any particular crop or on the trade of agricultural commodities.  Q4: Sobre servicios
:  Notamos que el documento de la Secretaría se limita a los servicios 
financieros, de telecomunicaciones, transporte  y turismo. Podrían las Comunidades informarnos 
sobre los desarrollos recientes r especto a la reglamentación que hayan realizado en otros sectores 
de servicios como en los profesionales, de  energía y ambientales, entre otros? 
 
A: In the sector of professional services, the main developments during the period under review 
concern a new proposed directive on the recognition of professional  qualifications and a report on 
competitions in professional services. Detailed information is available in 
http://europa.eu.int/comm/internal_market/qualifi cations/index_en.htm and in  http://europa.eu.int/ 
comm/competition/liberalization/conference/libprofconference.html.   The energy sector of the EC is in a process of progressive opening up to competition. Detailed 
information is available in http://e uropa.eu.int/pol/ener/index_en.htm. 
As regards environmental services, they are captu red by the proposal for a services directive. 
Developments in EC environment policy are also rele vant in this field. More detailed information is 
available in  http://europa.eu.int/comm/internal _market/en/services/services/index.htm and in 
http://europa.eu.int/pol/env/index_en.htm 
 
En la política comercial actual de las Co munidades Europeas un número importante de 
sectores de servicios no está sujeto a una polític a general de mercado int erno. Como consecuencia 
de lo anterior, existe una disparidad de reglame ntaciones entre los diferen tes Estados y engorrosos 
trámites administrativos que dificultan y limitan el acceso al mercado Europeo. El párrafo 92 de la 
parte IV del documento de la Secretaria cita los servicios de “turismo, distribución, construcción, 
ingeniería y consultoría, certificac ión y ensayos, así como los pr estados por agencias de empleo”, 
siendo estos sectores en donde los países en desarrollo tenemos exportaciones o potencial 
exportador. Teniendo en cuenta lo anterior: ¿Cóm o compatibiliza la CE la propuesta de Directiva 
de Lisboa con las negociaciones de servicio en curso? 
 
A: Within the Lisbon process, the proposal for a services directive has the objective to further 
improve the conditions for effective trade of ser vices and competition in the EC. Foreign services 
suppliers’ access to the EC and to their Member St ates’ markets is governed by the EC and their 
Member States GATS schedule of commitments, which is very liberal in most sectors. Foreign 
services suppliers already established in the EC and m eeting the conditions set by Article 48 of the EC 
Treaty are entitled to national treatment within th e limits imposed by the EC GATS schedule and 
might, like EC services suppliers, benefit from the further improvements pursued by the proposal for a services directive 
 
El párrafo 93 de la parte IV menciona que “l a lista refundida de compromisos y la lista de 
exenciones al trato NMF entrarán en vigor cu ando finalicen las negociaciones en curso con 
arreglo al artículo XXI (Modificación de las Li stas) del AGCS”.  Teniendo en cuenta que el WT/TPR/M/136/Add.1 
Page 32  
 
artículo XXI se refiere exclusivamente a modificaci ón o retiro de compromisos específicos y que el 
AGCS contempla condiciones específicas para las exenciones NMF, quisiéramos saber: ¿Cuál será 
el procedimiento que utilizarán las CE para sustitu ir su lista actual de exenciones NMF por la 
nueva consolidada?  
A: The European Communities consider that they are entitled to enlarge the existing MFN 
exemptions under GATS Article V (5).  However,  the EC have not launched the appropriate 
procedure yet.  The inclusion of the consolidated list of MFN exemptions was intended to give a complete overview of what the final schedule and the list of MFN exemptions might look like at the end of the process.  The EC will revert in due time  to the issue of MFN exemptions in accordance 
with the appropriate procedure. 
 
La CE presentó su oferta inicial condicional dentro de las negociaciones de servicios en 
junio de 2003 con base en su lista de compromisos existente.  En la decisión adoptada en julio, se acordó que en mayo de 2005 los Miembros presen tarían sus ofertas mejoradas. Dado que la CE se 
encuentra negociando la lista refundida de compro misos  con arreglo al artículo XXI de manera 
paralela quisiéramos saber: ¿Cómo está pensando gara ntizar la consistencia en los dos procesos? 
 
A: Only the final GATS EC-25 schedule of commi tments agreed under the Art. XXI procedure 
would be the baseline for an EC-25 offer within th e context of the DDA negotiations (Art. XIX of the 
GATS). 
 
QUESTIONS FROM CHINA  
  Anti-dumping
:  The method of “analogy country” is widely used by the EC to calculate the 
dumping margin in the antidumping cases. This pr actice is discriminative in nature and denies the 
comparative advantage of the Chinese enterprises.  China is concerned with the practice of the EC 
in choosing the analogy country.  Chinese enterpris es’ pleas over the choice of the analogy country 
are usually not accepted by the EC. These practi ces in antidumping have caused great concerns 
among Chinese enterprises.  Q1: Please provide the legal basis and exact crit eria for selecting “analogy country” in the anti-
dumping investigations by the EC.  
A: The legal base for the determination of norma l value on the basis of the price, constructed 
value or export price (either to another third count ry or to the Community) in a third market economy 
country is provided by Article 2(7)  of Council Regulation (EC) No 384/96
8 (the 'basic anti-dumping 
Regulation').  
 The aim of this provision is to avoid the u se of prices and costs which are not driven by 
market forces but which are the result of or ar e influenced by distortions still occurring on such 
markets. These distortions can be e.g. a lack of regulatory framework or outright state intervention 
and price-setting.   Article 2(7)(a) of the basic anti-dumping Re gulation specifies four broad criteria for the 
determination of the analogue country, which are examined in datail in our reply to question 3. 
• it shall be selected in a not unreasonable ma nner, due account being taken of anyreliable 
information available at the time of selection; 
• time limits shall be taken into account; 
• a market economy third country subject to th e same investigation shall be used when 
appropriate;  
                                                     
 
8  OJ L 56, 6.3.1996, p. 1. Regulation as last amended by Council Regulation (EC) No 2238/00 (OJ 
L257, 11.10.00, p.2). WT/TPR/M/136/Add.1 
Page 33 
 
 
 • the Community may be selected as a reference only if use of a third country is not possible. 
 Q2: In the antidumping case of 35 types of textile  products, the EC chose Mexico and refused to 
accept Chinese enterprises’ request for using Tha iland as the analogy country. Please provide the 
rationale for its decision. Does it relate to, e.g., the level of development of the countries concerned, 
or the respective production processe s, or the comparability of the products, or the comparability of 
the respective industries?  
A: The investigation is ongoing (on spot visits in  China) in the case concerning certain finished 
polyester filament apparel fabrics. Several thir d countries were proposed as analogue country: in 
particular Thailand, Mexico, Turkey. The Commission services are currently examining all the 
proposals which were made for the choice of the an alogue country. No final decision has been made 
yet  
Q3: The EC investigation authorities had chosen US and Japan as analogy countries for some 
Chinese cases. It is clear that  countries such as US and Japan are not at a similar level of 
development as China and that to take the domestic  prices in those countries as a benchmark for 
the normal value in China is certainly not relev ant. Please explain the EC’s rationale of the 
decisions for selecting these analogy countries for anti-dumping investigations cases against 
China?  
A: The EC investigation authorities had chosen US and Japan as analogue countries in some cases concerning imports originating in China in fu ll compliance with the criteria listed in Article 2 
(7). The second paragraph of Article 2(7)(a) speci fies that the selection shall be made "in a not 
unreasonable manner, due account bei ng taken of any reliable information available at the time of 
selection". This criterion has been clarified by th e practice developed over time by the Community 
institutions, leading to the more specific criteria lis ted below. These are the criteria used to determine 
the reasonableness of the choice of analogue country. 
• Cooperation 
• Representativity of domestic sales 
• Competition conditions 
• Comparability of production volume 
• Comparability of production process, access to raw materials 
 The first two of these criteria, comparability of  products and cooperation, must necessarily be 
satisfied in order for a certain country to be selected . The relevance of the other criteria, which are not 
and cannot be listed in a strict order of precedence,  may vary according to the circumstances of the 
proceeding. These criteria may cause one country to be selected rather than another if there are several 
eligible candidates, or they may cause adjustments to  the normal value to be made in order to ensure 
comparability.  For instance the United States was se lected as analogue country in Coke 80+ from China
9, 
among other reasons, because its producers had simila r access to raw mate rial as the Chinese 
producers.  Q4. Please provide the details on how the EC investigation authorities select an analogy country and obtain relevant information from the en terprises of that country with regard to a 
particular case. Please explain whether the EC pr ovides the information promptly to the victim 
enterprises of the specifi c cases. If not, why? 
 
                                                     
 
9 OJ L 316, 15.12.2000, p. 30. WT/TPR/M/136/Add.1 
Page 34  
 
A: When lodging an anti-dumping complaint concerning imports from a non-market economy country or a country with an economy in trans ition, the complainant has to propose at least one 
analogue country and to provide the relevant in formation available to it, including names of 
companies. This information is examined to the ex tent possible before initiation of an investigation. 
The envisaged analogue country is then mentioned in  the notice of initiation. Interested parties are 
given ten days to comment. At the same time, pr oducers or their associations in the envisaged 
analogue country are contacted in order to ascertain their willingness to cooperate. 
 Comments from interested parties are received in a majority of cases, and one or more alternative analogue countries are often proposed: as is the case for the complainants, these interested 
parties have to provide elements justifying their propo sal as well as a list of  companies in the country 
proposed. Producers are then contacted in order to find out whether they wish to cooperate in the 
investigation. Interested parties are asked to co mment on the new countries proposed within 10 days. 
Producers who have agreed to cooperate are subject to the same procedure as exporting 
producers in the country concerned in cases concerning market economy countries, involving questionnaires, confidential and non-conf idential versions of the replies,  deficiency lette rs and on-spot 
visits. All the information provided by them is s ubject to the usual exacting verification standards 
applied in all anti-dumping proceedings.  
Q5. Could the EC justify the consistency of 5 criteria of the EC market economy conditions 
with the rules of WTO Anti-dumping Agreement? Plea se also explain the rationale of the 5 criteria. 
 
A: Exporters in economies in transition from a non-market economy to a market economy are 
entitled to apply for “market economy treatment”, i. e. the use of their costs and prices for the 
determination of dumping. Such expor ters have to show that they comply with the five criteria listed 
in the EC’s Basic regulation Art 2(7).  The rationale lying under these criteria is to en sure that the companies applying to individual 
Market Economy Treatment operate s under market conditions whic h are normally enjoyed in a 
market economy. If the criteria are not fulfilled, costs and prices for the purpose of anti-dumping calculations will be distorted and unreliable.  In this respect, the EC notes, inter alia, that  Article 2.7 of the Agreement on implementation 
of Article VI of the General Agreement on Tariffs and Trade 1994 (the 'WTO anti-dumping 
agreement') makes a reference to th e second Supplementary Provision to paragraph 1 of Article VI in 
Annex I to GATT 1994. 
 Additionally, several WTO Members apply similar criteria in the context of such determinations. The EC also notes that the WTO accession protocol for PRC covers this issue  
 
 EC Enlargement:
  After enlargement of the EC, the legal basis on which trade remedy 
measures were taken prior to the enlargement is not necessarily applicable to each and every case.  
However, the EC still decided that “the trade reme dy measures in force in the EC-15 would apply for 
the enlarged EC-25”.  Therefore, the automatic application of the ex isting trade remedy measures by 
the new member states is not fu lly in line with GATT 1994, Agr eement on Anti-dumping Measures 
and Agreement on Safeguards.  
Q6. How does the EC justify the consistency, if any, of the automatic application of these 
measures with the related WTO provisions?  Please provide the relevant legal basis. 
 
A: The question of how to reconcile the enlarg ement of a customs union and the application of 
existing anti-dumping measures is not explicitly addressed in the GATT 1994 or in the WTO Anti-
Dumping Agreement. The EC has taken a very prudent  approach as outlined in the answer to question 
7.  From an anti-dumping  perspective, enlargemen t of a customs union is just another of the many 
parameters which are subject to modifications dur ing the lifespan of an anti-dumping measure (such 
as e.g. the increase of the number of domestic producer s, other changes in the market structure etc.). WT/TPR/M/136/Add.1 
Page 35 
 
 
 Since the enlargement does normally not alter the jus tification (i.e. the fulfilment of the criteria) for 
applying an anti-dumping measure, there should be no reason to question the extension of existing 
anti-dumping measures to new members of a customs union provided that the possibility of a review 
for changed circumstances is given  Q7. The EC intends to deal with the issue of au tomatic application of trade remedy measures by 
making "reviews" as stipulated in the related WTO Agreements.  Please explain the rationale behind this approach.  Is the EC considering any other approaches to address Members’ concerns in this 
regard?   
A: In the area of trade defence, EU enlargement falls into category of situations that can be 
addressed under provisions of Article 11.2 ADA. Enlargement by itself does not automatically vary the dumping, subsidy and injury pa rameters, which form the basis of every trade defence measure. In 
the vast majority of cases, imports of the product c oncerned into the new EU Member States are small 
compared to those into the EU-15. In addition, th e overall industrial output of the new Member States 
represents less than 5-7% of the industrial output of  the EU-15. All of this suggests that it would be 
legally unreasonable and superfluous to open automa tically reviews of all existing trade defence 
measures, creating a significant burden for a great number of operators involved and resulting in no 
change for most of the measures. The EU’s appr oach is to open reviews for those cases where 
interested parties request such reviews and subm it evidence that the measures would have been 
significantly different if they were based on information including the new Member States. 
Accordingly, exporting producers in third countries were encouraged and are still welcome to submit 
such requests for enlargement-related interim revi ews. A notice containing such an invitation was 
published in the EC’s official journal on 15.4. 2004 (OJ C91/2). Alternative approaches, e.g., 
automatic suspension of measures or automatic ex officio reviews, would be less appropriate for 
addressing the situation of the enlargement of a customs union, i.e., less compatible with the 
principles of the ADA including rights of domestic industry to be protected from injurious dumping 
 
Q8. Does the EC intend to conduct reviews of the injury determinations of all the trade remedy 
measures already taken in EC-15 and those under investigations after the enlargement so as to decide whether that these determinations still rem ain valid and the relevant  trade remedy measures 
will continue to be imposed?  If  so, have such reviews begun? 
 A: Regarding the measures imposed in the EU-15 and applied in the EU-10, please see reply to 
Question No.7. As in the previous 1995 enlargem ent, the Commission will not automatically review 
all the existing EU trade defence measures due to enlargement. All investigations (both new and 
review investigations) that have been initiated as of 1 May 2004 are based on the analysis of the EU-
25 data. 
 The EC would like to point out that, in order to ensure a smoother transition for everyone in 
the area of trade defence due to EU enlargement,  the EC approach was widely communicated, in 
particular via the following measures: 
• The EC launched an enlargement website “Enlargement – Impact on Trade Defence”. 
• Already in 2003 the EC set up a special Help Desk to answer questions on the impact of 
enlargement on trade defence and its contact information was published on the above-mentioned 
website and circulated to administrations and ec onomic operators in the EU acceding countries, the 
EU Member States and in third countries. 
• Seminars with the economic operators in the new Member States (producers, importers, users 
which were to be potentially be affected by  EU AD measures) were organised. Everybody was 
informed, so that they could react and ask for a review, in case it was thought to be necessary. WT/TPR/M/136/Add.1 
Page 36  
 
• The EC also published a notice in the Official Journal OJ C 91/2 of 15.4.2004. The notice 
again set out the principles of the approach and re-ite rated an invitation to interested parties to request 
reviews. 
• The enlargement approach w as already three times discu ssed in this WTO Committee. 
• In addition, a further step was taken to ensure that enlargement runs smoothly in terms of AD. 
The EC set up an enlargement task force. This taskforce contacted all countries with which the EC has 
significant measures in force. Signi ficant has been interpreted in a very broad sense: 32 delegations 
were contacted, out of a total of 33 against which the EC has measures in fo rce. The Taskforce looked 
at all measures in force on the basis of a number of  parameters: the level of the duty, the significance 
of the level of imports into the acceding States, the level of production and the level of prices in the 
acceding States. As a result of this exercise we received 50 communications. On 20 March 2004 the 
EC initiated on its own initiative eight Article 11. 2 ADA reviews (Official Journal C 70/15), which 
led to the amendments of measures in force concerning eight products. 
 
Q9. Will the EC consider any positive response to  any request for review of the injury 
determination of a case upon enlargement without a parallel request to revi ew the appropriate level 
of the related duties?  If the EC receives a request  for a review of the injury determination only, 
will it self-initiate an accompanying review of the related level of duties?  Please explain the legal 
basis for the EC’s policy in this regard. 
 
A: According to the EC current practice, th e duty level is based on either dumping/subsidy 
margin or on injury margin, whichever of the two is  lower. In about 50% of all the EC cases the duty 
level is based on the injury level that is lower than the dumping/subsidy margin. Unfortunately, there 
are no WTO rules making the “lesser duty rule” mandatory and no WTO rules that govern the 
determination of the injury margin. Nevertheless, the EC accepts a request for changing the level of 
the duties both on the basis of dumping/subsidization margin and/or injury margin.  Whether the EC will accept a request for an in jury interim review would very much depend 
on the circumstances of the particular case at hand. As a starting point, the EC would consider that an injury review does not necessarily have to be accompanied by, for example, a dumping review.  
However, if the information at hand suggests that the enlargement had not only affected the injury 
findings to a significant degree, but also the dumping findings, there would be neither reason, nor, indeed, any possibility to ignore this information.  The same approach would apply in the inverse 
situation, i.e. when the Community  industry requests a review limited to issues of dumping or subsidy 
 Q10. The EC has expressed that the exporters may request suspension of measures on the basis that injury would not be likely to recur after th e EC enlargement. Could the EC elaborate on what 
procedures are envisaged? What are the evidentia ry requirements relating to this request?  
 
A: The EC maintains that it considers requests for reviews of measures as the most appropriate 
way of addressing changes that might have occurred to the circumstances on which measures are 
based due to the EU enlargement. However, indeed , there are other possibilities to make sure that 
measures are in force and imposed only to the extent that is justified. Suspension of measures can be 
requested in cases where there is evidence that market conditions (e.g., injury parameters) have 
temporarily changed to an extent that injury would be unlikely to resume as a result of the suspension. 
If this is proved, measures may be suspended for a period of nine months a nd further extended for a 
period not exceeding one year. As a principle, th e possibility of a suspension of measures addresses 
situations where the nature of changes is tem porary, significant, exceptional and requires urgent 
intervention. For trade defence measu res the EU enlargement normally entails changes, if any, that are 
of a more permanent nature, so reviews ar e more appropriate means to address them. 
 
Q11. Article XXIV: 5(a) of GATT 1994 provides that duties and other regulations of commerce 
imposed at the establishment of any customs unio n shall not on the whole be higher or more WT/TPR/M/136/Add.1 
Page 37 
 
 
 restrictive than the general incidence of the duti es and other regulations of commerce applicable in 
the constituent territories  prior to the formation of such a union.  Automatic application of the 
existing trade remedy measures to imports to the ten new member countries would make their duties 
and other regulations of commerce higher or more restrictive, thus  making the application of these 
measures to those ten countries not in compliance with Article XXIV: 5(a).  How can this current 
practice of the EC be justified? 
 
A: Article XXIV: 5 (a) of GATT 1994 does not in tend to deprive Members who are part of a 
customs union or the customs union itself of their powe r to regulate against unfair trade as long as the 
conditions of the relevant agreements  are fulfilled. It should also be  recalled that the extension of 
common policies of an existing customs union such as anti-dumping to new members is the most certain 
way of ensuring that all parties of the enlarged customs union apply a common external policy, as required by Article XXIV: 8 (a) (ii) of GATT 1994 
 
Q12. How does the EC plan to ensure that the Uruguay Round export su bsidy commitments of 
both the EC-15 and the ten new member states are met with the enlargement of the EC?  Please 
also provide legal justification for the methodology the EC intends to use, if any.   
A: The EC will continue to ensure through Co mmunity legislation that the export subsidy 
commitments of the European Union enlarged to 25 Member States are respected. The EC intends to 
consolidate export subsidy commitments of the EC  15 and the 10 new Member States in conformity 
with WTO principles and drawing from WTO practice of the last EU enlargement. 
  
 Trade remedy measures rela ted to textiles and clothing
:  China appreciates the notification 
that EC will eliminate all the existing restrictions on the import of textiles and clothing products from 1 January 2005 in accordance with the requirement of the Agreement on Textiles and 
Clothing (ATC) as notified to the WTO. However,  China also notice with concern that there are 
signs of increasing use of trade remedies in EC ta rgeted at textiles and clothing products after 
those products are fully integrated into the norm al GATT rules and disciplines. For example, the 
EC has announced to make its trade remedy regu lations more “user-friendly” in the textiles and 
clothing sector after 2005. Such a measure will defin itely affect the legitimate benefits that all the 
developing members of WTO including China who a re entitled to gain after the expiration of ATC. 
 
Q13. How will the EC act to avoid abuse of trade  remedy measures against import of textiles and 
clothing products after the elim ination of the import quotas?  
 
A: The EC has no intention of abusing trade reme dy measures after the end of the ATC. In fact, 
during the whole period of the ATC  EC, contrary to  several other members, did not even avail itself 
of the possibility to invoke the safegua rd clause in Article 6 of the ATC. 
 It is obvious, however, that after 2004 normal and also specific rules do apply and may be invoked if and when necessary and justified. Obvious ly, EC can not give any undertaking not in the 
future to avail itself of existing possibilities unde r the WTO if considered necessary in specific 
circumstances. In this connection it is not necessary to draw attention to particular accession protocols 
in existence. 
 
Q14. In particular, how will the EC fulfill its commitments in the Doha Ministerial Decision to 
exercise particular consideration before initiating in vestigations in the context of anti-dumping 
remedies on textile and clothing exports fr om developing members previously subject to 
quantitative restrictions under the ATC for a period of two years following full integration of the 
sector into the GATT rules?  
 WT/TPR/M/136/Add.1 
Page 38  
 
A: Antidumping remedies will only be applied after due scrutiny of the merits of each case which may emerge. In the case of China, EC wishes to draw attention to nu merous allegations about 
price-undercutting practices which seem to take place in the market.  
 Customs administrative procedures
 
 
Q15. Please clarify whether and when the EC will fully implement uniform management system 
among the 25 EC members on uniformed customs administrative procedures, e.g. on duty collection disputes and appeals. Please provide relevant legal documents if there are any. 
 
A: The Community Customs Code lays down common rules for customs procedures, including 
duty collection and appeals. The first phase of an  appeal is before the administration and the 
Community rules on decisions apply. The second phase of an appeal is before national courts in 
accordance with the rules in force in  that Member State, given that the Community is a customs union 
made up of different States. However, the national co urts are obliged to submit a case to the European 
Court of Justice where the interpretation of Community law is at stake. 
 
 SPS/TBT measures:
  There are a great variety of technical regulations and standards in the 
EC which are very strict and subject to frequent revision. Although they were made under the 
claimed purpose of protection of human health and life safety, as well as the consumers’ interests, 
the inappropriate application would lead to trade pr otectionism, which would directly or indirectly 
affect negatively the international trade, especially  the trade of the developing countries of which 
the development level far lags behind the devel oped countries. Hence, the superficial equality 
conceals the factual unfairness. 
The EC CR standard on lighters :  In May 2002, the European Standardization Committee 
published the standard of lighters [i.e. EN: 13869, abbreviated as CR], which stipulated that all 
prices of one-off lighters less than 2.00 EURO have to be equipped with safe device against children’ ignition. However, it is appreciated that th e EC decided to deter the entry into force of the 
CR standard.  
 Q16. Please provide the justification of the prac tice as to linking the product safety with the 
product price. 
 
A: It is estimated that 1220 fires a year are cau sed in the European Union by children playing 
with lighters resulting in 260 non fatal injuries and 20 fatal injuries. 
 Some ten years ago, the USA, Canada, Aust ralia and New Zealand introduced mandatory 
requirements on child resistance (CR)-mechanisms (requiring the use of two hands to ignite the 
lighter) for all disposable lighters with a production co st less than 2 US $.  A preliminary review of 
the effects of introducing such requirements in the USA indicates that fires caused by children playing 
with lighters decreased by 40% and deaths and injuries in these fires each decreased by 50%.  It 
therefore seems clear that these measures have been effective in protecting human health and safety in 
an area of significant risk.  Financial savings to national health systems conf irm this analysis.  The annual net benefits to 
the US taxpayers are estimated at $125 million.  It is  estimated that, if this voluntary standard were 
applied by European manufacturers and importers, between €60 million and €205 million per year 
would be saved just for injuries and deaths.   The voluntary CEN-standard is in fact b ased upon the mandatory requirements in those 
countries where they exist (USA, Canada, Australi a and New Zealand), including the 2 $-limit for 
application (here 2 EUR).  This approach has been  favoured in order to minimise compliance issues 
for industry. US data indicates few problems in  practise with more expensive lighters.   
 No decision has been taken to give the standa rd a formal role under European legislation. 
 WT/TPR/M/136/Add.1 
Page 39 
 
 
 Q17. Please explain how is the standard consistent  with the article 2.2 of the WTO Agreement on 
Technical Barriers on Trade. 
 A: This is at this stage a voluntary CEN-standard thus not covered by article 2.2 of the WTO 
TBT Agreement.  The EU considers that this sta ndard fully complies with the TBT Code of Good 
Practice for the Preparation, Adoption and A pplication of Standards (Annex 3 of the TBT 
Agreement). 
 
REACH:
  The EC published the draft of the “Pra ctice of the Registration, Evaluation and 
Authorization of the Chemical Products”[hereafter referred as to the “REACH”]. According to the 
provision on the “registration” in the draft reg ulation, manufacturers of about 30,000 chemical 
products, covering over almost all chemical produ cts as well as down-stream products, will be 
required to register, and if the manufacturers fail to fulfill the registration in time, their products 
would not be able to be sold in the EC market.  
 The cost of the registration and testing pr ovided in the draft REACH is very high. The re-
registration, evaluation and authorization of th e known chemical products will cost considerable 
amount of resources. The limitation on the definition of the “manufacturer” will cause 
discriminative treatment to the manufacturers from the third countries, which may export chemical 
products to the EC, and lead to the failure in protecting the intellectual property rights of these 
manufacturers in an equal manner. The method of  “one registration by each manufacturer or 
importer” applied according to the draft REACH is  more trade restrictive than the method of “One 
Registration each Substance” which was used by the EC preciously. The EC’s new regulations on 
chemical products will possibly result in the transfer of the raw material industry with low-added 
value and high pollution into the developing count ries. Therefore we strongly urge the EC to carry 
out a careful evaluation of the negative impact on  the developing countries of the implementation 
of the REACH regulations.  
Q18. We would appreciate it if the EC could explai n the consistency, if any, of the regulation 
with article 2.2 in the WTO “Agreement  on the Technical Barriers to Trade”. 
 A: Both in the context of internet cons ultation which took place mid-2003 and the TBT 
notification of January, WTO members have provide d a variety of reactions and questions, which 
have been duly taken into account   The Commission has carefully designed its legisla tive proposal in such a way that it is neither 
discriminatory, nor more trade rest rictive than necessary to fulfil the objectives, as defined in its 2002 
White Paper.  More generally, the European  Communities considers that REACH is WTO-
compatible.  In addition to the preparation of guidance documents for EU and non-EU enterprises, the 
European Commission is willing to continue its efforts to explain the REACH proposal to WTO 
members, and continue to pursue bilateral and multilateral dialogues with our trading partners. 
 
Q19. Please explain why the management system of “One Registration each Substance” which is 
of less restriction on trade than the “One reg istration per manufacturer or importer” method 
provided in the REACH, can not sufficiently achie ve the purpose of the protection of human, and 
animal health and life, as well as the environment? 
 
A: The benefits of the one substance - one regi stration system (OSOR) of mandatory sharing of 
non-animal test data and other core data are claime d to be lower costs for industry at the registration 
stage, a lower likelihood of duplicate testing and simpler handling of the subsequent single dossier. 
The Commission is open to any changes to REAC H which can reduce costs and improve workability 
as long as the  timetable, objectives and scope of REACH are retained. Howe ver, the Commission has WT/TPR/M/136/Add.1 
Page 40  
 
concerns about the workability of the OSOR proposal , particularly in relation to the compulsory 
requirement foreseen for industry consortia to agree core technical data.  
Q20. Please explain how to ensure that the req uirements set out by the REACH will not exceed 
the extent necessary to serve its legislative obj ective, assumed that all of these objectives are 
justified. 
 
A: Concerns are frequently expressed about the proportionality of the impact of REACH on downstream users of chemicals, on international supply chains and therefore on world trade. The 
European Commission’s extended impact assessment already includes consideration of the indirect 
impact of REACH on downstream users as well as its di rect cost to the chemical industry. Moreover, 
in light of the comments received from various sources, the European Commission is now engaged in 
a process of further impact assessment with stak eholders including representatives of third country 
manufacturers in Europe. The scope of the work includes further de tailed analysis of the potential 
impact on downstream users and supply chains in global industries such as automobiles and 
electronics. This work includes analysis of effect s on the global sourcing of chemical substances, 
components and articles. It will in particular fo cus on concerns raised about the likelihood and 
implications of the potential withdrawal fro m the market of substances due to REACH. 
 
Q2.1 Please explain how the REACH is consistent  with article 12.3 of the WTO Agreement on 
Technical Barriers on Trade?  
A: The European Communities recognises its obligations under Article 12.3 of the TBT Agreement to take account of the special devel opment, financial and trade needs of developing 
country Members, with a view to ensuring that REACH does not create unnecessary obstacles to 
exports from developing country Members. In a ddition to the provision of extensive guidance 
material, we aim to do our best to help devel oping countries to familiarise themselves with REACH 
and comply with it. This will be achieved in part  through technical assistance and capacity building 
but also through training and provision of information by the proposed Chemicals Agency. 
 
Q22. Please provide information on whether the physical testing and/or registration can be 
operated in countries other than the EC countries? If yes, please clarify the detailed terms and 
procedures?  
A: Data may be generated from non-EU laborator ies. REACH allows the use of non-GLP (good 
laboratory practice) data in certain circumstan ces (see Annex IX, section 1.1 of the proposal). 
 Registrants must be established within the Community, as REACH cannot impose legal 
obligations on a manufacturer established outside the EU .  In order to assist non-EU manufacturers to 
register, they can choose either to pass on the respons ibility to their importers; or to use the facility set 
out in article 6a to establish an “only represen tative” in the EU to register on their behalf. 
 
Q23. Article 6.1 of the REACH stipulates that “the manufacturer, or importer, whose articles 
contain the substances in total amount higher or eq ual to 1T/year”, is requ ested to be registered. 
This is in fact a requirement to the manufacturer to prove that no risks exist in the chemical 
substances of their products, instead of the case th at the administrative authorities bear the burden 
to indicate the existence of the risks. Bearing in mind that certain chemical substances have not 
been proved to contain any risks in their long-term application, could the EC please clarify if this 
reversed burden of proof is necessary to meet the legal objective?  
 A: Article 6.1 does not require EU producers and importers of articles to prove that there is no 
risk. It simply requires the registration of any da ngerous substance that is known to be released. 
Likewise, article 6.2 only imposes an obligation to  notify the Agency if the producer or importer WT/TPR/M/136/Add.1 
Page 41 
 
 
 knows or is told that a dangerous substance may be unintentionally released during use. There is no 
requirement to prove there is no risk.  
The testing method of pesticide residues in tea
:  EC has established the residue limit level 
in tea on more than 153 pesticides. According to the principles of the risk evaluation system, the 
MRLs of the chemical substance in food should be assessed as per Individual Intake in a Day. As 
the tea is normally prepared with hot water, the MRLs should be assessed according to the release 
amount of the pesticide residues in the hot water.  However, the EC regulates that the test on the 
limit level of pesticide residues in tea is carried ou t on the samples of tea leaves instead of on the 
release amount in the hot water. This testing me thod leads to a false conclusion that the tea 
imported contains excessive level of pesticide residues,.  
Q24. Please explain the consistency, if any, of th is testing method with the articles 5.1 and 5.4 of 
the Agreement on the Application of Sanita ry and Phytosanitary Measures of WTO and the 
provisions of its Appendix C ? 
 
A: The EC has established a sampling method b ased on a risk assessment technique developed 
by Codex Alimentarius.  This body has establishe d a standardised method (ref. Codex STAN 229 and 
CAC/GL 33-1999), which allows to test the level of pesticide residues in tea.  The method foresees to 
analyse tea leaves (bulk product) instead of liquid tea,  because for the latter there is a lack of scientific 
evidence underpinning the standardised analysis of the product.  In this respect the EC is fully in line 
with Articles 5.1 and 5.4 of the SPS Agreement. Th e objective of minimizing negative trade effects 
(as stipulated in Art. 5.4 of the SPS Agreement) is taken into account as the EC is fully in line with 
the internationally accepted methodology. 
 
Directive of the Product Ecology Design (Draft):
  In August 1, 2003, the European 
Commission approved the “Directive of the Product  Ecology Design”(Draft). The draft introduced 
the concept of the “evaluation of effect on the environment by the lifecycle”, establishing that the 
manufacturers have to make the eligible conformity  assessment on and affi x the “CE” marking to 
their products. Otherwise, the products are not allowed to enter into the EC’s market. The above 
measure will considerably increase the costs of  the manufacturers. In addition, the relevant 
intellectual property and know-how will possibly subject to risks. The draft directive stipulated that if the manufacturers are the members of the “EC Ecology Management and Review Plan”, or their 
products have been granted an ecological label by EC,  they will be considered as consistent with 
the relevant requirements. However, the manuf acturers from non-EC countries are usually not 
able to participate in the Plan and therefore can not be exempted from the requirements. In fact, 
the EC products and its manufacturers are enjoying  an advantage over those non-EC products and 
manufacturers which, as a result, lead to discri mination towards the manufacturers and products 
outside the EC’s territory. 
 
Q2. Please clarify how the EC can avoid this discriminative practice in the implementation of 
the Directive. 
 A: The Commission has examined the potential economic impact on manufacturers (see p.17-19 of explanatory memorandum, COM(2003)453) a nd identified potential costs and benefits. 
Implementing measures will be proposed on the basis of an impact assessme nt which will consider 
inter alia the possible issues of intellectual prope rty. Due account will be taken of international 
standards and of international obligations of the EU in the context of WTO (for more details see 
explanatory memorandum, COM(2003)453, p.25). The EU eco-label is proposed as one possible 
means of presumption of conformity and its use is not intended to be obligatory. Participation in the WT/TPR/M/136/Add.1 
Page 42  
 
EU eco-label scheme is open to all products; for example, Chinese made light bulbs marketed in 
Denmark have been awarded the EU eco-label.  
The WEEE Directive and the ROHS Directive:
  EC published the EC Directive on Waste 
Electrical and Electronic Equipment (WEEE) and EC Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and El ectronic Equipment (RoHS) in the Official 
Journal of the European Union on February 13, 2003. 
 
Q26. Please clarify the consistency, if any, be tween these regulations and Article 2.2 of the 
Agreement on Technical Barriers on Trade? 
 
A: The measures taken through WEEE and RoHS pur sue a legitimate polic y objective, namely 
protection of the environment as well as of human health. The instruments chosen to pursue this 
objective have been specifically selected with a view  to identifying the least trade-restrictive measures 
available.  Finally, both directives apply wit hout discrimination to EU and non-EU producers. 
 
Q27. Please provide the legislations and their st atus of  implementation of the various Member 
States of EC on this issue. Does EC plan to provid e guidelines to the non-EC enterprises for their 
entry into the EC market?  
A: Directive 2002/95/EC (RoHS) and Directive 2002/96/EC (WEEE) had to be transposed into 
Member States legislation by 13 August 2004. Only Greece met the deadline. The other Member 
States are in the process of transposing the legisl ation into their national laws. The Directives are 
addressed to the Member States and national laws of  the Member States are binding for the  economic 
operators concerned. The Commission’s services ar e currently drafting guidelines for the Member 
States and are planning to publish them. Howe ver, timing and format is still under discussion 
 
Q28. Please provide the information on the recen t developments of the research conducted by the 
EC on the substitute materials to the 6 nocuous chemicals provided by the ROHS. If possible, 
please provide a list of the EC’s enterprises capable of recycling such 6 chemicals. 
 A: The Commission’s services are not investigating substitutes for the substances subject to the 
ban of Article 4(1) of the RoHS Directive. W ith regard to the chemicals in question, the 
Commission’s services have launched a study cove ring certain applications which are currently 
exempted from the requirements of this Article plus a selected list of additional requests for exemptions. The study will be completed by mid December. 
 
Q29. Please provide the testing method of these 6 nocuous chemicals. 
 A: The RoHS Directive does not make reference to testing methods. 
 
Subsidies on Agricultural Products;  Variable duties on imported agricultural products
:  
The imposition of variable duties on imported agr icultural products negatively affects the fair 
competition between imported and domestic agricultural products, and impairs the competitiveness of agricultural products from other WTO Members on the EC market. 
 
Q30. Please clarify the consistency, if any, be tween the practices of imposing variable duties on 
imported agricultural products and the objective of th e WTO to establish a fair and market-oriented 
trading system.  WT/TPR/M/136/Add.1 
Page 43 
 
 
 A: The EC schedule does not contain variable du ties. The EC tariff contains only fixed duties 
which are ad valorem duties or specific duties. Ou r tariff complies with our WTO commitments and is 
fully WTO compatible. Consequently, we do not understand this question. 
 
 Subsidies on Agricultural Products ;  Domestic Support:   Although the EC has reduced the 
domestic support by certain degree, the total amo unt of subsidies remains high. Meanwhile, the 
new Common Agricultural Policy still provides huge su bsidies related to or based on prices, volume 
of production and farming acreage. 
 
Q31. Please indicate what measures of real effect the EC is planning to take in order to reduce 
its total AMS. 
 A: The EC’s CAP has been on the path of refo rm since the policy changes of 1992. Agenda 2000 
reinforced the reform process. This has already led to reduced AMS levels as can be seen from the 
current AMS as notified to WTO and reviewed in the Committee on Agriculture. The reforms of 2003 
will lead to further much more significant AMS reductions. Legislation implementing the 2003 reforms is already in force.   Trade in services ;  Market access of the banking services
:  The financial administrative 
agency in a member state of the EC governs the bran ch of a bank from a WTO developing Member 
the same way as the subsidiary of a bank, whic h requires the branch to satisfy the capital 
sufficiency rate requirement and to proportionate  its credit business to its own capital scale. 
However, this requirement is not applied to th e branches of the banks from developed Members. 
Besides, a set of specific qualif ication requirements are imposed on the executives of the banks 
which are not from the European Economic Zone . The requirement has negative impact onto the 
personnel placement and job arrangement of the foreign commercial banks.      Q32. Please explain the rationality of these requirements. 
 
A: Third country branching requirements ar e not harmonised by the banking Directive 
2000/12/EC, but are subject to local (national) rules.  The only rule the Directive lays down is that 
third country branches cannot receive more favourable treatment than EU branches.  As there are no other rules at EU level the Member States’ supe rvisors are free to fix conditions of access for third-
country branches in the light of the branch’s risk profile.  In doing so, similar cases are given similar 
prudential treatment within the respect of WTO obl igations. This means that the MFN principle is 
respected. 
 
Trade in services ;  Other issues in the area of trade in Service
  
 
Q33. The EC has maintained a large number of MFN exemptions in trade in services, making 
itself virtually one of the Member s with the largest MFN exemptions . It appears to be asymmetrical 
with the EC’s leading player role in the WTO wh ich is based on MFN. Will the EC attempt to 
reduce the number of its MFN exemptions unilat erally or in the context of the current services 
negotiations?  
A: The eventual elimination of MFN exempti ons is an issue to be addressed in services 
negotiations under the DDA. 
 
Q34. The EC has notified to the Council for Trade  in Services that with the EC enlargement 
which took place respectively in 1995 and 2004, EC will extend its MFN exemptions in the 
Uruguay Round to cover those new member states. So far the EC has not invoked the relevant WT/TPR/M/136/Add.1 
Page 44  
 
WTO procedures to justify its extension of MFN exemptions. We would like to know when the EC 
will start the WTO process in this regard and which procedures the EC will resort to?   
 
A: The European Communities consider that they are entitled to enlarge the existing MFN 
exemptions under GATS Article V (5). The EC will launch the relevant WTO procedures in due time. 
 
Q35. In the constructions services, the EC tends to bias towards the use of construction service 
providers coming from its neighboring countries . Has the EC got any plan to liberalize its 
restrictions against the use of such servi ce providers coming from other regions? 
 A: The EC have made broad GATS commitmen ts in the construction sector and have a 
construction market open to foreign service provide rs. More favourable treatment as regards work 
permits may be awarded to Europ ean and Mediterranean countries, pur suant to bilateral agreements 
covered by a MFN exemption listed by the EC under the GATS. 
 
Q36. The criteria and administrative procedures of some of the EC member states governing the 
entry of natural persons who wish to provide servi ces to their clients a re unnecessarily burdensome 
and appear to be unreasonable. Will those crite ria and procedures be reviewed and improved in 
such a way that they will make the EC’s commit ments under the GATS practically effective and 
commercially meaningful? 
 
A: The EC's Mode 4 commitments are amongst the most comprehensive of any WTO Member 
and the EC consider that they have been implem ented in an effective and commercially meaningful 
manner.  Nevertheless, the EC and their Member States are continuously working to improve 
procedures generally and to address specific problems which are brought to our attention, whilst at the 
same time ensuring that the integr ity of our systems is maintained. 
 
QUESTIONS FROM JAPAN 
 TRADE REGIME
 
  
Unification of interpretation and implementation of EC directives   
 Q1. The EC member States sometimes have differen t interpretations and deadlines for the 
implementation of EC directives. For example, with regard to Directive 2000/53/EC on end-of-life 
vehicles of September 2000, scrapped vehicles were tr ansported to member States where regulations 
were not rigorous, and inappropriate processing an d disposal was carried out. Such a situation 
could not only undermine the original objective of the Directive, but also force enterprises to take 
different actions for each member State, which involves a great deal of needless effort.  
 Therefore, Japan respectfully req uests each member State to take measures leading to the 
harmonization and unification of deadlines for implementation, interpretation and inspection 
methods for EC directives.  
 
A: The EC member States sometimes have different interpretations and deadlines for the implementation of EC directives. For example, w ith regard to Directive 2000/53/EC on end-of-life 
vehicles of September 2000, scrapped vehicles were transported to member States where regulations 
were not rigorous, and inappropria te processing and disposal was carri ed out. Such a situation could 
not only undermine the original objective of the Direc tive, but also force enterprises to take different 
actions for each member State, which invol ves a great deal of needless effort.  
 Therefore, Japan respectfully requests each me mber State to take measures leading to the 
harmonization and unification of deadlines for impl ementation, interpretation and inspection methods 
for EC directives WT/TPR/M/136/Add.1 
Page 45 
 
 
 Q2. Regarding this point, please indicate the specific views of the EC. 
 
A: Directives are legislative instruments which have  to be transposed into the national laws of 
the Member States.  The Directive is binding for th e Member States with respect to the results to be 
achieved, but Member States are free to choose the forms and methods on how to achieve these 
results.  Directives normally lay down a deadline by when the Member States should transpose this 
Directive into the national laws and by when certa in targets of the Directive should be achieved   
 Member States were required to transpose the obligations of Directive 2000/53/EC into their 
national laws by 21 April 2002.  Furthermore, th is Directive establishes a ‘heavy metal ban’ as from 1 
July 2003 and lays down recovery/recycling/reuse targets which should be achieved as from 1 July 
2006.  In a number of cases these deadlines have pr oven problematic.  Conse quently, proceedings to 
rectify this situation are underway.  Apart from the formal infringement procedures against the Member States who have not or 
incorrectly transposed the Directive, th e Commission services also regularly discuss the 
implementation issues related to this Directive wi th the Member State experts during the Technical 
Adaptation Committee meetings established on the basis of Article 18 of Directive 75/442/EEC. 
Within this framework, the Commission services give  guidance to the Member States in order to 
facilitate a harmonised application of this Directive in the Community. 
 
Collective preferences
 
  
 The seminar on collective preferences wa s held under the auspices of the European 
Commission in September of this year.   Q3. Please explain how the EC is planning to deal with this matter. 
 A: EC has launched an academic and interdi sciplinary debate on the topic of “collective 
preferences” and its implications for global gove rnance. This debate showed that “collective 
preferences” have become a major shaping factor in international relations. In the current context of 
declining traditional trade barriers, trade disputes te nd to be more related to the specificities of the 
norms and rules societies decide on according to social choices.   The EC has just begun reflecting on the issue of collective preferences and it supports and 
encourages reflection on this issue also by others  as it is up to each WTO Member to pursue its own 
collective preferences.  
 
Trade policy
 
  
 At the Council Meeting of the European Union on 24 September 2004, a proposal was 
made to “extend single market rules and EU stan dards internationally in trade negotiations”. The 
actions mentioned in this proposal are considered to  be one of the important actions in EU trade 
policy.   Q4. Please explain how the EC intends to realize this proposal. 
 A: The statement appearing in the Competitiv eness Council conclusions must be placed in 
context. The debate focused on a Commission Comm unication on "Fostering structural change: an 
industrial policy for an enlarged Europe" (COM(2004)  274 final of 20.04.2004). Here the debate was 
about extending the single market rules and EU standards to neighbouring countries . 
The Strategy Paper on European Neighbourhood Policy  (COM(2004) 373 of 12.05.2004) is a clear 
example of the implementation of this proposal. Action Plans for each country will be set out to ensure that both the EU and its partners derive the full benefits of the provisions on trade contained in WT/TPR/M/136/Add.1 
Page 46  
 
the existing Partnership and Cooperation or Asso ciation Agreements. Legislative and regulatory 
approximation will be pursued on the basis of comm only agreed priorities, focusing on the most 
relevant elements of the EU legislation for stimul ation of trade and economic integration, taking into 
account the economic structure of the partner country , and the current level of harmonisation with EU 
legislation. Regarding goods, step s will be taken to improve administrative co-operation, and ensure 
the gradual elimination of non- tariff barriers to trade and the development of appropriate 
infrastructures. The movement of industrial products  can be facilitated through convergence with the 
European Union’s laws and regulatory structures. This could be supplemente d by the conclusion of 
Agreements on Conformity Assessment and Acceptan ce of Industrial Products (ACAAs) between the 
Community and individual partners.  
 
Trade Regulations and Business Environment
 (p.20-22, para.18-25) 
Corporate governance  (p.21, para. 22) 
  
 Japan supports the EC's efforts to enhance corporate governance. However, Japan believes 
that it is important to emphasize the independence of individual companies and that to ensure 
sound corporate governance companies should not be  controlled by the government.   When each 
company makes use of the reports on Corporat e Social Responsibility (CSR) as a means of 
achieving substantial corporate governance, Japan considers that it is desirable to value the 
independency of the company.    
Q5. Regarding this point, please indicate the specific views of the EC.  
A: In the Communication from the Commission c oncerning Corporate Social Responsibility: A 
business contribution to Sustainable Deve lopment, COM(2002) 347 final of 2
nd July 2002; 
http://europa.eu.int/comm/employment_social/soc -dial/csr/csr_index.htm), CSR is defined as a 
concept whereby companies integrate social and e nvironmental concerns in their business operations 
and in their interaction with their stakeholders on a voluntary basis. The objective is a responsible 
behaviour in all their operations and loca tions, trying also to encompass this inter alia in their supply 
chain. This can help addressing the concerns of  host countries (developing countries) and civil 
societies.  An EU CSR process led to the creation of th e European multi-stakeholder Forum on CSR in 
2002, following the Commission Communication on CSR. The Forum concluded its work on 29 June 
2004. The various Roundtables addressed specific as pects of implementing CSR in the EU and in 
developing countries (see http://forum.europa.eu.in t/irc/empl/csr_eu_multi_stakeholder_forum/info/ 
data/en/csr%20ems%20forum.htm).  Reporting on its CSR activities is certainly important and valuable for a company in order to 
let its shareholders and stakeholders know what its policy is as regards implementing CSR. Voluntary 
reporting, without precise format, was prompted by  companies themselves. However, the diversity 
and spread of such reports that cover different ar eas have raised questions as to whether common 
Guidelines for reporting would not make sense.  The Communication from the Commission to the Council and the European Parliament 
Modernising Company Law and Enhancing Corporate G overnance in the European - A Plan to Move 
Forward (21.05.2003) adopted an Action Pl an (available on http://europa.eu.int/comm/ 
internal_market/en/company/company/official/index. htm) that recognises the importance of flexibility 
for EU Member States its implementation, considering the diversity of governance systems in the European Union.  At this stage, CSR reporting is voluntary at EU level. Many companies do produce reports on 
Corporate Social Responsibility along differe nt formats (GRI report, website, etc.). WT/TPR/M/136/Add.1 
Page 47 
 
 
  As far as annual reports are concerned, directive 2003/51/EC10 of the European Parliament 
and of the Council of 18 June 2003 amending Directives 78/660/EEC, 83/349/EEC, 86/635/EEC and 91/674/EEC on the annual and consolidated accounts of  certain types of companies, banks and other 
financial institutions and insurance undertakings, h as introduced a certain measure of reporting on 
social and environmental aspects of the operation of companies, as these relate to the ‘fair review’ of 
their activities. 
 The annual report and the consolidated annua l report should present a fair review of the 
development of the business and of its position. It s hould not be restricted to the financial aspects of 
the company's business. It is expected that, where appropriate, this should lead to an analysis of 
environmental and social aspects necessary for an  understanding of the company's development, 
performance or position. Member States may choose to  waive the obligation to provide non-financial 
information in the annual report for undertakings below a certain size.  Trade Agreements (p. 22-36, para. 26-66 
 
Q6. Please indicate the specific views of the EC on the relations between WTO negotiations and 
FTA negotiations.   Q7. Please also provide the future pl ans for FTA negotiations in the EC. 
 
A: Combined to Qs 6 and 7
. (from DG TRADE) 
 The EC is committed, above all, to multila teral institutions and solutions. The Doha 
Development Agenda (DDA) is, and will continue to be, the EC’s main priority. In consequence, all 
of the EU’s RTA-negotiation processes originate fro m before the launch of the DDA and the EC has 
so far chosen to refrain from introducing new RTA- negotiations before the conclusion of the DDA. At 
the same time, while the EC has no plans at the mo ment to negotiate further RTAs beyond those for 
which the EC already has negotiating mandates, the Community has begun some trade dialogues and 
initiatives with different regions – in particular  the Andean Community, the Central American 
Countries, and ASEAN – that could, once the DDA is completed and depending on whether the 
partner regions in question move to a high level of re gional integration, pave the way for future RTAs.  
 In general, the EC’s bilateral and regiona l trade initiatives are designed to complement 
multilateral efforts by, inter alia, go beyond the scope of the WTO agenda or serve as additional tools 
for the promotion of sustainable development in de veloping countries. In that way, multilateral and 
regional processes can be mutually reinforcing. (DG Trade’s Reply)  A: Combined to Qs 6 and 7
. (from DG AGRI) 
 The EU intends in 2005 to open negotiations for further liberalization of trade in agriculture 
with Mediterranean Partner Countries in the Barcel ona Process in view to reach by 2010 a free trade 
area. Trade liberalization should also be negotiated in both directions with countries of the Western 
Balkans involved in the Stabilization and Associ ation Process like Serbia and Montenegro, Albania 
and Bosnia and Herzegovina. . In 2005 the EU will also negotiate further bilateral trade opening in 
agriculture with Iceland and ask for reopening bilatera l negotiations in agriculture with Norway, in the 
framework of the European Economic Area agreement. 
 EU will continue negotiations with Mercosur and initialize an evaluation process with Central 
America and the Andean Pact in view of negot iating FTAs in the future Putting in place Regional 
Trade Agreements is also a key feature of the undergoing negotiations of Economic Partnership 
Agreements with ACP countries, wh ich should be finalised by 2008. 
                                                      
10 OJ L178 of 17.7.2003, p. 16-22. WT/TPR/M/136/Add.1 
Page 48  
 
TRADE POLICIES AND PRACTICES BY MEASURE
 
  
Change in tariff classification of digital video cameras (camcorders)  (p.40, para. 14) 
 
Q8. The EC tariff classification distinguishes be tween video cameras capable of recording not 
only signals from embedded camera units but al so signals from external equipment, and those 
incapable of that. The EC has set different tariff rates, 14% and 4.9%, respectively.  
In the Official Journal of the European Union of 6 July 2001, the EC announced the change in 
practice of tariff classification on camcorders in the name of clarifying the interpretation. Japan is 
of the view that the change was a substantial one, and that it should have been issued as a 
“Regulation”. There were some manufacturers or im porters that suffered the disadvantage of a 
nearly 10% tariff increase due to this sudden ch ange of practice. In addition, Japan understands 
that some EC member States have notified those co mpanies that they would collect unpaid customs 
duties retroactively because past import declarations were erroneous.  These abrupt changes in tariff classification a ffect the predictability of business and fair 
trade in the EC. Japan requests the withdrawal of the notifications by some EC member States for 
the retroactive collection of customs duties, an d the unified operation of the classification 
throughout the EC.   Q9  Regarding this point, please indicate the specific views of the EC. 
 
A: Combined answers to Qs 8 and 9
 
 The EU fails to understand the reference to p.  40 para. 14 in connection with the question put. 
Having said so, it will hereby provide an answer th at hopefully definitively dispels the doubts of the 
Japanese delegation. 
 Customs authorities in Member States classify imported goods irrespective of their origin and 
in keeping with uniform procedures based on th e measures adopted by Commission, whose tasks 
include the preservation of consistent and uniform custom procedures through the EU. It is therefore 
incorrect to claim unfair and inconsistent interpreta tion of the EU tariff, or as stated in the question 
“abrupt changes”. More specifically, there is no evidence of incorrect classification by the EU 
customs authorities of such products originating in Japan.  
 Before determining the duty rate to be app lied to a product, one must find the corresponding 
single heading in the nomenclature of the EC's Co mmon Customs Tariff and in accordance with the 
General Interpretative Rules, whic h are set out in the introductory part of the tariff. For digital 
camcorders the relevant HS heading is 8525 40 ("st ill image video cameras and other video camera 
recorders"). For this heading our combined nomen clature contains two sub-headings for “still image 
video cameras” (CN code 8525 40 11 for “digital” on es with a duty rate of “free” and CN code 8525 
40 19 for "other" still video cameras with a duty rate of 4.9%) and two sub-head ings for “other video 
camera recorders” (CN code 8525 40 91 for those "onl y able to record sound and images taken by the 
television camera" with a duty rate of 4.9%, and CN  code 8525 40 99 for “other” types with a rate of 
duty of 14%).  Video cameras are classified according to the fu nction they are capable to perform, and based 
on an evaluation of the physical characteristics of the product. According to their physical 
characteristics, video cameras which include the n ecessary hardware to reco rd or reproduce sound and 
images other than by the camera itself are classifi ed under tariff heading 8525  40 99 with a duty of 
14%. As pointed out in the question by the Japanese de legation, last year, an explanatory note to the 
Combined Nomenclature was published to clarify the situation in this respect. The practice is uniform 
in the whole EU.  
The duty rates in question are the outcome of  GATT and then WTO negotiations for the post-
UR Information Technology Agreement (ITA), and re flect an equitable balance between what was 
given to the EU and what it offered in terms of market access. Many members of the WTO, including 
the EC, are parties to the ITA. It is worth stressing that most ITA participants were opposed to the WT/TPR/M/136/Add.1 
Page 49 
 
 
 inclusion of consumer electronic products. As a r esult ITA focused on eliminating duties on core IT 
products, covering only few digital products whilst most  digital consumer electronic products, such as 
digital video cameras or Internet television sets are excluded. 
The current multilateral trade negotiations unde r the Doha Development Agenda offer an 
opportunity for comprehensive tariff reductions cove ring all industrial products without a priori 
exceptions starting in 2005. In the context of these negotiations the EC has proposed to sharply 
compress duties, including for the products that ar e of interest to Japan. The success of our proposal 
depends on the wider package that WTO Members will  accept and which will re flect the consensus of 
WTO Members as well as the reciprocal balance of concessions between developed and the most advanced developing countries. 
 
Tariff classification of flat panel display monitors
 (p.40, para. 14) 
 
Q10. The nomenclature committee of the EC ha s been considering changing the tariff 
classification of flat panel display (LCD, PDP)  monitors. Japan is concerned that certain PDP 
monitors with PC terminals, which should be classi fied as output units for computers (tariff is 0%) 
and in practice has been imported at the tariff of 0%, will be classified as video monitors (tariff is 14%) without any clear classification criteria in ac cordance with WCO rules. In fact, two types of 
PDP monitors were classified as video mon itors under Commission Regulation No. 754/2004 of 21 
April 2004. There is also information that a simila r change of tariff classification is also being 
considered for LCD monitors.  
 
 Such a change of tariff classification may not only become a precedent for unreasonable 
tariff classification, but also affect predictab ility of business in the EC. Therefore, Japan requests 
the reconsideration and reexamination of these matters.     Q11. Regarding this point, please indicate the specific views of the EC. 
 A: Combined answers to Qs 10 and 11
 
 We find it slightly puzzling that the Japan ese delegation refers to “unreasonable tariff 
classification” in respect of flat panel display (L CD or PDP) monitors. Not only is there no evidence 
of specific problems for this type of  product, but as this answer will demonstrate the EC is merely 
acting in keeping with its WTO commitments, including the ITA agreement.  
Today monitors can be classified under th e following headings in our Combined 
Nomenclature (NC): 8471 computer screens (free), 8528 TV sets and other consumer monitors (14%) 
and 8531 indicator panels (free). 
Our ITA commitments cover heading 8471 in toto . This concerns monitors that are “of a kind 
solely or principally  used in an automatic data-processing syst em”. It is to be noted that Commission 
Regulation (EC) No 1288/91 established that colour monitors capable of accepting signals “only” 
from automatic data-processing (ADP) machines and not capable of reproducing a colour image from 
a composite video-signal (TV) were also classifiable under 8471.  The ITA descriptions in Attachments A and B limit the scope of the coverage  for duty free 
treatment. In fact, as mentioned in the previous  reply, the ITA does not cover consumer products, 
such as could be screens which are not
 solely or principally  for the use in an ADP machine. For these 
products, classification is determined by General Ru les 1 and 6 for the interpretation of the EC’s 
Combined Nomenclature, and by the wording of CN codes 8528, 8528 21 and 8528 21 90. For the reasons given above, classification under subheading 8 471 60 is excluded when these monitors are not 
of a kind solely or principally used in an ADP system. Likewise, these products are not classifiable under heading 8531 when their function is not to provide visual indication for signalling purposes (in 
this respect see the Explanatory Notes of the Harmonized System to heading 8531, point D). 
 We consider that Japan’s question for these products alludes to a notion whereby tariff 
concessions are the result of classification (or re-class ification) of products. In this respect we would WT/TPR/M/136/Add.1 
Page 50  
 
like to firmly recall that duty reductions can only be  the result of negotiations in multilateral rounds. 
We, therefore, consider that the ideal setting for such duties to be discussed are the current 
negotiations under the DDA where Japan will also be able to make its contribution in order for EU 
exporters also to improve access for their produc ts onto the Japanese market, for instance for high 
quality leather, where Japan still maintains a quot a system which appears anachronistic in an 
international context where all import quotas for te xtile and clothing will be eliminated beginning of 
next year  Tariff
 (p.41, para. 19) 
 
Q12. In spite of being an advanced economic re gion, the EC levies high tariffs on automobiles 
(10%), and audio/visual equipment (14%). Given the EC’s position as a leader in promoting trade liberalization, Japan considers that the EC should  take steps during WTO-DDA negotiations to 
abolish or substantially reduce the tariffs imposed  on automobiles and audio/visual equipment. 
 Regarding this point, please indicate the specific views of the EC. 
 
A: The current structure of duties of the EU is the result of previous GATT negotiations culminating last in the Uruguay Round Agreement. As  implied in the question, the EU has a very low 
level of duties overall. As regards the two specific products mentioned, we can  reiterate what said in 
reply to the previous question, ie that the curre nt DDA negotiations offer the best opportunity to 
further liberalisation in our reciprocal markets as  well as in developing countries markets, including 
by removing non-tariff barriers. In this respect, wh ilst the duty rate of 14% for some consumer 
electronic goods is a transparent measure, it appear s that access for similar or other electronic 
products of EU origin onto the Japanese market is currently hampered by a whole series of obstacles 
whose costs add sometimes much more than 14% for the price finally paid by the consumer. 
 In this respect, the EU hopes that Japan is equally committed to removing tariff and non-tariff 
barriers under the current round  of multilateral negotiations. 
 
Enlargement of the EU
 
 Q13. Japan has been holding negotiations with the EC on the Article XXIV: 6 of the GATT 
regarding the increase of rates of duty in some new EC member States. Japan, aiming for a 
satisfactory solution prior to EU enlargement on 1 May of this year, has submitted a list of selective 
products which Japan is interested in, according to the EC’s request, although Japan had no obligation to do so. The EC has insisted that it must make a package of compensation with the entire list of selective products every  member is interested in and that it will be difficult to solve the 
problem promptly unless those product lists from major interested countries are gathered. For this 
reason, negotiations have not been successful even to this day. This is partly the result of the fact 
that the EC did not submit enough statistical data for the members to calculate the damages and 
therefore, the members were not able to submit th e selective product lists early enough. The 
timeline of the enlargement this time was set in advance and the EC could have prepared the 
necessary data well in advance. Furthermore, the negotiations deadline could be set back in order to have more time. It is beyond our understanding  that the EC, with all of the benefits of a 
liberalized market, is neglecting WTO rules, for example, repeated delays in submissions of the 
EC’s drafts and insufficient communication with in the European Commission. This behavior 
suggests a lack of sincerity in the negotiatio ns. Japan requests that the EC resolves these 
negotiations promptly and that the EC makes sure that such satiation never happens in the negotiation process during the next enlargement. 
 In addition, regarding the selective produ ct list Japan has submitted, the European 
Commission has picked up the products which Jap an has the right to negotiate. However, Japan 
considers that whether we have the negotiation ri ghts or not does not influence the choice of 
products which will be subject to compensatory adjustment.  WT/TPR/M/136/Add.1 
Page 51 
 
 
 Regarding this point, please indicate the specific views of the EC. 
 
A: On 19 January the EC notified the WTO of th e enlargement of the European Communities as 
well as the data required when enlarging the cust oms union. While enlargement is generally truly 
positive also in terms of a vast lowering of tariffs and with credits vastly outweighing debits (in most 
cases more than 30 times), the EC has been rea dy to address the truly few situations, where the 
alignment of the tariffs of the ten new Member Stat es to those of the EC results in an increase. The 
EC initiated negotiations promptly after the havi ng notified with a view to achieve a negotiated 
solution. Given the delay of negotiations, measures have been taken to avoid to the extent possible 
diversification of trade, pending the finalization of negotiations. The EC has invited the claiming 
members of the WTO to extend the period of negotia tions with another six months, with a view to 
ensure sufficient time for reaching a negotiated so lution. All members of the WTO have accepted the 
EC’s invitation, generally understanding the reasons fo r the delays. The EC continues to wish to close 
negotiations as soon as possible.  
Anti-dumping
 (p.57-58, para. 61-63) 
 
Q14. According to the Report by the Secretariat, since 2002 a total of 24 cases of anti-dumping (AD) investigations were terminated without any measures being taken. Japan would like the EC 
investigating authority to note that initiating an  AD investigation will have a significant impact on 
exporters, because an initiation of an investigation could pave the way for AD duties to be imposed 
in the future, which could result in adversely affecting importers’ interests in products of the 
investigated company. Therefore, Japan considers that the authorities should  be more cautious in deciding whether or not 
to initiate investigations, and to do so only af ter they have thoroughly examined the evidence.  
 Regarding this point, please indicate the specific views of the EC. 
 
A: The EC shares Japan's view that the an tidumping instrument should not be abused for 
protectionist purposes and inves tigations should only be initiated after thorough examination of the 
evidence. The conditions for the initiation of an an tidumping investigation are quite strict and are 
clearly described in Article 5 of th e EC’s Basic Regulation. At the same  time, one has to bear in mind 
that the evidence needed for the initiation of an inve stigation is not necessarily  of the same quality and 
quantity, as the evidence needed to adopt Anti-du mping measures. This has been recognised by the 
WTO Dispute Settlement Body. Indeed the comprehe nsive evidence normally submitted by an exporter 
in response to the questionnaire is only availabl e at the investigation stage. The fact that 24 
investigations had been termin ated without measures proves th at the evidence provided by the 
exporters is thoroughly examined and taken into consideration 
 
Q15. Furthermore, Japan notes that there were amen dments to the AD related regulations in the 
beginning of 2004.  Please indicate whether or not there is any case where these amendments can cause a 
burden to enterprises, and if so, what sort of burden it would be. 
 A: There are no additional burden s to enterprises, to the contrary, importers, traders, users and 
exporters are one of the main beneficiaries of the re form:  Investigations will be shorter, transparency 
increased and market uncertainty eliminated – this  will reduce the costs for exporters, important in 
particular for those in developing countries.   And it will allow foreseeability for all economic 
operators.  These are all long-standing demands fro m exporting countries voiced in the continuous 
dialogue we have on trade defence ma tters.  Finally,  the changes will not affect the general approach 
of the EC which will continue to be one of the most moderate users of the AD instrument (less than 
0.1% of its imports covered by measures)  with the highest standards world-wide WT/TPR/M/136/Add.1 
Page 52  
 
New Chemical Policy (REACH)
 
 Q16. With regard to the proposal of the REACH Regulation (Regulation of the European 
Parliament and of the Council concerning the Registration, Evaluation, Authorisation and 
Restriction of Chemicals), Japan supports the e fforts of the EC aimed at protecting human health 
and the environment. However, Japan has some concerns about possible adverse effects on trade 
and investment from countries outside the EC and the workability of the REACH system, and respectfully requests further bilateral discussion s on the content of this regulation.   
Specifically, the REACH system, in principle, req uires every manufacturer and importer to register 
chemical substances, even if they have already been registered, and therefore, a registrant would 
carry out the same risk assessment or hazard assessment as that already made by other registrants. 
In this regard, this regulation is thought to be more trade-restrictive than necessary in light of the 
objectives of the regulation, due to the impos ition of excessive obligations on industries. 
 Furthermore, with regard to a registration or  notification of chemical substances contained 
in articles, the scope of chemical substances and articles has not been identified, and is wider than 
those under the systems of other countries’ chemic al management regulations, including Japan’s. 
This could also be more trade-restrictive than necessary.  In addition, on the basis of the above, Japan thinks that the treatment of chemical substances used in automobiles is already regul ated by the Directive 2000/53/EC on end-of life 
vehicles, and therefore, there is no need to regulate it by the REACH Regulation.   
 Regarding this point, please indicate the specific views of the EC. 
 
A: The Commission has carefully designed its legisl ative proposal in such a way that it is neither 
discriminatory, nor more trade restrictive than ne cessary to fulfill the objectives defined in the 2002 
White Paper. More generally, the European Comm unities considers that REACH is WTO-compatible. 
Furthermore, both in the context of internet consultation which took place mid-2003 and the TBT 
notification of January, WTO members have provided a variety of reactions and questions. We have 
not detected any potential problems.  
In addition to the preparation of guidance documents for EU and non-EU enterprises, the 
European Commission is willing to continue its efforts to explain the REACH proposal to WTO 
members, and continue to pursue bilateral and multilateral dialogues with our trading partners. 
 The REACH proposal requires manufacturers and importers of a substance to register the 
substance together with information on its prope rties and uses. The aim of Directive 2000/53/EC on 
end-of life vehicles (ELV-directive) is as a first priority the prevention of waste which means that it addresses vehicles with a view to their treatment at the waste stage. To fulfil the requirements of the 
directive, Member States must encourage  vehicle producers/importers to limit the use of hazardous 
substances in vehicles and to reduce them, i.e. to prevent their release into the environment (Art. 4.1 
ELV). REACH will help vehicle producers/importers to  achieve this goal as better information will be 
available on hazardous properties of substances.  
 The ELV-directive does not require any registratio n of substances used in the manufacture of 
cars nor does it authorise or approve chemicals intende d to be used in cars. However, it bans certain 
substances for use in cars, in order for the vehicl e to be treated properly at its end of life. The 
restrictions under the REACH proposal will take ov er those from the current Directive 76/769/EEC 
restricting the marketing and use of certain da ngerous substances and preparations. Further 
restrictions might of course be added to the new legislation in the future. Therefore REACH and the 
ELV-directive will be complementary to each other. 
The opinion of the European Commission is theref ore that there are no overlaps between REACH and 
ELV and that information generated under REACH should facilitate compliance with the aims and 
obligations under ELV.  WT/TPR/M/136/Add.1 
Page 53 
 
 
 Framework Directive on eco-design of energy-using products (EuP)  
 Q17. A proposal for a framework directive on the eco-design of energy-using products (EuP), 
was adopted by the EC on August 1, 2003.  
 Regarding this proposal, please provide the tim e schedule for the legislative process, and 
for the process of adopting implementing measures. 
 
A: It can reasonably be expected that the pr oposal will be adopted by Council and European 
Parliament during the first semester of 2005; implementing measures could then follow in 2006. 
Every possible draft implementing measure will be  notified to the WTO/TBT before adoption. 
 Q18. With regard to implementation measures, pl ease also provide information on the exact 
coverage of the type of energy-using products and the exact contents of the eco-design requirements and relevant parameters which are to  be written on the "ecological profile".  
 
A: The selection of the products will be based on the criteria spelled out in the framework 
Directive. The nature and level of eco-design re quirements will be defined after consultation of 
stakeholders and impact assessment and will be specified in the implementing measure. 
 
Application of ECE Regulations No. 94 and No. 95
 
 
Q19. With the members of the 1958 Agreeme nt of UN/ECE expanding globally, Japan 
appreciates the leading role taken by the EC to make UN/ECE/WP29 (World Forum for 
Harmonization of Vehicle Regulations of the Un ited Nations Economic Commission for Europe) 
function as an international forum. However, Japan has some concerns about the process of the 
EC’s adopting the ECE Regulations. It is desirable fo r the EC to make a more prompt decision to 
adopt the new ECE Regulations that have been passed at this forum.  In particular, ECE Regulation No. 95 (lateral co llision protection), which Japan has already 
adopted, and Regulation No. 94 (frontal collision pr otection), which Japan plans to adopt in the 
next fiscal year, have not yet been adopted by the EC, although Japan understands that most of the technical problems on non-conformance with the re levant EC Directives have been cleared. This is 
raising concerns among Japanese automakers as we ll. Japan respectfully requests that the EC 
adopt these ECE Regulations promptly in terms of  promoting reciprocal recognition of approval 
for motor vehicles based on the 1958 Agreement between the EU and Japan. In addition, Japan 
would like to request a revision of the EC Direc tive (70/156/ EEC) to allow the application of these 
regulations within the European whole vehic le type approval (WVTA) framework.   
 Regarding these points, please indicate the specific views of the EC. 
 
A: The Commission presently has a proposal in pr eparation for presentation to Parliament and 
Council concerning accession to both UN Regulations 94 and 95 early in 2005.  This accession will 
then allow acceptance of either the UN Regulation or the equivalent EU Directive for the purposes of 
type approval.   
It is noted that Japan intends to accept UN Regulation 94 but has notified the GRSP of 
Working Party 29 of the United Nations Economic Co mmission for Europe in Geneva of a conflict 
with national legislation in doing so.  In order to  avoid this conflict, Japan has made a request to 
GRSP for a change to the title of the existing UN Regulation 94. 
In addition, it is understood that Japan will c ontinue to maintain the requirements under their 
existing full-wrap impact test legislation.  The Eu ropean Communities is thus of the opinion that the 
proposed accession by Japan to UN Regulation 94 will provide no extra benefits to the European 
industry  WT/TPR/M/136/Add.1 
Page 54  
 
Standards for the protection of pedestrians
 
 Q20. Because regulations on the safety of pedest rians have effects on the basic chassis structure 
of automobiles, the international harmonization of these regulations, ensuring the protection of 
pedestrians, is highly required. In this regard,  the governments of Europe, the US and Japan are 
cooperating in establishing Global Technical Regu lations based on the 1998 Global Agreement of 
UN/ECE/WP29. Meanwhile, Japan understands th at draft regulations based on Directive 
2003/102/EC, so-called Phase 2, to be applied after 2010, is under consideration in the EC.   For the international harmonization of regula tions, it is indispensable that the EC actively 
participates in the process of the establishment of the GTR and adopts it for the protection of 
pedestrians which will be made by the end of 2005. From this point of view, Japan requests that the 
EC bring forward the knowledge accumulated in the examination of Phase 2 to the forum to 
collaborate toward the establishment of the GTR, and that the EC establish regulations reflecting 
the GTR.   Regarding this point, please indicate the specific views of the EC. 
 
A: The EU, through activities in Working Party 29 of the United Nations Economic Commission 
for Europe in Geneva, has sponsored, under the 1998 global agreement, an ad hoc informal group 
work on development of a global technical regul ation (GTR) on pedestrian protection.    
 The terms of reference for this  work state that “The development of the informal group within 
GRSP on the topic of pedestrian safety should be se en as a concentration of effort within GRSP and 
not a duplication of existing groups. The work could examine and combine the efforts of the work 
done by Japan, the United States of America,  EEVC, IHRA and any other governmental and 
nongovernmental organizations in the area of pedest rian safety. It could then further develop the 
knowledge and requirements.”  It is further stated that the group should give consideration to:  “use of the best available 
technology and improvements in technology that will provide significant steps in developing methods 
and in achieving and improving benefits, including bo th active and passive safety measures;” and “the 
relationship or potential interaction of any proposed technical regulation to other regulations currently 
in force or to be adopted either individually by  any Contracting Party or under existing Agreements 
administered by WP.29.”  The group was required to prepare and make a proposal for a GTR, based upon the research 
and development work available from different ins titutions and industry and to take account of any 
additional work being undertaken. 
The proposed work process of the group consists of two phases ending in 2005. 
The EU has recently published a Directive on Pe destrian Safety (2003/102/EC) which will be 
implemented in two phases in 2005 and 2010.  Under Article 5 of this Directive the Commission, 
acting on the basis of relevant information communi cated by the approval authorities and interested 
parties as well as of independent studies, shall mon itor the progress made by the industry in the area 
of pedestrian protection and is presently car rying out an independent feasibility assessment 
concerning the provisions of the second phase and, in particular, alternative measures – either passive 
or a combination of active and passive – which are at least equivalent in terms of actual effectiveness.  The European Communities considers it appropriate  that the requirements of the second phase of the 
Directive and the recommendations which may be fo rthcoming as a result of the feasibility study 
should be considered in the formulation of any GTR.    The European Communities has, consequently, su pported and taken active part in the work of 
this ad hoc group and is keen to have the work  completed as originally set out.  However, the 
development of a global requirement must, as stated  in the terms of reference for the group, take 
consideration of all sources of information and make  proper use of the best available to provide the 
highest levels of safety.  To date, there has been much work put into the detail of the required tests 
and the European Communities woul d wish to ensure a conclusion with wide agreement on the 
outcome.  In developing a global regulation it is becoming increasingly evident that, at least in the WT/TPR/M/136/Add.1 
Page 55 
 
 
 initial stages, there may need to be an element of  flexibility available in issues of application and 
scope.    The European Communities cons iders it essential that any global regulation should provide 
improvement with respect to that existing and shoul d be capable of acceptance by as wide a grouping 
of those contracting to the 1998 agreement as possibl e.  The European Communities will continue to 
support the group and work to achieve a result which provides this. 
 
Regulations on greenhouse gases
 
 Q21. With regard to draft regulations on gree nhouse gases which are currently considered in the 
EU, Japan understands that automobile air-conditioners will be subject to type certification 
requirements in the future. Japan respectfully requ ests that the EC give due consideration to the 
opinions of the parties involved in establishing certification methods and test methods for leakage 
rates in accordance with the Agreement on Technical Barriers to Trade Agreement. 
 Regarding this point, please indicate the specific views of the EC. 
 
A: The Commission proposal of 11 August 2003 on certain fluorinated greenhouse gases indeed contains provisions concerning air conditioning  systems fitted to motor vehicles. These draft 
provisions have subsequently been modified during the Community decision-making process and 
have been included in a new Directive under the EC  type-approval system for motor vehicles. Once 
the Directive on mobile air conditioning systems is  adopted, implementing measures will have to be 
developed providing for the specific administrativ e and technical requirements for the type-approval 
of these systems, and in particular a leakage test  method will have to be defined. These implementing 
measures will be developed in consultation with  all stakeholders, in accordance with the normal 
procedures used in the preparation of Community legislation. The resulting draft measures will be 
notified in accordance with the procedures established in the Agreement on Technical Barriers to 
Trade, in order to give third countries the possibilit y to make comments, and to take them into account 
as appropriate, before adoption of the final act  Industrial designs
 (p.79, para. 134) 
 
Q22. Japan has been informed that the European  Committee has made public the draft of the 
revision of Directive 98/71/EC on the legal protection of designs, leading to the abolishment of 
design protection for a component part of a comple x product including automotive repair parts.  If 
this revision is made, there will be no design protection for automotive repair parts within the 
overall framework of European Community Design Law.  Please indicate the reason why the EC 
intends to make this revision. 
 
A: On 14 September 2004, the Commission adopted the proposal to amend directive 98/71 on the legal protection of designs so as to introduce a “r epairs clause”. The modification of the Directive 
will only affect those spare parts in the secondary market which are protected by a design right based on novelty and individual character. In practice, th is means the outside and visible parts (“crash” 
parts) such as bonnets, bumpers, doors,  lamps, radiator grilles, windscreens and wings. The repairs 
clause does not limit the right of design right holde rs, it prevents the existence of monopolies on the 
spare parts market. Design protection on new cars w ould be retained under the proposal but the design 
right on the appearance of a primary product will not be extended to the product in the secondary 
market.  This proposal should not be viewed as an attack on intellectual property protection. The 
introduction of a “repairs clause” only affects situ ations where design protection can create captive 
markets and have the unwanted effect of excludi ng competition in the market place. As for the 
automotive sector, design protection is fully saf eguarded in the primary market, however the WT/TPR/M/136/Add.1 
Page 56  
 
Commission thinks that it should not lead to an unjustified monopoly in the repair market for the 
detriment of consumers.   This proposal therefore aims to harmonise the design protection regime in order to complete 
the Internal Market. In doing so  it would increase legal certainty . Suppliers and consumers would 
know where they stand and be able to  take full advantage of a uniform Internal Market for spare parts. 
That would increase competition, widen choice and reduce prices. 
 Copyright (p.81, para. 145) 
 
Q23. Regarding the EC Directive on the harmon ization of certain aspects of copyrights and 
related rights in the information society, pl ease indicate which member States have introduced 
laws, regulations and administrative provis ions to comply with this Directive. 
 
A: So far a total of 20 MS out of 25 have implemented Directive 2001/29 on the harmonisation 
of copyright and related rights in  the Information Society. Of these, 19 MS have notified their 
implementing laws –Denmark, Greece, Italy, Austria, Germany, UK, Ireland, Luxembourg, 
Netherlands, Poland, Cyprus, Portugal, Lithuania,  Latvia, Slovenia, Malta, Czech Republic, Slovak 
Republic, and Hungary. Estonia has implemented but not yet notified its implementing laws. 
 Finland, Sweden, Belgium, France and Spai n have not yet implemented the Directive 
 
Q24. Please also provide the prospects of im plementation of the member States which have not 
yet introduced such laws, regulatio ns and administrative provisions. 
 
A: Finland:
 a government bill (Bill no. 28/2004) w as submitted to Parliament on 19 March 2004.  
The Bill is currently at the committee stage.  No precise deadline is given fo r the final adoption of the 
bill by Parliament but it is likely to be in  spring 2005 . 
France: The bill was presented to the National Asse mbly in November 2003. There is no date 
set for debate in Parliament. The im plementation date remains uncertain 
Belgium: The i mplementation date is uncertain. Gene ral elections in 2003 have caused a 
delay. 
Spain: There was public consultation on an unofficial  draft in 2003 but no official bill yet. 
The implementation date remains uncertain. 
Sweden:  A draft bill will be presented to the Coun cil on Legislation in December 2004 and a 
bill will be tabled before Parliament in February 200 5. The entry into force is planned for 1 July 2005. 
 
Q25. Does the EC have any intention to impose any penalty on the member States which have 
not introduced any laws, regulations and administr ative provisions? If this is the case, please 
indicate the specific provisions in the EC Directive on imposing penalties. 
 
A: The European Commission has begun "in fringement" proceedings under Article 226 EC 
Treaty against those EU Member States which have not implemented the Directive into their national legislation.  Article 226 EC Treaty provides as follows: "If the Commission considers that a Member State 
has failed to fulfil an obligation under this Treaty,  it shall deliver a reasoned opinion on the matter 
after giving the State concerned the opportunity to  submit its observations. If the State concerned does 
not comply with the opinion within the period laid  down by the Commission, the latter may bring the 
matter before the Court of Justice".  So far, 8 cases are pending before the Court of Justice (i.e. against Belgium, Germany, Spain, 
France, Ireland, Luxembourg, the Netherlands, Portugal, Finland, Sweden and the UK, for the 
territory of Gibraltar). However, the cases against Portugal and the Netherlands will be withdrawn as 
these Member States notified to the Commission their national implementing measures in September 2004. With respect to those countries which join ed the Union on 1st May 2004, 9 (i.e. all except WT/TPR/M/136/Add.1 
Page 57 
 
 
 Estonia) have notified to the Commission the nati onal measures intended to implement the Directive. 
Estonia implemented in October 2004 and w ill soon notify to the Commission the national 
implementing measure.  
Q26. Please also indicate the specific content of such penalty. 
 
A: If a Member States does not comply with a judg ment of the Court of Justice, the Commission 
follows the procedure under Article 228 EC Treaty.  Article 228 EC Treaty provides as follows: "1. If the Court of Justice finds that a Member State has failed to fulfil an obligation under this Treaty, the State shall be required to take the 
necessary measures to comply with the judgment of  the Court of Justice. 2. If the Commission 
considers that the Member State concerned has not ta ken such measures it shall, after giving that State 
the opportunity to submit its observations, issue a re asoned opinion specifying the points on which the 
Member State concerned has not co mplied with the judgment of the Court of Justice. If the Member 
State concerned fails to take the necessary measures  to comply with the Court's judgment within the 
time limit laid down by the Commission, the latter ma y bring the case before the Court of Justice. In 
so doing it shall specify the amount of the lump sum or penalty payment to be paid by the Member 
State concerned which it considers appropriate in the circumstances. If the Court of Justice finds that 
the Member State concerned has not complied with its judgment it may impose a lump sum or penalty 
payment on it. This procedure shall be without prejudice to Article 227."  So far, the Court of Justice has not given its judgment on the above 8 pending cases. 
 
Q27. Japan assumes that one of the objectives of th is EC Directive is to fulfill the obligations of 
the WCT (WIPO Copyright Treaty) and WPPT (WIPO Performances and Phonograms Treaty).  Please indicate the current situation and future pros pects as to member States’ ratification of these 
treaties.      
 
A: Following a decision of the Council taken in April 2000 (Council Decision 2000/278), the Community and its Member States agreed to adhere to both Treaties and as far as possible to ratify the WIPO Treaties simultaneously. In the declarations that accompanied that Decision, the Council and 
Ministers agreed to periodically ascertain the stage r eached by Member States and if there is a serious 
delay to consider what action is to be taken.  It was also agreed that Directive 2001/29 is the means by which the Community and its 
Member States will implement their obligations un der these Treaties.  The Community and the 15 
Member States that were members of the EU at the time of the adoption of that decision have not yet ratified the WIPO Treaties. This is  due to late im plementation of Directive 200/ 29 –so far 20 out of 25 
Member States. However, of the new Member States that joined the EU as from the 1 April 2004, all 
had previously ratified the WIPO Treaties with the exception of Estonia, Malta and Cyprus (the latter 
has ratified the WCT but not the WPPT) 
 
TRADE POLICIES BY SECTOR
 
 
Services  
 Q28. Japan has a strong interest in the proced ures of the EC-25 consolidated schedules on trade 
in services related to the expansion of the EU to  25 countries pursuant to Article XXI of the GATS. 
Japan considers that economic integration should not lead to the creation of new trade barriers. 
 Regarding this point, please indicate the specific views of the EC. 
 
A: With regard to trade in services, EC Enla rgement will have an overall positive effect for non-
EC services suppliers. Indeed, from an economic point of view, enlargement will increase WT/TPR/M/136/Add.1 
Page 58  
 
substantially the size of the single market, therefore offering great business opportunities to non-EC countries and their services suppliers . Overall, the level of liberalisation within the EC single market 
is much higher than it was within the new Member States. Furthermore, most of the sectors covered 
by the GATS are ruled by EC law, which will increase transparency and legal certainty 
 
Movement of natural persons
 
 
Q29. Japan believes that to promote internatio nal movement of natural persons with certain 
qualifications will contribute to vitalizing the econo my of each EC member State. However, in some 
EC member States, quite a long period is required  for obtaining or renewing work permits, visas 
and residence permits. There are some cases wh ere treatments are different, depending on 
government officials.  
 Please explain how the EC is working to improve this situation to improve.   
A: The EC and their Member States are continuo usly working to improve procedures generally 
and to address specific problems which are brought to our attention, whilst at the same time ensuring 
that the integrity of  our systems are maintained. 
 In 2001, the European Commission made a pr oposal to simplify and harmonise application 
procedures for work and residence permits thr oughout the EU, based on common definitions and a 
“one-stop shop” procedure. In the course of 2002 and 2003, the relevant Council Working Group 
worked on a first reading of this proposal. The Justice and Home Affairs Council of 27/28 November 
2003 took note of the state of play of the - difficult - negotiations. The Commission is currently 
considering publishing a Green Book on economic migr ation, with the aim of stimulating a broad 
consultation procedure with all interested parties and facilitating the drafting of a possible modified 
proposal  Q30. As a result of market integration within  the EU, there are many EU corporate activities 
beyond the borders, and the numbers of non-EU  business people’s transfer within Europe are 
increasing. Therefore, once a non-EU business person  is permitted to enter a EC member State, in 
the case of a transfer to another member State the applications for residence and work permits 
should be immediately approved.   
 Please explain how the EC is dealing with this matter.  
 
A: Only EC citizens are beneficiaries of the in ternal market freedoms. Access of non-EC citizens 
to each Member State is governed by EC GATS co mmitments and by national legislation within the 
limits imposed by EC visa and immigration policy 
 
Audio-visual services
 
 Q31. Japan requests that commitments be made  in audio-visual services. Japan can accept 
certain regulations necessary for the protection of sp ecific cultures, but such regulations should be 
specified in the schedule of specific commitments. 
Regarding this point, please indicate the specific views of the EC. 
 
A: This issue, which is outside the scope of Trade Policy Review, is to be addressed in the 
framework of services negotiations under the DDA 
 
Q32. The “Television without Frontiers” Di rectives (amended by 89/552/EEC and 97/36/EC) 
require that more than 50% of the programs broa dcasted should be European. These regulations 
can influence the distribution of Japanese programs in the EU and, therefore, Japan has a concern that they might hinder good culture exchanges through television programs. WT/TPR/M/136/Add.1 
Page 59 
 
 
  Last year the “Mangas” channel, dedicated to Japanese animation, under the French cable 
channel AB GROUPE, was fined 70,000 Euro from the CSA (Conseil Superieur du l’Audiovisuel) 
as a the penalty for violating the internal law based on these regul ations. “Mangas” was 
established to provide Japanese animation exclusively, but, in practice, it is difficult to offer such 
dedicated channels because of regulations. 
Japan is fully aware of the importance of cultural diversity. However, taking into account the fact 
that the EU has created and developed rich cu ltures through cultural exchanges with outside 
regions, Japan believes that it would benefit both the EU and Japan to expand opportunities in 
order to appreciate quality Japanese works.  Therefore, Japan would like to request the following for expanding the distribution of 
Japanese programs; 
 (a) Deregulation on quota system  Japan would like to request a reform of th e regulations restraining the percentage of 
European television programs, regarding progr am formation. Taking into consideration a 
development of multiple channels, Japan considers that it will not be problematic for the EU to 
alleviate the current restraints e.g. for a channel dedicated to the distribution of specific programs. 
 
 A: The European audiovisual market is  very open and European TV channels’ 
programmes offer large access to foreign fictions an d animations. The “Television without Frontiers” 
Directive and its effects are regularly monitored by  the European Commission with a view to possible 
adaptations to respond to evolving needs as regards  the promotion of cultural diversity in Europe 
 
(b)  Flexibility of the definition of collabo ration between production companies within and 
outside of the EU  According to the guidelines made by the Eu ropean Commission, the making of programs 
must be supervised and actually controlled by Eu ropean producers in order for the programs to be 
regarded as European, when they are made un der the collaboration of European and non-
European producers. In order to promote the collaboration of European and Japanese producers, 
Japan would like to request the EC to consider a flexible definition of a European program by collaboration. For example, when a non-European producer collaborates with a European producer to make a program on equal terms, the program should be considered European. 
 
A: According to the Television without Frontiers Directive, coproductions may be considered as 
European products when there is majority European participation in the coproduction 
  
(c) Harmonization of French regulations with the EC Directive 
 Japan understands that the regulations of the CSA require that more than 50% of the 
programs broadcasted should be Fr ench and that more than 60% of those programs should be 
produced in Europe. The “Television without Frontiers” Directives require that more than 50% of the programs broadcasted should be European. Although Japan is not willing to accept the 
directives, Japan requests that the French authorities lower the European program percentage requirement to more than 50%, as  stipulated in the directives. 
 Regarding this point, please indicate the specific views of the EC.  
A: European contents requirements under the Television without frontiers Directive are a minimal basis. Member States are obliged to estab lish mechanisms of European contents promotion 
corresponding to this minimal level imposed by the Directive. They retain the possibility to define 
more stringent obligations and meas ures pursuing objectives of cultural or linguistical policy. French 
regulations are therefore in conformity with EC rules in this respect  WT/TPR/M/136/Add.1 
Page 60  
 
Construction services
 
 Q33. In Belgium, when a non-EU enterprise app lies to register as a construction business, it is 
necessary to establish a local enterprise that has the function of head office for instruction and 
management, within the EU. If an enterprise has not been registered for construction business, in 
order to contract construction work, the enterprise must pay in advance 15 % of the construction 
fee as a tax and 15% as a social security payment , which adds up to 30 % of the construction fee. 
This leads to disadvantages in competition.  In addition, the client who orders the constr uction work from a non-registered enterprise 
has to guarantee the certain debt (for tax and social security payment) of the non-registered 
enterprise. Japan also thinks that this is an excessive requirement.  
 The majority of Japanese construction ent erprises do not have a local enterprise which 
functions as head office within the EU and it is diffi cult for them to register. As mentioned above, if 
the enterprise is not registered, it will be treate d unreasonably. Japan requests for a reform of this 
system.  
 Regarding this point, please indicate the specific views of the EC.  
A: There is no legal obligation to register. Lack  of registration does not entail the payment of 
taxes above those that are normally applied, but only reimbursable advance payments and a joint 
responsibility of the client for the payment of eventu al tax debts of the non-registered enterprise. All 
these measures are intended to ensure the effective co llection of taxes in conformity with Article XIV-
d of GATS. 
 
Legal services
 
 Q34. We have requested that France establishes a system that allows foreign lawyers to engage 
in legal services pertaining to their own countries’  law without passing any special examination 
and that Germany allows foreign lawyers to pr ovide direct legal service concerning third country 
laws. However, Japan has not received a satisfacto ry reply. Therefore, Japan would like to ask the 
European Commission to take the initiative in this matter.  Please indicate whether or not the EC is taking any action regarding this matter. 
 A: This issue will be addressed in the fra mework of services negotiations under the DDA. 
Telecommunications and postal services
 (p.122-126, para. 110-118)  
 
Q35. Even after liberalization in 1998, some EC member States still maintain general restrictions 
on foreign investments regarding radio stations and so on.  
 Please provide reasons as to why these restrictions are maintained.   
 
A: One EC Member State retains a foreign owners hip restriction in the sense that non-EC natural 
or juridical persons may not hold in that Member Stat e directly more than 20% of the shares or voting 
rights of companies authorised to establish and opera te radio-based infrastructure for the provision of 
telecommunications services to the general public. This measure reflects practice in some other WTO 
member states. That being said there is no limitation on indirect foreign ownership in such companies 
in that Member State 
 
Q36. Please also provide the details of plans to deregulate or abolish these regulations, if any.   
 
A: The removal of such a restriction will depe nd on the removal of similar foreign ownership 
restrictions in other WTO member states 
 WT/TPR/M/136/Add.1 
Page 61 
 
 
 Q37. It is generally understood that broadband devel opment in the EC lags behind that of Asian 
countries, including Japan, in terms of quality an d price. One of the reasons for this could be 
attributed to the limited development of Local Loop Unbundling (LLU).  
Please explain what the EC considers could be the major obstacle to the development of LLU in the 
EU.   
 
A: The development of broadband is depending on many factors, such as geographical features, 
population density, and degree of competition and ava ilability of content. Detailed information is 
available on http://europa.eu.int/informati on_society/eeurope/2005/all_about/broadband/ 
index_en.htm for more details. 
 LLU is not an internationally agreed requirement in the telecom sector. That being said the 
EU decided to mandate LLU in its internal framewo rk. The implementation of LLU is starting to bear 
its fruits and penetration is growing rapidly in many EU Member States 
 
Q38. Please indicate which policies are being pr omoted with respect to LLU by the EC and each 
member State since the establishment of the U LL Regulation (Regulation on unbundled access to 
the local loop) in 2000.   
 A: The report already provides extensive explana tions. More detailed inform ation is available on 
the implementation reports on http://europa.e u.int/information_society/topics/telecoms/ 
implementation/index_en.htm 
 
Q39. We are interested in the relationship between  “Significant Market Power (SMP)” in the EC 
new Directives and “a major supplier” in the Refe rence Paper. According to the EC guidelines on 
market analysis and the assessment of SMP, the con cept of “a major supplier”  indicated in (b) in 
the Reference Paper seems to have close compa tibility with that of SMP. On the other hand, 
according to the EC recommendation on relevant markets, call termination on individual networks 
forms a single market and accordingly in each country’s market analysis, all network operators are 
designated as SMP in the market for call termina tion. Given that an SMP operator is identical to 
“a major supplier,” all network operators would be regarded as “a major supplier” as far as the 
market for call termination is con cerned.  Regarding this point, plea se indicate the specific views of 
the EC. 
 
A: The question of relation between the concepts of the reference paper and domestic regulatory 
concepts is indeed interesting.  The concept of SMP in EU law is not necessarily the same as the 
concept of and "major supplier" in the Reference Paper and the example given is therefore somewhat 
theoretical. 
Q40. Regarding the planning of policy and regul ation, and the implementation of regulation in 
the EC, please indicate the specific role of  the Communications Committee and European 
Regulators Group. 
A: The mechanics of the new EU  framework and the role of the different actors involved are 
described in: http://europa.eu.int/in formation_society/doc/factsheets/014-
regulatory_framework_imple mentation-october04.pdf 
 
Q41. Please indicate whether the independence of the NRA (national regulatory authority), 
provided in Article 3 of the Framework Directive, is beyond requirements indicated in 5 of the Reference Paper, which sets out the separation of regulators and operators. 
 
A: The EU Framework, and in particular Article 3 of the framework directive ensures 
independence of the regulator, as required by  paragraph 5 of the reference paper. 
 WT/TPR/M/136/Add.1 
Page 62  
 
Q42. Even if the NRA, which is in charge of implementing regulations, maintains its neutrality, 
this neutrality would be significantly impaired if the government would involve itself with the 
management of a telecommunications operator as a shareholder, or the finance authority, which 
holds shares of a telecommunications operator, intervenes in the policy-planning and legislative 
process.  Regarding this point, please indicate the specific views of the EC. 
 
A: See answer to question 43  
Q43. With regard to “state involvement”, plea se provide information on the EC member States’ 
plans to sell state-owned shares. 
 
A: The WTO rules leave WTO members free to main tain state ownership in services sectors, so 
long as this does entail the nullification of their ma rket access and related commitments.  Under that 
condition, it is thus for each Member to decide, as a shareholder, if and when it wishes to sell wholly 
or partly its shareholding in a given service s upplier. In the EU, the te lecom framework anyway 
ensures that regulators will take all necessary measu res to promote competition, whatever the private 
or state shareholding in operators. That means in particular that, for Member States which retain 
ownership in a given operator, the regulatory func tions will be exercised completely independently 
from and will not be affected by the shareholding activities of the state  
Transport
 (p.126-132, para. 119-139)  
Maritime transport  (p.130, para. 131) 
 
Q44. According to the Report by the Secreta riat, the Commission adopted new Guidelines on 
State Aid to maritime transport, aimed at furth er ensuring a favorable ta x environment for ship 
owners in order to counter interna tional competition by open registers and flags of convenience.   
 Japan is of the view that, in applying protective measures to national flags, they should be persuasive to other countries and be limited to the minimum necessary to achieve national 
objectives, and transparency should be ensured. Japan would like to ask the following questions:  What is the eligible scope for State Aid and the amount of State Aid which has been 
granted and is planned for the future?  
A: Under the 2004 Guidelines transport activities are eligible to State aid.   The Guidelines provide for a legal framewor k under which national schemes or measures are 
authorised by the Commission.  The financial res ources to be devoted to State aid are determined by 
each Member State. Some Member States do not grant State aid to maritime transport at all. We do 
not have aggregated data on the amounts granted by Member States altogether  
Q45. Will the Guidelines be reviewed regularly ? What is the EC’s plan for reviewing the 
Guidelines? 
 A: Under Chapter 13 of the 2004 Guidelines, the latter have to be reviewed in 2011 
 
Q46. Are there any measures to ensure trans parency and appropriateness of application for 
State Aid?  
 A: State aid to maritime transport is subject to the general rules on State aid (authorization 
procedure, monitoring by the Commission, etc.). In the case of the maritime Guidelines, moreover, 
Member States are obliged to send regular reports to the Commission on the economic effects of State 
aid (Chapter 12 of the Guidelines).  WT/TPR/M/136/Add.1 
Page 63 
 
 
 Q47. Are there any protective treatments whic h are provided for companies in the EC, for 
maritime auxiliary services?  
 
A: The maritime transport part of towage and dr edging may be eligible to State aid under certain 
conditions. Ship management is also eligible if, fo r a given vessel, a same ship manager is entrusted 
with both technical and crew management. Towage, dredging and any other service activity as such is 
not eligible to State aid to maritime transport. See also reply to the question by Hong Kong, China 
 
OTHERS  
  
Early adoption of draft directive allowing o ffset of profits and losses across multiple  
EU member States  
 Q48. Japan requests that the EC promptly estab lish a directive allowing offsetting of losses 
incurred by branches or subsidiaries in the EU wi th profits recorded by the parent company.   
Regarding this point, please indicate the specific views of the EC.  
A: The Commission already had presented a propo sal for the taking into account of losses of 
foreign permanent establishments or subsidiaries si tuated in other Member States in the year 1990 
(COM(1990) 595). However, this Directive was not di scussed so far at Council level. The question of 
cross-border loss set-off was re-e xamined in the Company Tax Study (SEC(2001) 1681) and in the 
framework of the accompanying Communication to the Council (COM(2001) 582 final), the 
Commission committed itself to withdraw the old Di rective from 1990 "with a vi ew to its replacement 
after technical discussions with Member States and other stakeholders".  In the meantime, preparatory works for such a propo sal have advanced and w ill enter into technical 
discussions with Member States by the beginning of next year 
 
Harmonization of value added taxation
 
 Q49. The procedures and operations related to  value added tax (VAT) are greatly different 
among tax authorities of individual members. This constitutes an obstacle to business operations conducted in recognition of the EU as a unified mark et. In this regard, Japan continues to hope for 
further initiatives of the European Commission on  the simplification of the entire VAT system, 
including shortening the waiting period for refund  procedures and more unified operations for 
current VAT rules.  Please explain how the EC deals with these matters.  
A: The Commission is aware of the complexities created by the manner in which the V AT system 
is applied in Member States and is convinced of the need for modernisation and simplification.  
 Details of the Commission's extensive program towards this end can be found on our website 
at:  http://europa.eu.int/rapid/pr essReleasesAction.do?reference=I P/00/615&format=HTML&aged=1&lan
guage=EN&guiLanguage=en 
 
Accounting standards
 
  Ensuring that the enterprises of a third country, which are operating or are planning to operate in the EU, raise funds smoothly will promot e international activity, including the trade in 
services of those enterprises. The Prospectus Directive and the draft Transparency Directive 
require non-EU issuers who have made or will make public offerings of, or have listed or will list 
their securities within the EU to prepare their financial statements in accordance with the WT/TPR/M/136/Add.1 
Page 64  
 
International Accounting Standard (IAS/IFRS), or accounting standards which are equivalent to 
the IAS.  If Japanese issuers were required to prepare th eir financial statements in accordance with 
the IAS, and not allowed to use Japan GAAP (Gener ally Accepted Accounting Principles), this may 
have had a bad influence on Japanese financial activities within the EU markets. Japan GAAP has 
become consistent with interna tional accounting standards. In this regard, Japan does appreciate 
that there have been constructive discussions to allo w Japan GAAP as an equivalent to the IAS.  
 In addition, Japan hopes that the Committee of European Securities Regulators (CESR) 
will provide technical advice on equivalence eval uation to the European Commission earlier than 
the deadline (June 2005) set out by the Commission.  Please explain how the EC intends to deal 
with the above matter.  
A: The Commission and CESR are aware of the importance and practical relevance of the issue of equivalence of third country GAAP under the prospectus and transparency directives. The 
Commission has given a mandate to CESR to provide  advice by June 2005 with the aim of adopting a 
formal decision by the Commission in December 2005. The mandate takes into consideration that 
CESR needs enough time to prepare its technica l advice. Furthermore, under the Lamfalussy 
arrangement, the European Parliament will have th ree months to consider the draft implementing 
measures. Given the complexity of the issue it see ms unrealistic for CESR to be able to provide 
advice earlier than June 2005  QUESTIONS FROM MEXICO  
 Se solicita a las Comunidades Europeas (CE) responder a las siguientes preguntas formuladas 
con base en lo señalado en el documento WT/TPR/S/136 , de fecha 23 de junio del presente año: 
 II. RÉGIMEN DEL COMERCIO / 5) ACUERDOS COMERCIALES / i) Panorama general.  Q1. En el párrafo 26 se señala que para las CE, el régimen NMF aplica únicamente a 9 miembros de la OMC, entre ellos, China. Tene mos entendido que China es uno de los principales 
beneficiarios del SGP de la Unió n Europea (33.1% del volumen to tal de importaciones). ¿Podrían 
aclarar este punto? 
 
A: Correct, China is ranking number one in the EC GSP, out of 178 beneficiaries.  
II. RÉGIMEN DEL COMERCIO / 5) ACUERDOS COMERCIALES / (ii) OMC. 
 
Q2. En el párrafo 34 se señala que con excepción de algunas disposiciones de transición, los 
nuevos Estados Miembros de las CE tienen que adop tar el arancel aduanero común al momento de 
ingresar a la UE. ¿Podrían especificar cuáles son la s disposiciones de transición a las que se 
refieren y por cuanto tiempo van a aplicar? 
 
A: The favourable duties and charges of the EC-15 have been temporarily extended to cover also 
the territory of the ten new member states, pendi ng the negotiations provided for by Art XXIV.6 
(GATT). No permanent exceptions have been gr anted to the ten new member states. Only two 
transitional arrangements exist. The Republic of Hungary may open a temporary yearly tariff quota for 
non-alloyed aluminium (CN code 7601 10 00) which is to  be progressively and fully phased out in April 
2007. The republic of Malta may open yearly tariff quotas for woven fabrics of combed wool or of 
combed fine animal hair (CN Code 5112 11 10) , denim (CN Code 5209 42 00), woven fabrics of 
artificial filament yarn (CN Code 5408 22 10) and other made-up clothing accessories (CN Code 6217 
10 00) which are to be progressively and fully phased out in December 2008. WT/TPR/M/136/Add.1 
Page 65 
 
 
 The above-mentioned transitional arrangements are not included in the EC’s TARIC because 
they do not apply to the Community as a whole but only to specific imports into Hungary and Malta. 
 
II. RÉGIMEN DEL COMERCIO / 5) ACUER DOS COMERCIALES / (iii) Acuerdos y 
disposiciones comerciales preferenciales / b) Acu erdos con países y grupos de países no europeos 
 
Q3. En el párrafo 50 se establecen cifras de co mercio bilateral e inversión correspondientes a 
los primeros dos años de implementación del Acue rdo de Libre Comercio entre la Unión Europea y 
México. ¿Podrían proporcionar cifras correspondientes al año 2003? 
 A: In accordance with imports data from both sides,  bilateral trade increased by 29% in its first 3 
years of implementation. Referring to Eurostat (EU 15) trade data, bilateral trade totalled € 20,3 billion 
in year 2003. The EU does not have yet outward/in ward FDI flows with Mexico updated to year 2003. 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE 
AFECTAN DIRECTAMENTE A LAS IMPORTAC IONES / viii) Medidas comerciales 
especiales / b) Medidas antidumping  Q4. Respecto de lo mencionado en el párrafo 65, ¿solicitamos se nos aclare por qué los nuevos 
Estados Miembros tienen que aplicar  las medidas antidumping de las CE desde el momento de su 
adhesión? 
A: As of enlargement, the 25 Member States of  the enlarged EU constitute one single market 
with a Common Commercial Policy, which includes the uniform EU-wide application of trade defence instruments. The Act of Accession provides fo r an automatic application of the provisions of 
the original Treaties and the acts adopted by the EU  institutions as of the date of accession, including 
all acts adopted in the field of trad e defence instruments. As a result, like with all the other aspects of 
the EU Common Commercial Policy, as of 1 May 2004, the current EU trade defence law and 
measures are automatically applicable in Cypr us, Czech Republic, Esto nia, Hungary, Latvia, 
Lithuania, Malta, Poland, Slovakia and Slovenia wh ile the 10 individual trade defence laws of the 
aforementioned 10 new Member States ceased to apply from that date onwards.   The EC would like to point out that, in order to ensure a smoother transition for everyone in 
the area of trade defence due to EU enlargement,  the EC approach was widely communicated, in 
particular via the following measures: 
• The EC launched an enlargement website “Enlargement – Impact on Trade Defence”. 
• Already in 2003 the EC set up a special Help Desk to answer questions on the impact of 
enlargement on trade defence and its contact information was published on the above-mentioned 
website and circulated to administrations and ec onomic operators in the EU acceding countries, the 
EU Member States and in third countries. 
• Seminars with the economic operators in the new Member States (producers, importers, users 
which were to be potentially be affected by  EU AD measures) were organised. Everybody was 
informed, so that they could react and ask for a review, in case it was thought to be necessary. 
• The EC also published a notice in the Official Journal OJ C 91/2 of 15.4.2004. The notice 
again set out the principles of the approach and re-ite rated an invitation to interested parties to request 
reviews. 
• The enlargement approach w as already three times discu ssed in this WTO Committee. 
• In addition, a further step was taken to ensure that enlargement runs smoothly in terms of AD. 
The EC set up an enlargement task force. This taskforce contacted all countries with which the EC has 
significant measures in force. Signi ficant has been interpreted in a very broad sense: 32 delegations 
were contacted, out of a total of 33 against which the EC has measures in fo rce. The Taskforce looked 
at all measures in force on the basis of a number of  parameters: the level of the duty, the significance 
of the level of imports into the acceding States, the level of production and the level of prices in the WT/TPR/M/136/Add.1 
Page 66  
 
acceding States. As a result of this exercise we received 50 communications. On 20 March 2004 the 
EC initiated on its own initiative eight Article 11. 2 ADA reviews (Official Journal C 70/15), which 
led to the amendments of measures in force concerning eight products. 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE 
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / ix) Obstáculos técnicos al 
comercio.  Q5. En los párrafos 66 y 67 se describe parcial mente la forma y los supuestos en que se 
establecen reglamentos técnicos por parte de la CE,  o bien de los Estados miembros. Al respecto, 
¿pueden las CE explicar detalladamente el proced imiento de elaboración de un reglamento técnico, 
tanto a nivel comunitario como nacional, indica ndo si el desarrollo de un reglamento técnico 
implica la elaboración de un análisis  de impacto regulatorio, e indicar el plazo normal de consulta 
pública, el procedimiento al que son someti das las observaciones que son recibidas, y el plazo 
normal de entrada en vigor de un reglamento técnico? 
 A: Technical regulations adopted at EU level are proposed by the Commission which has the 
right of initiating a proposal for a Regulation or  a Directive. These proposals are then subject to 
agreement by the Council and Parliament accordi ng to the procedure of Art 251 of the Treaty. 
Regulations are addressed to all Member States a nd must be applied in full without  requiring the 
adoption of  intermediate national legislation. Dir ectives are also addressed to all Member States, but 
they are not directly applicable. They are binding, as to the result to be achieved, but they leave to the 
Member States the choice of how to achieve the result.  
In the non-harmonised area, Member States may also introduce national legislation, as far as 
it complies with the EC Treaty, in particular with the provision on the free movement of goods.  With effect from 2005, all Commission prop osals will be accompanied by an impact 
assessment. The impact assessment procedure re quires an ample and systematic consultation 
procedure. This may take place via a public inte rnet consultation and/or through a widespread 
consultation of stakeholders.  
Q7. En relación con las normas de “nuevo enf oque”, el párrafo 68 señala que las soluciones 
técnicas que permitan cumplir con esas prescripcio nes de alcanza a través de normas europeas 
armonizadas de carácter voluntario o mediante so luciones propuestas por los propios fabricantes. 
Al respecto, ¿pueden las CE: explicar si los na cionales de otros países Miembros pueden participar 
en la elaboración de esas normas voluntarias y, en su caso, que procedimiento concreto ha de 
seguirse al efecto? 
 A: Standardisation in Europe is based on the prin ciples of transparency and openness. Therefore, 
any stakeholder from non EU countries can, in the same way as it is the case with stakeholders form EU countries, submit its comments in the course of the standardisation process.  
Q9. Por lo que se refiere al párrafo 69, ¿Pue den las CE señalar qué procedimiento se sigue 
para justificar las desviaciones de las normas co munitarias o nacionales, respecto de las normas 
internacionales y dónde puede consultarse esa información? 
 
A: It has to be stated, that the European standardisation system is committed to international 
standards as it is outlined in the Commission's  staff Working Document on European Policy 
Principles on International Standardisation" (Commission Staff Working Paper SEC(2001) 1296 of 
2001-07-26).. 80% of the European standards in th e electro-technical sector (CENELEC) are identical 
to international standards (IEC). For CEN standards, 30% are identical with ISO standards. If there is 
a deviation, the reasons can be manifold (e.g. with  CEN, international standards do simply not exist) WT/TPR/M/136/Add.1 
Page 67 
 
 
 and cannot be explained horizontally . More detailed information for different deviations should be 
obtained directly from CEN or CENELEC.  
Q10. Asimismo, respecto de lo indicado en el párrafo 70 ¿Pueden las CE confirmar si dicha 
marca puede ser obtenida por empresas que se encuentr an fuera del territorio de la UE y, si es así, 
qué procedimiento deben seguir?  
A: The New Approach Directives make no differe nce between manufacturers established in the 
EU and those established outside. The manufacturer is  required to affix the CE marking to the product 
himself after having completed the conformity asse ssment procedures provided for in the applicable 
Directives. (A sample of the CE marking is repr oduced in the Annexes of the Directives). Certain 
conformity assessment procedures provide for an i nvolvement of a third party (the so-called to 
notified body). Access to these notified bodies is open to manufacturers established outside the EU. 
 
Q11. Por último, también respecto de lo señalado en el párrafo 70, ¿Pueden las CE indicar cuál 
es el procedimiento para reconocer una norma extr anjera o procedimiento de evaluación de la 
conformidad como equivalente y, en su caso, cuánta s normas o procedimientos de evaluación de la 
conformidad han reconocido como tales, en los térm inos de lo dispuesto por el artículo 2.7 del 
Acuerdo sobre Obstáculos Técnicos al Comercio (AOTC)? 
 
A: The EU supports the use of Article 2 .7 of the TBT Agreement, and indeed has put it into 
practice. In two Mutual Recognition Agreements (M RAs), the Community has applied this principle. 
A MRA with the United States on marine equipment recognises US legislation as equivalent to its 
own, founded on a common basis in IMO regulation. The MRA between the EU and Switzerland recognises certain parts of Swiss legislation as be ing equivalent with its own.  In both cases 
certificates granted by the EU’s partner give access to the EU market. 
 
Q12. El párrafo 74 señala que los países de recien te adhesión a las CE deben adoptar el acervo 
comunitario sobre la libre circulación de mercan cías desde su adhesión, lo cual implica la 
aplicación de los reglamentos técnicos de las CE. Al respecto, ¿podrían las CE explicar de que 
manera sus diez nuevos estados Miembros dieron cu mplimiento a las obligaciones previstas por los 
artículos 2.9.1 a 2.9.4 del AOTC? 
 A: Notification of acts of the Community Ac quis that fall within the scope of the TBT 
Agreement was done by the EC during the preparation of  such acts. It is in fact on that moment that 
the Community Acquis acts were still at the draft stag e were amendments could be introduced and not 
on the moment that these acts are taken over by the new Member States of the EC.   
 
Q13. Asimismo, el párrafo 74 señala que, en la comercialización de medicamentos e 
instrumental médico, se aplican disposiciones de transición para algunos de los países de reciente adhesión a las CE. Al respecto, ¿podrían las CE exp licar en qué consisten dichas disposiciones 
transitorias? 
 A: The Treaty of Accession (2003) provides for a specific mechanism , according to which the 
holder, or his beneficiary, of a patent or Supplementary protection certificate (SPC) for a pharmaceutical product, filed in an EU Member Stat e at a time when such protection could not be 
obtained in one of the new Member States for that  product, may rely on the rights granted by that 
patent or SPC in order to prevent the import and marketing of that product in the member State or 
States where the product in question enjoys patent or SPC protection, even if that product was put on 
the market in the new member State concerned fo r the first time by him or with his consent. 
 WT/TPR/M/136/Add.1 
Page 68  
 
Q14. Respecto de lo señalado por el párrafo 75, ¿podrían las CE explicar cuáles son los 
requisitos aplicables para que un país no mi embro pueda ser parte de un acuerdo de 
reconocimiento mutuo, así como el proced imiento que tendría que seguirse al efecto? 
 
A: In selecting priority countries/regions for the negotiation of bilateral Mutual Recognition 
Agreements (MRAs) for industrial goods the EC ta kes into account different elements, such as the 
following : political commitment from both sides; c ontent of existing or under negotiation agreements 
with the country/region in question; current and pote ntial future trade flows with the country/region in 
question; the country's infrastructure and capacity in  the field of standards and conformity assessment 
for industrial products; the country's rules for the industrial product sectors under consideration and its 
willingness to align them with EU or internationa l rules.  The EU bases its rules on international 
standards.  The procedure to be followed to ne gotiate a MRA is the one used for negotiation of 
international agreements.  The Commission’s policy on Mutual Recognition Agreements can be found in Commission 
Staff Working Paper produced jointly by the Direct orates General Trade and for Enterprise: 'Priorities 
for Bilateral/Regional Trade Related Activities in th e field of Mutual recognition Agreements' - SEC 
(2004) 1072. 
Q15. México desearía conocer cuál es el estado actual de la propuesta del Sistema de Registro, 
Evaluación y Autorización de productos Quím icos (REACH), y qué acciones se han tomado para 
tomar en cuenta los comentarios presentados en la consulta llevada a cabo por la CE en junio de 
2003. 
 
A: The REACH proposal is still under discussion in the European Community Institutions, that 
is, the European Parliament and Council of Ministers.  It is therefore still subject to modifications and 
may still develop as a result of those discussions. The consultative exercise undertaken during the su mmer of 2003, when the European Commission 
published a draft legislative text on the internet and invited comments from all interested parties, 
generated a great deal of interest. Over 6000 dis tinct responses were received from all over the world. 
These comments resulted in significan t changes to the proposal before it was adopted by the European 
Commission in October 2003. The explanatory me morandum to the REACH proposal details these 
changes. Some of the more significant ones, related to concerns raised by trading partners, are listed 
below: 
• The scope of the proposal was reduced, by exempting polymers from registration and 
 evaluation, and by restricting the cases when  chemical safety assessments are required; 
• Legal certainty was improved, by replacing a duty of care with an explanation of the 
 principles underpinning the legislation; 
• Costs were reduced, by simplifying the regist ration obligations for substances produced  or 
imported between 1 and 10 tonnes, and re ducing the registration requirements for 
 intermediates; 
• Bureaucracy was reduced, by making the Agency  solely responsible for registrations and 
 giving the Agency a greater responsibility in the evaluation process; 
• Stricter protection of confidential business information was introduced 
 WT/TPR/M/136/Add.1 
Page 69 
 
 
 Q16. Finalmente, ¿puede la CE describir las medidas que está tomando para garantizar el 
cumplimiento del artículo 3 del AOTC por parte de las jurisdicciones locales de sus Estados 
miembros? 
 
A: The EC would like to remind that in 1999 submitted to the WTO information concerning the 
measures taken in implementing the Agreement. The relevant document is G/ TBT/2/Add.12/Rev.2 of 
5 November 1999. According to th is information the overall respons ibility for the implementation and 
administration of the TBT Agreement lies with  the Commission of the European Communities. 
 However, in the non-harmonized area covered onl y by national legislation, Member States’ 
authorities directly notify proposed regulations to  the WTO secretariat. As local government and non-
governmental bodies fall under the regulatory comp etence of the Member State on whose territory 
they are situated, obligations provided for by the Agreement in respect of these bodies are carried out 
by the Member States, including notifications  under Articles 3.2 and 7.2 where applicable 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 2) MEDIDAS QUE 
AFECTAN DIRECTAMENTE A LAS IMPORTACIONES / x) Medidas sanitarias y 
fitosanitarias.  Q17. Respecto de lo señalado en el capítulo corres pondiente a medidas sanitarias y fitosanitarias 
(en particular los párrafos 79 y 81 a 89), ¿podrían explicar la CE qué medidas han adoptado para 
otorgar trato especial y diferenciado a los países en  desarrollo Miembros, en los términos del 
artículo 10 del Acuerdo sobre la Aplicación de Medidas Sanitarias y Fitosanitarias (AMSF)? 
 
A: Las medidas adoptadas varían según sean la natu raleza de la medida; la más frecuente es un 
retraso en la entrada en aplicación. Un ejemplo reciente es la notificación G/SPS/N/EEC/221 (10 Nov. 2003) donde la CE informa de su intención de aplicar la Normas Internacionales para Medidas 
Fitosanitaria (NIMF) Num. 15, Directrices para reglamentar el embalaje de madera utilizado en el 
comercio internacional. A raíz de las observaciones presentadas por los terceros países, en la 
notificación G/SPS/N/EEC/221-Ad1 (13 Mayo 2004) la  Comisión Europea informa que ha propuesto 
postergar la aplicación de las disposiciones con el fin de facilitar la adopción de las medidas 
necesarias. En efecto, una vez adoptada la Directiva 2004/102/EC
11 se toma en consideración el 
Artículo 10 de acuerdo MSF permitiendo mas flexibilid ad para la entrada en aplicación de ciertas 
partes de la directiva que van hasta el 31 de dici embre de 2007 las embalajes reciclados y las maderas 
de estibar es decir 4 años desde el anuncio de la medida  
Q18. En relación con la pregunta anterior, ¿pueden las CE informar qué actividades de 
asistencia técnica han desarrollado para dar cumplim iento a lo dispuesto por el artículo 9 del 
AMSF (en particular el párrafo 2)?  
A: Véase el documento G/SPS/GEN/244 Comité de Medidas Sanitarias y Fitosanitarias - 
Asistencia técnica a los países en desarrollo  - Declaración de las Comunidades Europeas 
 
Q19. En el párrafo 90 se señala que la totalidad de los 10 países de reciente adhesión a las CE 
han transpuesto en su legislación nacional el acervo comunitario relativo a la inocuidad de 
alimentos. En este sentido, ¿pueden las CE e xplicar de que manera sus diez nuevos estados 
                                                     
 
11 Directiva 2004/102/EC de la Comisión que modifica los anexos II, III y IV de la Directiva 
2000/29/CE del Consejo, relativa a las medidas de pr otección contra la introducción en la Comunidad de 
organismos nocivos para los vegetales o productos vegeta les y contra su propagación en el interior de la 
Comunidad [Diario Oficial L309 de 6 Octubre 2004, Pág. 9-25].    WT/TPR/M/136/Add.1 
Page 70  
 
Miembros dieron cumplimiento a las obligacion es previstas por el artículo 5 del Anexo B del 
AMSF?  
A: Véase G/SPS/GEN/426 (08/10/2003) “ Comunicación Conjunta de Chipre, la republica 
Checa, Estonia, Hungría, Letonia, Lituania, Malta, Polonia, Eslovaquia, Eslovenia aya las 
Comunidades Europeas ” 
 
III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS / 4) MEDIDAS QUE 
AFECTAN A LA PRODUCCIÓN Y AL COMERCI O / iii) Protección de los derechos de 
propiedad intelectual.  
 
Q20. En el párrafo 138 se menciona que en  marzo de 2003 se alcanzó un enfoque político 
común en la elaboración de una propuesta de re glamento sobre una patente comunitaria. Sin 
embargo, aclara que todavía no se llega a un ac uerdo. Quisiéramos saber ¿cuáles son las 
dificultades que enfrenta la patente comunitari a y cuáles son las perspectivas para alcanzar un 
acuerdo?  
A: The Community patent Regulation was close to finalisation in November 2003 on the basis of a Presidency proposal which was based on the Co uncil common political approach of March 2003. 
However, as of May 2004 four states could not agree on two issues relating to translations: the deadline for filing of translations of the claims of  the granted patent, and the extent to which third 
parties could rely on inaccuracies in those translations 
IV. POLÍTICAS COMERCIALES, POR SECTORES / 6) SERVICIOS / i) Visión general. 
 Q21. En el párrafo 91 se señala que el sector de los servicios se encuentra a la zaga de otros sectores en la creación de un mercado único, principalmente por la disparidad de las 
reglamentaciones y los engorrosos trámites administr ativos. ¿Podrían explicar las CE qué acciones 
se pretenden instrumentar para evitar esta dispersión legislativa y administrativa y si las mismas serán objeto de consulta pública? 
 
A: The European Commission has submitted to the European Par liament and to the Council of 
Ministers of the EC a proposal for a services dire ctive, which is mentioned in the reports. More 
detailed information is availa ble on http://europa.eu.int/comm/internal_market/en/services/ 
services/index.htm 
 
Q22. ¿Pueden las CE explicar cómo garantizan a sus socios comerciales el respeto de sus 
compromisos multilaterales en mat eria de movimiento de personas, frente a las medidas que han 
adoptado en materia de reforzamiento a la protección de fronteras exteriores?  
A: The integrity of the EU’s external borders is ensured – inter alia – through the application of 
the EC’s and Member States’ visa policies.  In this  respect, attention is drawn to the GATS Annex on 
Movement of Natural Persons, a nd in particular paragraph 4 thereof which exclude entry visa 
measures and procedures from the scope of the GATS.   
 The EC and its Member States are conti nuously working to improve visa processing 
procedures generally and to address specific problems which are brought to our attention, whilst at the 
same time ensuring that the integrity of our visa systems and our external borders are maintained 
 
IV. POLÍTICAS COMERCIALES, POR SECTORES / 6) SERVICIOS / ii) Servicios 
Financieros / a) Visión General. 
 
Q23. En el párrafo 98 se señala que a partir de noviembre de 2003 se están aplicando medidas que regularán y supervisarán los sectores de ban ca, seguros y fondos de inversión y que ello WT/TPR/M/136/Add.1 
Page 71 
 
 
 permitirá reestructurar la organización del sistema financiero a través de cuatro nuevos comités. 
En este sentido, ¿pueden las CE explicar cómo func ionarán esos comités y cual será el objetivo de 
cada uno?  
A: The new financial services committee organisational structure is as follows: 
 
 Banking Insurance and Occupational 
Pensions Securities (including UCITS) 
Regulatory 
committee European Banking Committee (EBC) European Insurance and Operational 
Pensions Committee (EIOPC) European Securities Committee (ESC)
Committee of 
Supervisors Committee of European Banking 
Supervisors (CEBS) Committee of Europ ean Insurance and 
Occupational Pension Supervisors 
(CEIOPS) Committee of Eur opean Securities 
Regulators (CESR) 
 
 The role of the EBC and the EIOPC is to act as a regulatory committee (assisting the 
Commission in the exercise of its implementing powers under the Banking and Insurance Directives), 
and to advise the Commission.  The CEBS and the CEIOPS (and also CESR) bring representatives of supervisory authorities together in order to discuss and agree issues related to implementation of the 
financial services directives in practice.  
Q24. ¿La CE nos podría explicar de qué manera  sus diez nuevos Miembros adoptarán el paquete 
de medidas que actualmente se aplican entre sus estados Miembros, en especial en sectores como 
banca y seguros? 
 
A: In a limited number of cases transitional peri ods or derogations were agreed in the pre-
accession negotiations with the new Member States. In  the absence of such transitional periods or 
derogations the new Member States were required to ha ve fully transposed the EU rules in the area of 
financial services by the accession date (1 May 2004).  All new measures adopted by the EU 
institutions after the date of accessi on must be fully transposed by th e new Member States in the same 
way as the old Member States.  
IV. POLÍTICAS COMERCIALES, POR SECTORES / 6) SERVICIOS / v) Turismo.  
 
Q25. En el párrafo 143 se describen el financ iamiento que reciben diversas iniciativas de 
turismo de programas de las CE. En este sentido, ¿podrían las CE proporcionar mayor 
información sobre estas iniciativas (por ejem plo, si las mismas están abiertas a empresas 
extranjeras domiciliadas en el territorio abarcado por las CE)? 
 
A: The tourism policy of the EC and their Memb er States includes a broad range of programmes. 
Concrete policy instruments, (including financing programmes), may vary by Member State. Within 
the limitations reflected in the EC's schedule of  GATS commitments, all foreign companies fulfilling 
the conditions set by Article 48 of the EC Treaty receive national treatment. 
 
QUESTIONS FROM NEW ZEALAND  
 
A
GRICULTURE  
 Q1. New Zealand considers that the cost of th e CAP to European consumers warrants further 
attention.  The Secretariat has noted that the “prices of certain agricultural products [in recently 
acceded Member States] are expected to rise as a result of the adoption of the common agricultural 
policy (CAP)” (S/136, chap II, p 28, para 41).  Th e OECD has estimated that consumers pay an 
extra 28% for agricultural produce to fund support measures (S/136, chap IV, p 89, para 18). WT/TPR/M/136/Add.1 
Page 72  
 
 Has the Commission or the government of  any of the Member States conducted any 
research into consumers’ views on the artificially  high prices they pay for agricultural and food 
products due to the CAP?   
 
A: The EU Commission monitors the views of European citizens on the Common Agricultural 
Policy through annual surveys (calle d as Eurobarometers). These reports show that a majority of EU 
citizens considers that the CAP benefits consumers as much as producers.  The provision of safe, quality food at reasonabl e prices, which constitutes a key objective of 
the CAP, has been further reinforced by the latest  policy reform. One key element of the CAP reform 
is to make consumers benefit from the reduction in the institutional prices and from the deeper 
integration of food safety and food quality into  the CAP. The introduction of the single payment 
scheme should also encourage farmers to better re spond to market signals generated by consumer 
demand.  
Q2. Given the much lower GDP per capita in th e new Member States (see S/136, p 1, Table 1.1), 
how able are their consumers to adjust to these cost-of-living increases?   
 
A: The implementation of the reformed CAP in th e new Member States is projected to generate 
price increases at producer level for a small number  of agricultural products (including most notably 
sugar and beef). In contrast the prices of some  other agricultural goods, especially for pork, fresh 
dairy products and cheese, are forecast to decline.  The prices of remaining agricultural commodities 
should remain broadly similar to the pre-accession level. 
The consumer prices of these products are only partially related to the prices of raw 
commodities. For example the prices of livestock represent less than 40 % of the retail prices of fresh meat. This share is similar in the dairy sector a nd even lower for products  from products based on 
cereals (such bread, pasta, biscuits etc.) where its stands at less than 7 %. 
Furthermore, the integration of the new Member States in the Single Market as well as the 
increased liberalisation of the food chain in many new Member States are exp ected to keep retail 
prices for food products under pressure thanks to th e decrease in the currently high retail and food 
industry margins. 
Taking these elements together implies that consumer prices for food will not change 
dramatically in the new Member States. Moreover, c onsumer income is project ed to increase by about 
4-5 % annually in real terms over the medium term in these countries. This should rapidly reduce the 
relatively high expenditure share for food  products in most new Member States. 
 
Q3. Has the EC considered significantly lowering  its tariffs on all agricultural products to 
provide benefits to its domestic consumers in th e form of lower food prices and greater availability 
of a wider variety of products?  
A: The EC is fully committed to give effect to the Doha Ministerial Declaration on agricultural 
products and to the framework agreement of 1 August 2004.  
W
INE/TBT  
 
Q4. New Zealand continues to be concerned at  the restrictive nature of wine regulation 
753/2002.  We find it hard to reconcile the EC’s expressed concern for cons umers’ best interests 
with a regulation which allows only labels carrying a geographical indication to provide 
information such as vine varieties, produc tion methods and vintage. How does the Commission 
justify what appears to be an unnecessary obstacle to trade?  
A: The objectives of these Regulations include the protection of consumer interests, the 
prevention of deceptive practices a nd the promotion of qualit y exports.   The EC considers these to be WT/TPR/M/136/Add.1 
Page 73 
 
 
 legitimate objectives.  If New Zealand has more speci fic concerns, the EC remains available to pursue 
discussions with a view to enhancing mutual understanding and cooperation. 
 
SERVICES  
 
Q5. The Secretariat report notes (WT/TPR/S/136,  page 116) that in January this year the 
Commission presented a proposal for a Directive that sets out a framework for creating a genuine internal market for services by 2010.  What pr ogress has the EC made in implementing this 
proposal? 
A: The proposal is currently being examined by  the European Parliament and the Council of 
Ministers of the EC. Agreement is unlikely to be  reached before the end of 2005, at the earliest. 
According to the Commission proposal, Member Stat es would then have two years to transpose the 
Directive into national law. Information regardi ng progress on the procedure for the adoptin of this 
proposal is available on http://eur opa.eu.int/comm/internal_market/ en/services/services/index.htm. 
 T
RADE REGULATORY PROCESSES  
 Q6. We note the special emphasis the EU is cur rently giving to promote the quality of its own 
internal legislation and regulation under success ive Presidencies.  Does the EC calculate the 
impact on third countries of proposed trade and economic regulatory measures before these are implemented?   If so, how is this undertaken? 
 
A: Within the framework of the Better Regul ation package and the European Sustainable 
Development Strategy, the European Commission has taken several concrete actions to improve the 
way it designs policy. Central to this drive to en sure that all major policy proposals are guided by 
careful analysis of the available evidence of thei r potential consequences is the Commission’s system 
of Impact Assessment (IA).  This  approach, for which the Commi ssion introduced a new method in 
2002, has integrated and replaced previous singl e-sector types of assessments.  The scope of 
application of IA has continued to grow, and from 2005 every item which appears on the 
Commission’s Legislative and Work Programme  will be subject to Impact Assessment. 
Impact Assessment (IA) is a process aimed at structuring and supporting the development of 
policies. It identifies and assesses the problem to be  tackled and the objectives pursued. It identifies 
the alternative options for achieving the objectives and analyses their likely impacts in the economic, 
environmental and social fields. It outlines the pos itive and negative impacts of each option as well as 
synergies and trade-offs.  
Impact Assessment is an aid to political decision , not a substitute for it. It informs decision-
makers of the likely impacts of proposals, but it leaves it up to them to take the decisions. 
The guidelines and support handbook issued to Commission staff asked to carry out an 
Impact Assessment make explicit re ference to a number of possible impacts on third countries which 
should be addressed as part of the IA process.  Thes e include questions relating to the potential impact 
on international relations and trad e; impact on overseas development assistance; impacts on public 
health and education in non-EU c ountries; impact on international migr ation flows.  Work is currently 
underway to provide further guidance on the range of potential impacts, including those likely to 
affect third countries. 
 
E
NLARGEMENT  
 Q7. The preparation of a new WTO Schedule fo r the enlarged EU-25 provides an opportunity 
to move from the specific and mixed duties common in the agricultural area to their ad valorem 
equivalents.  Permanently adopting ad valorem ra tes would provide more transparency and, most WT/TPR/M/136/Add.1 
Page 74  
 
importantly, prevent effective rates of protection from  increasing.  Will this be taken up?  If so, 
when? 
 
A: The specific duties are consider ed to be transparent, as the ra te is clearly specified in the 
Member’ schedules. The main characteristics of sp ecific tariffs (notably predictability and non-
manipulation) demonstrate that specific duties do not impede trade but makes trade easier. Moreover, 
the fact that the most important importers use specific or mixed tariffs shows that these duties do not impede trade.   Specific duties are more transparent than ad valo rem duties due to the fact that the ad valorem 
duties have to be calculated as a percentage of th e custom value which is often declared in not a 
reliable way by the operators (import values whic h are declared are often under-invoiced or over-
invoiced for different reasons such as paymen t of VAT, frauds, exodus of capital).      
 
Q8. When will proposed modifications to the EU  consolidated Tariff Schedule concerning 
changes to tariff quota commitments, domestic su pport and export subsidy commitments, resulting 
from the enlargement of the EU to 25 member s on 1 May 2004, be notified to WTO members? 
 
A: The EU25 schedule will result from the outcome of the negotiations on XXIV.6. The EC has recently extended the negotiation period for all WTO Members who have claimed compensatory adjustment. The EC intends to notify under the relevant agreement in due course.  
 
QUESTIONS FROM TURKEY 
 SECRETARIAT REPORT
 
 EC enlargement
 
 
 The seventh trade policy review of EC mainly covers the EC-15’s trade policies for the last two years. However, the following questions in this  section will refer to the period after 1 May 2004, 
when the ec concluded its latest enlargement with the accession of ten new member states. 
 Q.1 Regarding the enlargement, would ec kind ly provide information on the method foreseen 
for the newly acceded member states to adopt the Common Agricultural Policy (CAP), and the 
transition periods thereof?  
 
A: As the question notes, the new Member States joined the European Un ion on 01 May 2004. 
Since that time, as with any Member State, they have had to comply with the acquis communautaire, 
including the Common Agricultural Policy (CAP). This  implies full participation in the various EU 
bodies involved in running the CAP, including the Council of Ministers and in various management committees chaired by the European Commission.   Applying the CAP is administratively demanding, and a period of several years was needed for the new Member States to prepare themselves.  In some cases strengthening of administrative 
capacity is still going on. Several EU programmes such as PHARE (in particular twinning) and 
SAPARD have supported the building up of the requi red administrative structures, and the process 
has been closely monitored throu ghout by the European Commission. 
 Although in general the CAP applies EU-wide, th ere are some new rules or transition periods 
that are only applicable to the new member stat es, which were introduced to take account of the 
specific agricultural situation in the New Member  States and which were a direct result of the 
accession negotiations. There is for example the phasi ng-in process for direct payments, meaning that 
EU direct payments to farmers in the new member st ates will start in 2004 at 25% of the EU level and 
will increase step by step so that the full EU leve l is reached in 2013. New Member States have been 
granted the possibility of increasing, or ‘topping-up’, these payments using national funds or rural WT/TPR/M/136/Add.1 
Page 75 
 
 
 development funds. Another novelty for the new Memb er States is the introduction of the Single Area 
Payment Scheme (SAPS), which 8 out of the 10 new Member States have chosen. This is an 
administratively simplified system for granting direct payments to farmers, which consists of a single flat-rate payment per hectare. There are various ot her elements resulting from the negotiations that are 
specific to the new Member States, including new rural development measures, special derogations 
from certain rules, and transition periods on ot hers. Notable amongst the latter are a number of 
transition periods in the area of veterinary and phy tosanitary standards, for example in relation to 
slaughterhouses or processing plants. Full details of the ways in which the CAP applied in the new 
Member States may differ from policy applied in th e EU15 can be found in the Act of Accession. 
 Q.2 Apart from these, should any increase be expected in the number of contingency trade measures taken by the ec after the enlargement? 
 
A: In policy term, the enlargement will not cha nge the eu’s traditionally high standards and 
prudent approach for initiation and imposition of  trade defense measures. EU trade defense 
legislation, which is fully in line with wto agreem ent and subject to scrutiny by that organisation and 
its members, will be applied throughout the enlarged  EU-25 and its application will be subject to the 
scrutiny of the european court of justice. There ar e no reasons to believe that the enlargement will 
cause an increase or decrease in the number of trad e defence measures applied by the eu. Likewise, it 
is reasonable to expect that after enlargement trade defense actions taken by the eu will continue to be 
mainly anti-dumping and anti-subsidy measures, a nd a conservative approach towards the use of 
safeguards will be continued. 
 
Trade Regime
 
 Preferential trade agreements and arrangements 
 
 
 While being an active player in the multilat eral trading system and dda negotiations, the 
EC also has a strong interest in pursuing bilat eral and regional trade relations through various 
preferential trade arrangements. In this respect, the EC has lately started bilateral and regional 
initiatives with MERCOSUR, ACP countries, Mexico, Gulf Cooperation Council as well as balkan countries and countries participating in the Barcelona process, among others.  
 
Q.3 In this framework, what will be the comme nts of the ec regarding possible future bilateral 
and regional preferential trade agreements with th e former soviet republics and north american 
countries? Will the community focus its efforts more  on the multilateral trade negotiations in the 
future?  
 A: Since it was launched in 2001, the Doha De velopment Agenda (DDA)  has been, and will 
continue to be, the EC’s main priority. in conseque nce, all of the EU’s negotiations on regional trade 
agreements (RTAs) originate from before the launch of the DDA. The EC has thus so far chosen to 
refrain from introducing new negotiations on regi onal trade agreements, including with North 
American countries and former Soviet republics, until the DDA is successfully concluded.  TRADE POLICIES AND PRACTICES BY MEASURE 
 
 Technical barriers to trade
 
 
Q.4  Taking into consideration that 25% of th e EC technical legislation is not harmonized, 
could the EC kindly provide us with the information on what sort of measures are taken to maintain free flow of trade within ec as well as with the third countries.  WT/TPR/M/136/Add.1 
Page 76  
 
 A: In the non-harmonised field, free movement of  goods within the EU is guaranteed by Articles 
28 to 30 EC Treaty. Articles 28 and 29 prohibit qua ntitative restrictions on intra-EU trade of goods 
and measures of equivalent eff ect. Some national measures restricting the free movement of goods 
can be justified on the basis of legitimate grounds of  public interest laid dow n in Article 30 EC Treaty 
or accepted by the Court of Justice, provided th ey comply with the proportionality principle. The 
mutual recognition principle in the non-harmonised field of goods is the im plementation of Articles 
28 to 30 EC Treaty (see the interpretative communi cation published in the OJ C 265 of 4 November 
2003).   The Commission is continuously monitoring the application of mutual recognition in the non-
harmonised field of goods through different means, the most important of which are the infringement 
proceedings under article 226 EC and the notifica tion of draft technical rules under directive 
98/34/EC. Besides the different monitoring mechanisms mentioned in the second biennial report on mutual recognition, the Commission has launched a study exploring the possible impacts of measures 
aimed to improve the functioning of mutual r ecognition in the non-harmonised field of goods. The 
Commission has also consulted the European bus iness test panel on its experience with mutual 
recognition in the non-harmonised field of goods. The results are published on the commission's website on mutual recognition.  
Intellectual property rights protection – geographical indications
 
 
 According to paragraph 142 of the document WT/TPR/S/136, “community-wide rules exist 
for the protection of geographical designation of  origin and indication (gi) for agricultural 
products and foodstuffs, wines, and spirits.12 For agricultural products and foodstuffs, there is a 
community-wide system of examination and registration.”  
Q.5 Does the EC have rules for protection of ge ographical indications and designations of 
origin for products other than agricultural product s and foodstuffs, wines and spirits? If so, could 
EC provide information on the rel evant community legislation?  
 
A: No, the EC does not have specific community legislation for the protection of geographical indications and designations of origin for products  other than agricultural products and foodstuffs, 
wines and spirits. However, all GIs enjoy protection under the ec legislation on trademarks (trademark 
directive 89/104/CEE, regulation on the community  trademark 40/94), labelling (directive 2000/13 on 
the labelling, presentation and advertising of foodstuffs) and adver tising (directive 84/450 on 
misleading advertising), as well as under member  states’ legislation on trademarks and unfair 
competition. 
 
TRADE POLICIES BY SECTOR
 
 Manufacturing-chemicals
 
  As reflected in paragraphs  84 and 85 of the document WT/TPR/S/136, EC is going to 
introduce a single, integrated system for chemical s, called reach (registration, evaluation, and 
authorization of chemicals). As to the Secretariat’s Report, “[one of] the key elements of the new system [is] placing responsibility on the industry to manage the risks of its chemicals”.   Q.6 Could EC give detailed information on how th is new system is going to be administered? 
What are the expected effects of the system on ec’s external trade? 
                                                     
 
12 Council Regulation (EEC) No. 2081/92, 14 July 1992; Council Regulation (EC) No. 1493/1999, 
17 May 1999;  and Council Regulation (EEC) No. 1576/1989, 29 May 1989. WT/TPR/M/136/Add.1 
Page 77 
 
 
 A: A European Chemicals Agency will be cr eated to manage the technical, scientific and 
administrative aspects of the REACH system. Sp ecific details can be found in the explanatory 
memorandum to the proposal, the legal text of the proposal and the response from the European 
Communities to comments submitted by WTO members under G/TBT/N/EEC/52.  The European Commission’s extended impact  assessment already includes consideration of 
the indirect impact of REACH on downstream users as we ll as its direct cost to the chemical industry. 
 The proposal has been designed in such a wa y that all REACH provisions equally apply to 
EU and non-EU-producers. The system is expected to affect equally EU and non-EU producers in a 
completely non-discriminatory way. The EC does not expect that REACH will lead to significant impacts on EC external trade. 
 Moreover, in light of the comments received from various sources, the european commission 
is now engaged in a process of further impact asse ssment with stakeholders including representatives 
of third country manufacturers in Europe. The scope of the work includes further detailed analysis of 
the potential impact on downstream users and supply chains in global industries such as automobiles 
and electronics. This work includes analysis of eff ects on the global sourcing of chemical substances, 
components and articles. It will in particular fo cus on concerns raised about the likelihood and 
implications of the potential withdrawal fro m the market of substances due to reach. 
 
Government Report
 
 Generalized System of Preferences (GSP)
 
 
 As declared in the 72nd paragraph of the document WT/TPR/G/136, the current 
Generalized System of Preferen ces (GSP) scheme of the ec is to be replaced after 2005.  
 Q.7 Accordingly, we would like to know about the changes regarding the country and product 
coverage under its new GSP scheme, which will be brought into effect in 2006.  
 
A: The new GSP is to be adopted by the Counc il in the forthcoming months upon a Commission 
proposal that has been adopted on 20 October 2004. In this proposal, the GSP country-coverage 
remains identical to that of the present scheme. On the opposite side, the GSP product-coverage will 
be improved. The normal GSP arrangement will be increased from 6900 products to 7200, mostly 
because of the inclusion of all the fishery sector within the a rrangement, together with a few 
agricultural products. The new normal GSP arrangement will be thus the same than the current “drug” 
arrangement. The only difference with the current “dr ug” arrangement is that in this new list almost 
half of the products will be sensitive thus enjoying only a limited tariff preference. 
 
QUESTIONS FROM HONG KONG 
 
Tariffs  
(WT/TPR/S/136, P. ix, Para. 9; P. xi, Para. 21; P. 37, Para. 1-2; and P. 40-41, Paras. 15-19 
and Table III.1) 
 
Q1. The EC’s average applied MFN tariff rate has remained fairly stable at 6.5% in 2004.  
However, the EC’s tariff structure is complex.  There are several types of ta riff, namely ad valorem, 
specific, compound, mixed and variable duties.  We  would like to know if the EC has any plan to 
simplify its tariff structure so as to introdu ce greater transparency in its tariff regime. 
 
A: The types of duties that are quoted by Hong Kong in its question are perfectly compatible 
with GATT and WTO obligations entered into by the EU. Furthermore, the existence of specific 
duties is in general regarded as very trade facilita tive especially if one bears in mind the problems WT/TPR/M/136/Add.1 
Page 78  
 
encountered in terms of customs valuation in so me Members. In any case the share of such non- ad 
valorem  duties is rather low if the whole EU schedule is taken into consideration. 
 We do not consider that any changes in ou r current policy are warranted given that the 
various types of duties offer the EU a better gamut of  tools in order remain an open market to imports 
from all over the world/  Q2. In 2002, some 12% of the EC's tariff lines carry nuisance applied rat es.  The same figure 
was reduced to 6.8% in 2004.  Would the EC cons ider taking further step s to eliminate all its 
nuisance tariff rates for trade facilitation purpose? 
 A: It would be useful for the question to specify what Hong Kong intends by “nuisance duty”. In 
the absence of such level of detail, one can surmis e that duties below 2% are regarded as “nuisance” 
duties. In this respect it is worth pointing out that th e elimination of such duties can be considered of  
help as long as other objectives are attained  within the ongoing DDA negotiations, including inter alia  
a less fragmented landscape in terms of schedul es for countries with comparable levels of 
development. Furthermore, the EU considers that the practice of slight differentiation between low 
and very low duties for very similar specific products  in some Members’ schedules is definitely not in 
keeping with trade facilitation purposes.  Extension of Quota Regime upon EC Enlargement
 (WT/TPR/S/136, P. 53, Para. 49) 
 
Q3: It is stated that the extension of the EC’s quota regime to the new Member States (MSS) 
upon their accession on 1 May 2004 was to ensure that trade with the ten new MSS could fully take place as before, for the remaining eight months for which the regime is in place.  Nonetheless, we 
note that there is clear WTO jurisprudence from  the dispute settlement case on “India-Turkey: 
Restrictions on Imports of Textiles and Clothing  Products” that the introduction of quota by 
Turkey following its customs union with the EC was inconsistent with Article 2.4 of the ATC.  We 
consider that the same understanding should apply to the extension of quota regime upon the EC 
enlargement.  We would be interested to know the EC’s justification for ex tending its quota regime. 
 
A: The justification to extend the regime as from enlargement and until the rest of the year when 
quotas will be abolished was obviously to ensure that  the expanded internal market of EU 25 could 
function satisfactorily , also in the interest of third countries. If the geographical scope of the already existing (i.e. not new) quotas for EU15 had not been  expanded to cover the ten new member countries 
it might have been necessary to exclude imports into  the latter from free circulation within the EU and 
this would on overall terms have be en detrimental to the interests of third countries and to trade. 
Incidentally EC does not consider the issue of enla rgement  as falling , within the remit of the ATC, 
which – and this should be noted – in article 2.4 fo resees that restrictions may be introduced under the 
provisions of ..“relevant GATT provisions..”.  Qualitatively speaking, there is  a difference between the creation of a customs union as in the 
case of Turkey which is mentioned and the outright p assage to full membership of the EU and for that 
reason it does not seem obvious that the analogy derived from the case mentioned does apply to the 
question of EU enlargement 
 Anti-dumping
 (WT/TPR/S/136, P. 56-58, Paras. 60, 61 & 63) 
 
Q4: We note that the EC has recently amended its AD regulation (Council Regulation 384/96) 
to bring in, among other things, new provisions which may favour easier initiations or impact on 
the magnitude of the AD duties in force (e.g. th e new Council voting procedure and the new rules 
on duty absorption).  We would be interested to  know the EC’s views on how these newly amended 
provisions would impact on the future trend of its AD actions, particularly whether they would 
encourage more extensive use of AD measures. WT/TPR/M/136/Add.1 
Page 79 
 
 
 A: Fact is that the changes will not lead to an increase in measures. The Commission will 
continue to scrupulously and impa rtially investigate allegations of dumping and Member States’ 
power to say “no” to the imposition of  measures is completely unaffected.  
Fact is also that importers, traders, users and exporte rs are one of the main be neficiaries of the reform: 
investigations will be shorter, transparency increase d and market uncertainty eliminated – this will 
reduce the costs for exporters, important in particul ar for those in developing countries.  And it will 
allow foreseeability for all economic operators.  These are all long-standing demands from exporting 
countries voiced in the continuous dialogue we have  on trade defence matters.  Finally, the changes 
will not affect the general approach of the EC whic h will continue to be one of the most moderate 
users of the AD instrument (less than 0.1% of its imports covered by measures) 
 
Q5: We also note that a study on the EC’s AD  policy mentioned that protection afforded to 
domestic industry through such measures may not be that significant since some of the benefits accrued to countries not subject to the measures.  We are interested to know whether the EC would 
adjust its AD policy in response to the finding. 
 
A: The thrust of the question is not entirely cl ear. Notwithstanding this, the EC is not having an 
intention to change its anti-dumping policy.  Technical Barriers to Trade 
(WT/TPR/S/136, P. 60, Para. 69) 
 
Q6: Only about two-thirds of the standards developed by CEN and CENELEC, the European 
standardisation bodies, are identical to or based on ISO and IEC standards.  For those European standards that are not based on international guid elines, how does the EC ensure that they are not 
more trade restrictive than necessary ? 
 A: Europe has an interest in international st andardisation because of its potential to eliminate 
technical barriers to trade and to increase mark et access for all. Co-operative arrangements with 
international standards bodies offer a systematic framework to take over international standards 
and/or to contribute to the international st andards making process. The Vienna and Dresden 
Agreements between ISO and CEN, respectively th e IEC and CENELEC are useful examples how to 
enable for input, to avoid double work or to speed up standardisation work.  
 
Sanitary and Phytosanitary Measures
 (WT/TPR/S/136, P. 63-64, Paras. 79 & 81) 
 
Q7: Under the EC's food safety regime (Regul ation (EC) No. 178/2002), risk managers are 
empowered to introduce emergency measures to protect  human and animal health on the basis of 
the precautionary principle when scientific information concerning the risk is incomplete or 
inconclusive, or when “other facto rs” are considered legitimate to th e subject in question.  We are 
interested in knowing what these “other fact ors” are and how they are determined. 
 A: The measures referred to in the Article 7 of  Regulation (EC) N°. 178/2002, are in compliance 
with the Article 5.7 of the SPS Agreement. Concerning the “other legitimate factors” to be taken into 
account in risk management decisions, the EC  follows the Codex Alimentarius Decision (2
nd 
Statement of Principles concerning the Role of Science in decision making process and the extent to 
which other factors are taken into account): “Whe n elaborating and deciding upon food standards 
Codex Alimentarius will have regard , where appropriate, to other legitimate factors relevant for the 
health protection of consumers and for the promoti on of fair practices in food trade”. The criteria for 
the consideration of the other legitimate factors ha ve been established by the Codex Alimentarius in 
appendix to the Procedural Manual (Thirteenth edition, page 179 of the English version). 
 WT/TPR/M/136/Add.1 
Page 80  
 
Q8: Some of the sanitary and phytosanitary me asures of the EC have been the subject of 
criticism from third countries, including that they are much stricter than in ternational regulations, 
and that there are high administrative costs in meeting the requirements.  We are interested to 
know what steps the EC has taken/will take to address such criticisms. 
 A: The sanitary and phytosanitary measures of the EC are based on scientific evidence and are 
applied for achieving the level of protection deemed appropriate by the EC. Sometimes, the relevant 
international standards are not sufficient to achieve  this appropriate level of protection and the EC 
applies the provisions of Article 3.3 of the SPS Agreement to introduce or maintain sanitary or 
phytosanitary measures which result in a higher le vel of protection than would be achieved by 
measures based on the relevant  international standards. 
 This is in accordance with Article  5.3 of Regulation (EC) N°. 178/2002. 
 However, such measures are not more trad e restrictive than required to achieve the 
appropriate level of protection and the cost fo r meeting these requirements is the same for the 
Member States of the EC.  
Import Regulations
 (WT/TPR/S/136, P. 113, Para. 80) 
 
Q9: It is mentioned that in anticipation of rem oval of all EC textile quotas on 1 January 2005, 
the EC has proposed measures to promote competiti veness in the textiles and clothing sector.  
These include exploring the use of labelling to fa cilitate access to the EC for products that respect 
international labour or environmental standards.  Would the EC assure that any labelling schemes 
under consideration will not carry any trade stifling effect and will not be discriminatory against 
particular groups of exporting economies, he nce becoming a trade barrier in disguise? 
 
A: Work is still ongoing as nothing has been adopt ed yet. However, any scheme that would be 
proposed will be WTO compatible and would draw on what already EU main trading partners have 
adopted.  Telecommunications Services
 (WT/TPR/S/136, P. 122-125, Paras. 111-117) 
 
Q10. We are glad to note that the fixed tel ecommunication market has been liberalized since 
January 2002 in all the ten new Member States.  While quite a number of the new Member States 
have undertaken phase-in commitments on fixed te lecommunication, a few have yet to commit in 
this sector despite the autonomous liberalizatio n made.  Would the EC consider reflecting such 
liberalizations in its consolidated services offer so as  to bring its commitments in line with its actual 
regime and to increase the predictability of its regime? 
 
A: The scheduling of new commitments is a ma tter of negotiations under article XIX of the 
GATS  
Q11. We note that the EC intended to implement the new EC-15 regulatory framework for 
telecommunications since 25 July 2003.  Details of the main elements of this framework have been 
provided in paragraphs 112 to 117 of the Secretariat Report.  Would the same regulatory framework be extended to EC-25?  When would th e deadline for implementation be for the ten new 
Member States?  
A: The new EC regulatory framework for elect ronic communications was applicable for the 
EC 15 from 25 July 2003 (as regards the Framework,  Access, Authorisation and Universal Service 
directives) and 31 October 2003 (as regards the ePri vacy Directive) respectively, and for the new 
Member States as from 1 May 2004 
 WT/TPR/M/136/Add.1 
Page 81 
 
 
 Maritime Transport  (WT/TPR/S/136, P. 130, Paras. 130-131)  
 
Q12. It is noted that state aid measures have been  taken to attract ship owners to re-flag to EC 
member state flags.  New Guidelines on State Aid was adopted in 2003 to maritime transport, 
aiming at further ensuring a favourable tax envi ronment for ship owners to counter international 
competition by open registers and flags of convenien ce.  We are concerned about the possible effect 
on trade by such measures.  We would appreciate if the EC could provide more details on the policy objectives behind the new Guidelines on State Aid,  the measures involved in the scheme and the 
criteria to be a beneficiary. 
 A: Under the 2004 Guidelines transport activities are eligible to State aid.  
Aid measures are usually directed towards ship-owners.  However, ship management is also eligible if, 
for a given vessel, a same ship manager is entrusted with both technical and crew management. Moreover, the maritime transport part of towage a nd dredging are also eligible provided that transport 
at deep sea constitutes at least 50% of the yearly activity of the ai d recipient. Towage, dredging and 
any other service activity as such is not eligib le to State aid to maritime transport.  
 The 2004 Guidelines encompass four main areas of aid: 
• Aid to shipping companies, in the form of ta x alleviation (in practice, the tonnage tax) 
• Aid to labour costs, i.e., tax/social secur ity contributions  exemptions/reductions for 
 seafarers 
• Aid to training 
• Aid to new services in Short Sea Shipping. 
 The objectives of State aid are clearly stated in  Section 2.2 of the Guidelines. They are:  
• improving a safe and environment friendly maritime transport, 
• encouraging re-flagging to Member States’ registers, 
• contributing to the consolidation of the maritime cluster in the Member States,  
• improving maritime know-how,  
• contributing to the promotion of new services in the field of Short Sea Shipping. 
 
QUESTIONS FROM TAIWAN, PENGHU, KINMEN AND MATSU 
 
I. ECONOMIC ENVIRONMENT
 
 
(2) RECENT ECONOMIC DEVELOPMENTS  
 
(pgs. 4-7)    The EC’s economic growth has been restrained by factors such as a strong Euro and weak 
consumer spending. We are interested in learning  what policy tools the EC might consider applying 
to stimulate its economy, in particular in the following areas: 
 
a) How does the EC intend to implement the Stability and Growth Pact (SGP), with a view to containing the budget deficit below the limit of 3% of GDP?  What is the length of the transition period within which the new member St ates are expected to achieve the goal? 
 
A: The Commission will continue budgetary surve illance in all Member States and use its right 
of initiative to help ensure a credible implementation of the SGP
13. During the period ahead, the 
Commission will resume or continue existing Ex cessive Deficit Procedures (EDP) procedures for 
                                                      
13 A summary of all ongoing procedure can be found on http://europa.eu.int/comm/ 
economy_finance/about/activities/sgp/main_en.htm. WT/TPR/M/136/Add.1 
Page 82  
 
France, Germany, the Netherlands and Greece.   As concerns the new Member States, six of which were placed in EDP before the summer, the transition periods for bringing the deficit below 3% of GDP depend on the specifics of the country, as outlined in the convergence programmes of these countries. According to the Commission’s 2004 
Public Finance Report, in aggregate terms the budget deficits in the 10 new Member States are 
expected to be reduced from an estimated 5.8% of  GDP in 2003 to 2.1% of GDP in 2007. Both in 
2004 and 2005, the aggregate budget deficit is expected to decrease by 1 percentage point. 
 
b) Will the Council of Economic and Financial Affairs Ministers (ECOFIN) continue with its 
suspension of the SGP? 
 
A: In July 2004, the European Court of Jus tice annulled the ECOFIN Council’s Conclusions of 
25
th November not to adopt a Commission recomme ndation to France and Germany on new measures 
to reduce the budget deficit and remedy the situatio n of an excessive deficit. The Commission in 
cooperation with the ECOFIN Council is now consider ing how to ensure a satisfactory resolution of 
the budgetary problems of these two Member States w ithin the framework of the Stability and Growth 
Pact.  
c) Will the EC move to prevent further apprecia tion of the Euro by adjusting the ECB’s 
monetary policy? 
 A: Responsibility to define and implement the monetary policy of the community is, according 
to the Treaty, to be carried out by the European System of Central Banks (ESCB), which is governed by the decision-making bodies of the ECB. The Treaty also states that in carrying out the task and 
duties conferred upon them, neither the ECB nor a national central bank, nor any member of their decision making bodies shall seek or take instruc tions from Community institutions or bodies. 
 d) What are the EC’s main medium- to long-t erm policies for resolving problems within the 
structure of its economy, including, for exampl e, a stagnant labour market, an ageing population 
and falling productivity? 
 
A: The EU’s medium-term economic policy strate gy is set out in the Broad Economic Policy 
Guidelines (BEPGs) 2003-05. They focus on the contribution that economic policies can make to the 
fulfilment of the strategic goal set in Lisbon, name ly for the EU to, ‘become  the most competitive and 
dynamic knowledge-based economy in the world capable  of sustainable economic growth with more 
and better jobs and greater social cohesion’. The strategy is concentrated around growth and stability-
oriented macroeconomic policies, economic refo rms to raise Europe’s growth potential and 
strengthening sustainability. 
Regarding raising productivity, the guidelines advoc ate the use of policies such as those that: 
promote R&D, innovation and education; encourage the completion of a fully integrated, EU wide 
financial market; and reforms that increase competi tion in product markets, including providing a 
supportive environment for SMEs to start-up and grow. 
In order to increase employment, the Guidelines outline the need for: comprehensive reform 
of tax and benefits systems in a number of Member States in order to improve the incentive for people 
to take up or remain in work; increased labour mark et flexibility, particularly regarding part-time and 
temporary work; and more effective use of active la bour market policies in order to combat long-term 
unemployment. 
The Guidelines include recommendations on how countries can strengthen the sustainability 
of public finances, particularly by reforming pension and health care systems now, while the 
demographic window of opportunity is still open. 
 
 WT/TPR/M/136/Add.1 
Page 83 
 
 
 (3) TRADE PERFORMANCE AND INVESTMENT  
 (p. 12, paragraph 26)  (a) The experience of some of our investors in Europe has been that certain EC members have 
maintained very stringent restrictio ns on visas and work permits for non-EC residents.  These 
obstacles can have a negative impact on the everyday operations of their companies as well as their predisposition to invest in the EC.  (b) We suggest that the EC coordinate with its member States on this matter, with a view to 
simplifying application procedures and relaxing req uirements for work permits and extension-of-
stay permits for non-EC residents.  
A: The EC and their Member States are continuo usly working to improve procedures generally 
and to address specific problems which are brought to our attention, whilst at the same time ensuring 
that the integrity of our systems is maintained. 
In 2001, the European Commission made a propo sal to simplify and harmonise application 
procedures for work and residence permits thr oughout the EU, based on common definitions and a 
“one-stop shop” procedure. In the course of 2002 and 2003, the relevant Council Working Group 
worked on a first reading of this proposal. The Justice and Home Affairs Council of 27/28 November 
2003 took note of the state of play of the - difficult - negotiations. The Commission is currently 
considering publishing a Green Book on economic migr ation, with the aim of stimulating a broad 
consultation procedure with all interested parties and facilitating the drafting of a possible modified 
proposal. 
 
II. TRADE REGIME
 
 
(5) TRADE AGREEMENTS AND ARRANGEMENTS  
 (p. 32, paragraph 52) 
 
 Under Association (free-trade) Agreements w ith the EC, Mediterranean country partners 
have a 12-year transition period (15 years in the ca se of Egypt) to fully liberalize their trade in 
industrial goods. This is clearly more than the ten years, or “reasonable leng th of time”, provided 
for in Article 24.5(c) of GATT 1994.  
 Please could EC explain the reasons for these longer transition periods. 
 
A: The EU concluded Euro-Mediterranean Associa tion Agreements with Me d partners aiming at 
bilateral FTAs over a transitiona l period of 12 years, taking fully into account the level of 
development of Meds which are still emerging/deve loping economies. The 12-year transitional period 
is regarded as necessary for them to modernize an d upgrade industrial production and enhance its  
competitiveness before their trade with the EU is en tirely liberalized. The long transitional period is 
for the sake of Med partners only, while EU indus trial (and agricultural) concessions apply from entry 
into force.  In the case of Egypt, virtually all industrial  trade is covered under the 12-year dismantling 
schedule. Only an extremely limited list of products (13  6-digit headings: luxury cars) with little trade 
relevance, enjoy an exceptionally longer period of 15 years, as this was requested by Egypt to phase 
out protection on this specific industry.  WT/TPR/M/136/Add.1 
Page 84  
 
III. TRADE POLICIES AND PRACTICES BY MEASURE
 
  
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
 
Customs procedures and valuation  
(pgs. 37-40)  
 
To facilitate the temporary entry of goods between our economies the EC and the Separate 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu have entered into an ATA Carnet 
arrangement, through our trade associations.  Despite the conf irmation from the EC that this 
arrangement has automatically applied to the ne wly-acceded member States on 1 May, 2004, we 
have found that certain member States, like Poland, has yet ready to accept the application for ATA 
Carnets under this arrangement. 
We would suggest that EC contact the releva nt new member States to ensure their timely 
implementation of this arrangement. 
 
A: "As a result of the EU enlargement, the Cu stoms administrations of the 10 new EU Member 
States will handle Customs territory of Taiwan, Penghu, Kinmen and Matsu Carnets for temporary 
export and import operations.   Originally the Customs territory of Taiwan , Penghu, Kinmen and Matsu Carnet System was 
set up in 1992 for temporary admission operations between the then 12 EU Member States and the customs territory of Taiwan.  
 As a result of negotiations between the parties concerned, including the European 
Commission, this system has been extended in 1 996 to the three then incoming Member States. 
 The same procedure is followed with the ne w Member States. At present the international 
Chamber of Commerce takes the appropriate step s with the national guaranteeing organizations 
concerned, including those from the Customs territory  of Taiwan, Penghu, Kinmen and Matsu, so as 
to extend/amend the Protocol be tween the guaranteeing associations to include the new EU Member 
States"  
Import prohibitions, restrictions and licensing
 
(p. 52, paragraph 46) 
  Can the EC please explain the purpose of th e surveillance measures on imports of steel 
products?  Do any restrictions apply to the application for and granting of an import licence? 
 A: The objective of the surveillance measures on the import of certain steel products is to gather 
advance statistical information of future imports into  the EC. No restrictions apply to the application 
or to the granting of an import licence. Article 2 (2) of the surveillance regulation reads as follows: 
“The surveillance document referred to  in paragraph 1 shall be issued automatically by the competent 
authorities in the Member States, without charge a nd for any quantities requested, within five working 
days of presentation of an application by any Comm unity importer, wherever it may be established in 
the Community …” 
 (p. 53, paragraph 49) 
 The EC’s textiles and clothing quota regime wa s extended to new member States as of 1 
May, 2004.  Since there were no quantitative restric tions in force in the new member States before 
their accession, the imposition of quota restrictio ns does not appear to be in compliance with 
Articles 11 and 13 of the GATT 1994, and Article 2.4 of the WTO Agreement on Textiles and 
Clothing.  Despite the fact that the EC has inc reased the quota levels to allow for the needs of 
enlargement, we still suffer from a shortage of qu otas for certain categories of textiles because the WT/TPR/M/136/Add.1 
Page 85 
 
 
 basis for calculating quota levels was affected by misdeclarations or misclassifications by some new 
member States in the years prior to their accession.   We are therefore of the opinion that the EC sh ould, at the very least, provide larger quotas 
in order to reduce barriers to trade in textiles and to meet the import needs of the enlarged EC 
market. 
 
a) Will the EC’s footwear import regime be fully liberalized from the end of 2004? 
 
A: Yes.  b) What are the EC’s views on numerous repor ts about potential trade remedy measures taken 
against footwear imports?  Does the EC intend to  undertake any measures to  reduce the incidences 
of interruption to normal trade caused by such actions? 
 
A: There are Trade defence instruments available in accordance with WTO rules, that the EU can 
use if and when the legal requirement are met. 
 
(p. 54, paragraph 50) 
  Since the textiles quota regime will expire at th e end of 2004, we are interested in learning 
about the EC’s future import policy on textiles, with particular reference to the following: 
 
a) What is the EC's position on the ending of the MFA and elimination of textiles quotas? 
 
A: The EC has clearly said that it will respect its commitment and will eliminate the quota as scheduled by the ATC. 
 
b) What is the EC’s view on proposals aim to delay full harmonization of the textile import 
regime? 
 
A: The EC is fully opposed to delay the fu ll harmonisation of the textile import regime. 
 c) Following the report of the EC High Level Gr oup on the Future of Textiles & Clothing in 
the EC, what is the future plan of the EC from a procedural and policy perspective? 
 
A: The Commission responses to the requests a nd issues raised by the High Level Group lay 
down mainly in seven actions. In brief:  
• Boosting research and innovation : to draw up and implement a strategic research agenda, 
the Commission considers setting up a European Technology Platform. Fostering advanced technology and high value added textiles and clothing under the EU's R&D Programmes.  
• Ensuring lifelong education and vocational training : encourage the use of the Leonardo da 
Vinci programme and the European Social Fund to provide for adaptation to industrial changes and 
innovative actions in the area of employment.  
• Structural funds to cover unforeseen crises : to help the textiles industry restructure, 
modernise, cover the consequences of trade openi ng and to mitigate the socio-economic impact on 
regions with high concentration of textiles indus try, the Commission has proposed a reserve fund 
within the structural funds (1% of the Structural Fund annual contribution for the “Convergence” objective and 3% of the “Regional competitiveness and employment” objective).  
• Strengthening fight against counterfeiting and piracy : creation of a user-friendly European 
website on intellectual property right s and disseminate information th rough seminars and networking, 
in particular for SMEs.  WT/TPR/M/136/Add.1 
Page 86  
 
• Opening markets : the Commission proposes to improve European industry access to third 
countries and eliminate non-tariff barriers within  the on-going WTO negotiations under the Doha 
Development Agenda. A task force bringing toge ther the Commission and industry is set up to 
identify and prioritise obstacles to be tackled w ith third countries. The Commission also proposes to 
enhance access of developing countries to the EU market, focusing on the poorest and more 
vulnerable.  
• Rapidly complete the Euro-Mediterranean zone : encourage conclusion of agreements 
between all Euromed partners including the same rules of origin so that cumulation of origin can take 
place as soon as the agreements have been initialled.  
• Strengthen co-operation with China : the Commission will use of recently established EU-
China textiles dialogue and the setting up of a monitoring of Chinese imports to ensure a smooth 
transition to a quota-free system as from 1 January 2005.   
d) Does the EC plan to set up any monito ring and surveillance mechanism on imported 
textiles and clothing? 
 A: As regards monitoring of EU imports from  China, the Commission Services are considering 
surveillance on the basis of customs declarations  under Article 308d of Re gulation 2454/9324 for the 
textile and clothing categories exported by China a nd to be liberalised at the end of 2004. Other 
options are being currently examined.   e) Does the EC expect that trade defence meas ures against textile imports will increase, at 
least in the short term?  Will the EC undertake any measures to reduce the incidences of interruption to normal trade caused by such actions? 
 
A: It is not clear how the situation will evolve. However, the EC intends to make sure that the 
transition towards post-ATC period be the smoothest  possible. The EC will consider trade defence 
instruments only if and when the legal c onditions are met, and as a last resort. 
 
(p. 54, paragraph 53) 
  The current quota regime on footwear products will lapse at the end of 2004.  Could the EC 
please provide some insight into its future import policy on footwear, with particular reference to 
the following:  
 a) Will the EC’s footwear import regime be fully liberalized from the end of 2004? 
 A: Yes 
 
b) What are the EC’s views on numerous repor ts about potential trade remedy measures taken 
against footwear imports?  Does the EC intend to  undertake any measures to  reduce the incidences 
of interruption to normal trade caused by such actions? 
 
 There are Trade defence instruments available in accordance with WTO rules, that the EU can 
use if and when the legal requirement are met.  WT/TPR/M/136/Add.1 
Page 87 
 
 
 Contingency trade measures  
 (p. 55, paragraph 56)   
 It would be appreciated if the EC could prov ide us with more information on the related 
regulations and procedures for “reducing the extent of double protection” resulting from the 
combined effect of anti-dumping or anti-subsidy measures with safeguard measures”.  
According to Article VI.5 of the GATT 1994, WTO Members shall not impose both anti-
dumping duties (AD) and countervailing duties (CVD ) on products imported from another Member 
in order to compensate for the same situation of dumping or export subsidization.  Does the EC 
have a relevant regulation in this respect? How does the EC, in practice, determine anti-dumping or countervailing duties on imports involved in dumping and subsidization at the same time? 
 
A: On 6 March 2003, the Council of the Europ ean Union adopted Regulation (EC) No 452/2003 
on measures that the Community may take in relatio n to the combined effect of anti-dumping or anti 
subsidy measures with safeguard measures (Offici al Journal L 69 of 13 March 2003, page 8). 
 According to this Regulation, the European Community can amend, suspend or repeal anti-
dumping and/or anti-subsidy measures, or exempt imports from anti-dumping or countervailing duties 
which would normally be payable, if it considers that the combination of these measures with 
safeguard measures could have effects greater than  those intended or desirable in terms of the 
Community’s trade defence policy and objectives. This  would be in particular the case, if such a 
combination could place an undesirably onerous burden on certain exporting producers seeking to 
export to the Community, which could have the eff ect of denying them access to the Community 
market. 
 To date, this Regulation has been applied to the anti-dumping measures applicable to certain  
hot-rolled coils and to certain tube and pipe fitti ngs, of iron or steel (Council Regulation (EC) No 
778/2003 of 6 May 2003 applicable to certain L 114/1), where the anti-dumping duty payable was 
reduced by the amount of the applicable safeguard duty 
 
(p. 56, paragraph 59) 
 
Within the framework of the internal market , the Treaty of Accession allows new members 
States (EC-10) to apply for authorization to take protective measures in certain circumstances.  It 
also permits existing member States (EC-15) to apply for authorization to take protective measures 
against products coming from one or more of the new member States. 
Please could the EC explain what kind of protec tive measures may be allowed and how they will be 
implemented.  If protective measures restrict pr oducts coming from certain member States, how will 
the flow of these products be controlled given the principle of the free flow of goods within the EC 
market? 
 
A: Reference is made to the general economic safeguard clause contained in Article 37 of the 
Act of Accession. This safeguard  may be invoked by both existing a nd new Member States in relation 
to any sector of the economy or economic situation of a given area. Safeguard measures may be taken 
under the conditions which are specified in the Act of  Accession. In particular, the safeguard may be 
invoked only during the first three years following accession. The duration of any measure will be defined by the European Commission on a case by case basis when taking the measure. 
 What kind of protective measures may be a llowed and how would they be implemented?
  
 In accordance with Article 37(3) of the Act of Accession they may involve derogations from 
the rules of the EC Treaty and from the Act of Acce ssion whose scope and dura tion is limited to what 
is strictly necessary to rectify the situation and adju st the sector concerned. Priority shall be given to 
measures which will least disturb the functioning of  the internal market. Measures must not entail WT/TPR/M/136/Add.1 
Page 88  
 
frontier controls. Protective measures must be au thorised by the European Commission, and the 
Commission will ensure the respect of the a bove principles. Protective measures would be 
implemented by the responsible authorities on th e basis of a decision taken by the European 
Commission. Before taking any measure, the Commi ssion will consult all Member States, and in 
particular it will hear the views and positions of th e Member States directly affected by the potential 
safeguard measure.  
 If protective measures restrict products coming from certain member States, how will the 
flow of these products be controlled given the pr inciple of the free flow of goods within the EC 
market?  
 The precise mechanisms for implementing a nd enforcing protective measures will depend on 
the specifics of each case, but must not involve borde r controls within the EC internal market. Other 
mechanisms are allowed as long as they respect th e proportionality requirements laid down in the Act 
of Accession, in particular the requirement to opt  for measures which least disturb the functioning of 
the internal market. The European Commission will en sure the respect of the principles laid down in 
Article 37 of the Act of Accession when deciding on possible measures. There are as yet no practical 
examples of safeguard measures invoked under Article 37 of the Act of Accession.  
 
(p. 58, paragraph 62)  
  As of 1 May, 2004, new member States began applying all EC anti-dumping measures automatically.  This is obviously not in co mpliance with the WTO Anti-dumping Agreement 
because the EC failed to carry ou t the necessary investigation pro cedure to support the enlarged 
EC “on the whole” is injured as a result of importation of the “dumped product”.  We are aware that the EC put in place an “enlargement spec ial review” scheme allowing exporters to apply for 
special review.  It is wrong, though, to place the burden of proof on exporters to apply for the reviews and we believe that the EC should initiate, by itself, reviews of injuries in all anti-dumping 
cases.   
 Please would the EC indicate how many requ ests for review have been received under this 
scheme, what products those requests have involved and the results of the reviews. 
 
A: Taiwan’s view expressed in this question that  the EC’s approach vis-à-vis enlargement and 
Anti-dumping measures is not in compliance with the WTO Anti-dumping Agreement is completely 
unfounded. We would like to note that one important aspect to bear in mind is that the EU 
enlargement did not automatically vary the dumping,  subsidy and injury parameters, which form the 
basis of every anti-dumping measure, i.e., enlargement did not necessarily render such measures inadequate in an enlarged EU-25. Measures resulti ng from an EU-25 analysis of dumping, injury, etc. 
would in most cases not be different than those based  on an EU-15 analysis. In the vast majority of 
cases, imports of the product concerned into the new Member States are small compared to those into 
the EU-15 and the overall industrial output of the new Member States represents less than 5-7% of the 
industrial output of the EU-15. All of this suggests that the results reached in EU-15 investigations 
normally would be representative for the EU-25 as well. Accordingly, automatic reviews of all 
measures would most probably not lead to modifica tion of the measures but would create a significant 
burden for all operators involved. Therefore, the Co mmission considers it more appropriate to leave it 
to interested parties to ask for reviews of individual measures.  
The EU has widely communicated its approach through many means, to different audiences 
and well in advance of the enlargement. Communi cation activities have included discussions in the 
WTO Committee on Anti-Dumping Practices, letters to the Delegations of the countries against which 
the EU had measures in force, seminars, website, and the publication of a notice in the Official 
Journal (OJ C 91/2 of 15 April 2004.) informing about the possibility to request for enlargement 
related reviews. At this point in time, the EU has not received any request for review based upon 
allegations that enlargement significantly changes the parameters underlying trade defence measures 
 WT/TPR/M/136/Add.1 
Page 89 
 
 
 (p. 58, paragraph 63) 
   A study of the EC’s anti-dumping policy ha s shown that the protection afforded to EC 
industry through anti-dumping measures may not be significant.  What comments does the EC 
have on the results of this study?  Would not it be appropriate for EC to re-evaluate its anti-
dumping policy? 
 It should be noted that steel, textile, bicycles, fittings and CD products are some of the main targets of the EC’s anti-dumping measures.  Measures imposed on some imported products have been in place for a long time, in some cases more  than 10 years, as reviews continue to find that 
industries are being injured by the dumping of products.   
 Given that anti-dumping measures are design ed to offset injuries caused by dumped 
imports, if domestic industries are still being hur t even after anti-dumping measures have been in 
place for such a long period of time, could it be that  the injury is being caused by factors other than 
dumping? We would welcome the EC’s comments.   
A: A superficial glance at the total number of cases initiated and measures in place in 2003 
appears to show that the EC is an extensive user of trade defense measures but in the same year only 
0,1% of all imports were concerned by measures. The EC recently has made some amendments to its 
basic Antidumping regulation which take into acc ount some longstanding requests made by exporting 
countries :  importers, traders, users and exporters are one  of the main beneficiaries of the reform:  
Investigations will be shorter, transparency increase d and market uncertainty eliminated – this will 
reduce the costs for exporters, important in particul ar for those in developing countries.  And it will 
allow foreseebility for all economic operators.   
The EC Basic Antidumping Regulation clearly states in Article 11 that antidumping measures 
shall remain in force only as long as, and to the extent that, they are necessary to counteract the 
dumping which is causing injury. In order to con tinue the application of measures beyond the normal 
5 years period an expiry review has to take pl ace. The same high standards and methodology applied 
in initial investigations also prevail in reviews and all new factors and circumstances are taken into 
consideration. Measures are only con tinued when it is determined durin g the review investigation that 
dumping and injury to the domestic industry would r ecur when terminating the measures. The EC also 
notes that a significant number of measures were not extended because no expiry review was 
requested or because the expiry review did not result in a finding of likelihood of continuation or 
recurrence of injurious dumping. 
 
(p. 58, paragraph 64) 
 
 Please elaborate on the criteria used in Council Regulation No. 2026/97 for determining 
whether a subsidy is “specific” and, in particular, how it defines “a group of companies or industries” in order to meet the “specificity” criterion.   
 Does the EC has any guideline for its investiga ting authority to make such determination? 
Please also explain the differences between th e above-mentioned criteria and those outlined 
in Article 2 of the ASCM.  
A: Article 2 of the ECs Anti Subsidy Regulation covering specificity mainly follows the wording 
of Article 2 of the WTO ASCM. For the definition of "group of enterprises or industries" therefore the same definition applies. The general idea of determin ating "group of enterprises or industries" is to 
see whether the subsidy is generally available to all economic operators or whether it is somehow 
limited to a particular field of economic activity, re gional criterion or only granted to a limited number 
of companies or individual firms  WT/TPR/M/136/Add.1 
Page 90  
 
Technical barriers to trade
 
  On 23 January 2003, two Directives (known as Waste from Electrical and Electronic 
Equipment [or WEEE], and Restriction of the U se of Hazardous Substances in Electrical and 
Electronic Equipment [or RoHS]) were adopted to  reduce waste and the environmental impact of 
discarded products and to create an incentive for companies to design and produce more 
environment-friendly products.   
 We are aware that by August 13, 2004, only  Greece had notified the EC of its transposed 
national laws.  To ensure relevant economic op erators, including producers and exporters from 
third countries, have sufficient lead time to adapt their design, production and waste management 
systems to be compliant with the requirement, we would ask the EC to work with its member States 
to expedite the transposition process. 
 
A: Directive 2002/95/EC (RoHS) and Directive 2002/96/EC (WEEE) had to be transposed into 
Member States legislation by 13 August 2004. Though only Greece met the deadline, the other 
Member States are in the process of transposing the legislation into their national laws. We nevertheless take note of your request.   We would appreciate that the EC can elaborate on how it can ensure that the implementation of its member States will be in co mpliance with the two Directives and whether the 
imports from third countries will not be disrupted  once the goods is cleared from Customs of any 
member States. 
 A: The Directives are addressed to the Member States and national laws of the Member States 
are binding for the economic operators concerned.  The Commission’s services are currently drafting 
guidelines for the Member States and are planning to  publish them. However, timing and format is 
still under discussion. 
 
 The Separate Customs Territory of Taiwan, Pe nghu, Kinmen and Matsu is also concerned 
about the lack of methods and standards for evaluating compliance with WEEE in terms of 
collection, treatment and reuse/recycle of EEE, and the lack of the Maximum Concentration Value 
(MCV) requirements, their unit and method/standard s for evaluating them as required by RoHS. 
 A: The Commission’s services are currently prep aring a draft decision laying down rules for 
monitoring compliance of Member States and establishing data formats for the purposes of the WEEE, pursuant to Article 7(2) and 12(1) of the Directive.  On the RoHS Directive, pursuant to Article 5(1)(a ) the Commission’s services have prepared a draft 
decision that was submitted to the Technical Adap tation Committee (TAC) for vote in June. The vote 
failed to reach qualified majority. According to  comitology rules (Council Decision 199/468/) the 
draft decision is now referred to the Council 
 
 We note that the EC pledged to conduct a risk assessment before 2004.  When will the EC 
make available the results of this assessment?  
A: We are unclear as to the risk  assessment your question is referring to.  For your information, 
all risk assessments under the EC Existing Substan ce Regulations 793/93 are published on the website 
of the European Chemicals Bureau.  
 
(p. 59, paragraph 67) 
   We note that Spain uses some non-harmonized  national standards that are available only 
in Spanish.  We would suggest that EC encour age its member States to provide English versions of WT/TPR/M/136/Add.1 
Page 91 
 
 
 those non-harmonized national standards in or der to facilitate understanding of the relevant 
economic operators. 
 
A: Article 10.8 of the TBT Agreement states that "Nothing in this Agreement shall be construed 
as requiring (…) the publication of texts other than  in the language of the Member;". We note 
moreover that, in the present case, Spanish is an official WTO language.  
Sanitary and phytosanitary measures
 
 
(pgs. 62-63, paragraph 78-79)  
 It is our understanding that the current “pl ant passport” regime in EC was designed to 
regulate the movement of plants or plant pr oducts among EC member States.  The quarantine 
aspect of this regime has been focused on specific pests regulated by EC in Part A, Section II, and 
Annex II of EC Directive 2000/29/EC. 
 The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu imposes import 
restriction against plants or pl ant products infected with certain plant pests e.g. burrowing 
nematode, Radopholus similes.  As we know, alth ough burrowing nematode can be found in some 
EC member States, however, this quarantine pest is not regulated by the EC “plant passport” 
regime.  Therefore, we find that it is difficult to a ssess the risk of importing host plants of such pest 
in each EC member States. 
We would like EC to provide suggestion and assistance to resolve this problem. 
 Sudden Oak Death (SOD) caused by Phyt ophthora ramorum has become an serious 
disease in EC member States since 2002.  We woul d like to know more about the EC’s regulations 
to prevent the spread of the disease within member  States, especially concerning the movement of 
host plants and their transfer to the third country.  
A: On the issue of Radopholus similis : the presence of this nematode on its hostplants ( Araceae, 
Marantaceae, Musaceae, Persea spp, Strelitziaceae , rooted or with growing medium attached or 
associated) is regulated as harmful organism in Annex II, Part A, section 2 of Dir. 2000/29/EC. As all 
these hostplants are listed in Annex V, Part A, point 2.3
, they need to be accompanied by a plant 
passport on the internal market. 
On Pythophthora ramorum : in order to prevent the introductio n into and spread within the EU 
of this pathogen, the EC has taken emergenc y measures by Commission Decision 2002/757/EC, as 
amended by Decision 2004/426/EC a nd will be reviewed again by the end of this year. These 
measures include: – import restictions for host plan ts/material from third countries; 
– movement restrictions on the internal mark et (with plant passport obligation for the 
 Rhododendron  (except R. simsii ), Camellia  and Viburnum , the key host plants in the EU) 
– obligation for Member States to carry out official monitoring of the movement of 
 susceptible plants 
– obligation for Member States to conduct official surveys in their territory. 
 The Commission is satisfied that this range of measures provides a high level of protection 
 
(p. 63, paragraph 79) 
 
 According to Decision 93/351/EEC, methylmercu ry levels in migratory species are not to 
exceed 1.0 ppm.  According to a survey made by  our researchers, the level of methylmercury in 
swordfish caught by our fishing vessels in the Pa cific and Indian Oceans ranges between 0.04 and 
1.65 ppm.  Our understanding is that EC fishing vessels also catch swordfish in the same water.   Could the EC please provide us with answers to the following questions: WT/TPR/M/136/Add.1 
Page 92  
 
a) Has EC conducted similar survey or research on the levels of methylmercury in swordfish 
caught by EC fishing vessels operating in the Atla ntic, Pacific and Indian Oceans?  Can the EC 
indicate the source of scientific data that support its 1.0 ppm maximum threshold? 
 
A: Methylmercury toxicity has been demonstrated  at low exposure levels, and exposure to this 
compound should therefore be minimized, while recognizi ng that fish represents an important part of 
a balanced nutrition. The major source of methyl mercury intake in humans is fish and seafood 
products. Specifically, large predatory fish which are at the top of the food chain, such as swordfish 
and tuna, which may contain high er levels of methylkmercury, are significant sources of human 
exposure to methylmercury.    The maximum level for methylmercury in swordf ish is 1 mg/kg, while for many other fish 
species the maximum level is 0.5 mg/kg.  The guidelin e level of 1 mg/kg is also the level adopted for 
methylmercury in swordfish by Codex Alimentari us in 1991. The guideline levels in Codex are 
intended for methylmercury in fresh or processed fish and fish products moving in  international trade.  
It is foreseen that the guideline level will be discu ssed at next year’s meeting of the Codex Committee 
for Food Additives and Contaminants, followi ng the new JECFA advice lowering the PTWI.  
 At EU level, given on the one hand the toxici ty of methylmercury and on the other hand the 
impossibility to fully address the i ssue by setting stricter levels for mercury in fish in view of 
providing sufficient protection for some vulnerable groups of the population such as woman of child 
bearing age and young children, a note has been issued  to provide relevant information in order to 
enable the Member States to issue consumer ad vice in particular as regards woman who might 
become pregnant, woman who are pregnant or wo man who are breastfeeding and  young children 
 
b) What measures would the EC take if it found methylmercury levels in swordfish exceed 1.0 
ppm?  Would it allow the fish stock be shipped to another third country, or will it demand 
mandatory destroy?  
A: In case the goods are already on the EU market, from 1 January 2005, Article 12 of the General Food Law 178/2002 applies. In case the swordfish found on the EU market
 exceeds the 1 
ppm methylmercury, then a safe disposal of the goo ds will be required from 1 January 2005 onwards. 
For the time being there are no specific Community  rules .  In case the goods are rejected at the border 
inspection post of the EU, Article 21 of Regula tion 882/2004 will apply fro m 1 January 2006. This 
article provides for the re-dispatc h of consignments to the third country of origin under agreed 
conditions 
 
(p. 66, paragraph 90) 
  How do the newly acceded member States harmonize their sanitary and phytosanitary 
measures with the EC?  
A: The new Member States are required to apply the existing body of harmonised Community 
legislation, including the legislation in the field of SPS. Intense preparations were made in the years 
preceding their accession to the EU on 1 May 2004 to facilitate this process 
 WT/TPR/M/136/Add.1 
Page 93 
 
 
 IV. TRADE POLICIES BY SECTOR  
 (2) AGRICULTURE
 
 
Common Agricultural Policy (CAP)  
 
(p. 91 paragraph 26) 
  The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu is extremely 
supportive of the CAP reform and considers the new CAP to be a good model for our reference.  
However, it is expected that the new system may drive lower prices of agricultural products on EU 
markets which could result in the abandonment of production, decreased production, and cause 
price uncertainty as well as lower employment in the agricultural sector.   
In light of the challenges to come, what count ermeasures will EC take to ensure income stability 
for its farmers? 
 A: Decoupling of support should not lead, as such , to a decrease in mark et prices. Once the link 
between income support and production is cut,  farmers take better account of economic and 
agronomic criteria in their production decisions. It is  true that enhanced market orientation implies 
increased exposure to price volatility. The single pa yment scheme, based on historic references, will 
provide a stable element of income to farmers,  independent of yield or price fluctuations. 
Nevertheless, in the context of CAP reform d ecision, the Commission committed itself to examine 
specific measures to address risks, crises and na tional disasters in agriculture and present a report, 
accompanied by appropriate proposals, to the Council before the end of 2004.  
 (4) ENERGY
 
 (p. 108, paragraph 63)  
 In view of the growing demand for energy,  the EC has set new energy policy guidelines 
with the main policy aims of energy supply security  and a complete internal market.  Given that 
these measures mainly focus on the supply aspect, we would like to ask whether any consideration 
has been given to measures dealing with demand-s ide participation, e.g. demand-side management 
and demand response trading? 
 
A: Demand-side management and demand-response trading  
 Yes, considerable attention has been given to  demand management. As has been pointed out 
in the Green Paper on the Security of Energy Supply, (COM(2000)769 final ) of November 2000, 
investing in the demand-side has been shown to be  the single most important way available in the 
short and medium term to manage  energy demand. Therefore, directly after the power outages in 
Europe in 2003, when the Commission proposed a package of legislative measures in the area of 
energy infrastructure and security of energy supp ly, strong measures were included to improve 
demand-side management. The package included pro posals for a Directive on the safeguarding of the 
security of electricity supply and of related infr astructure investments, for a regulation on conditions 
for access to the gas transmission network and a proposed decision laying down guidelines for the 
Trans-European networks. These are all intended to im prove the supply side of the electricity and gas 
markets and to complete the internal market and improve the inter-connectors (see Question 2, 
below). For the demand-side, there is also a proposal for a Directive on energy end-use efficiency and 
energy services.  All of these are now being discussed in Parliament and Council.  
 This proposal on Energy end-use efficie ncy and energy services  is designed to increase energy 
efficiency by using a number of focused operati onal measures that will increase the demand for and WT/TPR/M/136/Add.1 
Page 94  
 
the supply of energy efficiency investments and en ergy services. The Directive will also promote the 
development of a viable market for energy efficien cy.This proposal is broad, covering distribution and 
retail sales of most types of energy, including electric ity, gas, heating oil and transport fuels, and most 
final energy consumers.  In order to provide an effective “driver”, the proposal has a 1% per year mandatory overall 
cumulative savings target at Member State level, based on previous energy consumption. A 1.5%/year 
savings target for the public sector is also set fort h. Certain energy suppliers will be required to offer 
energy services that include energy-efficient technolog y and energy, or alternatively, to offer energy 
audits. Demand-response measures, while primarily  load-shifting tools in the high and medium 
voltage electricity markets, have been shown to pr omote energy efficiency. For that reason they are 
included in the proposal as possible energy efficien cy measures for meeting the targets. Trading in 
demand response, as well as white certificates for tradi ng energy efficiency measures, are set forth in 
the proposal as measures that will be considered fo r future action. The measurement and verification 
protocol developed for measuring the 1% and th e 1.5% target compliance could well serve as 
measuring tools for a future trading market. (T rading in white certificates and in demand-response 
buy-backs is already being conducted in a number of Member States and in Norway)  
 In addition to the targets and obligations, the proposal sets forth tools in the form of special 
financing instruments, requirements for improved me tering, consumer information, and certification 
of energy service providers and for improved energy audits. Tariffs to promote energy efficiency in 
the regulated energy distribution sectors are also an important element. 
 Additional energy efficiency measures   
 A Directive on the energy performance of buildings entered into force in January 2003 and 
will be transposed in the beginning of 2006. It is  already impacting on the areas it covers, which are 
the development and application in building codes of a new integrated methodology for measuring 
energy performance; performance certification and labelling of buildings; and regular inspection of 
heating and cooling systems in buildings.  
 A Directive on cogeneration has been adopted  that will require Member States to promote 
high-efficiency cogeneration by removing market barriers and increasing access to the grid for cogeneration production, in add ition to calculating national pot entials for cogeneration.  
 A proposal for a Framework  Directive on Eco-design  of Energy-Using Products  is in its 
second reading in Parliament. When adopted next year it will be possible to adopt implementing 
measures that will address particular products w ith the aim of improving their environmental 
performance, in particular minimum energy efficiency requirements. Mandatory minimum efficiency 
requirements already exist for refrigerators, boile rs and ballasts and voluntary negotiated minimum 
efficiency agreements exist for TV`s, VCR`s and other consumer electronics as well as for electric motors. The intention is to continue to revise th e level of these standards to reflect technological 
progress, doing so under the auspices of the Eco-design  Directive .  
 In addition to the above new measures, the EU  labelling scheme for appliances has existed for 
over a decade. It presently covers refrigerators, wa shing machines, driers, dishwashers, ovens, other 
appliances and compact fluorescent lights. The schem e has been evaluated and been shown to be 
highly effective in promoting energy-efficient mode ls. It is currently envisaged to revise it and 
broaden its scope.  
 Financial support program mes and awareness campaigns 
 In addition to the RTD Framework Programme  for technology, the Commission maintains 
and has also improved, consolidated and inte grated its non-technological financial support 
programmes for sustainable energy into a new four-year programme called Intelligent Energy-Europe . 
A new Executive Agency with a five-year manda te will manage this programme. The Commission 
also carries out public awar eness campaigns on sustainability 
 
 Under the heading of energy supply security there is a program concerning the 
development of a “trans-European energy network.”  Please describe in further detail the objectives of this program and how its goals will be pursued. WT/TPR/M/136/Add.1 
Page 95 
 
 
 A: The objectives of the "trans-European Energy Network" is to promote the interconnection, 
interoperability, development and access to such netw ork, with the aim of encouraging an effective 
operation of the internal energy market, reducing th e isolation of the less favoured and island regions, 
and reinforcing the security of energy supplies. Th e goals of such a program will be pursued by the 
implementation of guidelines, including projects la id down by Decision of the European Parliament 
and the Council. 
 
(p.108, paragraph 65) 
 
 The key issue in the Acceleration Directive an d related regulations put forth by the EC is 
the promotion of liberalization of the energy mark et.  Are there any additional measures, such as 
benchmarking on implementation, to ensure th e corresponding legislative actions and effective 
enforcement among member States?  In the 2003 Directive, the EC changed the location of taxation on natural gas in pipelines 
and electricity from the supply end to the consum ption end.  Please explain the consideration and 
objectives behind these changes.  What is the EC’s assessment of the impact of such changes on the market structure and competition? 
 In the last sentence of paragraph 65, “…and help to meet the environmental objectives of 
the Community and the Tokyo Protocol”, should “Tokyo Protocol” not be changed to “Kyoto Protocol”? 
 
A: The European Commission is responsible for compliance with all Directives. An infringement 
process can be launched against any Member State wh ich fails to produce legislation (primary and/or 
secondary) to transpose the Directive. The Commissi on has had to start this process against 18 of 25 
Member States for failing to implement th e Directive by the July 2004 deadline. 
 In addition, both the new electricity Direc tive (2003/54 – Article 28) and gas Directive 
(2003/55 – Article 31) require the Commission to produce an annual report relating to the 
implementation of the Directives. A number of areas have to be covered rela ting to the development 
of the competitive market. Other s ubjects such as security of supply  and public service issues also 
have to be reported on by the Commission.   Since 2001 (at the request of the Stockholm Eu ropean Council) , the Commission has already 
produced regular annual benchmarking reports on th e progress in constructing a competitive market 
for electricity and gas. These are available on the Commission website http://europa.eu.int/comm/energy/elect ricity/benchmarking/index_en.htm 
 
(5) MANUFACTURING
 
 
(pgs. 114-115, paragraphs 84-85) 
  Though the number of chemical substances that are subject to test and registration requirements under REACH (Registration, Evaluatio n and Authorization of Chemicals) program 
has been reduced by excluding most intermediates, polymers and articles, we think the coverage 
still imposes excessive burdens on industry and may become more trade-restrictive than necessary 
to fulfill its legitimate objectives (Article 2.2 of the TBT Agreement).  We suggest that REACH 
should avoid requiring excessive testing and registra tion of the most common and frequently used 
substances and articles for which the risks to human health and the environment are already 
known. 
 It would be appreciated if the EC could provide us with more information, and in a more 
transparent manner, on the following issues:  
a) What are the views of EC on the “one subs tance, one registration” system that has been WT/TPR/M/136/Add.1 
Page 96  
 
flagged by some member States?  Has such concept been materialized? 
 
A: The benefits of such a system of mandatory sharing of non-animal test data and other core 
data are claimed to be lower costs for industry at the registration stage, a lower likelihood of duplicate 
testing and simpler handling of the subsequent single dossier. The proposal is currently under 
discussion under the EC decision-making procedures. It is therefore still possible to take into account 
proposals for changes to REACH which would reduce costs and bureaucracy as long as the timetable, 
objectives and scope of REACH are retained. In re lation to the “one substance one registration” 
proposal, the Commission has concerns about the wo rkability of such a scheme, particularly in 
relation to the compulsory requirement foreseen for industry consortia to agree core technical data. 
 
b) Once REACH becomes EU law, will there be  transitional periods accorded to chemical 
substances subject to testing and registration requirements? 
 
A: Articles 19 and 21 set out the transitional peri ods available for phase-in chemical substances. 
 c) Will consistent, uniform and transparent pro cedures and rules for testing, registration and 
authorization be laid down soon  after the REACH becomes law? 
 
A: The European Commission has already r ecognized the need for clear guidance for 
stakeholders to ensure consistent, cost-effectiv e and smooth operation of the system, explaining the 
many flexible elements in REACH available to comp anies. It has therefore started a major programme 
of work to develop such guidance, in co-operati on with stakeholders. The Commission intends that 
appropriate guidance will be available at the time eac h part of the REACH system comes into force. 
 
d) We understand that a new extended impact assessment of REACH draft legislation has 
been commissioned.  When will the results of this assessment be made available?  Will the extended 
assessment include impacts on producers and exporters from third countries?  
A: In the light of the comments received from various sources, the European Commission is now 
engaged in a process of further impact assessment with stakeholders including representatives of third 
country manufacturers in Europe. The scope of th e work includes further detailed analysis of the 
potential impact on downstream users and supply chai ns in global industries such as automobiles and 
electronics. This work includes analysis of effect s on the global sourcing of chemical substances, 
components and articles. It will in particular fo cus on concerns raised about the likelihood and 
implications of the potential withdrawal from the market of substances due to REACH. The results of 
the work will be available early in 2005. 
 
e) What impact will the EC’s adoption of the REACH have on the import/export of chemicals 
between EC and non-EC countries?  
A: The proposal has been designed in such a wa y that all REACH provisions equally apply to 
EU and non-EU-producers.  The system is expected to affect equally EU and non-EU producers in a 
completely non-discriminatory way.  The EC does not expect that REACH will lead to significant 
impacts on EC external trade. 
  
f) Will the new member States (C-10) have a grace period for adopting the REACH system? 
 
A: The proposal does not foresee such a grace period. 
 WT/TPR/M/136/Add.1 
Page 97 
 
 
 (6) SERVICES  
 
Financial services  
 
(p. 117, paragraph 92)  
 We note that many service sectors, incl uding tourism, distribution, construction, 
engineering and consultancy, certification and testing services and employment agencies, are not subject to internal market policy. Please would the EC explain the reasons for that? 
 
A: All economic services are subject to the internal market provisions of the EC Treaty. For some services sectors, such as those mentioned, in ternal market policy has in practice largely been 
based on direct application of th e EC Treaty (in particular the freedom of establishment and the 
freedom to provide services), as interpreted through the case law of the European Court of Justice (. 
For other services, specific harmonisation measures have  been adopted.  All of the services mentioned 
are within the scope of the draft framework Direct ive on Services in the Internal Market, which is 
currently under negotiation. 
 
(p. 120, paragraph 102) 
  
It is indicated that regulation of the banki ng system in the EC is based on the single 
European passport principle. This means that ban ks are allowed to set up branches and offer 
services throughout the Community under a single li cence.  Please explain the substantive content 
of related regulations under this principle, wher e to apply, and whether there will be any negative 
impact on foreign bank branches.  
A: The 'single passport regime' only applies to firms that fulfil the conditions set by Article 48 of the EC Treaty. Foreign firms fulfilling those conditions  are considered as EC firms and are subject to 
EC rules. Foreign firms not fulfilling those conditio ns cannot take advantage of the single passport 
regime. More detailed information on th e European passport is available on 
http://europa.eu.int/comm/internal_market/finances/index_en.htm.  
Telecommunications and postal services
 
 
(p. 124, paragraph 113) 
 
a) What are the common methodologies and prin ciples for NRAs in relation to Commission 
guidelines on market analysis and the assessment of SMP? Could the EC provide some examples to 
help us better understand the main regulative mechanisms with regard to SMP assessment? 
 
A: The methodologies used by NRAs are those provided by the Commission guidelines on 
market analysis available at: http://europa.eu.in t/information_society/topics/telecoms/regulatory/ 
new_rf/index_en.htm#guidelines For specific inform ation about the article 7 procedure on the 
analysis of markets please look at:  http://e uropa.eu.int/information_society/topics/ecomm/ 
highlights/current_spotlights/art_7_task_force/index_en.htm 
 
b) Please provide us with a list of the 18 el ectronic communications markets as defined by the 
EC. 
 A: The list of markets is included in the European Commission recommendation on relevant 
market published on 11 February 2003 and availa ble at http://europa.eu.int/information_society/ WT/TPR/M/136/Add.1 
Page 98  
 
topics/telecoms/regulatory/maindocs/index_en.htm#di rectives. The list has not been changed since 
then.  QUESTIONS FROM SINGAPORE 
 
III  Trade Policies and Practices by Measure
 
 
(2)  Measures directly affecting imports – Technical Barriers to Trade  
 
Q. 1 In reference to paragraph 75 of page 62 of the WTO Secretariat Report (WT/TPR/S/136), 
Singapore notes that the EU has signed MRAs with a number of countries.  Would the EU be able to provide the names of the third country asses sment bodies (CABs) covered under these MRAs, the 
unique number that the EU has assi gned to each of these recognised bodies, and their scope of 
recognition under the relevant MRAs?  
A: The list of CABs under the MRAs is publicly  available on the Commission’s Web site, in 
particular http://europa.eu.int/comm/ enterprise/international/indexb1.htm 
 
IV  Trade Policies by Sector
 
 
(4) Energy  
 Q. 2
 What is the status of implementation of th e Acceleration Directive ref erred to on page 108 
of the WTO Secretariat Report (WT/TPR/S/136)?  If  process is not on schedule, could the EU 
elaborate on the countries that are not on schedule,  and the factors which are holding up the timely 
implementation of this directive?   
A: Of the 25 Member States, 18 have been sen t a “mise en demeure” letter relating to non-
notification of the measures taken to implement the Directives. This does not, however, necessarily 
mean that nothing has yet been done. Many Member  States have already transposed most of the 
provisions of the Directives but as yet have not given us a detailed e xplanation of the precise elements 
of national law that relate to the Directive on an Article by Article basis. 
 The following MS received a “mise en demeur e”:  Germany, Belgium, Estonia, Finland, 
Ireland, Italy, Lithuania, Latvia, Malta, the Un ited Kingdom, the Czech Republic, Slovakia, Sweden, 
Greece, Poland, Portugal, Spain and Luxembourg  We expect the majority of these to have  completed implemented and informed the 
Commission accordingly by the end of the year. 
 
QUESTIONS FROM PANAMA  
 Q1. En el marco de su compromiso con la Ag enda de Doha para el Desarrollo; Qué elementos 
aplicará la UE en su política comercial que permitir á la real y efectiva aplicación del trato especial 
y diferenciado en el acceso a los mercados de productos agrícolas de crucial importancia 
económica y social para los paises en desarollo? 
 
A: The EC has always indicated that it is fully supportive of the DDA being a development 
round. In that context, in their letter of 9 Ma y 2004, Commissioner Lamy and Commissioner Fischler 
recognised that special and differential treatment was a key issue for a large number of developing 
countries. They also suggested moving forward c oncrete and operational objectives for the Round and 
proposed that on NAMA and agriculture, the least de veloped countries and ot her weak and vulnerable 
countries in a similar situation (essentially the G- 90) should not have to open their markets beyond 
existing commitments and that they should be able  to benefit from increased market access offered 
both by developed and developing countries.  WT/TPR/M/136/Add.1 
Page 99 
 
 
  This offer has been partly reflected in the Agreed Framework of 1st August, which contains 
particular provisions such as the possibility for developing countries to designate an appropriate 
number of products as Special products and the estab lishment of a Special Safeguard Mechanism for 
developing countries. As indicated in the last sp ecial session on the negotiations on agriculture in 
early October, the EC could support the establishment of a special safeguard mechanism for vital food 
security products. 
 Last but not least, the EU is the only big trading group, among the wealthier nations, which is not only granting duty and quota free access to its ma rkets for imports from least developed countries, 
under its ‘Everything But Arms’ regulation, but is in practice actually importing considerable 
quantities from those countries.  The EU is by far the largest importer of agricultural goods from 
developing countries. Its imports from these countri es amounted to 40.6 bio euros in 2002 (against 
31.5 bio euros in 1995). The level and share of valu e-added products in these imports is estimated at 
3.9 bio euros and 10 % respectively in 2002 (from 2.1 bio euros and 7 % in 1995).  
 
Q2. Qué mecanismos comerciales aplicará la UE que garanticen el equilibrio a las erosiones de 
los programas preferenciales que amenazan rest ringir el acceso a los mercados de productos 
agrícolas de crucial importancia para la economía, el fomento de políticas agrícolas y la reducción 
de la pobreza en los países en desarrollo? 
 
A: As far as preferential regimes are concerned,  the tariff erosion may be address in extending 
the scope of preference to products that are not alre dy benefiting from these pref erences. This is what 
the EC does, for exemple, in its GSP regime.   
 
QUESTIONS FROM VENEZUELA  
 
Q1. ¿Podrían las Comunidades Europeas precisa r cuales serían los sectores o subsectores 
abarcados por esta propuesta, además del sector fi nanciero?, y, ¿ Como se vería reflejada esta 
propuesta en las negociaciones sobre comercio de servicios en la OMC?  "La Comisión presentó una propuesta de Directiva en que se establece un marco para la creación de un verdadero mercado interno de servicios para 2010.
14  La Comisión considera que 
esa propuesta es, tal vez, el principal objetivo a medi o y largo plazo de las reformas;  en particular 
el subsector de los servicios tiene importancia d ecisiva, ya que impulsará la competitividad general 
de la economía"15 (Informe de la Secretará, pp. 142) 
 
A: The financial sector is not covered by this proposal. Indeed, the proposal covers all services 
that correspond to an economic activity within the meaning of the EU Treaty as clarified by well-
established jurisprudence of the European Court of  Justice, except financial services, transport 
                                                      
14 Ese plazo se estableció en la estrategia de Li sboa.  Los servicios abarcados por la propuesta 
representan aproximadamente el 50 por ciento de toda la  actividad económica de las CE.  La Comisión propone, 
entre otras medidas, el reconocimiento mutuo entre Estados miembros de documentos que permitan a las empresas suministrar servicios;  la introducción de ventanillas únicas para le expedición de permisos de 
actividad en cada Estado miembro el 31 de diciembre 2008, a mas tardar;  la prohibición de exigir permisos, a 
menos que estén justificados por el interés general.  La Comisión propone también que se supriman:  las prohibiciones generales en materia de publicidad comercia l que afectan a las profesiones reguladas;  el requisito 
de que las empresas que suministran servicios de modo ocasional o temporal tengan un establecimiento 
permanente en el territorio o la obligaci ón de que las empresas observen las normas del país receptor, además de 
las vigentes en su país de origen;  y la obligación de los trabajadores procedentes de otras partes de las CE de 
registrarse ante las autoridades locales (Comisión Europea, Comunicado de prensa IP/04/37, de 13 de enero de 
2004). 
15 Subsisten muchos obstáculos formativos, por ejempl o, en material de compensación y liquidación, 
que constituyen las arterias del sistema financiero (Comisión Europea (2002c)) WT/TPR/M/136/Add.1 
Page 100  
 
services and electronic communications networks and services (insofar as they are dealt with by the 2002 regulatory package on electronic communication services). These three areas are explicitly excluded from the scope of the Directive. As the Court of Justice has consistently held with regard to 
Articles 49 et seq of the Treaty, the concept of service covers any economic activity normally provided for remuneration, without the service having  to be paid for by those benefiting from it and 
regardless of the financing arrangements for th e remuneration received in return, by way of 
consideration. Any service whereby a provider par ticipates in the economy, irrespective of his legal 
status or aims, or the field of action concerned, thus constitutes a service. The proposal does not cover 
"non-economic" services, such as public administrati on or public education, which are provided by 
the state or public entities in fulfilment of their duties towards their population and without any 
economic consideration. More detaile d information is available on:  http://europa.eu.int/comm/ 
internal_market/en/services/services/index.htm.  
 Q2. ¿Que medidas tienen previsto tomar la s Comunidades Europeas para mermar la 
complejidad intrínseca de su régimen comercial, producto de sus profusos acuerdos de libre 
comercio? 
"...la gran diversidad de estos acuerdos, con diferentes programas de  liberalización del 
comercio y normas comerciales (incluidas las normas de origen) acentúa la complejidad del 
régimen comercial de las CE."  (Ob servaciones Recapitulativas, p.xii) 
 
A. Through its RTAs, the EC aims to promote sustainable development, not least in developing 
countries as well as these countries' integration in globa l trade, in line with WTO rules. To that end, 
the EC, like many other countries, have found it advi sable to adjust the provision under RTAs to take 
into account the specific circumstanc es and needs of the parties involved.  In some instan ces, such as 
rules of origin, harmonization of trade rules has proved important. Therefore, the EC is already 
engaged in positive initiatives to harmonize origin rul es across different RTAs. In this sense, the pan-
Euro- Mediterranean rules of origin and its system  of cumulation can be considered as a relevant 
progress.  
Q3. ¿Qué medidas tiene previsto  adoptar la Unión Europea en materia de política sanitaria en 
su relación con los países de la Comunidad Andina de Naciones, CAN;  en particular lo referente a 
Acuerdos que preserven la transparencia en la  aplicación de determinadas normas como la 
denominada "Alerta Rápida"?  
A. El párrafo 6 del Artículo 50 del reglamento No 178/2002
16, notificado a la OMC en el 
documento G/SPS/N/EEC/110 (8 de febrero de 2001) posibilita la participación de terceros países u 
organizaciones internacionales en el sistema informa tivo de alerta rápida. Estos acuerdos se basarán 
en reciprocidad  e incluirán medidas relativas a la co nfidencialidad equivalentes a las aplicables en la 
Comunidad.  Una solicitud oficial de participación ha de ser dirigida el Sr. Robert Madelin, Director 
General de la Dirección General de Salud y Protección de los Consumidores  
Q4. Venezuela recientemente ha sufrido el impac to de lo que pudiera asimilarse a trabas al 
comercio por la reincidencia en el señalamiento de  la existencia de elementos contaminantes, que 
en nuestro país se asegura que no existen.  Por ello es importante llegar a acuerdos que garanticen 
la transparencia y la debida aplic ación de principios homologados. 
 
                                                     
 
16 Reglamento (CE) n° 178/2002 del Parlamento Europe o y del Consejo, de 28 de enero de 2002, por el 
que se establecen los principios y los requisitos generale s de la legislación alimentaria, se crea la Autoridad 
Europea de Seguridad Alimentaria y se fijan procedimientos relativos a la seguridad alimentaria ( Diario Oficial 
n° L 031 de 01/02/2002 p. 0001 – 0024)  WT/TPR/M/136/Add.1 
Page 101 
 
 
 A. La CE no tiene conocimiento de la aplicación, a envíos procedentes de Venezuela, de otra 
legislación sobre contaminantes que no sea el Reglamento 466/200117. Esta legislación se aplica tanto 
a los productos domésticos como a los importados. De acuerdo con las disposiciones de transparencia, 
las modificaciones a este reglamento se notifican regularmente al acuerdo de la OMC sobre aplicación de MSFS. Se invita a Venezuela a examinar esta legislación y ser más específica en su pregunta. 
 
QUESTIONS FROM INDONESIA 
 
I. Institutional Framework
 
 
Q1. According to the Report by Secretariat, the EC has now intensified to enlarge its PTAs with 
many countries and region and negotiations for new PTAs are ongoing.  It also stated that since 
the last review no focus on multilateral negotiatio ns has been done and the EC continues to offer 
non reciprocal trade preferences to almost a ll ACP countries under Cotonou Agreement and GSP 
to other developing countries. 
In this context, Indonesia would like to ha ve a comprehensive explanation the idea and 
philosophy behind this policy.  
It is also appreciated if EC could give us fu rther clarification the term “everything but 
arms” initiative for tariff and quota free access to almost all exports from LDCs.   
 
A. The report of the WTO Secretariat emphasises re fers to the EC as a “leading trading entity, 
which has been instrumental in advancing the D oha Development Agenda by tabling proposals in 
several areas”. The report further concludes th at the EU has "spearheaded initiatives in the 
liberalisation of trade, strengthening rules and promotion of sustainable development".  
 In addition to its strong support to the multila teral trading system the EC is engaged in 
developing trade relations with other trade partne rs in the world through a number of preferential 
trade arrangements, including bi-regional and bila teral free-trade areas, and bilateral agreements 
aiming at facilitating cross border trade with the EC’s closest neighbours. The Economic Partnership 
Agreements (EPA) initiative forms an integral part of efforts to foster the integration of the ACP 
countries into the global economy, and reflects two things. First, the political decision of the ACP 
States to base their own integration into the world economy on regional economic integration; and 
second, the EC’s belief that regiona l economic integration within th e developing world offer a better 
long-term prospect for development than perpet uating dependence solely on unilateral preferences 
granted by northern markets according to a hub and spoke development model: EPAs will therefore 
be based on existing regional integration initiatives ex isting in the ACP, and stimulate further regional 
integration, as provided for in the Constitutive Ac t of the African Union or as agreed among the ACP 
States as a whole. 
 
II. Trade Policy  and Practices by measure  
 
Q2. In paragraph  40  page 51  Rules of Origin Rules of Origin, We note that “The European 
Commission has recently published a Green Paper  (consultation document) on the future of 
preferential rules of origin and the paper containing  areas where actions are required such as  the 
fair application of origin rules; establishmen t of procedures to reduce the operational and 
administrative costs of certifying and verifying or igin,  and ensuring a balance of responsibilities 
between traders  and public  authorities.” 
                                                      
17 de la Comisión, de 8 de marzo de 2001, por el que se fa el contenido máximo de determinados 
contaminantes en los productos alimenticios. ( Diario Oficial n° L 077 de 16/03/2001 p. 1-13)  WT/TPR/M/136/Add.1 
Page 102  
 
Indonesia hereby wishes to have further explana tion to what extend this paper has been 
explored and can the EU confirm that this action is the beginning of the process of simplifying the 
current Rules of Origin? 
 
A: In the context of international trade libera lisation, the Commission adopted on 18 December 
2003 a Green Paper on 'the future of rules of  origin in preferential trade arrangements' 
(COM(2003)787 final), which provided an overall assess ment of the current problems of origin in 
preferential arrangements, a focus on aspects which re quire a consistent approach, an overview of the 
options available, particularly as regards the systems for certification, declaration and control of the originating status of products and ways of re focusing the current system of administrative co-
operation 
• The consultation process ran from January 2004 unt il 15 March 2004 and involved international 
traders and competent authorities of the Member  States, Accession and Candidate Countries and 
countries taking part in various preferential arrange ments with the European Union: 100 contributions 
were received. 
• A summary report of the results of the consultation process is available on the Website of the 
Commission at the following address: http://e uropa.eu.int/comm/taxation_customs/customs/ 
origin/rules_origin/rules_of_origin_en.htm. 
• From the replies to the consultation process, there are specific expectations with regard to these 
arrangements and rules concerning both their ob jectives and their formal presentation. These 
expectations have to be matche d with international commitments and orientations already submitted 
by the Commission, in particular in its Communication of 7 July 2004 on 'Developing countries, international trade and sustainable development: th e function of the Community's generalised system 
of preferences (GSP) for the ten-year period from 2006 to 2015'. 
 
Based on the CPES data, only one third of the import from developing countries are 
eligible to have tariff preferential. It seems that this situation is caused by the very complex 
requirements of the EU ROO where most of devel oping countries find them difficult to comply 
with. We need further clarification on this question.  
 
A. Figures on preferential imports into the Comm unity are shown in Annex I to the Commission 
Green paper on the future of rules of origin in pr eferential trade arrangements. From the consultation 
on the Green paper, it results that too stringent ru les of origin are seen as being one of the factors 
which could - amongst others - explain the low rate of utilisation of preferences for certain products, 
in particular in the context of GSP. Otherwise, preferential rules of origin should guarantee that only 
the concerned EC partners enjoy the preference. Ta ken all this into account, in its Communication of 
7 July 2004 on 'Developing countries, international trade and sustainable development: the function of 
the Community's generalised system of preference s (GSP) for the ten-year period from 2006 to 2015', 
the Commission acknowledges the need fo r changes in GSP rules of origin: in form (simplification), 
in substance (amendment of the origin criteria and cumulation rules) and in procedures (formalities 
and controls) 
 
III. Import prohibitions, restrictions and licensing
 
 
Q3. (paragraph 50 page 54 trade policy review  (vii) Import prohibitions, and licensing)    
 With respect to the third integration stage of  the ATC, the reports repeatedly refer to the 
terms of trade under quota restriction in 1990; only  about 20% has been integrated into the GATT, 
leaving 80% to be integrated on 31 Dece mber 2004. Hence the liberalization of quantitative 
restrictions (as required under the ATC) has been bac k-loaded to the end of the transition period. 
As almost all of the quota restrictions of sen sitive textiles and clothing products will be 
phased out at once in the very end of December 2004,  there has been a strong indication the surge WT/TPR/M/136/Add.1 
Page 103 
 
 
 in import will be happened. Can the EU guarantee th at it will not take trade remedy in the form of 
antidumping or safeguard to protect domestic industries? 
 
A: It is not clear how the situation will evolve. However, the EC intends to make sure that the 
transition towards post-ATC period be the smoothest  possible. The EC will consider trade defence 
instruments only if and when the legal c onditions are met, and as a last resort 
 
Will the EU still maintain the Visa Office to  monitor administrative requirements (export 
visa) for exports done in 2004 for the next 6 months since 1 January 2005? 
 
A: Under the ATC, exporting countries are responsible for the management of quotas and 
importing countries are not obliged to accept improts in excess of restrictions notified. It is the 
Community contention that the date of shipment is  the determining factor for the setting of against 
quotas and consequently shipment made in 2004 but with arrival during the next year will 
consequently for some time has to  be set off against the 2004 quotas. Obviously this system will be 
transitional and be terminated as and when such sh ipment has been completed, presumably during the 
first months of 2005.  
We note the EC has issued some programs fo r domestic producers in order to enable them 
to compete with textiles and clothing imports.  We need to have an appropriate explanation on this policy. 
 A. Indeed, the Commission issued some programs for domestic producers among the other 
measures reported in the new textile communication. In brief:  
• Boosting research and innovation : to draw up and implement a strategic research agenda, 
the Commission considers setting up a European Technology Platform. Fostering advanced 
technology and high value added textiles and clothing under the EU's R&D Programmes.  
• Ensuring lifelong education and vocational training : encourage the use of the Leonardo da 
Vinci programme and the European Social Fund to provide for adaptation to industrial changes and 
innovative actions in the area of employment.  
• Structural funds to cover unforeseen crises : to help the textiles industry restructure, 
modernise, cover the consequences of trade openi ng and to mitigate the socio-economic impact on 
regions with high concentration of textiles indus try, the Commission has proposed a reserve fund 
within the structural funds (1% of the Structural Fund annual contribution for the “Convergence” objective and 3% of the “Regional competitiveness and employment” objective).  
• Strengthening fight against counterfeiting and piracy : creation of a user-friendly European 
website on intellectual property right s and disseminate information th rough seminars and networking, 
in particular for SMEs. 
 
Q4. We note that tariff levels for some footwear  products are extremely high (HS 6401 to 6406, 
footwear 0-70%). Is there any intention of the EU to substantially reduce this tariff level under the 
July Package?? 
 A. The EU has launched a sectoral initiative for la bour intensive goods such as footwear. In this 
initiative which shall be discussed in the follow-up to  the July package, the EU proposed to have a 
narrow, common range of duties for all WTO Memebers  and to go as close to zero as possible, as long 
as export restrictions on inputs (namely hides, skins and finished leather) are removed by all Members. 
 
Q5. Paragraph  47  page 52  on Import prohibitions, restrictions and licensing
 of Secretariat 
Report notes that import licenses are required, for quota  management purposes, on all agricultural WT/TPR/M/136/Add.1 
Page 104  
 
products ( subject to tariff quota), such as cereals  and cereal products, rice, sugar, oil and fats, milk 
products, beef and veal, sheep and goat meat, fres h fruit and vegetables and processed  fruit and 
vegetables. We need further clarification and justification on this policy  
A. The quota management by import licenses is admitted under WTO rules and is used by several other WTO Members. 
 
IV. Contingency trade measures
 
 Q6. The report of the secretariat states (paragraph 56 page 55, safeguards)
 the following:  “EC 
safeguard regulations provide fo r the possibility to reduce the extend of “double protection” 
resulting from the combined effect of anti dump ing or anti subsidy measures with safeguard 
measures. Measures that can be taken in th is respect may involve amending, suspending, 
repealing, and providing for exemptions of anti  dumping or countervailing measures in place, the 
measures are limited in time and applicable only when the relevant safeguard measures are in 
force.”     
 In this context, Indonesia would appreciate, if  EC could provide further clarification on 
this statement.  
 
A. On 6 March 2003, the Council of the Europ ean Union adopted Regulation (EC) No 452/2003 
on measures that the Community may take in relatio n to the combined effect of anti-dumping or anti 
subsidy measures with safeguard measures (Offici al Journal L 69 of 13 March 2003, page 8). 
 According to this Regulation, the European Community can amend, suspend or repeal anti-
dumping and/or anti-subsidy measures, or exempt imports from anti-dumping or countervailing duties 
which would normally be payable, if it considers that the combination of these measures with safeguard measures could have effects greater than  those intended or desirable in terms of the 
Community’s trade defence policy and objectives. This  would be in particular the case, if such a 
combination could place an undesirably onerous burden on certain exporting producers seeking to 
export to the Community, which could have the eff ect of denying them access to the Community 
market. 
To date, this Regulation has been applied to the anti-dumping measures applicable to certain 
hot-rolled coils and to certain tube and pipe fitti ngs, of iron or steel (Council Regulation (EC) No 
778/2003 of 6 May 2003 applicable to certain L 114/1), where the anti-dumping duty payable was 
reduced by the amount of the applicable safeguard duty 
 
Q7. In the Chart III.4, page 57, Indonesia is on e of the target countries of the antidumping 
action by EU. Indonesia wishes to have a clarification of a “target country” in the EU policy.  
 
A. The term “target country” was used in the report by the WTO secretariat. The term “country 
concerned” as used normally by the EC would probably have been more appropriate. More 
importantly, the EC does certainly not pursue in the area of anti-dumping specific policy with regard 
to individual exporting countries. On the contrary, the rules and methodologies used are applied on a non-discriminatory basis  QUESTIONS FROM CUBA 
 
I. SGP
 
 
Q1. ¿El Sistema General de Preferencias de las Comunidades Europeas significaría un 
mecanismo único que se mantendrá en el futu ro para el acceso p referencial a ese mercado? 
 WT/TPR/M/136/Add.1 
Page 105 
 
 
 A. The EC GSP will continue in the future a lthough its mechanism is being revised. The future 
GSP scheme will include, as before, a general arrangement that will be made available to the current 
178 GSP beneficiaries. Under this  general arrangement, most ' dutiable' import products from 
developing countries into the EU market are granted with preferential tariff treatment. In addition, two 
additional special arrangements are envisaged, one a pplicable to Least Developed Countries, the other 
to sub-categories of developing countries which are faced with specific development, trade or 
financial needs. 
Q2. ¿Piensan las Comunidades Europeas mantener, a pesar de las críticas, las 
condicionalidades que se introducen con los incen tivos especiales y que son contrarios al trato 
generalizado que deben recibir todos los países subdesarrollados? 
 
A. The EC GSP general arrangements are currently  available for 178 developing countries that 
comprise dependent territories and economies in tr ansition. The EC GSP is non discriminatory. The 
WTO confirmed in April 2004 that the term 'non- discriminatory' under the Enabling Clause -which 
created the legal framework for the GSP donor countri es- does not mean that strictly identical tariff 
preferences have to be given to all developing without differentiation. The EC and all GSP donor 
countries can under certain conditions respond positivel y to specific development, trade or financial 
needs  of sub-categories of developing countries which ar e in the same situation and on the basis of 
objective and transparent criteria 
 
II. Sistema REACH  
 
Q3. Teniendo en cuenta el nivel de contradicci ón que ha generado el Sistema REACH tanto en 
el contexto de la OMC como en  otros foros, ¿Tienen las  Com unidades Europeas alguna intención 
de modificar, posponer o retirar este proyecto? 
 A. The reactions and questions of WTO members are consistent with the comments that have 
already been made over the past years through vari ous channels of communication such as the internet 
consultation. We have not detected any potenti al problems. The European Communities considers 
therefore that REACH is WTO-compatible.  The Commission proposal is currently under discu ssion in the Council of Ministers and in the 
European Parliament. The Commission is open to consider any changes to REACH which can reduce 
costs and bureaucracy so long as the timetable, objectives and scope are retained. The Commission 
has however no intention to delay or retrieve its proposal.  
Q4. En otro sentido, ¿Piensan las Comunidades Europeas tener en cuenta la recomendación 
generalizada de reducir la cobertura de productos  y simplificar el procedimiento que establece el 
sistema para el registro, evaluación y autorizaci ón de la producción e importación de estas 
sustancias? 
 
A. As stated above, the Commission is open to  consider any changes to REACH which can 
reduce costs and bureaucracy, so long as the timetab le, objectives and scope of REACH are retained. 
 Q5. ¿Han tenido en consideración las Comunidad es Europeas el nivel de implicación que este 
sistema tendría para las economías subdesarrollada s y han pensado en las medidas de flexibilidad 
para la aplicación y la compensación por daños que podrían otorgarles? 
 
A. The European Communities recognises its oblig ations to take account of the special 
development, financial and trade needs of developing  country Members, with a view to ensuring that 
REACH does not create unnecessary obstacles to exports from developing country Members. In addition to the provision of extens ive guidance material, we aim to do  our best to help developing WT/TPR/M/136/Add.1 
Page 106  
 
countries to familiarise themselves with REACH and co mply with it. This will be achieved in part 
through technical assistance and capacity buildin g but also through training and provision of 
information by the proposed Chemicals Agency.  
Q6. ¿Han tenido en consideración las Comunidad es Europeas el nivel de implicación que este 
sistema tendría para su propia industria dado el peso específico de los productos en cuestión 
provenientes de terceros mercados subdesarroll ados, carentes de recursos financieros y tiempo 
requeridos para el ajuste según las exigencias propuestas? 
A. The European Commission’s extended impact  assessment already includes consideration of 
the indirect impact of REACH on downstream users as we ll as its direct cost to the chemical industry. 
 Moreover, in light of the comments received  from various sources, the European Commission 
is now engaged in a process of further impact asse ssment with stakeholders including representatives 
of third country manufacturers in Europe. The scope of the work includes further detailed analysis of 
the potential impact on downstream users and supply chains in global industries such as automobiles 
and electronics. This work includes analysis of eff ects on the global sourcing of chemical substances, 
components and articles. It will in particular fo cus on concerns raised about the likelihood and 
implications of the potential withdrawal fro m the market of substances due to REACH. 
 
Q7. El apartado 2 del artículo 2 del Acuerdo OTC establece que las reglamentaciones técnicas 
deben tener una sustentación científica,  qu e el sistema REACH no dispone para todas las 
sustancias, ¿qué explicación dan las Comunidades Eur opeas a esta infracción del acuerdo OTC?     
 A. The Commission has carefully designed its legisl ative proposal in such a way that it is neither 
discriminatory, nor more trade rest rictive than necessary to fulfil the objectives, as defined in its 2002 
White Paper. The European Communities consider th at REACH complies with the obligations of the 
TBT agreement. 
 
QUESTIONS FROM GUATEMALA  
 
Q1. El párrafo 2 de las Directrices adoptadas el  10 de noviembre de 1980, Procedimiento para 
las Negociaciones en virtud del artículo XXVIII del GATT establece que:  “2. En la notificación o 
en la solicitud deberá figurar ... si se ha de modificar una concesión, la modificación propuesta 
deberá indicarse en la notificación o bien comuni carse después, tan pron to como sea posible...”. 
Podría explicar la Comunidad Europea, ¿en qué momento será  anunciada la modificación 
propuesta? 
 A: With regard to document G/SECRET/22, the EC is not in a position, at this stage of the 
negotiation, to inform other Members when it will be possible to circulate the proposed modification. 
 
Podría explicar la Comunidad Europea, ¿cuál es el procedimiento (plazos y calendario 
previsto) que tienen programado para las nego ciaciones bajo el artículo XXVIII del GATT? 
 A: On 19 January the EC notified the WTO of th e enlargement of the European Communities as 
well as the data required when enlarging the custom s union. The EC informed that it was withdrawing 
the schedules of the ten as well as that of the EC, pending the finalisation of negotiations for drawing up the new schedule. Thereby everything has clearly  been withdrawn. The EC however, with a view 
to ensure the greatest possible tr ansparency, indicated for each memb er of the WTO for which lines it 
believed that individual members could have a negotiation right, thereby actually assisting members 
with making their claims.   As for the scheduling of negotiations, the EC establishes such dates and places with claiming 
partners through bilateral contacts. In the case of  Guatemala, the EC has sent a letter inviting 
Guatemala to propose time and venue. WT/TPR/M/136/Add.1 
Page 107 
 
 
  
Q2. El 2 de agosto del 2004, la Comunidad Eur opa presentó el documento G/SECRET/22, por 
medio del cual, notifican su propósito de modi ficar concesiones respecto de la partida 08030019 
(bananas) incluida en la Lista CXL de las Co munidades Europeas anexa al Acuerdo General. 
Podría aclarar la Comunidad Europa si las estadísticas de importación de la partida 
08030019 (bananas) contenidas en este docum ento incluyen el comercio preferencial? 
 
A: The statistics of imports contained in Do cument G/SECRET/22 are in conformity with 
paragraph 2 of the “Procedures for Negotiations  under Article XXVIII” adopted on 10 November 
1980.  
 
El párrafo 3 del Entendimiento Relativo a la Interpretación del Artículo XXVIII del GATT  
establece en su parte relevante que: “...Para determinar qué Miembros tienen un interés sustancial, sólo se tomará en consideración el  comercio del producto afectado realizado sobre una base NMF...”   
Tomando en cuenta lo anteri or, podría aclarar la Comunidad Europea, qué otros criterios 
tomará en cuenta para determinar qué Miembros tienen un interés sustancial?  
A. The determination of which Member has substantial interest is done in accordance with WTO rules.   
Q3. El 2 de junio del presente año, la Comisi ón Europea circuló el documento COM (2004) 399 
final, por medio del cual expresan que: “...dad o que las negociaciones bajo el articulo XXIV.6  
(ampliación) y el artículo XXVIII (arancel único) se llevarán a cabo de forma paralela, es probable 
que las últimas concluyan antes de las primeras, en  cuyo caso, las consecuencias de la ampliación 
se tomarán en cuenta.”. 
Podría la Comunidad Europa exp licar detalladamente de qué forma tomarán en cuenta ‘ 
las consecuencias de la ampliación’ dura nte las negociaciones del artículo XXVIII.  
Más adelante, en este mismo documento, la Comunidad Europea explica que, durante el 
curso de las negociaciones encaminadas hacia un régimen de tarifa única, la Comisión velará por los intereses de sus productores de banano y de los Estados ACP. Podría expl icar la Comunidad Europea 
la forma en que conciliará lo anterior con el  compromiso de la Comunidad Europea de que 
“...cualquier reconsolidación del arancel de las CE sobre los bananos con arreglo a los 
procedimientos pertinentes previstos en el ar tículo XXVIII del GATT deberá tener como resultado 
el mantenimiento, al menos, del acceso tota l a los mercados para los proveedores de bananos 
NMF...” (WT/MIN(01)/15, 14 de noviembre de 2001). 
 
A. Document COM (2004) 399 is a Communication adopted by the European Commission. In 
conducting the Article XXVIII negotiations, the EC w ill respect all its obligations, while pursuing the 
various policy objectives pursued in its bananas re gime, as mentioned in the Communication.  As 
Guatemala is aware, the final level of the tariff will be set after negotiations with WTO members 
having negotiating rights.    
Q0. En el numeral 109 del informe de la S ecretaria se dice que según la Comisión, las CE 
mantienen su disposición de negociar nuevas reduc ciones de sus subvenciones a la exportación a 
condición de que se sometan a disciplinas todas  las formas de subvenciones a la exportación 
(créditos a la exportación, abusos de la ayuda alim entaría, prácticas desleales de las empresas de 
comercio de Estado, citando un documento de ref erencia de 2003, en ese sentido entendemos que 
de acuerdo al Mandato de Doha y al Paquete de Julio el compromiso de las CE  para los subsidios 
a la exportación es eliminación  de las subvenciones  a la exportación, para lo cual se acordará una 
fecha, ¿es esto correcto?  
 WT/TPR/M/136/Add.1 
Page 108  
 
A:  
 
Q1. ¿Podrías las Comunidades indicar cuántas medidas sanitarias o fitosanitarias han 
notificado con base a la precaución en el análisis de riesgo?  
 A: Guatemala puede comprobar esto examinando las notificaciones de la CE al acuerdo MSF. 
Ejemplos recientes: G/SPS/N/EEC/241
18 (30/3/2004) y G/SPS/N/EEC/24219 (4/4/2004)  
Q2. Al establecer una medida sanitaria o fitosanita ria sin un fundamento científico, como  es el 
caso de los niveles de ocratoxina A para el café , ¿sobre la base de qué establecen que la ingesta es 
significativa?  
 
A: La CE rechaza enérgicamente que las medidas comunitarias para la ocratoxina A (OTA) en café carezcan de fundamento científico. Comité  científico de la alimentación humana señala
20 que 
(OTA) es carcinógena, nefrotóxica, teratógena, inmu notóxica y, posiblemente, neurotóxica. También 
el comité conjunto FAO/OMC de Expertos en Ad itivos Alimentarios (JEC FA) en la 56ª reunión 
concluye que (Sic.)  “ efforts are needed to ensure that in takes of ochratoxin A do not exceed the 
PTWI, and this could best be achieved by lowering overall contamination by appropriate agricultural, 
storage and processing practices .”. La ingestión de OTA en la CE se ha estimado recientemente2122; 
los cereales y sus derivados  son los que los que más contribuyen, seguidos del vino , café  y cerveza  y 
para determinados grupos  de consumidores (i.e. niños), las uvas pasas  y zumo de uva . Otros productos 
significativos son cacao  y productos a base de cacao , especias  y regaliz . Existen límites máximos 
comunitarios para cereales,  productos a base de cereales  y uvas pasas23; el control de OTA en cerveza 
se realiza a través del de la malta (Máximo de 3 µg/kg).  
Próximamente concluirá un proyecto de inv estigación sobre los mecanismos de la 
carcinogenicidad de las micotoxinas, que se enviará la Autoridad Europea de Seguridad Alimentaria 
(EFSA) para que evalue el riesgo; mientras tanto, y a la vista de la contribución significativa del vino,  
café tostado  (y soluble), y zumo de uva, a la exposición humana de OTA la Comisión ha realizado 
una propuesta notificada a la OMC en el Docume nto G/SPS/N/EEC/247 (1 de Septiembre de 2004) la 
cual que fija niveles máximos en estos productos. Estas medidas son conformes con los Artículos 2 y 
5 del Acuerdo MSFS y las disposiciones de transparencia.  
Q3. De acuerdo al compromiso de larga data mencionado en el numeral 44, del Anexo A del 
Paquete de Julio para los productos tropicales, nos gustaría saber ¿cómo las CE otorgarán ese 
acceso a los países en desarrollo, partiendo qu e este es un compromiso dentro del marco 
multilateral?  
 
                                                     
 
18 En su dictamen de 6 y 7 de marzo de 2003, el Comité director científico de las Comunidades 
Europeas recomendó que se reforzara la protección de la sanidad animal y de la salud pública en la Comunidad 
con respecto al riesgo que representa la caquexia crónica de los cérvidos en el Canadá y los Estados Unidos.  
19 Suspensión de la comercialización y la importaci ón de las minicápsulas de gelatina que contengan 
los aditivos E 400, E 401, E 402, E 403, E 404, E 405, E 406, E 407, E 407a, E 410, E 412, E 413, E 414, E 415, 
E 417 y/o E 418. 
20 Opinion of the Sci. Committee on Food on Ochratoxin A http://europa.eu.int/comm/food/fs/ 
sc/scf/out14_en.html. 
21 Estudio realizado en el marco de la Directiva 93/5/CEE del Consejo, relativa a la asistencia a la 
Comisión por parte de los Estados miembros y a su cooperación en materia de examen científico de las 
cuestiones relacionadas con productos alimenticios ( Diario Oficial n° L 052 de 04/03/1993 p.18-21).  
22 Disponible en: http://europa.eu.int/comm/food/f ood/chemicalsafety/contaminants/task_3-2-7_en.pdf.  
23 Reglamento (CE) n° 466/2001 de la Comisión, de 8 de marzo de 2001, por el que se fija el contenido 
máximo de determinados contaminantes en los productos alimenticios ( Diario Oficial n° L 077 de 16/03/2001 
p.1-13).  WT/TPR/M/136/Add.1 
Page 109 
 
 
 A: The paragraph 43 of the framework agreemen t provides that the question of the trade in 
tropical products will be addressed. It is not possibl e to prejudge of the result of this negotiation. 
 
Q4. Tienen considerado las CE incluir algún producto tropical dentro de sus productos 
sensibles?  ¿Si la respuesta es afirmativa, nos gu staría saber qué productos y su razón de ser? 
 
A: In order to answer to this question, it would be necessary to know the results of the 
negotiation on the tariff reduction formula for non sensitive products as well as on the provisions 
dealing with sensitive products.   Q5. Para el compromiso de la eliminación de  los subsidios a la exportación, ¿las CE darán 
prioridad a los productos tropicales de los países en desarrollo para dicho desmantelamiento? 
 
A: As indicated under paragraph 18 of the Agr eed Framework, to which the EC is fully 
committed, the end date and consequently the timetab le for the elimination of export subsidies is an 
issue for negotiations. Nevertheless, in the course of the negotiations, the EC will continue to take into 
account the specific needs of developing countries. 
 
Q6. En el párrafo 6 de las Observaciones Recap itulativas del Informe de la Secretaria se dice 
que la política comercial de las CE está orientada a la liberalización de su régimen de comercio por 
la vía multilateral, y al mismo tiempo, la preferenci al.  ¿Podría indicarnos las CE cuál de estas dos 
vías tiene mayor prioridad en su política comercial?  
A: The EC is committed, above all, to mu ltilateral institutions and solutions. The Doha 
Development Agenda (DDA) is, and will continue to  be, the EC’s main priority. In view of the 
priority given to the DDA, therefore, it should be noted that all of the EU’s RTA-negotiation 
processes originate from before the launch of the DDA and the EC has so far chosen to refrain from 
introducing new RTA-negotiations be fore the conclusion of the DDA. 
 Nevertheless, that does not mean that the EC puts less effort into negotiating regional 
agreements for which mandates have already been est ablished, or into ensuring that our preferences 
support long-term sustainable development. These ar e designed to complement multilateral efforts, 
and in many instances extend significantly beyond the scope of the WTO’s liberalization and rule-
making agenda, compliant with WTO rules. In order to  promote development, the EC has also in most 
its preferential agreements both opted for a broa d-based approach – coveri ng cooperation, political 
dialogue and trade – and endeavoured to negotiate agreements with groups of developing countries 
(so called North-South-South agreements) that support and build upon integration efforts among 
themselves. The EC is convinced that this appr oach, as illustrated in the negotiations on Economic 
Partnership Agreements with the ACP-countries, pr ovides the best possible framework for improving 
the capacity of the EU’s partners to reap the fu ll benefits of trade and ensure their long-term 
sustainable development.  
Q7. Hemos tomado nota de la ‘Communicatio n from the Commission to the Council, the 
European Parliament and the European Econom ic and Social Committee (‘la Comunicación’)’ de 
fecha 7 de Julio de 2004.    Aunque este docum ento aún está sujeto a discusión y aprobación por 
las distintas instancias administrativas de la Comunidad Europea, en él se puede  encontrar una 
descripción general de los parámetros y del marco legal  del futuro SGP.  En el párrafo 6.2 de esa 
Comunicación, la Comunidad Europea expresa que: “... el SGP debería concentrar sus efectos en lo s países que más lo necesitan, como son los PMA y 
los demás países en desarrollo más vulnerables (p equeñas economías, países sin salida al mar, 
pequeños Estados Insulares, y países con un bajo nivel de ingresos, etcétera).”  WT/TPR/M/136/Add.1 
Page 110  
 
Guatemala entiende que estas condiciones esp eciales (pequeñas economías) serán tomadas 
en cuenta al momento de elaborar la lista de beneficiarios del régimen.  Podría explicar la 
Comunidad Europea, ¿de qué otra forma tomará en cuenta las condiciones de pequeñas economías 
como Guatemala?  
 A: The “small economies” that are referred to  in the Commission communication are the ones 
that may not compete with the very big developing countries, like China, India or Brazil. The latest, 
because of their size, attract investments, which is detrimental to the smaller developing countries, Guatemala certainly is.   Q8. Guatemala ha sido beneficiario del Régi men Drogas por casi 12 años. Como se ha 
expresado en diversas ocasiones, el Régimen Drogas ha contribuido al desarrollo del país y a la 
aplicación exitosa de programas de lucha contra  el tráfico de drogas. El Régimen Drogas ha 
promovido la creación de programas  de desarrollo alternativo y la diversificación de exportaciones 
no tradicionales, tales como: flo res, cigarros, hortalizas, melones,  camarones, legumbres, miel de 
abeja, artesanías, cardamomo y ajonjolí. Por esta razón, es de vital importancia que el nuevo 
régimen no menoscabe el acceso del que hasta ah ora han gozado las exportaciones de productos 
guatemaltecos. Adicionalmente, y en consonancia,  con el objetivo de concentrar el SGP en los 
países que más lo necesitan, ¿podría asegura la   Comunidad Europea que nuestra condición de 
beneficiarios – en términos de cobertura de pr oductos y beneficios - no será menoscabada  por este 
nuevo régimen? 
 
A: Guatemala is benefiting from the so-called “d rug regime” for 12 years. Within the framework 
of the “shared responsibility” between the EC and th e drug producers countries, this regime intends to 
enhance legal productions with a view  to substitute them to the drugs’ ones. India did not share this 
point of view, and following its panel launched in the WTO, the EC has no choice but to repeal its 
drug regime, because of the lack of objective criteria.  Were the EC to renew its drug regime, it should 
be based on more stringent criteria. According th e UN specialised bodies, only a few of the current 
drug beneficiaries would qualify for such a regime  (Guatemala probably would not qualify), and 
several Asian countries should be taken on board, which would be detrimental to the Central 
American interests. Accordi ngly, the Commission adopted, on 20 October 2004, a draft Council 
regulation which objective, among others, is to enhance the sustainable development of the 
beneficiary countries (“GSP+”). As a matter of fa ct, the developing countries that are achieving 
sustainable development goals are facing “special development needs” (WTO panel). They must be 
helped accordingly. So, in order to benefit from the GSP+, these beneficiary countries must ratify and 
implement the international conve ntions related to the sustainable development. Out of these 
conventions, Guatemala has only to ratify the International Convention on the Suppression and 
Punishment of the Crime of Apartheid  in order to qualify for the future GSP+. 
 
Q9. La Comunidad Europea ha expresado que la entrada en vigor de los reglamentos del SGP 
deberá producirse lo más pronto posible, para que los operadores económicos puedan planificar su 
actividad. ¿Podría la Comunidad Europea explic ar los avances que se tienen en el proceso 
administrativo interno comunitario para  la adopción de este nuevo régimen? 
 
A: The sooner the new regime will be adopted, th e better it will be with a view to help the 
economic operators, both the beneficiary countries a nd the EC, to be in a position to benefit from the 
regime. Accordingly, and following of the adopti on of the draft regulation on 20 October, the 
Commission is about to present officially its draft regulation to the Council and the Parliament with a 
view to make it adopted by the end of 20 04 or the very beginning of 2005 the latest. 
 WT/TPR/M/136/Add.1 
Page 111 
 
 
 QUESTIONS FROM PERU  
 
I. INSTRUMENTOS DE POLITICA COMERCIAL  
 
Q1. El informe de la Secretaría señala en el pá rrafo 9 que “los derechos no ad valorem que se 
aplican a un 46% aproximadamente de las línea s arancelarias de la agricultura, comprenden 
derechos específicos, mixtos, compuestos y d erechos (variables) en función de un “precio de 
entrada” y en algunos casos esos derechos se aplican  según el contenido técnico de los productos y 
pueden variar según la estación”.  ¿Podrían explicar las CE cómo se condi ce la aplicación de derechos no ad valorem 
(particularmente los aranceles mixtos y los vari ables, que han sido muy criticados respecto a su 
transparencia y administración) con una política co mercial orientada a la liberalización? Teniendo 
en cuenta que se ha observado una demanda consta nte de parte de muchos miembros de la OMC 
por la conversión a sus equivalentes ad-valorem, de bido al sesgo proteccionista de la aplicación de 
dicho sistema. 
 ¿Podrían explicar las CE cuáles son las ventaja s para el sistema comercial y los miembros 
de la OMC, que se derivan del mantenimiento del sistema de aranceles no ad valorem en 
comparación con aquéllos que se derivan de la aplicación de aranceles ad valorem únicamente? 
 ¿Cuáles son los criterios de evaluación del co ntenido técnico para la variación de la tasa 
arancelaria y cuáles son los márg enes de variación a dicho respecto? 
 ¿Cuál es la metodología de cálculo que utilizan para la expresión de los equivalentes ad 
valorem teniendo en consideración las variables de contenido técnico de los productos y la 
variación según la estación? 
 
A. The European Community decided in 2002 to suspend its communication to IDB on AVEs due to the fact that there are many different methods of conversion of specific duties into AVEs 
giving very different results. Before 2002, a disclaimer was already included in the EC 
communications on AVEs to IDB to underline the lack  of reliability of such calculation. Moreover, 
AVE calculation methodology is an important issue that WTO Members are currently negotiating on. 
To communicate AVEs ignoring the method of c onversion which will be agreed under the DDA 
should be not serious.  II. POLITICAS Y PRÁCTICAS COMERCIALES POR MEDIDA
 
 Q2. Como señala el informe de la Secretaría resp ecto al impuesto sobre el valor añadido (IVA), 
el mismo se aplica a las importaciones y a los produ ctos de producción nacional. La base imponible 
está plenamente armonizada, pero no así los tipos que aplican los Estados Miembros. La 
legislación comunitaria establece un tipo normal de IVA que no puede ser inferior al 15%, con uno 
o dos tipos reducidos no inferiores al 5%. La  Comisión Europea ha presentado una propuesta 
destinada a simplificar las normas sobre los tipos reducidos del IVA a fin de  lograr su aplicación 
uniforme (párrafo 21).  ¿Podrían explicar las CE el estado en el que se encuentra la mencionada propuesta? ¿Cuándo se calcula que podría entrar en vigencia? 
 ¿Cuáles serían las consecuencias de la ap licación de dicha propuesta con relación al 
transporte internacional de pasajeros y carga? 
 
A. "The Commission's proposal for a COUNCIL DIRECTIVE amending Directive 77/388/EEC 
as regards reduced rates of value added tax CO M (2003) 297 remains under discussion in the Council. 
This is the proposal on simplifying the range of re duced VAT rates to which the question refers. Its 
adoption is proving difficult and it is not possible to give a reasonable estimate of when it might enter into effect".  WT/TPR/M/136/Add.1 
Page 112  
 
 The existing Annex H to the 6
th VAT Directive allows Member States the option of applying 
a reduced rate of VAT to the transport of passe ngers and their accompanying luggage. The proposal 
mentioned above contains no change  to this. It is however the intention of the Commission to re-
examine the rules governing the taxation of passenger transport during 2005".  
 Q3. En el área de procedimientos aduaneros y va loración en aduanas, se señala que el Código 
Aduanero de las CE se aplica de manera uni forme en todo el territorio aduanero de las 
Comunidades a las exportaciones e importaciones de  mercancías (párrafo 7). También se señala 
que dicha aplicación ha resultado  problemática de bido a las diferencias en la disponibilidad de 
acceso electrónico a los servicios aduaneros y a la s interconexiones para la interoperabilidad entre 
sistemas y a las diferentes interpretaciones de la legislación de aduanas de las CE por parte de las 
autoridades aduaneras nacionales (párrafo 10). Las exportaciones peruanas todavía enfrentan 
algunas dificultades respecto a los procedimient os aduaneros, debido fundamentalmente a las 
diferentes interpretaciones ya mencionadas, lo que se agrava por las dificultades en el acceso a la 
información de los servicios aduaneros de los Estados Miembros. 
 En el marco del programa comunitario “A duana 2007” se prevén algunos mecanismos que 
permitirían atender los problemas antes indicados  y que repercutirían favorablemente sobre la 
facilitación del comercio. En tal sentido, es de l interés del Perú conocer los avances que se han 
dado respecto a la aplicación del program a y de los mecanismos previstos. 
 
A. Business and trade have wi despread access to electronic facilities for the major customs 
operations (entry of imported goods) and the EC Member States customs administrations provide 
comprehensive information services to the public via their national websites. Forthcoming customs 
legislation will in fact provide a legal basis for all customs declarations to be made on a electronic basis.   There is uniform interpretation and applica tion of EC customs law (including customs 
valuation), which is pursued and ensured in several ways. The Customs 2007 programme has many 
objectives, which include the provision of a legal an d financial base for an electronic system which 
will allow business to move towards a paperless envi ronment. This programme also continues the 
work of Customs 2002 with a view to promoting th e operational capacity of customs administrations 
in the Community.  III. OBSTÁCULOS TÉCNICOS AL COMERCIO
 
 
Q4. Tal como se señaló en el caso de proced imientos aduaneros, también en el área de 
Obstáculos Técnicos al Comercio las exportaciones peruanas han enfrentado dificultades debido a las diferencias en los reglamentos y especialme nte en los procedimientos de evaluación de 
conformidad, ya que ello repercute en los requisito s técnicos que se exigen para la entrada de los 
productos, lo que ha creado en más de una op ortunidad obstáculos innecesarios al comercio. 
 También es de preocupación del Perú las exigencias técnicas que no reconocen la 
equivalencia de los procesos (caso de productos  derivados: cueros, pieles, etc); así como las 
normativas específicas más restrictivas que las normativas internacionales (maderas, frutas, 
envases, etc).  
Dado que en la comunicación (2003/C282/02 ) sobre las directivas, las CE indican la 
necesidad de un criterio más coherente respecto de la evaluación de la conformidad y la 
designación de los organismos notificados, la revisi ón del procedimiento basado en la cláusula de 
salvaguardia y el fortalecimiento de las medidas  destinadas a imponer la observancia, incluida la 
vigilancia del mercado, el Perú apreciaría conocer: 
¿Cuáles son las acciones que han adoptado la s CE a fin de solucionar los mencionados 
problemas y evitar los obstáculos técnicos innecesarios al comercio? 
¿Cuál es la política de las CE con relación al artículo 2.7 del Acuerdo sobre Obstáculos 
Técnicos al Comercio? En qué medida han cumplido con esta disposición? WT/TPR/M/136/Add.1 
Page 113 
 
 
 A. The EU supports the use of Article 2 .7 of the TBT Agreement, and indeed has put it into 
practice.  In two Mutual Recognition Agreements (M RAs), the Community has applied this principle.  
A MRA with the United States on marine equipment recognises US legislation as equivalent to its 
own, founded on a common basis in IMO regulati on.  The MRA between the EU and Switzerland 
recognises certain parts of Swiss legislation as be ing equivalent with its own.  In both cases 
certificates granted by the EU’s partner give access to the EU market. 
 
IV. MEDIDAS SANITARIAS Y FITOSANITARIAS  
 
Q5. Es este ámbito el que pres enta los mayores problemas para las exportaciones peruanas. En 
algunos casos, el problema radica en la aplicac ión de los reglamentos que requiere exigencias 
superiores a las exigencias requeri das por la normativa expresa. En otros casos, dichas exigencias 
no sólo se constituyen en una mayor exigencia del cumplimiento de estándares que superan las 
establecidas por la normativa internacional aplic able a las características sanitarias que el 
producto debe cumplir, sino que incluyen condicio nes que dentro del ámbito sanitario no están 
definidas, ni especificadas, como el de exigir aná lisis de riesgo respecto de l medio ambiente (caso 
de los productos del mar).  También resulta de preocupación para el Perú, el establecimiento de condiciones 
adicionales en el proceso de producción de det erminados productos para demostrar la inocuidad, 
más allá de las certificaciones sanitarias, así co mo las exigencias de cu mplimiento de normativa 
sanitaria como condición previa a las autorizaciones de importaci ón, que van más allá de los 
certificados sanitarios (caso de las uvas y productos agroindustriales). 
 Medidas como las descritas obstaculizan el comercio al imponer elevados costos 
administrativos. 
¿Podrían explicar las CE la existencia de ta les medidas en el marco del cumplimiento del 
Acuerdo sobre medidas sanitarias y fitosanitarias? 
El párrafo 79 del Informe de la Secretaría indica que el Reglam ento (CE) Nº 178/2002 permite que 
las medidas de gestión del riesgo se basen no sólo en  la evaluación científica, sino también en otros 
factores “pertinentes”. 
¿Podrían explicar las CE cuáles son los ot ros factores “pertinentes” y su compatibilidad 
con el Acuerdo sobre medidas sanitarias y fitosanitarias? 
 A. Exigencias superiores
 
El Artículo 3(3) del acuerdo MSFS permite a lo s miembros “establecer o mantener medidas 
sanitarias o fitosanitarias que representen un nivel de protección sanitaria o fitosanitaria más elevado que el que se lograría mediante medidas basadas en las normas, directrices o recomendaciones internacionales pertinentes, si existe una justificaci ón científica o si ello es consecuencia del nivel de 
protección sanitaria o fitosanitaria que el Miembro de que se trate determine adecuado” 
Análisis de riesgo respecto del medio ambiente (caso de los productos del mar).
 
Ver “ Código internacional de Prácticas de  Higiene para Mariscos Moluscoides”  CODEX 
CAC/RCP-18) § 3.1.1 a 7 (Se aplica únicamente a los moluscos bivalvos) 
Condiciones adicionales que van más a llá de los certificados sanitarios  (caso de las uvas  y 
productos agroindustriales ) 
Para responder esta pregunta es pr eciso saber cuales son las ( sic.: “condiciones adicionales 
que van mas allá de los certificados sanitarios ”. Para uvas y productos agroindustriales. 
 
Q6. Las CE prohibieron el uso de la harina de pescado en la alimentación de rumiantes desde 
el año 2001 de acuerdo a la Decisión del Cons ejo de Nº 2000/766/CE. El Perú presentó esta 
situación en la FAO, la misma que en el 25 perí odo de sesiones del Comité de Pesca realizada en 
Roma, del 24 al 28 de febrero de 2003, refrendó y aprobó el informe del Sub – Comité de Comercio 
Pesquero, según el cual no había datos epidem iológicos que demostraran que la Encefalopatía WT/TPR/M/136/Add.1 
Page 114  
 
Espongiforme Bovina (EEB) se transmitía a rumiant es u otros animales a través de la harina de 
pescado y que tampoco había pruebas de la tran smisión a seres humanos de la enfermedad de 
Creuzfeld Jacob causada por priones que utilizar an como vectores el pescado u otros productos 
pesqueros. 
La inocuidad de la harina de pescado también se ha demostrado en una audiencia pública 
convocada por el Comité de Pesca del Parlamento  Europeo, donde se concluyó que la medida 
restrictiva era política y no estaba sustentada en criterios científicos ni técnicos y que solicitarían a la Comisión de la UE que levantará esta medida. 
La Comisión ha exigido dos requisitos para el  levantamiento de las restricciones al uso de 
la harina de pescado, los cuales ya fueron cumplidos: 
- metodología de análisis microscópico: se ha presentado la metodología de IFFO de 
análisis microscópico actualizado, realizado por el Laboratorio Rilkit de Holanda y el ring test 
validado por nueve laboratorios europeos, respecto a la  detección de harina de carne y huesos en 
harina de pescado, con una aproximación de 0.1%, lo que satisface las inquietudes para evitar la 
contaminación cruzada. 
- La aprobación del reglamento que establece la s normas sanitarias aplicables a los sub-
productos animales no destinados al consumo humano: Dicho reglamento fue aprobado por el 
Parlamento Europeo y el Consejo de la UE: Regl amento 1774 (CE)/2002, el mismo que rige desde 
el 1 de mayo de 2003 y para terceros países desde di ciembre de 2003. El Perú cumple con todos los 
requisitos sanitarios exigidos.  Después de varias reuniones el Comité Perm anente de la Cadena alimentaria y sanidad 
animal de la UE aprobó la modificación del méto do de análisis microscópico mejorado que permite 
distinguir y detectar la presencia de harina s en los piensos animales lo que fue aprobado por 
Directiva Nº 2003/126/CE de la Comisión de la UE de 23 de diciembre de 2003, que entró en vigor 
en julio de 2004.  En la novena reunión del Sub- Comité de Com ercio Pesquero del Comité de Pesca de la 
FAO, realizada en febrero de 2004, la FAO ha re iterado en su informe que no existe ninguna 
relación entre la EEB y la harina de pescado.  La medida aplicada por las CE es una pedida para-arancelaria que viene afectando el comercio exterior del Perú, dado que no existe un a prueba epidemiológica que vincule a la harina 
de pescado con la Encefalopatía Espongiforme Bo vina (EEB) como lo de muestran los informes 
científicos nacionales e internacionales y la opinión autorizada de la FAO. 
El Perú agradecerá a las CE que señalen los motivos por los que aún se siguen aplicando 
las restricciones al uso de la harina de p escado, toda vez que se han cumplido los requisitos 
sanitarios y técnico exigidos para el levantamie nto de la restricción  y que dicha medida adoptada 
como temporal ya lleva aplicándose más de tres  años sin tener ningún sustento técnico ni 
científico, sino que ha sido basada únicamente en el enfoque precautorio.  
 
A. El considerando 11 del Reglamento (CE) N° 1234/2003
24 dice  
"A medida y en el momento en que se disponga de las necesarias herramientas de control y 
de pruebas razonables de que las disposiciones act uales se aplican de forma satisfactoria en todos los 
Estados miembros, debería revisarse la prohibición del uso de harina de pescado para rumiantes, el 
uso de proteína aviaria para animales de granja no  rumiantes y el uso de proteína de porcino para 
animales de granja no rumiantes".  La comisión espera que una propuesta en este sentido sea aprobada por los estados Miembros 
próximamente 
 
                                                     
 
24 De la Comisión, de 10 de julio de 2003, por el que se modifican los anexos I, IV y XI del 
Reglamento (CE) n° 999/2001 del Parlamento Europeo y del Consejo y el Reglamento (CE) n° 1326/2001 en lo 
que respecta a las encefalopatías espongiformes transmisibles y a la alimentación animal ( Diario Oficial No. 
L173 de 11/07/2003 p.6- 13)  WT/TPR/M/136/Add.1 
Page 115 
 
 
 V. POLITICAS COMERCIALES, POR SECTORES  
 AGRICULTURA
 
POLITICA AGRICOLA COMUN (PAC)  
 
Q7. En el informe de la Secretaría se señala qu e el valor total de la ayuda que potencialmente 
tiene lo mayores efectos de distorsión de la produ cción (sostenimiento de los precios del mercado, 
pagos a la producción y subvenciones a los insumos) representó el 68, 7 por ciento de la ayuda a los productores en el 2002. (párrafo 119) Podr ían las CE señalar cuánto  espera reducir dicho 
porcentaje luego de la aplicación de la reforma de la PAC decidida en el 2003? 
 
A. The reform of the CAP will be implemented ove r several years starting in 2005. Therefore, it 
is too early to provide an accurate estimate of ch anges in the share of support that has “the most 
production distorting effects”. As the greatest part of  direct payments to farmers will fall under the 
Single Payment Scheme and be decoupled from producti on, it is clear that the share of support having 
“production distorting effects” will significantly decr ease.  The figure indicated for 2002 in the WTO 
Trade Policy Review has been estimated by the OECD. This institution has published an “Analysis 
the 2003 CAP reform”
25 and has carried out various calcula tions as regards the composition of 
support. The OECD confirms that there will be “large changes in the composition of support to 
producers as a significant part of expenditures becom es less coupled to production and trade, and less 
commodity specific”. 
 
Q8. Con relación al párrafo 26 del mencionado informe, El Perú desearía conocer con mayor 
precisión qué entienden las CE por productos con d esequilibrios estructurales y en qué consiste la 
reforma del mecanismo de intervención?  
 A. Some specifications on changes in the intervention system can be found in Table IV.5 of the 
report for the sector concerned. The main new elements can be summarized as follows. Rye: This cereal is not anymore eligible for buy-in under the intervention system. 
Rice: The intervention price is reduced by 50%, dow n to 150 EUR/t. Paddy rice can be sold to public 
intervention agencies from 1 April to 31 July with in a quantitative limit of 75 000 tons per year. 
Milk sector: The intervention price is reduced  by 25% over 4 years for butter and by 15% 
over three years for skimmed milk powder. In addition,  a ceiling is introduced for butter, starting at 70 
000 tons in 2004 to be brought down to 30 000 tons from 2008 onwards.  
Q9. ¿Cuál es el efecto que las CE consideran que te ndrá la aplicación de la reforma prevista en 
el área de acceso a los mercados para los productos de interés de los PED? 
 
A. Series of studies have assessed the imp act of CAP reform. The European Commission 
published an impact analysis in March 2004 
26. This study provides detailed estimations of the effect 
of the reform on domestic supply and demand, and draws conclusions on trade. To summarise, the 
implementation of CAP reform allows for improvi ng the balance of the market in all the sectors 
concerned.  In the case of rice, the reduction in the intervention price has a downward effect on EU 
production and stocks as well as on imports. It is also  expected to enhance domestic demand for rice, 
which is in the interest of developing countries s upplying the EU market. In addition, the EU should 
stop exporting rice. In the beef sector, decoupling support is likely to lead to a decrease in EU 
                                                      
25 OECD (2004) Document AGR/CA/APM (2003) 16 
26 European Commission (2004), “Reform of the Common Agricultural Policy, Medium Term 
prospects for agricultural markets and income in the European Union. 
http://europa.eu.int/comm/agriculture/publi/caprep/prospects2003b/index_en.htm WT/TPR/M/136/Add.1 
Page 116  
 
production. As a result, domestic prices will increase and in turn attract more imports. The EU has 
recently turned into a net importer of beef and will remain in this position with the reform. The 
significant changes undertaken in the milk sector, will improve market balance for various dairy 
products and lead to a decline in exports. 
 
POLITICA PESQUERA COMUN
 
 Q10. Después de la adopción de la Política Pesq uera Común en enero de 2003, podrían señalar 
las CE cuál ha sido el efecto de la aplicación de las mismas en lo que se refiere a las subvenciones 
a la pesca y en lo que se refiere a los niveles de sobre-explotación?  
 
A. As financial aid for vessel construction and for vessel renewal (fishing capacity increase) will 
be phased-out by the end of 2004, it is still too early too assess the impact s of these measures on the 
level of exploitation of fishery resources.  QUESTIONS FROM AUSTRALIA 
 
Environmental and Social Objectives
 
 
Q1. The EC's endeavour to pursue social and en vironmental objectives in its regional, bi-
regional and bilateral trade arra ngements raises some concer ns (WT/TPR/G/136, pages 10-11, 
paragraphs 33-39) 
 Has the EC quantified the implications or th e results of trade flows resulting from the 
inclusion of social and environmental provis ions in its regional or bilateral agreements? 
 
A: In line with its international commitments,  including the Millenium Development Goals, the 
Sustainable Development Plan of Implementation agreed upon in Johannesburg and the World Social 
Summit (Copenhagen), the EC indeed pursues social and environmental objectives in its regional, bi-
regional and bilateral agreements with partner countries. Trade is an essential driving force for 
economic growth but can have implications beyond  strictly economic ones, for instance by adding 
pressure on natural resources or by disrupting social  conditions. Trade policy is thus an important 
vehicle for social and environmental objectives, alongs ide a range of other policy areas. This is also 
based on the idea that, in order to make sure th at trade and environment policies are mutually 
supportive for the sake of sustainable development, strong and effective environmental policies should accompany trade liberalisation.  The EC also  agrees with the recent findings of the World 
Commission on the Social Dimension of Globalisation that trade liberalization should be a means to achieve growth, employment and poverty reducti on and move towards sustainable development. 
To better understand the impact of its trade nego tiations, both bilateral a nd multilateral, on the 
different pillars of sustainable development as well as inter-linkages between them, including in terms 
of policies, namely the economic, social and enviro nmental spheres, the EU is committed to carrying 
out Sustainability Impact Assessments (SIAs) of its negotiations. Initial results from these SIAs are 
now emerging, and show a broadly positive relatio nship between economic gr owth in developing 
countries and social development. However, they al so confirm that increased trade flows can have 
negative environmental impacts and that the trade liberalisation process should necessarily be 
accompanied by appropriate envir onmental measures at various le vels (national, regional and 
multilateral) to mitigate negative environmental effects.  
Q2. We note that the EC continues to advo cate increased action at the multilateral level, 
including through the WTO and through the im plementation of key MEAs, in favour of 
sustainable development 
Does the EC see a problem in the current relationship between the WTO and MEAs? Or 
does it see the WTO and MEAs as mutually supportive? WT/TPR/M/136/Add.1 
Page 117 
 
 
 A: As agreed in Doha by all WTO members, the CTE in special session is negotiating with a 
view to "enhancing the mutual supportiveness between  trade and environment" and, in particular 
between MEAs and WTO agreements. This means th at WTO members are mandated to ensure, in the 
WTO context, that the existence and competence of  MEAs is fully "acknowledged" and respected. 
The EC believes that MEAs and WTO inter-actions ha ve been satisfactory and mutually supportive so 
far, but that, in a spirit of conflict prevention and identification of synergies, one should make sure 
that the WTO will not operate in isolation from othe r sources of international law and in particular 
from MEAs  
Q2.bis How does the EC ensure that measures take n in the interests of social and environmental 
policy are as least trade restrict ive as necessary to fulfil the legitimate objectives of health, safety, 
environment and consumer protection so that they do not create unneces sary barriers to trade? 
 
A: Since 2002, under the Better Lawmaking action plan, the EC has committed to improve its 
legislative procedure. In particular, the European  Commission is more transparent, showing how it 
sets out clearly the reasons why it takes a particular initiative, and how it ensures that the substance of 
its legislative proposals are restricted to the bare essentials. Moreover, minimum consultation standards have been set out to be applied by th e European Commission's departments. The purpose is 
to enable the legislator to be sure of the quality, and particularly the equity, of consultations leading 
up to major political proposals. The move is motiv ated by three concerns: to systematise and 
rationalise the wide range of consultation practices and procedures, and to guarantee the feasibility 
and effectiveness of the operation; to ensure the tran sparency of consultation from the point of view 
of the bodies or persons consulted and from the le gislator's point of view; and to demonstrate 
accountability vis-à-vis the bodies or players consulted, by making public, as far as possible, the results of the consultation and the lessons that have been learned.  
There is also a systematic approach to assessing the impact of initiatives, essentially 
legislative ones. It takes the form of a general-pur pose impact analysis tool which will be applied to 
all initiatives undertaken under the European Commiss ion's work-programme. Impact assessment is a 
tool to guide and justify the choice of the right in strument at the appropriate level of intensity of 
European action.  
With effect from 2005, all Commission legislative proposals will be accompanied by an 
impact assessment. This ensures that, in designi ng proposals, environmental, social and economic 
aspects are thoroughly taken into account. Consistency w ith principles of free trade is integrated in the 
impact assessment procedure.  
Policy Formulation and Implementation
 
 
 Australia notes that reforms to improve the le gislative process have continued since the last 
TPR (WT/TPR/S/136, page 18, paragraph 11) and that the EC has undertaken consultations with a broad section of interested parties, including thir d countries, to formulate recommendations to 
simplify and improve the regulatory environment  Q3. In light of the growing impact of EC regulatory policy on third countries, such as the EC's 
Takeovers Directive and the Maritime Transport guid elines, what measures will the EC take to 
ensure such measures do not unnecessarily restrict international trade or have 
adverse/discriminatory effects on thir d country commercial interests? 
 
A: As mentioned in the reply to question 2bis, the EC has introduced new instruments, such as 
public consultations and impact assessments, in its  lawmaking system in order to ensure that its 
legislative proposals are restricted to the bare  essentials and do not unnecessarily restrict trade. 
 WT/TPR/M/136/Add.1 
Page 118  
 
Q4. Has the EC considered setting up a process wh ereby countries which might be affected can 
be consulted at an early stage in the development of such measures? 
 
A: As mentioned in the reply to question 2bi s, the EC has develope d minimum consultation 
standards which include general principles for cons ultation of stakeholders, such as participation, 
openness and accountability, effectiveness and coherence. 
 The minimum standards refer to the clear cont ent of the consultation process, the consultation 
of target groups, publication and feedback. Therefore, consultations are open to all interested parties, 
including third countries These principles are developed in the Commission's Communication COM(2004) 704 of 11.12.2002. 
 
EC Enlargement - GATT Article XXIV.6
 
 
Q5. Is the EC able to advise when it will provide to Members having negotiating rights the 
additional information required to prog ress the GATT Article XXIV:6 negotiations? 
 
A: Most members of the WTO have already received the EC’s examination of their claim for negotiation rights. Work on TRQ’s and the vast amount  of data, has however led to a delay in this 
process. The EC intends to submit the few remaining examinations in the nearest future, and to also 
open substantial negotiations with su ch partners in the nearest future , should there be a need for such 
negotiations. 
 We have notified to the WTO on 19 January that , in relation to the EU enlargement, we are 
ready to enter into negotiations with our WTO partne rs according to the rules of Art. XXIV.6 of the 
GATT, in order to address possible compensations.  Our notification to the WTO on enlargement, which is the result of an extremely complex work of 
trade data collection and analysis, is fully in acco rdance with WTO rules and procedures; it is fully 
transparent as each WTO member can see its trad e data with each of the 10 new Member States. 
 Nevertheless, the EC is ready to clarify, in  the framework of the negotiations all remaining 
unsolved questions from WTO members having claimed compensatory adjustment.  
Q6. The WTO agricultural domestic support and e xport subsidy commitments of the EC and the 
ten new EC member states need to be amalgamated . When does the EC intend to provide data on 
these aspects of enlargement?  
A: The EC is ready to clarify, in the framewo rk of the negotiations all remaining unsolved 
questions from WTO members having claimed compensatory adjustment.  EC efforts towards harnessing the benefits of globalisation
 
 Q7. We note the EC's use of preference arrangem ents to give market access for economies that 
have limited tradable commodities (WT/TPR/S/136,  pages 33-35, paragraphs 5665). However, 
given the concerns that preferen ces may create dependencies fo r developing economies, making 
such countries reluctant to diversify their econo mies  - Could the EC provide data showing the 
extent to which imports from de veloping countries have increased over time as a result of these 
preferential arrangements? 
 
A: As regards the trade régime applicable to ACP countries the report itself (§59) indicates that 
unilateral preferences granted by the EC under th e Lomé Convention have not been sufficient to 
prevent the further marginalization of ACP countries.  This is why the EC and the ACP countries have 
decided in the Cotonou Agreement to negotiate  new, WTO compatible trading arrangements 
removing progressively barriers to trade between them  and enhancing cooperation in all areas relevant 
to trade (see §57-58 of the report on Economic Partnership Agreements). WT/TPR/M/136/Add.1 
Page 119 
 
 
  In the biggest EC preferential regime, i.e. the GSP, the data demonstrates that the beneficiary 
countries benefited from the preferences to enhan ce their access towards the EC market. In 1999, the 
GSP-preferential imports into the EC reached € 34 b illion and topped to € 52 billion in 2003. It has to 
be noticed that, over this period, the GSP produc t coverage decreased because some products (like 
coffee) became duty-free and thus are not anymore GSP eligible. With these products, the increase of 
the GSP preferential imports would have been by far higher 
 
Q8. could the EC show how its development a ssistance has assisted developing countries to 
diversify their export base and all eviate reliance on preferences? 
 A: The EC is the largest provider of trade relate d assistance in the world. Many activities in the 
area of Trade Development are in fact aimed at improving the opportunities for SMEs (many of them 
which are not involved in dominant export sectors) to trade. These programmes hereby contribute to 
broadening the export base of our partner country.  Agriculture
 
Export Competition  Q9. Could the EC indicate whether it or Member States provide any officially supported agricultural export credits? If so, to wh ich products and to what magnitude? 
 A: The EC does not provide officially supported agricultural export credits at Community level. 
 
Q10. The EC policy statement indicates that the EC remains the largest importer and exporter of 
agricultural products and remains the world's largest  customer for farm products from developing 
countries (WT/TPR/G/136, page 7, paragraph 22). -  With regard to being the world's largest 
exporter of agricultural products, is it not also true that during the time period covered by this 
review the EC was also the world's largest user of export subsidies and the largest provider of 
production and trade dist orting domestic support? 
 
A: The above question sounds more like a political statement than a real question. In absolute terms the EC may well be the WTO me mber with the highest amount of notified export 
subsidies and highest level of domestic support measures notified under the Amber box. Firstly, in 
relative terms the conclusion maybe diffe rent and secondly, this is an ev idence of the fact that the EC 
is much more transparent than other WTO members which, for example as regards export 
competition, use other tools, which are not cu rrently subject to notification obligations.  
 Q11. Can the EC provide data on the growth in ne t imports of agricultural products ( ie imports 
minus exports) for the EC 15 from all sources in per capita terms for the last five years and the last 
ten years? 
 
A: Between 1995 and 2003 total EU 15 imports of agricultural pr oducts in value terms have 
increased by more than 11 billion euro (+22%) while exports have increased by more than 15 billion 
euro (+35%). This results in a net importing positio n for the EU15, which goes from 5 billion euro in 
1995 to 454 million euro in 2003. On a per cap ita basis EU15 imports have increased from 134 
€/person in 1995 to 160 €/person in 2003.   
Market Access 
 
Q12. It has recently been reported that the EC will trade off market access openings in the Doha 
Round with those negotiated in bilateral and regio nal trading arrangements (the so-called 'single WT/TPR/M/136/Add.1 
Page 120  
 
pocket' approach) 
 
A: The EU has a negotiating mandate with clear pa rameters for the Doha round. The results of 
the Doha round will have an influence in our trade po licy, no doubt, as in all other countries. Thus the 
Doha round may have, depending of th e results, an impact also on our free trade agreements, which 
are part of our trade policy. 
 
Q13. Could the EC please indicate how it intends to treat preferential market access deals in 
comparison with market access improvements it has undertaken to provide in the Doha Round? 
 
A: The EC is fully committed to give effect to the Doha Ministerial Declaration on agricultural 
products and to the framework agreement of 1 August 2004 and to respect all its other WTO 
commitments.  
Q14. Could the EC confirm that its commitment to the Doha mandate and to market access 
improvements in the Doha Round is not subject  to market access commitments in other trading 
arrangements? 
 
A: See reply above.  
Q15. Of the 89 tariff rate quotas maintained by the EC, there are a number which are 
consistently unfilled or have low fill rates. When asked in the Committee on Agriculture as to why 
such quotas are maintained, the EC has previousl y responded that the low fill rates are a result of 
market forces which in some cases lead to low or  zero out-of-quota duties  -  Could the EC please 
provide additional information as to what some of these internal market forces are (some of the 
products in question include frozen orange juice, pork meat, wheat, broken rice, fresh apricots and 
animal feed)?  
A: The decision to import is a complex decision taken for each product by the operators at the light of many parameters ( for example, evolution of  the demand, evolution of external and internal 
prices, evolution of the exhange rate, evolution of  the quality of the imported goods compared to the 
quality of  equivalent EC products).  
 
Q16. Wwould the EC agree that if persistent low fill rates are attributable to market forces, and 
not to the un-commercial size of the quota or to other aspects of the administration system, it would 
be reasonable to reduce the in-quota rate or relax other elements of the system in order to 
encourage trade to take place? 
 
A: The framework agreement of 1. August provides an effective improvement in tariff quota administration for existing tariff quotas.  
Q17. How does the EC justify the imposition of a "secu rity deposit" (equivalent to the full rate of 
duty) on imports of certain TRQs, such as sheep meat, when the fill-rate of the TRQ reaches a 
predetermined rate. This approach imposes additional costs on imports within a TRQ and does not 
take account of the risk of the quota being o ver subscribed or mitigating circumstances such as 
when country specific quotas are controlled by the exporting country.    Page 51, paragraph 43 of WT/TPR/S/136 states: 
 Observing that sensitive sectors in multilatera l negotiations are also  sensitive sectors in 
Preferential Trading Arrangements (PT As), a re cent WTO study concludes that "the degree of 
liberalization achieved in PTAs is less than one may be led to believe". This conclusion would 
appear to be valid for most of the EC's PTAs. Fo r instance, since the EC already provides low duty WT/TPR/M/136/Add.1 
Page 121 
 
 
 rates on non-agricultural goods the removal of ta riffs on these products represents a limited degree 
of liberalisation. On the other hand, market a ccess in sensitive products (agricultural and non-
agricultural products) is included in some cas es, albeit with less generous tariff preferences. 
 
A: The imposition of a "security deposit" is pr ovided for in the European Customs Code and 
applies to all goods (agriculture and non agricultu re)  imported under the "first come/ first served" 
rules.  A derogation for the sheepmeat sector is not possible.  
Q18. This conclusion along with other sources of  research indicate that preferences provide only 
limited short term benefits to developing countries while potentially imposing considerable long 
term costs. Research also shows that substantia l gains are obtainable for developing and developed 
countries alike from more open and l ess distorted markets in agriculture 
 
A: The EC is widely opened to imports of agricultural products from developing countries. A 
significant share of trade in agricultural products from developing countries already takes place at low 
or zero duties, in particular in the framework of ACP agreements or GSP, including EBA but also on 
an MFN basis for a number of products.   For some countries, this already represents a signi ficant part of the trade. This is notably the 
case for agricultural products such as coffee, cocoa or cotton but also  for other products such as sugar 
and rice for which the EU has already made subs tantial concessions notably to least developed 
countries.  
 These preferences have an important and positive impact not only on the industry which is 
granted preferences in our partner-countries but more generally on the whole economy of these 
countries. The net positive impact of such preferen ces is all the more important in a non-perfect 
market where all the conditions for full market and trade liberalization, which are a prerequisit for 
benefiting for free-trade and liberalization, are not met. 
 
Q19. Does the EC consider (inherently limite d) preferential market access for developing 
countries to be preferable to the potential gains for developing Countries from broad market access 
liberalisation? 
 
A: The EU believes that all WTO Members should fully benefit from the expansion of trade. 
Participation of developing countries and in particular  the least developed, in the international trading 
system is a priority.   As regards the Eu’s preferential arrangeme nts, aside from the countries and territories 
benefiting from the extensive EU preferences under th e “General System of Preferences“ (GSP) and 
the EBA initiative for the Least Developed Countri es, 77 Africa Caribbean and Pacific countries 
(ACPs) also benefit from preferential access to th e EU market. Furthermore, the EU has concluded 
free trade agreements with a number of developing  countries (e.g. Mexico, South Africa, Chile and 
Mediterranean countries). This preferential access is  reflected in the much higher level of exports 
from these countries to the EU comp ared to other QUAD member countries. In fact, the EU is the 
largest importer of agricultural products globally , and by far the largest market for products 
originating in developing countries. 
 
Q20. The Secretariat report notes that the aver age bound tariff rate for agricultural products 
(WTO definition) is 16.5 per cent, which is twice the overall average. Four per cent of tariff lines in 
agriculture carry rates higher than 50 per cent, wi th agricultural subsectors such as dairy, meat, 
sugar and rice attracting high tariff rates ranging from 101 per cent to 210 per cent 
(WT/TPR/S/136, pages 41-45, paragraphs 19-20) 
 The EC policy statement claims that the EC's trade policy is charac terised by activism, 
innovation and leadership and that the EC has been  the driving force behind progress in the Doha WT/TPR/M/136/Add.1 
Page 122  
 
Round (WT/TPR/S/136, page 4, paragraphs 3-4) if th e EC considers that market  access is vital to 
foster global economic growth and to help developi ng countries to fully participate in the global 
economy (WT/TPR/SI136, page 12, paragraph 46), has the EC undertaken reforms that have led to 
improved market access for third countries? 
 A: The EC is fully committed to give effect to the Doha Ministerial Declaration on agricultural 
products and to the framework agreement of 1 August 2004.  
Q21. The Secretariat report notes that meat of swine,  fresh, chilled or frozen attracts a high tariff 
of up to 120.8 per cent (WT/TPR/S/136 page 45, par agraph 20), placing pig meat in the 4 per cent 
of tariff lines in agriculture with rates higher th an 50 per cent - Given the export orientation and 
competitiveness of the EC pig meat industry, how do es the EC justify such high tariff rates for pig 
meat? 
 
A: The WTO Secretariat decided to calculate Ad  Valorem Equivalents of specific duties under 
its own responsability. There are sever al methods to calculate ad valo rem equivalents. Each of theses 
methods give very differents results. It is why the EC  put a strong disclaimer  on its calculations of 
AVEs transmitted to the IDB before 2002 (It was clear ly underlined that the calculations were purely 
technical and not reliable).  In 2002, the EC decided to stop to communicate estimates of AVEs to the 
IDB due to the fact that the methods of conversion of specific duties into ad valorem were put on the 
table of negotiation of the DDA. As a matter of fact, it is not possible to convert specific duties 
ignoring what method of conversion will be agreed by the Members. Due to the above reasons, it is 
not possible for the EC, at this time, to confirm the ad valorem equivalent calculated by the WTO 
Secretariat for meat of swine.  
 
Q22. What plans does the EC have for a phased reduction of these rates? 
 
A: This is an issue for further negotiations on the basis of the Agreed Framework to which the 
EC is fully committed.  
Q23. The Secretariat report estimates that over 46 per cent of agricultural product tariff lines are 
subject to non-ad valorem duties, while only a m ere 0.5 per cent of non-agricultural tariff lines are 
subject to non-ad valorem duties (WT/TPR/SI136 page 42, Table 111.2)   
 Why has the EC agreed in the area of NAMA  to convert non-ad valorem duties to ad 
valorem equivalents and to bind those rates in ad va lorem terms but has so far declined to do so in 
relation to agricultural products. Could the EC explain why such a high percentage of its agricultural tariffs are express ed in non-ad valorem terms? 
 
A: The EC has only very few tariff lines (3 tariff lines) subject to specific duties for industrial 
goods but around 960 tariff lines subject to specific duties for agricultural goods.  The prices for agricultural goods are submitted to greater variations than the prices for 
industrial goods. Consequently, it is difficult to ev aluate several months in advance the amount of 
duties which will have to be paid for a certain quan tity of agricultural goods to import. With specific 
duties, this evaluation is easy to do in a reliable way, due to the fact that specific duties are predictable 
and simple: So many stuff so much duty. In th is respect, specific duties make trade easier for 
operators. This justify that a hi gh percentage of EC agricultura l tariffs are expressed in non ad- 
valorem tariffs.  Furthermore, in the case of inflation (and we have always some significant inflation), the use 
of specific duties improves market access.  
 
Q24. Has the EC or its member states undertake n any economic studies to ascertain the impact 
of non-ad valorem duties, including that they offer the greatest protection when markets are WT/TPR/M/136/Add.1 
Page 123 
 
 
 depressed? 
 
A: It is difficult to know if the internatio nal prices of most basic agricultural products will 
increase or decrease in the future. However, the in ternational forecast studies  provide an increase of 
world prices of main agricultural products in their medium term forecasts. According to these 
expectations, the use of specific tariffs should improve market access and serve the interests of 
exporters.  Furthermore, one of the arguments expressed to  answer to the question n°23 has to be recalled 
and underlined here: In the case of inflation (and we have always some significant inflation), the use 
of specific duties improves market access.  
 Consequently, we estimate that specific duties will imply a lesser tariff protection than ad 
valorem duties in the future and will permit more market access than the use of ad valorem duties. 
 
Q25. Given that such a high percentage of the EC's agricultural product tariff lines are subject 
to opaque and complicated non-ad valorem duties and within the context of the EC's claim of 
having a 'transparent and open trade regime' (WT/TPR /S/136, page 5, paragraph 7), can we expect 
that the EC will be a strong supporter in th e current agriculture negotiations for permanently 
converting non-ad valorem tariffs to straight forward and transparent ad valorem tariffs? 
 
A: The specific duties are consider ed to be transparent, as the ra te is clearly specified in the 
Member’ schedules. The specific duties are simple and predictable: So many stuff so much duty. They 
are also clearly more transparent than ad valorem duties due to the fact that the ad valorem duties 
have to be calculated as a percentage of the custom value which is often declared in not a reliable way 
by the operators (import values which are decl ared are often under-invoiced or over-invoiced for 
different reasons such as payment of VAT, frauds, exodus of capital).  
The fact that the most important importers use sp ecific or mixed tariffs also shows that these 
duties do not impede trade. In this respect, it has to be underlined that Switzerland has more specific 
tariffs than the EC and imports more per inhabitant than the EC.  
Q26. During the review period has the EC provided support to farmers to adapt to the 
introduction of EC standards in the area of animal welfare? If so, could they provide details of the 
nature and duration of such support, and ho w they intend to notify these to the WTO? 
 
A: Domestic support is notified in the context of the review process under Article 18.2 of the Agreement on Agriculture. 
 
Domestic Support 
 
Q27. Could the EC indicate how it intends to no tify the recently introduced single farm payment 
in the WTO, including the portion that is target ed at preventing land abandonment? Could the EC 
also indicate how it intends to notify the 'envir onmental' component of the single farm payment? 
 
A: The Single Farm Payment will be notified in the Green Box. Land abandonment will be 
targeted in an array of measures partly coupled and partly decoupled. Continued coupled support will 
be notified blue or amber, decoupled measures wi ll be notified in the green box. Concerning the 
'environmental component' we need to clarify that there are two environmental issues at stake. One 
involves the issue of cross-compliance with certain environmental standards required for eligibility in 
the standard scheme, the second requires efforts on behalf of the farmer that go beyond normal 
practice and that correspond to actions in conformi ty with par 12 of annex 2 of the Agreement on 
Agriculture. The first is a condition for the dec oupled green box payment, the second constitutes in 
itself a green box payment not related to eligibility for a decoupled payment. WT/TPR/M/136/Add.1 
Page 124  
 
Q28. Can the EC advise on which elements of its sugar regime will be reformed? 
 
A: The following changes are proposed: 
• Reduction of the institutional support pri ce from €632/t to €421 in two steps over 
 three years  
• Reduction of the minimum price for sugar beet from € 43.6/t to € 27.4 in two steps over three 
 years  
• Abolishing public intervention, repl aced by a private storage scheme  
• Reduction of EU production quota by 2.8 million t (from 17.4 mio to 14.6 mio) over four 
 years  
• Reduction of subsidised exports by 2 mio t (from 2.4 mio t to 0.4 mio t)  
• New, decoupled payment for sugar beet farmer s to partially compensate (60%) income losses  
• Quotas transferable between operators of different Member States  
• Conversion scheme of € 250/t for factories leaving the sector. 
 
Q29. The Secretariat report notes that 'the producer support estimate (PSE) for the EC remains 
very high'. While the report observes that the PS E for all agricultural commodities decreased on 
average from 40 per cent to 35 per cent between 1986-88 and 2002, the PSE for pig meat increased 
from 16 per cent to 26 per cent (WT/TPR/S/136 pages 88-89, paragraphs 16-18)  - Can the EC outline what factors explain the increase in the pig meat PSE over this period? 
 
A: There have during recent years been outbreaks of  swine fever in certain areas of the European 
Union. These outbreaks have led to support operations th at in turn led to a restructuring of the sector. 
The cost of this support is reflected in the PSE. The EC would however point out that in AMS terms the support stays below de minimis levels.  
Q30. could the EC provide a calculation of th e total Euro amount of export subsidies and 
Amber/Blue Box support provided to the pig meat sector in the review period? 
 
A: The support will be notified to WTO in the regular review process under art 18:2 of the agreement on Agriculture.  
Rice
 
 
Q31. We understand there have been changes to  aspects of the EC's rice import regime, 
including the provision of duty free access for ce rtain rice imports from India and Pakistan under 
tariff lines 10062017 and 10062098. Clarification of the impact of these and other recent changes on the EC's existing commitments would be helpful  - What tariff will the EC apply to rice (milled and husked) from countries other than India and Pakistan? 
 
A: Please refer to Council decisions 2004/617/EC, 2004/618/EC and 2004/619/EC. Other than 
that the EC has no intention to provide further information on Art XXVIII negotiations. 
 
Q32. Will this applied rate change  depending on volume imported? 
 
A: See reply to question 31.  
Q33. What administrative requirements  will have to be met for rice now? 
 A: See reply to question 31. 
 WT/TPR/M/136/Add.1 
Page 125 
 
 
 Q34. Will any of these answers change with regard to basmati or basmati style rice 
 
A: See reply to question 31. 
 
Q35. From origins other than India and Pakistan? 
 
A: See reply to question 31.  
Q36. what is the date of effect of any chan ges for existing access arra ngements for countries 
other than India and Pakistan? 
 
A: See reply to question 31. 
Q37. Does the EC recognise that basmati or bas mati style rice can be produced in countries 
other than India and Pakistan 
 A: See reply to question 31. 
 
Geographical Indications
 
 Q38. The EC provides "incentive payments" to farmers who participate in EC or national schemes for the protection of Gls and "designations of origin"  -  What was the total amount of 
support paid to farmers under this scheme in the last financial year?  
A: There was no expenditure in the financial year 2003.  
Q39. Is support provided to farmers who decide to  promote their products through other forms of 
IP protection such as trade marks or certification marks?  
A: If the question is about products other than covered by Community quality schemes as set out 
in article 24b (2) of R.1257/1999, quality schemes related to these products must meet at least the 
requirements set out under paragraphs (3) and (4 ) of the same article, and the corresponding 
provisions in R. 817/2004 (article 22). Support for promotion for these products is possible under the 
conditions of article 24d of  R.1257/1999 and of articl es 23 - 26 of R.817/2004. 
 
Q40. How does the EC justify payments to fa rmers under the WTO Agricultural Agreement? 
 
A: Any support to farmers can be justified under the WTO Agricultural Agreement as long as it 
complies with the conditions of any of the three boxes. This includes support under the food quality 
chapter. Box classification will follow as appropriate.  
Q41. The EC has proposed that all WTO Members should prohibit the use of certain generic 
terms by their own producers, but allow these terms to be used exclusively by EC producers. Does 
the EC agree that: 
 The TRIPS agreement does not require the u se of such terms to be prohibited. 
 
A: The EC agrees that the TRIPS Agreement do es not require such prohibition, based on the 
exception to the protection of GIs to be found in Art. 24.6 of the Agreement. However, the TRIPS 
Agreement also contains the agreement of WTO Members to enter into negotiations aimed at 
increasing the protection of individual geographical indi cations, specifying that in the context of such 
negotiations, Members shall be willing to consider the continued applicability of the exceptions to 
protection in Art. 24 to individual geographical indications. WT/TPR/M/136/Add.1 
Page 126  
 
Q42. Use of these terms in non-EC Member states is TRIPS-consistent. 
 
A: The EC agrees that, in accordance with Article 24.6 of the TRIPS, Members are not required to apply the provisions in Section 3 of the TRIPS Ag reement in respect of a geographical indication of 
any other Member with respect to goods or services fo r which the relevant indication is identical with 
the term customary in common language as the common name for such goods or services in the 
territory of that Member.  
Q43. Agreement to prohibit the use of such  terms would render null and void the exception 
provisions of TRIPS articles 24.2-24.8 
 
A: The EC does not agree that to prohibit the use of such terms would render null and void the 
relevant exception provisions in Article 24, which would continue to be applicable, except to those 
individual geographical indications for which nego tiations would have resulted in agreement to 
reserve the protected names exclusively to the pr oducts originating in the place indicated by the 
geographical indication in question. 
 
Q44. That the legal concept of an "outright proh ibition on use" is not currently enshrined in the 
TRIPS Agreement and goes well beyond the "high est" level of protection currently afforded to 
wine and spirit Gls in Article 23 of the TRIPS Agreement. 
 A: This question is not clearly drafted. The EC agrees that the expression “outright prohibition 
on use” does not appear in Article 23 of the TRIPS Agreement. In any case, the EC is certain that 
Australia agrees that Article 23 of the TRIPS Ag reement clearly reserves the use of geographical 
indications identifying wines and spirits to exclusivel y wines and spirits respectively originating in the 
place indicated by the geographical indication in question. 
 
Trade facilitation
 
 Q45. The Secretariat report notes legislative reforms are taking place to improve trade 
facilitation at EC borders (WT/TPR/S /136, page 40, paragraph 12) 
-  could the EC advise whether these trade facilitation reforms include: 
o new measures to ensure simplification an d standardisation of import certificates for 
food and agricultural products; o uniform application of technical import requirements for food and agricultural 
products across the EC; and o an adequate consultation period for stakehol ders (including foreign governments) prior 
to the introduction of new import regulations , and readily accessible informative advice on 
the implementation of such regulations? 
 
A: The legal act referred to is intended to facilita te access to tariff information issued by Member 
States for economic operators. This  measure do es not concern certification rules for food or 
agricultural products or import requirements for such products 
 
Q46. Regarding the EC's Rapid Alert System for Food and Feed (RASFF) which publishes 
information about non-complying import shipments and establishments, we understand that in an 
event that an establishment is listed on RASFF as noncomplying, the next 10-12 consignments from that establishment are targeted for inspectio n and testing until compliance is established  -  
Could the EC advise on how the number of targeted  consignments subject to compliance inspection 
and testing are calculated? 
 WT/TPR/M/136/Add.1 
Page 127 
 
 
 Q47. Is the calculation based on consignments to (a) the EC overall; (b) each EC member state 
or (c) individual EC ports? 
 
A: Combined to Qs 46 and 47  
 Work is underway to improve information exch ange between Border Inspection Posts, which 
will allow a more consistent application of Article  24 of Directive 97/98 and Article 30 of Directive 
96/23. However, not all import requirements are harmonised and Member States retain a certain 
degree of autonomy in relation to their priorities for checking of import consignments.  
Technical Barriers to Trade
 
 
Q48. Does the EC propose to progressively replace prescriptive "old-approach" directives for 
motor vehicles, cosmetics, ch emicals, foodstuff, and pharmaceutical products with "new-
approach" directives setting out essential (limited) requirements? (WT/TPR/S/136, page 60, paragraph 68) If so, can the EC give an indication of the timeframe? 
 
A: The European Commission is currently reviewing the horizontal elements of New Approach 
directives. In the context of this review it will be  examined to what extent it is appropriate and 
opportune to extend the application of this legisla tive technique to sectors currently covered by the 
traditional approach. At the time being there are no specific initiatives concerning the sectors 
mentioned 
 
Q49. The EC has indicated that "new-approach" directives lay down essential requirements 
defined to meet health, safety and environm ental objectives (WT/TPR/S/136, page 60, paragraph 
68)  Do "new-approach" directives address pro cessing and production methods, or are they 
confined to performance requirements, in acco rdance with Article 2.8 of the TBT Agreement? 
 
A: A fundamental principle of the New Approach is to limit legislative harmonisation to the essential public interest requirements, such as th e protection of health and safety. Essential 
requirements define the results to be attained in te rms of performance indicators, but do not specify or 
predict the technical solutions for doing so. This flexibility allows manufacturers to choose the way to 
meet the requirements and also allows that th e materials and product design may be adapted to 
technological progress  
Q50. The EC has indicated that "under the new- approach directives, the technical solutions to 
meet the requirements are to be found through vo luntary European harmonized standards (such as 
those of the European standard-setting bodies) or manufacturers' own initiatives" (WT/TPR/S/136, 
page 60, paragraph 68)  Does the EC give positive considera tion to accepting as equivalent the technical regulations 
of other WTO Members, in accordance with Article 2.7 of the TBT Agreement? 
 
A: The EU supports the use of Article 2 .7 of the TBT Agreement, and indeed has put it into 
practice. In two Mutual Recognition Agreements (M RAs), the Community has applied this principle. 
A MRA with the United States on marine equipment recognises US legislation as equivalent to its 
own, founded on a common basis in IMO regulation. The MRA between the EU and Switzerland recognises certain parts of Swiss legislation as being equivalent with its own. In both cases certificates 
granted by the EU’s partner give access to the EU market 
 
Q51. The EC has estimated that non-application of the mutual recognition principle cut trade by 
up to € 150 billion in 2000 (WT/TPR/S/136, page 61,  paragraph 72). We note that a communication WT/TPR/M/136/Add.1 
Page 128  
 
clarifying the mutual recognition principle was published in November 2003 
 Has the EC continued to monitor the applica tion of mutual recognition by member states? 
 
A: The Commission is continuously monitoring the application of mutual recognition in the non-
harmonised field of goods through different means, the most important of which are the infringement 
proceedings under Article 226 EC and the notifica tion of draft technical rules under Directive 
98/34/EC. Besides the different monitoring mechanisms mentioned in the second biennial report on mutual recognition, the Commission has launched a study exploring the possible impacts of measures 
aimed to improve the functioning of mutual r ecognition in the non-harmonised field of goods. The 
Commission has also consulted the European Busi ness Test Panel on its experience with mutual 
recognition in the non-harmonised field of goods. The results are published on the Commission's 
website on mutual recognition  
State aid for shipbuilding
 
 
Q52. Does the EC collect information on the im plementation of the shipbuilding state aid rules 
by member states (WT/TPR/S/136, page 76 paragraph 127)?  If so, which member states are implementing the new state aid rules and how much money 
are they allocating to implement the rules? 
 
Q53. Have member states spent any funds to implem ent the state aid rules, and if so, how much? 
 
Q54. Could the EC provide information on the lik ely process for deciding whether to extend the 
shipbuilding state aid rules beyond 2006? 
 
A: Combined to Qs 52, 53, 54
 
 Member States are all obliged to conform to the State Aid rules in force, including in the 
shipbuilding sector. All State Aid schemes and individual aids must be notified to the European Commission, otherwise they are automatically ille gal and must be repaid, even if they would 
otherwise have fulfilled the criteria for clearance or  exemption. Information on State Aids granted (in 
all sectors) is thus collected by the Commission, a nd published in the State Aids Scoreboard, which is 
available on the DG Competition part of the Europa web site, updated twice a year
27. All individual 
Commission decisions on shipbuilding aids notified to it are also available on the same web site28. 
Regarding the amount of funds spent by Member States to implement the rules, it is not clear 
whether this question refers to State Aids granted in  the shipbuilding sector, or to administrative costs 
(such as staff time) required for implementing the rul es. As for the former interpretation, it should be 
pointed out that the State Aids framework for the shipbuilding sector, including the Temporary 
Defence Mechanism, in no way obliges Member States to grant State Aids in that sector, but lays 
down in what circumstances they may do so, if they  choose; State Aids granted by Member States 
cannot therefore be said to be funds spent “to implem ent the rules”. As for the latter interpretation, the 
Commission has no information about the admini strative costs incurred by Member States. 
 No decisions have yet been taken on the procedures for deciding whether the current Temporary Defence Mechanism on shipbuilding ai ds will be prolonged beyond 2006 or not. 
 
Draft chemicals regulation (REACH
) 
 
Q55. How does the EC intend to ensure that its dr aft legislation on the Registration, Evaluation, 
and Authorization of Chemicals (WT/TPR/S/136 page 115, paragraphs 84-85) is not more trade 
restrictive than necessary to fulfil a legitimate objective? 
                                                      
27 http://europa.eu.int/comm/competition/state_aid/scoreboard/ 
28 http://europa.eu.int/comm/competition/state_aid/register/ii/by_sector_shipbuilding.html WT/TPR/M/136/Add.1 
Page 129 
 
 
  In particular, does the EC intend to amend the scope of the legislation to focus on 
chemicals that present the greatest risk? 
 
A: The Commission has carefully designed its legisl ative proposal in such a way that it is neither 
discriminatory, nor more trade restrictive than nece ssary to fulfil the objectives, as defined in its 2001 
White Paper. The European Communities consider th at REACH complies with the obligations of the 
TBT agreement. 
REACH is already designed to focus on the s ubstances that present the greatest risk. The 
authorisation requirements, for example, is restri cted to the substances of the highest concern, 
including carcinogens, mutagens  and reproductive toxicants (CMR s) and substances that are 
persistent, bio-accumulating and toxic (PBTs). The registration requirements are reduced for 
substances of lower risk. For example, substances produced or imported in quantities below 1 tonne 
are not required to be registered and substances us ed as intermediates require a lighter registration. 
 
Q56. REACH imposes an asymmetrical informa tion burden on importers of chemical 
substances, mixtures and articles into the EC co mpared to purchasers of like products in the 
internal EC market  How does the EC intend to address the impact of REACH on imported products? 
 
A: REACH does not impose an asymmetrical info rmation burden on importers. Exactly the same 
obligations to register substances on their own, or in mixtures (preparations) or, if certain conditions 
apply, in articles, apply to EU manufacturers as  importers. In order to assist importers and EU 
producers of articles, technical guidance is being prepared.  
Q57. The legislation may have a disproportionate  impact on the minerals and metals sector, 
owing to differential effects on in organic and organic substances 
 How does the EC plan to address the appa rent discrimination between organic and 
inorganic substances under REACH? 
 
A: REACH does not discriminate between organic and inorganic substances.  It is acknowledged 
that the impact of REACH is not uniform thr oughout all industry sectors, but REACH has not be 
designed in order to favour any one sector over another.  Moreover, in light of the comments received 
from various sources, the European Commission is now engaged in a process of further impact 
assessment with stakeholders incl uding representatives of third country  manufacturers in Europe. The 
scope of the work includes further detailed analys is of the potential impact on downstream users and 
supply chains in global industries such as automob iles and inorganic materials. This work includes 
analysis of effects on the global sourcing of chemi cal substances, components and articles. It will in 
particular focus on concerns raised about the li kelihood and implications of the potential withdrawal 
from the market of substances due to REACH.  
Q58. Does the EC plan to allow for recogn ition of data already available, particularly 
assessments already conducted by recognized international bodies? 
 A: REACH allows industry to use existing data  and analyses performed under other national and 
international programmes, where these data or an alyses meet the technical requirements of REACH 
(see REACH Annex I, section 0.4 and Annex IX section 1.1).   
 
Q59. Has the EC developed guidelines and/or rules related to data sharing and data 
compensation, and if not, has the EC contemplated developing such rules? 
 WT/TPR/M/136/Add.1 
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A: Title III of REACH sets out the rules on data sharing and cost sharing. REACH requires mandatory data-sharing of information deriving from tests carried out on vertebrate animals. 
 
Financial services
 
 
Q60. There is some variability between memb er states in relation to matters underlying 
regulatory requirements eg, regis tration requirements and fees. WT/TPR/S/136, Page 118, footnote 
130 records that there is no mandatory harm onisation of penalties for market abuse 
 
A: : Penalties indeed remain within the competence of Member States 
 
Q61. To what degree do penalties vary between member states? 
 
A: At this moment, data are not available. This issue has to be reviewed by the  Commission with 
Member States. 
 
Q62. Are payments above 12,500 euros subject to  any regulation (WT/TPR/S/136, page 120, 
paragraph 1O3)?  –  if not, to what extent is there any differential pricing? 
 
A: Cross-border credit transfers below €50000 are regulated by directive 97/5/EC. The regulation on cross-border payment (price equality principle) in euro applies for the time being to 
payments above €12 500, but this threshold will be increased to €50000 on 1 January 2006. This 
means that the two texts will have the same thr esholds. Payments above the amount of €50 000 are 
not regulated  
Q63. What is the timetable for the comple tion of the EC's single securities market 
(WT/TPR/S/136, page 121, paragraph 1O8)?  
A: Work on completing the single securities ma rket will no doubt be ongoing into the 
foreseeable future. The date for transposition by Member States of two of the last FSAP measures is: 
prospectus directive, July 2005, and the Markets and Financial Intermediari es Directive, April 2006 
 Q64. Is it expected that the clarification of th e Investment Services Directive for professional and 
other investors will result in an expansion or contra ction of the number of people subject to more 
protection?  
A: The process of introducing implementing measures at level 2 (Lamfalussy) is ongoing  
Q65. What is the timetable for the implementatio n of the EC's proposal to extend the licensing 
regime (WT/TPR/S/136, page 122, paragraph 1O9)? 
 
A: Directive 2001/108/EC entered into force on 13 February 2002. According to Article 3 of the Directive, Member States had to adopt the impl ementation measures no later than 13 August 2003 and 
apply them no later than 13 February 2004. Ho wever, the Commission adopted a Recommendation on 
27 April 2004 on the use of financial derivative inst ruments for undertakings for collective investment 
in transferable securities (UCITS). This Recommenda tion is published in OJ L 199 of 7 June 2004. It 
follows the agreement reached in the UCITS Contact  Committee on the benefits of formulating basic 
principles which should be taken into account by Member States. Those principles should help them 
to ensure an equivalent and effective protecti on of investors throughout the Community and level 
playing field for UCITS operators and products regulated under different jurisdictions  WT/TPR/M/136/Add.1 
Page 131 
 
 
 Q66. Do any authorisation differences for undert akings for collective investment in transferable 
securities (UCITS) persist between member states? 
 
A: Member States are re quested to inform the Commission by 28 February 2005 of any measures 
they have taken further to the Recommendati on. The full text of the Directive and the 
Recommendation are also available on http://e uropa.eu.int/comm/internal_market/finances/ 
index_en.htm.  
Q67. Is it a requirement for foreign (non-EC) firms to establish a separate range of investment 
funds to be able to take advantage of the 'single passport regime'? 
 
A: The 'single passport regime' only applies to firms that fulfil the conditions set by Article 48 of the EC Treaty. Foreign firms fulfiling those conditions  are considered as EC firms and are subject to 
EC rules. Foreign firms not fulfiling those conditio ns cannot take advantage of the single passport 
regime  QUESTIONS FROM THE US 
 
TRADE REGIME
 
 Institutional Framework and Policy Formation and Implementation
 
 
Q1. Paragraphs 3 and 9 of the Secretariat Repor t relate the increasing role of the European 
Parliament in trade decision-making and its interaction with the European Council and EU 
ministers.  
A) Please describe how the new EU constitution will affect the role of the European 
Parliament in co-decisions related to tr ade and commercial-related matters.   
 
A: The new Constitution foresees that “European laws shall establish the measures defining the 
framework for implementing the common commercial policy” (Article III-315.2). This means that 
trade laws shall be adopted, on the basis of propo sals from the Commission, jointly by the European 
Parliament and the Council under the ordinary le gislative procedure (Articles I-34.1 and III-396). 
Therefore, the approval of the European Parliament  will be required to adopt new trade legislation. 
The European Parliament will also be entitle d to propose amendments to draft laws.  
 At present, the Commission’s practice is to c onsult the European Parliament on the main trade 
policy orientations  B) Please describe how the new EU constitution will affect the role of the European Parliament in terms of its consent on international agreements.   
 
A: The new Constitution formally recognises the ri ght of the European Parliament to be kept 
informed on the progress of trade negotiations (paragraph 3 of Article III-315) and to give its assent to 
trade agreements. Indeed, Artic le III-325.6(a)(v) of the Constitu tion provides that agreements 
covering fields to which the ordinary legislative procedure applies cannot be concluded without the 
previous consent of the European Parliament. 
 
C) What types of international agreemen ts will require parliamentary consent? 
 
A: The types of international agreements th at will require parliamentary consent are: 
• association agreements; WT/TPR/M/136/Add.1 
Page 132  
 
• Union accession to the European Convention for the Protection of Human Rights and 
Fundamental Freedoms;   
• agreements establishing a specific instituti onal framework by or ganising cooperation 
 procedures; 
• agreements with important budgetary implications for the Union; 
• agreements covering fields to which either the ordinary legislative procedure applies, or the 
 special legislative procedure where consent by the European Parliament is required. 
 
D) Please provide further detail regarding the stat ement that the Treaty of Nice has extended 
the EC’s competence to cover th e negotiation of agreements on the “commercial aspects” of 
intellectual property rights. 
 
A: Before the entry into force of the Treat y of Nice, the European Community had limited 
powers for the conclusion of agreements on the comme rcial aspects of intellectual property. With the 
Treaty of Nice, the European Co mmunity has a general power to conclude agreements on the 
commercial aspects of intellectual property and, therefore, joint conclusion by Community and its 
Member States is no longer required. 
 
E  Please describe the role of the Union Mi nister for Foreign Affairs in the new EU 
constitution.    
A: The Union Minister for Foreign Affairs w ill have a double role: on the one hand, he will 
conduct the Union’s common foreign and security policy; on the other hand, he will be one of the Vice-Presidents of the Commission and, in that  capacity, he will coordinate and ensure the 
consistency of the Union’s external action. 
 
F) Will the new Minister have a role in reco mmending to the Council the opening of 
negotiations on trade-related agreements and t reaties?  If so, what role will that be? 
 
A: As regards international negotiations, the Commission will be responsible for recommending 
the opening of negotiations in all cases, including tr ade, except when the agre ement envisaged relates 
exclusively or principally to the common forei gn and security policy (Ar ticle III-325.3 of the 
Constitution). Therefore, in so far as trade negotia tions are concerned, the Commission will retain its 
current prerogatives. Of course, the Minister will participate in the decision-making process in his 
quality as Commission Vice-President. 
 
Policy Formation and Implementation
 
 Q2. Paragraph 11 of the Secretariat report on policy formulation and implementation describes 
reforms including consultations with a broad sectio n of interested parties and promoting a culture 
of dialogue and participation in the development of regulations and laws.  
Will the European Commission continue to use m echanisms such as the "internet consultation 
process" that was used in the case of REACH (R egistration, Evaluation, and Authorization of 
Chemicals) as a way of advancing public participa tion in the formation of EU regulatory and trade 
policy? 
 A. The European Commission has designed very demanding consultation guidelines by which it 
consistently abides. It employs a wide range of consulting instruments when designing its proposals. 
These include the internet (including the use of  a single access point on the Commission’s website, 
through which all consultations may be accessed) as  well as a far-reaching stakeholder consultation 
procedure 
 WT/TPR/M/136/Add.1 
Page 133 
 
 
 Trade Policy Objectives  
 Q3. Paragraph 16 of the Secretariat Report review s the function of the internal EU market. We 
remain concerned that the EC's focus on intern al transparency has compromised third country 
opportunities to influence the development of techni cal regulations as foreseen by the transparency 
obligations of the WTO TBT Agreement. As the EC’s WTO notifications of its regulations are 
typically made only after
 the European Council reaches a Acommon position @ internally, how can 
the EU argue that its notifications are Amade at an early appropriate stage, when amendments can 
still be introduced and comments taken into account? 
 
A: The EC, through the TBT notification procedure,  aims at ensuring the greatest transparency 
on EU drafts technical regulation and conformity ass essment procedure. When the notified drafts have 
the legal status of acts to be adopted by the European Council/Parliament, the notifications are 
generally submitted once the Commission has adopted  its proposal and before the proposal is 
discussed in the other relevant European institu tions (i.e. before the Council reaches a common 
position). The notified drafts are therefore notified at  a stage where they can still be modified. This 
process also provides the European Communities w ith an opportunity to take into account the 
comments received in the context of the TBT notification.  Trade Regulations and Business Environment
 
 Q4. The Secretariat Report (paragraph 19) states “ restrictions exist on foreign direct investment 
flows to or from third countries in areas such as real estate, provision of financial services, and 
capital markets (admissions of securiti es).” Please identify these restrictions. 
 A: The EC regime on Foreign Direct Investment is defined in EC Treaty provisions on right of 
establishment and free movement of capital and pa yments (article 43 and following and Article 56 
and following) and by implementing legislation. Ar ticle 48 offers a non-discriminatory treatment to 
companies according to certain provisions on its establishment in the EC.  Restrictions to investment in services sectors for third countries are described in the EC’s schedule of 
commitments 
 
Q5. The same paragraph states “the application of tax law by each Member State makes it 
necessary to distinguish between taxpayers on the ba sis of their residences and the place where the 
capital is invested.”  What does this mean in practical terms to potential investors in EC Member 
States?  
A: The EC investment regime is defined by  EC Treaty provisions on capital and payments 
(article 56 and following) and by implementing legi slation. Article 58 expressly recognizes the right 
of Member States to apply the relevant provisi ons of their tax law which distinguish between 
taxpayers who are not in the same situation with rega rd to their place of residence or with regard to 
the place where their capital is invested. 
 
Q6. The Secretariat Report mentions in Paragraph 22 an EC Action Plan entitled 
“Modernizing Company Law and Enhancing Corporat e Governance in the EC.”  Please describe 
the initiatives contained within this “Action Plan.” 
 
A: The Action Plan is based on a comprehensive set of proposals, grouped under six important chapters: corporate governance, capital maintenance and alteration, groups and pyramids, corporate 
restructuring and mobility, the European Priv ate Company, cooperatives and other forms of 
enterprises. According to both the conclusions adopted by the Competitiveness Council on 30 WT/TPR/M/136/Add.1 
Page 134  
 
September and the Final Report presented by the High Level Group, the Action Plan consists of 
legislative and non legislative proposals, as appr opriate. More detailed info rmation is available on 
http://europa.eu.int/comm/internal_market/en/company/company/ modern/index.htm  Trade Agreements and Arrangements - WTO
 
 Q7. According to paragraph 26 of the Secretar iat Report, the EC applies MFN tariff rates to 
only nine countries.    What percentage of EU goods and services trade , on a value basis, is now conducted on a 
preferential basis?  On an MFN basis?  To what  extent has this changed over the last decade? 
 
A: In 2003, 53% of all EU imports benefite d from zero-MFN tariffs, accounting to €499bn of 
merchandise trade. Under non-zero-MFN tariff lines, tw o thirds of imports we re granted preferential 
access (294€bn), while the rest accounted for €153bn. Since 2000, the MFN share of EU imports has 
remained fairly constant. 
 
Q8. Paragraph 27 of the Secretariat Report describes how the EC’s preferential trade 
agreements (PTAs) increasingly include provisio ns related to the harmonization of technical 
requirements (including standards).  Please describe what types of technical req uirements are most frequently subject to 
harmonization. 
 How do harmonized standards apply to trading relationships with third countries as well as countries that have PTAs with the EC? 
 
A: The objective of the chapters on standards, technical regulations and conformity assessment 
procedures of the EC's PTAs is to facilitate and increase trade in goods by eliminating and preventing 
unnecessary barriers to trade. Main actions relate to   regulatory co-operation in view of developing 
common views and ensuring compatibility of approach es with regard to preparation of technical 
regulations (good regulatory practices), use of intern ational standards, proportionality in conformity 
assessment requirements and market surveillance prac tices. The Parties shall aim at identifying which 
mechanisms or combination of mechanisms are the most appropriate for particular issues or sectors. 
Such mechanisms include convergence and/or equiva lence of technical regulations and standards, 
alignment to international standards, reliance on the supplier’s declaration of conformity, use of 
accreditation to qualify conformity assessment bodies, and mutual recognition agreements 
 
Q9. Under the EU’s Partnership and Cooperatio n Agreements (PCA) with Russia and the CIS 
(as described in paragraph 28 of the Secretariat Report), EC shipping companies have benefited 
under certain preferential market access arrangemen ts, including the ability to establish branch 
offices.  Are there any corresponding benefits that  the EU provides to Russian and CIS shipping 
companies that provide preferential (na tional) treatment under these agreements? 
 
A: The Partnership and Cooperation Agreements  (PCAs) concluded between, on the hand, the 
EU and, on the other hand, Russia and most CIS countries are based on the application of the most 
favoured nation and national treatment principles, a nd can therefore not be considered as preferential 
trade agreements. These agreements provide for the application of the most favoured nation and the 
national treatment principles both with regard to tr ade in goods and to the conditions affecting the 
establishment and operation of companies of one of the Parties in the territory of the other Party. In 
particular, as regards shipping companies provi ding services related to international maritime 
transport, the PCAs state that each Party shall permit a commercial presence by companies of the 
other Party under conditions of establishment and operation no less favourable than those applied to 
its own companies or to those of third countries WT/TPR/M/136/Add.1 
Page 135 
 
 
 Q10. In reviewing the EC’s preferential trade ag reements, the Secretariat Report comments in 
paragraph 29 that empirical evidence indicates sma ll, if any, economic gains for EC PTA partners.  
The Report even observes that some economies ma y have suffered negative welfare effects from 
their participation in an EC PTA.   
A) Please comment on the Secretariat Report’ s evaluation and elaborate on the economic 
gains the EC believes it has achieved with its preferential trade agreements. 
 
A: One of the EC’s main trade policy objectives is to promote sustainable development more 
broadly by ensuring that all countries are capable  of harnessing globalization and of benefiting from 
the expansion of trade. This objective is further un derpinned by the fact that the EU is by far the 
largest market for products originating in de veloping countries, including agricultural products. 
Therefore, the increased participation of developi ng and least developed countries in the international 
trading system is a strong priority for the EC, both in the WTO and in preferential arrangements.   The Secretariat’s Report refer to that evaluati ons of preferential trade agreements in general 
(including also agreements concluded by the EC) provide ambiguous result, but that most studies find 
a positive, albeit small, welfare impact on countries pa rticipating in preferential trade agreements. The 
EC’s approach on regional trade agreements and the EC’s position in the WTO-negotiations on rules 
for regional trade agreements are based on the recogn ition of this general state of regional agreements 
and, hence, attempt to further the developmental im pact of preferential agreements. Therefore, besides 
providing extensive EC preferences under the “General System of Preferences” and launching the 
“Everything But Arms” initiative for the Least Developed Countries, the EC has inter alia concluded 
a number of regional trade agreements that are desi gned to complement multilateral efforts, and in 
many instances extend significantly beyond the scope  of the WTO’s liberalization and rule-making 
agenda, compliant with WTO rules. It is also why the EC has opted for a broad-based approach, 
covering cooperation, political dialogue and trade, in  most its preferential agreements with a view to 
improve the capacity of its partners to reap the fu ll benefits of trade. Finally, it is why the EC has 
endeavoured to negotiate agreemen ts with groups of developing  countries (so called North-South-
South agreements) that support integration effort s among developing countries as a means to ensure 
their long-term sustainable development. 
The Economic Partnership Agreemen ts (EPA) initiative forms an in tegral part of efforts to 
foster the integration of the ACP countries into the global economy. It reflects both the political 
decision of the ACP States to base their own integration into the world economy on regional 
economic integration as well as the EC’s belief th at regional economic integration within the 
developing world offer a better long-term prosp ect for development than perpetuating dependence 
solely on unilateral preferences granted by northern markets according to a hub and spoke 
development model. EPAs will thus be based on exis ting regional integration in itiatives existing in the 
ACP, and stimulate further regional integration, as provided for in the Constitutive Act of the African 
Union or as agreed among the ACP States as a whole. 
 
B) Has the EC performed any ex post examinations of whether and how these trade 
preferences are helping development in targeted preferential countries? 
 
A: The EC is continuously assessing the effectiveness  of its preferential trading agreements. The 
conclusion of the Cotonou Agreemen t was e.g. based on studies anal yzing the effects of the Lomé 
Convention. Similarly, the proposal for a revised GSP was based on underlying examinations of the 
impact of the current GSP. The EC has also eval uated the effectiveness of its trade measures towards 
other group of countries or regions. 
 
C) Please provide details on products excluded  from, or not yet incorporated in, recent 
preferential trade agreements. WT/TPR/M/136/Add.1 
Page 136  
 
A: The EC has a number of preferential agreemen ts in force, many of which were negotiated 
during the last decade. Given the often large diffe rences between the countries with which the EC has 
signed reciprocal agreements and while fulfilling the requirements under WTO rules, the coverage 
may not always be the same. The agreements have been or are in process of being examined in the 
Committee on Regional Trade Agreements. In acco rdance with the procedures under the CRTA, the 
EC notifies its regional trade agreements to the WT O, submits a report in line with the Standard 
Format and provides as complete answers as possible to any question that other delegations may have 
on our individual RTAs.  
D) How will agriculture be incorporated in the EC-Mediterranean agreements?  On what 
timetable?  
A: Agriculture is already incor porated in all the Euromed Associ ation Agreements which the EU 
has concluded with its Mediterranean partners (Tuni sia, Israel, Morocco, PA, Jordan, Egypt; Lebanon, 
Algeria, Syria). In average, 80% of agricultural pr oducts originating in the Mediterranean countries 
are imported in the EU duty free. 
The Euromed Association Agreements include provisions aimed at deepening trade 
liberalization in agriculture with a view to reach ing a free trade area in 2010. Thus in 2005, the EU 
intends to open negotiations with Tunisia and Jo rdan to improve mutual  tariff concessions on 
agricultural products  Q11. Section IV, paragraph 41 of the European Communities’ report relates that the EC has carried out a number of Sustainability Impact Asses sments (SIAs) of both its WTO DDA objectives 
and of several bilateral FTA negotiations.  Please describe how the output of the SIA process is 
incorporated into the EU's trade negotiations and the development of provisions for trade 
agreements. 
 A: To better understand the impact of its trade ne gotiations, both bilateral and multilateral, on the 
different pillars of sustainable development as well as inter-linkages between them, including in terms 
of policies,  namely the economic, social and environmenta l spheres, the EU is committed to carrying 
out Trade Sustainability Impact Assessments (SIAs)  of its negotiations.  When appropriate, Trade 
SIAs also identify and describe complementary policy measures which will optimise the contribution 
of trade policy to sustainable development.  The commitment to link Trade SIAs with policy making 
is at the core of the Trade SIA process.  For this purpose the EC has set up a whole procedure to ensure a full integration of SIA results into its po licy making. This includ es internal and external 
consultations.  This process leads notably to public  position papers which indicate the Commission’s 
reaction towards Trade SIA results as well as policy actions endorsed by the Commission which will 
be undertaken in reaction to these findings. 
 
Q12. The Secretariat Report (paragraph 34) no tes that the EC’s tariff commitments are in 
Schedule CXL and the new EC Member States have to adopt the Common Customs Tariff with the 
exception of a few transition provisions.  
A) What are those transitional provisions?  
B) When will the new Member States adopt the transitions? 
 
A: Combined answers to paras A and B
 
 The favourable duties and charges of the EC-15 ha ve been temporarily extended to cover also 
the territory of the ten new member states, pendi ng the negotiations provided for by Art XXIV.6 
(GATT). No permanent exceptions have been gr anted to the ten new member states. Only two 
transitional arrangements exist. The Republic of Hungary may open a temporary yearly tariff quota for 
non-alloyed aluminium (CN code 7601 10 00) which is to  be progressively and fully phased out in April WT/TPR/M/136/Add.1 
Page 137 
 
 
 2007. The republic of Malta may open yearly tariff quotas for woven fabrics of combed wool or of 
combed fine animal hair (CN Code 5112 11 10) , denim (CN Code 5209 42 00), woven fabrics of 
artificial filament yarn (CN Code 5408 22 10) and other made-up clothing accessories (CN Code 6217 
10 00) which are to be progressively and fully phased out in December 2008.  
 The above-mentioned transitiona l arrangements are not include d in the EC’s TARIC because 
they do not apply to the Community as a whole but only to specific imports into Hungary and Malta 
 
C) What market access do third countries cu rrently have related to these transitional 
provisions? 
 A: Third countries exporting the above-mentioned products to Hungary and Malta will benefit 
from the relevant transitional provisions, provided that  their exports fall within the tariff quotas, and 
until the end of the transitional period. At the end of  the transitional period, third countries’ exports to 
Hungary and Malta will be subject to the tariffs applied at that time under the EU’s Common Customs 
Tariff. 
¾ Remark:  Relevant text of the TPR Report: The EC's tariff commitments are in Schedule 
CXL. With the exception of a few transition provisions, new EC members have to adopt the Common Customs Tariff (CCT) upon their accession to the Union.  As a consequence of the enlargement to EC-
25, the procedures relating to re-negotiations of  tariff concessions under GATT Article XXIV:6 began 
during the period under review.  Q13. With further reference to Paragraph 34 of the Secretariat Report, please provide an update 
of the status of your Article XXIV:6 compen sation negotiations with interested WTO members. 
How will the EC notify the resulting, revi sed EC tariff schedule to the WTO? 
 
A: On 19 January the EC notified the WTO of th e enlargement of the European Communities as 
well as the data required when enlarging the cu stoms union. The EC has since entered into 
negotiations with a view to achieve a negotiated solution. The EC has temporarily extended the 
schedule of the EC-15 to cover also the territo ry of the ten new Member States, pending the 
finalization of the negotiations provided for by article XXIV.6 (GATT). The EC will upon completion 
notify a revised schedule.  Trade Agreements and Arrangements – Pref erential Trade Agreements and Arrangements
 
 Q14. Paragraph 38 of the Secretariat Report notes the new Members of the European Community.   
A) Please describe the transitional arrangemen ts that new Member States have been provided 
in terms of their adoption of the acquis communautaire. 
 
A: The various transitional periods granted in th e accession negotiations are detailed in the Act 
of Accession of the ten new Member States to the EU . The EU has followed a strict approach in these 
negotiations, aimed at limiting the scope and timing of  such transitional arrangements to the absolute 
minimum. As far as trade is concerned, only very limited transitional periods ha ve been granted in the 
field of Customs Union legislation, as reporte d under the reply to question 12; furthermore, no 
transitional period has been accepted in the field of  external relations and the new Member States 
started applying all EU international trade agre ements upon their accession to the EU on 1 May 2004. 
 Further information on the transitional periods can be obtained on the Commission’s 
website:http://europa.eu.int/comm/enlargemen t/negotiations/treaty_of_accession_2003/treaty_accessi
on_28.htm WT/TPR/M/136/Add.1 
Page 138  
 
Remark:  Relevant text of the TPR Report: On 1 May 2004, ten countries (Cyprus, Czech 
Republic, Estonia, Hungary, Latvia, Lithuania, Malta , Poland, Slovak Republic, and Slovenia), out of 
thirteen candidate countries, acceded to the EU. Accession into the Union implies meeting the so-
called Copenhagen criteria: stable institutions guaranteeing democracy; the rule of law; respect for protection of human rights and minorities; existenc e of a functioning market economy; capacity to 
cope with market forces and competitive pressure s within the Union; and ability to take on the 
obligations of membership. The latte r implies the adoption of the EC's acquis communautaire , also in 
the areas of trade and trade-related legislation, including the CCP. However, a few transitional arrangements on specified areas apply to new members (Chapter III).   
 
B) Please describe the specific intellectual pr operty rights commitments that new Member 
States are required to adhere to as part of their adoption of the acquis communautaire or as part of 
enlargement generally.  
 
A: New Member States were required to adopt th e existing Community acquis in the field of IP 
subject to specific provisions set out in the Act of Accession (see eg Annex II particularly OJ L 
23.9.2003 pages 342 - 344 and Annex IV partictularly OJ L 23.9.20 03 page 797).  These relate to 
Community Trade Marks (new Article 149a in Council Regulation (EC) No 40/94), Community 
designs (new Article 110a in Council Regulation (E C) 6/2002), Supplementary Protection Certificates 
(new Articles 19a and 20 (2) of Council Regula tion (EEC) No 1768/92 and Council Regulation (EEC) 
1610/96) and the specific mechanism allowing for th e prevention of parallel imports of patented 
pharmaceuticals into the EU15 under certain circumstances (such as non-availability of 
pharmaceutical product patents prior to  1991/92 in certain jurisdictions) .  New Member States were 
also required to adhere to a number of internationa l treaties such as the European Patent Convention. 
 
Q15. In addressing the bilateral trade agreements of new Member States, the Secretariat Report 
states that, "as part of their EU obligations new Member States will have to renounce their 
bilateral trade agreements with third countries upon  accession”.  Footnote 52, however, clarifies 
that “acceding countries are required  to renounce or amend international agreements with third 
countries that are incompatible with the acquis .”  The United States notes that neither the new 
Member States nor the European Commission ha s identified a specific legal incompatibility 
between a requirement in US bilateral trade agreements with new Member States and the acquis 
communautaire.  Please clarify EC policy towards new Member Stat es’ bilateral trade agreements 
with third countries where those agreements have not been found to present any legal 
incompatibilities with the EC acquis. 
 
A: As the US knows from the discussions on the B ilateral Investment Trea ties, the new Member 
States were under an obligation to denounce or rene gotiate all international agreements which were 
incompatible with the obligations of membersh ip. The Commission monitored closely the acceding 
countries’ progress in this field, but left it up to each government to decide whether to denounce or 
renegotiate those international agre ements which had been analysed as not being in conformity with 
the acquis . 
 Agreements incompatible with the obligations  of membership include by nature all trade-
related agreements for reasons of competence, irresp ective of whether these agreements contradict in 
substance any EC trade provision. This stems not onl y from Article 133 of the EC Treaty, which shifts 
any competence away from the Member States and gi ves full competence to the EC for trade policy 
matters, including for the conclusion of internationa l trade agreements, but also by extension from 
Article 6.10 of the Act of Accession whic h entered into force on 1 May 2004.  
 Moreover, even when there is no apparent c onflict between a Member State’s trade agreement 
and EC agreements or policy, such conflict may occu r at a later stage: the interpretation of national 
agreements remains a matter of national competence and in the last resort of national courts or WT/TPR/M/136/Add.1 
Page 139 
 
 
 instances of arbitration (hence not of the European Court of Justice) which may give these agreements 
a meaning not in line with EC agreements or policy.   Finally the existence of such agreements cr eates confusion in the mind of national authorities 
and private operators as to the applicable law in  general. Upholding trade agreements or trade 
provisions is therefore a permanent source of confusion.  
 For the above-mentioned reasons, maintaining in  force MFN trade agreements after accession 
was not legally possible. The United States have repeated ly been informed of this analysis at technical 
level and specific incompatibilities between US-new  Member States bilateral trade agreements and 
the acquis communautaire  have been identified and discussed. 
While trade agreements are by nature incompatib le with EC membership obligations, economic 
cooperation agreements have genera lly not been found to present a ny legal incompatibilities with the 
EC acquis . Consequently, the new Member States have  often chosen to renegotiate their trade 
agreements into economic coope ration agreements. It is the Commission’s understanding that a 
number of new Member States have proposed this  option to the United States. However, such 
renegotiation must lead either to a new agreement or  mutual official Government declarations in line 
with the Vienna Convention that certain provisi ons of the agreement are moot, thus securing full 
compatibility with EU membership obligations. In  particular, all MFN obligations have to be 
eliminated 
Remark:  Relevant text of the TPR Report: As part of their EU obligations, new members 
States will have renounced their bilateral trade agreements with third countries upon accession and 
will have applied, as from 1 May 2 004, all bilateral and regional ag reements concluded by the EC.
29 It 
is  expected that more than 60 existing agreements  will have been superseded or terminated, thereby 
consolidating trade relations within Europe.  More precisely, the Europe Agreements and the 
Association Agreements between the acceding countri es and the EC will have terminated, while the 
trade-related aspects of all existing agreements  among acceding countries, as well as those between 
the latter and third parties will have been repealed.30  An enlarged EC memb ership will have also 
extended the geographical coverage of the EC's own trade agreements, thereby increasing market 
access to EC's preferential partners , while third countries without such preferential market access will 
find it more difficult to compete on the EC market  
Q16. Paragraphs 47 and 48 of the Secretar iat Report discuss EC trade negotiations with 
MERCOSUR. 
 
A) What is the status of the EU’s negotiations on FTAs with Mercosur?   
 
A: These biregional negotiations are in an advanced  state of preparations. Both sides exchanged 
market access offers on May 2004 as well as on Sept ember 2004. Unfortunately, offers exchanged in 
September 2004 include more downward adjustments than  improvements. This exchange of offers has 
reduced the prospects of conclusion by end Octobe r. However, parties  keep their commitment  
towards the conclusion of a balanced agreement. 
 
B) How will the prospective agreements cover subs tantially all agriculture and services trade?   
 A: The negotiations are still not finalised however the EU will comply with its WTO obligations. 
Liberalisation for agricultural products will be gran ted through tariff elimination, tariff reduction and 
tariff quotas.  
                                                     
 
29 In general, acceding countries are required to reno unce or amend international agreements with third 
countries that are incompatible with the EU acquis .  
30 Fisheries agreements concluded by new member St ates with third countries will be managed by the 
Community. WT/TPR/M/136/Add.1 
Page 140  
 
C) Will there be transition periods for liberaliz ation?  If so, for how long will transition 
periods last?  
A: Yes there will be transition period towards lib eralization, their length is still subject to 
ongoing negotiations. The tariff dismantling will be  done over a period of maximum 10 years and 
tariff quotas will be phased in gradually. 
 
D) What measures does the prospective agreemen t contain to “increase the compatibility of 
sanitary and phytosanitary legislation” between the EU and Mercosur? 
 A: The prospective agreement will make the sanitary  and phytosanitary legislation of the EU and 
the Mercosur Members more compatible as it will contain measures to implement bi-regionally the 
provisions of the WTO SPS Agreement and other provisions that are WTO SPS - plus.  
Q17. Paragraph 54 of the Secretariat Report discusses EC trade negotiations with the Gulf 
Cooperation Council (GCC).  
 A) Do EC negotiations with the GCC include market access for agricultural products and 
textiles, as well as industrial goods? 
 
A: Yes, they do  B) What other areas are covered by the negotia tions, e.g., services, government procurement, 
intellectual property, standards, etc.?   
 
A: The ongoing negotiations between the EC and the GCC aim at a "WTO+" agreement. Hence, 
all the areas referred to above are due to be covered.  
 
C) What is the status of negotiations in those areas? 
 
A: Negotiations are quite advanced and c ould be concluded in the coming months 
 Q18. Paragraphs 56 and 57 of the Secretariat  Report describe the terms of the Cotonou 
Agreement between the EC and 78 African, Caribbean and Pacific (ACP) countries.  The agreement entered into force in April 2003.  What are the specific provisions of the Cotonou Agreement for sp ecial market access for 
sugar and beef/veal? 
 
A: The special market access provisions set out  in the Cotonou Agreement for imports of sugar 
and beef/veal are set out in Protocol 3 on ACP Sugar and Protocol 4 on beef and veal.  Under the Sugar Protocol, the EU has undertaken to purchase and import at guaranteed prices 1.3m 
tonnes of sugar, raw or white, from specific ACP co untries who, in turn, have undertaken to deliver 
their agreed quantities. These imports benefit from a preferential tariff and pay zero duty.  
The Protocol on beef and veal sets out a specifi c quantity of beef and veal from specific ACP 
countries for which customs duties are reduced by  92%. The total quantity is 51,100 tonnes. 
 
TRADE POLICIES AND PRACTICES BY MEASURE
 
 
Measures Directly Affecting Imports – Customs Procedures and Valuation  
 Q19. Paragraphs 6-13 describe the EC’s customs regime, but do not address the May 1, 2004 
enlargement. WT/TPR/M/136/Add.1 
Page 141 
 
 
 A) What have the new Member States done to bring their customs regime in line with those of 
the EC(15)?     
A: Community legislation is directly applicable in the Member States. New Member States do 
not need to adjust their legislation, given th at their national customs regimes cease to apply. 
 
B) Have any transitions been granted to the new Member States in this area?   
 
A: National customs regimes cannot be applie d since the date of accession. The only cases 
treated in the Act of Accession concern cases in wh ich an operation started before the accession and 
ended afterwards. 
C) Has the issue of Latvian ports of ent ry being equipped to provide for food safety 
certification been resolved?  If so, how? 
 
A: This issue is practically resolved.  For info rmation, the Commission would note that a mission 
from the Food and Veterinary Office to Latvia to examine the operation of a number of recently 
completed Border Inspection Posts (BIPs) took place 27.9 - 01.10 2004. As a result of this mission a recommendation for listing of 5 additional BIPs in La tvia was made by the FVO. These BIPs will be 
proposed on a revised list of BIPs to be put be fore the Standing Committee of the Food Chain and 
Animal Health on 16 November 2004.  The locations  include the ports of Riga and Ventspils, and rail 
links at Daugavpils and Rezekne.  Once these five additional BIPs are listed this will facilitate the 
importation into - and transit through - Latvia of goods from third countries 
 
Measures Directly Affecting Imports – Other Duties and Taxes 
 
 Q20. Paragraph 23 describes the May 2002 Counc il Directive related to e-commerce, radio and 
television broadcasting.  
  A) How will the EU ensure that non-EU suppli ers of digital products are treated in a non 
discriminatory manner in the application of the VAT  for electronic delivery of digital products? 
 
A: The 6 th Directive removes a tax discrimin ation against EU business and in imposing an 
equivalent tax regime on non-EU suppliers, gives th em a number of options when they must collect 
and account for VAT. The choices for compliance include  establishing within the EU or registering as 
a non-established supplier in each Member State of  the EU where taxable activities are conducted. 
 The Directive however also introduced a new special simplified scheme whereby non-EU 
suppliers who are affected by its provisions may c hoose to register with a single VAT authority in a 
Member State of their choice. 
 Under this special scheme, all the procedures th ey need to fulfil – registration, payment and 
reporting – are handled through the tax administrati on which they have selected, which also gives 
them guidance on how to meet their obligations.  The non-EU e-commerce business using this speci al simplified registration scheme is offered 
a set of procedures which are easier to operate and more business-friendly than the existing rules for 
non-resident businesses generally. The single regist ration model provides a streamlined set of 
obligations that can be easily completed online with out the need for a fiscal representative or for any 
physical presence 
 
B) If a non-EU supplier is subject to more onerous administrative and compliance 
requirements than an EU supplier (e.g., the EU su pplier calculates and collects one VAT rate - it's 
home market, while a non-EU supplier must calculate and collect 15 different VAT rates - the destination market), how is that not discriminato ry against a non-EU supplier of digital products? WT/TPR/M/136/Add.1 
Page 142  
 
A: Although there are differences in treatment between different categories of businesses, this 
does not amount to discriminatory treatment and the Directive is fully consistent with international 
obligations on non-discrimination. Such differences in tax treatment are a normal feature of any tax 
system. There is nothing new about requiring non-resi dent businesses to register and account for VAT 
in respect of taxable activities that they carry on within the EU – there ar e already many thousand 
such registrations. Therefore, the changes made in th e Directive are for the most part an extension of 
the rules already in place for non-established bus inesses that have taxable activities in the EU. 
 The most significant new feature introduced by  the Directive is the simplified scheme which 
can be availed of by non-EU operators making Bu siness to Consumers supplies into the EU. This 
simplified scheme has been designed to recognise th e unique circumstances of non-established traders 
providing digital services and to provi de a fair and efficient means for these traders to meet their fiscal 
obligations. This does not involve discriminatory tr eatment, but rather acting in response to business 
demands, provides a taxation framework that fac ilitates the emerging e-commerce environment. The 
registration aspect of this simplified scheme will be easier to operate and more business-friendly than 
the existing rules for non-resident businesses. I ndeed the day-to-day operation of the simplified 
scheme is more straightforward than that current ly faced by most EU businesses. This scheme of 
course carries the benefit of a single point of contact for the entire Community, with a set of simplified, harmonised tax obligations.  As far as the impact of differences in VAT rates are concerned, the overall impact on non-EU 
businesses who avail of the simplified scheme is likely to be neutral vis-à-vis their competitors who 
set up in Europe. The non-EU business will collect tax from their European customer at rates of 
between 15% and 25% depending on where they are lo cated whilst European companies will charge 
taxes according to the rate where they are esta blished, again between 15% and 25%. (There are 
incidentally 25 EU Member States, not 15 as indicated in the question.) 
Furthermore, requiring non-established traders who opt  for the simplified scheme to charge VAT at 
the rate of the Member State of consumption is not administratively difficult and is compatible with 
most common tax computation software. 
 The Directive has now been in place for over a year. All reports indicate that it is operating satisfactorily and there have no complaints about its operation. 
 
Q21. In paragraph 27, the Secretariat Report not es that excise taxes assessed on imports are not 
harmonized among the EU Member States.   
 Will excise taxes eventually be harmonized between the Member States?  
A: Excise duties are national taxes on the cons umption of certain products. Their revenue 
accrues entirely to the Member States' budgets.  The most commonly applied excise duties, and those which are subject to EU legislation, are those 
on: alcoholic beverages; manufactured tobacco pr oducts; and energy products (motor fuels and 
heating fuels, such as petrol and gasoline, electricity, natural gas, coal and coke).  
 EU legislation in the area of excise duti es on these products was mainly adopted in the 
context of the completion of the Internal Market  on 1 January 1993, which involved the abolition of 
controls of a fiscal nature at internal borders be tween Member States. Although full harmonisation of 
the excise duty rates throughout the European Uni on was not considered necessary by the Council of 
Ministers for the proper functioning of the Internal  Market, a series of minimum rates were agreed. 
Above these minimum rates Member States retain sovereignty to set excise duty rates at levels they consider appropriate according to their own national circumstances.  However, the Commission is 
required to review these minimum rates periodically taking into account various factors, such as the 
proper functioning of the Internal Market, and to  present a report with proposals if appropriate. 
 WT/TPR/M/136/Add.1 
Page 143 
 
 
 Measures Directly Affecting Imports – Impor t Prohibitions, Restrictions and Licensing  
 Q22. Since 1992, the EC has maintained strict qu antitative restrictions on imports of natural and 
enriched uranium to protect its domestic produ cers.  Since 1994, import restrictions have been 
applied in accordance with the terms of a never pu blished declaration, the Corfu Declaration, 
which imposes explicit quotas for imports of both natural and enriched uranium.  The Secretariat 
Report makes no mention of the Corfu Declaration.   With respect to enriched uranium, we believe 
that only about 20 percent of the European market is open to imports of enriched uranium.  The 
quotas are enforced through licensing restrictions  administered by the EURATOM Supply Agency.  
As a consequence, U.S. enriched uranium exports  to Europe have been essentially eliminated. 
  
A) How does the EC intend to fulfill its obligation to provide the text of the Corfu Declaration 
to WTO members pursuant to Article X:2 of the GATT 1994? B) We seek clarification of the content and pu rpose of the Corfu Declaration, in particular 
concerning the quantitative restrictio n placed on imports of enriched uranium, notification to the 
Committee of the licensing requirements that enfo rce its quotas, and provision to the Committee of 
the legislation that enforces them.   C) Would the EC provide the text of the Corfu Declaration to interested WTO members? 
 
A: Combined answers to Qs A, B and C
 
 The EC follows a common supply policy, based  on Chapter VI of the Euratom Treaty, and 
aimed at ensuring a regular and equitable supply of nuclear fuels for Community users and at 
avoiding an excessive dependence on any single s ource of supply. This supply policy has been 
confirmed by the European Court of Justice, notably in the KLE case (case C-161/97P, KLE/Commission). 
 
D) Will the EC impose quantitative restrictions on imports of enriched uranium, pursuant to 
the Corfu Declaration or some other measure, in to the countries that acceded to the EU in May 
2004?  Specifically, will the EC impose such restrictions with respect to imports of enriched uranium into Slovenia and/or the Czech Republic?   a) If the answer to either of the preceding qu estions is “yes,” please explain the manner in 
which such restrictions will be imposed. 
b) Will the newly acceded countries be subject to the overall 20 percent restriction on imports 
applicable to the entire EU or will the quantitative restrictions be applied in some other manner in 
these countries? 
 
A: According to the Article 105 of the Euratom Treaty, existing contracts of all new Member 
States at the time of their accession into the EU must be grandfathered, if these contracts are 
communicated to the Commission within 30 days of accession. 
 
E) Is the European Commission currently in ne gotiation with the Government of Russia or 
any other parties regarding quantitative restrictions on  imports of natural and enriched uranium?   
F) Please provide any information regarding the content and status of such negotiations.    
G)  When does the EC envision concluding such an agreement? 
H) What would be the possible effects on other suppliers to the EU of natural or enriched uranium? I)  Has the Commission included any WTO memb ers in its discussions concerning the supply 
of enriched uranium to the EU market?   
J)  What would be the possible effects on other suppliers to the EU of natural or enriched 
uranium?  WT/TPR/M/136/Add.1 
Page 144  
 
K)  What would be the effect of such an agreement on the Corfu Declaration?  Would the 
agreement amend, supplement, or replace the Corfu Declaration? 
L) Does the EC intend to notify any such  agreement to the WTO’s Import Licensing 
Committee?  M) Will the EC provide periodic updates to that Co mmittee on its negotiations in this area with 
Russia?  
A: Combined answers to Qs E, F, G, H, I, J, K, L and M
 
 The European Commission has proposed to the Russian Federation starting negotiations for 
an agreement on trade in nuclear materials. The negotiations have not started yet. 
 
Measures Directly Affecting Imports - Contingency Trade Measures - Anti-dumping  
 Q23. In connection with the May 1, 2004 enla rgement of the EU, the EC has adopted a policy 
whereby existing trade remedy measures (e.g., antidum ping orders) are automatically extended to 
apply to the enlarged EU, without conducting additio nal analysis of market conditions or injury 
effects.  The U.S. has previousl y raised concerns regarding the co nsistency of this practice with 
relevant WTO rules.  The Secretariat Report did not cover this issue.  A) Please explain why the EU believes that trade remedy measures can be automatically extended, despite obvious changes in the eco nomic conditions of the importing EU market? 
 
A: Enlargement by itself did not automatically lead to changes in the dumping, subsidy and 
injury parameters, which form the basis of every tr ade defence measure. In the vast majority of cases, 
imports of the products concerned into the new EU Member States are small compared to those into 
the EU-15 and the export prices are generally below the level of the EU-15 export prices. Moreover, 
the overall industrial output of the EU-10 represents l ess than 5-7% of the industrial output of the EU-
15. All of this suggests that automatic opening of  reviews of all existing trade defence measures 
would not be grounded, creating a significant burde n for a great number of trade operators involved 
and resulting in no change for most of the measures. The EU’s approach is to open reviews for those 
cases where interested parties request such reviews and submit evidence that the measures would have 
been significantly different if they were based on information including the new Member States. 
Accordingly, exporting producers in third countries have been encouraged and are welcome to submit 
such requests for enlargement-related reviews.  The EC would like to point out that, in order to ensure a smoother transition for everyone in 
the area of trade defence due to EU enlargement,  the EC approach was widely communicated, in 
particular via the following measures: 
• The EC launched an enlargement website “Enlargement – Impact on Trade Defence”. 
• Already in 2003 the EC set up a special Help Desk to answer questions on the impact of 
enlargement on trade defence and its contact information was published on the above-mentioned 
website and circulated to administrations and ec onomic operators in the EU acceding countries, the 
EU Member States and in third countries. 
• Seminars with the economic operators in the new Member States (producers, importers, users 
which were to be potentially be affected by  EU AD measures) were organised. Everybody was 
informed, so that they could react and ask for a review, in case it was thought to be necessary. 
• The EC also published a notice in the Official Journal OJ C 91/2 of 15.4.2004. The notice 
again set out the principles of the approach and re-ite rated an invitation to interested parties to request 
reviews. 
• The enlargement approach w as already three times discu ssed in this WTO Committee. 
• In addition, a further step was taken to ensure that enlargement runs smoothly in terms of AD. 
The EC set up an enlargement task force. This taskforce contacted all countries with which the EC has 
significant measures in force. Signi ficant has been interpreted in a very broad sense: 32 delegations WT/TPR/M/136/Add.1 
Page 145 
 
 
 were contacted, out of a total of 33 against which the EC has measures in fo rce. The Taskforce looked 
at all measures in force on the basis of a number of  parameters: the level of the duty, the significance 
of the level of imports into the acceding States, the level of production and the level of prices in the 
acceding States. As a result of this exercise we received 50 communications. On 20 March 2004 the 
EC initiated on its own initiative eight Article 11. 2 ADA reviews (Official Journal C 70/15), which 
led to the amendments of measures in force concerning eight products. 
 
B) In regard to the expansion of antidumping orders as a result of EU enlargement, in the 
"Joint Statement on EU Enlargement and EU-Russia Relations" the EU announced the adoption of "special measures" to be undertaken for "t he most significant existing EU antidumping 
measures on Russian exports."  Please describe th ese "special measures."  Why were these special 
measures adopted only for exports from Russia,  and not for exports from other sources? 
 
A: Concerning the impact of the EU enlargemen t on the EC trade defence measures, Russia did 
not receive any “special treatment” from the side of th e EC. In the context of the EU enlargement, the 
EC has consistently invited all interested pa rties to come forward with evidence that the 
appropriateness of applying the EU 15 trade defence measures to the market of the EU25 would need 
to be assessed in the framework of a proper investiga tion. To this end, in November 2003 the EC sent 
letters to the missions of all third countries unde r the EC trade defence measures (including the 
Mission of the USA to the EU) and asked the third country governments and exporters to contact the European Commission without a delay if they we re intending to request reviews due to the EU 
enlargement. The Commission received approximately 50 replies, which were examined individually. 
Following the analysis, it was determined that the risk  of an excessively negative impact from the EU 
enlargement was particularly high for eight products.  Anti-dumping measures chosen for the 
review fell into two broad categories:  
• several measures that were subject to undertak ings with a quantitative and/or a price element 
(measures on imports of colour television receivers  originating in the People's Republic of China; 
measures on imports of silicon carbi de originating in Russian Federation; measures on imports of 
aluminium foil originating in the Russian Federation.);  
• several measures that were characterized by high levels of duty and a significant level of 
imports into the new Member States, which indi cated that interested parties including users, 
distributors and consumers could become subject to excessively negative effects immediately after the EU enlargement (measures on imports of potassium chloride originating in the Russian Federation 
and the Republic of Belarus; measures on imports of silicon carbide originating in Ukraine; measures 
on imports of ammonium nitrate originating in the Russian Federation and Ukraine; measures on 
grain-oriented electrical steel sheets originating in the Russian Federation; measures on imports of 
silicon metal originating in th e People's Republic of China). 
 The Notice of Initiation of a partial interim review of these antidumping measures was published in the Official Journal of the EC on 20 Ma rch 2004. As a result of investigations carried out 
thereafter, the measures were later amended. The EC  again takes this opportunity to re-assert its 
commitment to examine carefully and with an ope n mind all the requests for reviews that might be 
submitted in the context of the EU enlargement.  
Measures Directly Affecting Imports – Technical Barriers to Trade
 
 
Q24. Referring to Paragraph 66 of the Secretariat Report, the United States has several questions concerning labelling rules for wine, as set forth in Commission Regulation (EC) No 753/2002 of 29 April 2002 (laying down certain rules for applying Council Regulation (EC) No. 
1493/1999 as regards the description, designatio n, presentation and protection of certain wine 
sector products) (the ARegulation @).  Notification G/TBT/N/EEC/15 identified two objectives of 
this Regulation: to prevent deceptive practices and to  protect consumers.  However, the Regulation WT/TPR/M/136/Add.1 
Page 146  
 
itself in its preambular paragraph (4) implies that the objective of the Regulation is to protect the legitimate interests of consumers and producers, to ensure the Asmooth operation @ of the EC =s 
internal market for wine, and to promote the production of quality products, among other 
objectives.  Would the EC please explain the differences between the objectives indicated in its 
notification and those in the Regulation itself?  In light of the EC =s notification, would it be 
appropriate to consider that every provision of the Re gulation has as its objective the prevention of 
deceptive practices and/or the protection of the consumer? 
 
Q25. The Regulation appears to prohibit the use of certain words and phrases identified in the 
Regulation as Atraditional terms @ in connection with any wines but those European wines 
specified in the Regulation.  The United States would appreciate clarification of this point.  For 
instance, under the Regulation, will U.S. wines so ld in the EC be prohibited from using the words 
Aclos,@ Achateau, @ Acream @ (or Acreamy @), Aclassic, @ Anoble, @ Asuperior, @ Ahors d =age,@ 
Afine,@ Aruby,@ and Atawny @ anywhere on their label? 
 
Q26. If so, please provide the justification u sed by the European Communities in determining 
that these and other terms were Aproprietary @ to certain European wine producers.  (Comment: A 
number of the terms appear to be purely generic and/or descriptive.  Others, in addition to being 
descriptive, are terms that have been used in connection with U.S. wines B either as descriptions or 
as parts of brand names or trade names B for many years.) 
 
Q27. If wine exported to the EC is  prohibited from using so-called Atraditional terms @ B as 
descriptions, brand names, or trade names, coul d the EC please clarify what objective is being 
served by prohibiting the use of so-called Atraditional terms @ in connection with U.S. wines?  What 
perceived problem does this provision add ress?  What was the basis for the EC =s determination 
that such action was necessary to achieve its objectives?   If the objective is to avoid misleading the 
consumer, what evidence guided the EC to conclu de that EC consumers associate certain words 
only with certain wines?  Did the EC find that this association to be so strong that even full 
information as to the imported wine (e.g., country or  place of origin, or type of wine) would still  
mislead the European consumer?   
 
Q28. What was the basis for identifying this regulatory approach as necessary to achieve those 
objectives?  In drafting the Regulation, did the EC consider alternatives and why were these 
alternatives rejected?  For example, if the objec tive were to prevent deceptive practices, it would 
seem that this objective could be achieved by requiri ng that accurate information be provided and 
that such information not be misleading.  Do es the EC have reason to believe that EC consumers 
will mistakenly believe that a wine plainly labeled as  a product from California in the United States 
is actually a product of France, simply  because the label contains the word Achateau @?  How does 
the EC ensure that its consumers are not misled as to the origin of certain EC wines bearing the 
word Achateau, @ since the EC permits the term Achateau @ to be used on wines from France, Italy 
and Luxembourg?  What is the EC =s basis for believing, if this is its belief, that the use of the 
descriptive words Aruby@ or Atawny @ in connection with wines identified as U.S. products will 
mislead EC consumers into thinking they are purchasing a Portuguese port wine? 
 
Q29. The Regulation raises other questions with respect to the use of so-called Atraditional 
terms. @  When Article 24.4 states that the protection of a Atraditional term @ shall apply only for the 
languages in which it appears in Annex III, do es this mean, for instance, that the term Asuperior @ 
may be used on an English language label, sin ce that term is only protected in Portuguese? 
 
Q30. The Regulation further appears to suggest, at Article 24.8, that, for wines from third 
countries that use a geographical indication, some of the Atraditional terms @ listed in the WT/TPR/M/136/Add.1 
Page 147 
 
 
 Regulation (those in Annex III(A)) may be used only if use of the term is provided for in the 
legislation of the third country and the term meets the criteria of the Regulation.  What is the 
objective served by this requirement?   What is the rationale for this Aderogation @ that applies only 
to certain Atraditional terms @ and not to others?  And why is the derogation only allowed for 
Atraditional terms @ that are used with a geographical indication?  
 
Q31. The criteria for designating Atraditional terms, @ in Article 24.5 of the Regulation, do not 
appear to take into account the rights of trade mark owners or of persons in third countries 
producing products with geographical indicatio ns.  Could the EC explain how its process for 
designating Atraditional terms @ and the results of that process pr otect trademark and geographical 
indication right holders? For exam ple, in compiling the list of Aproprietary @ Atraditional terms, @ 
was there any process for interested persons, incl uding those in third countries, to submit 
information, e.g., that the so-called Atraditional term @ was generic or descriptive, or that it was in 
use in the third country and/or the EC, as part of a brand, or trade name? 
Q32. Article 24 appears to create a system whereby Atraditional terms @ will be able to block 
trademarks.  How is it justified to grant this ty pe of protection to terms that do not meet the 
requirements of a trademark?  The United States no tes that, according to the records of the U.S. 
Patent and Trademark Office, there are dozens of  trademarks registered in the United States that 
include the words Aclos@ or Achateau. @  No doubt there are many trademarks in the EC and its 
Member States that incorporate these words as well.   Many of these may also operate as trade 
names or other forms of intellectual property.  Is it true that U.S. wines may not be sold in Europe 
either using trademarks or using associ ated trade names that incorporate a Atraditional term @?  
What steps will the EC take in connection with th e Regulation to ensure that the rights of these 
right holders are being protected?   
Q33. In addition, Article 24 provides that a trade mark owner can keep using its trademark only 
if the mark has been in continuous use since it was registered or first used, presumably coexistent 
with the use by others of the Atraditional term. @  Article 16 of the TRIPs Agreement gives 
registered trademark owners the right to prevent others from using similar signs, which would 
include the words of a 
Atraditional term. @  However, under Article 24 of the Regulation, the 
trademark owner will not have any ability to prevent,  only to co-exist.  How are these provisions 
consistent with Article 16 of the TRIPs Agreement? 
 
Q34. Article 24 also raises the question of how a non-EC Atraditional term, @ if any exist, can be 
incorporated into the EC Regulation.  Article 24 suggests that a term can only be protected by 
inclusion in Annex III if it is defined in an EU Member State =s legislation, has been in use in an 
EU Member State for 10 years in connection with a Community wine, and meets a number of other 
requirements with respect to the EC market.  Arti cle 37 seems to provide for the possibility of a 
non-EU term being used on a wine imported into the EC if the wine bears a geographical 
indication in accordance with EC rules for imports , and if conditions of use of the term are 
regulated Ain accordance with Articles 23 and 24. @  Could the EC please explain how, and on what 
basis, the EC will determine that a non-EC Atraditional term @ is regulated in accordance with 
Articles 23 and 24?  Would the EC please explain th e procedure for third countries or their wine 
industries to apply for approval of a Atraditional term @ and provide an approximate time frame for 
completion of the EC =s approval process? 
 
Q35. Article 36 appears to impose general requirem ents on the use of geographical indications 
in connection with wines from third countries.  Could the EC please clarify how, and on what 
basis, the decision will be made as to whether a wine product from a third country may use a WT/TPR/M/136/Add.1 
Page 148  
 
geographical indication?  Part G of Annex VII of Council Regulation (EC) No. 1493/1999
31 
indicates that imported wines bearing a geographical indication Amay be eligible, with regard to 
their marketing in the Community and subject to reciprocity, for the protection and control 
scheme @ required of each EU Member State for the control and protection of EC wines bearing 
geographical indications.  Will the EC recognize an d protect third country geographical indications 
as it does its own only if a country has signed a bilateral agreement with the Community?  Alternatively, will the EC rely on the representations  of the exporters?  Or, will some other decision 
mechanism be established?  How does the EC take into account the interests of third countries, 
particularly where there is a conflict between a third country =s geographical indications and the 
EC=s geographical indications or Atraditional terms @?  Could the EC explain how its system for 
recognizing third country geographical indications is consistent with its obligations under the 
TRIPs Agreement? 
 
Q36. Article 12 appears to contain a notification provision under which, inter alia, third country 
geographical indications would have to be notified to the EC for certain wine products.  Could the 
EC please explain this notification process?  Could the EC also explain how conflicts would be resolved between notified geographical indications of EU Member States and third countries, and as between third countries?   
 
Q37. Finally, Article 19 appears to give a p reference with respect to the protection of 
geographical indications of (1) EC producers and (2) producers from third countries that have signed agreements with the EC.  Could the EC explain whether this is the case and how the 
protection in Article 19 compares to the EC =s protection of geographical indications of third 
countries that have not signed agreements with the EC?  Article 36 notes that a geographical 
indication cannot be used if it conflicts with a bilateral agreement; how will interests of third 
parties be protected against later bilateral agreements?  
Q38. To the extent that imported wine may be blocked from imparting this  important information 
on its wine labels, the Regulatio n appears unnecessarily and arbitrar ily trade restrictive.  Under 
what conditions will imported wine be cons idered to comply with these requirements? 
A) With respect to the requirement for a geograph ical indication, who will decide whether the 
imported wine has a Ageographical indication @?  Plainly, if the EC imposes a restrictive 
interpretation of Ageographical indication, @ the effect will be that few imported wines will be 
permitted to impart important information to th e consumer.  How will the EC avoid unnecessary 
trade restrictions?   
B) With respect to the requirement that the subject matter be Aregulated @ in the third country, 
who will decide whether the subject matter is Aregulated @ in such a way that it complies with the 
Regulation?  On what basis will this decision be made?  Will Aequivalency @ with EC regulations be 
required?   If so, what criteria will be used to ju dge equivalency?  On what basis were these criteria 
established?  Alternatively, will any amount of Aregulation @ suffice?  For instance, if the United 
States has no specific rules for whether wine is called Ayellow @ but only general requirements that 
representations be truthful, is this sufficient Aregulation @
?  Or would U.S. exporters be prohibited 
from informing consumers of the specific color of  their wine?  How does this prohibition on the 
use of “specific colors” protect trademark or ge ographical indication right holders for whom these 
terms may comprise part of their intellect ual property?  Would terms such as Aoak-aged @ or 
Abarrel-aged @ be required to be specifically regulated as  a production method in the United States 
in order for a U.S. wine to be so labeled in the EU?  
                                                      
31 Regulation 753/2002 constitutes the rules implementing Council Regulation (EC) 1493/1999 of 17 
May 1999 on the common organization of the market in wine with respect to the description, designation, 
presentation and protection of certain products (Cha pter II of Title V, Annex VII and Annex VIII). WT/TPR/M/136/Add.1 
Page 149 
 
 
 Q39. What legitimate objective do these requirements serve?  
A) Why is the presence on a label of a geographical indication B as opposed to another 
geographic term identifying the origin of the product B a precondition to informing the consumer 
of such important information as, for instance, th e vintage year, or the vine variety?  If the 
objective is to provide the consumer truthful inform ation, the vintage year an d the vine variety used 
to produce any wine are plainly useful B and in fact may be critical B information that the 
consumer will demand.  Will the Regulation prohibit  such information on the label of a given wine 
if the EC chooses not to recognize the geographic al region where the wine was produced as a 
geographical indication?  It is not obvious that the EC consumer will be misled if the vintage year 
and vine variety name are used in connection with a wine whose label contains the geographic 
origin of the wine but not necessarily a geographic al indication.  The same questions are relevant 
with respect to the other critical consumer info rmation that apparently is only permitted with 
respect to wine with a geographical indication: production methods, awards  and medals, name of 
establishment, and bottling location.  In each of  these instances, it would appear that limiting the 
use of information only with respect to win es bearing a geographical indication does not serve a 
legitimate objective, and is more trade restrictive th an necessary to achieve any legitimate objective.   
B) What is the objective of imposing a requirement that the exporting country regulate the 
subject matter?  Please explain why this is necessa ry.  If, for instance, the European consumer is 
being accurately informed of the vine variety for a Californian wine, or of the vintage year of that wine, the United States questions the rationale fo r requiring that the United States regulate vintage 
year or variety name in a way the EC deems accept able for purposes of U.S. sales in the EC.  The 
same is true of the other information for which Athird country regulation @ is apparently a 
prerequisite:  production method, the color of the wine, location of bottling, among other important 
information.   
C) There appears to be exemptions from the req uirement of having regulated the subject 
matter for certain countries that ha ve signed agreements with the EC.  Preambular paragraph (21) 
seems to provide for the exemption of third co untries that have concluded agreements with the EC 
from the requirements of the Regulation.  If it is true that exemptions or derogations are available 
to certain WTO Members or certain nationals, can th e EC explain how this is consistent with the 
national treatment and MFN obligations of the TRIPs and TBT Agreements?  And, would the EC 
explain how such exemptions or derogations are justified in light of the EC =s notified objectives?  
With regard to indications concerning color, Artic le 17 seems to suggest that not every EU Member 
State is required to maintain rules on indicatio ns of colour, again raising questions about national 
treatment. 
 
Q40. Did the EC consider alternative measures to fulfil its objectives that are less trade 
restrictive? If so, which alternatives were consid ered and why were they rejected? Is there no less 
trade restrictive way of achieving the objecti ves to prevent deceptive practices and to protect 
consumers, the objectives stated in the EC's TBT notification?   
 
Q41. Article 9 reserves the use of certain bottle ty pes to specific wines from specific regions. To 
which regulatory objective does the reservation on bo ttle types pertain? Given that bottle shapes 
can be protected under the TRIPs Agreement as d esign patents or configuration marks, how does 
Article 9 take into account the interests of intellectual property rights holders who claim a 
particular bottle shape as their intellectual prop erty? Further, Article 9 appears to permit third 
countries to qualify for Abottle shape @ protection only if 
Areciprocal arrangements apply. @  What 
is meant by Areciprocal arrangement @? Why is a Areciprocal arrangement @ required for the EC to 
recognize a third country bottle shape? How can th e EC justify such preferential treatment for 
some products and for the nationals of some WTO Members in light of the national treatment and 
MFN obligations of the WTO, in particular the TRIPs Agreement and the TBT Agreement?  WT/TPR/M/136/Add.1 
Page 150  
 
Q42. With respect to vine varieties,  in addition to the above requirements B that the imported 
wine have a geographical indication and that vine  varieties be regulated in the exporting country B 
Article 37 apparently provides that some vine variet y names may not be used at all in connection 
with imported wines, except under conditions specified in Article 19 and Annex II of the 
Regulation.  The vine variety names listed in Annex II, which the EC claims contain a 
geographical indication, may only appear on the labels of wine from countries identified in the 
Annex.  For instance, under the Regulation, the Un ited States is identified as being allowed to use 
several of the listed variety names, but not all.  Looking at another example, Brazil will apparently 
not be able to inform EC consumers if its wine is made from chardonnay grapes.  What is the 
rationale for prohibiting particular countries, but no t others, from informing consumers of the vine 
varieties used in a particular wine?  Why may so me countries’ wines be accurately labeled, but 
other countries may not?  How is this consistent with WTO obligations, including the principle of 
most-favored nation?  
Q43. Article 37 of the Regulation requires that only names of grape varieties promulgated by 
certain specified organizations may be used on the l abels of imported wines.  What is the legitimate 
objective served by limiting the variety names to  those listed by these organizations?  How may 
wineries exporting to the EC obtain the lists of vi ne varieties promulgated by these organizations?  
Is there any method for third countries to have vari ety names accepted in the EU market under the 
Regulation?  We note that the United States withd rew in June 2001 from one of the organizations, 
the International Office of Vine and Wine, due to concerns about its lack of impartiality and 
transparency. 
 
Q44. Preambular paragraph 14 states that cert ain requirements are imposed to ensure the 
Atraceability @ of wine sector products.  Could the EC clarify what these requirements are and what 
the objective of ensuring Atraceability @ is? 
 
Q45. Article 15, which relates to persons involved in the marketing, and Article 25, which relates 
to names of enterprises involved in commercial di stribution, apply in part to imported wines. These 
provisions appear to limit th e use of the name of an Aagricultural holding @ or an Aenterprise @ to 
the case where an imported wine bearing a geograp hical indication is made entirely from grapes 
harvested on that holding or enterprise, and th e wine-making process occurred entirely on that 
holding or enterprise. Would the EC please define the terms Aagricultural holding, @ and 
Aenterprise? @   
 
Q46. Article 44 appears to limit EC sparkling wine  imports to third country sparkling wines that 
are listed in Annex VIII of the Regulation.  It appears from Annex VIII that the only sparkling 
wines permitted to enter the EC are sparkling wi nes from Bulgaria, Hungary, South Africa, the 
United States, the former Soviet Union, and Roma nia that meet certain criteria specific to each 
country.  Further, it seems that a competent offici al body or, in the case of the United States, a 
producer approved by a competent offi cial body, must note on the EC =s import certification 
document that these criteria are met.  The criteria for U.S. sparkling wines are extremely unclear.  
Would the EC please explain the requirements that apply to U.S. sparkling wines exported to the 
EC?  Is a geographical indication or appellation of origin required to appear on the label?  Would 
the EC please clarify what exactly is to be certifie d for U.S. sparkling wines?  What is the objective 
of restricting imports of U.S. sparkling wines to those meeting these requirements?  What is the objective of the import certification requirement?  
 
Q47. Several articles of the Regulation relating to imports reference other articles that shall 
apply Amutatis mutandis @ to imported wine products.  In general, it is very difficult to understand 
precisely how the referenced articles will apply to impor ts.  Particularly unclear is the application WT/TPR/M/136/Add.1 
Page 151 
 
 
 of those provisions relating to EU Member States.  For instance, Article 34 indicates that Article 16 
on product types ( Adry, @ Asweet, @ etc.) shall apply mutatis mutandis to imports.  Will associated 
acidity and residual sugar requirements in individual EU Member States, which are permitted 
under Article 16, apply to U.S. products imported or sold in the individual EU Member States or in 
the EC as a whole?  The United States seeks clarific ation from the EC of the specific articles where 
this confusion arises. 
 
Q48. In many instances in the Regulation, EU Member States are specifically authorized to 
impose their own regulations that are in addition to or stricter than those in the Regulation, e.g., as 
provided in Article 28.  In some instance, but no t all, the Regulation states that the EC shall take 
steps to ensure that such measures are Apublicized. @  Can the EC confirm that all such measures 
will be notified, as appropriate, under the TBT Agreement? 
 
Answer to questions 24 to 48  
 
A: Commission Regulation (EC) No 753/2002 of 29 April 2002 was notified to WTO Members under G/TBT/N/EEC/15 on 10 June 2002. The Regul ation entered into force on 1 August 2003. 
Following comments from third countries in the cont ext of the TBT notification and two informal 
consultations held on 16.10.2002 and 16.7.2003, Regulation (EC) No 753/2002 was modified by 
Commission Regulation (EC) No 316/2004 with an entry into force on 15 March 2004.     
 The questions raised by the United States in the context of the trade policy review,  figure 
also in their comments dated 23 August 2003 to TB T to which the Commission replied during the 
above mentioned meetings  and during pending bila teral wine negotiations. 
 
Q49. Paragraph 73 of the Secretariat Report d escribes recent regulatory developments affecting 
the EC’s technical barriers to trade regime.   
A) Please comment on potential European Co mmission proposals to revise existing EC 
Directives on batteries and spray paints. B) What is the current status of these directives? C) What impact will revised directives have, if passed, on batteries and spray paint that are 
imported into the EC?  
A: PART I : with regard to spray paints
 
 (A) We assume that the 'recent regulatory devel opments' referred to in Question 49 is the 
Directive 2004/42/EC of the European Parliament and the Council on the limitation of emissions of 
volatile organic compunds due to the use of organic solvents in decorative paints and varnishes and 
refinishing products and amending Directive 1999/13/EC, O.J. L143/87.    (B) This Directive was adopted on of 21 April 2004 .  (C) The Directive covers two broad categor ies of products: (1) Decorative paints and 
varnishes  for the indoor and outdoor coating of buildings  and parts hereof (for a listing of the specific 
subcategories of products covered,  see Annex I.1.1 to the Directive) and (2) Vehicle Refinishing 
Products (for a listing of the specific subcategories of products covered, see Annex I.2.1 ) 
 Spray-paints (Decorative paints  and varnished in areosols)  are explictly exempt from the limit 
values established in Annex II (See Annex I.1), whereas Vehicle Refinishing Products in aerosols are 
covered by the Directive, (See Annex I.2.1 -subcate gory: (e)).  These latter products have to comply 
with a limit value of max 840 grammes per litre by 1 January 2007, (See Annex II.B.e.).  After the 
same date these products also have to carry a label,   when they are placed on the market in the EU, see 
Article 4. This label shall indicate "(a) the sub category of the product and the relevant VOC limit 
value in g/l as referred to in Annex II" and "(b) the maximum content of VOC in g/l of the product in 
a ready to use condition." WT/TPR/M/136/Add.1 
Page 152  
 
According to Article 9 of the Directive, the Commission is invited to present a report to the 
European Parliament and the Council by 2008 at the la test. This report shall - inter alia - examine "the 
broad scope and potential for making reductions in th e VOC content of products outside the scope of 
this Directive including aerosols for paints and va rnishes".  The report shall, if appropriate, be 
accompanied by proposals to amend the Directive. 
Conclusion:  Spray-paints 
(Decorative paints in aerosols) are not covered by Directive 
2004/42/EC.  
As of 31 December 2006 Vehicle Refinishing Products in aerosols shall, however, comply 
with the limit value of a maximum content of 840grammes of VOCs per litre of product and carry a label with the information indicated in Article 9 ( see above) if they are to be placed on the EU 
market."  This measure is applied in a non- discriminatory manner, both to EU and non-EU 
manufacturers.  PART II: with regard to batteries
 
 A) In November 2003, the Commission adopted  a Proposal for a new Battery Directive, 
revising the existing EU legislation on batteries.  This Proposal was accompanied by an Extended 
Impact Assessment (ExIA), which analysed the economic, social and environmental impacts of 
different policy options which could reach the objectives of the new Proposal.     This new Proposal applies to all batteries and accumulators placed on the Community market 
and establishes high collection and recycling requireme nts in order to guarantee a closed-loop system 
for all batteries.  
B) What is the current status of these directives?   
The Commission’s Proposal for a new Battery Di rective has been submitted to the European 
Parliament and the Council for adoption in Novemb er 2003. The European Parliament finalised the 
first reading in April 2004.  Currently, the Council is discussing the Proposal and intends to reach a common position in Spring next year.  It is expected  that this Proposal will be formally adopted by the 
end of 2005/beginning 2006 at the earliest.  After a doption, Member States nor mally have 1.5 years to 
transpose the obligations of this Directive into their national laws. 
C) What impact will revised directives have, if  passed, on batteries and spray paint that are 
imported into the EC? Batteries that are imported into the EU, will have to comply with the national laws transposing the 
requirements of the new Battery Directive.   
On the basis of the Commission’s Proposal, imported batteries should comply with the 
prohibition on the use of mercury and the labellin g requirements.  Both requirements already exist 
under the current EU legislation on batteries.  The Pr oposal no longer requires batteries to be removed 
from appliances, since appliances w ill in the future be collected on the basis of national collection 
schemes for electrical and electronic equipment (to be established on the basis of Directive 2002/96/EC on waste electrical and electronic equipment).  The Proposal introduces a producer 
responsibility scheme; by making producers and batte ry importers financially responsible for the 
treatment of waste batteries. 
However, this remains a Commission Pr oposal, still under discussion in the European 
Parliament and the Council.  It is therefore t oo early to say which final policy options will be 
established in this Directive.   
 
Q50. Paragraph 74 of the Secretariat Report  discusses the adoption of EC standards by new 
Member States.  A) Have all of the new Member States now adopted all of the EU’s Old Approach and New Approach Directives related to health, safety and environmental objectives?   
 
A: On the basis of the commitments undertak en during the accession negotiations, new Member 
States applied the entire acquis as of the first day of  accession (1 May 2004). The vast majority of the 
acquis was transposed and implemented in the new member states, except for a very small number of WT/TPR/M/136/Add.1 
Page 153 
 
 
 Community legislative texts. However, it should al so be noted that, according to the settled case law 
of the European Court of Justice, Community le gislation will prevail on na tional provisions, in cases 
where some countries have not yet transposed it . 
 
B) If not, what is the schedule for th eir adoption of these Directives?     
 
A: There is no “schedule” because the legislati on should have already been transposed. Those 
countries that have not transposed all legislation before accession are in the process of finalising the 
process immediately after accession. 
 
C) Please describe the transitional provisions that apply to Cyprus, Lithuania, Malta, Poland 
and Slovenia in the area of marketing medicinal products and medical devices. 
 
A: The following transitional arrangements were  agreed in the negotiations: the renewal of 
marketing authorisation for pharmaceuticals in Cyprus,32 Lithuania,33 Malta,34 Poland35 and 
Slovenia,36 and the licensing of medical devices37 in Poland. 
 As regards marketing authorisations, it was agr eed that marketing authorisations issued under 
national law prior to the date of accession would remain valid until they are renewed in compliance 
with the acquis , for a certain number of years. 
 The transitional provision in each of the Accessi on Treaties concerned contains an annex that 
lists the products covered by the derogation. 
 The same is true for medical devices. Produc ts manufactured in Poland in accordance with 
licenses granted before the day of accession (1 Ma y 2004) will remain valid until December 2005, 
even though not anymore in compliance with the legislation applicable in Poland after 1 May 2004 (the Medical Device Directive). 
 
Q51. The United States is concerned that the ha rmonization of regulatory requirements in EU 
accession countries described in paragraph 74 of  the Secretariat Report not result in unjustifiable 
discrimination or unnecessary obstacl es to international trade.   
A) Does the EU contemplate negotiating PECAs (Protocols to the Europe Agreements on 
Conformity Assessment and Acceptance of Industrial  Products) or similar types of agreements with 
Romania, Bulgaria, Croatia or any other third countries?   
B) If so, will non-EU origin products that have been tested to the same European 
requirements and demonstrated their conformity wi th the applicable EU technical regulations (e.g., 
carry a CE-mark from an approved lab) be able to  enter those countries without redundant testing?  
 
A: The EU is currently negotiating PECAs w ith Romania and Bulgaria. Several rounds of 
negotiations have already taken place and the ag reements will be initialled as soon as some minor 
outstanding issues have been finalised. It is expected  that the agreements will enter into force  well in 
advance of the accession of those c ountries (planned for January 2007). 
The EU also has plans to negotiate a PECA with Croatia. Similar agreements (called ACAA – Agreement on Conformity Assessment and Accepta nce of Industrial Produc ts) for neighbourhood 
countries may also be negotiated, provided that a general agreement exists (such as Association 
                                                     
 
32 Until 31 December 2005. 
33 Until 1 January 2007. 
34 Until 31 December 2006. 
35 Until 31 December 2008. 
36 Until 31 December 2007. 
37 Until 31 December 2005. WT/TPR/M/136/Add.1 
Page 154  
 
Agreements with Mediterranean countries, or Part nership and Cooperation Agreements with Eastern 
Europe countries, or a Stabilisation and Associa tion Agreement with western Balkans countries). 
However, this is a medium stage goal, as sev eral pre-conditions must be fulfilled before 
negotiations start (transposition of  the relevant horizontal and sect oral legislation by the country 
concerned, assessment of the quality infrastructure, etc.). 
 As regards part B of the question, it should be noted that the new PECAs and ACAAs that the 
EU is negotiating or will negotiate, will not contain a cl ause of origin, contrary to previous practice.  
However, PECAs contain a standard clause stating that “ the Agreements on conformity assessment 
concluded by either Party with a country which is not a Party to this Agreement shall not entail an 
obligation upon the other Party to accept the results of conformity assessment procedures carried out 
in that third country, unless there is an explic it agreement between the Parties in the Joint 
Committee ”. This means that the EU cannot force the ot her parties to the PECAs  to accept the results 
of conformity assessment procedures carried out by  third party laboratories established in third 
countries, even though the EU has a separate agr eement, as for instance an MRA, with such third 
countries. 
 
Measures Directly Affecting Imports – Sanitary and Phytosanitary Measures
 
 Q52. Referring to paragraph 78 of the Secret ariat Report, why is the EU resisting the 
development of a CODEX food standard for sardines that would expand the scope of species covered, and thus provide significant commercial benefits to developing countries in South 
America and Africa?  
A: The EU is of the opinion that the methodology detailed in the CODEX Standard for Canned Sardines and Sardine-Type Products is inappropr iate as it has allowed fishes such as Sprats, 
Anchovies and Herrings to be sold as sardines when they are canned whereas they are sold under their 
own names when salted. The EU thinks that this approach is totally misleading for consumers. The 
EU would therefore favour the revision of the criteri a to include fish species in the list of species 
allowed to be sold as sardines and a revision of th e existing list prior to the possible inclusion of 
Clupea bentincki.  
 
Q53. International Standard for Phytosan itary Measure # 15 (ISPM 15), Guidelines for 
Regulating Wood Packaging Material  (WPM) in International Trade was developed under the 
auspices of the International Plant Protection Convention.    A) Why is the EC seeking to modify or add additional requirements to the international standard for importing WPM? 
 
A: The measures are in line with the Standard No 15 on wood packaging as point 3.3 of the standard allows that "subject to technical justifi cation, countries may require  that imported wood 
packaging material  subjected to an approved m easure be made from debarked wood and display a 
mark." 
 
B) As required under the WTO SPS Agreement, what is the technical justification for the EC’s 
deviation from an international standard?  
 
A: To ensure protection against future infest ation or re-infestation once treatment has been 
completed. 
 
Q54. With reference to paragraph 85 of the Secretariat Report, please describe the status of EU 
Member State implementation of EC Regulation 1830/2003 on traceab ility and labeling of 
biotechnology products. WT/TPR/M/136/Add.1 
Page 155 
 
 
 A: Regulation (EC) No 1830/2003 on labelling an d traceability of GMOs and traceability of food 
and feed products produced from GMOs requires, unde r its Article 12, that the Commission forward a 
report on its implementation to the European Parlia ment and to the Council by 18 October 2005. The 
requirements for labelling and traceability of GM pr oducts under this Regula tion are founded on the 
transmission and retention of information at each stage of their placing on the market.  Inspection and 
control measures are, therefore, required to ensure that these requirements can be and are being met.  
It is Member States that are responsible for ensuring that inspection and control measures are 
carried out to ensure compliance with the Regulati on. Member States should, therefore, gain first-
hand experience in terms of both the implementation a nd enforcement of the Regulation. It is foreseen 
that the Commission will request information from Member States as to this experience to be 
accounted for in the above report. In addition, cont act has and will continue to be made with the 
relevant industries as to their experience with im plementing the Regulation and again this information 
will be included in the report. Such information should allow the Commission to gain a clear insight 
as to the operability and eff ectiveness of the Regulation 
 Q55. Also referring to paragraph 85, the EU's Standing Committee on the Food Chain and Animal Health determined on September 24 to ex clude products made from genetically modified 
micro-organisms (GMMs) from the scope of the EU's new labeling regulations (Regulation EC 
1829/2003) for biotech products when no traces of the modified DNA are present in the final product.  Products produced from GM plants will still have to be labelled.  Please explain why GM products produced from GMMs are different in na ture than those produced from GM plants.   
 
A: The Regulation on GM food and feed covers all food and feed produced from a GMO. This 
means that it covers food and feed produced from a genetically modified plant as well as from a 
genetically modified micro-organism. Thus, if bact erial biomass is used in food and feed, this is 
clearly covered by the legislation. This is in line with whereas  16 of the Regulation, which states that 
the determining criterion is that the food or feed has been derived from a genetically modified source 
material. 
This is valid for both plants and micro-organi sms, the the application of these provisions is 
therefore coherent vis-à-vis our trade partners.  However, some GMMs are kept under cont ained conditions, where they serve for the 
production of feed and food, wit hout themselves being placed on the market. They do not constitute 
the source material of the food and feed, but onl y intervene as a processing aid during the production 
process by converting a substrate (source  material) into a reaction product. 
 It is only this food and feed where the GMM has merely intervened as a processing aid during 
the production process, where it has been kept under  contained conditions and is not present in the 
final food, that is exempted from the provisions of the Regulation. 
These two different scenarios should be clearly differentiated 
 
Q56. Referring to Paragraph 86 of the Secretariat Report, describe the measures that the EU is 
taking to comply with the WTO ruling on beef hormones.  
 
A: The Commission carried out a complement ary risk assessment, in accordance with the 
requirements of the Agreement on the applicati on of sanitary and phytosanitary measures as 
interpreted by the appellate body in the Hormon es case, of the six hormonal substances (oestradiol 
17β, testosterone, progesterone, trenbolone acetate, zeranol and melengestrol acetate) whose 
administration for animal growth promotion purposes is prohibited by Directive 96/22/EC.  Following 
completion of  the said risk assessment the EU adopted Directive 2003/74/EC of 22 September 2003 
amending Council Directive 96/22/EC concerning th e prohibition on the use in stockfarming of 
certain substances having a hormonal or th yrostatic action and of beta-agonists. 
 WT/TPR/M/136/Add.1 
Page 156  
 
Q57. With respect to Paragraph 90 of the Secretar iat Report, please provide a brief description of 
the procedures and decision-making factors und er which certain of the 10 recently acceded 
Member States of the EU have been granted tempor ary derogations from community requirements 
in the area of food safety.  
A) Please describe in detail the transitional periods that new Member States have been given 
to upgrade food-processing plants.   
 
A: Some food establishments (processing plants , dairies and abattoirs) will need some 
transitional time to finish upgrading their standards. During that time, their products will only be sold 
on the domestic market of the new Member States c oncerned. These products will not be eligible to 
be sold in other Member States and will be  labelled and marked to prevent this.  
 These establishments all comply with EU hygien e. They need further time to fully comply 
with structural EU requirements.  In all (Treaty and Decisions of Apr il 2004), 995 (around 1000) food processing 
establishments have been granted transition periods , roughly representing 8% of the total number (12 
000) of food processing establishments in these countries.  
 
B) Are third countries being provided national treatment?   
 
A: No this concerns intracommunity trade rules and therefore this is not applicable to third 
countries 
 
C) Are third countries also allowed a trans ition period during which they can meet the 
national (for instance, Polish) meat processing re quirements and ship for export only to that 
market?  
A: No this concerns intracommunity trade rules and therefore this is not applicable to third 
countries 
 
D) Please describe the other transitional arrang ements for new Member States that relate to 
the quality requirements for seeds, animal nutritio n, plant protection, and marketing of forest 
reproductive material.   
 A: Seeds : several new member states received a trans ition period during which varieties of plant 
species that were not registered nationally accordin g to EU requirements can still be marketed on the 
national market only pending completion of the fulfil ment of all EU requirements. This is necessary 
to avoid that some varieties be lost: without the TP these varieties can't be marketed and therefore 
maintained. 
Animal nutrition : there was a TP mentioned for the C zech Republic for the use of animal 
feedingstuff based on Candida utilis but it was conditional to the provision by the Czech Republic of 
a dossier.  This was not provided and  consequently no TP was granted. 
Plant protection products : Producers of active substances for plant protection products must 
be able to demonstrate that they have access to  extensive information concerning these substances. 
Transition periods have granted for the provision of the required information  for a very limited 
number of active substances contained in products marketed on the national market only and only to 
companies that started the acquisition of  the required data before 01.01.2003. 
Marketing of forest reproductive material : Production of seeds (notably) of forest species 
is very variable from 1 year to another while pl anting is a yearly exercise. Stocks are therefore 
necessary to have stocks to face possible shortage. Poland has been granted a TP allowing the use of 
stocks of seeds accumulated before accession not meeti ng all provisions of the relevant EU Directive  
 WT/TPR/M/136/Add.1 
Page 157 
 
 
 E) Which new Member States benefit from these transitions and how do the transitions 
last? 
 
A: Seeds:  All new Member States have a transitional period granted from 3 to 5 years. 
 Animal nutrition: As the Czech Republic has not provided the dossier, no transitional period 
has been granted. 
 Plant protection products:  Poland until 31/12/2006 
 Marketing of forest reproductive material:  Poland until exhaustion of stocks. 
 
Measures Directly Affecting Imports – Government Procurement  
 
Q58. Paragraph 93 of the Secretariat Report states “contracting authorities may not reject 
tenders with technical solutions equivalent to the specifications they have defined.”   
  A) Does this mean that a contracting authority may award a contract to a supplier that does 
not meet the tender specifications set ou t in the notice and tender documentation? 
 
A: The idea referred to paragraph 93 is that tec hnical specifications (either defined in terms of 
performance or in terms of design or descrip tive characteristics) always contain the essential 
requirements against which other innovative solutions proposed by suppliers can be measured. Under 
Community law, a contracting authority is obliged to consider tenders whic h do not comply with the 
detailed provisions of the technical specifications but do demonstrably meet the essential 
requirements of the technical specifications and ar e fit for the purpose inte nded. The EC considers 
that this approach facilitates competition betw een tenderers and the pr esentation of innovative 
solutions 
 
B) If so, how does the EC ensure the fa ir treatment of all suppliers?   
A: Tenderers, who comply with the provisions of  the technical specifications in question, only 
have to provide the proof of such compliance. On the other hand, tenderers who wish to submit 
equivalent solutions must demonstrate that their tenders meet the essential requirements of the technical specifications in question and are fit for the purpose intended  C) What is considered an equivalent solution?   
 
A: Please see above 
 
D) Please describe the extent of the discretion of  a contracting authority to determine what it 
considers equivalent.    
A: As explained above, tenderers who wish to submit equivalent solutions bear the burden of 
proof and must demonstrate that their tenders meet the essential requirements of the technical specifications in question. Under Community law,  any decision of a contracting authority accepting 
the equivalent solution or rejecting it must be justified by the contracting authority 
 E) Are there any limitations on such discretion of a contracting authority? 
 
A: The above mentioned decision by a contracting authority to accept or reject a proposed equivalent solution can be challenged by any partic ipating supplier before th e relevant review body 
(either judicial or administrative) 
 WT/TPR/M/136/Add.1 
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Q59. Regarding Paragraph 93 of the Secretariat Re port, for each of the following procedures, 
please describe the procedure, the conditions under which it may be used by contracting 
authorities, and percentage of total contracts for wh ich it is used: 1) open procedures; 2) restricted 
procedures; and 3) negotiated procedures.   
A: ‘Open procedures’ are those procedures in  which any interested economic operator may 
submit a tender. ‘Restricted procedures’ are tho se procedures in which any economic operator may 
request to participate and whereby only those economic  operators invited by the contracting authority 
may submit a tender. ‘Negotiated procedures’ are those procedures whereby the contracting 
authorities consult the economic operators of their c hoice and negotiate the terms of contract with one 
or more of these.  
 Contracting authorities are free to award their contract by open procedure or by restricted procedure. Use of the negotiated procedure is only po ssible in the cases listed in Article 6 of Council 
Directive 93/36/EEC coordinating procedures for th e award of public supply contracts (Official 
Journal of the European Communities L 199 of 9. 8.1993, p. 1), Article 7 of Council Directive 
93/37/EEC concerning the coordination of procedur es for the award of public works contracts 
(Official Journal of the European Communities L 199 of 8.8.1993, p. 54) and Article 11 of Council Directive 92/50/EEC relating to the coordination of procedures for the award of public service 
contracts (Official Journal of the European Communities L 209 of 24.7.1992, p. 1). Contracting entities in the utilities sectors covered by Council Di rective 93/38/EEC coordinating the procurement 
of entities operating in the water, energy, transpor t and telecommunications sectors (Official Journal 
of the European Communities L 199 of 9.8.1993, p. 84) are free to choose the open procedure, the 
restricted procedure or the negotiated procedure. 
The open procedure, the restricted procedur e and the negotiated procedure correspond with, 
respectively, the open tendering procedure, the selective tendering procedure and the limited 
tendering procedure referred to in Article VII of  the WTO Agreement on Government Procurement. 
The Commission services are preparing the annual statistical reports for 1996 to 2001 of the 
EC for submission before the end of the year. Th ese reports will include data on the use of these 
procedures  
Q60. Regarding Paragraph 94 of the Secretariat Report, please provide information as to the 
number of challenges of contract awards where: 1) the award procedure was suspended; 2) the 
award decision was cancelled; 3) discriminato ry specifications were removed; 4) damages were 
awarded to the aggrieved tenderer; and 5) the actio ns of the contracting authority were upheld.  
Where the Commission has taken actions to correct  alleged infringements by Member States, 
please provide details of such actions, including the number of such actions.  
A: The Commission services estimate that the total number of national review procedures 
relating to the award of public contracts was 2715 in  2002. In the same year, the Commission handled 
403 complaints. At the moment, the Commission do not have accurate information as the number of national review procedures were the award pro cedure was suspended, the award decision was 
cancelled, discriminatory specifications were remove d, damages were awarded or the actions of the 
contracting authority were upheld.  
The Commission services are preparing two Comm ission proposals to modernise the public 
procurement remedies directives (Council Directive 89/665/EEC of 21 December 1989 on the coordination of the laws, regulations and administ rative provisions relating to the application of 
review procedures to the award of public supply and public works contracts, Official Journal of the 
European Communities L 395 of 30.12.1989, p. 33, and Council Directive 92/13/EEC of 25 February 
1992 coordinating the laws, regulations and administ rative provisions relating to the application of 
Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors, Official Journal of  the European Communities L 76 of 23.3.1992, p. WT/TPR/M/136/Add.1 
Page 159 
 
 
 14). In this context, the Commission is currently ga thering information about the application of the 
remedies directive.  
Q61. Regarding Paragraph 97 of the Secretariat Report, please provide an explanation for the 
“growing gap between the number of invitations an d contract award notices published”.  Does the 
gap indicate that procurements are not being co mpleted or that contracting authorities are not 
reporting the results? What measures is the EC taking to ensure that the results of procurement competition are published. 
 
A: The growing gap between the number of i nvitations and contract award notices published 
does not mean that the situation is deteriorating but that it has not yet improved. The ratio of 
invitations to tender and contract award notices h as remained stable, although the numbers of both 
continue to grow. This gap certainly reflects some  procurements that are not completed, but also 
certainly considerable underreporting. The EC has frequently reminded Member States of the 
obligations to report contracts awarded and is taking  practical measures to ensure that an electronic 
system of standard forms is available which can  require contracting authorities to respect their 
obligations and thus greatly reduce the gap  
Q62. Please describe the specific measures that the EC is taking to “simplify, modernize and 
make more flexible” its public procurement regime.   
 A: On 31 March 2004, the “legislative package” th at consolidates, simplifies and modernizes the 
current EU public procurement rules was adopted. The legislative package consists of Directive 
2004/17/EC of the European Parliament and of  the Council of 31 March 2004 coordinating the 
procurement procedures of entities operating in the wa ter, energy, transport and postal services sectors 
(OJ L 134 of 30.04.2004, p. 1) and Directive 2004/18/EC of the European Parliament and of the 
Council of 31 March 2004 on the coordination of proce dures for the award of public works contracts, 
public supply contracts and public service contracts (OJ L 134 of 30.04.2004, p. 114). The EU Member States are required to implement these direc tives into national law by 31 January 2006 at the 
latest.  In addition to this, the EC is taking various  measures to improve its public procurement 
regime. A general description of the policy objectives in the field of public procurement can be found 
in the Internal Market Strategy 2003-2006 (doc ument COM(2003) 238 final of 7.5.2003; ). The 
Commission regularly reports on the implementation of  the Internal Market Strategy (cf. the Report 
on the implementation of Internal Market Stra tegy (2003-2006) (COM(2004) 22 final of 21.1.2004). 
Recent actions include: 
• On 30 April 2004, the Commission presented a green paper on public-pri vate partnerships 
and Community law on public contracts and concessions . The aim of this paper is to launch a debate 
on the application of Community law on public contracts and concessions to the public-private 
partnership phenomenon. 
• On 23 September 2004, the Commission adopted  a green paper on defence procurement 
(COM(2004)608 final) to develop a debate on the gr adual creation of a European defence equipment 
market.   Work on the other procurement-related topics in cluded in the Internal Market Strategy, such 
as the review of the procurement remedies directiv es and the action plan on e-procurement, is in 
progress.  
Measures Affecting Production and Trade – State-Owned Enterprises
 
 Q63. Paragraph 113 of the Secretariat Report re ports that only two State Trading Enterprises 
operate in the EC. WT/TPR/M/136/Add.1 
Page 160  
 
A) What reports do the EC authorities require SOEs to file to validate their operating on a 
commercial basis? B) If reports are filed, are they available to the public and other WTO members?  Are the reports reviewed by independent auditors who publish their findings?  
Q64. The Secretariat Report did not include information on the extent of State Ownership in the 
European Communities, including in the ten new Members.  A) Please provide a list of State-Owned or  partially State-Owned Enterprises under EC 
jurisdictions, including those op erating in the ten new Members. 
B) Please describe the regulatory regimes that insure that State-Owned Enterprises operate on 
a commercial basis per WTO requirements. 
 
A: Combined Qs 63 and 64
: 
 As a preliminary remark, questions 63 and 64 contain two different terms, “state-trading 
enterprises”, which is a WTO term of art, and “stat e-owned enterprises” which is not a term used in 
either EU law or WTO rules. The questions actually asked under 63 A) and B) and 64 A) and B) use the term “state-owned enterprises” only, and not the term “state-trading enterprises” and thus are 
presumed not to relate to state-trading enterpri ses in the meaning of GATT 1994 article XVIII. This 
reply therefore does not deal with how the EU applies WTO rules on state-trading enterprises. 
The EU would emphasise that the EC Treaty (article 295) assures absolute neutrality as 
regards property ownership. Therefore it is not possibl e for EU rules or rules in the Member States to 
discriminate or apply differently as regards pub licly-owned or privately-owned enterprises. 
 The EC Treaty uses the term “public undertaking”  in several places, in particular article 86, 
which reads: “ In the case of public undertakings and un dertakings to which Member States grant 
special or exclusive rights, Member States shall neither enact nor maintain in force any measure 
contrary to the rules contained in this Treaty …”. That article confirms that Member States cannot 
grant to public undertakings derogations from the rules contained in the Treaty, for example on competition. 
However, in order to ensure that public unde rtakings comply with the Treaty rules, in 
particular with regard to possible public aid which such undertakings might be able to obtain, specific 
additional rules have been adopted:  
• Firstly, Directive 80/723 of 25 June 1980 on th e transparency of financial relations between 
Member States and public undertakings, which requi res Member States to provide information on 
financial assistance granted to public undertaki ngs. The Directive was amended in July 2000 by 
Directive 2000/52 specifying the nature of the fina ncial and other information which Member States 
must pass on concerning activities of public undertakings.  
• The Commission also amended the 1980 directive in 1993 and 2000 to include explicitly the 
requirement for Member States to submit the a nnual reports of all public  undertakings in the 
manufacturing sector with a turnover of more than €250 million.  The EU can further clarify that, since “state-owned enterprise” is not a term used or defined in its legislation, there are no specific rules in appl ication to such enterprises, and no list of such 
enterprises. There are no doubt many hundreds or even  thousands of enterprises in the EU which have 
either a minority or a majority shareholding by one or more Member States. 
 
Measures Affecting Production and Trade – Competition Policy and Regulatory Issues – Anti-
Trust  
 
Q65. The Secretariat Report does not address the i ssue of price controls maintained by EU 
Member States.  American Companies have repor ted that a number of EC Members maintain 
maximum price control measures that affect the importation and sale of pharmaceuticals.  For WT/TPR/M/136/Add.1 
Page 161 
 
 
 example, Germany has established "jumbo groups" th at use the prices of older, generic products as 
the reference to set the price of innovative patented pharmaceuticals.   A) With respect to price controls on pharmaceu ticals, what steps do the Communities and the 
Member States take to avoid to the fullest practicable extent effects prejudicial to the interests of the 
United States, which is a principal global sou rce of innovative pharmaceuticals, and other 
members supplying imported pharmaceuticals, within  the meaning of paragraph 9 of Article III of 
the GATT 1994?   
 
A: Pricing is a full responsibility of the indivi dual member states within the European Union. 
Whereas some member states (E.g. U.K.) do not apply any pricing restriction, other member states 
(e.g. Germany) do implement restrictions. These rest rictions are driven by (1) the fact that those 
member states are the prime financer/purchaser of  medicines and (2) the concern to ensure an 
affordable price for every patient. 
Most member states rely on the concept of ‘the rapeutic added value’ to set the levels of 
pricing (and reimbursements) for ne w drugs. Within this concept the medical and economical value of 
new drugs are compared to existing drugs or treatments. It is worthwhile mentioning that the European Commi ssion is at this point, driving an effort to ensure 
that all pricing, and related reim bursement, regulations within the me mber states are transparent and 
compliant to European Transparency  directive (Directive 89/105/EC). 
 
B) Please identify all price control meas ures in effect in EU Member States. 
 
A: We can at this point not provide you with a list of all price control measures applied. Pricing 
and reimbursement regulations in all EU member st ates are continuously adapted. For this reason, a 
stock-taking effort is at this moment ongoing, wi thin the context of the European Transparency 
Directive (Directive 89/105/EC). Results for publica tion will only be available after discussion at the 
European level, within th e Transparency Committee.  
 
Measures Affecting Production and Trade – Competition Policy and Regulatory Issues – State Aid
 
 Q66. With respect to the Paragraphs 126 and 127 of  the Secretariat Report, what is the current 
amount of state aid awarded to ship building in the EU?  
A: Information on State Aids granted (in all sectors) is published the Commission in the State Aids Scoreboard, which is available on the DG Co mpetition part of the Europa web site, updated 
twice a year
38. All individual Commission decisions on shipbuilding aids notified to it are also 
available on the same web site39. No more detailed breakdown is available than that which is 
published on that site.  
Q67. Please also explain how the EU defines “s mall and medium sized firms” when determining 
which firms will receive state aid for hori zontal objectives in targeted sectors. 
 A: As a preliminary remark, the EU does not it self determine which firms will receive State Aid 
for horizontal objectives in target sectors; only Memb er States decide whether or not to grant State 
Aid. The EU rules on State Aids only lay down when  Member States may grant State aids but in no 
circumstances oblige them to do so.  
                                                     
 
38 http://europa.eu.int/comm/competition/state_aid/scoreboard/ 
39 http://europa.eu.int/comm/competition/state_aid/register/ii/by_sector_shipbuilding.html WT/TPR/M/136/Add.1 
Page 162  
 
Commission Regulation (EC) No 70/2001 of 12 January 2001 on the application of Articles 
87 and 88 of the EC Treaty to State aid to sm all and medium-sized enterprises determines under 
which circumstances State Aid to SMEs can be consid ered compatible with the State Aid rules. This 
regulation is available on the compe tition part of the Europa web site
40. It should be noted that the 
definition of SMEs used for the purposes of this regulation will change as of 1 January 2005. The 
existing and the new definition are too long to quote in fu ll in this reply, but both can be found also on 
the competition part of the Europa web site41. 
 
Measures Affecting Production and Trade – Intellectual Property Rights Protection  
 
Q68. The Secretariat Report and the Government Report provided a brief overview of recent 
efforts to strengthen the protection of intellectua l property rights.  Paragraph 131 of the Secretariat 
Report states that the Commission is giving prio rity to the enforcement of intellectual property 
rights in the Member States.  As you are aware,  the United States has concerns about the protection 
of IPR in several Members.   
 
A) Please explain how the Commission seeks to strengthen the protection of these rights in the Community. 
 
A: In January 2004, the Commission presented a proposal for a Directive on the enforcement of 
IP rights. On 29 April 2004, the European Parliament and the Council adopted the proposal as 
Directive 2004/48/EC. The aim of the Directive is to  harmonise the national laws in order to require 
the Member States to apply effective measures, procedures and remedies against those engaged in counterfeiting and piracy. It is based on “best practice” found in at least one Member State, and follows a “TRIPS plus” approach since the TRI PS Agreement provides for the minimum provisions 
on enforcement already applied in the Member States.  
 The Directive sets out, for instance, a number of obligations which are of importance for 
establishing the infringement of an IP right such as provisions on evidence and the protection of evidence. The Directive also incl udes a right of information allowing judges to order certain persons 
to reveal names and addresses of those involved in  distribution the illegal goods or services, along 
with details of the quantities and prices involved. Fu rthermore, right holders may order the seizure of 
goods suspected of infringing an IP right so as to prevent their movement within the channels of 
commerce. Other available remedies include the destruction, recall or permanent removal from the 
market of illegal goods. The Directive sets out the pr inciples that the infringer pays the right holder 
damages appropriate to the actual prejudice suffe red as a result of the infringement, and that 
reasonable and appropriate legal costs should be paid  by the unsuccessful party in court litigation. It 
also signals to MS measures such as the publication of judicial decisions and the development of 
professional codes of conduct. MS will have to  appoint national correspondents to cooperate and 
exchange information with other MS and the COM. Member States will have two years to implement the Directive (at the latest 30 April 2006).  The Commission is currently examining the po ssibility of proposing harmonisation measures 
providing for criminal sanctions on IP infringements 
 
B) In particular, please describe any measures that the EC is taking generally to stem the flow 
of cross-border trade in pirated and counterfeit goods  from third countries, particularly Russia and 
Ukraine.    
 
A: Both Partnership and Cooperation Agreemen ts (PCAs) with Russia and Ukraine include 
provisions on Intellectual Property Rights. Amongst other the PCAs provide for special measures to 
                                                     
 
40 http://europa.eu.int/comm/competition/state_aid/legislation/aid3.html#CA 
41 http://europa.eu.int/comm/competition/state_aid/legislation/aid3.html#sme WT/TPR/M/136/Add.1 
Page 163 
 
 
 be taken by these countries for ratifying relevant international conventions and special mechanisms 
for urgent consultations if problems in the area of intellectual, industrial and commercial property 
affecting trading conditions were to occur.  Within the framework of the New Neighbour hood Policy, actions plans were drafted for 
certain countries including Ukraine providing for,  amongst other: enforcement of TRIPS compliant 
legislation, enforcement of legislation on trade marks and geographical indi cations, harmonisation of 
legislation to EU legislation in the sphere of intellectual and industrial property rights protection, 
effective implementation of sanctions for infringeme nts of intellectual and industrial property rights, 
establishment and effective functioning of the necessary associations of rights holders and establishment of a dialogue with them and the user s of IP, strengthening of enforcement authorities 
(administrative and judicial) and proper access to judicial review. 
 Objectives mentioned in the action plans should be supported by specific assistance programmes.  It should also be mentioned that in order to  sensitize countries like Ukraine and Russia to the 
issue of protection of Intellectual Property Right s, it was proposed to provide assistance to these 
countries for customs control in this field under th e TACIS programme. Russia was invited to attend a 
seminar in Brussels 27 - 29 October 2003. The even t  brought together customs officials from the 
European Community and other major trading countries, as well as certain right holders, in order to exchange practical information and techni ques for combating this growing traffic. 
 
C) More specifically, please describe any meas ures that the EC, in cooperation with new 
Member States such as Poland and the Baltics, is t aking to prevent the entry into the EU internal 
market of pirated optical disk media.  
 
A: In addition to the Community acquis, which every new Member State is implementing from 1 May 2004 on, including the new regulation to combat counterfeiting and piracy th at entered into force 
1 July 2004, special programmes are developed by the European Commission to ensure that best 
practises are share throughout the 25 Member St ates. One of these programmes called customs 2007 
proposes several actions on Intellectual Property Rights in general and if necessary on some specific issues of concern within this framework.  The aim of the programme is not only to share best practises but also to address specific problems encountered in the field, as well as to  introduce improved control methods. Both Member 
States and Candidate Countries have the opportunity to participate to actions undertaken within the 
framework of this programme.  Special attention was and is still paid to the issue of Intellectual Property Rights and to improvement of the application of existing cont rols at every point of the customs territory. 
 Q69. Paragraph 7 of the Government Report states that one of the positive benefits of enlargement is that “investors and exports will al so benefit from the adoption of higher regulatory 
standards, notably in the protection of intellectua l property rights.”  Please provide details about 
the specific requirements that new Member States ha ve adopted or are still required to adopt related 
to intellectual property rights protection as part  of the enlargement process and adoption of the 
acquis communautaire.   
 
A: The fifteen new Member States also have to  respect the deadlines for the transposition of 
Directive 2004/48/EC in their national legal or der. See on this Directive Question 69 A). 
 WT/TPR/M/136/Add.1 
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Measures Affecting Production and Trade – Intellectual Property Rights – Patents 
 
 Q70. Referring to paragraphs 137-141 of the Secret ariat Report, what is the status of the 
Community Patent legislation?  
A: The Community patent Regulation was close to finalisation in November 2003 on the basis of 
a Presidency proposal which was based on the Co uncil common political approach of March 2003. 
However, as of May 2004 four states could not ag ree on two issues relating to translations:  the  
deadline for filing of translations of the claims of  the granted patent, and the extent to which third 
parties could rely on inaccuracies in those translations 
 
Q71. We understand that the European Union is developing a proposal regarding the disclosure 
of source or origin of genetic resources in paten t applications.  What are the details of this 
proposal?  Would the disclosure requirement be ma ndatory?  Would it be tied to patent validity? 
 A: The European Union has always supported ongoing work on the development of an 
international regulatory system on the disclosure of s ource of genetic resources in patent applications. 
Last March, at the Sixth Session of the Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folk lore, the EC and its Member States committed 
themselves to present a concrete, balanced and effectiv e proposal for the introduction of a system that 
would allow Member States to keep track, at global leve l, of patent applications  with regard to genetic 
resources. Details of the EU proposal are currently being discussed. However, the main principles will 
be that the disclosure in patent applications of th e country of origin of genetic resources should be a 
mandatory requirement (not an option), and the di sclosure requirement should apply to all national, 
regional and internationa l patent applications. 
 Q72. What steps is the European Union taking regarding the implementation by Member States of EU Directive 98/44/EC on Legal Protection of Biotechnology Inventions? 
 
A: The deadline for implementation of Directive 98/44/EC was 30 July 2000.  In the absence of 
communication of any implementing measures, and following contacts with the national authorities concerned, the European Commission decided in Ju ly 2003 to refer eight EU Member States to the 
European Court of Justice (Germany, Austria, Belg ium, France, Italy, Luxembourg, the Netherlands 
and Sweden).  The Court ruled against France in a decision of 1 July 2004 and against Luxembourg and Belgium on 9 September 2004.  France has now communicated measures implementing Articles 5 and 6 of the Directive, and Sweden has also comm unicated its national implementing measures to the 
Commission 
 
Measures Affecting Production and Trade – In tellectual Property Rights – Geographical 
Indications  
 Q73. With reference to paragraphs 142-144 of the S ecretariat Report, we note that Article 12 of 
Council Regulation (EEC) No. 2081/92, 14 July 1992 (concerning geographical indications for 
agricultural products and foodstuffs) appears to require, as a condition for protecting GIs of 
another WTO member, that the WTO member con cerned offer equivalent GI protection to EC 
products.  Could the EC explain how requiring that WTO members offer reciprocal GI protection to EC agricultural products before the EC will prot ect GIs from that WTO member is consistent 
with the national treatment obligation under the TRIPS Agreement (which requires that all 
nationals of WTO members receive as favorable t reatment as EC nationals with respect to the 
protection of GIs)?   WT/TPR/M/136/Add.1 
Page 165 
 
 
 A: No. This question is based on a misunders tanding of Regulation 2081/92. Article 12(1) of 
Regulation 2081/92 provides that it applies “without  prejudice to internatio nal agreements”. Such 
international agreements include the WTO Agre ements. WTO Members are obliged to provide 
protection to geographical indications in accordan ce with Section 3 of Part II and the general 
provisions and basic principles of the TRIPS Agreement. For this reason, Article 12 (1) 
(“equivalence”) and (3) (“reciprocity”) of Re gulation 2081/92 do not apply to WTO Members. 
Accordingly, the registration of a geographical indicati on relating to an area located in the territory of 
another WTO Member does not require that the Commission examines whether the conditions set out 
in Article 12 (1) of the Regulation are fulfilled. Ra ther, the procedure for the registration of third 
country geographical indications can  be immediately applied. For th is purpose, the Regulation lays 
down rules relating to the registration of geogr aphical indications from outside the European 
Communities which closely parallel the provisions app licable to geographical indications from inside 
the European Communities.  The purpose of these specific rules, some of which were recently 
introduced by Regulation No. 692/2003, is to f acilitate the registration of non-EC geographical 
indications while at the same time ensuring that geographical indications from outside the European 
Communities corresponded to the definition of a geogra phical indication. In other words, the EC GI 
register is open to geographical indications from other WTO Members, and the registration of such 
geographical indications may take place on the sa me substantive conditions which apply to the 
registration of geographical indications from EC member States.  
Q74. That same Article 12 also appears to require,  as a precondition to protecting GIs, that the 
WTO Member concerned offer guarantees equivalent  to those in the EC Regulation, and have 
inspection procedures and a right of objection equivalent to those in the EC Regulation. 
Recognizing that different WTO members have adopted different ways of protecting GIs, could the EC explain how requiring that other WTO members  have an equivalent system to the EC’s system 
is consistent with the national treatmen t obligations of the TRIPS Agreement?  
 
A: See reply to question 73.    
Q75. Article 14 of Council Regulation ( EEC) No. 2081/92, 14 July 1992 (concerning 
geographical indications for agricultural products and foodstuffs) appears to provide that, in most 
cases, pre-existing trademarks have to co-exist w ith similar GIs, even if there is a likelihood of 
confusion between the two:  only
 certain well-known trademarks (those with sufficient reputation, 
renown and history of use) will be able to stop the reg istration of a GI.  How is this consistent with 
the TRIPS Agreement requirement to provide owners of all registered trademarks the ability to 
prevent the use of similar signs that result in a likelihood of confusion?  
 A: No. Article 14 (3) of Regulation 2081/92 prev ents the registration of geographical indications 
that would result in a likelihood of confusion with an earlier trademark.  The question suggests that 
this provision would exclude the registration of a geographical indication only where the trademark 
has been used for a long time  and has a considerable  reputation or renown, but neither of those two 
qualifications is provided in Article 14(3).  More over, the criteria listed in Article 14(3) are not 
limitative. The registering authority may take into  account also other relevant criteria in order to 
assess whether the registration of the geographical i ndication will result in a likelihood of confusion, 
such as the degree of similarity between the signs  or between the goods concerned.  Nevertheless, 
given that geographical names are primarily non-dist inctive as trademarks, the two criteria specified 
in Article 14(3) will often be of pa rticular relevance in practice. It is for that reason, and not because 
they are the only relevant criteria, that the regist ering authorities are directed expressly to consider 
those two criteria. 
 WT/TPR/M/136/Add.1 
Page 166  
 
Q76. Approximately how many GIs have b een registered under Regulation 2081/92?   
 
A: There are approximately 670 GIs registered in the EC. 
 
A) Of these how many registered GIs rela ted to territories outside the EC?   
 
A: None. The EC never received any applications  for registration of GIs related to territories 
outside the EC 
 
B) Of the registrations applied for or grante d, how many were submitted by nationals of 
countries other than EU Member States? 
 
A: All applications submitted to the Commission fo r registration of geographical indications to 
date have related to territories in the EC territory, independently of the nationality of the applicants.  
 Q77. How many GIs for wines and spirits ha ve been communicated to the Commission and 
“enjoy EC-wide protection” (paragraph 142)?   
 
A: The Community geographical indications for wine figure in the Official Journal of the European Union, Section C, No 90 of 14.4.2004, p. 1 and No 92 of 16.4.2004, p. 12. The Community geographical designations for spirits figure in  Council Regulation (EC) No 1576/89, Annex II.  
 
General comment on questions 73-77
: 
 
As the United States is well aware, the answers to these questions may be found in the submission of 
the EC to the Panel in the pending dispute settleme nt panel proceeding in case WT/DS/174.   For the 
information of other WTO Members, the EC will however respond to these questions below . 
 
Q78. How many of these GIs refer to territories ou tside of the EC, or otherwise refer to non-EC 
wine and spirits?  
A: These geographical indications concer n wines and spirits of the Community. 
 Q79. The registration process described in paragraph 142 appears to relate exclusively to 
Regulation 2081/92, which does not cover wines and spirits.    A) What is the corresponding process for achievi ng EC-wide protection of GIs for wine and 
spirits?   
 
A: The process for achieving protection in the EC of  GIs of wine and spirits is governed by the 
law of the Member States, see Articles 51 and 54  of Council Regulation (EC) No 1493/1999, and 
Article 28 of Commission Regulation (EC) No 753/2002. 
 
B) Within that process, what is the process for achieving EC-wide GI protection for wines and 
spirits produced in the territories of other WTO members?   
A: The conclusion of a bilateral agreement is the procedure which has generally been applied, in 
accordance with the provisions of Regulation (EC) No 1493/1999. 
 
C) If the process of registration is purely a EU Member State process, please describe that 
process for each EU Member State, describing in particular the available process for registering 
and protecting non-EC
 wine and spirits.    
 WT/TPR/M/136/Add.1 
Page 167 
 
 
 A: Due to the very short timeframe at its dis posal to answering these questions, the Community 
cannot detail the process in each of its 25 Member States. 
  
D) Are there GI protections for wine and spirits that are not based on an EC-wide 
registration?  If so, what is the process to obtai n such GI protection for non-EC wines and spirits?  
 
A: The GI for wines are registered by Member States and published by the Community to ensure 
a proper protection in the Community, see answer 77.   The control and enforcement of the wine 
legislation figure in Commission Regulation (EC) No 2729/2000.  
 
Q80. In connection with the registration and protection of GIs for non-EC wine, the United 
States notes that, under Commission Regulation 753/2002 of 29 April 2002, it appears that references to geographic areas may only be put on  wine labels if they qualify as “geographical 
indications” (Article 26, Regulation 753).  It al so appears that key information about a wine may 
only be put on a wine label if the label bea rs a “geographical indication” (Article 37).   
  
A) How does the EC or EU Member States determ ine whether a geographic area on a non-EC 
wine is a “geographical indication” for purposes of these labelling requirements?   
 
A: Please see Article 37(1) of Commission Regulation (EC) No 753/2002. Since Community Regulations are directly applicable in Member States and Member States are responsible for the 
enforcement of the requirements in the Regulatio ns, it is the competence of the authorities of the 
Member States on the basis of the criteria in the TRIPs Agreement. 
 
B) What if the geographical indication at issue is not registered in the EC?  
 A: See point A. There is no requirement for registration, see Annex VII, point A, 2.d. 
 
C) Is it still considered a geographical indi cation for purposes of Regulation 753?   
 
A: See points A and B. 
 
D) Who makes this decision, and what standard is applied?   
A: See point A.  
Q81. Part G of Annex VII of Council Regulation (EC) No. 1493/1999
42 indicates that imported 
wines bearing a geographical indication Amay be eligible, with regard to their marketing in the 
Community and subject to reciprocity , for the protection and control scheme @ required of each EU 
Member State for the control and protection of EC wines bearing geographical indications.   
  
A) Will the EC recognize and protect third country geographical indications as it does its own 
only if a country has signed a bilateral agreement with the Community?   
 
A: The conclusion of a bilateral agreement is the procedure which has generally been applied, in 
accordance with the provisions of Regulation (EC) No  1493/1999  
                                                     
 
42 Regulation 753/2002 constitutes the rules impl ementing Council Regulation (EC) 1493/1999 of 
17 May 1999 on the common organization of the market in wine with respect to the description, designation, 
presentation and protection of certain products (Cha pter II of Title V, Annex VII and Annex VIII). WT/TPR/M/136/Add.1 
Page 168  
 
B) Alternatively, will the EC rely on the representa tions of the exporters?  Or, will some other 
decision mechanism be established?   
 
A: See reply to question 81.A)  C) How does the EC take into account the interest s of third countries, particularly where there 
is a conflict between a third country's geograph ical indications and the EC's geographical 
indications or Atraditional terms @?   
 
A: The provisions of Regulation (EC) No 1493/1999 and Commission Regulation (EC) No 753/2002 enable and direct the Commission to take in to account the interests of third countries within 
the procedures for recognition of third country GIs.   D) Please explain how its system for recogniz ing third country geographical indications is 
consistent with its obligations under the TRIPs Agreement?  
 
A: The EC system for recognizing third country ge ographical indications is fully consistent with 
its obligations under the TRIPs Agreement.  If the Un ited States has specific concerns in this regard, 
the EC is ready to discuss them bilaterally.  
Q82. Article 19 of Regulation 753 appears to give a preference with respect to the protection of 
geographical indications of (1) EC producers and (2) producers from third countries that have signed agreements with the EC.   
  
A) Could the EC explain whether this is the case and how the protection in Article 19 
compares to the EC =s protection of geographical indications of third countries that have not signed 
agreements with the EC?   
 
A: Commission Regulation (EC) No 753/2002 of 29 April 2002 was notified to WTO Members under G/TBT/N/EEC/15 on 10 June 2002. The Regul ation entered into force on 1 August 2003. 
Following comments from third countries in the cont ext of the TBT notification and two informal 
consultations held on 16.10.2002 and 16.7.2003, Regulation (EC) No 753/2002 was modified by 
Commission Regulation (EC) No 316/2004 which entered into force on 15 March 2004.      The questions raised by the United States in the context of the trade policy review,  also 
figure  in their comments dated 23 August 2003 to the TBT Committee to which the Commission 
replied during the above menti oned meetings and during ongoing  bilateral wine negotiations. 
 
B) Article 36 notes that a geographical indication cannot be used if it conflicts with a bilateral 
agreement; how will interests of third parties be protected against later bilateral agreements? 
 
A: Commission Regulation (EC) No 753/2002 of 29 April 2002 was notified to WTO Members 
under G/TBT/N/EEC/15 on 10 June 2002. The Regul ation entered into force on 1 August 2003. 
Following comments from third countries in the cont ext of the TBT notification and two informal 
consultations held on 16.10.2002 and 16.7.2003, Regulation (EC) No 753/2002 was modified by 
Commission Regulation (EC) No 316/2004 which entered into force on 15 March 2004.      The questions raised by the United States in the context of the trade policy review, also figure 
in their comments dated 23 August 2003 to the TBT Committee to which the Commission replied 
during the above mentioned meetings and dur ing ongoing bilateral wine negotiations. 
 
Q83. With respect to the first 41 GI names that  the EC has stated its intention to try to 
“recuperate” (paragraph 144), what is the EC view  on the rights of owners of trademarks in 
individual WTO members that already incorporate these terms?   WT/TPR/M/136/Add.1 
Page 169 
 
 
 A) What is the EC view on the rights of ow ners of brand names incorporating those names, 
who may have spent many years pr omoting those brands, only to have them “recuperated” by the 
EC?   B) What is the EC view on how the interests of  consumers, who may ha ve a long familiarity 
with these terms as simply product descrip tions, are to be taken into account?   
 
A: The TRIPS Agreement contains the agreemen t of WTO Members to enter into negotiations 
aimed at increasing the protection of individual ge ographical indications, specifying that in the 
context of such negotiations, Members shall be willi ng to consider the continued applicability of the 
exceptions to protection in Art. 24 to individual geographical indications.  
 The EC is of the view that the interests of all parties concerned shoul d be taken into account 
by the negotiators, notably the rights of the producer s of products originating in the place indicated by 
the relevant geographical indications, as well as th e right of consumers to truthful information 
regarding the origin of the goods and the qualities, reputation or other characteristics of the goods 
essentially attributable to their geographical origin.  Measures Affecting Production and Trade – Intellectual Property Rights – Copyrights
 
 Q84. The Secretariat notes in paragraph 145 th at the expiration date (December 22, 2002) for 
EU Member States to implement the EU Directive on  harmonization of certain aspects of copyright 
and related rights law in the information society.   
 
A) Please indicate which Member States have im plemented the Directive and where other EU 
Member States are in the process of implementation.   
 
A: So far a total of 20 MS out of 25 have implemented Directive 2001/29 on the harmonisation 
of copyright and related rights in  the Information Society. Of these, 19 MS have notified their 
implementing laws. The five remaining Member States are currently in the process of implementing the directive.  
B) Please provide details on these countries’ implementation status.  
 A: Finland:
 a government bill (Bill no. 28/2004) w as submitted to Parliament on 19 March 2004.  
The Bill is currently at the committee stage.  No precise deadline is given fo r the final adoption of the 
bill by Parliament but it is likely to be in  spring 2005 . 
 France: The bill was presented to the National Asse mbly in November 2003. There is no date 
set for debate in Parliament. The im plementation date remains uncertain 
 Belgium: The i mplementation date is uncertain. Gene ral elections in 2003 have caused a 
delay.  Spain: 
There was public consultation on an unofficial  draft in 2003 but no official bill yet. 
The implementation date remains uncertain.  Sweden:
 A draft bill will be presented to the Coun cil on Legislation in December 2004 and a 
bill will be tabled before Parliament in February 200 5. The entry into force is planned for 1 July 2005 
 
TRADE POLICIES BY SECTOR  
 Agriculture
 
 
Q85. In paragraph 10 of the Secretariat Report, it states that the EC is the world’s largest trader 
of agricultural products.  The EC claims to be  the largest importer of agricultural goods from 
developing countries. WT/TPR/M/136/Add.1 
Page 170  
 
 What percentage of developing country imports is comprised of value-added goods? 
 
A: The EU is by far the largest importer of agricultural goods from developing countries. Its 
imports from these countries amounted to 40.6 bio euro s in 2002 (against 31.5 bio euros in 1995). The 
level and share of value-added products in these imports is estimated at 3.9 bio euros and 10 % 
respectively in 2002 (from 2.1 bio euros and 7 % in 1995). For comparison, total agricultural imports 
of the USA from developing countries stood at 17.1 bio euros in 2002 (with 3.5 bio euros of value-
added products).  
Q86. The EU is currently applying the 89 tariff quotas (paragraph 19 of the Secretariat Report) 
on agricultural products with only the volum es established for the EU15, despite the market 
expanding by 10 countries and 100 million people.    A) What is the EU doing to address tariff ra te quotas in the enlargement context?   
 A: The EU is following the same approach as in its previous enlargement to 15 Members: 
consolidation of the 10 New Member Stat es’ TRQs into EU TRQs and netting-out. 
 
B) When will the European Communities notify a revised tariff schedule reflecting new TRQ 
commitments?   
 A: When negotiations on GATT article XXIV.6 are concluded.  
 
C) What is the EU doing to ensure that qu ota commitments by the EU10 are upheld or if 
eliminated by their adoption of the EU’s comm on external tariff, that third countries are 
appropriately compensated?   
 
A: The only justification for the elimination of a NM S TRQ is when the in-quota rate is higher or 
equal to the out of quota rate of EU15 correspondi ng products. In this case there is no economic 
justification to maintain an implementation of such quota.  
D) How is the EU monitoring fill rates of the EU15 quotas?   
 
A: Through licensing for certain quotas and by the accounting system for First Come First Served for the other quotas.  
E) How is it ensuring that third country market access is not affected? 
 A: In strictly following consolidation and netting-out. 
 
Q87. Paragraph 19 also describes the EC’s tariff rate quotas on agricultural products and the 
significant under utilization of the pig meat TRQ.   With regard to recent pu blication of  1458/2003, 
which addresses the administration of a TRQ system in the pig meat sector, the United States is 
concerned with some of the provisions in this regulation, particularly, the 10 percent limit on the 
volume that importers can apply for when they requ est an import license.  We believe this practice 
imposes additional trade distorting effects on import s in addition to those caused by the imposition 
of the restriction. Further, it is more administ ratively burdensome than necessary and appears to 
discourage the full utilization of the quota. 
 WT/TPR/M/136/Add.1 
Page 171 
 
 
 A) How was the 10 percent limit calculated and wh y is it used as the ceiling for pork products 
placed in the group 2 TRQ, particularly when that TRQ is not being fully utilized?  
 
A: The 10% limit allows a larger participation of small and medium enterprises that wish to 
participate in this import quota. The large majority of importers in the pig meat sector are such small 
and medium enterprises. This allocation system is not new and has been applied ever since 1995 
under regulation 1486/95 (art 4 (b)). 
 
B) Can an importer request to import more than 10 percent of the quota volume? 
 A: No, he cannot. 
 
Q88. With reference to paragraph 25 of the Secretar iat Report, How does the EU intend to notify 
domestic support for products that remain partially coupled in some Member States? 
 A: The decoupling operation concerns support that until know was notified in the Blue Box. As a 
result of the reform and depending on choices made by individual Member States on the degree of decoupling, only part of this coupled Blue Box support will be maintained. The coupled support will 
continue to be notified in the Blue Box or if not fu lly in compliance with the Blue Box criteria, in the 
Amber Box.  Q89. Referring to paragraph 28 of the Secretaria t Report, please explain how the EU will ensure 
that new Member States’ use of “top-up” payments is  in compliance with WTO rules.  Does the EU 
expect that these top-up payments will be fully de -linked from the production of specific products?  
If so, how will this be enforced?  If not, how will they be notified?  
 A: According to the provisions of the Act of Accession, the complementary national direct 
payments (so-called "top-ups") may complete a ny CAP scheme of direct payments. For the new 
Member States using the Single Area Payment Sc heme (fully de-linked from the production of 
specific products) and from the year 2005, they may ta ke the form of a simple complement to the 
SAPS payment; they may also consist in national di rect payments similar to the coupled direct 
payments regimes applicable in the EU. 
 As provided for in the Act of Accession, the form of the top-ups  (with reference to EU direct 
payment schemes and including the eligibility condi tions) and their amounts shall be authorized by 
the Commission, following a request from the new Member States concerned.  
 
Q90. Referring to the Secretariat Report’s di scussion of CAP Reform, can the EC provide 
figures on area for cereals and oilseeds since th e time that the CAP Agenda 2000 reforms were 
implemented?  What has occurred in this area as a result of EU enlargement?   How is the Blair 
House agreement being upheld in the context of EU enlargement? 
 
A: Area on cereals and oilseeds
 
 
EU-15 area (000 ha)  
  2000/01 2001/02 2002/03 2003/04 2004/05(p) 
 marketing years 
Total Cereals 37.507 36.488 37.395 36.413 37.061 
Total Oilseeds 5.277 5.256 4.947 5.185 5.158 
 
 It is too early to assess the impact of enla rgement on the EC areas of cereals an oilseeds. WT/TPR/M/136/Add.1 
Page 172  
 
Regarding the Blair House Agreement, it is applied to the enlarged EU exact ly in the same way as it 
has been applied before enlargement took place.  
Q91. Please provide an update on EU negotiations with banana producing countries towards a 
tariff only regime for bananas.  
 
A: On 15 July 2004 the EC notified members of the WTO of its intention to modify concessions 
for bananas in the EC Schedule CXL. As the United States is aware, the provisions of the Ad note to 
Article XXVIII of the GATT provide that Article  XXVIII negotiations and co nsultations should be 
conducted with the greatest possible secrecy. Therefore,  at this stage, the EC is not in a position to 
provide an update on Article XXVIII  negotiations concerning bananas. 
 
Q92. Please explain how the EC will ensure that Member States’ use of the “national envelope” 
created in the 2003 CAP reform is in compliance w ith WTO rules.  Does the EC expect that 
programs using the national envelope will be fully de-linked from the production of specific crops?  
If so, how will this be enforced?  If not, how will they be notified?  How will
 third countries be able 
to monitor the use of these funds? 
 
A: The 2003 reform of the CAP establishes various  ceilings for limiting EU expenditure for the 
agricultural sector. In particular, it introduces a ceili ng by Member State for direct payments falling 
under the Single Payment Scheme (SPS). The SPS en compasses the vast majority of EU direct 
payments to farmers. The general rule applyi ng under the SPS is decoupling of support in accordance 
with Annex 2 of the Agreement on Agriculture. It is possible for Member States to opt for partial 
implementation of the SPF. In this case, they may re tain a limited part of the above-mentioned ceiling 
for sector-specific support. The conditions applying fo r partial implementation are well defined in EU 
Regulations: share of support and types of paymen ts that can be maintained specific, corresponding 
sectoral sub-ceilings, notification to the Commis sion etc. The payments eligible for partial 
implementation of the SFP correspond to direct aids that were enforced under previous reforms of the 
CAP. They comply with article 6 of the Agreemen t on Agriculture (blue box). According to the first 
notifications of Member States for 2005, the great er part of support granted under the SPS will be 
decoupled. As to notifications to the WT O, please refer to answer on question 88. 
 Fisheries 
 
 Q93. Please comment on the requirement in EC Regulation 1181/2003 (amending Regulation 2136/89, establishing common marketing standard s for preserved sardines) that requires that 
sardine producers re-label their product before marke ting it in the EU market.  In particular, does 
the EC believe that adding the scientific names of non-European sardine species to sardine labels 
really provides useful information to the consum er?  Is this requirement aimed at making non-
European species less commercially viable?  Is th e typical European consumer familiar with the 
scientific genus and species nomenclature for fish? 
 
A: The new rules were the subject of a joint notif ication of Peru and the European Union in the 
WTO, within the framework of the dispute on the trade description of sardines and of sardine-type 
products. The two Parties considered that the new European regulation fulfilled the requirements of 
the Dispute Settlement Body rulings.   The new EC regulation is based on the relevant  standard of the Codex. Alimentarius Among 
the possibilities offered by the standard of the Codex, the European Union did choose one that 
guarantees the most complete information and that a voids the risk of confusion between the various 
species of fish. The European consumer is incre asingly demanding when commercial information is 
involved and with regard to the quality of the pr oducts. Even so, the regulation does not establish one WT/TPR/M/136/Add.1 
Page 173 
 
 
 obligation to use the scientific name in all cases, provided the used commerc ial name is sufficiently 
distinctive.   It was certainly not the intention of the Eu ropean Union to make non-European species less 
commercially viable. The European Union sought to ensure a maximum of transparency in the 
drafting of its new regulation allowing WTO Members to express their views on the subject 
 
Manufacturing – Overview
 
 Q94. Paragraph 71 of the Secretariat Report discu sses sectoral policies related to manufacturing 
and Section II, paragraph 5 of the EC’s report d escribe the objectives of the Lisbon Strategy, 
including competitiveness and growth. 
 A)  How does the Energy Using Products (EuP) directive, which can name certain industry 
sectors for specific environmenta l targets, help European competitiveness, particularly the 
competitiveness of small and medium -sized European enterprises? 
 
A: The EuP framework Directive will contribute to  the integration of environmental life-cycle 
thinking during the product design, it will thus  increase understanding of the product by the 
manufacturer and lead to better products; it will also  help manufacturers placing products in the EU 
market to prepare themselves better for the incr easing market demand for environmentally friendly 
solutions. Small and medium-sized enterprises will al so benefit more from the greater availability of 
comparable data and design tools in the public dom ain and from an organized information exchange 
in the supply chain. The Commission has provided a more detailed analysis of these aspects in the 
explanatory memorandum to its proposal (COM(2003)453, p.17-19). 
 
B) How does the EC’s REACH policy support the Lisbon strategy?  
 
A: The aims of REACH include, in addition to th e protection of the environment and health, the 
objectives of maintaining and enhancing the competiti veness of the EU chemical industry, prevention 
of the fragmentation of the EU internal market and integration with international efforts on chemicals 
control. These objectives of REACH are therefor e fully in line with the Lisbon Strategy. 
 Manufacturing – Selected Industries – Chemicals
 
 Q95. Paragraphs 84 and 85 of the Secretariat Re port describe the EC’s October 2003 proposal 
for a new regulatory framework for chemicals kn own as REACH (Registration, Evaluation, and 
Authorization of Chemicals).   
  
A) What are the EC’s plans for responding to co ncerns raised by members in response to the 
WTO TBT notification of REACH?   B) When will the EU post responses on its website? C) How does the EC plan to address the potential adverse economic and trade effects posed by REACH on individual WTO members? 
 
A: The European Communities’ response to the comments submitted by WTO members under 
G/TBT/N/EEC/52 is being finalised and will be sent  to the TBT Secretariat for distribution to all 
WTO members within the next few weeks.  We shall also make this response available on our 
website.  
 In addition, the European Communities will present the REACH proposal to WTO Members 
in the context of the next meeting of the TBT Co mmittee due to be held in  Geneva on 4 November WT/TPR/M/136/Add.1 
Page 174  
 
2004. Certain specific and detailed qu estions will be best resolved in technical dialogues with WTO 
members on a bilateral basis.  The European Communities considers that RE ACH is WTO-compatible and that adverse 
economic and trade effects on individual WTO members will be minimal. The European Communities recognises its obligations under Article 11. 3 of the TBT Agreement to provide adequate 
assistance to allow developing countries to comply with legislation such as REACH. Therefore, in 
addition to the provision of extens ive guidance material, we aim to do  our best to help developing 
countries to familiarise themselves with REACH and co mply with it. This will be achieved in part 
through technical assistance and capacity buildin g but also through training and provision of 
information by the proposed Chemicals Agency  Q96. Under REACH, importers appear to be required  to know the exact chemical makeup of 
every imported article and to further ensure that each import or constituent of each import is 
registered under REACH.  It would be helpful to understand better what importers will be required 
to know and to report upon implementation of REACH. 
 
A) How does the Commission intend to address the impact of REACH on imported products? 
 
A: REACH does not require importers to know the exact chemical make-up of every imported 
article, nor does it require each imported article or c onstituent of articles to be registered. Registration 
is only required for substances imported in articles if they are (a) present in quantities above 1 tonne 
per importer per year per article type, and (b) if they meet the EU criteria for classification as 
dangerous and (c) if they are released under norma l and foreseeable conditions of use. The obligation 
to register substances if all these conditions apply,  is also required of EU producers of articles. 
Notification to the Agency is required for certain substances that are unintended to be released in 
normal use, but are found to be released in quan tities that may adversely affect health or the 
environment. In order to assist importers and EU producers of articles, technical guidance is being 
prepared. 
 
B) How does the Commission plan to ensure the consistency of Member State implantation of 
REACH? 
 A: Several features of REACH contribute to assure consistent interpretation across the 
Community. First, the proposed legal instrument is a regulation, which is directly applicable in all 
Member States. Secondly, the futu re European Chemicals Agency would take decisions directly in 
some areas (e.g. Registration), while in other ar eas it would have powers to ensure consistent 
decision-making (e.g. Evaluation). Thirdly, the gui dance referred to above will promote consistent 
interpretation of REACH. Fourthly, the Forum fo r Exchange of Information on Enforcement would 
also have a role to play in promoting consis tency. And fifthly, stakeholders have numerous 
possibilities for appeal to the Agen cy and to the European Court of  Justice in cases where they might 
feel that the regulation had not been consistently applied, as well as to Member State national courts, 
which have the possibility to request a preliminary ruling of the Court of Ju stice in accordance with 
Article 234 EC. In addition the Commission has the possibility to start infringement proceedings 
(ECT article 226).    
 
C) Does the Commission plan to develop guid elines for Member States on the operation of 
REACH? 
 A: Yes. Technical guidance is being developed for the Member State authorities in order to help 
them fulfil their roles under REACH and to ensure consistency of operation. 
 WT/TPR/M/136/Add.1 
Page 175 
 
 
 D) Does the EC intend to amend the scope of the legislation to focus on chemicals that present 
the greatest risk? 
 
A: REACH is already designed to focus on the substances that present the greatest risk. The 
authorisation requirements, for example, is restri cted to the substances of the highest concern, 
including carcinogens, mutagens  and reproductive toxicants (CMR s) and substances that are 
persistent, bio-accumulating and toxic (PBTs). The registration requirements are reduced for 
substances of lower risk. For example, substances produced or imported in quantities below 1 tonne 
are not required to be registered and substances used  as intermediates require a lighter registration.   
  
E) Does the EC plan to allow for recognitio n of data already available, particularly 
assessments already conducted by recognized interna tional bodies?  What criteria will be used as a 
basis for recognizing bodies?  
A: REACH allows industry to  -use existing da ta and analyses performed under other national 
and international programmes, where these data or  analyses meet the technical requirements of 
REACH (see REACH Annex I, section 0.4).  
F) What measures are the EC prepared to take  to protect confidential business information 
disclosed in the REACH process, particularly propr ietary information related to formulations and 
mixtures of chemicals?  
 A: Article 116.2 of REACH specifically states that  certain information submitted to the Agency 
will always be considered as confidential. This  includes “details of the full composition of a 
preparation”.  In addition, article 6a of REAC H allows non-EU based manufacturers to register 
substances directly with the Agency through an “only representative”, without having to divulge 
confidential business information to an importer. 
 
G) What guidelines and/or rules has the EC developed related to data sharing and data 
compensation? 
A: Title III of REACH sets out the rules on data sharing and cost sharing. REACH requires 
mandatory data-sharing of information deriving from tests carried out on vertebrate animals. 
 
Q97. The Secretariat Report  (paragraph 84) describes the current legislative system for 
chemicals as cumbersome and describes the EC’s a ttempt by introducing REACH to create a new, 
integrated system.   
Please comment on how the current REACH proposal will effectively streamline and 
simplify the EC regulatory system.   
A: REACH will replace and consolidate 5 major legislative instruments and their many amendments, in total around 40 pieces of legislation.  REACH will also remove the discrepancy in the 
treatment of new and existing chemicals, by treating them in the same way in the future.   Q98. Paragraph 85 of the Secretariat Report stat es that the EC believes that the costs to industry 
of REACH will be 2.3 billion Euros over an 11 year p eriod.  Some assessments suggest that total 
costs could be considerably higher.  How does the EC intend to reflect downstream co sts (and the impact of EU enlargement) in 
a comprehensive impact assessment?  
 
A: The European Commission’s extended impact  assessment already includes consideration of 
the indirect impact of REACH on downstream users as we ll as its direct cost to the chemical industry. WT/TPR/M/136/Add.1 
Page 176  
 
 In light of the comments received from various sources, the European Commission is now engaged in a process of further impact assessment with stakeholders including representatives of third 
country manufacturers in Europe. The scope of th e work includes further detailed analysis of the 
potential impact on downstream users and supply chai ns in global industries such as automobiles and 
electronics. This work includes analysis of effect s on the global sourcing of chemical substances, 
components and articles. It will in particular fo cus on concerns raised about the likelihood and 
implications of the potential withdrawal from the market of substances due to REACH. It will also 
consider the impact on the new Member States.  
Services
 
 
Q99. In general, the Secretariat report on servi ces does not describe the situation in the new 
Member States at all.  One exception is the section on the telecommunications sector.   
Please describe the status of new Member Stat e adoption of EC regulations in the services 
area.   
Please describe any transitio nal arrangements in the 10 new Member States related to 
services. 
 
A: In the Commission’s view, it is normal that the report does not contain information on new Member States, since the date of their accession to the EU is posterior to the period under consideration in the Trade Policy Review. Part of  the information requested can be found in the 
accession treaties. The rest of the information requested  is too wide, but is to a large extent available 
in http://europa.eu.int/  
Q100. In paragraph 91, th e Secretariat Report identifies differen ces in regulations  across Member 
States and red tape for EC companies operating outs ide of their home countries as impediments to 
the further development of the EU internal ma rket.  The report describes a Commission proposal 
for a Directive to rectify this, but only describes (footnote 120) some of the potential measures and their possible benefits for EU companies.    A) Please describe how differences in regulatio ns affecting services across Member States 
impede U.S. and other countries supply of services in the EU internal market across all modes of 
supply.   A: US and other countries supply of services is governed by the EC and their Member States’ 
GATS schedule of commitments. 
 
B) Does the Commission proposal for a new Directive address third country suppliers?   
C) If so, how would the new Directive affect them  and what are some of the potential ways that 
U.S. and other third country companies and indivi duals could benefit from further integration of 
the EU internal services market? 
 
A: Combined answers to Qs B and C
 
 The proposal addresses only third country services suppliers that fulfil the conditions set by 
Article 48 of the EC Treaty in order to be consider ed as a beneficiary of the internal market. These 
will fully benefit from further integratio n of the EU internal services market 
 
Q101. Paragraph 112 of the Secretariat Report describes the new framework for 
telecommunications and related services.  It does no t provide any details regarding the status of 
regulations related to electronic commerce.  Please provide an overvi ew of regulatory developments 
related to e-commerce (other than those di scussed in the section on the VAT).  
 WT/TPR/M/136/Add.1 
Page 177 
 
 
 A: The framework for e-commerce was detailed in  the previous TPRM report, and there have 
been no new measures adopted since then.  
Services – Transport – Maritime transport
 
 
Q102. With respect to transport of cargoes on the EU’s inland waterways (Secretariat Report, 
paragraph 130), what is the status of cargo sh aring arrangements now under the enlarged EC 
membership?  
 
A: It is not clear to us what cargo-sharing arrangement the question refers to.  
By way of background we can informs that  the ac cess to the markets is based on the following key 
requirements, found in Council Regulation (EC) No 1356/96 of 8 July 1996 on common rules 
applicable to the transport of goods or passengers  by inland waterway between Member States with a 
view to establishing freedom to provide such transport services:   
“Article 1  
This Regulation applies to the transport of goods or passengers by in land waterway between 
Member States and in transit through them. 
Article 2.  Any operator transporting goods or passengers by inland waterway shall be allowed to carry 
out the transport operations referred to in Article  1 above without discrimination on grounds of his 
nationality or place of establis hment, provided that he: 
– is established in a Member State in accordan ce with the laws of that Member State; 
– is entitled in that Member State to carry out th e international transport of goods or passengers 
by inland waterway; – uses for such transport operations inland waterw ays vessels which are registered in a Member 
State or, in the absence of registration, possess a cer tificate of membership of a fleet of a Member 
State; and 
– satisfies the conditions laid down in Article 2 of Council Regulation (EEC) No 3921/91 of 16 
December 1991 laying down the conditions under whic h non-resident carriers may transport goods or 
passengers by inland waterway within a Member State (4).”  
Inland waterway transport plays an important role  for the transport of goods in Europe. The is 
more than 35.000 kilometres of waterways in th e EU. While 18 out of 25 Member States have inland 
waterways, 10 of which have an interconnected wate rway network, the modal share of river transport 
accounts for 7% of the total inland transport in the European Union.  
In 2003, 125 billion ton-kilometres of freight were  transported by inland waterways in the Union. 
Fluvial transport plays a vital role in transport th rough the European North-west. In the hinterland of 
the largest seaports of the EU, the modal share of  inland waterway transport can reach up to 43%.  
 Q103. Referring to Paragraph 1 31 of the Secretariat Report, please explain how the current State 
Aid to maritime transport differs from the fa vourable tax treatment of EC ship owners? 
 
A: The main differences between the 2004 a nd the 1997 Guidelines on State aid to maritime 
transport are the following: 
 1. Stricter monitoring of aid  
 The new guidelines provide for reports to be sent to the European Commission every three 
years for flag-neutral measures, every six years for flag-linked measures.   2. Strengthening of the flag-link  In order to continue to benefit from fiscal a lleviation (tonnage tax), sh ipowners operating less 
than 60% of their tonnage under EU flags will have to  maintain under EU flags at least the same share 
of tonnage they had in January 2004 (when the ne w Guidelines entered into force). Member States 
whose global EU tonnage is not decreasing may however derogate from this rule. WT/TPR/M/136/Add.1 
Page 178  
 
3. New rule on tax exemptions/reductions for seafarers.  Tax alleviation will only appl y to EU/EEA citizens in case of passenger vessels operating 
scheduled services between EU ports. It may apply to all seafarers, irrespective of residence or 
nationality, in all other cases 
 
QUESTIONS FROM ARGENTINA  
 
III. TRADE POLICIES AND PRACTICES BY MEASURES
 
 
III (2) (ix) – Technical barriers to trade  
 
Paragraph 76  
 
Q1. Within the framework of trade or cooperatio n agreements, the EC is engaged in assistance 
programmes for standardization, certification, metr ology, and quality with several trading partners 
in Central and Eastern Europe, the Commonwealth of Independent States, the Mediterranean, the 
Middle East, the Far-East, Latin America, and the ACP States. How these cooperation agreements 
work? How is the assistance given? Which countries  are the beneficiaries of this assistance? 
 
A: Over the past four years, the EC has provided information on technical assistance projects to the TBT Committee. The EC recently  submitted its latest list of EC  and EC member state funded 
technical assistance projects/programmes in the TBT fi eld. This list has been distributed as document 
G/TBT/W/244 of 11 October 2004 to the TBT Committee members. The list contains the EC funded 
programmes all around the world including Central a nd Eastern Europe (under headings South East 
Europe and New Member States and Candidate C ountries), Commonwealth of Independent States 
(CIS), the Mediterranean and the Middle East, the far East (under heading Asia), Latin America and 
ACP States. Please consult the list for information a bout the technical assistance to specific countries. 
 The programming procedure of the EC technical  assistance has been presented to the TBT 
Committee in document G/TBT/W/228 of 15 October 2003.  There are also links in this document to 
the EC Commission websites where detailed informati on about the assistance strategies for different 
countries and regions and project  information can be found. 
The EC has Europe Agreements with the candi date countries; a Customs Union with Turkey; 
Stabilisation and Association Agreements with th e Western Balkan countries; Partnership and Co-
operation Agreements with the CIS; and Euro -Mediterranean Association Agreements and 
Partnership Agreements with other countries. Th e EC technical assistance in the TBT field is 
programmed to assist the partners of these agreements to fulfil their obligations in the TBT field. The 
technical assistance in the TBT field can be provided for legislative, administrative or infrastructure 
related matters. It can be bilateral or regional.  The assistance can be implemented by EC and EC 
Member State public authorities or be contracted to private organisations in the EC and beneficiary countries after tendering. 
The technical assistance provided has usually wo rked well and the objectives have been met. 
Evaluations are carried out after each project/progr amme and the lessons learned are taken in account 
when new assistance is programmed 
 
(2) (x) – Sanitary and phytosanitary measures
 
 
Paragraph 79  
 Q2. Could you please explain the legal consistency of the Regulation (EC) 178/2002 with the SPS Agreement? In the response, could you please m ake special reference to requirements related 
to traceability, particularly the consisten cy with art. 5.6. of the SPS Agreement? 
 WT/TPR/M/136/Add.1 
Page 179 
 
 
 A: The proposal43 was notified in G/SPS/N/EEC/110 (8 Feb. 2001) and its comment period 
extended. No WTO’ member submitted comments against. The traceability provisions of Article 18 of Regulation 178/2002 do not have extraterritorial effect  outside the EC, thus th e question is irrelevant 
to this exercise.  Q3. Could you please explain whether the rapi d alert system works in a timely manner and 
whether information provided to exporting countries is appropriate? 
 
A: The Response is yes. The EC informs about in terceptions -on real time- information that do 
not discriminates between origin i.e. EC or imported.  This information can be used by Food Control 
Authorities to prevent potential health problems to occur, including traffic deviation (re-exportation) 
of intercepted products. Concerning imported products , only consignments with a clear identification 
of the dispatcher and/or manufacturer are notified to 3
rd Countries. 
 
Q4. Could you explain the legal and technical consistency of the “Precautionary Principle” (as 
referred to by the EU) with art. 5.7. of the SPS Agreement?  
A: Article 5(7) of the SPS this agreement provides that “ In cases where relevant scientific 
evidence is insufficient, a Member may provisi onally adopt sanitary or phytosanitary measures
 on the 
basis of available pertinent information, including th at from the relevant international organizations 
as well as from sanitary or phytosanitary me asures applied by other Members.  In such 
circumstances, Members shall seek to obtain th e additional information necessary for a more 
objective assessment of risk and review the sanitary or phytosanitary measure accordingly within a 
reasonable period of time ”. It is not up to the EC to justif y the presence of this article in the 
agreement. 
In document G/SPS/GEN/168 of 14 March 2000, th e Commission explained its approach to 
using the precautionary principle and guidelines for applying it. The approach  is consistent with 
Article 5.7 and the rest of the SPS Agreement  
Q5. The SPS Agreement establishes in art. 2.2. that all SPS measures shall be based on science. 
In this regard, could you explain the role of “ot her legitimate factors” to justify an SPS measure, 
replacing the obligation to use sci entific grounds? Could you please justify the consistency of this 
statement with the SPS Agreement?  
A: The European Commission in his risk ma nagement proposal takes into account Codex 
standards, recommendations and guidelines as recommended by the SPS Agreement; concerning 
other factors see “ Procedural manual of the Codex Alimentarius Commission , 13 Ed. pag.181-183 
“Statements of principle concerning the role of science in the Codex decision-making process and the 
extent to which other factors
 are taken into account ” adopted in the 21st Session of the Codex 
Commission (1995).  Paragraph 80
 
 Q6. According to the SPS Agreem ent, SPS measures shall be based on risk assessment. Could 
you please explain the role of the EFSA in d eveloping these risk assessments and whether final 
measures are based on them? Do risk managers have the option to deviate from the risk assessment 
                                                     
 
43 Proposal COM(2000)716 that later become Regulation (EC) No 178/2002 of the European 
Parliament and of the Council of 28 January 2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety. 
Official Journal L 031 , 01/02/2002 P. 0001 - 0024  WT/TPR/M/136/Add.1 
Page 180  
 
conducted by the EFSA? If so, could you please explain the reasons for such deviation and the 
legal consistency of adopting an SPS measure not based on a risk assessment? 
 
A: Role of EFSA
 
The European Food Safety Authority (EFSA) is a separate legal entity, independent from the 
other EU institution which provides the European Commission with independent scientific advice on 
all matters with a direct or indirect impact on food safety. The establishment of EFSA was one of the 
key measures contained in the Commission’s White Paper on Food Safety  of which the EC circulated 
an explanation to all WTO Member States in document G/SPS/GEN/169 (14 March 2000). EFSA 
collects information and analyses new scientific developments so it can identify and assess any 
potential risks to the food chain. It can carry out scientific assessment on any matter that may have a 
direct or indirect effect on the safety of the food supply, including matters re lating to animal health, 
animal welfare and plant health. EFSA also gives scientific advice on non-food and feed GMO’s as 
well as on nutrition in relation to EU legislation. It  can communicate directly with the public on any 
issue within its area of responsibility. 
Regulation (EC) No 178/2002 of the European Pa rliament and of the Council of 28 January 
2002 laying down the general principles and require ments of food law, establishing the European 
Food Safety Authority and laying down procedures in matters of food safety  was notified in 
G/SPS/N/EEC/110 (8 Feb. 2001) its comment period  extended until 26 May 2001. No WTO’ member 
-including Argentina- submitted comments against this proposal.  
Role of Risk managers  
As provided to in Annex A of the SPS Agreement,  risk managers have to take into account 
the risk assessment but also the condition for implementation of any SPS measure.   Paragraph 84
 
 
Q7. Could you please explain the legal consistency of Regulation (EC) 1774/2002 with SPS 
obligations? 
 
A: The Commission proposal to the European Pa rliament and to the Council that become 
Regulation 1774/200244 was notified in G/SPS/N/EEC/103  (24 Nov. 2000). The proposal, based on 
the opinions of the Scientific Steering Committee45 had an extended comment period 
                                                      
44 Regulation (EC) No 1774/2002 of the European Parliament and of the Council of 3 October 2002 
laying down health rules concerning animal by-products not intended for human consumption. Official Journal 
L 273 , 10/10/2002 p.:1-95  
45 Can be downloaded from: http://europa.eu.int/comm/ food/fs/sc/ssc/index_en.html. Relevant to this 
proposal are the Scientific Steering Committee opinions on: 
The safety of meat-and-bone meal from mammalian anim als, naturally or experimentally susceptible to 
TSEs (27 March 98 – 25 Sept 98). 
The safety of tallow derived from ruminant tissues (27 March 98). 
The safety of gelatine (27 March 98- 21 January 2000). 
The safety of dicalcium phosphat e precipitated from ruminant bones and used as an animal feed 
additive (26 June 98). 
The safety of mammalian derived meat-and-bone meal forming a cross-contaminant of animal 
feedstuffs (25 September 98). 
 The safety of hydrolyzed proteins produced from bovine hides (23 October 98). 
The risks of non conventional transmissible agents, conventi onal infectious agents or other hazards such as toxic 
substances entering the human food or animal feed via raw material from fallen stock and dead animals 
(including also: ruminants, pigs, poultry, fish, wild/exotic /zoo animals, fur animals, cats and laboratory animals) 
or via condemned material (Fallen stock opinion) (25 June 99 re-edited on 23 July 99). 
The risk born by recycling animal by-products as feed with regard to propagating TSE in non-ruminant farmed 
animals (Intra-species recycling opinion) (17 September 99).  The safety of ruminant blood with respect to TSE 
risks (14 April 2000). WT/TPR/M/136/Add.1 
Page 181 
 
 
 (G/SPS/N/EEC/103 Ad.1). The Commission received numerous comments for 3rd Countries and 
members of the WTO that were taken into consider ation in the final act of 3 October 2002 (notified 
G/SPS/N/EEC/103 ad. 3). Further to this, in response to comments received, and with a view to help 
third countries to comply with its provisions, the Commission adopted Regulation 812/200346 notified 
in G/SPS/N/EEC/103 Add.03 (28/05/2003) setting down a general "transitional period" for third 
countries  lasting until 31 December 2003. Since them, and in response to further comments, the EC 
has adopted further 7 amendments to the initial propo sal of all which have been notified to the SPS, 
the latest being G/SPS/N/EEC/103 Ad.10, (18/06/2004).  
In conclusion  the EC has been consistent with the EC obligations since the beginning.  
 
Paragraph 85  
 
Q8. Could you explain the consistency of tr aceability and labelling requirements with SPS 
obligations, especially regarding art. 2.2, art. 5.1 and art. 5.6? 
 A: The provisions of Regulation 1830/2003
47 traceability and labelling requirements do not fall 
into the scope of the SPS agreement but instead into the TBT agreement.  
 
III (3) (ii) – Measures Directly Affecting Exports. Export taxes, charges and levies  
 
Paragraph 101  
 
Q9. The report of the Secretariat states there is no provision, at the Community level, for the 
imposition of duties or charges or exports. Is ther e any provision at country level for the imposition 
of duties or charges on exports? If the answer  is affirmative, please detail EU Members and 
measures involved. 
 
A: Neither during the review period nor at present export duties have been or are applied by the 
Community (or its Member States who do not have the right to introduce customs duties on their own). In case the Community introduces export duties for a specific agricultural product in order to 
avoid a shortage of supply, the rules of the Community Customs Code apply  
Paragraph 105
 
 
Q10. Please detail which products required e xport licenses under common market organizations 
during the period under review and on what grounds were such licenses required. 
 A:  
 
                                                     
 
46 Regulation (EC) No.812/2003 of 12 May 2003 on transitional measures under Regulation (EC) 
No.1774/2002 of the European Parliament and of the Council as regards the importation  and transit  of certain 
products from third countries  (Official Journal L117, 13 May 2003 pp.19-21). 
47 Regulation (EC) No 1830/2003 of the European Parliament and of the Council of 22 September 2003 
concerning the traceability and labelling of genetically mo dified organisms and the traceability of food and feed 
products produced from genetically modified organisms and amending Directive 2001/18/EC (Official Journal 
L 268 , 18/10/2003 P. 0024 – 0028). WT/TPR/M/136/Add.1 
Page 182  
 
III (3) (iv) – Measures Directly Affecting Exports. Export subsidies
 
 
Paragraph 107  
 
Q11. Please detail at 8 digit of the Combined Nomenclature which “incorporated products” were 
granted export subsidies. Please detail country of destination of all products which were granted 
export subsidies.  
 
A: The information related to export subsidies gran ted to incorporated products is available in 
EU schedule CXL.  Concerning destinations for wh ich these export subsidies were granted no such 
statistics are available, this type of inform ation is not subject of reporting to the WTO. 
 
III (3) (v) – Measures Directly Affecting Exports. Export assistance  
 
Paragraph 110  
 
Q12. Has the Commission got notice of any viola tion to Community rules by individual Member 
States when offering export assist ance at national level? Please detail. 
 
A: When giving export assistance in the form of  officially supported export credits the Member 
States are bound by directly compelling Community le gislation. In accordance with the EC Treaty the 
Arrangement on Officially Supported Export Credits  (the “Arrangement”)– falling under trade policy 
and thus under direct Community competence instea d of national competence – has been approved by 
the EC and integrated into the Community legisl ation. Member States – in their export support 
activities – have thus a direct legal requirement  to respect the “rules” of the Arrangement.  
 Via the OECD wide notification system tran sparency on export support activities is created 
and OECD countries and/or EC Member States, wh en they have a direct interest, and the EC 
Commission, as guardian of the (respect of the) EC Treaties, would react to any substantive infringement of the Arrangement rules. At th is moment no specific Community procedures are 
running or being initialled because of violation by one of the Member States of this part of the Community legislation.  
Paragraph 112
 
 
Q13. Paragraph 110 above states that “the EC does not have a policy of direct and indirect 
assistance to exports. However, such  assistance can be offered by in dividual Member States, subject 
to Community rules”. On the other hand, paragr aph 112 indicates that the CE is party of the 
OECD Arrangement on guidelines for officially supported export credits. Please give further details 
about the functioning of this OECD Agreement w ith regard to export sectors that benefit from 
officially supported export credits. 
 
A: The Arrangement has – in accordance with th e EC Treaty and in respect of the Community 
competence on trade policy matters - been accepte d by the Community and been integrated into 
Community law. Export credit (official support) ac tivities are undertaken at national level by the 
Member States. Because being part of Community legislation the Arrangement rules (disciplines, 
notification requirements) do directly apply to these national official support activities. 
http://europa.eu.int/comm/trade/issu es/sectoral/export_cred/envir.htm. 
 WT/TPR/M/136/Add.1 
Page 183 
 
 
 III. (4) (iii) Measures affecting Production and Trade. Intelectual property rights protection  
 
Paragraphs 137 y 138  
 
Q14. In paragraph 137 the Report of the Secretaria t explains that there are three methods for 
filling for patents in EC member States. The second , through the unitary pro cedure, available at 
the European Patent Office (EPO). However, pa ragraph 138 refers to a draft regulation for the 
creation of a single industrial property right (across the EC) to be granted by the European Patent Office. Therefore, could you please explain the cu rrent legal effect of a filling for patent at the 
European Patent Office (EPO)? 
 
A: The European Patent Convention (EPC) sets out a system of law, common to its 28 contracting States, for the grant of patents for inve ntion. In principle, patents granted under the EPC 
shall, in each of the EPC contracting States for whic h they are granted, have the effect of and be 
subject to the same conditions as a national patent gr anted by that State. In  other words, unlike the 
proposed unitary Community patent, the current Euro pean patent is a bundle patent which after grant 
splits into national titles for the States designated.  It should be noted that the EPC has also established the European Patent Organisation (EPOrg) which is an autonomous international organi sation in its own right. One of the organs of the 
EPOrg is the European Patent Office (EPO).  
Paragraph 144
 
 
Q15. Paragraph 144 of the Report by the Secret ariat states that EC member States cleared a 
shortlist of  41 EC regional quality products  wh ose name the EC seeks “to recuperate”  under the 
ongoing multilateral trade negotiations. Under win es and spirits, footnote 218 refers to “Rioja”. 
Could the EC please explain what does “to recuperate” means in that context?  
A: The EC proposal for modalities in the WTO Agriculture negotiations (Job (03) 12 of 5 February 2003 and Addenda) states clearly the discipline the EC is seeking for geographical indications for agricultural products specified therein  IV. TRADE POLICIES BY SECTOR
 
 
(2) (ii) Common agricultural policy (CAP)  
 
Paragraph 34  
 
Q16. Please give details about production refunds gran ted for olive oil used in vegetable and fish 
preserves. In relation to this, which industrial products benefit from produ ction refunds granted on 
account of their utilization of agricultura l products? Please detail amounts involved. 
 
A: Olive oil used in the manufacture of preser ved fish falling within CN code 1604, with the 
exception of subheading 1604 30, preserved crustacea ns and molluscs falling within CN code 1605 
and preserved vegetables falling within CN codes 2001, 2002, 2003, 2004 a nd 2005 can benefit from 
this scheme. The purpose of this aid is to encour age the use of olive oil by the Community preserve 
industry. 
After 1998, the amount of the refunds was kept  at a steady 440 €/to nne, for quantities of 
between 50 000 and 70 000 tonnes depending on the ca mpaign, involving a budgetary expenditure of 
some € 24 million per year.  WT/TPR/M/136/Add.1 
Page 184  
 
Council Regulation (EC) No 865/2004 on the common  organisation of the market in olive oil 
and table olives, applying as from 1
st November 2005, does not provide for such aids, which will 
consequently disappear at the end of the 2004/05 marketing year.   
IV (6) (i) – Services. Overview
 
 
Paragraph  91  
 
Q17. The Report by the Secretariat states that servi ces has also lagged behind other sector in 
creating a single market, and account for only  20% of the EC-15 cross-border trade, mainly 
because of differences in regul ation across member States an d red tape for EC companies 
operating outside their home countries. Footnote 119 states that a Commission report listed 92 remaining barriers encountered by companies wish ing to offer services in more than one EC 
country. Could the EC please list the main barri ers and which sectors affects? Could the EC 
explain if the above mentioned report includes th e differences in regulation across member States? 
 
A: The Commission's report found that barriers (in the sense of the EC Treaty, as interpreted by 
the European Court of Justice) affected a very wide range of sectors. Such barriers arise not only from regulatory or administrative action by Member States but also from self-regulation, or the practices of 
professional bodies. They may include, for example, complex, lengthy and burdensome authorisation 
procedures, highly detailed and divergent ru les on advertising, burdensome and complex 
administrative formalities relating to employment law in  the context of posting of workers, or, simply 
the duplication of requirements such as for depos its and guarantees, professional insurance or quality 
controls which the service provider has already fulfilled in his Member State of origin. The 
information in the report, and the further cons ultation and legal and economic analysis which 
followed it, were important factors in determin ing the shape and content of the Commission's 
proposal for a Directive on Services. Further information can be found at:  
http://europa.eu.int/comm/internal_m arket/en/services/services/index.htm. 
 
IV (6) (ii) – Financial Services
 
 
Paragraph 102  
 
Q18. The Report by the Secretariat states in paragraph 102: “ Member States must not apply 
more favourable Community provisions to foreign banks branches than those applied to branches 
of credit institutions having their head office  w ithin the EC. The Community, however, may agree 
to apply identical provisions to branches having th eir head office within or outside the EC when the 
principle of reciprocity is observed by the country in which the head office of the foreign bank 
branch is based. Could the EC please explain that statement? 
 
A: This possibility of concluding agreements  with non-Member States to ensure identical 
treatment of their bank branches in all Member States was first envisaged in the First Banking Directive of 1977, and repeated in the Codified  Banking Directive of 2000.  The possibility of 
concluding such agreements has not so far been made use of. 
 
IV (6) (iv) – Transport
 
 
Paragraph 132  
 
Q19. Regarding the proposed legislative fram ework for ports. Could the EC please give 
information about the current status of the proposal regarding the system “one-stop shop”? 
 WT/TPR/M/136/Add.1 
Page 185 
 
 
 A: On 13 October 2004 the European Commission a dopted a revised proposal for a Directive on 
Port Services. The directive pr oposes new measures to improve mark et access to port services. The 
Commission’s new text is based both on its origin al 2001 proposal and th e 2002 amended proposal, as 
well as amendments brought forward duri ng consultations with stakeholders 
 QUESTIONS FROM NORWAY  
 
The Secretariat Report Chapter II Trade Regime 
 
 
Q1. The EC makes extensive use of quantitative rest rictions on imports.  Norway is faced with 
40 different quotas on seafood products alone.  Th e use of import quotas creates a non-transparent 
system with high costs of administration, both for the exporters and the importers, the processing 
industry and the consumers in the EC.  Norway encourages the EC to move towards a simpler trade 
regime with fewer quotas.  We would like to know whether the EC has any plans to move from a quota to a tariff regime? 
The Secretariat Report  Chapter III Trade Polici es and Practices by Measure, (2) (v) Rules 
of origin  
 
A: First of all the EC would like to clarify th at it does not operate “quantitative restrictions” 
whatsoever, in the sense of Article XI of GATT 1 994, on imports of fish and fish products. The 
Secretariat Report has identified “quantitative restri ctions” applied by the EC, in sectors other than 
fisheries. (e.g. textiles under the Agreement on Te xtiles and Clothing). Rather Norway seems to refer 
to a number of preferential tariff quotas related to the trade agreement between the EC and Norway. 
These preferential tariff quotas are the result of a ne gotiation and therefore, mutually agreed. This 
trade agreement has been the s ubject of a recent joint communication from Norway and from the EC 
(“Biennial Report on the Operation of the Ag reement”, WTO document WT/REG137/R/2, G/L/691 
of 17 September 2004)  
Concerning the transparency on the use of the ta riff quotas, the EC notes that Part III of the 
Secretariat’s Report states, in footnote 16, that “The Community's online data base on the integrated 
tariff (TARIC) and tariff quota (QUOTA) 
are estimated to have attracted 2.5 million consultations per 
month during their first six months of operation.”  Economic operators in No rway and the Community 
can thus access on-line information, through the Internet, on, among other items, the level of 
utilisation of the aforementioned tariff quotas.  
Furthermore, importers and expor ters have been taking advant age of the preferential tariff 
quotas since the mid-seventies, when the first tariff quotas were agreed. 
On the possible cost to consumer s, the EC notes that Norway maintains the same type of tariff 
quotas for a number of agricultural products.   
Finally, and with reference to the future of the bilateral trade relations in fish and fish 
products, the EC welcomes Norway’s encouragement to move towards a simpler trade regime with 
fewer quotas. Nevertheless, and as stated in Sec tion II “Trade Provisions” of the aforementioned 
communication, “the extent of liberalisation under the EEA Agreement remains to be only possible if 
non-EU Members have agreed to take over the Comm unity acquis in its entirety, in the relevant 
sectors.”  As there was no agreement by non-EU Me mbers to take over the Community’s acquis on 
the fisheries and aquaculture sectors, presently covere d by protocol 9 to the EEA Agreement, changes 
in the current regime on trade in fish and fisheries products must be the subject of negotiations specific to the fisheries and aquaculture sectors,  while maintaining the overall balance of the 
agreement between the EC and Norway  Q2. The EC has different sets of rules of origin within different preferential agreements.  Three different sets of rules of origin are applied for EUs import of seafood from Norway.  Could the EC 
comment on any plans to harmonize the different sets of rules of origin that apply today? WT/TPR/M/136/Add.1 
Page 186  
 
A: The commission have had internal prelimin ary discussion on the feasibility of such an 
harmonisation.   EEA EFTA partners have been requested by the Commission (DG TAXUD) to provide with 
detailed information on the harmoni sation of preferential rules of origin between EEA partner 
countries that they required last year in the c ontext of the EEA negotiations. The Commission expects 
EEA EFTA partners to reply before the end of the year. It was agreed with EEA EFTA partners that 
bilateral discussions on the feasibility  of such an harmonisation would take place after due analysis of 
their contribution.   
The Secretariat Report Chapter IV Trade Po licies by Sector, (6) (iv) Transport
  
 
Q3. On maritime transport, it would be useful  to receive updated information on the current 
market access conditions and any restrictions fo r foreign vessels in international and domestic 
trade in the EU and the various member states.    In para 130 the development of the shift of the EC fleet towards ”flags of convenience" is 
described.  How has the enlargement of the EC as of 1 May 2004 influenced the size of the EC 
fleet, and the portion of the fleet owned by EC shipping companies registered outside EC?  
A: The Commission is not aware of any restricti ons concerning internationa l traffic. As regards 
domestic transport (maritime cabotage) in some Me mber States access is restricted to EC vessels.  
 Commercial fleet EC-15: 
 
• under control (nationality): 274 M tonnes dwt, th is is +14% compared to January 2003 (35% 
 world fleet, residents) 
• under EC flag: 136 M tonnes dwt, this is +25% compared to January 2003 (16% world fleet), 
 50% tonnage fleet under EC flag  Commercial fleet EC-25:
 
• under control (nationality): 293 M tonnes dwt, th is is +12% compared to January 2003 (37% 
 world fleet, residents) 
• under EC flag: 215 M tonnes dwt, this is +13% compared to January 2003 (25% world fleet), 
 tonnage EC flag/tonnage EC control 73%  QUESTIONS FROM COSTA RICA  
 
Acceso a Mercados
 
 
Sección II  
 Q1. Se menciona en varias ocasiones el compro miso y la participación activa de las CE en la 
búsqueda del desarrollo futuro del sistema multilat eral de comercio.   Por otra parte, se señala 
también que, debido a la gran cantidad de acuer dos comerciales preferenciales en los que participa 
las CE, solamente comercia con nueve países miembr os de la OMC en términos estrictamente 
NMF.   Se indica que los acuerdos preferenciales forman parte de una polít ica más amplia de las 
CE en la promoción del multilateralismo.   ¿De qué manera armonizaría las CE los acuerdos 
preferenciales con sus objetivos en el marco multila teral, y cómo ajustaría las distintas condiciones 
otorgadas a los signatarios de estos acuerdos para lograr concordancia con las negociaciones 
multilaterales?  
 
A: The fact that the EU provides preferences to  a large number of WTO members does not imply 
that the EC receives preferential treatment for its  exports by the same members. The GSP scheme, 
including the Everything But Arms initiative, a nd the Cotonou Agreement provides for unilateral 
preferential access to the EC market for developing countries. None of them provides for preferential 
treatment for EU exports. In fact, the EC enjoys MF N-treatment on most of its biggest export markets WT/TPR/M/136/Add.1 
Page 187 
 
 
 (e.g. US, Japan, China, Canada, Hong Kong/China, South Korea, Australia, India, Singapore). It 
should also be recalled, as pointed out below (on question 2), that the composition of EC imports is 
such that the majority of EU imports benefit from zero-MFN tariffs. 
Naturally therefore, and contrary to what seems  to be implied by the question, the EC is 
committed, above all, to multilateral institutions an d solutions. The EC is convinced that the WTO-
route brings the biggest comparative gains for all Parties. The Doha Development Agenda (DDA) is, 
and will continue to be, the EC’s main priority.  
To that end, the EC has been active in its e fforts to maintain the primacy of the multilateral 
trading system, and to enable the WTO to respond to  current and future challenges. In the DDA, the 
EC has pursued greater market opening – for goods and services – and, simultaneously, has promoted 
stronger rules and disciplines. The EC has also re mained committed to ensure full compliance with 
WTO rules, including that the EC’s regional trade agreements, as well as unilateral preferences, fulfils 
those WTO rules that both legitimize and set th e conditions for the establishment of preferential 
arrangements. Preferential agreements respecting WTO commitments are not prohibited. Moreover, the paragraph 44 of the framework agreement date d 1. August 2004 fully recognised the importance 
of long standing-preferences for developing coun tries. The launch of the Economic Partnership 
Agreements with the ACP-countries must also be viewed in this light. 
On a more general note, the EC firmly believ es that multilateral and regional processes can be 
mutually reinforcing. The EU’s past actions are a living example of that. Throughout the history of the GATT and the WTO, the EU has enlarged, integr ated and deepened its relations with partners 
around the globe, while, simultaneously, taking active part in the multilateral trading system and 
multilateralism at large. 
 
Sección II.5, párrafo 26. 
 
 Q2. Se indica que cerca del 74% del comercio de  las CE se realiza bajo el régimen NMF.  De 
éste, cerca de un 36% lo representan los nueve paí ses con los que las CE comercia en términos 
puramente NMF y el restante 38% del comerci o NMF se realiza con los socios comerciales 
preferenciales. De lo anterior podría surgir la  interpretación de que un porcentaje importante del 
comercio con los socios pref erenciales no se lleva a cabo en  condiciones de preferencia 
arancelaria. ¿De qué manera se puede interpretar este dato? ¿Implica este “comercio bajo el régimen NMF” el comercio de productos excluidos de los acu erdos preferenciales, o se puede 
hablar de cierto porcentaje de come rcio bajo arancel NMF igual a cero?  
 
A: With respect to zero-MFN tariff lines, expor ts from countries benefiting from a preferential 
trade regime when entering EU market do not request preferential treatment as there is no margin of preference. This is the main explanation for a hi gh share of total EU imports entering under MFN 
rates. In 2003, 53% of all EU imports benefite d from zero-MFN tariffs. With respect to non-zero-
MFN tariff lines, two thirds of imports were granted preferential access the same year.  
Párrafo 56 de la Sección II.5
 
 Q3. En materia de acuerdos comerciales prefer enciales no recíprocos, se indica, en relación 
con las preferencias bajo el Acuerdo de Cotonou,  como al vencer el período definido para el 
otorgamiento de las preferencias (2001-2007) est as medidas serán reempl azadas por acuerdos 
recíprocos entre las CE y los países beneficiarios.   Sin embargo, no se hace mención sobre el 
futuro del reglamento SGP actual, el cual está vigente hasta el 31 de diciembre de este año.  No se indica sobre la intención de las CE de elaborar un nuevo reglamento.  ¿Podría indicar los pasos 
que está dando con relación a este nuevo reglamento?  WT/TPR/M/136/Add.1 
Page 188  
 
A: The current GSP regime has been extende d until the 31 December 2005. Nevertheless, on 20 
October 2004, the Commission has adopted a new regime it intends to present very soon to the 
European Council and the European Parliament. This  new GSP should enter into force as from the 1
st 
July 2005, in order to comply with the WTO arbitr ator’s decision, calling for the repealing of the GSP 
“Drug arrangement” on the 1st July 2005 the latest. In this new regime, the “Drug arrangement” is not 
anymore an option, after the condemnation by th e WTO. A new “GSP+” aiming at encouraging the 
sustainable development will be granted to those of the beneficiary countries that will ratify the core 
international conventions related.  The “GSP+” will be granted upon approval of the application, and 
the Commission will select those of the beneficiaries complying with the requirements. Costa Rica should comply with this requirement, having al ready ratified almost all of these conventions 
 Párrafo 2, Sección III.
 
 Q4. ¿La falta de armonización interna de los impuestos al valor agregado o al consumo ha tenido algún impacto sobre el comercio? ¿Tiene  las CE algún plazo estimado para armonizar estos 
impuestos entre todos sus miembros?   
A: Concerning VAT
, the administrative and other measures which were put in place in 1992 
when internal borders were removed have proved e ffective in eliminating tax based barriers to trade 
between Member States. 
Rather than pursuing a goal of further harmoni sation, the aims is now to make the system 
more business friendly. This involves the simplifi cation and modernisation of existing rules and a 
reinforced system of administrative cooperati on between Member States. Where the continued 
development of trade between Member States identif ies areas where improvements in the tax system 
are needed – for instance to facilita te the creation of a pan-European market for financial services – 
this will be addressed through targeted measures wh ich may involve some further harmonisation in  
certain areas.  
 Excise duties are national taxes on the consumption of certain products. Their revenue 
accrues entirely to the Member States' budgets.   The most commonly applied excise duties, and t hose which are subject to EU legislation, are 
those on:  alcoholic beverages, manufactured tob acco products and energy products (motor fuels and 
heating fuels, such as petrol and gasoline,  electricity, natural gas, coal and coke).   
 EU legislation in the area of excise duti es on these products was mainly adopted in the 
context of the completion of the Internal Market  on 1 January 1993, which involved the abolition of 
controls of a fiscal nature at internal borders be tween Member States. Although full harmonisation of 
the excise duty rates throughout the European Uni on was not considered necessary by the Council of 
Ministers for the proper functioning of the Internal  Market, a series of minimum rates were agreed. 
Above these minimum rates Member States retain sovereignty to set excise duty rates at levels they 
consider appropriate according to their own national circumstances.  However, the Commission is 
required to review these minimum rates periodically taking into account various factors, such as the 
proper functioning of the Internal Market, and to  present a report with proposals if appropriate 
 
Párrafo 15, Sección III.
 
 
Q5. ¿Cuáles sectores componen el 0,4% del aran cel de las CE cuyas tarifas aplicadas difieren 
de las consolidadas?  
 
A: Hundred per cent of the EC Custom s tariffs are actually consolidated. 
 WT/TPR/M/136/Add.1 
Page 189 
 
 
 Párrafo 2, Sección IV.1  
 Q6. Se menciona un incremento en el nivel pr omedio tarifario para el sector pesca. ¿Este 
incremento está relacionado con la nueva Política Común para este sector; o de  dónde proviene ese 
incremento en el promedio? 
 
A: The Secretariat’s Report indicates, in the last sentence of paragraph 2: “ Tariff protection on 
fishing is 10.5%, on average, in 2004 (up from 10. 4% in 2002), with rates ranging up to 23%.” 
(emphasis added).  
 A similar sentence appears at the end of paragraph 42 of the same Section: “ MFN tariffs on 
fishing products average 10.5%, with rates ranging up to 23 %.” 
 It seems therefore that the Secretariat’s statement under paragraph 2 concerns average MFN 
tariffs. The above references do not specify, however , whether the figures relate to applied or bound 
MFN tariffs, or whether these figures are simple or we ighted averages. In addition a reference to the 
exact source for this information appears to be missing. 
 In view of the foregoing, it is thus difficu lt to explain the reason for such minor increase. A 
possible explanation could possibly be found, beari ng in mind the above qualification, in the way the 
calculations have been made with re gard to the Enlargement of the EC. 
 
Sección IV, párrafo 74.
 
 
Q7. Se menciona que el sector manufacturero es uno de los mayores beneficiarios de ayuda 
estatal. ¿Podría indicar los sectores, en particular , a los que se ha destinado este tipo de ayuda 
durante el período citado? 
A: In the interest of transparen cy, the European Commission publishes a range of data that result 
from its control of state aid granted by EU Member States. This data is made public through the web 
site of the European Union.  
 This data is published twice-annually in the form of a State Aid Scoreboard , the last edition of 
which dates from spring 2004. The State Aid Scoreboard is available at the following internet address:  
http://europa.eu.int/comm/competition/state_aid/scoreboard/  It should be pointed out that all aid monitored in this context is related to aid within the 
meaning of Article 87(1) of the EC Treaty. 
 As a general rule, the European Commission does not have a further break-down, sector by 
sector, of the state aid earmarked for the various sectors of the manufacturing industries. The only exception to this rule is state aid gran ted to the shipbuilding and steel sectors: 
 
 1998 1999 2000 2001 2002 
Steel 52 61 96 90 78 
Shipbuilding 1650 953 818 557 500 
(Figures in million Euro, European Union of 15 Member States) 
 
Agricultura   
 
Q8. La proporción combinada de los subsidios de insumos a la producción y el sostenimiento de 
los precios del mercado representan el 69% de la ayuda al productor.  Además, se nota un aumento 
de los pagos por superficie plantada o número de cabezas de ganado que actualmente representa el 
28% del total de la ayuda a la producción.   Es o da como resultado que los precios que reciben sus 
productores sean en promedio 34% más alto de los precios mundiales (OECD, 2004). ¿Qué 
medidas piensan tomar las CE para evitar que la acumulación de pagos pro venientes de programas WT/TPR/M/136/Add.1 
Page 190  
 
de caja ámbar, azul y verde, para un mismo producto,  no tengan el efecto perverso de distorsionar 
la producción y el comercio? 
 
A: Green box payments have by definition no or at most minimal trade-distorting effects on production. Blue box payments are allowed und er production-limiting programs. The different 
support measures target different objectives and resp ect the criteria set out by the Agreement on 
Agriculture. The different types of support can  therefore not be cumulated per commodity. 
 
Q9. Pese a los esfuerzos por reformar la PAC aún existen sectores productivos de las CE 
aislados de los mercados mundiales y beneficiarios de ayudas desproporcionadas a la producción y 
el comercio.  El banano es un ejemplo.  Pese a que las CE producen el 1.16% de la producción 
mundial de banano, los productores comunitarios recibieron en el año 2001, 219 millones de euros 
(DG  Agriculture, 2003), lo cual significa una ayuda equivalente de más del 200% del precio por caja que recibe un productor bananero en Costa Ri ca.  ¿Podrían las CE detallar qué piensan hacer 
para reformar el sector bananero comunitario para que cumpla con el objetivo del Acuerdo sobre 
la Agricultura de establecer un sistema de co mercio agropecuario equitativo y orientado al 
mercado que prevea reducciones progresivas sustanciales de la ayuda y de la protección a la agricultura? 
 
A: An evaluation of the banana sector in th e European Union is currently under way. This 
evaluation covers all the instruments of the Co mmon market Organisation for bananas including 
financial support to EU producers. 
 
Sistema Generalizado de Preferencias 
  
 Q10. Uno de los instrumentos que las CE ha u tilizado en apoyo a los países en desarrollo es el 
sistema general de preferencias (SGP).  ¿C uáles serán los pilares fundamentales del nuevo 
reglamento que comenzará a regir a partir del 2006 y cuándo espera las CE aprobar dicho reglamento?  
A: The new GSP will provide the beneficiary count ries with simplification (in cutting from 5 to 3 
different arrangements, setting up a simplified gradua tion). It will provide a better offer (extension of 
the products coverage, in particular to the fisher y sector) and greater stability (applicable 3.5 years 
without any changes, including the graduation). It will be better focussing on the developing countries most in need (rather than on the very big benefi ciary like China or India), and will encourage the 
sustainable development in its various fields (d emocratic, social, environmental, governance issues, 
including the fight against drug production and trafficking).  Normas de Origen
 
  Q11. Las CE mencionan en el informe presentado a la Secretaría que otro paso importante para 
permitir a los países en desarrollo  un mejor acceso al mercado comunitario fue la adopción del 
Libro Verde para simplificar los procedimientos y requisitos relacionados con las reglas de origen 
preferenciales.  ¿Cuáles modificaciones han si do o serán implementadas para lograr este objetivo? 
 
A: The EU applies the same non-preferential rules of origin for all countries and for the various 
items listed in the question by Costa Rica. In other words, in the absence of the pre-conditions for the 
application of a preferential scheme, the same non-pr eferential rules of origin are used to apply the 
Customs Tariff of the European Communities (with  the exception of preferential tariff measures 
contained in agreements the Community has concl uded with certain countries or group of countries 
and which provide for the granting of preferentia l tariff treatment) or measures other than tariff 
measures established by the Community provisions governing specific fields and relation to trade in WT/TPR/M/136/Add.1 
Page 191 
 
 
 goods. As required by Article 1 of the WTO Agre ement on Rules of Origin, in addition to MFN 
treatment under Articles I, II, III, XI and XIII of GATT 1994, the EU applies non-preferential rules of 
origin also to non-preferential trade policy in struments such as anti-dumping and countervailing 
duties under Article VI, safeguard measures unde r Article XIX and discriminatory quantitative 
restrictions or tariff quotas, as well as to govern ment procurement and for statistical purposes as 
indicated in Costa Rica’s question. There is only on e set of non-preferential rules (s. Article 24 of 
Council Regulation (EEC) 2913/92 establishing the Community Customs Code) for all these instruments and without any geographical differentiation. 
 
Normas Técnicas al Comercio
 
 
Q12. En concordancia con su política de desarro llo sostenible, las CE son parte del Acuerdo 
relativo al Programa Internacional para la Con servación de los Delfines (APICD).  ¿Cuáles 
medidas han sido adoptadas por las CE para implementar la certificación sin riesgo para los 
delfines ("Dolphin Safe") que promueve dicho Acuerdo? 
 
A: The Community, acting as a responsible memb er of the AIDCP, joined in the consensus 
during the AIDCP meeting in El Salvador in 2001, in adopting the Dolphin Safe Certification System 
and the related AIDCP Dolphin Safe label.  It should be recalled that the application of this system is 
voluntary for each Party – it is not binding. 
The question of the eventual implementation of this AIDCP Certification and labelling 
scheme in the Community has been raised with the Member States in  the Council of Ministers. The 
matter is still under consideration by the European Community.  
 
Servicios  
 
Q13. ¿En qué estado se encuentra el proceso para establecer un marco regulatorio para el 
mercado interno de servicios en  las CE a partir  del año 2010? ¿Este marco regulatorio cubriría 
todos los sectores de servicios?   
A: The proposal is being considered by the Council of Ministers and by the European 
Parliament, who both have to approve the text. Agre ement is unlikely to be reached before end of 
2005 at the earliest. According to the Commission proposal, MS would then have two years to 
transpose the Directive into national law.  The proposal covers all services that corres pond to an economic activity within the meaning 
of the EU Treaty as clarified by well-established ju risprudence of the European Court of Justice, 
except financial services, transport services and electronic communications networks and services 
(insofar as they are dealt with by the 2002 regul atory package on electronic communication services). 
These three areas are explicitly excluded from the scope of the Directive. As the Court of Justice has 
consistently held with regard to Articles 49 et seq  of the Treaty, the concept of service covers any 
economic activity normally provided for remunerati on, without the service having to be paid for by 
those benefiting from it and regardless of the financ ing arrangements for the remuneration received in 
return, by way of consideration. Any service whereby a provider participates in the economy, 
irrespective of his legal status or aims, or the fiel d of action concerned, thus constitutes a service. The 
proposal does not cover "non-economic" services, such as public administration or public education, 
which are provided by the state or public entities in  fulfilment of their duties towards their population 
and without any economic consid eration. More detailed information is available on:  
http://europa.eu.int/comm/internal _market/en/services/services/index.htm . 
 Q14. ¿Qué reformas han considerado que deben rea lizarse en el sector de servicios financieros 
para poder contar con un marco regulatorio comunitario?  WT/TPR/M/136/Add.1 
Page 192  
 
A: Over a period of about thirty years the EU  has developed a number of directives in the 
financial services sector which co-ordinate the au thorisation and ongoing pr udential requirements 
relating to banks, insurance companies, investme nt firms, collective investment funds and asset 
management companies. An authorisation grante d in the financial service provider’s home Member 
State enables it to set up branches and provide service s in other Member States without the need for a 
further authorisation (the principle of “home country control”). 
 More recently a fresh political impetus was given to removing remaining obstacles to the creation of a true single market for financial ser vices with the adoption of the Financial Services 
Action Plan (FSAP).  Most of the measures set out in  the FSAP have now come into force.  For more 
details of the FSAP please refer to the website :  http://europa.eu.int/comm/internal_market/ 
en/finances/actionplan/index.htm. 
 
Q15. ¿Qué tipo de medidas se aplican en el sector de servicios financieros en relación con la 
vigilancia y fiscalización prudencial? 
 A: Directives adopted at EU level by the Council and the European Parliament set out the 
authorization and prudential requirements that Member  States have to apply to their banks, insurance 
companies, investment firms, collective investme nt undertakings and asset management companies. 
Such directives typically lay down minimum requirements for the initial capital that the financial service provider must have, for the competence of it s directors and the suitability of its shareholders.  
Rules are also laid down for th e need to respect minimum cap ital ratios on an ongoing basis.  
Supervisory bodies must be appointed to monitor the respect of these rules. 
 More details of the regulatory regime applicab le in each of the different financial services 
sectors are available on http://europa.eu.int/co mm/internal_market/index-finances_en.htm. 
 
Inversión
 
 
Q16. ¿Se ha considerado la posibilidad de establecer un marco regulatorio comunitario con 
respecto a la inversión?  
A: The EC regime on investment is defined by EC Treaty provisions on right of establishment 
and free movement of capital and payments (artic le 43 and following and Article 56 and following) 
and by implementing legislation  
 
Medidas Antidumping y Compensatorias  
 Q17. Se entiende que las medidas antidumping y compensatorias son de aplicación general para 
la importación de mercancías a toda la Comunid ad Europea.  ¿Cómo se de termina o define la 
“rama de producción nacional” dentro de las CE  pa ra evitar  que la aplicación de dichas medidas 
no sea utilizada como medida proteccionista a favor de  productores que por sus características de 
producción no se ven afectados por las importaciones en cuestión? 
 
A: Art 9 of the Basic Regulation states that when the “Community Industry” suffers material injury from dumped imports, measures shall be imposed. Furthermore Art 4 (1) of the Basic 
Regulation states that the Community Industry shal l be interpreted as referring to the Community 
producers as a whole of the like products or to those of them whose collective output of the products 
constitutes a major proportion Community production of those products, except in case of related 
exporters or importers and in the case of regional cases. 
These provisions are a transposition of the Ar t 9 of the WTO Anti-dumping Agreement. It 
follows from this that measures shall be imposed if  a positive determination of injury has been made 
with regard to the “Community Industry” as defined in the above mentioned Article. 
 WT/TPR/M/136/Add.1 
Page 193 
 
 
 Q18. El informe indica que en el momento de la adhesión a las CE , los nuevos miembros deben 
adoptar las medidas antidumping que estén en vigor en ese momento para las CE  y renunciar a las individuales.  Si estos países, después de incor porarse a las CE  consideran  que las importaciones 
que antes estaban sujetas a medidas antidumping en su país siguen causando daño, ¿deben solicitar una investigación nueva o existe un proced imiento más expedito para la revisión de la 
aplicación de estas medidas para este caso?  
A: Indeed, as of 1 May 2004, all the TDI measures in force in the 10 new EU Member States lapsed. So did all the on-going inv estigations and TDI legislation of these states because trade defence 
is part of the EU Common Commercial Policy. A ccordingly, after 1 May 2004 the 10 new Member 
States did not have to (and, legally, as individual EU Member States they even could not) adopt any 
trade defence measures – they simply had to start to  apply and enforce the EC trade defence measures, 
which are applied uniformly across the entire cust oms union. There is no special procedure for the 
Community Industry to launch a complaint concerni ng imports of any of the products that were under 
the national TDI measures of the 10 new EU Member States prior to 1 May 2004 – as of 1 May 2004 
all new complaints have to be based on the EU- 25 data, including the data for the standing of the 
complaint, injury, and dumping.  
Política de Competencia
 
 Q19. Debido a que el sistema centralizado de notificación fue abolido en la ley del 16 de 
diciembre del 2002, ¿existe algún tipo de proced imiento que permita a las empresas que estén 
estudiando los efectos anticompetitivos de algú n acuerdo recibir guía o tener algún criterio 
preliminar por parte de la Comisión acerca de si  el acuerdo propuesto efectivamente calza en las 
excepciones establecidas en la ley? O, ¿es esto una  revisión que hace la Comisión ex - post? ¿Ha 
habido algún caso en que la Comisión haya determinado ex – post que algún acuerdo entre 
empresas sí perjudicaba la competencia?  
A: For over forty years, the EU anti-trust rules provided for undertakings to notify to the European Commission agreements between them, wi th a view to obtaining from the Commission a 
decision, or at least an indication, of whether the agreement infringed the competition rules or not. 
Notification did not in any way prevent the implemen tation of an agreement, and could be made at 
any time, not necessarily ex-ante, but possibly long after an agreement had entered into force. The 
main advantage of notification was the immunity from fines which the rules conferred as from the 
date of the notification, and many notifica tions were made mainly for this reason. 
 This possibility of notification was removed,  with effect from May 2004, in the recent 
“modernisation” of the EU’s anti-trust rules. It was considered that the notification procedure had 
served its purpose, and that it tied up a large pr oportion of the staff of DG Competition, often on 
agreements of minor significance, which could be bette r utilised in investigating serious restrictions of 
competition.  There exists now in the EU a considerably body of case-law on many different types of competition cases, complemented by guidelines on various  subjects (horizontal co-operation, vertical 
co-operation, transfer of technology agreements , for example) and block exemption regulations, 
which declare certain categories of agreements co mpatible with the competition rules. This is 
regarded by the Commission as adequate to enable undertakings and their legal advisers to assess for 
themselves the compatibility with the EU compet ition rules of any agreement. The modernised 
competition rules do allow the Commission to adopt decisions finding that a particular practice does not infringe the competition rules, and to issue guida nce letters, but this is envisaged as an exceptional 
procedure, for cases which raise novel issues. The majo rity of Commission decisions will in future be 
prohibition decisions in cases of serious infringements of the competition rules. WT/TPR/M/136/Add.1 
Page 194  
 
Even before the abolition of the notification syst em, virtually all of the anti-trust decisions of 
the Commission were ex-post, in the sense that they concerned agreemen ts and other commercial 
practices which were already being implemented. This  continues to be the case. Information about the 
Commission’s anti-trust decisions is available on the Competition part of the Europa web site
48. 
  Propiedad Intelectual
 
 Q20. ¿Podrían las CE  indicar si las regulacio nes en materia de indicaciones geográficas 
contemplan la protección de indicaciones geográf icas de productos distintos a los productos 
agrícolas, alimenticios, vinos y bebidas espirituosas , por ejemplo productos artesanales, así como 
de indicaciones geográficas de servicios?.  De ser  así, ¿podrían  describir el tipo de protección 
otorgado a este tipo de indicaciones geográficas? 
 
A: No, las Comunidades Europeas no disponen de legislación comunitaria específica para la protección de indicaciones geográficas y denominacion es de origen de productos distintos de los 
products agrícolas, alimenticios, vinos y bebidas espirituosas. Sin embargo, la protección existente 
conforme a la legislación comunitaria sobre marc as (Directiva de marcas 89/104/CEE, Reglamento 
sobre la marca comunitaria 40/94) y publicidad (D irectiva 84/450 sobre publicidad engañosa), así  
como conforme a la legislación de los Estados Miembros sobre marcas y competencia desleal, está 
disponible para estos productos.  Q21. ¿Podrían  describir las enmiendas incluidas en las disposiciones para regular la protección a las indicaciones geográficas homónimas, a que se  hace referencia en el párrafo 143 del Informe 
de la Secretaría? 
 
A: Dichas enmiendas fueron introducidas por el Regl amento 692/2003 del Consejo, de 8 de abril 
de 2003, que modificó el Reglamento (CEE) 2081/92. La enmienda consistió en añadir en su artículo 
6, referido al procedimiento de registro de i ndicaciones geográficas relativas a productos procedentes 
de áreas geográficas situadas en la Unión Euro pea, un nuevo párrafo (párrafo 6.6) relativo a 
solicitudes de registro referidas a denominacion es homónimas de denominaciones ya registradas. Los 
criterios que, según dicho párrafo, serán tenidos en cuenta a la hora de registrar una denominación 
homónima, son los usos locales y tradicionales y los ri esgos efectivos de confus ión, con el fin de no 
inducir a error al público. 
 En definitiva, ante una situación de homonimia entre denominaciones de distintos Estados Miembros de la Comunidad, el resultado puede ser  la necesidad de indicar el Estado Miembro de 
origen con el fin de poder diferenciarlas. 
Resulta de interés añadir que, en su Artíc ulo 12.2. el Reglamento 2081/92 establece que: 
“Cuando una denominación protegida de un país  tercero sea homónima de una denominación 
protegida comunitaria, se concederá su registro teniendo en cuenta los usos locales y tradicionales y 
los riesgos efectivos de confusión.  La utilización de  tales denominaciones sólo se autorizará si en el 
etiquetado se indica de forma clara y visi ble el país de origen del producto.” 
Evidentemente, esta última referencia a “tales denominaciones” es aplicable tanto a 
denominaciones protegidas de terceros países como de la Comunidad. Por tanto, la obligación de 
indicar el país de origen puede corresponder tant o a la denominación del país tercero como a la 
comunitaria.  
Q22. ¿Podrían  describir en detalle las regulacio nes aprobadas por el Consejo para combatir la 
piratería y falsificación, mencionadas en el  párrafo 146 del Informe de la Secretaría? 
 
                                                     
 
48 http://europa.eu.int/comm/competition/antitrust/cases/ WT/TPR/M/136/Add.1 
Page 195 
 
 
 A: The new regulation 1383/2003 was drafted in close c ooperation with right-holders and 
associations. The changes it introduces over previous legislation can be summarised as follows: 
• The scope of anti-counterfeit and piracy action is extended to ot her intellectual property rights 
 in order to protect consumers more effectively. Statistics show that there are as many  counterfeit food products as tex tile products. It was therefore essential to include geographical 
 indications, designations of origin and plant variety rights. 
• In order to facilitate action by small and medi um-sized businesses in Europe, applications for 
 action submitted to customs authorities will be free of charge and their form and the 
 information required will be standardised , with validity extended to one year.   
• Faster destruction of counterfeit products will ta ke place for specific cases, in particular for 
 goods presenting a risk for the health and safety of consumers are concerned.   The new legal instrument should enable the customs authorities, in close cooperation with right 
holders, to improve checks at exte rnal borders and protect consumers more effectively bearing in mind 
the need not to impose excessive checks that woul d run counter to our aims  in trade facilitation. 
 
Procedimientos aduaneros
 
 Q23. En el marco de la inclusión de los 10 nuevos miembros a las CE, ¿de qué manera se les 
brinda apoyo, cooperación y/o asistencia técn ica a los miembros para que puedan adoptar e 
implementar de manera exitosa  el EC's Customs Code (CC)? 
 
A: In the pre-accession period, long term and s ubstantial support and assistance was provided to 
the countries which became EC Member States in 2004. This process also addressed the need to 
ensure that the candidate countries were in a pos ition to successfully implement the EC customs law 
on accession to the EU. This process was completed before accession of 10 new Member States. From 1 May 2004, Community legislation is directly appl icable in the Member States. New Member States 
do not need to adjust their legislation, given th at their national customs regimes cease to apply. 
 
Compras del sector público
 
 
Q24. ¿Existe algún mecanismo por medio del cual proveedores de países que no forman parte del Acuerdo sobre Contratación Pública puedan participar en las contrataciones públicas que 
realicen los Estados de la Comunidad Europea? 
 A: In addition to the WTO Agreement on Govern ment Procurement (GPA), the EC has entered 
into a number of bilateral agreements that grant s uppliers from third countries the right to participate 
in tender procedures in the EU. There is no mechan ism that grants suppliers from other countries the 
right to participate in tender procedures in the EU.  
Medidas en materia de medio ambiente
 
 
Q25. ¿Cuáles serían, en general, los estánda res ambientales internacionales que toman en 
consideración las CE para otorgar  incentivos adicion ales dentro en el marco del  régimen SGP?  
 Q26. Por otra parte, ¿Cuáles serían específicame nte los estándares ambientales de la ITTO que 
los países deberían de cumplir para que en el marco del  régimen SGP los países puedan gozar de 
incentivos adicionales?  
 
A: Combined answers to Qs 25 and 26
 
 With its new “GSP+”, the EC intends to urge  the beneficiary countries to better take into 
consideration in their development strategy not  only the environmental issues, but also the WT/TPR/M/136/Add.1 
Page 196  
 
“sustainable development” as a whole (democratic ri ghts, social rights, environmental and governance 
issues, including the fight against the drug production and trafficking). Accordingly, the “GSP+” arrangement will be granted to those of the GSP benefi ciaries that will have ratified, at the entry into 
force of the regime, at least 23 conventions ma king up the core of the sustainable development 
 QUESTIONS FROM CHILE 
 
INFORME DE LAS COMUNIDADES EUROPEAS
 
 
Párrafos 30 a 37  
 
Q1. Chile apoya la visión de la UE, en cuanto  a que se debe buscar conciliar el crecimiento 
económico, la protección ambiental y los derechos sociales y laborales.  Desearíamos saber cómo 
este objetivo se relaciona con el concepto de las llamadas “preferencias colectivas” y con la 
reciente sugerencia hecha por el Comisario Lamy de un nuevo tipo de salv aguardia ligada a dichas 
preferencias.       
A: “Collective preferences” have become a majo r shaping factor in international relations. The 
key question is how the social choices of trading part ners can interact with one  another. For example, 
the European approaches to issues su ch as rural development or animal  welfare play an important role 
in our relations with third countries. In the current context of declining traditional trade barriers, trade 
disputes tend to be more related to the specific ities of the norms and rules societies decide on 
according to social choices.   As tariffs and quantitative restrictions to tr ade have been successful ly tackled in successive 
rounds of trade liberalisation during GATT talks, “h idden difficulties” have progressively come to the 
forefront of global trade talks. Non-tariff barriers to  trade, which derive from differences in standards 
and regulatory issues, can reflect underlying differences in collective preferences and priorities. Trade 
flows have grown exponentially in scope and magnitude, bringing into contact value systems .  
In seeking to promote further market opening world-wide, politicians and trade negotiators 
are increasingly confronted w ith the issue of diverging  collective preferences among trading partners, 
for instance in areas of rural development or sanita ry risk. Differences in societal choices and national 
values give rise to frictions and exacerbate the legiti macy crisis currently faced by the world trading 
system. Politicians and trade negotiators have to reconcile two objectives: promoting the opening-up 
of global markets, while safeguarding cer tain legitimate collective preferences.  
A number of avenues have been considered over th e years to deal with this problem. To some 
extent the WTO has already tackled this question: both its legal text and the dispute settlement body 
recognise the legitimacy of different preferences.  
We are still at the beginning of the reflection on th at topic and to explore further this question, 
the European Commission organised a high level conference on the issue of collective preferences 
and global governance. The event to ok place in Brussels on September 15
th. Key people from 
academia, business, and several international bodies partook in an open exchange to examine these 
issues. One of the main conclusion was that sci ence and proportionality, where relevant, should 
remain important criteria when setting norms and rules relating to collective preference.  
The European Commission will certainly continue  to support and encourage reflection on this 
issue. It will remain, in any event, up to each WT O Member to pursue its own collective preferences. 
 WT/TPR/M/136/Add.1 
Page 197 
 
 
 INFORME DE LA SECRETARÍA  
 
III  POLITICAS Y PRACTICAS COMERCIALES POR MEDIDAS  
 2) Medidas que afectan directamente a las exportaciones
 
viii) Medidas comerciales especiales  
a) Salvaguardias  
 Párrafo 56
 
 
Q2. La legislación comunitaria contempla como posibilidad el modificar, suspender o eliminar 
derechos antidumping frente a la adopción de una salvaguardia, co n el fin de evitar la ‘doble 
protección’. Dicha posibilidad ¿constituye una política absoluta de la UE, en el sentido de eliminar 
siempre un derecho antidumping frente a la ado pción de una salvaguardia? ¿Qué factores o 
causas permitirían la mantención conjunta de un derecho antidumping y una medida de 
salvaguardia sobre un mismo producto importado?  
A: On 6 March 2003, the Council of the Europ ean Union adopted Regulation (EC) No 452/2003 
on measures that the Community may take in relatio n to the combined effect of anti-dumping or anti 
subsidy measures with safeguard measures (Offici al Journal L 69 of 13 March 2003, page 8). 
According to this Regulation, the European Co mmunity can amend, suspend or repeal anti-
dumping and/or anti-subsidy measures, or exempt  imports from  anti-dumping or countervailing 
duties which would normally be payable, if it cons iders that the combination of these measures with 
safeguard measures could have effects greater than  those intended or desirable in terms of the 
Community’s trade defence policy and objectives. This  would be in particular the case, if such a 
combination could place an undesirably onerous burden on certain exporting producers seeking to 
export to the Community, which could have the eff ect of denying them access to the Community 
market. 
To date, this Regulation has been applied to th e anti-dumping measures applicable to certain  
hot-rolled coils and to certain tube and pipe fitti ngs, of iron or steel (Council Regulation (EC) No 
778/2003 of 6 May 2003 applicable to certain L 114/1), where the anti-dumping duty payable was 
reduced by the amount of the applicable safeguard duty 
 
Párrafo 59 
 
 Q3. Este párrafo hace mención a medidas de sa lvaguardia que, en el contexto del mercado 
interno, los Estados miembros recientemente ing resados a la UE pueden adoptar en contra de los 
Estados miembros “antiguos”, y viceversa.  Estas medidas, ¿se basan en los criterios y 
requerimientos contenidos en el Artículo XIX del GATT de 1994 y en el Acuerdo sobre Salvaguardias de la OMC?  
A: Article 37 of the Act of Accession of the ten new Member States to the EU gives the 
possibility for both "old" and "new" EU Member s to take safeguard measures in exceptional 
circumstances, and only for the first three years fo llowing accession, in trade against one or more of 
the new Member States. Such a measure is taken w ithin the customs union in relation to a member of 
that customs union (hence the name of "internal ma rket safeguard"), and therefore does not relate to 
Article XIX (GATT). The duration of any measure w ill be defined by the European Commission on a 
case by case basis when taking the measure. 
What kind of protective measures may be allo wed and how would they be implemented?  
In accordance with Article 37(3) of the Act of  Accession they may involve derogations from 
the rules of the EC Treaty and from the Act of Acce ssion whose scope and dura tion is limited to what WT/TPR/M/136/Add.1 
Page 198  
 
is strictly necessary to rectify the situation and adju st the sector concerned. Priority shall be given to 
measures which will least disturb the functioning of  the internal market. Measures must not entail 
frontier controls. Protective measures must be au thorised by the European Commission, and the 
Commission will ensure the respect of the a bove principles. Protective measures would be 
implemented by the responsible authorities on th e basis of a decision taken by the European 
Commission. Before taking any measure, the Commi ssion will consult all Member States, and in 
particular it will hear the views and positions of th e Member States directly affected by the potential 
safeguard measure.  
If protective measures restrict products coming from certain member States, how will the 
flow of these products be controlled given the pr inciple of the free flow of goods within the EC 
market? 
The precise mechanisms for implementing and enforcing protective measures will depend on 
the specifics of each case, but must not involve borde r controls within the EC internal market. Other 
mechanisms are allowed as long as they respect th e proportionality requirements laid down in the Act 
of Accession, in particular the requirement to opt  for measures which least disturb the functioning of 
the internal market. The European Commission will en sure the respect of the principles laid down in 
Article 37 of the Act of Accession when deciding on possible measures. There are as yet no practical examples of safeguard measures invoked under Article 37 of the Act of Accession.  
 
b) Medidas Antidumping
 
 
Párrafo 60  
 Q4. El artículo 5.10 del Acuerdo Antidumpi ng establece que, salvo en circunstancias 
especiales, las investigaciones deberán concluirse dent ro de un año.  Sin embargo, en el Informe de 
la Secretaría se señala que las investigaciones an tidumping en la UE concluyen normalmente 
dentro de un período de 15 meses, ¿Cuáles son la s circunstancias especiales que justificarían que 
normalmente las investigaciones en la UE demoren más de un año en concluirse?  
 
A: The EC Basic Antidumping Regulation goes be yond the time limits laid down in Article 5.10 
ADA. While the indicative time limit is set at 12 months under both legal frameworks, the EC legal 
framework allows for a maximum of only 15 months  as opposed to 18 months in Article 5.10 ADA.  
Investigations in the EC are thus carried out considerably more swiftly than provided for by the ADA 
and than done in many other countries. However, as a matter of fact and law, investigating authorities 
not only have to strive for carrying out swift inv estigations, but must also ensure accuracy of the 
findings and give the parties sufficient time and opportunity for exercising their rights of defence. The EC considers that accuracy of findings and rights of parties in antidumping investigations are at least 
on equal footing with the requirement of swiftness.  If the indicative 12-month time limit cannot be 
met in EC antidumping investigations , it will usually be due to the fact ual and legal complexity of the 
case and/or the necessity to give parties extensive opportunity to defend their rights, including by 
extending statutory deadlines. This being said,  the EC has indicated in the DDA Rules Group 
negotiations that it would be willing to discuss as to  whether the periods set out in Article 5.10 ADA 
could be significantly shortened (joint paper with Japan, TN/RL/W/138). 
 
ix) Obstáculos Técnicos al Comercio
 
 Párrafo 72
 
 
Q5. Con respecto a  las regulaciones no armoni zadas que se mencionan en el Párrafo N°72: 
  A)  ¿Qué trato recibe un producto importado que cumple con las especificaciones técnicas o de 
calidad de un determinado Estado miembro de la UE , y que luego de ser importado al territorio de WT/TPR/M/136/Add.1 
Page 199 
 
 
 ese Estado, se lo quisiera comercializar en ot ro Estado miembro que requiere especificaciones 
diferentes?  En este caso, ¿se aplica al producto im portado (producido fuera de la UE) el principio 
de reconocimiento mutuo entre productos similares pr oducidos en distintos Estados miembros de la 
UE? 
 A: The principle of mutual recognition plays an important part in the non-harmonised field of 
goods (Articles 28 and 30 EC Treaty). Thanks to it, the free movement of products within the EU is 
possible in the absence of any Community harmon ising legislation. Under it, Member States of 
destination cannot forbid the sale on their territories of products lawfully manuf actured or marketed in 
a Member State, even if the product in question was manufactured according to different technical 
and quality rules than those that must be met fo r their own products. The only exception to this 
principle are restrictions laid down by the Member State of destination, provided that these are justified on the grounds described in Article 30 of the EC Treaty or on the basis of overriding 
requirements of general public importance recognised by the Court of Justice’s case law, and that they 
comply with the proportionality principle. 
The principle of mutual recognition also a pplies to products coming from third countries, 
provided they are legally marketed in the Member St ate where they are first sold. Article 24 of the EC 
Treaty states that “products coming from a third country  shall be considered to be in free circulation 
in a Member State if the import formalities have  been complied with and any customs duties or 
charges having equivalent effect which are payable have  been levied in that Member State, and if they 
have not benefited from a total or partia l drawback of such duties or charges”. 
 
B) La comunicación que se señala al final de l párrafo 72 se refiere a la carga de la prueba y 
resume cuándo y cómo se puede restringir el libre mo vimiento de productos.  Sin embargo, la nota 
al pie de página N°107, a la cual dicho párrafo hace referencia, señala la comunicación OJ C265 del 4 de noviembre del 2003, la cual trata de la aplicación de los Artículos 87 y 88 del Tratado de la 
UE para la ayuda estatal a PYMEs involucradas en  la producción, procesamiento y marketing de 
productos pesqueros.  Pareciera que existe un error en la referencia.  Chile quisiera conocer cuál 
es la comunicación que se señala en el párrafo N°72. 
 
A: The document in question is:  Commission in terpretative communication on facilitating the 
access of products to the markets of other Member  States: the practical application of mutual 
recognition Official Journal C 265 , 04/ 11/2003 P. 0002 - 0016   
 
C) Considerando los siguientes puntos: 
La UE parecería tener algunos problemas en la  aplicación del principio de reconocimiento 
mutuo (de acuerdo a lo señalado en el párrafo 72).  En 2001 (con sólo 15 estados miembros) el 
número de productos no armonizados fue alrede dor de 21% del total de líneas arancelarias . 
 ¿Cómo planea la UE abordar los mayores costos, trámites y barreras para el libre 
movimiento que surgirán del aspecto no armoni zado de una regulación tan compleja como es la 
denominada REACH?   
A: The REACH proposal would introduce a single, harmonised system of chemicals legislation that would apply in all Member States of the Europe an Union. It will therefore strengthen the internal 
market within the EU with re gard to the free movement of chemicals and articles containing 
chemicals. The European Communities considers that REACH is compatible with WTO rules 
 WT/TPR/M/136/Add.1 
Page 200  
 
IV POLITICAS COMERCIALES POR SECTOR
 
 
6) Servicios  
iv) Transporte  
 
Párrafos 130-131  
 Q6. Teniendo en cuenta que desde mediados de los años 80 ha habido una tendencia hacia la adopción de banderas de conveniencia por parte de la  flota de la UE, y que hoy existiría un interés 
de que dichos barcos vuelvan a naveg ar portando banderas de la UE:  
¿Cuál es la posición de la UE respecto de los subs idios estatales y beneficios tributarios otorgados a 
las embarcaciones que porten bandera europea? ¿Con sidera la UE que estos mecanismos puedan 
tener un efecto distorsivo sobre el comercio de servicios en este sector?  
 
(i) Turismo
 
 
Párrafo 143  
  ¿Considera la UE que los altos montos en su bsidios desembolsados en el sector de turismo 
entre 1994-99 pueden tener un efecto distorsivo en el comercio de servicios?  De ser así, ¿se 
encuentra la UE dispuesta a considerar su el iminación o disminución en el marco de las 
negociaciones de la Ronda de Doha?  
 
A: The subsidies in question are strictly discip lined by EC rules and are compatible with EC 
obligations under WTO  QUESTIONS FROM EL SALVADOR  III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDA
 
 (2)  Medidas que afectan directamente las importaciones
 
V. Normas de Origen  
 
Q1. De conformidad al Informe de la Secretaría , "Las normas de origen no preferenciales se 
aplican principalmente con fines tales como la  defensa del comercio, la vigilancia y las 
restricciones de las importaciones, los reintegros a la exportación y las estadísticas comerciales". 
A ese respecto, Cuál ha sido la experiencia europea en la aplicación de une misma 
normativa de origen no preferencial para todos los fines antes señalados?  o bien, la Unión 
Europea cuenta con diferentes normativas de origen  no preferenciales, según los fines de que se 
traten? 
 
A: The EU applies the same non-preferential rul es of origin for all countries and for the various 
items listed in the question by Costa Rica. In other words, in the absence of the pre-conditions for the 
application of a preferential scheme, the same non-pr eferential rules of origin are used to apply the 
Customs Tariff of the European Communities (with  the exception of preferential tariff measures 
contained in agreements the Community has concl uded with certain countries or group of countries 
and which provide for the granting of preferentia l tariff treatment) or measures other than tariff 
measures established by the Community provisions governing specific fields and relation to trade in 
goods. As required by Article 1 of the WTO Agre ement on Rules of Origin, in addition to MFN 
treatment under Articles I, II, III, XI and XIII of GATT 1994, the EU applies non-preferential rules of 
origin also to non-preferential trade policy in struments such as anti-dumping and countervailing 
duties under Article VI, safeguard measures unde r Article XIX and discriminatory quantitative WT/TPR/M/136/Add.1 
Page 201 
 
 
 restrictions or tariff quotas, as well as to govern ment procurement and for statistical purposes as 
indicated in Costa Rica’s question. There is only on e set of non-preferential rules (s. Article 24 of 
Council Regulation (EEC) 2913/92 establishing the Community Customs Code) for all these instruments and without any geographical differentiation.  III. POLÍTICAS Y PRÁCTICAS COMERCIALES, POR MEDIDAS
 
 (2)  Medidas que afectan directamente las importaciones
 
X.  Medidas Sanitarias y Fitosanitarias  
 
Q2. De conformidad al Reglamento (CE) No. 178/2002 se permite que las medidas de gestión 
del riesgo se basen no sólo en la evaluación científic a, sino también en otros factores pertinentes.  
A ese respecto Qué entiende la Unión Eur opea por "otros factores pertinentes"? 
 
A: La Comisión Europea, en su propuesta para la gestión de riesgo, toma en consideración las 
normas, directrices y recomendaciones del Codex, tal como se exhorta en el acuerdo sobre la 
aplicación de MSFS. En lo relativo a otros factores,  véase el manual de procedimiento en su versión 
13a (solo en lengua Inglesa por el momento). La referencia es “ Statements of principle concerning the 
role of science in the Codex decision-making process and the extent to which other factors  are taken 
into account ” adopted in the 21st Session of the Codex Commission (1995). “ Procedural manual of 
the Codex Alimentarius Commission , 13 Ed. Páginas 181-183.  
 
IV.  POLÍTICAS COMERCIALES, POR SECTORES  
 (2)  Agricultura (ii)  Política Agrícola Común (PAC) 
 
Q3. La Reforma Agenda 2000 de la PAC fue aprobada en 2003 por el Consejo de Ministros europeo.  Hasta la fecha, cuáles pasos concretos  ha tomado la UE para implementar esta reforma? 
 
A: The main steps achieved so far for implem enting the 2003 reform of the CAP can be 
summarised as follows: 
Autumn 2003
 
  Series of Council Regulations concerning CA P reform are adopted and published in the 
Official Journal of the European Union49. These regulations lay down the new rules applying to direct 
payments as well as changes in various Common Ma rket Organisations and amend the regulation 
governing support for rural development. 
  Commission proposals for extending the CAP reform process to other sectors: cotton, 
tobacco, olive oil, hops and sugar.  Winter 2003/2004 
 
  Adapting the Act of Accession and the CAP refo rm regulations with a view to the Accession 
of the New Member States by the first of May 200450.  
  First implementing rules (Commissi on Regulations) for the 2003 CAP reform 
 Spring 2004  
  Further implementing rules for the CAP 2003 re form, in particular for the single payment 
scheme, cross-compliance, modulation and controls   Agreement and legal texts on the reform for the cotton, tobacco, olive oil and hops sectors.
51 
                                                      
49 OJ No  L 270 of 21 October 2003. 
50 Council Decision No 281/2004 and Council Regulation (EC) No 583/2004 . 
51 OJ No L 161 of 30 April 2004. WT/TPR/M/136/Add.1 
Page 202  
 
 Summer 2004
 
  Commission proposal for the reform of the sugar sector   Furthermore, in the context of the new financial framework for 2007-2013, the Commission 
adopts a proposal for the future of Rural Development Policy.  QUESTIONS FROM COSTA RICA, ECUADOR, GUATEMALA, HONDURAS, NICARAGUA AND PANAMA 
 
Q1. El inicio de procedimientos bajo el Artícul o XXVIII del GATT por parte de la CE, el 2 de 
agosto 2004, para modificar sus concesiones par a el banano contenidas en sus listas de 
compromisos, deja clara su intención de aument ar el nivel arancelario consolidado para el banano 
de 75 €/mt (o aproximadamente 17% a.v.).  Ese nivel de 75 €/mt ya representa un arancel NMF 
desmesuradamente alto, toda vez que los productores que están afectos al mismo son todos países 
en desarrollo.     
A) Por favor explique ¿cómo se concilia un aumento de ese nivel arancelario, que ya es 
elevado, con los claros compromisos aprobados po r la CE y todos los demás miembros en el 
Programa de Trabajo del 31 de ju lio de 2004, sobre “ mejoras sustanciales de acceso a los 
mercados” y asegurar “la aplicación plena del compromi so de larga data de lograr la más completa 
liberalización del comercio de produ ctos agropecuarios tropicales”? 
B) Por favor explique ¿cómo se concilia un aument o de arancel con el fuerte y público énfasis 
que ha dado la Comisión a la promoción de los intereses comerciales de lo s países en desarrollo en 
la Ronda de Doha.  C) Por favor aclare si la CE tiene contempl ado aumentar el arancel de otros productos, 
distintos del banano, durante la Ronda Doha. 
 
A: Combined answers to Qs A and B
 
 On 2 August 2004 the EC notified its intention to withdraw its concessions for bananas with a 
view to move to tariff-only. According to Ar ticle XXVIII (GATT) members of the WTO have 90 
days to make a claim. The EC is examining the cl aims received and intends to enter into negotiations 
with a view to find a mutually satisfactory agreement. 
     
A: Answer to Question C  
 GATT Article XXVIII procedures and rights fo r the modification of Schedules are available 
to any WTO Member at any time, includi ng during rounds of multilateral negotiations. 
 
Q2. La Comunicación de la CE del 2 de junio 2004 solicitando la autorización del Consejo de 
la CE a fin de iniciar procedimientos para el banano bajo el Artículo XXVIII, enfatiza en forma 
prominente la necesidad de salvaguardar los in tereses de los productores de banano de la CE, 
específicamente expresó la intención de la Co misión de “mantener un nivel de protección 
equivalente al que existe actualmente con el fi n de asegurar que la producción Comunitaria se 
mantenga y que estos productores no  sean colocados en una situac ión menos favorable que antes 
de la entrada en vigor del régimen de cuotas de importación en 1993.” 
A)  Por favor explique ¿por qué la CE necesita  “mantener” protección en frontera para sus 
productores domésticos cuando ya concede a esos productores subsidios anuales de hasta €200-300 
millones, lo que aproximadamente asciende a $7.50 por caja? B) Por favor explique detalladamente cualquier modificación a su sistema de subsidios que a 
partir del 2006 esté contemplando la Comisión.  WT/TPR/M/136/Add.1 
Page 203 
 
 
 A: Document COM (2004) 399 is a Communication adopted by the European Commission. In 
conducting the Article XXVIII negotiations, the EC w ill respect all its obligations, while pursuing the 
various policy objectives pursued in its bananas regime, as mentioned in the Communication.   
 An evaluation of the various aspects of th e Common Market Organisation for bananas is 
currently ongoing 
 
Q3. El comunicado del 2 de junio de 2004 de la Comisión indica que: “como las negociaciones 
del Artículo XXIV.6 [para el banano] sobre la am pliación y las negociaciones del Artículo XXVIII 
para cambiarse al arancel único se estarán conduc iendo en forma paralela, es posible que éstas 
últimas se concluyan antes que aquéllas, en tal caso las consecuencias de la ampliación serán 
tomadas en cuenta” 
A)  Por favor explique, cómo es posible que las negociaciones del artículo XXIV.6 (las cuales 
se refieren a un cambio de régimen que fue instau rado hace casi cinco meses) puedan concluir 
después de las negociaciones del artículo XXVIII (l as cuales se refieren a un cambio de régimen 
que no está programado sino hasta el 2006). ¿Se están contemplando retrasos adicionales no 
usuales en las negociaciones del artículo XXIV.6? 
B)  Por favor explique cómo “l as consecuencias de la ampliación serán tomadas en cuenta” 
dentro de los procedimientos del Artícul o XXVIII, dado que nuestros gobiernos han dicho 
claramente que estos dos procesos no pueden fusionarse. 
 
A: The content and outcome of negotiations r esulting from the EC notifications to the WTO 
G/SECRET/20 and G/SECRET/22 are for discussions with members having negotiating rights under 
GATT Article XXVIII procedures.  
Q4. Los Procedimientos de 1980 para las Ne gociaciones bajo el Artículo XXVIII prescriben 
que si se va a modificar una concesión, la modifica ción propuesta se debe indi car en la notificación 
o bien circularse tan pronto como sea posible. 
A) Por favor aclare cuándo será anunc iada la modificación propuesta. 
B) Por favor aclare qué calendario contempla la  Comisión para sustanciar los procedimientos 
del Artículo XXVIII. 
 
A: Negotiations within the frameworks of Article XXIV. 6 (GATT) and Article XXVIII (GATT) 
are carried out with the countries having negotiation s rights. The EC will seek to reach a mutually 
satisfactory outcome of such negotiations, as pr ovided for by the relevant provisions of the 
agreements.  
QUESTIONS FROM KOREA  
 
II.  TRADE REGIME 
 
 
(page 8-15, para. 26-32)    
 
Q1. It is believed that there will be opportunities for an expansion in trade and investment both 
within and outside of the EC as a consequence of its enlargement to 25 me mbers.  However, there 
are worries about the trade diversion effect that th e increase of intra-EC trade will exceed that of 
extra-EC trade because of the inflow of investment and transfer of factories into the newly expanded areas.  
 Does the EC have any detailed statistical data to show whether or not the trade diversion 
effect exists as a result of its enlargement?   WT/TPR/M/136/Add.1 
Page 204  
 
A: The EC does not have any detailed statistical data  in this matter. In any event, the very high 
degree of trade and economic integration achieved with the new Member States before accession guarantee that trade diversion effects, if any, would be minimal. 
 
(Page 27-36, para. 38-66) 
 
Q2. The Secretariat’s report indicates that th e EC has been pursuing regional or bilateral 
economic agreements with non-me mber countries. In addition, Mr. Mandelson, the Commissioner 
designate for Trade, reportedly mentioned during his confirmation hearing that he is ready to 
consider the launching of new regional or other bilateral negotiations.  
 Does the EC envisage FTA negotiations with Northeast Asian countries, including Korea?  
 A: The EC is committed, above all, to mu ltilateral institutions and solutions. The Doha 
Development Agenda (DDA) is, and will continue to be, the EC’s main priority. In consequence, all 
of the EU’s RTA-negotiation processes originate fro m before the launch of the DDA and the EC has 
so far chosen to refrain from introducing new RTA- negotiations before the conclusion of the DDA. At 
the same time, while the EC has no plans at the mo ment to negotiate further RTAs beyond those for 
which the EC already has negotiating mandates, the Community has begun some trade dialogues and 
initiatives with different regions that could pave the way for future RTAs once the DDA is completed 
and depending on an evaluation of potential gains and whether the partner regions in question move to 
a high level of regional integration. With respect to the EC’s RTAs, it should furthermore be noted 
that the EC has both opted for a broad-based appro ach – covering cooperation, political dialogue and 
trade – and endeavoured to negotiate agreements wi th groups of countries that support and build upon 
integration efforts among themselves. The EC is c onvinced that this approach provides the best 
possible framework for improving the capacity of the EU’s partners to reap the full benefits of trade 
and ensure their long-term sustainable development.  This is particularly important for developing 
country partners, as illustrated in the negotiations  on Economic Partnershi p Agreements with the 
ACP-countries. 
In sum, the EC does not preclude the launch of additional regional or other bilateral 
negotiations in the future. For exampl e, the EC has agreed to look at  this in the medium terms with 
some Latin American countries. The line taken by th e EC is that we remain open to evaluate, on a 
case by case basis, potential candidates for regional trade agreements, even though this is, first and 
foremost, envisaged after the conclusion of the Doha-round.  
 
III.  TRADE POLICIES AND PRACTICIES BY MEASURE 
 
 
(page 37-52, para. 1, 15-16, 19-20, 47) 
 
Q3. It is our understanding, from the Secretariat’s report, that the EC has a total of 2,091 HS 8 
digit items (or EC’s CN code 8 digits under the Common Customs Tariff column) that are subject 
to the WTO Agreement on Agriculture. 968 of th ese items are subject to non-ad valorem. The 2004 
average tariff rate for agricultural products is 16.5% in the case of the applied tariff rate and 16.6 
in the case of the bound rate. The EC maintains tari ff quotas for 89 tariff lines, which are the items 
subject to MMA and CMA as a result of the UR negotiation.  
Could the EC confirm whether or not our underst anding above is correct? Are the numbers 
of the tariff lines above based on HS 8 digit? If  not, could the EC inform us of those numbers 
calculated based on HS 8 digit? 
Does the average tariff rate above reflect th e ad valorem equivalents (AVEs) of the 968 
non-ad valorem items as well as the tariff rates of the 1,123 ad valorem items? If not, what was the 
methodology of the calculation?  
Could the EC inform us of the general level of tariff rates of the 1,123 ad valorem items 
and that of AVEs of the 968 non-ad valorem items  respectively? How many items exceed 100, 150, WT/TPR/M/136/Add.1 
Page 205 
 
 
 200 and 250% respectively?  
What is the simple average out-of-quota tariff rate of the 89 items subject to tariff quotas 
(based on HS 8 digit)?  
Among the 89 items subject to tariff quotas, ho w many and which items in terms of HS 8 
digit can trigger SSG? Could the EC inform us of the statistical data about the trigger of SSG for those tariff lines during the last three years (2001-2003)?  
 
A: The EC has around 960 eight-digit tariff lines submitted to non-ad valorem tariffs. The WTO Secretariat decided to calculate AVEs and an averag e tariff rate for EC agricultural products under its 
own responsibility.  
There are several methods to cal culate ad valorem equivalents. Each of these methods give 
very different results. It is why the EC put a st rong disclaimer on its calcula tions of AVEs transmitted 
to the IDB before 2002 (It was clearly underlined th at the calculations were purely technical and not 
reliable).  In 2002, the EC decided to stop to co mmunicate estimates of AVEs to the IDB due to the 
fact that the methods of conversion of specific duties into ad valorem were put on the table of 
negotiation of the DDA. As a matter of fact, it is not  possible to convert specific duties ignoring what 
method of conversion will be agreed by the Members. 
Due to the above reasons, it is not possible for th e EC, at this time, to estimate in a reliable 
way the average tariff ra te for agricultural products and the simp le average out-of-quota tariff rate for 
the agricultural tariff lines subject to tariff quotas.  
All information about tariff quotas and SSG required by WTO commitments have been 
notified each year in due time to the WTO Secretariat.  
(page 56-58, para. 26-32) 
 
Q4. The Secretariat’s report shows that the EC resorts frequently to contingency trade 
measures, particularly anti-dumping investigations. It  should be noted that the initiation itself of an 
anti-dumping investigation can adversely affect the exporters concerned.  
We hope that the EC will be more cautious about resorting to the initiation of anti-dumping 
investigations. What is the view of the EC on this opinion? 
 
A: The EC reject the claim that it should be more cautious on the initiation of anti-dumping 
investigations. The EC traditionally applies high standards and prudent approach for initiation and 
imposition of trade defence measures. Investigations are initiated on the basis of sufficient evidence in 
line with the applicable WTO rules and in conformity with strict EC legislati on. Furthermore we point 
out that the Commission goes beyond WTO rules in re quiring inter alia the Community interest test 
before measures can be applied.   (page 63-64, para. 79-82) 
 
Q5. The Secretariat’s report explains the EC’s food safety regime. Regarding this, there is a 
difficulty in exporting fisheries products to the EC due to the insufficient or delayed information of 
the sanitation criteria and test methods of the EC or its member states. The information is 
necessary to allow the ex porters concerned to beco me familiar with the regime and to enhance the 
safety of food, for example, by setting up the Residue Monitoring Plan for Fisheries Products, 
which is made and reported to the EC annually. (Comment) 
 
A: The Commission provides Guidance documents for information on the Internet site of its DG 
Health and Consumer Protection. The Commission provides, in addition, contact points for third 
countries, which are designated to provide further information, if necessary. Rules concerning the 
Residue Monitoring Plan are laid down in Directiv e 96/23/EC, which lists in detail the elements and WT/TPR/M/136/Add.1 
Page 206  
 
criteria to be addressed. These rules are known to  Korean government and exporters since 1996 – 
which should be sufficient to b ecome familiar with the regime 
 
(page 66-67, para. 91-92)  
 
Q6. Regarding the Government Procurement, it is our understanding that the EC has the 
common public procurement rules and directives. The Secretariat reports that the scope of 
application in each of the directives is establishe d by minimum thresholds for contracts, which 
correspond where necessary to those in the GPA,  while below-threshold contracts are covered by 
the provisions and principles of the EC Treaty. According to the report, the threshold has been 
established at 200,000 Euros for public supply an d public service contracts and 5 million Euros for 
public works contracts.  
Please clarify whether or not there is any principle or practice limiting the participation of 
foreign suppliers or rendering preferential treatmen t (including price preference) to the suppliers 
of EC member countries (particularly in case of below-threshold contracts). 
 
A: Article 36 of Directive 93/38/EEC coordi nating the procurement procedures of entities 
operating in the water, energy, transport and tel ecommunications (Official Journal of the European 
Communities L 199 of 9.8.1993, p. 84, as amended) contains a limited preference for EC suppliers. 
Furthermore, Council Regulation (EEC) No 1461/ 93 of 8 June 1993 concerning access to public 
contracts for tenderers from the United States of America (Official Journal of the European Communities L 146 of 17.6.1993, p. 1, as amende d by Council Regulation (EC) No 1836/95 of 24 
July 1995, Official Journal of the European Communities L 183 of 2.8.1995, p. 4) restricts access for United States tenderers in respect of certain c ontracts awarded by certain public authorities not 
covered by the WTO Agreement on Government Proc urement (GPA). This regulation was adopted in 
reaction to measures of the United States that prev ent EC tenderers from competing for US Federal 
procurement contracts not covered by the GPA. The EC has no other instrument granting EC 
suppliers preferential treatment in tender procedures.  IV. TRADE POLICIES BY SECTOR 
 
 (page 91-92, para. 25-27)   * EC report page 6, para 14-16 
 
Q7. According to para. 14-16 of the EC report and para. 25-27 of the Secretariat’s report, the key element of the recent CAP reform is the introdu ction of a single farm payment scheme (SFPS) 
“decoupled” from production. It is also repor ted that the reformed CAP includes reduction in 
direct payments for bigger farms.   
Could the EC inform us of both the total and product-specific annual amount of the SFPS 
both in total and product-specific terms from 2005 to 2013? Could the EC inform us of both the 
total and product-specific annual amount of red uction in the current support during the same 
period? 
 
A: The EC invites to Korea to consult ANNEX VIII of regulation 1782/2003. There it will find the ceilings referred to in Article 41 of that same regu lation. No further information is available at this 
stage. Several choices on the use of the funding still have to be made by Member States. 
 
(page 114-115, para. 82-85)  
 
Q8. The Secretariat reports that the EC will introduce the REACH system, which is a single integrated regulatory framework. The REACH system may be needed for safe use of chemicals and 
human and environment protection, but we are conc erned that the system can be implemented in a 
way that imposes a heavy burden on the exporters concerned to the EC. WT/TPR/M/136/Add.1 
Page 207 
 
 
 What is the view of the EC on the opinion that a sufficient transition period be given to 
allow the exporters or importers concerned to become fully familiar with the system? 
 A: REACH contains a number of transitional periods  already. A period of 11 years is planned in 
order to phase into the registration system the vast  majority of substances currently being marketed 
and manufactured. Article 21 of REACH establishes a series of deadlines, starting with the higher 
tonnage and higher concern substances first. Article  6 of REACH, which introduces the requirements 
for importers and producers of articles, also appli es only 11 years and 3 months after REACH comes 
into force. We think these transitional periods will be sufficient to allow importers and manufacturers 
to become familiar with the system. The European Commission recognises the need for clear technical guidance for importers and EU manufacturers to ensure consistent, cost-effective and smooth operation of the system. It has therefore started a major programme of work to develop such  guidance, in co-operation with stakeholders. The 
Commission intends that appropriate guidance will be  available at the time each part of the REACH 
system comes into force. 
In addition, the European Communities recogni ses its obligations under article 11.3 of the 
TBT Agreement to provide adequa te assistance to allow developing  countries to comply with 
legislation such as REACH. In addition to the pr ovision of extensive guidance material (as mentioned 
above), we aim to do our best to help devel oping countries to familiarise themselves with REACH 
and comply with it. This will be achieved in part  through technical assistance and capacity building 
but also through training and provision of information by the proposed Chemicals Agency.   
(page 116-17, para. 91-92)  
 
Q9. The Secretariat reports that the EC presented a proposal for a Directive that sets out a 
framework for creating a genuine internal market for services by 2010.  
Could the EC explain where the review process of the proposal stands? Could the EC provide us with a specific list of services that would be affected by the 
proposed Directive?   
 
A: The proposal is being considered by the Council of Ministers and by the European 
Parliament, who both have to approve the text. Agre ement is unlikely to be reached before end of 
2005 at the earliest. According to the Commission proposal, MS would then have two years to 
transpose the Directive into national law.  The proposal covers all services that corres pond to an economic activity within the meaning 
of the EU Treaty as clarified by well-established ju risprudence of the European Court of Justice, 
except  financial services, transport services and electronic communications networks and services 
(insofar as they are dealt with by the 2002 regul atory package on electronic communication services). 
These three areas are explicitly excluded from the scope of the Directive. As the Court of Justice has 
consistently held with regard to Articles 49 et seq  of the Treaty, the concept of service covers any 
economic activity normally provided for remunerati on, without the service having to be paid for by 
those benefiting from it and regardless of the financ ing arrangements for the remuneration received in 
return, by way of consideration. Any service whereby a provider participates in the economy, 
irrespective of his legal status or aims, or the fiel d of action concerned, thus constitutes a service. The 
proposal does not cover "non-economic" services, such as public  administration or public education, 
which are provided by the state or public entities in  fulfilment of their duties towards their population 
and without any economic consideration. More detailed information is available on:  
http://europa.eu.int/comm/internal_market/en/services/services/index.htm.  
 WT/TPR/M/136/Add.1 
Page 208  
 
Q10. The Secretariat refers to the establishment of the European Maritime Safety Agency and 
the European Aviation Safety Agency as part of ma jor developments in the field of services during 
the past two years.  
Concerning the two organizations, could the EC provide us with information about their 
structure, function and relationship with the EC or its member states?  
 A: The European Parliament and the Council have adopted on 15 July 2002 a Regulation on 
common rules in the field of civil aviation and establishing the European Aviation Safety Agency 
(EASA).   The current scope of this Regulation is limite d to airworthiness and environmental protection. 
However, it should be extended soon to ai r operations and flight crew licensing. 
 The Agency assists the Community in the prep aration of the aviation safety legislation and 
assists the Members States and the industry in its implementation. It also issues certification specifications and guidance material and makes te chnical findings and issues type certificates to 
aeronautical products and agre ements to organisations.  
As foreseen by its founding Regulation, the Ag ency is independent in relation to technical 
matters and has legal, administrative and financial autonomy.  Consequently, it is a Community body, 
having legal personality. 
The Commission and the Members States are represented within a Management Board in 
order to control effectively the functioning of the Agency.  (page 123, para. 112)    Q11. According to the Secretariat, the new regulatory framework for telecommunications 
consists of five Directives, though only nine memb er States had incorporated it into national law by 
February 2004. Among them, an Access and Interconnection Directive reportedly stipulates 
procedures and principles for imposing pro-compe titive obligations on operators with significant 
market power (SMP).    Could the EC give us more information about the obligations on operators with SMP?  
 
A: The Access and Interconnection Directive fo cuses on the wholesale aspects of network and 
service provision.  When companies cannot agree commercial terms of inte rconnection or access, 
national regulators may intervene.  The direct ive incorporates the principle of “any-to-any” 
connectivity and allows national re gulators to impose obligations to achieve this.  This directive 
contains the list of possible remedies for national regulators to impose at the wholesale level when 
they determine that a relevant market is not effectively competitive.  Regulators may also seek 
Commission approval if a wholesale remedy not identif ied in the directive is thought to be more 
appropriate.    The “toolbox” from which regulators can pick their appropriate remedy is composed of 
obligations for transparency, non-discrimination, accounting separation, mandated access to a network 
or service, or price regulation.   
(EC report page 13, para. 49) 
 
Q12. In its report, the EC points out that it e xpects other WTO Members to  table ambitious offers 
by the deadline of May 2005.  
Does the EC have a plan to table a revised offer by the deadline?  
 
A: European Commission intends to tabl e a revised offer by the deadline. 
 WT/TPR/M/136/Add.1 
Page 209 
 
 
 QUESTIONS FROM MALAYSIA  
 Q1. The appreciation of the euro from US$0.87  in February 2002 to US$1.26 currently did not 
seemed to have a negative impact on  EU’s exports despite concer ns on price competitiveness and 
high oil prices. The EU registered a current accoun t surplus of Euros 57.2 billion in 2002 and 49.7 
billion in 2003.   What factors account for this strong growth in the current account surplus? 
 
A: A first remark is that the bilateral euro-dolla r exchange rate is not a good measure of the price 
competitiveness of the EU. While the euro has appr eciated by 38½% against the US dollar over the 
period January 2002-September 2004, the trade-wei ghted (or nominal effective) exchange rate 
appreciated by only 25% over the same period. 
The goods part of the EU-15 current account declined in 2003, to a surplus of €43bn, 
compared to €57bn in 2002. This means that some part of the effect of the euro appreciation has 
already been felt in 2003. It is likely that another part of the trade-depressing effect will only be felt in 2004 (the so-called “J-curve” effect). Another explana tion for the resilience of the trade surplus is the 
weakness of domestic demand, which caused below-average import growth. 
Finally, it should be noted that the relative stability of the EU-15 current account (a decline by 
€3bn, according to the latest Eurostat release) is  the result of the €14bn deterioration in the goods 
surplus, partly compensated by a €7.7bn improveme nt in net income flows and a €3.5 advance in 
current transfers.  Q2. Given the recent EU expansion to 25, wo uld there be any significant economic impact 
given that the EU-10 contributes only 5% of GDP to the economy of the EU 25. What would be the impact on economic growth, inflation and unemployment? 
 
A: The overall impact on economic growth, infl ation and unemployment will be positive, but 
there are many other, and even more important fa ctors than enlargement, in particular exogenous 
factors (e.g. world economic development; oil price;  etc.) which will influence these three parameters 
more than this enlargement a such. This question,  formulated already very hypothetically, whose 
answering necessitates assumptions or rather speculations  over the future, is not fully in the context of 
the TPR which we understand as a factual exercise, based solely on facts and past events and 
developments that had already happened. 
 
Q3. Outward flows of EU15 FDI declined signific antly from Euro267 billion to Euro140 billion 
in 2002.  What were the factors that contributed to this decline and of this decline, what was the 
impact of the decline on FDI flows on developing countries? 
 A: Global FDI inflows fell in 2003, as cross-borde r mergers and acquisitions – the key driver of 
global FDI since the late 1980s – remained weak. The EU was no exception to this global trend. 
The main reason for the significant decline of FDI outflows relies on the dramatic slowing 
down of the world economy in 2001 and 2002, including the EU15 itself and major trading countries in the world.   The major explanation of this evolution is found in the US (who accounts for 40% of EU FDI 
outflows) to which EU FDI declined by 66% between 2001 and 2002, corresponding to €97bn. This 
diminution explains more than three-quarter of the total diminution of EU FDI (€127bn in total). 
EU15 FDI outflows to many other trading partners al so declined in a simila r proportion: -68% with 
Africa (-€6bn), -66% with Mercosur countries (-€11b n) and -43% with Asian countries (-€5bn).  
 It is difficult to relate the extent to whic h a slowdown in world growth has affected FDI 
slowdown to developing countries.  It is likely that to favour foreign investment to developing country 
a multilateral trade agreement on investment would ha ve been of great interest by creating a more 
stable, transparent, predictable and non-di scriminatory climate for FDI world-wide WT/TPR/M/136/Add.1 
Page 210  
 
Q4. A number of EU TBT regulations such as those on waste disposal for electrical and 
electronic products and the REACH chemical regulations have significant cost impact for developing country manufacturers.  How would th e EU ensure that such regulations would 
minimize the adverse impact on the producers in these countries, particularly SMEs which lack the expertise and resources to comply effe ctively and may lose market share? 
 
A: In order to address the concerns raised by  developing countries (a nd in particular Asian 
exporting countries) on the trade impacts of WEEE, RoHS and other pieces of environmental legislation, the EU has developed a number of bilateral regulatory dialogues to discuss common 
approaches and to address market access concerns linked to compliance with EU environmental 
requirements. These dialogues have been successfully used as a platform to facilitate compliance with 
EU environmental legislation having a significan t impact on developing country exporters (e.g. 
WEEE, RoHS and REACH). In particular, in the co urse of the year 2004, several meetings took place 
to discuss market access issues linked to the impl ementation of the WEEE and RoHS Directives. 
These discussions have taken place both with regulators and with business. 
 In addition to the efforts described above , the EU has sought to address these concerns 
through its technical assistance programmes. In th e context of the ASIA PRO ECO Programme, the 
EU has, for example, recently financed a project  aiming at informing Asian electronic manufacturers 
(particularly SMEs) about new EU standards which are likely to come into force in 2005:  WEEE , 
RoHS , EuP (Eco-design of Energy-using Produc ts) and IPP (Integrated Pollution Prevention). 
 QUESTIONS FROM KENYA   
 
Q1. We note from the Secretariat report that the continuous appreciation of the Euro against 
major currencies has weakened th e “competitiveness” of European exports and as a result the real 
GDP growth rate fell from 3.6% in 2001 to 0.8% in 2003.  Kenya would like to know how the EC 
intends to deal with the negative impact of con tinued appreciation of the Euro on competitiveness 
of its exports. 
 
A: Real GDP growth in the euro  area declined from an annual rate of 3.5% in 2000 to an annual 
rate of 0.6% in 2003 (in the EU15 countries, real GD P growth declined from 3.6% to 0.9% over this 
period). It is, however, not completely accurate to say  that this occurred “as a result” of the weakened 
competitiveness of European exports from the strengt hening euro. Instead, the decline in the rate of 
economic growth in the European Union economies can be traced to the slowdown in the world 
economy which set in from 2001 onwards. The trend a ppreciation of the euro against the dollar, on 
the other hand, occurred between February 2002 an d February 2004. In February 2002, the monthly 
average exchange rate of the eu ro was $0.87, compared to a high of around $1.286 in mid-February 
2004 (it then eased back somewhat to a value of $1.18 in mid-May before climbing to $1.24 in mid-
July; in mid-October it had risen to around $1.26).  
The movement of the euro over this period partly reflects a correction of the previous 
undervaluation of the euro. It also reflects a generalis ed weakness of the US dollar against other major 
currencies. It is true that the euro’s apprecia tion has weighed on the competitiveness of euro area 
exports, but this needs to be put in context. In r eal effective terms (i.e. measured against a basket of 
currencies and also taking account of relative price le vels), the euro is currently only about 5 per cent 
above its average level over the period 1995-2003. The Commission shares the prevailing view that 
the economic recoveries in the euro area and th e world economy remain on course, and that the 
current value of the euro exchange ra te is not a problem in this respect. 
 Q2. According to the Secretariat report the co sts of collecting, managing and storing the 
information needed for origin veri fication and administration is about 3% of product prices.  In 
addition the EC’s origin rules are more restricti ve for products with higher preferential margin.  
Such products include beverages, tobacco, textiles, clothing and footwear which are of export WT/TPR/M/136/Add.1 
Page 211 
 
 
 interest to developing countries.  Kenya would like to know how the EC intends to address the 
impact of restrictive rules of origin and their administration a way of facilitating trade with its 
trading partners and enhancing the value of trade preferences for beneficiary countries. 
 
A: In the context of international trade libera lisation, the Commission adopted on 18 December 
2003 a Green Paper on 'the future of rules of  origin in preferential trade arrangements' 
(COM(2003)787 final), which provided an overall assess ment of the current problems of origin in 
preferential arrangements, a focus on aspects which re quire a consistent approach, an overview of the 
options available, particularly as regards the systems for certification, declaration and control of the originating status of products and ways of re focusing the current system of administrative 
cooperation. 
The consultation process ran from January 2004 until 15 March 2004 and involved international 
traders and competent authorities of the Member  States, Accession and Candidate Countries and 
countries taking part in various preferential arrange ments with the European Union: 100 contributions 
were received. A summary report of the results of the consultation process is available on the Website 
of the Commission at the following address: http://europa.eu.int/comm/ta xation_customs/customs/ 
origin/rules_origin/rules_of_origin_en.htm. From the replies to the consultation process, there are specific expectations with regard to these 
arrangements and rules concerning both their ob jectives and their formal presentation. These 
expectations have to be matche d with international commitments and orientations already submitted 
by the Commission, in particular in its Communication of 7 July 2004 on 'Developing countries, 
international trade and sustainable development: th e function of the Community's generalised system 
of preferences (GSP) for the ten-year period from 2006 to 2015.  The EU supports any improvement of preferentia l rules of origin implying a combination of 
appropriate provisions, meeting the objectives of the arrangements and the needs of the stakeholders, 
efficient procedures, allocating in an optimal wa y responsibilities in managing and controlling origin 
and strict compliance with legal obligations, wh ich guarantees that only the concerned Community 
partners enjoy the preference."  
Q3. What mechanism does the EC have for assis ting developing countries in meeting its SPS 
standards? 
 A: In the field of food safety, the Commission is aware of the difficulties which more stringent 
EU regulations may impose on expor ters of developing countries. Indeed, food safety has become a 
priority of the European Union, responding to th e legitimate concerns of its consumers. Several 
programmes have been implemented to raise the aw areness of public authorities and the private sector 
in developing countries regarding the trade implic ations of such measures and to help them to 
overcome the potential difficulties of complying with EU sanitary and phyto-sanitary (SPS) 
requirements.   
Examples of EC SPS support measures (ACP region) 
- The €28m joint EU-ACP Pesticides Initiative Programme (PIP) aims to help with adapting horticultural 
exports to EU import requirements, 
- The €45m framework programme for fisheries aims to  improve the access of ACP fisheries products to the 
EU market by strengthening export health controls and improving production conditions. 
- A new €50m instrument for trade capacity building called TRADE.COM, expected to be operational later in 
2004, includes a component to  assist ACP partners to address compliance with food safety requirements for 
export into the EU.  
- The “Pan-African programme for control of Epizootics” (PACE) contributes to strengthening the capacities 
of the Veterinary Services in 32 Sub-Saharan countr ies for the control of the OIE list “A” animal trans-
boundary diseases.  WT/TPR/M/136/Add.1 
Page 212  
 
 From a financial point of view, the different amounts and sources of budget used by the EC to 
help the ACP to comply with EU sta ndards in the field of SPS are as follows: 
• Under implementation: 
Programmes with core SPS relations 
- A l l  A C P :       7 2  M €  
- Regional Indicative Programmes:   100 M€ 
- National Indicative Programmes/STABEX:    21 M€   
Programmes with an SPS component / SPS link 
- Regional Indicative Programmes:    77 M€ 
- National Indicative Programmes/STABEX:    22 M€ 
 TOTAL       292 M€
 
• Programmed (9th EDF): 
- Participation of ACP in standard setting bodies  3 M€ 
- Compliance with EU import regulation   30 M€ 
- P.m.: Trade dimensions of the regional programmes 
•  Additionally, there is a small fund (€1m in 2004) which is aimed at providing direct assistance to 
solve immediate problems such as residue controls, and also to allow developing countries to play 
their part in the internationa l standards-setting organisations. 
 
QUESTIONS FROM INDIA  
 
Issues related to EC expansion  
 
Q1.  India has existing trade with 10 new member s who have joined EC with effect from 1-5-04.  
This trade has been on the basis of their exis ting regulation governing registration or market 
approval of drugs and medicines, import of drugs and pharmaceuticals, patents and patent law. It is gathered that in respect of each of these matte rs, the existing regulations are likely to undergo 
substantial changes as per EC requirements.  It is requested to inform as to by when such changes 
are likely to be effected. There is an apprehen sion that existing liberal regulations in these 
countries can become protective and stringent.  Can EC give an indication regarding the likely 
direction of changes? 
 
A: New Member States were required to adopt th e existing Community acquis in the field of IP 
subject to specific provisions set out in the Act of Accession (see eg Annex II particularly OJ No. L 
236, 23.9.2003, pages 342 - 344 and Annex IV par ticularly OJ No. L 236, 23.9.2003, page 797).  
These relate to Community Trade Marks (new Ar ticle 142a in Council Regulation (EC) No 40/94), 
Community designs (new Article 110a in Council Regulation (EC) 6/2002), Supplementary 
Protection Certificates (new Articles 19a and 20 (2) of Council Regulation (EEC) No 1768/92 and 
Council Regulation (EC) 1610/96) and the specific mechanism allowing for the prevention of parallel imports of patented pharmaceuticals into th e EU15 under certain circumstances (such as non-
availability of pharmaceutical product patents prior to 1991/92 in certain jurisdictions) .   
 
Q2. Upon EC’s expansion, there are some broad issues of concern for India. These are (i) 
increase in the tariff rates of acceding countries consequent upon their accession to the EC (for 
which compensation would be required), (ii) extens ion of textiles/clothing quotas to the acceding 
countries, and (iii) extension of trade defen ce measures invoked in the EC to the acceding 
countries and vice versa. How does EC propose to address these concerns.  
 
A: As concerns textiles the EC takes the view that no compensation is due for the geographical 
extension of already existing quotas. On overall te rms the benefits from free circulation within an 
expanded community of 25 members will in the medium and longer term far outweigh alleged short-
term disadvantages WT/TPR/M/136/Add.1 
Page 213 
 
 
 Q3. In the context of EC’s notification conseque nt to its expansion, we request information 
about the time frame in which EC would provide tari ff equivalents for goods which attract specific 
or mixed rates of duty? 
 
A: The EC is not in the position to convert th e specific or mixed rates of duty into tariff 
equivalents. In our view the specific duties are more transparent than ad valorem duties since AV 
duties are calculated as a percentage of the customs va lue, not always declared in a reliable manner by 
the operators.  Instead of using ad valorem equivalents, the EC has compared the duty rates applied for each 
tariff line in the NMSs and the EC for the actual im ports into the NMSs with in the reference period. 
Specific duties have been applied to trade vol umes and ad valorem duties to trade values. 
 
Q4. In Article XXIV of GATT 1994 there is no mention of enlargement or `expansion of an 
existing customs union. Could EC indicate the speci fic provisions in WTO acquis which mentions 
or permits enlargement or expansion of existing customs union?  
 
A: The EC does not agree with India that there is no mention in Article XXIV of enlargement or 
expansion of existing customs unions. While the id ea may have been implicit in GATT Article XXIV 
and referred to through the concep t of "adjustment", the introductory  part of the WTO Understanding 
on Article XXIV of GATT 1994 expl icitly refers to "enlargement" thus making the concept no longer 
implicit. 
 
Q5. In India’s view, application of quantitative restriction to imports of textile products from 
third countries into the new member States fr om May 2004 constitutes new restrictions under 
Article 2.4 of the ATC.  These restrictions viol ate provisions of Article XI and XIII of GATT 1994 
and those of Article 2.4 of the ATC.  The introduction of any such otherwise GATT / WTO 
incompatible import restriction is not permitted by  Article XXIV of GATT 1994. Can EC indicate 
the relevant provision under the ATC or GATT 1994 which permits a member to extend the 
geographical scope of the existing quota? 
 
A: The justification to extend the regime as fro m enlargement and until the rest of the year 2004 
when quotas will be abolished was obviously to ensure  that the expanded internal market of EU 25 
could function satisfactorily, also in the interest of third countries. If the geographical scope of the 
already existing (i.e. not new) quotas for EU15 had not been expanded to cover the ten new member 
countries it might have been necessary to exclude im ports into the latter from free circulation within 
the EU and this would on overall term s have been detrimental to the interests of third countries and to 
trade. 
Incidentally EC does not consider the issue of  enlargement as falling within the remit of the 
ATC, which – and this should be noted – in article  2.4 foresees that restrictions may be introduced 
under  “… relevant GATT 1994 provisions ...”. Apart from the reference made to article 2.4 of the 
ATC EC is not arguing that ATC provisions cover th e question of enlargement since it is obvious that 
this issue falls outside the remit of the ATC, whic h was not conceived to cover such situations nor 
does it purport to do so. 
 
Q6. Article XXIV:8 (a) of GATT 1994 specifies that a customs union shall be understood to 
mean the substitution of a single customs territory  for two or more customs territories. When ten 
new members acceded to EU 15, a single customs territory (EU 25) substituted the customs territory 
of EU 15 and that of the ten new member states. Would EC agree that EU-25 is a new customs 
union which is different from EU 15? If not, why not?   WT/TPR/M/136/Add.1 
Page 214  
 
A: The EC does not agree with India that the customs union including 25 Member States is a new customs union vis-à-vis the one with 15. Th is would be the case only if the EC customs union 
had dissolved and subsequently been  substituted for by the creation of a new entity (EU25). In reality, 
the EC customs union – incidentally the customs union of a Member of the WTO, i.e. the EC – has merely enlarged, just as when the members of th e EC customs union increased from 12 to 15 on 1 
January 1995. The EC Customs Union has not dissolved  nor been substituted. This is only the case for 
the ten new Member States’ individual customs terri tories since these entities ha ve been absorbed in 
the customs territory of the EC. As a result, the customs territory of the EC has been expanded by 
these countries and 25 Member States make up the single customs territory of the EC.  
 
NTBs related to SPS Issues
 
 Q7. The maximum level of benzoic acid (genera l level) permitted as food additive in cooked 
shrimps is 0.2 per cent as per the Directive of the European Commission. While the EC members namely, Netherlands, Belgium etc. are permitted to  use benzoic acid at a higher level (0.6%), 
Indian shrimps are permitted only 0.2%. EC is requested to explain the rationale behind this 
discriminatory treatment.  
 
A:   
Q8. In the case of cooked shrimp, the maximum level of preservatives permitted in EU is 2000 
mg/kg.  A higher level of 6000 mg/kg is allowed by EC for two species (caught in the European 
waters) of smaller shrimps (e.g. Crangon) which ca n only be peeled by hand and therefore present 
a higher risk of contamination. This is ho wever not applied to Indian shrimps such as 
Metapeanaeus Dobsonii and M. Brevicornis which co nstitute an important fishery in the west coast 
of India and grow to a maximum of 125 mm as against crangon which grow upto 80mm. It is 
requested to remove this type of NTB urgently.  
A:  
 
Q9. India has several concerns regarding SPS related issues as highlighted below: 
(i) EC standards are often found to be hi gher than the international standards. Such 
regulations should be in conformity with the in ternational standards and in relation to the risk 
assessment and should not be used as NTBs for shutting out exports from developing countries; 
(ii) Standards in a number of areas within  EC countries have not been harmonized, creating 
uncertainty and confusion within the exporting community;  (iii)  The EC border inspection posts have also b een testing under the food safety standards for 
parameters which have not been specified in EC reg ulations. For example, the norm for minimum 
quantity to be tested for any food product to test negative for any bacteria is 25 gm; (iv) There is no adequate provision for appeal m echanism in case of rejection of consignments;  
(v)  There is no adequate transition period befo re introduction of higher standards  and before 
EC resorts to testing with more sophisticated equipments; (vi)  The regulations on residues are not based on analysis but on the efficiency of  analytical 
instruments.   
 We request  EC’s comments on how they plan to address the above concerns which are 
serious market access problems.  
 
A:  
 WT/TPR/M/136/Add.1 
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 Destruction of Consignments  
 Q10.  Several EC Member States have been not only  holding up consignmen ts of seafood exports 
from India to EC on the ground of detection of microbiological contamination and presence of 
antibiotics banned in EC but also destroying the same on  the ground of risk of public health in EC.  
 In the past two years, there are at least two co nfirmed destruction of marine consignments 
in France and one consignment of spices destroyed in Germany on account of contamination by chemical. This action of the EC Members seems to be discriminatory, arbitrary and unjustified on 
the following grounds:  The existing EC directive allows member stat es to return such consignments to the 
exporting country. Furthermore, EC Members actio n seems to be at variance with the Codex 
guidelines.  While developing its “The Guidelines for Exchange of Information Between Countries 
on Rejection of Imported Foods” C odex not only highlighted about information to be exchanged in 
cases of rejected consignments,  but also said a bout taking into account different options, namely, 
return of consignment to the country of export, re-export to a third country in case the same is 
acceptable to them or destruction.  
 EC Member States therefore, should not destroy the consignments as per its own laws as 
the concepts of safety may vary across nations. Instead, it should return them to exporting country 
to be dealt with as per the laws in the orig inating country. India’s Competent Authority (Export 
Inspection Council) has already evolved procedures to handle products(as far as marine products 
are concerned), when such products are rejected by the EU Member countries and returned back to 
India.  
 European Commission claim that while destro ying the consignments they are extending a 
national treatment as they also destroyed such consignments produced in the Member states. EU 
Members may require to destroy the products pr oduced in the EU because the producers always 
have the possibility to send such products to other Member states through the la nd route. In case of 
imported products they always have the option of re jecting the consignments before entering the 
EU and inform other border posts about such cons ignments so that these cannot be sent to other 
member countries. This may be facilitated  by furnis hing of a certificate by the consignor that the 
consignment shall not be re-routed or re-exported to  the EU countries. If necessary, the certificate 
could even be endorsed by the Government author ities or the Export Inspection Agencies. Thus the 
possibility of re-entry of rejected consignments to  the EU Member countries may be eliminated and 
hence destruction of the same can be avoided. 
 When EU Member Country’s rejected consignm ents are allowed to come back (as per EC 
regulations) to the originating country(EC) after getting refusal from a third country,  then there 
seem to be little justification why the same should  not hold good with any third country when the 
consignment is refused by EC. 
 Arbitrary destruction without provision of re-testing/appeal mechanism deprives Indian 
agencies of the opportunity to identify the probl em for remedial action and regain their own 
products. What action does EC propose to take  to address this issue? Cooperation between 
testing/inspection institutions and laboratories for Mutual Recognition Agreements and initiatives 
for self certification can be a solution.   We seek EC’s view on the above. 
 
A:  
 
Spices consignments
 
 
Q11. Under the EC regulations, chilli and chili products imported into EC need to be 
accompanied by a certificate to the effect that th e consignment is free from Sudan I to IV (added 
colour) and products which are found to be contam inated by Sudan dye is to be destroyed. The WT/TPR/M/136/Add.1 
Page 216  
 
above decision was a sequel to a Rapid Alert Notific ation (RASFF) occasioned by the detection of 
Sudan 1 in a consignment of chili powder importe d into France in the year 2002. So far some 45 
rapid alerts (RASFFs) have been received with respect  to chilli or chilli products claimed to have 
originated from India. On this, Indi a has the following observations to make: 
a) There is no evidence forthcoming from the authorities issuing the RASFFs to show that the 
processor or the importer in EC  have exclusively u sed products of Indian origin or that they have 
imported chilli or chilli  products only from Indi a and that the samples were drawn from lots 
positively identified as shipped from India. b) In a number of cases, though it is stated that  the material is of Indian origin, an Indian 
source is not named. 
c) In some RASFFs, the alleged presence of the offending substances is not quantified. In a 
number of RASFF, the reported presence of Sudan 1 are either at ppbs (parts per billion) or less 
than 15 ppm (parts per million) which would not enhance the colour of the chilli and hence tests 
would have a likelihood of showing a false positive result.  d) There were conflicting laboratory certificate reports from Italy and France. 
In view of this, it is felt that to make the trade in Chilli and Chilli products less  restrictive, 
following steps could be taken by EC: (i) Not to rush to publish a Rapid Alert (RAS FF) in those cases where the public health 
authority of the importing country claims to det ect presence of the offe nding substances at low 
levels. (ii) All samples testing positive for Sudan dye be  subjected to confirmatory tests in a reputed 
laboratory in another country of the EC. 
(iii) Where the confirmatory tests are positive, prov ide to the Spices Board of India an official 
sample and details of test methods employed to  verify the findings to take appropriate corrective 
action. (iv) Dispense with the system of mandatory ce rtification of all exports of chilli/chilli products 
into EU in view of the fact that adulteration if any was a solitary instance.   
We request EC’s response on these suggestions.  
A:  
 
MRL for pesticides in tea by infusion
 
 
Q12. Germany is a major market and destination for Indian tea. Indian tea exports to Germany 
face considerable non tariff barrier in the form of SPS requirements. Germany in particular has 
strict and higher standards for pesticide residue in tea. There is a need for defining the MRLs on tea on infusion basis rather than on dry matter.   Part of residue found in dry matter would be 
absorbed by the tea waste and left over infusion.  In dry matter analysis, the whole incidence of 
residue would be accounted whereas in reality th e same does not get into the tea which is 
consumed.  The pesticide residue analysis carried out by using “dry tea” may not provide the actual 
information regarding the content of the residue.  Detailed technical study data with reference to  the transfer of pesticide residues from made 
tea to tea infusion has been provided to the EC side and Indian side is interested in getting 
information from EC regarding scientific informa tion to demonstrate the equivalence of systems 
employed for testing on dry tea and liquid tea.    
 
A:  
 
Ochratoxin-A (OTA) in Coffee
 
 
Q13. EU wide limits for Ochratoxin-A (OTA) a re proposed only for cereals while in respect of 
coffee and spices, the member states’ legislation would apply.  EU has proposed a maximum OTA 
limit of 3-4 ppb for roasted coffee and 6-10 ppb for soluble coffee.  A harmonized level of OTA for WT/TPR/M/136/Add.1 
Page 217 
 
 
 the EC would facilitate trade and help to minimise its effect as a barrier to exports/ trade with EC 
Member State. Does EC plan to harmonise OTA levels for all its member States? 
 
A:   Pesticide residues
 
 Q14. There are disparities in plant protection chem icals allowed for use in different countries of 
the EC for gherkins and other vegetables and fruits . A Gherkin exporter from India needs to supply 
his customers in different countries with a different pesticide usage from the same crop grown in 
India. This condition is just impossible to observe . Will EC take steps to bring the regulations 
prevailing in all the 25 members EC countries at par to remove such disparity and thus facilitate 
trade? 
 
A:  
 
Q15. In UK, the list of chemicals/pesticides a llowed on ‘gherkins’ in the two parts, dried and 
fresh or frozen differs. It is inconceivable that fruit meant for preserving would be spared from the 
pest/disease attack, while selectiv ely attacking fruits meant for consumption in fresh, dried 
uncooked or frozen form. EC may please explain th e rationale for maintaining such differential 
standards. 
 
A:   
Q16.  The European Communities has strict health & hygiene rules for import of spices such as 
Black Pepper and Red Chilies. Moreover, ETO treatm ent which is allowed in countries such as 
USA & Australia is not permitted for imports into EC countries. Will EC take steps to modify their 
health & hygiene rules so that ETO treatmen t is permissible as in USA & Australia?  
A:  
 
Unreasonable approach of Irish resi due testing Government laboratory
 
 
Q17. Irish Government Laboratory has reported that Indian table grapes shipped by Indian 
Company Sam Agri Tech, possess pesticide residue called Omethoate even though the same has 
been certified by Eurepgap, a quality certification Or ganisation. Further, these are also checked by 
laboratories of the Netherlands and UK who have confirmed that these varieties of grapes are pesticides free. This is causing severe loss to the In dian exporters. By when is EU likely to have a 
harmonized system for laboratory testing of pestic ide residue levels in different Member countries 
of EU? 
 
A:   
Rejection of consignments
 
 
Q18. When a consignment is reported to be rejected by a member state, neither the reports nor the method of testing is intimated to the export ers, even on demand. Hence, the credibility of the 
method and test results are doubted and it also se ems to be contrary to the principles of natural 
justice.  There is no appeal provision in the EC norms and cargo is not permitted to return on 
rejection. Exporting country have a right to know the reason for rejection of consignment and also 
return of rejected goods.  Does EC propose to revise its  regulations to take care of these concerns? 
 WT/TPR/M/136/Add.1 
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A:   
Lack of harmonisation and common standards
 
 Q19.  EC border posts have been testing importe d food item under the food safety standard for 
parameters that have not been specified in the EC regulations. For instance, the EC regulation do 
not seem to specifically ban the use of “bacterial inhibitor” and hence this cannot be cited as a 
reason for rejecting the consignment and putting the unit on rapid alert. However, this has 
happened in Spain. Could EC explain the rationale for such action?   
A:  
 
Differential levels of pesticide residue
 
 
Q20. A problem being faced by Indian exporters of grapes, gherkins etc., is the differential 
pesticide residue levels followed by different member st ates of the EC, in spite of the fact that there 
are EC wide harmonized levels prescribed by the EC as  well as Codex.   Besides, frequent reduction 
in maximum residue levels of pesticides and without adequate notice creates problems for exporters. Would the EC indicate a time frame by which they would have harmonized residue norms? 
 A:  
 
Problems relating to health certificate
 
 
Q21. For export of certain products like crus hed bones, ossein and gelatin to EC meant for 
human consumption, the European Communiti es has specified certain conditions to avoid 
contamination, and regular inspection by the co mpetent authority of the same. Since name of 
vessel is required to be indicated in the Health Certificate, if due to overbooking and other reasons, 
some shipping companies shut out the cargoes an d export consignment are eventually shipped by 
other vessels, then the exporters have to obtain fresh  Health Certificates.  This results in delays in 
exports and loss of market access. Will EC consider modifying  this requirement to make it more 
trade facilitative?  
A:   
Q22. The Indian exporters are facing difficulty in the export of Ossein and Gelatin and other 
livestock and poultry products due to the categorization of India in GBR II in spite of the fact that 
India is free from TSE group of disease and have provided all the technical data on the import of 
MBM and cattle during the last 20 years from the Eu ropean countries to EC. However, EC has not 
upgraded India’s GBR status. Would EC clarify the reasons for the same? 
 
A:  
 
Varying procedures for rapid alert notices
 
 
Q23. Under the current system, out of the 25 countries of the EU, if an alert is issued by one 
member state and the concerned exporter is exportin g to mainly 3 EU countries, even after these 3 
countries have lifted the alert after clearing of the stipulated number of consignments, in practice, 
the alert will still be in force in the remaining 22 countries.  This would affect the credibility of the 
exporter as these alerts may remain perpetually in force in the 22 countries.  This is irrational and 
should be modified.  Normally the alert should be lifted by the other countries once the same has WT/TPR/M/136/Add.1 
Page 219 
 
 
 been lifted by the country where it originated.  Varying MRLs prevailing in the Member States for 
agricultural products also result in issuing of more rapid alerts against Indian products.  Does EU propose to modify its curr ent systems to meet this concern? 
 
A:  
 
Equivalence arrangements for Indian accreditat ion agencies for export of organic products
 
 
Q24. In accordance with Regulation 2092/91 of the EC, India has requested the EC on 5.7.2001 
to approve 4 accreditation agencies (APEDA, Tea Boar d, Spices Board and Co ffee Board) of India 
for export of organic products to EU.  The no tified Indian accreditation agencies will have the 
powers to accredit certification and inspection agencies to certify the quality and conformity of the 
products meeting EC requirements.    India ha s carried out the necessary amendments in its 
regulations which, in most cases, are on the lines of amendments carried out by the EC in its own 
regulations. Would EC take early action to gran t accreditation to the 4 Indian agencies as a 
measure for smoother trade flow between India and EC? 
 
A: Work on recognition of Indian organic sta ndards and controls is well advanced. An EC 
inspection team has just returned [27.10.04] from I ndia examining the practical application of organic 
rules and advance the discussions with the aut horities in New Delhi, including APEDA, the Spices 
Board, the Tea Board, the Coffee Board, and the Coconut Board. Subject to any recommendations the 
inspection team makes and the response of India, we foresee taking a decision on recognition of 
Indian organic rules in the next few months.  
Genetically modified Foods
 
 
Q25. During November, 2002 the EC Farm Mini sters reached an agreement on the safety and 
labelling on food and feed derived from GMO.  Under the agreement, the presence of 0.9% GM 
material in food and feed requires specific labelling.   A tolerance threshold of 0.5% was set for the 
accidental presence of GM material in food and f eed. It is not clear what happens if the presence is 
between 0.5% to 0.9%. We request EC to clarify the same.  
A:  
 
4. Issues related to Pharmaceuticals
 
(ii) REACH  
 
Q26. The EC proposal for a Regulation for regis tration and evaluation of notified chemicals 
manufactured or imported into EC will make it man datory for about 30,000 chemicals imported in 
quantities above one ton a year to be subject to re gistration, testing and certification in EC and 
regulate authorisation for import/sale of these su bstances in the EC. This is likely to result in 
additional cost for the exporters.   Under the proposed regulation,  the responsibility of ensuring that the chemicals imported 
into EC conform to the REACH regulation devolves on the EC based importer.  
EC may indicate the present status of the pr oposals and how they are going to simplify the 
procedures for exporters and in what manner they wo uld protect the interests of SMEs?   What are 
the further ways of lightening the registration and safety obligations for businesses being 
considered by the EU? Will EU consider a single re gistration obligation per chemical or substance 
so as to allow businesses to get together in co nsortia to register just once where all produce the 
same chemical or substance. 
 WT/TPR/M/136/Add.1 
Page 220  
 
A: It is important to note that although  REACH requires around 30 000 substances to be 
registered – over a period of 11 years, onl y a small proportion of these (about 2000 to 2500 
substances) must be authorized for use. These are the substances of highest concern. Moreover, the 
registration requires information of the properties of substances to be sent in, but there is no automatic 
requirement for the testing of all chemicals, rath er the opposite, as REACH requires all available data 
to be used before any testing should be carried out. 
Non-EU based manufacturers can choose either to leave the re sponsibility for the registration 
with their importers, or they can  use the facility set out in article 6a to establish an “only 
representative” in the EU to register on their behalf.  
In order to assist registrants, the European  Commission has started a major programme of 
work to develop guidance, in co-operation with stak eholders, to ensure consistent, cost-effective and 
smooth operation of the system, explaining the many  flexible elements in REACH available to 
companies. The Commission intends that appropriate guidance will be available at the time each part 
of the REACH system comes into force. 
In addition, the European Communities recogni ses its obligations under Article 12.3 of the 
TBT Agreement to take account of the special devel opment, financial and trade needs of developing 
country Members, with a view to ensuring that REACH does not create unnecessary obstacles to exports from developing country Members. In a ddition to the provision of extensive guidance 
material, we aim to do our best to help devel oping countries to familiarise themselves with REACH 
and comply with it. This will be achieved in part  through technical assistance and capacity building 
but also through training and provision of information by the proposed Chemicals Agency. 
The REACH proposal encourages consortia to be formed in order to allow different 
companies to share data and costs. When it concerns  data originating from test s on vertebrate animals, 
the data-sharing is mandatory.  
During the ongoing discussion in the Council of Ministers and in the European Parliament of the 
Commission proposala system of “one registration one substance” – involving mandatory sharing of 
non-animal test data and other core data – has be en proposed by some EU Member States and is 
currently under discussion under the EC decision-making procedures. It is still possible to take into 
account proposals for changes to REACH which would reduce costs and bureaucracy as long as the 
timetable, objectives and scope of REACH are reta ined. In relation to the “one substance one 
registration” proposal, the Commission has conc erns about the workability of such a scheme, 
particularly in relation to the compulsory requireme nt foreseen for industry consortia to agree core 
technical data.  
 
Marketing approval for Pharmaceuticals/drugs
 
 
Q27. There are price, volume an d access controls placed on marketing of medicines by the 
national governments in EU as there is no comp lete harmonisation of the policy for approvals. 
Marketing approvals in EU are granted at the EU  level by the European Agency for Evaluation of 
Medicinal Products based in the UK as also by  the respective member states. The process involves a 
lot of investigations into the composition, quality, manufacturing process, pre-clinical 
documentation, clinical data and pharmacologi cal data at several stages. There are testing 
obligations which are costly and time-consuming.  
 EC is requested to provide details about the procedures for marketing approvals at the EC 
level and at the level of member states. Information is also requested about the patents for pharmaceuticals/drugs that are expiring in EU. Wi ll  EU explain whether it is willing to accept the 
field trials or clinical trials in In dia as the data for approval of drugs ?  
 A: The fundamental principle of the EC pharmace utical legislation is that no medicinal product 
may be placed on the market of a Member State unl ess a marketing authorization has been issued by 
the competent authorities of that Member State in accordance with the provisions of Directive 
2001/83/EC (medicinal products for human use) or  of Directive 2001/82/EC (veterinary medicinal WT/TPR/M/136/Add.1 
Page 221 
 
 
 products) or an authorization has been granted by the European Commis sion in accordance with 
Regulation (EEC) No 2309/93 (replaced by Regulatio n (EC) No 726/2004 as of 20 November 2005). 
 Whether the marketing authorisation is granted by the Member States or by the European Commission, the above mentioned legislation lays down detailed criteria for the scientific assessment 
of medicinal products, based on the quality, safety, and efficacy of the product concerned. In turn, in 
order to prove the safety and efficacy of the medici nal product, the applicant can choose a number of 
routes: it can provide the results of all necessary pre-c linical tests and clinical trials; it can refer to the 
pre-clinical and clinical information of an existi ng already authorised product (the so-called informed 
consent and generic applications), or it can rely  on the well-established medicinal use of the active 
substance contained in the medicinal product. 
 All relevant legislation governing the approva l of medicines is publicly available in the 
following website: http://pharmacos.eudra.org/F2/home.html.  Besides, it should be pointed out that all d ecisions taken in this area by the European 
Commission and the Member States conform to the principles of the WTO agreement since they do 
not differentiate between EC and non-European manufacturers/im porters, nor do the procedures 
constitute access barriers. 
 As regards pricing and reimbursement decisions, these fall under the exclusive competence of the Member State, and in any event they do not  interfere with the safety, efficacy and quality 
assessment necessary for granting a marketing authorization.  With regard to the expiry of patents, the Commission does not monitor the expiry of patents.   As to the acceptability of clinical trials perform ed in India, the only requirement contained in 
the Community legislation is the inclusion in th e application for marketing authorization of a 
statement to the effect that clinical trials carri ed out outside the European Union meet the ethical 
requirements of Directive 2001/20/EC of the European  Parliament and of the Council of 4 April 2001 
on the approximation of the laws, regulations and administrative provisions of the Member States 
relating to the implementation of good clinical prac tice in the conduct of clinical trials on medicinal 
products for human use. 
 
Q28. The manufacturing sites of Indian phar ma industry are inspected and approved by EC 
Regulatory Agencies before granting them market  authorization (MA) for any product. However, 
even after such registration, the industry still need  to have each batch of every product sent to a 
batch release site (approved laboratory) in EC be fore the batch is allowed to be marketed. This 
results in delay in product launching, additional co sts incurred due to additional testing, transport 
of goods first to batch release site and then to  distribution to warehouses in various EC member 
states. For corresponding exports to India from  EC member states, once the manufacturing site 
and the product is registered, India does not insist on testing of each batch of a drug before its 
release in the Indian market. EC is requested to ex plain the rationale for its current regulation.  Is 
there any proposal to review these requirements? 
 
A: According to Article 51(1)(b) of Directiv e 2001/83/EC and Article 55(1)(b) of Directive 
2001/82/EC, in the case of medicinal products coming from third countries, each production batch must undergo in the importing Member State a full qualitative analysis, a quantitative analysis of at 
least all the active constituents and all the other tests or checks necessary to  ensure the quality of 
medicinal products in accordance with the requirements of the marketing authorization.  
 The rationale for this provision is to ensure  that each batch released in market of the 
Community fulfils the requirements of the releva nt legislation concerning the quality of medicinal 
products. The provision has been amended recently  (by Directive 2004/27/EC amending Directive 
2001/83/EC and by Directive 2004/28/EC amending Di rective 2001/82/EC) to specify that it applies 
even in the case of imported products whic h were manufactured in the Community.  WT/TPR/M/136/Add.1 
Page 222  
 
 There is no intention to review this pr ovision, which in any event places the same 
requirements of quality on products manufactured inside or outside the Community and between 
Community and imported products.  
NTBs faced in medicinal plant exports
 
 
Q29. Even though several medicinal plants a re widely used since ages in India for human 
ailments, many of these plants are not in the approved list of EC countries. The procedure for 
inclusion of such Indian plants in their approved  list is very time consuming and a costly affair. 
Will the EC initiate steps to reduce cost and time factor so that medicinal plant exporters from 
India do not face this NTB in export of medicinal plants? 
 EC Regulation on Ayurveda traditional system of medicines 
 
A: As stated above, all medicinal products to be placed on the Community market have to be 
granted a marketing authorization by either the Member States or the European Commission. The 
time and cost involved are the same for all me dicinal products wishing to be placed on the 
Community market.  The situation of herbal medici nal products, and the need to im prove their routes for marketing 
in the EU, has been addressed in recent legislati on, namely Directive 2004/24/EC of the European 
Parliament and the Council of 31 March 2004. The dir ective aims at addressing the fact that many 
herbal medicinal products have been in use for lo ng period of time. Still, there are often no or no 
sufficient tests and trials for the product so that th e requirements for a “normal” authorisation are not 
fulfilled.  The new Directive adds a third possibility fo r obtaining the permission to market a herbal 
medicinal product. The three possibilities available would therefore be: 
• marketing authorisation on the basis of a dossier containing a full set of pre-clinical tests and 
 clinical trials on the product’s safety and efficacy; 
• marketing authorisation on the basis of the well established medicinal use of the substance 
 concerned demonstrated by reference to publis hed scientific literature on the product’s safety 
 and efficacy;  
• a new simplified registration procedure introdu ces by Directive 2004/24/EC on the basis of 
 information on the traditional use of the substance. 
• The simplified registration procedure of the new Directive will be applicable where the 
 medicinal product concerned fulfils certain criteria:  
• it must be a medicinal product that contains only active substances of herbal origin;  
• it must be in medical use for 30 years (at least 15 years in the Community);  
• Information on the traditional use of the product must be sufficient to conclude on the 
 product’s safety and efficacy;   
• only those therapeutic indications which do not require the prescription by a doctor are 
 allowed.  Directive 2004/24/EC has to be transposed by the Member States by 30 October 2005.  
Q30. EC has proposed a regulation that requires the imported ayurvedic products to prove 
bibliographic or expert evidence to the effect that  the product in question has been in medicinal use 
throughout a period of at least 30 years including at least 15 years within the EC. If the product 
has been in use in EC for at least 15 years, fast  track marketing approvals are allowed. EC has so 
far not allowed marketing of ayurveda products and medicines. Hence, the requirement of at least 
15 years use in an EC country imposed by EC Regula tion is contradictory in nature and cannot be 
fulfilled. This regulation is thus a market access ba rrier.  India requests for the rationale for this 
regulation. 
 Seizure of Indian Pharma Products by EU as ‘Counterfeit’ WT/TPR/M/136/Add.1 
Page 223 
 
 
 A: The legislation mentioned is Directive 2004/24 /EC (see reply to the previous question), which 
creates a simplified registration procedure for trad itional herbal products. We  understand that certain 
ayurvedic products (namely those of herbal orig in) could benefit from the provisions of the new 
Directive.  To be eligible for the proposed simplified re gistration of Directive 2004/24/EC, the medicinal 
product has been in medicinal use in the Community for at least 30 years. To open the new procedure 
for products with medicinal use (also) outside the Community, the Direc tive provides that it is 
sufficient that at least 15 years of use fall within  the Community, if the rest of the 30 years has 
occurred outside the Community.  Hence, the proposal requires a certain use with in the Community and does not go as far as to 
consider any use even if occurred only outside the Community. The key reason is that the effects of a 
medicinal product as well as its side-effects can vary  according to the circumstances of its use (like 
physical particulars of the human beings, availa bility and prevalence of therapeutic treatments or 
medicinal products etc.). Bearing in mind that the applicant generally does not have to run any pre-clinical or clinical trials on the product, it therefor e is inevitable to demand at least a certain period of 
use within the Community where the product shall be authorised. 
However, the Directive goes one step further to wards facilitating the use of herbal medicinal 
products with a tradition outside the Community. To maintain a high level of health protection, it 
upholds the minimum requirement of 30 years of traditional use. But where this period cannot be demonstrated within the Community, the product ca n be referred to the new Committee for Herbal 
Medicinal Products established within the European Me dicines Agency. On the basis of an analysis of 
the product, the Committee will establish a Community herbal monograph, on whose basis the 
Member States shall grant or refuse the registration. 
In any event, it should be noted that, in t hose cases where ayurvedic medicinal products do 
not fulfil the requirements for simplified registrati on of Directive 2004/24/EC, they can still apply for 
a marketing authorization through one of the routed for authorization described  in the answer to the 
previous question (application on the basis of a dossi er containing a full set of pre-clinical tests and 
clinical trials on the product’s safety and efficacy or application on the basis of the well established 
medicinal use of the substance concerned demonstrat ed by reference to published scientific literature 
on the product’s safety and efficacy).  
 
Q31. The French Customs have seized an in tran sit merchandise of ‘Venegra’  exported by an 
Indian firm. The seizure was apparently made on a complaint filed by M/s Pfizer Ltd, 
manufacturers of ‘Viagra’, who claim that the consignment was counterfeit produced by an Indian pharmaceutical company and did not have the properties of Viagra.  The action of the French authorities raises issues about interpretation of patent protection laws in Europe and India.  The pharmaceutical product was manufactured by Indian 
manufacturer with necessary licence from the Drug  Control Authorities of India and exported to 
Guinea. It will apparently have the legal protectio n in India where process patents are allowed.  
Product patents will have protection in India only with effect from 1.1.2005.  Since the consignment was in transit and wa s not meant for EC market, it does not stand to 
reason that the consignment violated any of the IPR provisions of EC patents law, which permits 
only product patents.  Would EC clarify its understanding on this issue? 
 
A: First of all, the Community customs code  and its Implementing provisions enables EU 
customs authorities to undertake any necessary control from the moment a good is placed under 
customs supervision within the European custom s territory. This includes cases in which a good is 
placed under a transit procedure within the European  customs territory, as transit is a suspensive 
customs procedure where goods are under customs supervision. 
 Moreover, in the framework of customs acti on against goods suspected of infringing certain 
intellectual property rights, the customs authorities concerned have an obligation to detain the goods WT/TPR/M/136/Add.1 
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for which an application has been lodged. If the right holder does not initiate proceedings within 10 
working days, release of goods is granted subject to completion of customs formalities.  
Customs Procedures
 
 
Q32. It is served (refer paragraph 11 of the Summary Secretariat Report) that although customs 
procedures are harmonized among the EC Member States, however, their uniform implementation 
is still awaited. We request the EC to provide an  indicative timeframe fo r uniform implementation 
of the customs procedures among EC’s Member States? 
 
A: The Community Customs Code lays down common rules for customs procedures, and the Commission's objective has always been to ensure uniform application of all customs rules and to 
ensure a level playing field in the treatment of  economic operators. The Community has in place all 
the necessary legal, institutional and administrative measures to ensure harmonised practice. Those 
measures ensure effective coordination between EU Member States in order to have uniform 
implementation. The EC customs Union is indeed  supported and equipped to function as a single 
entity. There is adequate legislation (e.g. the EC Customs Code and its Implementing Provisions), 
there is regulatory and supervisory structure a nd they are various operational tools and common 
procedures  Tariff related issues – Basmati Rice
 
 
Q33. After the issuance of EC Regulation No. 2294/2003 of 23 December 2003, it was ruled that 
w.e.f 01 January 2004 only 6 Indian and 1 Pakistani Traditional Basmati variety would be entitled to 250 ECUs derogation of duty. Accordingly, Cer tificate of Authenticity (COA) when issued by 
EIA, the Competent Authority containing the mix of these 6 Indian Traditional basmati varieties 
were accepted in EU  and given the necessary rebate of 250 ECUs. Suddenly EC issued another instruction that any COA issued by EIA afte r 15 April 2004 for export of Traditional Brown 
Basmati Rice should only mention ONE variety in Box 6.  The Basmati trade of India treats this action as a clear case of Non -Tariff Barrier or a Technical Barrier since it does not matter whether the rice is Basmati 370 or Taraori or Type 3 or 
Basmati 386 or Ranbir Basmati  or Basmati 217 as  all of them are entitle d to 250 ECUs derogation 
of duty following inevitably that the blend of a ll these very 6 varieties too are eligible for 250 ECU 
derogation of duty. Will EC clarify the reasons for imposing this new condition? Is it likely to 
review this condition?  
 A:  
 
Q34. The Report by the Secretariat in par agraphs 9 and 10 of the Summary, read with 
paragraphs 15 to 19 of Section III, draws attentio n to the complexities in the EC’s tariff structure 
on agricultural products, with possibilities of varying  the duty applicable due to seasonal, technical 
content, or “entry price” (variable) considerations.   We note that variable levies are not consistent 
with the EC’s obligations arising from the WTO Ag reements.  We further request the EC to lower 
its tariffs on agricultural products, simplify its tariff regime and to impart due transparency.  Not 
only do agricultural products attract the highest ta riff rates, with over 200% for some products and 
a vast array of products of export interest to developing countries attracting duties of 100% or more 
(refer paragraph 20 of Section III of Secretariat Report), our attention has been drawn to the fact 
that the EC has not revised downwards its tariff st ructures since the last TPR.  We believe that 
continuous and progressive reform provides a useful policy tool to enhance domestic 
competitiveness, and urge the EC to address the leg itimate concerns of its trading partners in the 
agriculture sector.   
 WT/TPR/M/136/Add.1 
Page 225 
 
 
 A:  
 
Q35. The Secretariat Report has identified (by reference to paragraph 14 of the Summary and 
paragraph 23 of Section IV) that higher tariff protection for agricultural products and domestic 
support coupled with limited liberalization of trade in agricultural products under the EC’s 
preferential trade agreements, have insulated EC’s production from competition and generated 
surpluses.  The policy thus has made subsidies indi spensable for exports of these surpluses, as well 
as of downstream agricultural products. The S ecretariat Report has also observed that EC’s export 
subsidies have remained relatively high.  It is fe lt that such measures adversely affect exports of 
other countries particularly developing countries.  We request the EC to provide a timeframe for 
discontinuing these measures whic h limit foreign competition.  
 
A: The EC is fully committed to further negotiati ng on the basis of the Ag reed framework, with a 
view to reaching agreement on modalities in Hong K ong at the end of the year 2005. Regarding the 
question raised here, it is an issue for further nego tiations as indicated in paragraph 18 of annex A of 
the Agreed Framework. 
 
Q36. Paragraphs 26 through 31 of Section II of the Secretariat Report draw attention to the 
complex web of preferential trade agreements of th e EC, and to the limited liberalisation of trade in 
agricultural goods thereunder. In fact, the Report is  categorical that the limited liberalisation of 
agriculture under the agreements has hindered its exposure to competition and more significantly, 
that liberalisation on a multilateral MFN basis would eliminate the existing adverse trade diversion 
effects of EC’s PTAs.  We urge the EC to adopt an approach consistent with this recommendation. 
 
A:   Market Access Issues
 
 Preferential Quota for Sugar
 
 
Q37. The level of import of quota sugar in the EC under the Tariff Rate Quota (TRQ) regime 
has remained constant even though sugar consum ption in EC countries has gone up over the years 
and new members have joined the EC. The existin g TRQ regime for sugar does not also take into 
account the shortfalls in utilization of quotas by the quota-holding countries which can be allocated to other countries.  In view of this Indi a feels that EC needs to review its TRQ regime on 
sugar and give higher quota allocation to countries  like India, which is the largest producer of 
sugar in the world.  
 We request EC’s comment on this issue.  
A:  
 
Approval of milk products producing/exporting units:  
 
 
Q38. Currently 39 Indian milk processing units are awaiting approval of EC.  In the absence of approval of the EC, the export of milk/milk based  products cannot be made to EC.  The Residue 
Monitoring Plan (RMP) has also been submitted to  the EC.   The delay in such approvals impedes 
market access for milk and milk  based products. Does EC proposed to streamline its procedure for 
approvals so that these are granted in a time bound manner?  
 
A:   WT/TPR/M/136/Add.1 
Page 226  
 
Approval of egg products producing/exporting units
 
 
Q39. 3 egg products producing/exporting units is awaiting approval for more than five years.  
The EC has not approved the units apparently on the ground that it needs to harmonize its standards and procedures for member states befo re granting the approvals.  By when does EC 
propose to complete harmonization exercise? Woul d the accession of new members to EC further 
delay this process? Are any time limits be ing fixed for completing harmonization? 
 
A:   Approval of India for export of poultry meat
 
 
Q40.  A proposal to approve India as a third country eligible for export of poultry meat to EC is 
pending for more than four years on account of  completion of formalities like exchange of 
documents and inspection results. Does EC propo se to standardize a timeframe for approval 
procedures and also indicate a timeframe  by which approval would be granted?  
 
A:   
Outward processing
 
 
Q41. In case of textiles, Outward Processing Trade (OPT) of EC with East European countries is done without any quantitative restriction and duty. For example, fabrics sent from EC to East 
European countries for converting into garments, assumes special status. Garments made out of 
fabrics originating in EC return back to the Co mmunity without any quantitative restrictions or 
any duties. As against this, garments made of Indian  fabrics attract a duty of 12.2% on the garment 
value. This puts the Indian fabrics at a disadvant age to the extent of 25-35% vis-a-vis fabric of 
European community origin. Will EC explain the rationale for such differential treatment? 
 
A: The fabric of EC origin sent for processing keep s its origin status and reenters the Community 
as such  Problems in realizing payments against L/Cs
 
 
Q42. Indian exporters of leather & leather products of late are facing difficulties in realizing 
payments from overseas buyers particularly from Italian buyers even if the export shipments are 
effected under irrevocable and confirmed Letter of  Credit opened by Banks in Italy. The buyers 
generally obtain Court decree from the local Courts  in Italy directing L/C opening banks to stop 
payments.  Stoppage of payment of L/Cs does not appear to  be a fair trade practice as banks are bound 
to honor the L/Cs, if the documents submitted under the L/Cs are in total conformity. The practice 
of resorting to Court decree to stop payment under  the L/Cs appears to be against the letter and 
spirit of Uniform Customs and Practices in Documentary (UCCP).  
EC is requested to inform in what manner this problem can be overcome. 
 
A:   WT/TPR/M/136/Add.1 
Page 227 
 
 
 Trade Defence Measures  
Anti-dumping  
Repeated recourse to AD/AS actions against India  
 
Q43. Over the years, European Communities has been taking frequent recourse to anti-
dumping/subsidy investigations especially on India’ s textile products. The use of such measures by 
the EC far outweighs the trade proportion. While In dia’s total market share in EC’s global imports 
is 1.36%, the trade defence measures of EC target almost 3.5% of India’s total exports to EC. While 
Art. 15 of the Agreement on anti-dumping provid es for special & differential treatment to the 
developing countries in the use of such measur es by the developed countries and suggests that 
constructive remedies must alwa ys be explored by the developed countries to address the relevant 
concerns, the EC has failed even to reflect this prov ision in the domestic laws of the member states 
of the EC. In the textile sector, certain product  categories, namely Unbleached Cotton Fabrics 
(UCF), Cotton Type Bed-linen, and Polyester Staple Fibre (PSF) originating inter-alia, from India 
have been subjected to repeated anti-dumping/su bsidy actions. This is perceived as a systematic 
campaign targeting at India’s textile exports in which India enjoys a measure of comparative 
advantage.  This has had a debilitating effect on  In dia’s textile industry. We would request EU to 
be sensitive to India’s concerns on this issue. In  this context we would also like to know what 
constructive remedies its explores before imposin g anti-dumping measures against developing 
countries.  
 A:  
 
Q44. EC has initiated and conducted anti-absorptio n proceedings. Could EC indicate the specific 
provision of the ADA/Article VI of GATT 1994  under which such action against dumping is 
justified? 
 
A:   
Q45. Could EC separately provide details of the financial contribution provided by the 
Commission and Member States for the following : Research and development;  Environment 
purposes;  Aid to disadvantaged region. 
The data may be provided fo r the period 2001-2003 annually. 
 
A:   
Q46. WTO Member made a commitment at Doha Mini sterial Meeting in para 4.2 of the Decision 
on Implementation Related Issues and Con cerns that members will exercise particular 
consideration before initiating investigations in the context of anti-dumping remedies on textile & 
clothing exports from developing countries previo usly subject to quantitative restrictions under the 
Agreement for a period of two years following full integration of this Agreement into the WTO. EC  
may please  explain the  action taken in their domes tic regulations to give effect to this commitment 
at Doha. 
 
A:   
Subsidies and Countervailing Measures
 
 
Q47. The EC may explain as to how it calculates the subsidy margin while examining the Indian 
duty neutralisation schemes etc. The EC must establish in each and every case how the duty 
neutralisation schemes are utilised and take into account for its calculation only that portion of WT/TPR/M/136/Add.1 
Page 228  
 
benefit which exceeds the amount of duty paid/payable instead of countervailing the entire scheme.  
It may please be indicated whether such an approach is followed . 
 
A:   Q48. In disregard of its well established practi ce of taking the depreciation period from the 
accounts of the company and overlooking the us eful life of the product, the EC has taken a 
different period of depreciation much more onerou s or in certain cases disadvantageous to the 
company.  EC is requested to clarify its exis ting practice and the circumstances under which it 
takes the accelerated period of depreciation instea d of depreciation from the books of account of 
the concerned producer/exporter.  
 
A:   
Q49. There is no provision in GATT 1994, the Anti-Dumping Agreement or the Agreement on 
Subsidies and Countervailing Measures which permits  a member to geographically stretch the 
applicability of anti-dumping measures to cover im ports into territory of countries which were not 
subjected to an anti-dumping/countervailing duty investigation.  Could EC indicate the relevant 
provisions in the WTO acquis which permits it to  extend   trade remedy measures which were 
applicable in EC-15 to cover imports into the entire territory of EC-25? 
 A:  
 
Textile-related issues
 
Lack of meaningful integration  
 
Q50. The integration programme implemented by the importing countries has not been in line 
with the spirit of the ATC though it may have conformed to the narrow technical and legal requirements of the Agreement.    It is ironical that while India has removed all import restrictions on textile products, save 
for a small list of  10 tariff lines at 8-digit level on account of safety and health exceptions, EC has 
kept the bulk of restrained products (about 79%) fo r integration till the very end i.e. on 31.12.2004. 
According to a recent EC Study, EC import restrictio ns on textiles and clot hing cost consumers 
almost EUR 25 billion every year, which means an extra annual cost of EUR 270 for a family with two children.  In this view, will EC explain the rea sons for deferring the integration till 31.12.04. 
 
A: For the record and to put things into perspec tive it is noted that India’s export of T&C to the 
Community in 2003 amounted to over 4 billion $ whereas EU’s exports to India amounted to 220 mio 
$.  The Community has faithfully adhered to the provisions of the ATC’s integration programme 
and in so doing respected the percentages and produ ct mix during each phase of integration With this 
in mind decisions to integrate products were ma de at the discretion of the importing country 
 Issue of year-end shipments in 2004
 
 
Q51. There can be no dispute that trade into 2005 would have to be free of any restrictions.  
GATT Article XI clearly provides that “No prohib itions or restrictions-whether made effective 
through quotas, import or export licences or other me asures, shall be instituted or maintained by 
any Member on the importation of any product of the territory of any other Member-“ Further, 
ATC provides that all restrictions shall stand termin ated on 1st January, 2005 and on this date, the 
sector shall be fully integrated into the GATT. This implies that all quota restrictions as well as all requirements relating to these restrictions would stand abolished on 1st January, 2005. WT/TPR/M/136/Add.1 
Page 229 
 
 
 It may also be recalled that in previous in tegration stages, the categories which were 
integrated, the EC had not instituted any mechanism to check imports of integrated categories in 
the ensuing year.  It may also be worth mentio ning that additional levels of quotas due to 
enlargement of EC membership to 25, goods shipped before 1st May 2004 but reaching these 
countries after this date will be quota free.  For co nsignments which start arriving in the quota free 
situation of 2005 would need to be shipped in the final months of 2004 and any requirement of 
export visa would be uncalled for.  There would be hardly any legal ground to deny entry to those 
shipments reaching on or after 1st January, 2005. 
In order to provide predictability and conf idence to both exporters and importers, it is 
requested that the EC authorities issue fresh inst ructions to their respective customs authorities 
accordingly. We request EC’s  reaction to this request. 
EC is also requested to give a clarification to the effect that concurrent with the phase out 
of quota regime, the administrative requirement of  the visa certificates would also be dispensed 
with effect from. 1st January 2005. 
 A: It is correct that restrictions shall stand terminated by the end of 2004. 
It is equally correct that exporting countries shall administer restrictions and that importing members shall not be obliged to accept shipments in excess of restrictions notified. The date of shipment has for 
decades according to bilateral agreements and sub sequently under the administrative arrangements 
been the determining factor for the setting off ag ainst quota. Consequently, shipments made during 
2004 but with arrival in 2005 have to be set off against the 2004 quota which the exporting country is 
bound to respect and the importing country entitled to enforce. If this were not the case provisions of 
article 4.1 would indeed be meaningless. Any other interpretation of the ATC would open an 
invitation to exceed bilaterally agreed quotas  
Textile/Clothings Quotas
 
 
Q52. EC has allotted some additional textile and cl othing quota based on the average of last 3 
years textile and clothing exports from India to these countries.  This methodology does not appear to be correct as it does not even protect the previou s years exports as it takes average of last 3 years.  
A better method would have been to take the highest import figure of the last 3 years and provide for at least 6% growth on that. We would request EC’s comments on this suggestion. 
 
A: In applying the method of the average of imports of the three last known years  EC resorted to a well tested principle which diminished the risk of   the  erratic fluctuations in trade patterns and 
consequently statistically provid es a safer basis for adjustment 
 Services Issues
 
  Burden of social security contributions on short term Indian IT professionals working in EU countries 
 
Q53. As per the local rules and regulations, Indian IT professionals on short-term assignment to 
their own branch offices/ subsidiaries or liaison o ffices are subjected to deduction of social security 
contributions from their wages drawn in the EU country concerned but because they are employed 
on a short term basis - say for a period of 3-4 years.  Such persons are deprived of the social security 
benefits when they return to India because, they are not entitled for the benefits, in case of a  
change in residence, in the absence of any bilateral social security agreement between India and 
the EU country concerned. 
 The EU member countries follow varying practices in this regard. The U.K. allows exemption to all foreigners from social security contributions for up to 52 weeks of employment. WT/TPR/M/136/Add.1 
Page 230  
 
Finland and Sweden allow repatriation of benefits after fulfilling the qualifying period to all 
persons irrespective of their residence. Rest allo w this on the basis of bilateral social security 
agreements.   Will EU explain if it has any plans to take measures to ensure that the EU member States follow a common policy and provide the necessary benefits as mentioned above on a non-
discriminatory basis to all third country nationals .  
 
A: As regards natural persons, only EC citizens are beneficiaries of the internal market freedoms. 
Access of non-EC citizens to each Member St ate is governed by EC GATS commitments 
 Need to make ENTs more transparent.
 
 
Q54. Can the EC clarify the conditions on the basis of which ENTs are imposed while permitting entry of foreign service providers? What steps are being taken to make the ENTs transparent and 
objective? 
 
A: The application of ENTs is an issue to be addressed in services negotiations under the DDA. 
 
Visas/Work Permit Issues
 
 
Q55. Indian businessmen and professional seeking entry to the EU member countries in 
connection with work have to sa tisfy varying requirements for obtaining visas from different 
countries. Apart from the normal documentatio n, some countries require medical certificate, 
income-tax certificate, policy verification certificat e etc. which are unnecessarily burdensome for 
normal travellers seeking entry for business fo r work. These problems are especially acute for 
companies wishing to depute technical staff and pr ofessionals at various sites in the EU countries, 
including for fairs and exhibitions organized in  Europe. Such lack of harmonisation and the 
nature of the documentation requirement are found to be actual market access barriers for Indian 
professionals and businessmen. This is so even in  sectors wherein the EU has taken commitments 
for access for business travellers, for contra ctual service suppliers and for Intra-Corporate 
Transferees. How does the EU pr opose to tackle these issues? 
 In connection with business visa, many EU member countries also require letters of 
invitation from local companies, to accompany the initial application. This essentially means that 
Indian companies and professionals are denied the opportunity to carry out exploratory visit to markets of interest. How does this approach ge l with ECs commitments regarding access for 
business visitors who are representatives of the foreign service suppliers and seeking temporary 
entry for the purpose of negotiating for sale of  services and for setting-up a commercial presence of 
the service supplier in an EC member state.   
A: In relation to entry visa policy, attenti on is drawn to the GATS Annex on Movement of 
Natural Persons, and in particul ar paragraph 4 thereof which exclude entry visa measures and 
procedures from the scope of the GATS.   Notwithstanding this, the EC and their Member  States are continuously working to improve 
visa processing procedures generally and to addr ess specific problems which are brought to our 
attention, whilst at the same time ensuring that the integrity of our visa systems and our external 
borders are maintained.  Entry visas procedures for pe rsons entering an EU Member State to carry out 
an economic activity are determined by individual Me mber States and not at a Community level.   
 Q56. Many Indian companies have multiple offices within the EU and need to post their employees, both Indian and third country nationals, seamlessly between these offices. It is understood that under the common market rules, co mpanies operating in an EU member country 
and wishing to supply short time services in another member country using either EU nationals or WT/TPR/M/136/Add.1 
Page 231 
 
 
 non-EU nationals, can do so on the basis of memb er state in which the company is established. 
However, despite this rule some member countri es require that the companies obtained separate 
residence permits from the countries where the professionals are being posted. This requirement, clearly and unnecessarily burdensome one, that th e company being hindered in the profession of 
services in the most efficient manner. Can the EU  explain whether it intends to simplify and 
harmonise these rules so that such market access barriers are not regularized against service 
suppliers from country such as India.  
 
A: As regards natural persons, only EC citizens are beneficiaries of the internal market freedoms. 
Access of non-EC citizens to each Member St ate is governed by EC GATS commitments 
 
Q57. Can it be confirmed that the EC’s commitm ents on Business Visas extended to persons 
visiting the EC for business discussions, project review meetings, short-term training on client platform studies to bring the project to off-sho re development centre, installation support & user 
training at client site fo r software development off-shore? 
 
A: This is an issue to be addressed in services negotiations under the DDA.  
Q58. Companies carrying out out-sourced projects on behalf of EU companies naturally need 
access for their employees for short visits. This is often necessary for a clearer understanding of the 
requirements of the client company. However, even  for the entry of such service providers, some of 
the EU member countries need a regular work permit.  It is not legal to carry-out any work relating 
to installation of the system, harmonization of the systems of the clients and the customer etc. while 
on a business visa. This is, also seems to be unnecessarily onerous restriction. Can the EU 
respond?  
A: This is an issue to be addressed in services negotiations under the DDA 
 
Q59. Many of the EU member countries insi st upon imposing minimum salary requirements 
while granting work permits for foreign prof essionals for work. This condition is imposed 
particularly for the “highly qualified personnel” cate gory. The salary bench-mark is fairly high in 
such cases. This places burdenso me obligation and severely affect s the competitive advantage of 
the companies involved. Moreover, the definition of “highly qualified personnel” is not clear and is 
apparently open to interpretative discretion. This is unwarranted particularly since the EC has 
undertaken commitments providing access for contra ctual service suppliers in which there is no 
reference to any wage parity restriction. We request EU to indicate whether such requirement are likely to be done away with in order to fully e xploit comparative advantage in the services sectors. 
 
A: This is an issue to be addressed in ser vices negotiations under the DDA. However, we note 
that access of non-EC citizens to each Member St ate is governed by EC GATS commitments, which 
includes definitions for key personnel.    
Q60. Local investment conditions: In a few EU  countries e.g. Luxembourg, the grant of work 
permits are often subject to restrictions in  terms of numerical ceiling on the number of 
professionals, and are linked, in some cases, to a certain minimum level of capital investment being 
made in the region or State before the permits are granted.  Besides, there is also a requirement of 
recruiting a certain minimum number of local employees for the Indian companies to establish a commercial presence in the Member’s territory and bring Indian professionals for their work.  The 
ratio of foreign to local employment expected by the authorities can be as high as 3:1.  This puts an 
extra and unwarranted burden on the Indian companies engaged in providing services in EU.  WT/TPR/M/136/Add.1 
Page 232  
 
There is no such market access lim itation in the EC’s GATS commitments in Mode 3 and Mode 4.  
How does the EC explain this?  
 
A: Access of non-EC citizens to each Member State is governed by EC GATS commitments. 
 Delay in issue of visas/work permits:
 
 
Q61. No time-frame has been fixed for issue of visas causing avoidable inconvenience and 
disruption to the applicants’ work schedules.  It takes about 4-6 weeks to get a 3-month (or more) 
work permit approved by most EU Member-States, each of which has its own regulation on the 
subject. Usually, a client company has to wait for periods ranging from 3 weeks to 3 months to 
obtain a work permit. Sometimes, the applications a re rejected after this long wait. In a situation 
where the processing period is more than a month at the most, the client companies lose interest in 
the offer of the service provider and the contract falls. Such non-transparent and slow procedures 
act as a real market access barrier to the provision of services by companies/professionals in India. 
The period of processing should be standardized and reduced to a maximum of three weeks. We 
request EU’s comment on this issue. 
 
A: The EC and their Member States are continuo usly working to improve procedures generally 
and to address specific problems which are brought to our attention, whilst at the same time ensuring 
that the integrity of our systems is maintained. 
 In 2001, the European Commission made a pr oposal to simplify and harmonise application 
procedures for work and residence permits thr oughout the EU, based on common definitions and a 
“one-stop shop” procedure. In the course of 2002 and 2003, the relevant Council Working Group 
worked on a first reading of this proposal. The Justice and Home Affairs Council of 27/28 November 
2003 took note of the state of play of the - difficult - negotiations. The Commission is currently considering publishing a Green Book on economic mi gration, with the aim of stimulating a broad 
consultation procedure with all interested parties and facilitating the drafting of a possible modified 
proposal 
 
Work permit for outsourced work
 
 
Q62.  Even in the case of out-sourced proj ects, service providers entering Luxembourg for the 
purpose of commissioning/installing their system  require a regular work permit. Such service 
providers or professionals can not legally provide a service while they are on a business visa. A 
solution needs to be found by al lowing the persons on business visas to provide necessary services 
to their clients through the parent companies. We request EU to respond to this suggestion. 
 
A: Schengen entry visas are only issued to pers ons who will not carry out an economic activity 
in the EU.  Persons who intend to carry out an economic activity, including service provision of the 
type mentioned above require a na tional visa and a work permit, within the limits imposed by the 
relevant Member State’s visa and immigration policies 
 
Professional Cards  
 
Q63. Self-employed non-EEA nationals and qua lified professional (doctors, lawyers, creative 
artists and sales people) need a professional card in order to practise their profession and/or provide consultancy in Belgium (and also other EU member-States).  The concerned person has to 
apply to the relevant authorities for such permit on an individual basis.  The card, which is valid 
for five years, is issued in Belgium by the go vernment agency the Federal Public Services for the 
Economy, SMEs Self-employment and Energy. In obtaining and renewing the professional cards, WT/TPR/M/136/Add.1 
Page 233 
 
 
 problems similar to those noticed as in case of obtaining work permits are encountered.   How does 
EU propose to reduce barriers by simplifying the procedure? 
 
A: The EC and their Member States are continuo usly working to improve procedures generally 
and to address specific problems which are brought to our attention, whilst at the same time ensuring 
that the integrity of our systems is maintained. 
 Entry of third country nationals to carry out an economic activity is cu rrently permitted within 
the limits of the EC’s GATS commitments. In 2001,  the European Commission made a proposal to 
simplify and harmonise application procedures for work and residence permits throughout the EU 
including for self-employed persons, based on common definitions and a “one-stop shop” procedure. 
In the course of 2002 and 2003, the relevant Council Working Group worked on a first reading of this 
proposal. The Justice and Home Affairs Council of 27/28 November 2003 took note of the state of play of the - difficult - negotiations. The Commission is currently considering publishing a Green Book on economic migration, with the aim of stim ulating a broad consultation procedure with all 
interested parties and facilitating the drafting of a possible modified proposal. 
 
Data Privacy
 
 Q64. There are data privacy norms in EU which are likely to come in the way of India’s e-
commerce with EU and process outsourcing of data operations to India. EU permits free transfer 
of personal data (Article 25 of the Data Protectio n Directive no 46/95) in electronic or other form 
from EU/EEA sources to the third countries only if the data protection regime in the concerned 
third countries EU is judged adequate i.e. the level of protection for data offered is the same as 
offered in the EU. It is understood that an EC offi cial must necessarily appr ove all proposals by EU 
companies to out-source any activity. This is done on the basis of a subjective analysis of the EU 
company, the foreign counterpart, the nature of the data etc. This provision can become a serious 
obstruction to the flow of data in the course of  business transactions and can even check BPO 
activities. As it is, many of the Indian small an d medium enterprises have virtually withdrawn from 
the BPO business in the EU because of difficu lties faced in proving compliance with the EC 
requirements. How does the EC propo sed to reduce barriers and restrict the impact of this measure 
to the actual requirement of data protection? 
EU insists on such safeguards being a part of contractual arrangements between the 
parties involved. While the Indian companies are, in the short run, conducting their work on the 
basis of contractual agreements with their European  counterparts, this is likely to delay and cast 
additional burden on the exporting companies in developing countries like India. Does EU  
propose to grant recognition to Indian data protection regime to enable a more conducive  business 
environment ? 
 
A: The 95/46 EC data protection Directive allows transfers of personal data to non-EU countries 
if either the destination country ensures an adequate  level of protection (Artic le 25 of the Directive) 
or, by way of derogation from Article 25, if adequate  safeguards are put in place (Article 26) so that 
personal data transferred also enjo y an adequate of protection, even  if the destination country as a 
whole does not ensure such level. 
The possible adequacy afforded by the third c ountry shall be assessed in the light of all 
circumstances surrounding the transfer operation, acco rding to Article 25 (2) of the Directive. The 
notion in Article 25 according to which the level of protection shall be ‘a dequate’ does however not 
require that it shall be ‘equal’ or the ‘same’ in th e third country in question, but that a number of key 
data protection principles are set up and applied. 
As regards the procedure to be followed fo r an adequacy findi ng, the Commission, upon 
request of the third country and in close co-operati on with the Working Party 29 (composed of the EU 
Member States’ independent data protection comm issioners and established under Article 29 of the WT/TPR/M/136/Add.1 
Page 234  
 
data protection Directive) and the Member States, will assess the level of protection in the third country in question and, in case this level is adequate, will decide so. 
India should therefore enact a data protection la w that provides for such adequate protection 
and, once this law is applied in practice, make a request for an adequacy finding to the Commission. 
 In the absence of such adequacy  finding, data transfers to India will have to take place under 
Article 26 of the Directive, with contractual clau ses under Article 26 (2) being a possible legal basis 
for transfers. It is however not to the Commission to authorize such transfers in any way, but this is 
left to Member States, with no authorization be ing required when use is made of the Commission 
standard contractual clauses.  (See http://e uropa.eu.int/comm/internal_market/privacy/ 
modelcontracts_en.htm) 
The attached document gives an overview of  how the Article 29 Working Party applies 
Articles 25 and 26 of the data protection Direct ive. http://europa.eu.int/comm/internal_market/ 
privacy/docs/wpdocs/1998/wp12_en.pdf.  
Professional Services
 
 
Q65. In architectural services, many member countries of the EC impose a residency stipulation 
for grant of license to provide architectural se rvices. This requirement appea rs to be inconsistent 
with the EC’s GATS commitments since a limitation of residency has been imposed only in respect 
of Italy and Greece. How does the EC justify this? Likewise in Accounting Service (other than auditing) the only countries with a residency stipul ation are Denmark and Italy. Yet, residency is a 
requirement for license to practice in several EU states.  
Furthermore, many countries make prior residenc y a requirement for eligibility for registration 
with the licensing body. However, visas are often not granted to foreign professionals who wish to enter in order to fulfil the residency requirement for licensing. How does the EC explain this contradiction? 
 
A: Access of non-EC citizens to each Member  State is governed by EC GATS commitments. 
Nevertheless, the EC and their Member States are continuously working to improve procedures 
generally and to address specific problems which are br ought to our attention, whilst at the same time 
ensuring that the integrity of our systems is maintained. 
 EU also does not grant recognition to its ow n professional degrees e.g. dentistry if it was 
obtained by a non-EU national. In a specific case, an Indian national holding such a degree obtained 
from the University of Semmelweise in Budapest has not  been allowed to be registered by the General 
Dental Council (GDC) of the UK despite the existenc e of the EU directives on mutual recognition of 
such degrees. This has been denied on the ground th at a European degree held by a non-EEA national 
is not valid for registration as dentist in th e UK unless she or he passes further International 
Qualifying Examination. How does EU intend to address such cases?  
 As regards natural persons, only EC citizens are beneficiaries of the internal market freedoms. 
This is expressly mentioned in a horizontal limitation in the EC GATS schedule of commitments. 
 
QUESTIONS FROM BRAZIL   
 I) Import prohibitions, restrictions and licensing
 
 
Q1. In Chapter III (Trade Policies and Practices by Measure), Paragraph 45 of document WT/TPR/S/136, it is stated that "The EC al so implements import prohibitions, licensing 
requirements, and other restrictive trade measures  in accordance with international conventions 
and treaties (...) The EC also applies import prohib itions, surveillance, and controls on grounds of 
technical requirements (including standards, sanitary and phytosanitary, and environmental 
requirements)". It is mentioned that the EC applies technical barriers to trade under TBT. How 
does the EC apply these procedures? WT/TPR/M/136/Add.1 
Page 235 
 
 
 A:  
 
Q2. In the Secretariat Report, Paragraph 48 of Chapter III (Trade Policies and Practices by 
Measure), it is stated as follows: "The EC has bilateral arrangements on trade in textile and 
clothing products with the following WTO Me mbers: Armenia; Bangladesh; Croatia; Egypt; 
Kyrgyz Republic; Moldova; Mongolia; and Sri La nka. Under these arrangements, the EC applies 
double-checking surveillance without quantitativ e restrictions. The EC applies quantitative 
restrictions, on an autonomous basis, on impor ts from Bosnia and Herzegovina, Democratic 
People's Republic of Korea, and Serbia and Mont enegro. Furthermore, surv eillance of imports of 
textile and clothing products under the double-chec king system also applies under agreements with 
certain countries not members of the WTO..." Does the EC intend to continue adopting the 
"double checking" surveillance after the end of th e ATC? Is it under consideration to suspend at 
least one of the required documents? 
 A:  
 
II) Rules of Origin
 
 
Q3. In accordance with WT/TPR/S/136, Chapter III (Trade Policies and Practices by Measure), 
Paragraph 37, "The EC applies both non-preferentia l and preferential rules of origins. Its non-
preferential rules of origin are contained in the customs code and corresponding implementing 
regulations; the preferential rules of origin are set out in the relevant preferential trade 
agreements/arrangements (...)". Since the EC adopt s preferential and non-preferential rules of 
origin, could the EC please inform us which are the authorities responsible for the issuing of the 
certificate of origin? 
 
A:  
 
III) Safeguards and antidumping  
 
Q4. Chapter III (Trade Policies and Practices by Measure), Paragraph 55, of document 
WT/TPR/S/136 affirms that "Separate safeguard provisions apply to non-WTO members, and to 
imports of textile products from certain third countries. On 3 March 2003, the EU adopted a 
regulation, that amended its regulation on non- WTO Members, to bring into line its safeguard 
provisions on imports from th e People's Republic of China with the transitional provisions 
contained in China's Protocol of Accession to the WTO". What kind of amendments have the EU authorities adopted as regards the abov e-mentioned safeguard provisions? 
 
A:   Q5. Regarding the Secretariat Report, Chapter III (Trade Policies and Practices by Measure) 
paragraph 60, "(...) anti-dumping duties are to be im posed if three conditions are met: (i) a finding 
of dumping; (ii) a determination of material injury to the Community industry; and (iii) it is in the 
interests of the Community..." Could the EC pr ovide a more specific definition of the term 
"interests of the Community"? 
 
A:   Q6. Still regarding Chapter III of the above mentioned document, Paragraph 62 states that "At the time of their accession, new members must apply EC anti-dumping measures in place; their 
own measures will lapse". Could the EC explain wh ether these measures are automatically lapsed? WT/TPR/M/136/Add.1 
Page 236  
 
A:   
IV) Trade Regime
 
 
Q7. In the Secretariat Report, Paragraph 15 of  Chapter I (Economic Environment), it is stated 
that "Long-term sustainability of  public finances in the EC-15 is hampered by the relatively high 
levels of government debt, partly due to ageing po pulations. In 2003, public  debt remained above 
60% of GDP in six member States, particularly  Italy (106.2%), Greece (103%), and Belgium 
(100.5%). Despite recent pension system reforms un dertaken by Austria, Finland, France, Greece, 
Portugal, and the UK, the ratio of government debt to GDP in the EC-15 increased from 63% in 
2001 to 64.1% in 2003, while in the euro zone, it ro se from 69.4% to 70.4%. Overall, the ratio in the 
EC-15 and in the euro zone is above that of the C-10; Cyprus (72.2%) and Malta (72%) exceed the 
60% benchmark". In the Commission’s view, what is the specific role of the trade policy in order to 
diminish such debts and improve public finance across the EC? 
 
A:   Q8. Document WT/TPR/S/136, Chapter II (Trade Regime), Paragraph 28, affirms that "The 
EC's web of preferential trade agreements, with different trade liberalization agendas and trading 
rules (including rules of origin), further complic ates its trade regime. The limited liberalization (so 
far) of agriculture under the agreements has hind ered its exposure to competition. Furthermore, 
for preferential trading partners, absence of, or dela ys in, the alignment of their regime may lead to 
trade diversion to the detriment of their exports". Since the EC has long argued that agricultural 
subsidies should be dealt with on a multilateral basi s, what specific aspects in agricultural market 
access should be negotiated in the WTO, and what sh ould be left for preferential trade agreements? 
 
A:  
Q9. In WT/TPR/S/136, Paragraph 41 of Chapter II (Trade Regime), it is stated that "Several 
studies confirm that the Europe Agreements stimul ated substantial growth in trade between the EC 
and acceding countries. (...) In general, given th at EC tariffs are lower than acceding countries', 
the adoption of the CCT is expected to put downw ard pressure on prices in new member States. 
However, for acceding countries with  relatively lower customs duties (see Annex I.1 for statistical 
tables on Estonia, Latvia, Lithuania, and Malta), there could be a rise in prices. Furthermore, prices of certain agricultural products are expect ed to rise as a result of the adoption of the 
common agricultural policy (CAP)". In the Commission’s view, how would the trade impacts 
deriving from the accession of ten new memb ers affect EC’s willingness to further pursue 
preferential trade agreements? 
 
A:   V) Services
 
 
Q10. The first footnote related to paragraph 91 of  Chapter IV (Trade Policies by Sector) of the 
Secretariat Report states that "In 2002, a Co mmission report listed 92 remaining barriers 
encountered by companies wishing to offer servi ces in more than one EC country, 'Financial 
Times', 18 November 2003". Could the Commission pr ovide the list of those barriers and indicate 
the regulations related to them? 
 A:  
 WT/TPR/M/136/Add.1 
Page 237 
 
 
 Q11. In the Secretariat Report, Paragraph 93 of  Chapter IV (Trade Policies by Sector), it is 
stated that "The EC-15 has tabled its initial cond itional offer in the ongoing services negotiations". 
Regarding the "initial conditional offer", please indicate: 
a)  the criteria and definitions applied to Ec onomic Needs Test (ENT) in the following 
services:  - Computer and Related Services (CPC 84) - Italy 
 - Higher education services (CPC 923) - Spain, France, Italy 
 - Entertainment services (CPC 9619) - Italy 
 - Limousine services (CPC 71222) - Italy and Portugal 
 - Maritime Auxiliary Services – Italy b) the elements utilized in the definition of the following criteria on ENT: 
 (i) Local demand 
 -  Medical services (CPC 9312) and midwives services (CPC 93191) - Germany  -  Freight transportation (CPC 7123) - Italy 
-  Passenger transportation (CPC 7122) - Spain 
-  Taxi services (CPC 71221) - All Member States -  Assessment of the labour market situation - Research and Development  
  Services (CPC 851-853) - France 
 -  Construction and related engineering services (CPC 511-518) - France and    United Kingdom 
 (ii) the population and the geographical density 
 -  Retailing Services (CPC CPC 631, 632,  633, 61112, 6113, 6121 excluding  
  63211) - Belgium, Denmark, France, Ireland, Portugal 
 - Services provided by pharmacists (Supply and retail distribution of   
  pharmaceutical goods - (part of CPC 6 3211) - Belgium, Germany, Denmark,  
  Spain, France, Ireland, Portugal 
 -  Wholesale pharmacies (part of CPC 622) – France c) the regulations that cover all ENT applied by EC Members; 
d) the definition of 'public utilities', mentioned in horizontal commitments; 
e) the elements that will be considered in th e application of numerical ceiling in "Independent 
Professionals", mentioned in horizontal commitm ents, including its  distribution among the 
activities (eg. Architectural services, Engi neering and  Computer services, etc.) 
 
A:  
 
VI) Government Procurement
 
 
Q12. In document WT/TPR/S/136, Chapter III (Trade Policies and Practices by Measure), 
Paragraph 99, it is affirmed that "The last TPR of the EC referred to two proposals for new 
directives on public procurement, one on the coor dination of procedures for the award of public 
works contracts, public supply contracts, and pu blic service contracts, and the other coordinating 
the procurement procedures of entities operating in the water, energy, transport and postal services 
sectors..." Which are the main changes that brough t simplification in comparison with the previous 
text on the coordination of procedures "for th e award of public works contracts, public supply 
contracts, and public service contracts" (Directives 93/37/EEC, 93/36/EEC, 92/50/EEC) and of 
"entities operating in the water, energy, tran sport and postal services sectors" (Directives 
92/13/EEC, 93/38/EEC)? Does this modification concern Directive 89/665/EEC? 
 A:  
 WT/TPR/M/136/Add.1 
Page 238  
 
Q13. Regarding the above mentioned paragraph 99, why, after enlisting water, energy, and 
transport sectors, is it mentioned postal services se ctors instead of the telecommunications sector, 
as it used to be the case in the text s concerning Directives 92/13/EEC and 93/38/EEC? 
 
A:   Q14. Paragraph 92 of Chapter III (Trade Policies and Practices by Measure) asserts that "Under the current legislative framework, there a re directives on public supplies, works, and 
services, complemented by a remedies directive. An other directive concerns the procurement by 
publicly owned entities and private entities with special or exclusive rights operating in the water, energy, transport, and telecommuni cation areas (utilities directive); this  is also complemented by a 
remedies directive...". What does th is “remedies dire ctive” refer to? 
 
A:  
 
Q15. In The Secretariat Report, Chapter III (Trade Policies and Practices by Measure), 
Paragraph 98, it is stated that "According to th e Commission, the EC's public procurement market 
is still not sufficiently open and competitive; public purchasers, particularly at the local 
government level, are unaware of the full extent of the rules, which may a ccount for the low level 
of cross-border procurement...". What is the strategy  that the EC intends to implement to inform 
the rules that local government should observe in order to implement commitments that the EC has 
undertaken in its international agreem ents on government procurement? 
 A:  
 Q16. It used to be estimated that the bila teral agreement between the EU and the US on 
procurement, signed on 15th April 1994, would open  around 200 billion ECU of public contracts to 
competitive bidding. What amount has the EU e ffectively accessed in government procurement 
contracts of the US in 2002 and 2003, after ten years of the agreement?  
A:  
 
Q17. With regard to the Free Trade Agreement EU-Mexico on government procurement, what 
participation do Mexican suppliers have in governm ent procurement contracts at the EU in 2002 
and 2003?  
A:  
 
VII) Competition Policy
 
 
Q18. In the Secretariat Report, Paragraph 115 of Chapter III (Trade Policies and Practices by 
Measure), it is stated that "During the period under review, major reforms have taken place in most areas of the EC's competition policy in order to meet the challenges of an enlarged union, as 
well as to address the structural problems that limit the competitiveness and hamper the growth 
opportunities of the European economy". What are those reforms? How does the EC intend, 
henceforth, to tackle the competition exper tise and economic gaps between the EC-15 and C-10? 
 
A:  
 
Q19. Will the new members be under the same EC’s competition rules and enforcement or will 
they be under S&D treatment and technical assi stance? May the Commission undertake special 
and separate cooperation agreements with the new acceding members? WT/TPR/M/136/Add.1 
Page 239 
 
 
 A:  
 
Q20. Which are the Commission initiatives and plans to promote competition advocacy and 
culture within the ten new countries?  
A:  
 
Q21. Are imports of new, used, recapped or refor med tires subject to any special procedures by 
the EC (technical regulation observan ce, environmental requirements)? 
 
A:  
 
VIII) AGRICULTURE
 
 
Q22. The reform process of the CAP is well underw ay, despite some initial political hurdles that 
led to delays in its launching. The overall direc tion to lower distortions and greater market 
orientation is in the right way. Nevertheless, th e reform pace is rather slow and the assessment of 
its impact in terms of commodities is difficult to be evaluated. Indeed, the CAP involves an exceptionally large number of measures and variabl es to be taken into account. Finally, some key 
sectors are yet to have the framework for its reform completed. a)  In the dairy sector, which responds for a sizeable share of EC´s farm production, the quota 
system will be prolonged until 2015. The intervention price cuts appear not to be sufficient to bring 
European prices in line with international pri ces thus making it difficult to eliminate export 
subsidies for dairy products. Is a further reform for the dairy sector envisaged? b)  The CMO for sugar is a blatant example of market distortions. The Secretariat reports that 
European intervention price is three times higher than international prices. Notwithstanding, the 
EC is the second largest exporter of sugar and th e third largest producer. When will Commissioner 
Fischler´s proposal for sugar reform be taken up for decision-making? c)  In the sugar sector, production quotas are presently much larger than EC’s internal consumption. The project of reform proposes a cut on  the intervention price that will keep it twice 
as high as the international prices and the reduc tion would be compensated by direct payments to 
beet producers. In the absence of an internal co mmon market based on free competition, is there 
any intention to reduce production quotas in or der to adapt them to EC’s commitments concerning 
domestic support and export subsidies? 
 
A:   Q23. The Single Farm Payment is a key featu re of the CAP reform. It is due to be fully 
implemented by Member States until 31 December 2006. a)  What is the current status of the Member States decisions in rela tion to the transitional 
period? b) In document http://europa.eu.int/sc adplus/leg/en/lvb/111089.htm, the Commission 
indicates that during the transition period Memb er States "will apply a direct payment system in 
compliance with the EU´s compe tition rules and international obligations". What will be the 
instruments in place to ensure that the nationa l payments will not go beyond EC´s commitment 
levels? c) From document 
http://europa.eu.int/scadplus/leg/en/lvb/111089.htm , it appears that there 
are various exceptions from the single farm  payment: regional implementation, partial 
implementation and optional exclusion, thus, creating large differences among Member States on 
the way they are going to implement the Single Farm Payment. How does the Commission intend WT/TPR/M/136/Add.1 
Page 240  
 
to implement these various mechanisms so as  to ensure compliance to EC´s international 
obligations? d) Is there any mechanism of notification to the Commission of payments made at national 
level? Are these payments included in the calcula tion of payments made under amber, blue and 
green boxes? In cases where natio nal government payments go beyo nd agreed levels, are they 
deducted from the EC’s budget? 
e) With regard to products and sectors included in the reform for which “coupled” payments are still allowed, the combination of “coupled” and “decoupled” payments may have an influence 
on farmer’s decisions, es pecially because high border protec tion still represents an incentive to 
keep producing. In those cases, “decoupled” direct  payments could not be considered as “less 
distorting” as long as payments linked to production remain. Is there any timetable established by 
the EU for the elimination of remaining “coupled” payments? f) Commissioner Franz Fischler has sent letters  to Ministers of Agriculture of the member 
states concerning the intention of some of them to  make large use of exceptions — such as regional 
implementation — and the impact that this could have on the expected results of the CAP reform. 
Regional implementation may distort the dist ribution of payments among sectors and makes 
difficult to check compliance with EC rules and wi th international commitments. Are there specific 
disciplines for the use of that exceptio n and ways to monitoring its impacts? 
 
A:  
 Q24. The CAP reform places emphasis on the so-called second pillar — rural development — 
which covers measures regarding agri-enviro nmental issues, early retirement schemes, 
afforestation and payments to assist  farmers in least-favored areas,  as well as additional measures 
such as investment, training, promotion and conversion of agriculture are also envisaged 
(paragraph 12 of report WT/TPRS/S/136). These actions will be co-financed by Member States. 
How will the EC ensure compliance of such activities by Member States with the notion that rural 
development measures should be "no or at most minimally trade-distorting", in accordance with 
paragraph 1 of Annex 2 of the Agreement on Agriculture? 
 
A:   Q25. The EU enlargement will bring under the CAP additional four million farmers. Paragraph 28 of the report WT/TPR/S/136 states that to the C-10 countries the mechanisms of financial discipline and modulation will not be applicable un til 2013. In the absence of financial discipline 
mechanisms, how does the EC expect that its level of  spending will abide by its commitments at the 
WTO, particularly in light of substantial cuts in  trade-distorting support deriving from the July 
package?  
A:   
Q26. Being the world´s leading trader (paragraph 10, Chapter IV, WT/TPR/S/136) of 
agricultural products, the EC occupies the highest rank in terms of support despite recent steps to 
reduce its farmers´ over-reliance on subsidies. As  a consequence, it is not by accident that the 
highest rate of self-sufficiency of the EC is fo und among the more subsidized commodities (dairy 
products and sugar) and that the individual commodities that respond for a substantial share of world trade (wine, pig-meat, cheese, milk powd er and sugar) also benef it from export subsidies 
(paragraph 10, passim). In market access, despite low average tariffs, high tariffs and TRQs are an 
important feature of the EC´s tariff structure. Add itionally, the tariff lines that concentrate most of 
the trade have TRQ commitments (38% of the EC´s  production, according to the World Bank). 
They also count with the Special Safeguard Mechan ism, and most tariffs are expressed in non-ad 
valorem terms. All these measures, which to a large extent are redundant, represent a bias against WT/TPR/M/136/Add.1 
Page 241 
 
 
 imports. In agriculture negotiations, the EC claims  that these commodities, particularly those that 
compete with domestic production, are "sensitiv e". Despite two CAP reforms, these products — 
which in the past were largely subject to quantita tive restrictions — continue to be so considered. 
a)  As a measure to expedite the long-term  reform process, does the EC consider the abolition 
and/or expansion of the TRQs that show permanent underfill? 
b)  What measures can the EC envisage in order to simplify its TRQ administration 
procedures? c)  How C-10 imports will be taken into account  in calculating the amount of TRQs after 
enlargement? 
 A:  
 
Q27. EC´s resistance to open up its markets is not limited to WTO negotiations, as liberalization 
of agricultural products continues to be lim ited in regional trade agreements. How does the EC 
expect to carry out free trade agreements with de veloping countries in view of the fact that its 
difficulties to liberalize agricultural trade will hinder the attainment of the benchmark of 
"substantial part of the trade"? 
 
A:   
IX) SPS
 
 
Q28. In accordance to document WT/TPR/S/136,  Chapter III (Trade Policies and Practices by 
Measure), Paragraph 79, "Five ge neral principles are laid down by Regulation (EC) No. 178/2002 
for the EC's food safety regime: (i) a high level of food safety at all stages of the food chain, from 
primary production to the consumer; (ii) risk anal ysis as a fundamental component of food safety 
policy; (iii) full responsibility of operators for the safety of products they import, produce, process, 
place on the market or distribute; (iv) traceability of products at all stages of the food chain; and (v) entitlement of citizens to clear and accurate inform ation from public authorities (...) Furthermore, 
the regulation allows for risk management actions not only based on scientific assessment, but also 
on other factors "legitimate" to the matter under consideration. This provision has attracted some 
criticism, however, as the definition of "other factors" is not clearly defined". Under this 
regulation, what parameters for risk management ac tions based on "other factors" can be expected 
to be used? 
 A:  
 
Q29. Paragraph 81, Chapter III (Trade Policies and Practices by Measure) of the Secretariat 
Report, affirms that "Various Community-wide le gislation has been adopted, in the area of 
sanitary and phytosanitary standards, on, inter alia, animal feeding stuff, animal health conditions, 
and plant health (...) Some of these regulations  have been the subject of several criticisms from 
third countries, including that they are much stri cter than international regulations (e.g. Codex 
Alimentarius and OIE), and there are high administrative costs in meeting them". As some of the 
regulations are considered much stricter than in ternational ones, what countries and products will 
be subject to these stricter regulations? Which criteria will be used to select products and 
countries?  
A:   Q30. Still according to Paragraph 81 of Chapter III  of the Secretariat Report, the EC has been 
criticized by third countries for implementing SPS measures that "are much stricter than WT/TPR/M/136/Add.1 
Page 242  
 
international regulations (e.g. Codex Alimentarius and OIE)". One example of  this practice is the 
proposed regulation that revises Maximum Residue Levels (MRLs) for pesticides on animal and 
plant products, notified to the WTO SPS Committee as G/SPS/N/EEC/196. The proposed regulation will revoke the authorization for 400 acti ve principles for which the MRLs will be set at 
the determination level (0,01mg/kg), regardless the existence of a different MRL defined by the 
Codex Alimentarius. The EC has also indicated that  these substances are removed from the market 
for economic rather than safety reasons. Could the EC please explain how this kind of measure is 
consistent with the WTO SPS Agreement, if: a)  there is not "sufficient scientific eviden ce" supporting the new MRLs (Article 2.2 of the 
WTO SPS Agreement); 
b)  the measure is taken on economic rather than safety grounds; and 
c)  there is not a risk assessment appropriate to the circumstances, as required by Article 5.1 of 
the WTO SPS Agreement. 
 
A:  
 
QUESTIONS FROM THAILAND  
 GSP Drug Regime
 
 Q1. Could the European Communities confirm that its drug regime will be modified to be 
compatible with the DSB rulings by 1 July 2005?  Is it likely to result in more countries getting the 
drugs benefit or will it be removed altogether? 
 
A:   Q2. Thailand is a country which is widely accepted as having undertaken a successful anti-narcotic drugs programme to combat drugs traffickin g.  In view of this, we would like to know 
whether or not Thailand, being a developing country, could be eligible for inclusion in the list of countries qualified for the preference s under the Drug Arrangements.   
 
A:  
 
Textile Quotas
 
(Secretariat’s Report, pp.53 para.49)  
  On 1 May 2004, the EC automatically extend ed EC’s textile quotas to the 10 acceding 
countries.  This took place despite the fact that Article 2.4 of the ATC requires that no new 
restrictions in terms of products or members can be introduced.    Q3. How does the EC reconcile the fact that  new restrictions have been adopted by the 
acceding countries with the prohibition on new restrictions in Article 2.4 of the ATC?  
 
A:  
 
Q4. If the EC affirms that Article XXIV of GA TT 1994 justifies such restrictions, how did the 
EC establish that the formation of the customs uni on implied by the enlargement would have been 
prevented if the introduction of the textiles quotas  to the new member states had not been allowed?  
 A:  
 
Q5. If Article XXIV was the basis for the new textile quotas, what alternatives to applying 
textiles quotas in the new member states were explored?  WT/TPR/M/136/Add.1 
Page 243 
 
 
 A:  
 
Q6. How does the EC expand the textile quotas for 10 new member countries? What is the 
calculation method used in determining tex tile quota allocation for the 10 new members?  
 A:  
 
Anti-dumping
 
(Secretariat’s Report, pp.54-59)  
 
 Article 11(5) of the Council Regulation No . 384/96 on protection against dumped imports 
from companies not members of the EC, as amende d by the Council Regulation (EC) No 461/2004, 
states that expiry and interim reviews shall normal ly be concluded within 12 months of initiation 
and, in all cases, within 15 months. However, the EC has, in the amended regulation Article 11 (5), 
set a mandatory time limit of 15 months for both expiry and interim reviews.   
 
A:   
Q7. Does the EC anticipate that the majority of expiry and interim reviews will now be 
concluded before a 15-month mandatory time limit? 
 A:  
 
Q8. The recital 12 of the preamble to the amende d regulation argues that in the EC experiences 
expiry review and interim reviews “present the same complexity as new proceedings.”  Could the EC explain why this could be the case in term s of its procedural and/or legal matters?  
 
A:   
Q9. When the EC determines that circumvention is occurring in a third country, the normal 
practice is that duties are imposed on all product s concerned from the third country except those 
that have applied for, and been granted, an exemp tion on the basis that they are not involved in 
circumvention. How does the EC reconcile the requirement of Article VI and the WTO anti-
dumping agreement to establish dumping, injury and causal link when applying anti-dumping duties to products that have, in fact, not been  involved in circumvention practices yet have not 
applied for exemption?  
 A:  
 
Q10. Article 13(1) of the Council Regulation No. 384/96 on protection against dumped imports 
from companies not members of the EC as amende d by the Council Regulation (EC) No 461/2004, 
states that anti-dumping duties may be extended to products that have been modified so as to make 
them fall under customs codes which are not norm ally subject to the measures. Even if the 
essential characteristics of the product have no t changed, how does the EC reconcile the WTO 
requirement to establish dumping, injury and causal link with the fact that no such determination 
would have been made for such products legitimate ly classified under a no n-subject customs code?  
 
A:  Q11. How does the EC justify the expansion of collecting anti-dumping duty from non-EC members in 10 new member countries without reviewing the investigation?  
A:  WT/TPR/M/136/Add.1 
Page 244  
 
Q12. How does the EC justify the elimination of  AD duty collection from 10 new members while 
continuing and expanding duty collection fr om non-EC members, which could result in the 
decreasing of competitiveness of non-EC memb ers that are subjected to AD measures?  
 
A:  
 
Q13. Article 13 (1) of the amended Basic Regulation states that slight modification of the 
product resulting in reclassification in new custom s code may be subject to anti-circumvention 
measures, though now reclassified customs codes are not subject to AD measures in the original 
investigation.  Given that there is no agreement in WTO on circumvention, how could, in the EC 
views, the notions of dumping, injury and causal link in respect of the products under investigation 
be reconciled with the WTO’s requirement?  
 
A:   Sanitary and Phytosanitary Measures (SPS)
 
(Secretariat’s Report, pp.64 para. 81)  
 
 As pointed out in the Report, some of th e regulations in the area of sanitary and 
phytosanitary standards are much stricter than international regulations (e.g. CODEX and OIE) 
and there are high administrative costs in complying with them.  
In addition, the contamination levels required  are varied across EC member countries, for 
instance, the United Kingdom stipulates the contamination level of Nitroflurans at 1 ppb, whereas Germany is stricter than other EC member countries , goods will be eradicated immediately without 
sending them back to the exporting countries. 
 
Q14. Please clarify the rationale for imposing such a high standard.  
 
A:   
Q15. Does the EC take into account the scientific test generally available and costs involved that 
is commercially viable when setting the standard?  
 
A:   
Q16. Where there are discrepancies in the level  of contamination in EC member countries, 
would the EC consider bringing them to the same standard so that there will be a consistency in 
implementing measures and regulatio ns for all EC member countries?  
 
A:   
Q17. Does the EC have the intention of relaxing those regulations to th e international level?  
A:  
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Page 245 
 
 
 The REACH (Registration, Evaluation and Authorization of Chemicals) Proposal  
(Secretariat’s Report, pp.114 para.84)  
  The ongoing development of the EC’s chem ical regulation called REACH poses serious 
concerns for its future adverse impact on a wide range of Thai industrial exports to the EC.  Most 
of the exporters of these products are downstream users of chemicals and are SMEs who have 
difficulties adjusting or preparing themselves to m eet the increased costs of registering, testing 
chemicals, conducting risk assessment, etc. in order to comply with REACH. 
 While we support the EC’s intention to protect human health and the environment, Thailand continues to urge that EC’s legisla tion approval process of the REACH be a balanced, 
cost-effective workable approach, and not to pose unnecessary obstacles to trade.   
 Q18. Does the EC have any plans to assist exporters in developing countries who may be 
adversely affected by REACH, such as bearing of hi gher costs, depriving of competitive edge due to 
a switch to required higher priced substances fo r producing export products to the EC market?  
What are (or will be) the features incorporat ed in REACH to accommodate these concerns?  
 
A:   
Q19. How does the EC plan to address the potential adverse effects caused by REACH on 
individual Members?  
 
A:  
Q20. Can the EC make sure that the developme nt of REACH conform to the GHS (UN Globally 
Harmonised System of Classification and Labellin g of Chemicals), and other criteria set by the 
IFCS (the Inter-Government Forum on Chemical Safety) as well as other relevant international 
conventions?  
 
A:   
Q21. With inadequate funds and limited level of economic development of the majority of 
developing countries, could time frame be extended for them to adapt their products or production 
methods before the EC regulation is strictly applied?  
 
A:   
Q22. How does the EC ensure that the standard evaluation is only for a good practice and by no 
means causing trade barriers?  
 
A:   
Q23. Could recognised institutions in other count ries, for example, the US’ EPA Evaluation be 
accredited?  
 
A:   
Q24. Article 26 Point 2 (b) “the deadline laid down in Article 21 (2) for phase-in substances 
manufactured or imported in quantities of 1 tonne or more per year
” does not correspond with 
Article 21(2) which states “in quantities reaching 100 tonnes or more per year ”. Could the EC 
clarify this difference?  
 WT/TPR/M/136/Add.1 
Page 246  
 
A:  
 
Enlargement and Non-Uniform Practices among Member States
 
 Q25. How does the EC intend to tackle problems that continue to impede bilateral trade with 
Thailand, such as non-uniform practices among member states, inconsistent application and 
interpretation by member states of legislation,  complications and overlaps among directives?   
 
A:   Services
 
 Q26. Some members (France and maybe Italy) have indicated in the Schedule of Specific 
Commitments under GATS that for establishing indu strial, commercial or artisanal activities, a 
‘specific authorization’ is needed if the managi ng director is not holder of a permanent residence 
permit. We would like to seek clarification on detailed criteria and procedures for granting such 
‘specific authorization.’  
 
A:   
Q27. Concerning the entry into and temporary stay within the EC of natural persons who 
provide services, the EC has indicated in her initia l offer that Contractual service suppliers (CCS) 
are subject to the application of a ‘numerical ce iling’ whose modalities of application and level to 
be determined, we would like to inquire about th e progress, as well as brief details, of such 
modalities resulting in the numerical ceiling.  
 A:  
Q28. In some cases, for establishing business or  professional services, some Member States have 
restricted the access to ‘Natural persons,’ we woul d like the EC to clarify the meaning of ‘access 
through natural persons.’  
 
A:  
 
Q29. In connection with public health insurance, we would like to ask the EC whether the 
citizens of the Member States can reimburse th eir expenses arising fr om consuming private 
hospital services within the EC or not. If so , how much can they reimburse, and on what 
conditions? Also, if such expenses arising outsid e the EC, are such reimbursement and conditions 
still the same as in the case of within the EC?  If not, what is the difference?  
 
A:   
Agriculture
 
CAP Reform  
 
Q30. To better understand the CAP reform and its effects on EC’s agricultural production and trade, we would like to request detailed info rmation on the breakdown of domestic support 
measures (Amber, Blue and Green Boxes) accord ing to the CAP reform, together with their 
respective values for individual ma jor agricultural commodities, in particular rice and sugar.   
 
A:   WT/TPR/M/136/Add.1 
Page 247 
 
 
 Rice 
 Q31. The Secretariat Report (page 95, Table IV .5) mentions the mandate for negotiation on 
tariff quotas on rice imports.  As Thailand is in the process of negotiating with the EC under 
Article XXVIII of the GATT, we would appreciate clar ification from the EC regarding its plan to 
further the negotiation.  We urge the EC to conclude the negotiation soonest.  
 
A:   
Sugar subsidies
 
 
Q32. Could the EC elaborate on how it intends to  implement its sugar regime, and whether or 
not there are different phases of implementation and whether or not it is in any event linked to the 
DDA? 
 A:  
 
Waste portable batteries
 
 Q33. Regarding the revised Directive on Batteries and Accumulators, which include producer responsibility for the collection and recycling of used batteries, do EC importers have any 
responsibility for the cost incurred  in battery collection and recycling?  
 
A:  
 
New Initiatives on EC Trade-Preference Scheme
 
 
Q34. The EC is poised to launch a new trade-preference scheme aimed at giving duty-free access 
for about 7,200 product lines originating in smaller countries with vulnerable and poorly diversified economies.  The new scheme, which is  to take effect from January 2006, is geared 
towards developing countries that implement the Ky oto protocol and other international treaties on 
human rights, labour standards and the environment.  In this regard, we would be interested in 
receiving further information about the new trade-preference scheme, as well as the EC views as to 
how it will ensure the scheme’s full complia nce with WTO’s rules and regulations. 
 
A:   
 
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