RESTRICTED  WORLD TRADE  
ORGANIZATION  TN/CTD/M/25 
3 August 2006 
 
 (06-3755) 
Committee on Trade and Development 
Twenty-Fifth Special Session  
 
 
 
NOTE ON THE MEETING OF 1 JUNE 2006 
 
Chairman:  Ambassador Burhan Gafoor (Singapore) 
 
 
A. ADOPTION OF THE AGENDA ........................................................................................................1  
B. AGREEMENT -SPECIFIC PROPOSALS .............................................................................................1  
C. OTHER BUSINESS ......................................................................................................................15  
 
 
A. ADOPTION OF THE AGENDA  
1. The draft agenda for the meeting as contai ned in airgram WTO/AIR/2824 of 19 May 2006 
was adopted . 
B. AGREEMENT -SPECIFIC PROPOSALS  
2. At the outset, the Chairman  informed Members that at the re cently held informal Heads of 
Delegation meeting, the Director-General had outlined  an approach for timelines on the work that was 
needed to be carried out in the upcoming weeks.  The Special Session operated in the context of the 
larger negotiating process and it was therefore import ant that the work of the Special Session keep 
pace with work elsewhere.  The issue of special and differential treatment (S&D) for developing 
countries was an important part of the development dimension of the Doha ne gotiations and it was all 
the more reason that the work of the Special Sess ion keep up with the larger process.  Given the 
timelines, he reiterated the importance of maintaini ng a text-based approach to the discussions on the 
remaining Agreement-specific proposals.   
3. With respect to the Category I Agreement-speci fic proposals, the Chairman said that while 
Members had made some progress, they were still far from reaching a middle ground.  Members had 
been able to come up with revised language on th e three proposals relating to Article 3.5 of the 
Agreement on Import Licensing, and on one proposal relating to Article XVIII of GATT 1994.  
However, further consultations would be needed  to narrow the remaining differences.  On the 
proposals relating to the Understanding in Respect of  Waivers of Obligations and Article XVIII:A of 
the GATT 1994, Members still had fundamental diff erences and the landing zone for these proposals 
was not clear.  He had recently held some in formal consultations on the proposals relating to 
Article 10.3 of the SPS Agreement.  Those consu ltations were a follow-up of the earlier discussions 
where several ideas and language had been put forwar d.  Those consultations had been useful and had 
focused on the issue of ensuring predictabilit y in cases where developing countries may seek 
time-limited exceptions under Article 10.3 of the SPS Agreement.  It was also clear from the 
consultations that any approach that implied auto maticity in terms of the outcome may not garner 
consensus and hence the discussions had focused on predictability rath er than automaticity.  He had 
been encouraged by the discussions and intended to continue consultations in the hope of reaching a 
middle ground, which he believed was possible.  Like other Chairpersons, he was committed to TN/CTD/M/25 
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  ensuring transparency and maintaining a bottom-up pr ocess, and would continue to keep the larger 
Membership abreast of the deliberations.  
4. He went on to say that his intention of th e meeting was to begin consideration of the 
remaining eight Category III Agreement-specific proposals.  Time permitting, Members could 
comment on the Category I proposals after discussions  on the Category III proposals.  He was aware 
of the difficult nature of the Category III proposal s which was in fact the reason why the former 
General Council Chairman  had categorized them as such.  It wa s important to get a collective sense of 
where Members stood on those proposals and for Me mbers to start figuring out what could be the 
possible "landing zone" for the Category III proposals.  He did not feel that there would be any value 
in having a general discussion since such a discussion had already taken place earlier.  Members 
needed to go beyond just introducing and explaini ng the proposals.  They needed to discuss what 
could be the "middle ground".  He would be looking for signs of convergence as well as a clear indication of where the problems lay.  At the same time, Members needed to bear in mind that, at 
Hong Kong, Ministers had agreed that the Special Session must make clear recommendations on all the Agreement-specific proposals by December 2006.  In order to do this, Members would need to 
now also focus on the Category III proposals.   
5. On behalf of the least-developed countries (LDCs), the representative of Zambia
 introduced a 
paper on rules of origin (TN/CTD/W/30) which th e LDCs hoped would contribute to the debate on 
the implementation of the duty-free quota-free (DFQF) market access decision taken at Hong Kong.  The LDCs had for a long time argued that despite being accorded preferential market access, they had 
not been able to take advantage of those market  access opportunities due to the stringent associated 
rules of origin.  It was against that background th at the LDCs had been advancing the position that 
preferential rules of origin needed to be simplifie d.  He said that being a multilateral decision, the 
DFQF market access decision, would require a single set of rules of origin.  The Hong Kong decision 
had specified that the accompanying rules of origin for the DFQF market access should be simple and 
transparent so as to facilitate expor ts from LDCs.  It was the LDCs understanding that rules of origin 
should be primarily designed to minimize trade defl ection.  In preparing the proposal, the LDCs had 
examined several preferential rules of origin and had reached the conclusion that there was no optimal 
set of rules of origin.  There were advantages a nd disadvantages to whatever criteria one used.  The 
LDCs were proposing the use of a combination of va lue addition and local content criteria to confer 
origin, and had provided a detailed proposal on ho w value addition and local content percentages 
could be calculated.  While no specific percentage s had been suggested, it was preferable that to 
promote trade, those percentages be kept as low as possible.  The paper also attempted to address the 
unique situation faced by landlocked LDCs.  Pr oposals had been made on what should constitute 
insufficient working processes, territoriality, cumulation and units of qualification.  He said that since 
Members would need time to consider the paper,  the LDCs did not expect to have a detailed 
discussion of the paper at the meeting.  He requested  that the LDCs be given the opportunity to make 
a more detailed presentation of the paper at the next formal meeting.  He also indicated the LDCs' 
intention to table a second paper in the context of the DFQF decision, on market access.   
6. The representative of Norway
 said that it was perhaps best to  consider the rules of origin 
paper submitted by the LDCs in the Committee on Rules of Origin, where the experts were more 
likely to understand the points contained therein. 
7. The Chairman  said that copies of the paper by the LD Cs were available at the back of the 
room.  He recalled that the issue of DFQF market access had been raised at previous meetings of the 
Special Session.  It was important for the key stak eholders to undertake b ilateral consultations among 
themselves in order to reach convergence on the issue.   He welcomed the LDCs' intention to make a 
PowerPoint presentation, as well as to submit a seco nd paper on market access, at the next meeting.  
As Chairman, he was available to facilitate any process of informal consultations, if the key 
stakeholders so wished.    TN/CTD/M/25 
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  8. The representative of Egypt  commented on the reference made by the Chairman to the notion 
of a "middle ground" and "landing zone".  He sense d that the two terms had different meanings for 
different Members.  To his delegation, reaching an agreement on language that exacerbated rather 
than solved the problems raised by the developing countries was not a "middle ground" solution.  A "middle ground" solution was reaching an agreement on language that reflected disciplined flexibility.  
Developed countries needed flexibility albeit in a di sciplined manner.  However, questioning the need 
for flexibility itself should not be the aim of the exercise.  Flexibility could not be sacrificed.  
Members should instead consider some form of mon itoring of this flexibility to avoid possible abuse.  
That was the "middle ground" and the "landing zone " which Members should aim for.  With respect 
to the SPS proposals, he said that the fundamental element was the need for predictability.  Members 
had been engaged in discussions for a long time.  Wh at they now needed was a reference paper that 
highlighted the different problems and views on the proposals.  This would help focus the discussions and give a sense of purpose to the work.  It would al so enable Members that had so far not been able 
to  participate in the discussions to do so.   
9. The representative of Kenya
 said that what the representative of Egypt had said was 
something Members needed to consider seriously if they were to make any pr ogress.  His delegation's 
understanding of a "middle ground" solution was that all Members needed to move, not just some Members.  From past experience, it was clear that Members had discussed many of the proposals over and over again, and yet nothing had come out of that .  If there was to be a common landing zone, then 
all Members needed to move.  He reiterated the need  for Members not to question the flexibility being 
sought but rather to work on the basis of the ma ndate and add value to the existing provisions.   
10. The Chairman
 agreed with the representatives of Egypt and Kenya that all Members needed 
to move and work together to reach a middle ground.   He had taken note of the suggestion of having 
reference papers.  As Chairman, he would fac ilitate the process to build convergence and if a 
background paper helped such a process then it woul d be useful.  However, if a reference paper 
merely catalogued the divergences that existed on the proposals, then there would be no value added 
in undertaking such an  exercise.  It was his unde rstanding that the reference papers that had been 
used in the negotiations on agriculture were a me ans to an end, i.e. a means of getting to the 
modalities.  Similarly, if there were any such re ference papers in the Sp ecial Session, then they 
needed to be a means of reaching convergence and not  merely to collate the different viewpoints.   
11. The Chairman  went on to introduce the first Category III proposal (no. 77) on the 
Understanding on the Interpretation of Article II.1 (B) of the GATT 1994, in which the African Group 
had proposed that the prohibition of not levying any "other duties or charges" as set out in 
Article II.1 (B), should not apply to developing countries if those charges were being levied for 
generating additional revenue.   
12. The representative of Kenya  said that Members had last discussed the proposal almost a year 
ago.  At that time, the discussions had not yiel ded any results.  He hoped that Members could now 
make some progress.  The key issue in their pr oposal related to rais ing government revenue.  
Considering that tariffs were coming down and th at donor funding was falling, the African Group 
wished to see some flexibility in Members' ability to  levy other duties and charges.  It was therefore 
important that in the context of falling reserves, Memb ers were able to  levy other duties or charges to 
increase government revenue.  The African Group was not attempting to rewrite the provision but wished to strengthen it as mandated in paragr aph 44 of the Doha Ministerial Declaration. 
13. The representative of the United States
 said that Article II.1 (B) established that products 
subject to bound rates of duty be exempt, among other things, from all duties of any kind imposed in 
conjunction with importation.  In her delegati on's view, the proposal would rewrite the Uruguay 
Round Agreement of not raising trade barriers thr ough other duties and charges and would relax the 
essential disciplines of Article II that discouraged the levying of duties and charges in excess of bound TN/CTD/M/25 
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  rates of duty.  The proposal, if accepted, woul d fundamentally change the obligations in the 
Agreement, which would not be acceptable to her delegation.   
14. The representative of the European Communities
 said that the last time Members had 
considered the Category III proposals, his de legation had submitted wr itten comments on all the 
proposals.  That paper contained his delegation's comments as they currently stood on six of the eight 
Category III  proposals, including the proposal on Article II.1 (B) of the GATT 1994.  His delegation 
was concerned that the proposal questioned the va lue of Article II for both developing and developed 
trading partners since it suggested that other duti es and charges should not be constrained in anyway, 
thus calling into question the value of the bound commitment itself.  His delegation was willing to 
engage in further discussions in order to clarify th e intent of the proposal, but would have reservations 
about any alteration of the fundamental rights and obligations of Members. 
15. The representative of Norway  said that he had taken note of Egypt's earlier intervention that it 
was important  to ensure predictability and yet to av oid any abuses of the flexib ilities granted.  As had 
been stated by the representative of the EC, the prop osal went against the basic principle of the WTO 
that Members not be allowed to exceed the bound tariff rates.  At the same time, that did not mean 
that a country could not have a taxation system, or a value-added tax system, to secure government 
revenues.  Those were revenues that would not be covered by Article II.1 (B).  His delegation was 
therefore not clear what the African Group was see king.  If the African Group was suggesting that 
tariffs be no longer bound, then this would comple tely undermine one of the key principles of the 
GATT.  If however the African Group was seeking to  ensure that Article II should not prohibit 
countries from having a taxation system or being able to introduce value-added tax or a general sales 
tax within their national legislation, then that w as clearly something different.  There needed to be 
more clarity about what the proponents were seeki ng and how their proposal would operate within a 
rules-based system of bound tariffs. 
16. The representative of Japan  agreed with those who had raised  concerns.  While his delegation 
understood that some developing countries faced difficulties raising revenue, he felt that perhaps 
those countries could consider addressing the problem by seeking recourse to other S&D provisions, 
for example Article XVIII:A of the GATT 1994. 
17. The representative of Canada  said that his delegation had also submitted comments on the 
proposals which went along the lines of the comments  that had been made by other delegations, 
including the fact that the proposal  undermined the basic principle of  tariff bindings.  Perhaps there 
could be other ways of addressing the problem either through technical assistance or more focused 
language, because as it stood the proposal was too open-ended. 
18. The representative of Pakistan  said that when its Central Board of Revenue had wished to 
impose certain duties and taxes, her Government had been advised that if these other duties and 
charges had not been recorded at the time when Pakistan had made its commitments, then they could 
not be now imposed.  However, as clarified by the representative of Norway, sales tax was not a part 
of other duties and charges.  Perhaps, further clar ification could be sought to ascertain whether what 
was being sought was feasible. 
19. The representative of Australia  associated her delegation with the comments made by the US, 
EC, Norway, Canada and Japan.  She said that th e proposal seemed to undermine one of the most 
fundamental principles of the WTO, namely that of tariff bindings.  This would not only create uncertainty in trade between developed and deve loping countries, but also between developing 
countries themselves.  As suggested by the representa tive of Canada, this was perhaps a problem that 
could be best dealt with elsewhere, incl uding possibly through technical assistance.    TN/CTD/M/25 
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  20. The representative of Kenya  said that it was true that Article II.1(B) was related to bindings 
but it was important to note that no Member was for ced to bind tariffs except in the context of the 
negotiations.  What the proposal sought to do was to  preserve the flexibility of levying other duties 
and charges needed to support g overnment revenues.  He questi oned how this could be addressed 
through technical assistance because shortfalls in  government revenues could not be fulfilled through 
technical assistance.  He felt that it would be helpful if the Members which had expressed concerns 
could suggest some alternate language. 
21. The representative of Brazil  said that the need to raise gove rnment revenue was a legitimate 
concern.  The OECD Working Party on Trade in 2005 had come up with a paper which pointed out 
that some countries, especially African countries and LDCs, could face shortcomings in government 
revenue because of tariff liberalization.  However, his delegation did not feel that that could be a 
reason to undermine tariff bindings.  The OECD, World Bank and IMF had proposed that countries relying heavily on tariffs for their revenues shoul d consider shifting to a tax system based on 
consumption.  He therefore suggested that the propo sal be amended by stating that "Other duties or 
charges shall not be construed or applied in a manner that prejudices the right of developed and 
least-developed country Members under assistance programmes  to reform their tax systems to levy 
transitional duties or charges to meet their requirements relating to government revenue and 
administrative expenses".  His de legation believed that before a c ountry made the transition from a 
tariff-based revenue collection system to a domestic consumption tax-based system there might be a need for a transitional period during which other duti es or charges may need to be maintained in order 
to guarantee revenue.  His delegation, however, ag reed with others that the proposal should not 
undermine the concept of tariff binding which w as one of the main pillars of the GATT.   
22. The representative of Kenya
 sought clarification from the representative of Brazil about the  
assistance programmes that had been referred to.  Who would finance them  and how predictable 
would this assistance be?  The Understanding on the Interpretation of Article II.1(B) did not include 
any elements of such an assistance programme, but if  that would add value and provide predictability, 
then it was something the African Group was willing to consider.   
23. The representative of Australia  said that her understanding was that the duties and charges 
referred to in the proposal were not sales tax and, therefore, she was not certain as to how including 
such flexibility under Article II (B) would be cons istent with the suggestions made by the IMF or 
World Bank.  Perhaps, what Members were attempting to put across was that other duties and charges would not be applied in a manner that could prej udice the rights of developed and least-developed 
country Members to levy sales tax.  In that regard, she sought further clarification from the 
representative of Brazil.  
24. The representative of Brazil
 said that it was his understanding that the World Bank, the IMF, 
the OECD and others had proposed that countries sh ould not rely on tariff revenues alone as this was 
not productive.  There was a need to shift fro m a tariff-based taxation system to a domestic 
consumption-based taxing system.  However, the transition from one system to the other should not 
lead to a gap in the countries budget.  That was wh y other duties and charges should be maintained in 
a transitional manner to allow governments to cope w ith that transition.  The idea was not to prevent 
countries from imposing sales tax or any value-added ta x, but to rather allow them to maintain their 
other duties or charges on imports, until they succeeded in raising revenue through tax-based 
consumption.   
25. The representative of New Zealand  said that his delegation was still unclear whether the 
proposal intended to provide scope for devel oping and least-developed country Members to 
temporarily breach their bindings, or to do so on a long-term basis.  His use of the word "breach", 
though severe, reflected the significance of this principle of the GATT.  The ability to introduce value-added taxes, or taxes on goods or services, had been raised by others.  With respect to TN/CTD/M/25 
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  assistance, New Zealand had introduced a GST in 1987 and had since then provided assistance to a 
number of its neighbours which had wanted to in troduce a domestic consumption tax.  That was 
perhaps getting into public policy but there was not hing under the present Agreement that constrained 
the ability to introduce a GST. 
26. The representative of Kenya
 said that elements of the assistance that had been mentioned 
were not clear;  neither was this assistance's relation to the proposal cl ear.  He was not sure  how the 
assistance which, was yet to be spelt out, would re place the levying of other duties and charges.  
Attempts had been made to raise revenues through va lue-added tax, however, this had not resulted in 
the desired outcome.  Kenya had a large informal se ctor and more than 50 per cent of its population 
lived under the poverty line.  Therefore, the tran saction cost may even be more than the revenue 
generated.  That was not what the proposal was sugg esting.  If the assistance or transitional period that 
had been mentioned could not be amplified then the proposal made by the representative of Brazil 
complicated, rather than helped the situation.  
27. The Chairman  suggested that Members reflect on the proposal based on the discussion that 
had taken place.  He was willing to hold further informal consultations on the proposals, but those 
consultations could not be a substitute for moveme nt on substance. He then introduced proposal 
no.78 on paragraph 1 of the U nderstanding on the Interpretati on of Article XXVIII of the GATT 
1994.  The proposal, tabled by the African Group, made out a case for urgent consideration to be given to a rebalancing of the relative rights of  small and medium-sized exporting Members.   
28. Introducing the proposals, the representative of Kenya
 said that paragraph 1 of the 
Understanding on the Interpretation of Article X XVIII of the GATT 1994 related to the withdrawal 
and modification of concessions.  It was in that spirit that the African Group felt that small and 
medium-sized exporting Members should have a right to share the compensation given in lieu of the 
withdrawal of a concession.  The key word in the proposal was "consideration".  It meant that no 
action was guaranteed beyond an initial phase of discussion whether or not to rebalance the rights.  All it sought was to see whether  small and medi um-sized exporting Members could gain increased 
market access for their products.  That was basically what the African Group had in mind and he 
hoped that the language put on the table met that objective. 
29. The representative of Norway
 said that the proposal had a link to the implementation issue 
which had been raised by St. Lucia and Barba dos, as well as to the five-year review on the 
Understanding on the Interpretation of Article XXVIII, of the GATT 1994 that had been undertaken 
in 2000.  He did not recall what the outcome of that review was, but since no changes had been made, 
it would not be wrong to announce that Members had fe lt that there was no need to amend any part of 
the Understanding.  Under Article XXVIII, there were actually four di fferent groups of Members that 
had to be consulted.  There were those with initia l negotiating rights, those with a principal supplying 
interest, those with a substantial interest in the concession and those with the highest percentage of 
exports of that particular product into that country.  It was a complex issue which had also been raised 
by Honduras and Guatemala in the General Council.  His delegation needed to reflect more on what 
the African Group was attempting to achieve.  He asked what sort of ch anges the African Group 
foresaw.  In the last meeting chaired under the im plementation agenda, the delegation of Barbados 
had suggested that they would come up with a new do cument explaining the sort of changes that they 
had foreseen.  However, this had not yet been tabled.  
30. The representative of Canada  echoed the comments made by the representative of Norway.  
His understanding was that the 2000 review had not brought out any specific problems.  He, therefore, 
sought clarity on what had happened since 2000 that had resulted in the proposed rebalancing in the 
existing language.  In that regard, perhaps the pape r by the delegation of Barbados would be useful.  TN/CTD/M/25 
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  31. The representative of the European Communities  said that most Members were aware that his 
delegation had, in past General C ouncil meetings, mentioned that it did not have a problem in having 
a broad discussion on different negotiating rights, in particular those of sma ller exporters. However, 
there were two provisos.  The first was that Members should not launch into a discussion in the 
Special Session without first being clear about what  they intended to discuss and the objectives sought 
to be achieved.  Second, the Special Session shou ld not create a mandate for future discussion without 
being clear about its role, in particular in the c ontext of the work being done under the implementation 
track, or in the Goods Council.  The proposal was however essentially a starting point for future work 
and, as had been mentioned by the representative of Kenya, the key was to give consideration without 
necessarily concluding that an adjustment or rebala ncing be carried out.  His delegation was ready to 
engage in further discussions to refine the idea ma king it clear what Members should focus on and to 
ensure that the process was an incl usive one so that all Members could be engaged, especially because 
different Members had a different perspective a bout small and medium-sized exporting Members in 
situations covered by Article XX VIII, depending on whether or not they had initial negotiating rights 
and depending on their relative share of trade in  particular products to that country.   
32. The representative of Kenya  said that the key issue was one of ensuring the security of market 
access for small and medium-sized e xporters in developing countries. 
33. The Chairman  introduced proposal no. 79 on Article 10.2 of the Agreement on the 
Application of Sanitary and Phytosanitary M easures tabled by the delegation of India. 
34. The representative of India  said that Article 10.2 of the SPS Agreement related to those SPS 
provisions that allowed for a phased introduction of new SPS measures and longer time-frames for 
compliance for products of interest to developi ng country Members.  Members would recall that 
paragraph 3.1 of the Decision on Implementati on-Related Issues and Concerns, provided a 
clarification of the phrase "longer time-frame for compliance", stating that it should be understood 
that "normally" meant a period of not less than six months.  His delegation proposed the deletion of the word "normally" from paragraph 3.1 of th e decision on Implementation-Related Issues and 
Concerns to give clarity and precision to the decision.  Explaining the reason for tabling the proposal, 
he stated that, over the years, experience had shown that compliance to new SPS measures required 
substantial infrastructural improve ments and changes for which a fair amount of investment and time 
was needed at various levels.  Exporters had little time  to adjust and often exports were blocked.  It 
was a practical issue that exporters faced.  The deve loping countries needed to be given more time to 
comply with new measures.  
35. The representative of Pakistan
 supported the proposal tabled by the delegation of India. 
36. The representative of the European Communities  stated that the phrase 'normally a period of 
six months' in paragraph 3.1 of the Decision on Im plementation-Related Issu es and Concerns meant 
that transition that was less than six months w ould be the exception rather than the norm.  His 
delegation understood the concern that the representa tive of India had raised but was apprehensive 
that removing a degree of exceptional flexibility already foreseen in the decision from Doha, might 
not have the desired effect.  However, those measu res were always a judgement of the regulator in 
terms of the balance of risk versus the flow of trade.  If the judgement of the regulator was that four months would be an appropriate transitional period but it was told that it had to wait six months, there 
could be a risk that the regulator would do so sooner and actually implement a more restrictive 
measure.  He asked whether th e delegation of India saw any ri sk in removing the exceptional 
possibility of a transitional period of less than six months as possibly leading regulating countries to 
veer towards precaution and implement measures with no implementation periods rather than through 
a transitional period.   TN/CTD/M/25 
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  37. The representative of India
 replied that the proposal emanated from practice and experience 
and the problems that exporters faced.  Often im porters suddenly came up with new standards and 
scientific ways, which may at times be based on va lid grounds, to measure requirements resulting in 
the exporters' products having to m eet extra standards.  The problem  was that it often took a long time 
for exporters to be able to conform.  The purpose of ensuring a bare minimum period of at least six 
months was because, in practice, that time period w as not provided by the regulating country.  Citing 
an example, he stated that in the marine sect or there had been cases where large amounts of money 
had to be spent on meeting certain requirements.  In 2003/2004 alone, the ma rine sector in India had 
spent almost a million US dollars to meet the EU's food safety requirements.  It was obvious that additional time was required for these types of inv estments.  The concern was to prevent exports 
being restricted due to the introduction of new meas ures.  He sought clarification on one of the points 
raised by the EC and stated his willingness to fo rward more specified comments to his capital and 
revert to the issue at a later stage.   
38. The representative of the European Communities
 clarified that with the proposed text, the 
flexibility provided for in Article 10.2 would possibly be potentially decreased.  It could also lead to 
situations where SPS measures that would liberalize tr ade would have to wait six months before being 
introduced.  He, however, understood that the proposal  was coming from the angle that SPS measures 
added to restrictions rather than liberali zed trade to particular export markets.   
39. The representative of Canada  said that very few requests for th e extension of time-periods had 
been made by Members and hence the experience, ove r the past few years, had shown that this had 
not seemed to have been a problem.  It was also his understanding that the issue had not been brought 
up in the SPS Committee.  His delegation, therefor e, appreciated getting some more examples about 
the problems that Members may have faced in this regard. 
40. The representative of the United States  recalled that, in 2003, the then Chairman of the 
General Council had put the proposal no. 79 into Ca tegory III because there appeared to be a wide 
divergence of views on the proposal and it had app eared that progress was not forthcoming on it.  She 
associated her delegation with the comments made by  the representatives of the EC and Canada.  She 
was especially struck by the EC's comment that  elimination of the word "normally" could be 
disadvantageous in some instances.  Her delegation felt that the retention of the word "normally" in 
paragraph 3.1 of the Decision on Implementati on-Related Issues and Concerns, preserved Members 
rights under Article 2.1 of the SPS Agreement to take measures necessary to protect human, plant and animal life and for that reason could not support the idea of making phasing in mandatory.   
41. The Chairman
 said that the Special Session's task was to come up with clear 
recommendations on all outstanding Agreement-specific  proposals by December 2006.  Ministers, at 
Hong Kong, had not specified what those recomme ndations ought to be.  Those recommendations 
could take various forms.  He was working on the assumption that Members should focus their efforts 
to finding common ground on those proposals.  As Chairm an, it was not for him to say, a priori, that 
progress was not possible on some of the proposals.  That would only become apparent if Members 
were unable to find convergence on particular proposals.  However, even that was something for which Members had to undergo a process of discu ssion and informal consultations.  It was a 
bottom-up process in which it was for Members to make a decision as to where progress was possible 
and how far they could go in building convergence .  For that reason, Me mbers needed to work 
through the Category III proposals and try to identifyi ng the zones of possible agreement.  What could 
be achieved was something that would come as a result of the process that was being undertaken.  
Possible engagement in the discussion was a preco ndition to identifying the possibilities of building 
convergence.  Members were clearly far from finding a middle ground on Category III proposals and 
even though some progress had been made on the Cate gory I proposals a lot of work still remained to 
be done.    TN/CTD/M/25 
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  42. The representative of Egypt  sought clarification from the Secretariat as to how the word 
"normally" in paragraph 3.1 of the Decision on Implementation-Related Issues and Concerns was 
perceived.   
43. The Secretariat  said that it was perhaps best to begin by putting Article 10.2 in the context of 
the other provisions of the Agreement.  Under th e SPS Agreement, measures that restricted trade 
could only be taken when they were necessary fo r health protection.  Other provisions in the 
Agreement required that the measures be no more re strictive than necessary.  Additionally, Members 
were obliged to notify proposed or draft measures at  an early stage and to provide an opportunity for 
other trading partners to comment on the proposed  SPS regulation.  In addition to requesting an 
extension for the comment period, the Agreement also envisaged a situation where Members could 
lodge a request for an extension for the entry into  force of a new measure or changes in a proposed 
measure.  The recommended comment period was a minimum of 60 days.  It was not hard to find instances where extensions of comment periods had been given.  However, the fact that some 
Members did not provide a 60-day period for comments had been an issue of discussion in the SPS Committee.  In response to the representative of Ca nada's observations that for most measures that 
were notified, few comments had been received and there were hardly any requests made by Members 
for extensions, the Secretariat stated that the transparency provisions agreed by the SPS Committee 
provided for favourable consideration to be given to comments made as well as to the requests for 
extensions for comments.  Annex B of the SPS Agreem ent required that a reasonable interval of time 
be given after the adoption of a new measure and its en try into force.  That was, in part, to address the 
concern that trading partners required a reasonable period of time to adjust to a new measure.  The 
issue was considered by Ministers at Doha and they agreed on language that referred to that period as 
being normally a period of not less than six mont hs.  However, much depended on the health risks 
involved and the type of measure.  There might be measures that could be phased in over a period of 
time while ensuring that the health protection w as maintained.  In such cases, Members had an 
obligation to take into account the concerns of  developing countries in that phasing in process 
according to Article 10.2.   
44. On a question raised by the EC, the representative of Egypt
 said that the issue related to the 
problems faced by developing countries to comply with a measure.  Often the trade aspect was not 
taken into account as much as the compliance by th e developing country Member to the measure.  In 
the proposal, India was seeking predictability that  developing country exports would be granted 
appropriate time for complying with that measure.  Measures that libera lized trade did not fit into that 
process.  Although the issue of flexibility was d ealt with in paragraph 3.1 of the Decision on 
Implementation-Related Issues and Concerns, in that  the appropriate level of  SPS protection allowed 
scope for the phased introduction of new measures,  ambiguity still remained due to the word 
"normally".   
45. The representative of Mexico  said that in emergency situations  it was more difficult to have a 
longer time-frame to implement a measure.  It was, therefore, important to consider the relationship 
between Article 10.2 and paragraph 6 of Anne x B of the Agreement on SPS which related to 
emergency measures.  He suggested that Members pe rhaps consider limiting the proposal to ordinary 
situations rather than those rela ting to emergency situations.   
46. The representative of Japan  said that since the Agreement related to the protection of human 
and animal life, any changes to it had to be take n with caution.  His delegation could not agree to 
amendments that would undermine the purpose of the SPS Agreement. 
47. In response to the representative of the US's comment on the categorization of the proposals, 
the representative of India  said that it was important to bear in mind that the process of categorization 
had been carried out at a certain time and in a certain context, which had undergone considerable 
change.  His delegation expected Members to cons ider all the proposals with an open mind and assess TN/CTD/M/25 
Page 10  
 
  them on their merit rather than in terms of the categorization.  He also said that the proposal related to 
non-emergency measures especially since the idea of  phase in related to non-emergency measures.  
He clarified that the intention was not to undermine the purpose of the SPS Agreement. 
48. The representative of Kenya
 stated that since he was not privy to the process of categorization 
of the proposals, he could say anything about the cr iteria that may have been followed.  The Chairman 
of the General Council had, in his own wisdom, cate gorized the proposals on the basis of what he felt 
could be agreed at Cancún and what would need to be  dealt with at a later stage.  He suggested that 
Members needed to put aside the categorization issu e and focus their efforts towards making progress.  
49. The representative of the United States  clarified that her inquiry with regards to the status of 
the different categories was in no way related to the proposal that was being discussed.   
50. The representative of Norway  said that the proposal to consider the relationship between 
Article 10.2  and paragraph 6 of Annex B of the Agreement on SPS was interesting.  He said that in 
the area of SPS and TBT there was a distinction between urgent measures which were immediately 
put in place and those that were not urgent that could follow normal procedures.  In his view, the 
problem was, perhaps, twofold – one, being that it was probably not ideal to have a strict period of 
time and not for so long.  Second, his delega tion did not see the issue as a developed versus 
developing country issue.  It was also an issue for developed countries when developing countries or other developed countries introduced new SPS measur es with short time-frames.  It was a problem 
that all Members had and they needed to find a solution that was generic to all countries.   
51. In response to the representative of  Mexico's comment, the Secretariat
 said that Article 10.2 
related to measures where the level of health protection allowed for ph asing in.  That was not 
normally the case for emergency measures which logica lly needed to be taken quickly.  There could 
be aspects of an emergency measure that might be phased  in at a later stage but at least some part of it 
would be introduced almost immedi ately.  In response to Egypt's comment that developing countries 
wished to have predictability to ensure that th e time being allowed to phase in new requirements 
would provide enough time for them to make the nec essary adjustments, the Secr etariat said that such 
concern could in part be addressed through the op portunity to comment on the proposed new measure 
when it was being notified.  It was not uncomm on when considering notifications in the SPS 
Committee to find measures where a notification of a proposal did receive comments and was finally 
extended for a number of years before the new requi rements were expected of  all trading partners.  
That had been the case when the EC introduced HACCP processing requirements on fish products.  It 
had taken more than ten years before the new re quirements were actually imposed on their trading 
partners, in part due to the questi ons and concerns that had been raised on the need for systems to be 
changed, and for countries to adapt and introduce new methods.   
52. The Chairman  said that he would hold informal consu ltations on that proposal together with 
the Category I proposals on Article 10.3 of the SPS Agreement.   
53. He introduced proposals no. 82 by the African Group and no. 83 by a group of developing 
country Members on Articles 11 and 12 of the Agreement on Technical Barriers to Trade.   
54. Explaining the African Group proposal  no. 82, the representative of Kenya  said that 
sub-paragraph (a) of the proposal reaffirmed th at Article 11 of the Agreement on TBT contained 
binding obligations and suggested the establishment of a fund which would help developing and least-
developed countries to implement the Agreement.   It recommended that  those Members which 
introduced new standards, deposit money, that wo uld be assessed by the TBT Committee based on the 
resource implications of developing and least-devel oped countries.  Sub-paragr aph (b) made reference 
to special needs which according to Article 12 meant that technical assistance would be provided to the developing and least-developed countries.  Sub-pa ragraph (c) also related to technical assistance  TN/CTD/M/25 
 Page 11 
 
 
  and proposed that the technical assistance be fully fu nded.  Sub-paragraph (d) proposed that an impact 
assessment be carried out that would establish the lik ely effect of the new standard to developing and 
least-developed countries.  If the standard would adversely affect the export opportunities of  those countries it would be recommended that the deve loping and least-developed countries be given 
sufficient time to fulfil the requirement of the new standard introduced.  Sub-paragraph (e) 
strengthened paragraph 8 of Article  12 and introduced a time-period of no less than three years for 
developing and least-developed countries to undertake any necessary adjustments.  Sub-paragraph (f) which related to paragraph (a) recommended the est ablishment of a facility within the global trust 
fund which would meet the requirement of im plementing the Agreement by facilitating the 
participation of developing count ries in meetings of the Committee on TBT and in other standard 
setting organizations and also helping those coun tries to utilize the flexibility provided in the 
Agreement.  What the proposal sought was to provi de for mandatory predictable technical assistance 
to developing and least-developed countries, both for the implementation of the existing Agreement 
and the standards that would be introduced in the future.   
55. The representative of Egypt
 introduced proposal no. 83 by a group of developing country 
Members.  He said that the proposal attempted to address the problem of lack of technology that 
developing country Members faced when complying with standards adopted by other countries.  He said that it was important that when Members c onsidered the proposal they also came up with 
suggestions and alterna tive language in order to reach convergence.   
56. The representative of the European Communities
 said that the proposals were too wide 
ranging.  He also pointed to the fact that a lot of work had been carried out in the TBT Committee 
since the proposal was tabled in 2002.  In fact, th ere was an upcoming triennial review of the TBT 
Agreement where those issues could be addressed.  Ou tside the WTO, a lot of work was also being 
done in the area of technical assistance and capacity building.  For instance th e EC had been working 
with developing countries to build capacity to m eet TBT requirements in export markets.  The EC 
found it difficult to consider the proposals because a number of the elements contained therein had 
evolved ever since their first submission.  His dele gation therefore felt that further work was needed 
to make the proposals more focused, taking into acc ount the discussions and work carried out in the 
TBT area, both within and out of the WTO.  Whilst it was useful to re-enga ge in discussions on those 
proposals, his delegation felt more work was needed to  clarify, update and focus the proposals.  With 
respect to proposal no. 83 relating to the issue of  technology transfer, his delegation accepted that 
technology transfer could play a role in provid ing countries with the technical facilities to meet 
product standards of exports markets.  In its b ilateral cooperation assistance programmes, the EC had 
had good experiences in building regional capacity wher e, for example, it had made sense to build one 
laboratory in the region rather than building one in each individual exporting country.  That was one dimension in the area of capacity building that his delegation felt merited further exploration.  In both 
proposals, his delegation had, and would continue  to have a problem with the suggestion that 
technical assistance and capacity building should be made mandatory.  Essentially, technical 
assistance and capacity building were demand driven  and were the product of a mutual agreement 
between partners in terms of what the prioriti es for trade-related assistance and capacity building 
were.  Neither the relevance of TBT and SPS nor the volume and availability of that assistance was in 
doubt.  It was, however, difficult to see how Members could pre-empt what was essentially a bilateral 
process between an individual beneficiary coun try and the provider of that support.   
57. The representative of Canada
 said that his delegation shared the EC's position that the work 
on technical assistance in the TBT area had progressed  since the time the proposal was tabled.  The 
structure of proposal no. 82 in terms of the creati on of a fund and impact assessment was perhaps too 
broad considering the work that had been done.  Th e language in the proposals would therefore need 
to be streamlined.  He said that the notion of making technical assistance mandatory was problematic 
for his delegation. TN/CTD/M/25 
Page 12  
 
  58. The representative of Colombia
 sought clarification on whether the contributions into the 
fund proposed in paragraph (a) of proposal no. 82 re lated to all Members or just developed country 
Members. 
59. In response to the EC's comments relating to th eir reluctance to accept technical assistance as 
mandatory, the representative of Kenya  said that he agreed that technical assistance was demand 
driven, however, the provision of tec hnical assistance needed to be pr edictable.  Once the beneficiary 
of the technical assistance determined what assistance it required, then the provision of that assistance 
needed to be mandatory.  That was what the Afri can Group proposal was attempting to address.  He 
agreed that some good work had been done in th e TBT area.  However, he argued that, despite the 
work that had been done in the TBT Committee, th e proposal aimed at making technical assistance in 
Articles 11 and 12 of the TBT Agreement predic table and ensuring that new standards were 
introduced in a way that would enable Members to comply with them.  In response to the 
representative of Colombia's question, he said th at those Members introducing new standards which 
proved difficult for developing and least-developed countries to comply with, were expected to 
contribute to the fund.   
60. The representative of Egypt  said that it would be useful if the EC could suggest language that 
addressed its concerns on proposal no. 83.   
61. The representative of the Economic Communities  said that he did not have any suggested 
language in mind.  The problem that his delega tion had was with the mandatory nature of the 
language, i.e. that an importing developed country  Member "shall provide" relevant technology and 
technical facilities on preferential and non-commercial te rms, preferably free of  cost.  His delegation 
would only feel comfortable with language that  would not contain the words "shall provide" and 
would be more along the lines of an encouragemen t or a possibility to provide such assistance.   
62. The representative of the United States  associated her delegation with the comments made by 
the representatives of the EC and Canada.  With respect  to proposal no. 82, she said that a lot of work 
had  been carried out in the TBT Committee and ma ny of the concerns raised therein had been 
effectively addressed since the proposal was first tabled.  On proposal no. 83, her delegation was 
concerned that the proposal would undermine the rights of Members with respect to technical regulations and conformity assessment procedures.  Regulators already had the burden of enforcing 
compliance with legitimate regulations when they  identified non-compliant products which signalled 
that there was a problem, be it from a developed or developing country.  Since S&D was a standing 
item in the TBT Committee, her delegation suggested that both proposals along with the issues raised 
therein be considered by the relevant experts in the TBT Committee.   
63. The representative of Canada
 echoed the statement made by the representative of the US and 
said that it would be useful to hear what work  the TBT Committee had carried out on some of the 
issues raised in the proposals.   
64. The representative of India  sought clarification as to whether the representatives of the US 
and Canada were suggesting that the two proposals be addressed as part of the Category II proposals. 
65. The representative of the United States  said that it was not really an issue of categorization 
but more that the issues raised in the proposals be referred to the TBT Committee for consideration.  It 
was important to keep the work performance oriented  and if there were problems that needed to be 
solved it seemed the most efficient way to do that was to send them to the experts that had the best 
possibility of solving them.   
66. The representative of Canada  said that he had not had the notion of changing the category of 
the proposals in mind.  However, that did not mean that discussions that had taken place in other fora  TN/CTD/M/25 
 Page 13 
 
 
  and the advice of experts should not be utilized .  He was thinking along the lines of document 
G/SPS/33 relating to the procedure to enhance the transparency of S&D in favour of developing 
country Members which highlighted consultations a nd measures that had been carried out in the SPS 
Committee to take developing country concerns on board before putting measures in place.  He 
thought some kind of consultation mechanism coul d perhaps be useful in addressing the concerns 
contained in proposal no. 83. 
67. The representative of India  said that his delegation did not consider document G/SPS/33 
particularly helpful especially in addressing the S&D c oncerns.  He therefore did not wish to pursue a 
parallel-track based on a document on which his de legation had concerns.  In light of the US's 
clarification he explained the idea behind proposal no . 83.  Citing an example, he said that India found 
that testing equipment used in the leather tanning process was very expensive and there had been an 
attempt to calculate the pcp content, which was used in the leather tanning process.  Technical 
standards had been developed by the ISO and Me mbers which adopted them had a tendency to 
strengthen them.  A number of developing country Me mbers had an interest in leather exports and in 
many of those countries it was the small and medium-sized enterprises that were involved in that 
sector.  The testing equipment was extremely expensive and it was often not possible to obtain it 
without some assistance.  As standards increased, some of which were sometimes legitimate, there 
was a need for increased technical assi stance.  That was where Article 12.3 of the Agreement fitted in.  
However, his delegation found that the Article as it existed was too general and their proposal 
attempted to make the assistance more targeted in order to assist their certif ication institutions and 
laboratories to conform to those standards.  With respect to the phrase "preferably free of cost", the 
operative word was "preferably" and it was understa ndable that that might not be possible.  The 
emphasis was that the relevant technology and tec hnical facilities should be provided.  Where it was 
too expensive that it made it virtually impossible fo r exporters to meet those standards, assistance 
needed to be provided on non-commercial terms.  His delegation was open to  suggestions on language 
that would address the concerns raised. 
68. The representative of Kenya  said that reference had been made to the good work done in the 
TBT Committee, and that some of the issues rais ed in the proposal might have been addressed.  
Proposal no. 83 raised three issues.  One, the predictability of technical assistance; two, the 
establishment of a fund;  and three, the timeframe for compliance. He wished to know which of those 
three issues had been addressed in  the TBT Committee.  He was aware that some good work had 
taken place in the SPS area, including the EC's propo sed technical-assistance pack age.  That went in 
the direction that the African Group was trying to go in  the area of TBT.  If some of those issues were 
to be referred to the TBT Committee, his delega tion wished to know whether there would be positive 
results or whether the results would be the sa me as on the other issues being dealt with under 
Category II.  If that was the case, then his delegati on preferred those issues to be dealt with in the 
Special Session where experts could be invited to participate in the discussions. 
69. The Chairman  said that there were a number of elements in the proposals that Members 
needed to reflect on.  There was clearly a con ceptual issue on which Members needed to find 
convergence, otherwise drafting suggestions would not  result in convergence.  The second, was one of 
technical assistance.  At the same time, it was impor tant to obtain information on the work that was 
being carried out in the TBT Committee.  Further work on those proposals would require informal 
consultations and dialogue between the stakeholders.  He therefore encouraged the stakeholders to 
consult with a view to narrowing the divergences and coming up with drafting suggestions.  That 
would put Members in a better position to revis it the issue.  He then went on to introduce 
proposal no. 85 on Article 3 of the TRIMS Agreemen t which had been tabled by the African Group 
and sought to clarify that cooperation arrangements,  laws, measures and policies adopted on the basis 
of the provisions of GATT 1994 and that operated as exceptions, and that they also applied to the 
provisions of the TRIMs Agreement. TN/CTD/M/25 
Page 14  
 
  70. The representative of Kenya
 said that Article 3 of the TRIMs Agreement stated that all 
exceptions under GATT 1994 applied as appropriate to the provisions of the TRIMs Agreement.  The 
African Group proposal merely confirmed that and gave examples of the exceptions contained in 
GATT 1994.  The African Group was seeking reaffirma tion that all those exceptions were special and 
differential treatment permitte d under the TRIMs Agreement. 
71. The representative of Canada  said that his delegation did not wish to rewrite the TRIMs 
Agreement and it considered that what was referre d to in Article 3 as exceptions, were provisions 
such as GATT Articles XX and XXI, and not so much the examples that were laid out in the proposal.  
In his delegation's view, those exam ples were more of derogations. 
72. The representative of Kenya  said that he was not clear what the difference between an 
exception and a derogation was.  The African Grou p was attempting to strengthen and operationalize 
Article 3 especially for those countries that were at low levels of industrialization.  As a result, they 
were attempting to reaffirm the flexibilities provided in the TRIMs Agreement.  He asked for suggestions on alternate language that could reaffirm that.   
73. The representative of the United States
 supported the comments made by Canada and said 
that her delegation was not clear about the intent of the proposal, since the TRIMs Agreement already 
stated that all exceptions under GATT 1994 applie d as appropriate to the TRIMs Agreement.  
74. The representative of the European Communities  said that the proposal was essentially 
repeating what was already contained in the Ag reement.  However, the representative of Kenya 
seemed to be talking about something else in term s of flexibility from the application of the TRIMs 
Agreement.  He was not certain if that was the intention.  Moreover, the proposal seemed to be 
reiterating something already contai ned in the TRIMs Agreement.   
75. With respect to paragraph (a) of the proposal, the representative of Mexico  sought a 
clarification on the kind of cooperation agreements the African Group had in mind.  She also wanted 
to know how the notion of preferential treatment in that paragraph related to the Enabling Clause.   
76. In response the representative of Kenya  clarified that cooperati on agreements related to 
regional trading arrangements establishe d between developing countries. 
77. The representative of Tanzania  said that the idea of the exercise on S&D was to make the 
existing provisions more precise, effective and operational.  If he had understood correctly, the 
representative of the US had stated that the prop osal did not deviate from what was included in 
Article 3 of the TRIMs Agreement.  Then there sh ould not be a problem in accepting it.  However, 
Members could come up with alternate language that would make the provision more precise and 
operational.  
78. The representative of Kenya  suggested that since the examples were a cause of concern and 
the proposal reiterated what was contained in Artic le 3 of the TRIMs Agreement, he was willing to 
delete the examples contained in para graphs (a) to (c) from the proposal. 
79. The representative of Hong Kong  said that she had the same concern as the delegation of 
Mexico with regards to the cooperation agreements .  Referring to the delegation of Kenya's proposed 
amendment, she said that that may not necessarily be an S&D proposal.  As it was Article 3 of the 
TRIMs Agreement did not relate to S&D per se .   
80. The representative of Tanzania  said that he appreciated the amendment suggested by the 
representative of Kenya.  However, his de legation preferred the original version.  TN/CTD/M/25 
 Page 15 
 
 
  81. The Chairman  said that Members needed to reach a c onceptual convergence on  the proposal 
before starting any text-based discussions.  He suggest ed that the various stakeholders consult among 
themselves and try to reach some degree of conceptual convergence.  
82. The Chairman  then introduced the two proposals no. 86 and no. 87, tabled by the African 
Group on Article 20 of the Agreement on the Implementation of Article VII of GATT 1994. 
83. The representative of Kenya  proposed that the consideration of those proposals be deferred 
until the next meeting as the African Group was still cons ulting on them.  He said that there had been 
a number of developments in that area and the Afri can Group needed some time to consider them.   
84. The Chairman  said that the discussions had been useful in giving a sense of different 
Members' positions.  Although there had been useful  suggestions on the way forward, Members had 
not really broken much new ground.  The work on  the remaining Category III proposals needed to be 
demand driven.  On some of the proposals, there was a degree of conceptual divergence and Members 
would need to work further.  On other proposals,  a degree of conceptual understanding existed but it 
was a question of expressing those convergences into suitable language.  The next time Members revisited the Category III proposals, he would look  for signals from Members as to which of those 
proposals were ripe for discussion.  There would be no value added if the next discussions just 
entailed going through each of the proposals and Members repeating their positions.  He suggested 
that the proponents engage in discussions with the other Members on those proposals where there 
were conceptual divergences, and reflect on tho se proposals on which drafting suggestions had been 
made.  He intended to schedule informal consultati ons before the next form al meeting scheduled for 
7 July and said that he would look forward to signals from Members on any progress that may be 
made in the interim. 
C. O
THER BUSINESS  
85. No issue was raised under "Other Business" and the meeting was concluded. 
 
 
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