RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/GC/M/96 
21 July 2005 
 (05-3285) 
General Council 
29 June 2005  
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 29 June 2005  
 
Chairman:  Ms Amina Mohamed (Kenya) 
 
Prior to the close of the meeting, the Chai rman made a statement regarding the future 
consideration of agenda items by the General Council and the sectoral Councils which is carried in an 
Annex to these Minutes.  Also prior to the close of the meeting, and in response to a suggestion from 
the delegation of Chile, the Chairman said that, in view of the anticipated heavy workload in the 
coming weeks and the current heat wave, she had no difficulty with delegations observing an informal 
dress code for WTO meetings, whether formal or informal.   
 
Subject discussed : Enlargement of the European Union – Communication from the 
European Communities (G/L/695/Add.2) 
 
1. The Chairman  drew attention to the communication from the European Communities in 
G/L/695/Add.2, which concerned the accession to the European Union on 1 May 2004 of Cyprus, the 
Czech Republic, Estonia, Hungary, Latvia, Lithua nia, Malta, Poland, the Slovak Republic and 
Slovenia.  In that communication, the EC had indi cated that it would not assert that Members who had 
submitted a claim pursuant to Article XXIV:6 of GATT 1994 were precluded from withdrawing 
substantially equivalent con cessions under Article XXVIII:3 of GATT 1994 because this withdrawal 
occurred later than six months after the EC's wit hdrawal of concessions, provided that the claiming 
Member withdrew concessi ons no later than 21 months  after the EC's modification of concessions.  
She recalled, in connection with the negotiati ons relating to enlargement of the European 
Communities, that the General Council had on two earlier occasions, on the basis of similar 
communications from the EC, extended the deadline in Article XXVIII:3, namely at its meetings in 
October 2004 and March 2005.  Under the provisi ons of Article XXVIII:3, and the most recent 
extension of the deadline as agreed at the Ma rch 2005 meeting of the General Council, Members 
could withdraw substantia lly equivalent concessions no later than fifteen months after the EC's 
withdrawal and modification of concessions – in  other words, no later than 1 August 2005.  
Furthermore, Members had to provide at least 30 days' notification of their intent to withdraw 
substantially equivalent concessions – in  other words, no later than 1 July. 
2. In the light of these impending deadlines under Ar ticle XXVIII:3, and to ensure that action 
could be taken on this matter in a timely manner, the delegations of Canada , Colombia and the United 
States had requested that the General Council c onvene on or before 30 J une to consider the 
communication in G/L/695/Add.2, in which the EC had proposed that this deadline be extended a 
further six months for a total of 21 months follo wing the EC's modification of concessions.  As 
indicated in the convening notice for this meeting,  in subsequent communications addressed to her, 
Ecuador had indicated that it associated itself with  this request, and Costa Rica, Honduras and Panama 
had also indicated that they considered it n ecessary that a meeting of the General Council be 
convened to consider the EC communication. WT/GC/M/96 
Page 2  
 
 3. The representatives of Canada
, Colombia , the United States , Costa Rica  and India  thanked the 
Chair and Members for the opportunity to hold this meeting. 
4. The representative of Canada  said his delegation had requested the present meeting in 
response to the EC's communication in G/L/695/Add.2 expressing the EC's willingness to extend further the period during which parties could ex ercise their rights under Article XXVIII:3(a) of 
GATT 1994 for the withdrawal of substantially equiva lent concessions.  Canada welcomed the EC's 
communication and asked that the General Council agr ee to an extension of this period from six to 
21 months – namely, that Members would have un til 31 January 2006 to w ithdraw substantially 
equivalent concessions under Article XXVIII:3.  Canada believed that the current state of negotiations 
with the EC warranted some additional time being accorded to allow for a su ccessful conclusion.  His 
delegation also reaffirmed its inten tion to conclude its bilateral negotiations with the EC in the most 
timely fashion. 
5. The representative of Colombia
 said that since the European Communities had notified its 
enlargement to 25 members under Article XXIV:6 of the GATT, the General Council had already 
granted it two extensions to negotiate co mpensation under the procedures established in 
Article XXVIII of GATT 1994, first to 12 months and th en to 15 months.  In all that time, the EC had 
not managed to complete the modification of its schedules of market access commitments.  Colombia had been affected adversely by EC enlargem ent.  Although the Communities had recognized 
Colombia as a party with substantial interest, Co lombia had seen no political resolve to carry out 
negotiations to redress those adverse effects.  Colo mbia was drawing attention to this matter because 
it had sent several communications to the EC reques ting compensation but as yet had had no response.  
Her delegation did not wish to see a repetition of what had occurred previously, when EC membership 
had been enlarged to 15.  On that occasion, t oo, Colombia had been adversely affected, because 
access conditions for one of its export products had been impaired.  Although the EC had never 
provided compensation, it had increased the impor t quota for the product in question, but had not 
bound that quota extension in its schedules.  It w as Colombia's understanding that such an extension 
became a right for Members and an obligation for th e EC.  Since the product in question was bananas, 
her delegation wished to take advantage of th is opportunity to note that the process under way 
involving recourse to arbitration under the waiver  Decision on the ACP-EC Partnership Agreement 
and the negotiations under Article XXIV:6 we re two separate processes, each with its own 
procedures.  They were not one and the same process. 
6. Colombia was entitled to, and wished to receive , compensation for the EC's modification of 
its schedules upon enlargement to 25 members.  For a country like Colombia, the use of retaliatory 
measures should the EC fail to provide compensation was not a suitable alternative.  Accordingly, 
together with Canada and the United States her de legation had requested the present meeting before 
the expiry of the time-limit set in Article XXVIII, to ensure that the EC had time to negotiate with all 
the Members of this Organization, whatever their level of development or size.  She trusted that 
during this further extension the EC would take into account the injury the modification of its 
schedules had caused Colombia. 
7. The representative of the United States
 recalled that the EC had notified Members in 
January 2004 of its intention to modify concessi ons in connection with the accession to the EU of 
10 new member States on 1 May 2004.  The United States had rights pursuant to GATT Articles XXIV:6 and XXVIII in many of the tariff lines subject to modification.  Therefore, like a 
number of other Members, the United States had been  working with the EC to reach an adequate 
compensation agreement.  While it had been making good progress towards reaching such an 
agreement, more time was needed to conclude th e negotiations, and his delegation continued to wait 
for an improved offer from the EC.  As the Chairm an had noted, in a communication of 16 June 2005, 
the EC had notified the Council for Trade in Goods th at it agreed to an extension for an additional 
six months of the deadline for Members to cl aim compensation pursuant to Articles XXIV:6 and  WT/GC/M/96 
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 XXVIII to withdraw substantially equivalent concessions.  The United States welcomed the EC's 
notification and proposed that the General Council take  note of it and agree to the extension of the 
Article XXVIII deadline for an additional six mo nths.  This time was necessary so that the 
compensation negotiations could be concluded, approv al could be secured of the bilateral agreements 
between Members and the EU, and those agreements could be implemented. 
8. The representative of Costa Rica  recalled that his country, together with others, had requested 
that the present meeting be held.  The EC had re cognized Costa Rica's substantial interest in the 
negotiations as a consequence of  the EU's enlargemen t to 25 members.  In this context, Costa Rica 
had requested compensation from the EC for the modi fication of the EC's tariff schedules and for the 
injury it had suffered.  To date, Costa Rica had not  received any reply to its request from the EC.  
Along with Colombia, Costa Rica considered th at this process was independent from the one 
regarding the single tariff that had been established for bananas, in respect of which an arbitration 
process was currently under way.  His delegation h oped, as Colombia had already stated, that the 
extension of the time-period would provide Costa Rica with the opportunity to be compensated for the 
damage it had suffered as a resu lt of the EU's enlargement.  For this reason, Costa Rica supported 
extension of this deadline. 
9. The representative of Ecuador  welcomed the Communities' new initiative for extension of the 
time-limit in Article XXVIII for the withdrawal of substantially equivalent concessions in connection 
with EU enlargement to 21 months following the EC's modification of concessions.  Ecuador 
supported approval of the EC's initiative.  Althoug h such a measure was pos itive, in that it would 
allow Members adversely affected by the EU's enlarg ement to exercise their ri ghts, the EC needed to 
give the measure substance and show sufficient fl exibility to allow resumption of the substantive 
bilateral negotiations initiated on this issue as far back as November 2004, which had as yet not 
yielded any results.  Both Ecuador, which the EC recognized in this process as having principal supplier rights, and other Latin  American countries had rights regarding compensation or the 
possibility of retaliation in respect of a specific product – namely bananas – where large volumes of 
trade had been affected by the higher tariff bi ndings resulting from the accession of 10 new members 
to the EU.  With respect to bananas, the EC's position remained inflexible regarding the quantity 
determined for MFN suppliers on the basis of the balance of the credits and debits established from 
the comparison of bound tariffs provided for in Artic le XXIV:6 and in its Understanding, in each new 
member, before and after the enlargement of the EU , which amounted to the exact equivalent of the 
enlargement quota – 460,000 tonnes in the present ca se – opened by the EC in Regulation 1892/2004.  
The amount yielded by the balance of credits a nd debits for Ecuador a nd MFN suppliers was not 
sufficient.  Some 60 per cent of that amount was due to Ecuador, whose market share in the ten 
countries that had recently joined the EU was close to that percentage. 
10. The reviews of the amounts due in compensation showed that the quota of 460,000 tonnes 
opened by the Communities on account of the enlargemen t was insufficient.  It was also important to 
bear in mind the following.  First, the Communiti es had reduced the volume of MFN exports to the 
10-member EU – 541,000 tonnes was the figure the EC had provided – in the three-year period 2000-2002 taken for the comparison, had accepted that the MFN countries had been exporting to the countries that had recently joined the EU, a nd had then made a reduction from 560,000 tonnes to 
460,000 tonnes.  As a result, the supplying countri es had suffered trade effects involving a loss in EC 
market access of some 100,000 tonnes that they were exporting and had exported regularly to that 
market.  This was what had prompted these countries to  stress that this exercise  needed to be pursued 
positively.  It was important to bear in mi nd as well that, although Ecuador and the other MFN 
suppliers were not challenging the quota of 460,00 0 tonnes in the WTO, it was their understanding – 
and in this regard they agreed with Colombia a nd Costa Rica – that the two procedures in which they 
were currently engaged with the Communities, namely, the enlargement proceedings and the 
arbitration proceedings under the 2001 waiver Deci sion, were two separate procedures.  Failure to 
assert their rights as MFN exporting countries in th ese enlargement proceedings would be tantamount WT/GC/M/96 
Page 4  
 
 to tacitly admitting that the volume they were exporting to the 10-member EU was 460,000 tonnes, 
whereas historically they had been exporting much  more.  The volume for the three-year period 2000-
2002 used to calculate the enlargement quota was 560, 000 tonnes.  This amounted to a loss of some 
100,000 tonnes, and was the source of Ecuador's concer n.  As the EC had refused to give serious 
consideration to other options for affording Ec uador sufficient compensation, his country was 
weighing the possibility of asserting in the near futu re the rights available to it under Article XXVIII. 
11. The representative of Argentina
 said his country was also involved in negotiations with the 
EC and supported the proposed extension of the tim e-period.  Although the EC had recognized it as 
having principal supplier rights for a number of products, Argentina, like other Members, saw no 
resolve on the part of the EC to offer compensati on commensurate with that status.  His delegation 
noted the six-month extension of the deadline as requested in document G/L/695/Add.2.  What 
mattered, however, was not a further extension to the negotiations, but the will to reach agreements 
that were mutually acceptable.  In this context,  Argentina also welcomed the decision that would 
allow Members to determine and to implement reta liatory measures by the date set out in document 
G/L/695/Add.2. 
12. The representative of Thailand  said her delegation welcomed the proposed further extension 
of the deadline under Article XXVIII:3(a).  Her de legation also thanked the United States, Canada, 
Colombia and other Members who had requested th e present meeting so that Members could express 
their views on this issue.  Her delegation supported the further extension of the deadline, taking into 
account that Thailand, as well as many other Members, had not been able to conclude its negotiations 
on the EU enlargement as rapidly as it had hoped.  Thailand also accepted the proposed period of the 
extension, namely six months, as it envisaged a very busy period of negotiations under the DDA in 
the lead up to the Hong Kong Ministerial at the end of the year.  Having said that, her delegation hoped that its negotiations with the EC could be c oncluded as expeditiously as possible for the mutual 
benefit of both parties. 
13. The representative of Chinese Taipei
 said that since his delegation had also requested 
consultations with the EC concerning the EU en largement and had not yet reached agreement, it 
supported approval of the proposed extension.  As Chinese Taipei had a significant interest in only a 
few items, it hoped that the EC could expedite the consultation process in order to find a mutually 
satisfactory solution. 
14. The representative of India  said that India, too, was engaged in negotiations with the EC in 
this matter, and that these negotiations had yet to reach a satisfactory conclusion.  India therefore 
endorsed the EC's request for a further extension of six months. 
15. The representative of Australia  said his delegation hoped that the deadline for retaliation 
would be further extended at this  meeting to cover the period needed for completion of outstanding 
negotiations under Articles XXIV:6 and XXVIII.  Austra lia intended to continue to work actively and 
cooperatively with the EC towards this end. 
16. The representative of Malaysia  welcomed a decision to extend the period under 
Article XXVIII:3 for the withdrawal of substan tially equivalent concessi ons.  The additional time-
period was necessary to finalize formalities and b ilateral compensation agreements, including their 
scope and substance.  However, the Article XXI V exercise should be completed as expeditiously as 
possible, and the extension should not lead to a delay in the effective date of compensation. 
17. The representative of the Philippines  reiterated his authorities' systemic concerns in this 
matter, which had been raised in the Philippines' interventions at the meeting of the Council for Trade 
in Goods in October 2004 and in the General Council the same mont h.  While his delegation could  WT/GC/M/96 
 Page 5 
 
 
 support any consensus in the General Council regarding the request for extension, it reserved all of its 
rights under the GATT. 
18. The representative of Brazil  joined previous speakers in supporting a further extension of the 
deadline for retaliation.  Brazil, too, was in nego tiations with the EC, and although there had been 
some encouraging progress at the technical level c oncerning a number of products, there was still a 
lack of agreement regarding compensation for othe r products.  Brazil looked forward to continued 
constructive engagement with the EC. 
19. The representative of Singapore  welcomed the EC's offer of a six-month extension.  This was 
a necessary and constructive effort to provide more time for these complex negotiations to be 
concluded.  Accordingly, his delegation recomme nded that Members in the General Council support 
this initiative.  Singapore was still engaged in bila teral consultations with the EC, and would work 
closely with the EC in the coming months in order to reach a mutually satisfactory outcome. 
20. The representative of Japan  said his delegation understood that there was a need to extend the 
deadline concerning these negotiations.  Japan c ould join the consensus on extension on the 
understanding that this extension would not affect th e rights of Members like Japan that were close to 
concluding bilateral agreements w ith the EC.  Japan hoped that the EC would proceed with the early 
implementation of any agreemen ts that were concluded. 
21. The representative of Indonesia  joined others in supporting the requested extension.  As 
Members were aware, Indonesia was already engaged in bilateral cons ultations with the EC with a 
view to seeking a mutually satisfactory solution. 
22. The representative of Pakistan  joined others in welcoming th e EC's effort in offering to 
extend the time-period under Article XXVIII for a furthe r six months.  Like others, Pakistan was also 
engaged in bilateral discussions with the EC, and looked forward to c oncluding these negotiations 
soon.  Pakistan also looked forward to the early implementation of any compensation agreements that 
were reached, as suggested by Japan. 
23. The General Council took note  of the statements and of the communication from the EC in 
document G/L/695/Add.2, and agreed  on the extension of the deadline for the withdrawal of 
concessions referred to in Article XXVIII.3 of GATT 1994 from six months to 21 months, i.e. until 
1 February 2006. WT/GC/M/96 
Page 6  
 
 ANNEX  
 
Statement by the Chairman regarding the future consideration
 
of agenda items by the General Council and the sectoral Councils  
 
 
 Before concluding this mee ting, I would like to leave delegations with a few thoughts 
regarding the future considerati on of agenda items by the General Council and the various sectoral 
Councils.    
 While it is indeed the prerogative of any Member  to bring any matter to the attention of the 
General Council that it considers necessary, I would like to encourage delegations to take greater 
account of the decision-making competencies of  the different WTO bodies as provided in the 
WTO Agreement, so that we may collectively ensu re the continued smooth and efficient functioning 
of the WTO machinery across its various parts. 
 
 With regard to GATT Article XXVIII matters, for example, I note that the Council for Trade 
in Goods, operating under the ge neral guidance of the General Council, has responsibility for 
overseeing the functioning of the Multilateral Trade Agreements in Annex 1A of the 
WTO Agreement, including the GATT 1994.  As  such, and as a body composed of the full 
membership of the WTO, the Council for Trade in Goods has full legal authority – except as 
otherwise provided in the WTO Agreement and other relevant agreem ents, understandings and 
procedures – to act on all matters relating to those agreements.   
  Consequently, any action by the Council for Trade in Goods, taken in accordance with its 
mandate, would have the same legal effect as th e same action taken by the General Council, and 
would not
 need to be approved once again at the General Council level.   
  As we move into a period of an especially heavy workload, I would encourage delegations to 
keep in mind this distribution of decision-making aut hority within the WTO, so  that we can keep the 
WTO system as a whole functioning smoothly and e fficiently, and avoid unnecessary duplication of 
our work. 
 
 I thank delegations for their cooperation in this regard.  
  
__________