RESTRICTED  WORLD TRADE  
ORGANIZATION  G/MA/M/42 
14 November 2006 
 (06-5484) 
Committee on Market Access  
  
MINUTES OF THE MEETING HELD ON 4 OCTOBER 2006 
 
Chairman: Dr. Mohammad Saeed (Pakistan)
 
 Subject discussed
 Page  
 
1. Periodic report of the Committee to the Council for Trade in Goods 
(G/MA/SPEC/33) ................................................................................................................. .....1 
2. Submission of HS96 documentation........................................................................................2  
3. Extension of the HS2002 waiver ..............................................................................................3  
4. Changes in the Harmonized System to be introduced on 1 January 2007...........................3  
5. Modalities and operation of th e Integrated Data Base..........................................................5  
6. Consolidated Tariff Schedules Database ................................................................................5  
7. Transitional Review under Paragraph 18 of the Protocol of Accession of the 
People's Repub lic of China ..................................................................................................... .6 
8. Draft Report (2006) of the Committee to the Council for Trade in Goods 
(G/MA/SPEC/34) ................................................................................................................. ...13 
9. Election of the Vi ce-Chairperson ..........................................................................................13  
10. Other Bu siness................................................................................................................. ........13  
ANNEX I: Secretariat's Report on the Modalities and Operation of the 
Integrated Data Base (IDB)....................................................................................................1 5 
ANNEX II: Secretariat's Report on the HS2002 transposition using the 
Consolidated Tariff Schedules (CTS) database....................................................................17  
 
   The Committee adopted
 the agenda as reproduced in WTO/AIR/2893.  An annotated agenda 
was circulated in document JOB(06)/238. 
 
1. Periodic report of the Committee to the Council for Trade in Goods (G/MA/SPEC/33) 
1.1 The Chairman  drew attention to document G/MA/SPEC /33 which contained the draft periodic 
report of the Committee.  He noted that this repor t, which would be finalized in the light of the 
discussion that would take place at this meeting,  would be submitted to the Council for Trade in 
Goods (CTG) for examination.  The report containe d no requests for extensions of HS96 waivers so 
no factual information on this issue had been provided in its Annex. 
 1.2 The Committee took note
 of the period report and agreed  to forward it to the CTG. 
 G/MA/M/42 
Page 2  
 
  2. Submission of HS96 documentation 
2.1 The Chairman
 drew attention to document G/MA/TAR /2/Rev.38 which reflected the present 
situation concerning the submission of required HS 96 documentation.  From the document, it could 
be noted that the submissions of Argentina and Panama  remained pending because of reservations by 
other Members.  In addition some information need ed to be provided by Venezuela, Paraguay and 
Thailand in order for certification of their HS96 doc umentation to take place.  Thailand had submitted 
information which was circulated in docum ent G/SECRET/HS96/17/Rev.2/Add.2.  They  
had recently submitted, in addition, a co rrigendum which would be circulated as 
G/SECRET/HS96/17/Rev.2/Corr.2.  Paraguay had also  submitted some additional information, but 
they were still discussing some tec hnical issues with the Secretariat. 
 
2.2 The representative of Thailand  stated that following the circulation of their last document (the 
addendum 2) they had received a communication fro m Australia indicating that there were some 
mistakes and incomplete detailed descriptions of  the information.  Th ailand had, accordingly, 
submitted a correction which would be circulated to Members shortly.  They hoped that their revised 
schedule, including all the modifications, would be  accepted and certified to complete their HS96 
work.  They would continue to work to complete  their transposition work including into HS2002 and, 
soon, into HS2007.   2.3 The representative of Israel
 informed that the last reservati on that they had in respect of its 
HS96 certification had been withdrawn by the Member  in question, so they expected to have the 
document certified very soon. 
 2.4 The Chairman
 raised an issue that had been discussed at the previous meetings.  The former 
Chairman had recalled, at the meeting of the Committee that took place on 3 October 2005, that the 
Secretariat had already introduced HS96 changes to  the schedules of several Members when the CTS 
database was prepared.  This issue had been rai sed by the Secretariat on 29 June 2005 when it had 
given a technical briefing on issues arising from the HS2002 transposition exercise.  The reason this issue had been brought before the Committee was b ecause the results of this transposition exercise, 
which were already contained in the CTS files of sever al Members, had not been verified or certified.  
Therefore, the HS96 changes contained in these CTS files have not been given legal effect.  A question had been raised at that technical briefi ng regarding which Members were concerned by this 
issue.  In response to that request, the Se cretariat had circulated a list in document 
JOB(05)/124/Add.2.  
 
2.5 The former Chairman had also proposed th at the Members concerned could use the work 
undertaken by the Secretariat to prepare and subm it their HS96 documentation, in accordance with the 
GATT procedures to implement changes in the Ha rmonized System (GATT document L/6905).  He 
had also proposed that the Committee could revisit the situation the following year to see to what 
extent there had been any follow-up action by the Members concerned.  The Committee had taken 
note of these proposals.    2.6 The Chairman
 informed that no follow-up action has been taken by any of the concerned 
Members.  He nevertheless felt that it was his duty to  bring this issue to the Members' attention again, 
and to remind those Members who had not subm itted any HS96 documentation that this option was 
available.  He finally urged interested Members to get in contact with the Secretariat as soon as 
possible.   2.7 The Committee took note
 of the document and the statements.  
  G/MA/M/42 
 Page 3 
 
 
  3. Extension of the HS2002 waiver 
3.1 The Chairman  recalled that a number of Members had been given an extension or granted a 
new waiver – in the form of a collective decision-  in order to introduce HS2002 changes domestically 
and to subsequently introduce these changes to th eir respective schedule of concessions.  Negotiations 
would be undertaken, if required.  This waiver  decision was contained in document WT/L/638 and 
would expire on 31 December 2006.  He noted that the status of the HS2002 transposition would be 
discussed under agenda item F.  3.2 The Chairman
 noted that a number of Members covered by this waiver had yet to complete 
the HS02 exercise and proposed to extend it for anothe r year.  A draft waiver decision was contained 
in G/MA/W/80 and addendum 1. 
 3.3 The representative of Macao, China
 requested to be included in the waiver. 
 3.4 The Committee took note
 of the draft waiver decision, and agreed  to amend its annex to 
include Macao, China and to forward it to the CTG for appropriate action. 
 
4. Changes in the Harmonized System to be introduced on 1 January 2007 
- A Draft Procedure for the introduction of Ha rmonized System 2007 changes to Schedules of 
Concessions using the Consolidated Tari ff Schedules (CTS) database (G/MA/W/81)  
 
- HS2007 Draft Waiver Decision (G/MA/W/82)  
  4.1 The Chairman
 addressed the two sub-agenda items together. 
 
4.2 The Chairman  recalled that, at the meeting that took place in early April, the former Chairman 
had proposed that the Secretariat work on draft procedures to incorporate HS2007 changes to the 
schedules of concessions using as a basis the current HS2002 procedures (WT/L/605), which 
appeared to be working well.  The Secretariat pr epared a first draft of these procedures which were 
circulated in document G/MA/W/81.   
4.3 He noted that his predecessor had also request ed the Secretariat to prepare a draft waiver 
decision for the purpose of allowing Members to introduce the HS2007 changes domestically and to 
subsequently introduce changes to their schedules of concessions and undertake to negotiations, if 
required.  This draft waiver decision was to follow, to the extent possible, the format of the existing 
HS2002 draft waiver decision.  The Secretariat prep ared, with the assistance of the Legal Division, 
such a draft which was circulated in document G/MA/W/82. 
 4.4 The Chairman
 proposed that, given the short time delegations had had to examine these 
documents, the discussion on this agenda item be su spended.  He would hold an informal meeting of 
the Committee on 16 October 2006 in order to discuss the draft HS2007 procedures and the draft HS2007 waiver decision.  The Committee would return  to formal mode once it were at a stage to 
approve them.  He finally noted that further de tails on this meeting w ould be faxed shortly. 
 4.5 The representative of the United States
 noted that he would like to present some brief 
comments so that both the Secretariat and the Me mbers were aware of their thinking on these 
documents.  He also requested Members to consider  these comments with a view to factoring them at 
the informal meeting.  He noted that Annex 1 of the procedures stated that the 2007 material "shall 
cover all tariff lines and relevant tables".  He r ecommended to expand this provision to state that 
Members should provide complete tariff schedules, including both concession materials and G/MA/M/42 
Page 4  
 
  concordances.  He also considered that it would be useful to add a column to all the concessions in the 
concordance tables and spreadsheets, which would i ndicate the lines that had been changed.  This 
would be the most transparent way to proceed a nd would expedite cross-Member and Secretariat 
reviews.  If the Secretariat preferred MS Access format  for the files, it could be stated in Annex 1 for 
clarity.  With respect to the submission of inform ation, he recalled that in the past there was a 
distinction between so-called "do-it-yourself" group a nd the rest of the membership.  So it could be 
useful to consider whether the do-it-yourself group would need to get together and talk about what would be possible and how to proceed.  The Secretariat could then try to accommodate this format for the Members for which it would be preparing the work.  Having dealt with the HS2002 transposition 
and its review process, he found that this would faci litate the provision of information and review of 
the schedules. 
 4.6 The representative of Australia
 proposed an amendment concerni ng paragraph 15 of the draft 
procedures.  This paragraph dealt with cases wh ere the scope of concession was modified and 
provided that the Members concerned should enter into Article XXVIII procedures.  He was of the 
view that Article XXVIII was not applicable to all Parts of Members' schedules.  In particular, it was 
not applicable to Part IV which reflect commitments limiting subsidi sation of agricultural products in 
accordance with the Agreement on Ag riculture.  These were multilateral commitments that could not 
be renegotiated through GATT Article XXVIII.  Alt hough it was unlikely that the HS transposition 
exercise would cause any Member to seek a change  in the scope of such commitments, Australia 
would propose that Paragraph 15 be amended to clarif y this aspect by inserting a reference to "in Part 
I of the Members' schedule" in the sentence.  He not ed that they would be ready to discuss further the 
issue at the informal session.  4.7 The representative of the Philippines
 noted that it would useful if the preliminary comments 
by the United States and Australia were distributed in advance so that Members would have an 
opportunity to look at them. 
 4.8 The representative of Japan
 noted that he would also like to raise some issues, but he would 
do so at the informal meeting.  One preliminary point  he would like to clarify was whether, given the 
draft procedures were based on the HS2002 procedures contained in WT/L/605, the proposed HS07 file to be submitted would only cover tho se items affected by HS2007 changes.   
 
4.9 The Chairman
 proposed to discuss these items at the informal meeting of 16 October 2006.  
He also proposed to discuss at this meeting a point  made by the United States at the July multilateral 
review concerning the lack of approval by Members of  their HS02 Files.  These were files in which, 
although there was no objection remaining from the mu ltilateral review, they could not be certified 
because the Member concerned had not approved its ow n file.  The impossibility to proceed with the 
certification was expressly contemplated by Para graph 12 of the HS2002 procedures (WT/L/605).  In 
this regard, he recalled that he had sent some 36 letters to Members concerned requesting them to 
either approve their file or to submit specific co mments on their HS02 File.  Unfortunately, he had not 
received any response and the Secretariat had not received either any approval or specific comments.  This had delayed the procedures leading to the certif ication of those 36 files and the HS02 exercise as 
such.  He proposed to also take up the issue at the informal meeting of 16 October.  
 4.10 The Committee so agreed
. 
  G/MA/M/42 
 Page 5 
 
 
  5. Modalities and operation of the Integrated Data Base 
- Status of submission of the required documen tation (G/MA/IDB/2/Rev.24) and Report by the 
Secretariat  
 5.1 The Chairman
 referred to document G/MA/IDB/2/Rev .24 which presented the situation of 
IDB submissions as of 29 September 2006. 
 
5.2 A member of the Secretariat  (Mr. J. Richtering) introduced the report which is contained in 
Annex I.  
5.3 The Committee took note
 of the report.  
 
6. Consolidated Tariff Schedules Database  
- Introduction of Harmonized System 2002 cha nges to Schedules of Concessions using the 
CTS database (WT/L/605) – Report by the Secretariat on the status of work  
 
6.1 The Chairman  recalled that the Committee had had three multilateral review meetings in 
2006.  The first one was held on 25 January, the second one on 23 May and the most recent one on 
27 July.  He also informed Members that the next multilateral review session was tentatively 
scheduled for 3 November 2006.  The Secretariat had circulated an updated periodic report in the 
JOB(06)/8 series, as provided by Paragraph 14 of the HS2002 Procedures.  As mentioned in agenda 
item D, he proposed to discuss at the informal mee ting of 16 October the situation of those HS02 files 
in which a formal approval by the Member concer ned was still required to finalize the procedures. 
 6.2 A member of the Secretariat
 (Mr. J. Richtering) introduced the report which is contained in 
Annex II. 
 
6.3 The representative of the United States  enquired about the progress on the files that remained 
to be prepared.  He assumed that it was a mix of developed and devel oping countries.  For the 
developing Members for which the Secretariat was pr eparing the transposition, he would like to know 
what was the expected timetable and when woul d the process be finished.  For the developed 
Members, he wanted to know where the others stood.   
 
6.4 A member of the Secretariat  (Mrs. Alya Belkhodja) noted that all the 44 files that remained to 
be prepared were for developing Members.  The Secretariat had already sent initial comments to all 
developed Members.  However, the Secretariat wo uld need to consolidate the files of developed 
Members at some point, because comments had only been made on the changes.  For developing 
Members, the files were prepared by the Secret ariat according to the standard procedure. 
 6.5 The representative of the United States
 sought clarification on the expected date to complete 
the transposition for those developing Members.  
 6.6 A member of the Secretariat
 (Mrs. Alya Belkhodja) noted that work was hoped to conclude 
by the end of this year or during the first part of 2007. 
 6.7 The Committee took note
 of the report and of the statements. 
 G/MA/M/42 
Page 6  
 
  7. Transitional Review under Paragraph 18 of th e Protocol of Accession of the People's 
Republic of China 
- Questions and/or Comments Submitted to Ch ina by the European Communities, Japan and 
the United States in documents G/MA/W/79, G/MA/W/77 and G/MA/W/78, respectively  
 
7.1 The Chairman  noted that the Committee would be c onducting its fifth transitional review 
(TRM).  In this respect, he noted that a numbe r of comments and questions had been put to the 
Chinese delegation from Japan, the United States a nd the European Communities, which had been 
circulated in documents G/MA/W/77, 78 and 79 re spectively.  China had submitted the information 
required by Annex 1 of the Protocol, which would be circulated in G/MA/W/83.   
 
7.2 The representative of China  thanked the delegations of the EC, Japan and the United States 
for the questions and comments submitted prior to th e meeting.  He noted that he would like to 
explain, or rather try to repeat, China's understanding of this exercise, including the mandate, its nature and requirements.  He considered this w as necessary because, after reading the documents and 
questions submitted, some of them were not in line with the mandate of the transitional review.  For 
instance, China was requested to  provide answers to questions relating to China's Trade Policy 
Review (TPR) that took place in April.  As a pro cedural issue, he asked what was the relationship 
between that TPR and this transitional review; and whether China had the obligation to provide 
answers to those questions under the procedures of Pa ragraph 18.  Another point that he wanted to 
make was that some questions ha d been raised in several other committees.  For example, the same 
question concerning the Chinese Compulsory Certifi cation (CCC) regulation had been raised in the 
Market Access Committee, the TBT Committee and the CTG.  He understood that the transitional 
review exercise was a once-a-year event but, as result of the practice by some Members, it had 
become an exercise of multiple times a year for certa in questions.  He believed that this was not in 
conformity with the requirements of Paragraph 18.  He noted that China had no objection to reply to 
relevant questions, but the same question should not be  raised several times in different Committees.   
 7.3 On a different issue, the representative of China
 recalled that they had received over one 
thousand questions during their TPR of April.  He considered this was too much of a burden and not 
fair for his country.  Some of the questions receive d for this transitional review asked why China had 
not provided answers to questions raised in April.  In this respect, he recalled that the United States 
received less than one thousand questio ns in their last TPR and, yet, it took them almost nine months 
to complete all the answers.  Given that China was a developing, and rela tively new, Member it 
should take them at least one year to complete all the answers raised at their Trade Policy Review.  He 
requested Members to understand the amount of pressure , work and constraints faced in that context.  
Coming back to the transitional review, he recalled that one Member had repeatedly requested, in its 
yearly submissions, that the exercise could be re ndered more efficient and effective by having China 
to provide responses and relevant information prior to  the meetings.  As to the relevant information 
part, he recalled that China had provided the inform ation required by Annex 1 and that the document 
was available at the back of the room.  However, he recalled that there had been a debate since the 
first transitional review under Paragraph 18 as to wh ether China's responses constituted part of the 
"relevant information".  China understood that rele vant information did not cover the answers to 
questions raised by Members, because they could not know in advance what would be asked and on 
what time these would be raised.  China was prepar ed to faithfully implement its obligations under 
Paragraph 18 and to provide the relevant informati on as needed, but they were not in a position to go 
beyond that.  He hoped that, after this review, Me mbers would strictly follow the mandate contained 
in that paragraph, as it would otherwise be very difficult for them to comply with the request.  
Coming back to the request to make the transitional review more efficient and effective, he requested 
the delegation concerned to provide a definition of wh at was meant and drew attention to the fact that 
these terms were not mentioned in the mandate.  Finally, he stressed that the seriousness and  G/MA/M/42 
 Page 7 
 
 
  importance that China attached to this exercise was demonstrated by the presence of capital-based 
officials during a week-long national holiday.  7.4 Another representative from China
 noted that, as they had done in the previous TRM 
meetings, China did not undertake any obligation to  provide responses in written form to questions 
and comments presented.  On the questions and co mments concerning the development policy for the 
steel industry, he reiterated that this policy was not compulsory in itself.  It only outlined the 
Government's opinion towards the development of the steel sector, such as encouraging innovation, 
strengthening environmental protection, encourag ing energy conservation, further reducing the 
administrative approval process by the government and narrowing the scope of government approval 
in investment projects.  He noted that no specifi c regulation or rules rega rding imports had been 
carried out.  On the interpretation of some legal terms which had been raised in the questions, he 
referred Members to document G/LIC/M/22 for deta iled information.  On the CCC Mark, China 
believed that this was a technical regulation issue which should not be taken up in the Market Access 
Committee.  He would, nevertheless, provide some  background information on the issue.  The CCC 
Mark was a system that was put in place to unify  the previous CCIB and the Great Wall Marks, which 
were unified at the request of some Members upon their accession.  Despite the fact that those two 
recognition systems had been implemented in a manner  consistent with the WTO principle of national 
treatment, China designed a new CCC system to implement their accession commitment.  China considered the CCC system to be in full conformity  with WTO rules and that it had greatly facilitated 
trade.  This had been demonstrated by the strong growth of both imports into and exports from China 
since its accession.  Another issue raised by Members was the VAT policy for the MAP and DAP, 
which were two kinds of chemical fertilizers.  He  noted that China had currently no intention to 
change the system.  Regarding their position and inte rpretation on this issue, he referred Members to 
document G/MA/M/35 for further information.  On the tariff rates for photographic products, he noted 
that several rounds of talks on the te chnical issues had been held in th e past year and both parties were 
currently quite close to a solution.  He added that  China would welcome any further bilateral technical 
communication and discussion on the few tariff headings  where agreement had not been secured.  On 
the import prohibition of used goods and the TRQ quan tity for fertilizers, he indicated that China had 
no plan to revise the system and their opinion had been clearly reflected in document G/MA/M/35.  
As to the issues raised concerning wood and wo od products, he took note of the comments made by 
Members.  He clarified the notice mainly aimed at environmental protection and natural resource 
conservation, and would be implem ented in a manner that would be consistent not only with China's 
domestic legislation, but also with WTO rules.  On  some issues, such as export restrictions, trading 
rights, and investments measures, he believed that th ey ought to be discussed in other meetings, such 
as the TRIMS Committee or the CTG.  This was because they did not necessarily fall within the 
mandate of this Committee.  Finally, as to the tari ff issue of automobile parts, given the issue was 
currently under DSB procedures China did not regard  any forum other than the DSB as suitable and 
appropriate to discuss it.  Members who were closel y involved could refer to DSB documents for this 
issue and the others could refer to documents G/ LIC/M/22 and G/MA/M/35 for further information on 
the Chinese position.  7.5 The representative of Japan
 stated that the TRM was an important opportunity to ensure 
transparency and regularly update the state of th e implementation of China's commitment under the 
WTO, and to improve the understanding on each othe r's concerns.  He welcomed the constructive 
responses from China and were pleased to note th at certain progress had been made.  He sought 
further clarification on two issues.  First, he indi cated that the explanation given on export licensing 
for coke was insufficient in Japan's view.  The expo rt price of cokes from China had soared since two 
years ago because of strict export licensing which ha d left the market disrupted.  Japan had asked 
China to review the export licensing system on a number of occasions, but the scheme still remained.  
Although China explained that the measures were  intended to restrict domestic production and 
consumption of coke, it was unclear whether tho se measures had effectively reduced the production 
and consumption of coal, which was an ingredient of the cokes.  Japan ask ed China to improve its G/MA/M/42 
Page 8  
 
  licensing scheme and to maintain a stable supply of cokes in the future.  Another issue on which Japan 
still had concerns was on the import prohibition of  used goods.  China had explained that these 
measures were needed due to hygiene and quarantin e concerns.  However, Japan was particularly 
concerned about the consistency of the import proh ibition with the WTO rules, in particular with 
respect to GATT Article XI.  In addition Japan w as of the view that Chinese consumers would lose 
their benefits and asked China not to maintain su ch import prohibition measures to ensure compliance 
with the WTO rules and to improve the consumers'  benefits.  Finally, Japan requested China to 
provide its replies in writing in order to avoid misunderstandings. 
 7.6 The representative of the United States
 noted that he would like to start by addressing the 
issue of questions being raised in multiple Comm ittees and the claim that it was not appropriate to 
have addressed some of those issues, as it had been  done in the US communication.  The questions by 
the United States fell into four categories: trading rights, export restrictions, tariff-rate quotas on fertilizers, and value-added tax on Diammonium Phos phate (DAP).  He argued that these were all 
issues that fell directly within the purview of this  Committee.  Therefore, th e United States expected 
to have answers to the questions which had been put forward in these four areas.  With respect to 
trading rights, China had said in the past that it had the right to restrict the importation or exportation of books, newspapers and magazines in order to pr otect public moral and pub lic interest in national 
security.  They had cited Article XX in this respect.  However, there was a specific provision in China's Protocol of Accession with respect to these ma terials.  It was clear, on the one hand, that the 
flow of certain kinds of information was necessarily  exempted from this provision.  For example, a 
publication on how to construct a hydrogen bomb was clearly an issue related to national security.  
But the flow of run-of-the-mill sorts of books, ma gazines, newspapers a nd other publications was 
specifically protected by the provisions of China's Protocol of Accession and it could not simply be asserted that Article XX trumped that provision.  The question was whether China contended that it 
had the right to restrict the importation of these pr oducts, despite the provisions of their Protocol of 
Accession and, in addition, whether China believed it had the right to restrict the importation of 
audiovisual products and electronic publications on th e same basis as it restri cted the importation of 
books, newspapers and magazines.  As  to the export restrictions, it was clear for the United States that 
the WTO rules established a general prohibition against export restrictions with only limited 
exceptions.  With respect to the exportation of coke, the United States had understood that China would eliminate its export quota system in 2006.  Thus, the question was whether China had any plans 
to eliminate its coke export quota system in 2006, as it had been previously indicated.  There were, in 
addition, other export quotas on products such as fluo rspar.  He would like to know whether China 
could identify the products that remained under export restrictions and an explanation on the 
consistency of those measures with their WTO oblig ations.  More specifically, whether China had 
begun to take any steps to eliminate the export quot as that it maintained on fluorspar and other raw 
materials.  If it were not the case, he would like to  know why not.  With respect to tariff-rate quota on 
fertilizers, although the United Stat es got a response, the question w as whether China had any plan to 
adjust it.  He understood that the answer to this qu estion was no.  With respect to the value-added tax 
and DAP, the United States continued to be concer ned regarding China's VAT exemption policy for 
this product.  The United States had previously re quested China to provide data showing its annual 
consumption of DAP and Monoammonium Phosphate (MAP) -which was a direct competitor of 
DAP- including the amounts sourced domestically versus the imported amounts.  Since China had not 
provided any of these data, they wanted to renew their request.  The specific request was whether 
China had any plans for revising circular 113/2001 wh ich affected this product in order to eliminate 
the discriminatory treatment of DAP.  If it were not the case, he would like to know why not.  
7.7 The representative of the European Communities
 noted that their industries were facing real 
challenges in this respect and hoped to be able to ge t answers.  On the system ic issue raised by China 
on efficiency and effectiveness, although she w ould abstain from entering into a definitional 
discussion, she expected an appropriate process to d eal with the concerns raised by other Members.  
On the specific questions, she noted the questions by the EC had many similarities with those raised  G/MA/M/42 
 Page 9 
 
 
  by the delegate of the United States and subscribed  to many of the comments made.  She recalled that 
she was present at the first TRM and noted that, not only had they raised the same questions in 
different committees, but had also been putting th e same questions for five years without getting 
answers.  She considered this was a serious issue which raised questions on the systemic value of the 
exercise.  She however considered the presence of  Chinese capital based officials during holidays as a 
testimony of China's commitment to the TRM mechanism and that was the reason why she would be 
referring to those questions.  The first concern raised  by the EC in the context of the TRM related to 
export restrictions where the EU was concerned on the compliance of commitments undertaken by 
China in some particular areas, in particular those related to coke, non-ferrous metals and rare earths.  
She requested China to live up to the commitment of Pa rt I, Section 8(b), of its Protocol of Accession 
and notify the quantities associated with these export restrictions, as soon as possible.  The EU also 
wanted to have a justification for such restricti ons, which they had not received so far.  Whenever 
there was no justification, like in the case of rare ea rths or coke, she requested China to notify the date 
or the time-line by which they intended to remedy the situation.  They would be grateful if China 
could communicate the time-line for the abolition of  the export licence system it currently had on 
coke.  They would also like to have comprehe nsive information on the VAT reimbursement scheme 
and any other restrictions that concerned specifica lly non-ferrous metals and chemical products.  She 
joined the US concern on fluorspar and on the proble ms relating to phosphorous in general.  The EC 
requested to receive this information in order to  better understand whether there was some deficiency 
vis-à-vis  WTO commitments.  The EC also wanted to receive information concerning any new 
restrictions that China may have imposed.  She expressed concerns on a new area which related to 
export taxes and restrictions on raw hides and skins,  and recalled that this was an issue of great 
importance to the EC which was even being a ddressed in the NAMA negotiations in relation to 
Africa's "leather gap".  As to the China Compulso ry Certification (CCC) Regulation scheme, although 
she acknowledged that  it could also be related to  TBT, she noted that it was also a market access 
concern, because the measures did not seem proportiona te to the concerns that China was trying to 
protect.  The EC would like China to develop a certif ication scheme which would be less of a barrier 
to trade and they were ready to undertake discussions bilaterally or multilaterally.  In this respect, she 
considered that any bilateral so lutions, such as the one indicated by the Japanese delegation on 
Chapter 37 (photographic products), should be notif ied to the multilateral forum.  As to the 
automotive chapter, China rightly noted that ther e was a case being dealt by the dispute settlement 
body and she would also abstain from comments on the issue concerning the classification of parts 
and components.  However, there were other issu es which may overlap with TRIMS and other areas 
which would nevertheless be related to market access.   This was the case of the limitation on the joint 
venture ownership, also known as the "two plus two" rule.  She urged China to undertake a dialogue with the EC because this was curtailing the ability that companies located in China had to compete 
internationally.  As to the approval and homologati on standards issue, she urged China to adopt the 
criteria and standards of the 1958 UN/EC Agreement so  that once the products were certified in China 
could then be exported all over the world.  This  instead of having a conformity assessment system 
which, although could be regarded as useful in Chin a, would not allow compan ies located in there to 
export abroad.  She wanted to know when would discussions on the adoption of such standard would 
begin.  Also on the automotive chapter, she re ferred to the new Automotive Industry Development 
policy which presented challenges in terms of investment.  This issue was listed as point IV on page 
three of document G/MA/W/79.  She requested clar ifications concerning the words that had been 
included in the policy and to hold cons ultations to gain a better insight on what was their real aim.  On 
the Steel Industry Development Policy, and the i ssue which could be called the dearth of raw 
materials, she questioned the new policy to lim it exports on high energy consuming and high 
polluting primary processed products such as coke, ferroalloys, pig iron, steel scrap and billets 
(ingots) and export drawbacks on these products.  This  piece of legislation concerned the EC because 
many aspects remained unclear and they hoped that an  explanation would alleviate their fears.  For 
example, it was not clear what kind of limitations  would be imposed and what was meant by the term 
export drawback.  In addition, whether there woul d be implementing provisions for the policy, the 
timeframe envisaged and the Ministry that would be  responsible for such implementation.  It was G/MA/M/42 
Page 10  
 
  finally unclear what was the meaning of the enc ouragement of Chinese companies to source and to 
invest abroad in the supply of minerals.  As to the section concerning technology transfer and 
technology policies in the steel sector, the EC w ould like to understand what measures were being 
referred to with the allusion to reducing or eliminating the importation of equipment from abroad.  
The EC would like to understand what type of im plementing provisions would be put in place and 
when would they be launched.  She noted the reference by the Chinese delegate to document 
G/MA/M/35, but since she could not find an answer  therein, she requested China to provide more 
clarity on the issue.  Another question concerning the steel industry development policy was the reference to foreign investors not holding a controlling stake.  She noted that such limitations would be questionable from a WTO point of view and counter productive to investment in this sector.  As to 
the petrol chemical, chemical and energy sector, the EC delegate recalled there was in place limitation 
to invest –a less than fifty per cent ownership provi sion- which they found very difficult to cope with.  
She urged China to eliminate such limitation and th e local content requirements which have travelled 
with these type of provisions.  The EC had also noticed difficulties in the opening of the retail and 
wholesale market of fuels, where they would like to  know when would the investment limitations and 
the price control regulations would be eliminated. As to the pharmaceuticals, she noted that these 
products were burdened with very  costly procedures for registration, licensing, certification and 
reimbursement.  They did not find it acceptable that imported active ingredients faced stricter licensing requirements than the national ones.  Sh e also noted some empirical evidence suggesting 
that clinical trials lasted more than one year to the detriment of consumers.  The EC delegate urged 
China to shorten the clinical trial periods to mo re normal time spans, such as for instance three 
months, and to de-link the price of generics vis-à-vis  the original manufacture of the speciality 
product.  Another issue of concern in the chemical sector was the double tier.  The local versus central 
tier was an increasing problem in some countries which related to the relationship between the 
regional and central level an item also recognised  by the EU as a negotiable NAMA point in its 
second submission (TN/MA/W/11).  She requested China to try and streamline the situation.  As to 
cosmetics, the questions were similar to that of ch emicals in terms of trials and all the procedures 
were required every time leading to high costs.  The EC considered that this situation did not live up 
to the national treatment commitments and they re quested China to notify when would there be a 
unification of the two streams, the imported and the local products under one single procedure.  As to 
wood and wood products, the EC delegate noted that  it was a major concern for them.  She was not 
clear about the scope of the wording in the Ch inese legislation concerning "legally harvested" 
products.  She asked what limitations were imposed, what sort of certification was being considered 
and how would China proceed in this respect.  The EC requested to have re gulations that did not 
discriminate between foreign and local producers if the product came from a sustainably farmed area.  
Finally, she requested China to submit written answ ers so that all interested Members could profit 
from the clarification.  
 
7.8 The representative of Australia
 noted that they had a more modest question to present to 
China.  Their question related to the implementa tion of the tariff commitment of subheading 1006.40, 
broken rice.  China's schedule of commitments pr ovided that this subheading should have a bound 
rate of 10% from the date of accession, a concession wh ich was also listed in the CTS.  This was the 
out-of-quota binding.  The lines were also related to  a tariff rate quota commitment for which there 
was a lower in-quota bound rate.  On the other hand, China's national tariff, as notified in the IDB file 
for 2005, provided for an applied MFN tariff rate of  65%.  Australia requested China to take whatever 
steps were required to ensure that it did not impos e tariffs on imports in this item in excess of the 
bound rate of 10%.  He also requested China to co rrect the published applied rate to reflect this.  
 
7.9 The representative of China  took note of the question raised by Australia and indicated that, 
that since it was just being raised at the meeting, he would convey it to capital for study.  Coming to 
the last statement by the delegate of the EC, he believed that most of the concerns and questions 
raised could already find answers in the several doc uments which had been mentioned by China.  He 
added that the EC's submission covered several majo r categories and he really believed that some of  G/MA/M/42 
 Page 11 
 
 
  those issues, such as investment, did not belong to  the scope of responsibility of the Market Access 
Committee.  If the Market Access Committee were also to discuss investment issues and foreign 
investment regulations, he would ha ve no objections, but advised the EC to think carefully on what 
really belonged to the responsibility of this Committee.  He added that some of the questions raised by 
the EC covered services sectors.  On the EC questi ons regarding some of the policies, he noted that 
China had been trying to act upon advise of well-k nown international economists and think thanks, 
including EC experts, who had suggested that China was developing too fast and at the expense of the 
environment.  They have acted upon these suggestions  to develop new policies and guidelines to have 
a more sustainable and environmentally friendly in dustries, and reduce the number of high pollution, 
high energy consumption sectors.  However, they were now being criticized for following that advice 
because they could not satisfy the demands for ra w materials of certain foreign partners.  He 
considered that there was a conflict of interest  even within the EC, because some governmental 
departments were calling China to invest more in pollution control, reduce the speed of development, 
do more to reserve natural resources and to leave more for the future generation of children.  
However, other departments were calling China to  ensure a sufficient supply of coke and other 
products.  This presented a dilemma for China and asked those countries giving conflicting advise to 
help them out with the problem.  On the export rest rictions, he considered there were double standards 
being applied.  For instance, the EC encouraged China to impose export restrictions on textiles and shoes, but now had problems with the ones imposed on the raw materials they needed.  He considered 
this was against the interest of developing countries.   On the questions raised by the United States, he 
stressed that China attached a great deal of importa nce to the trade relations with the other Members, 
because their bilateral trade –both exports and im ports- had been growing considerably.  He 
considered it was only natural for problems to occur in this context and China was fully committed to 
implementing its commitments under the terms of its Protocol of Accession.  There should not be any 
doubt in this respect because they did not want these problems to hinder future trade expansion and 
investment flows.  He requested the United St ates to specify which accession commitment they 
considered related when raising a specific ques tion.  Although the purpose of the exercise was to 
review the manner in which China had been implementing its accession commitments on market 
access, some documents raised new problems which were not related to the Protocol of Accession.  He considered that they could continue a dialogue on the issues which had been raised by US.  On the 
request by the EC and Japan to ha ve written answers, he considered there was a procedural issue and 
stressed that China was not required to do so.  He  noted that China was the only Member required to 
undergo a transitional review each y ear and he considered this was ag ainst the basic WTO principle of 
non-discrimination.  China would continue to work and cooperate with others  in order to conduct the 
transitional review in a way that fulfilled the manda te of Paragraph 18, but they would not go beyond 
it.  He concluded by requesting Members to study the mandate carefully before preparing documents 
and comments for the next exercise. 
 
7.10 The representative of Cuba
 noted that she fully subscribed to the essential matters that had 
been raised by China.  She considered regrettable that the TRM did not apply to all WTO Members.   
In responding to the representative of the EC, an d her concern for the situation of developing 
countries, she noted that they would be most comfortable to pose the same questions to a certain specific Member in the manner that it had been put to China.  She agreed there was a double standard 
because one Member was required to do certain things that others were not.  In fact, the right to 
invoke Articles XX and XXI on the part of China was being questioned by some, whereas other 
Members who applied these measures were not called to talk about them.  She considered the exercise 
was discriminatory in its very nature, because ther e was just one Member in the position of having to 
respond, while others were over extending in th e questions asked and refraining from answering 
themselves of any infringements to certain WTO Articles being invoked.  The Cuban delegation 
encouraged delegations to keep in mind the legitimate objectives of the exercise. 
 7.11 The representative of the United States
 considered that a step backwards had been taken with 
respect to previous years.  They previously sen sed that China was taking the process seriously and G/MA/M/42 
Page 12  
 
  doing what it could within the limitations.  There were, however, two new issues of concern for this 
year.  The first one that China was not under an obl igation to deal with the process and the questions 
being raised.  He hoped this was not China's official  position.  He noted that China had many rights 
under the WTO Agreements and that those rights c ould only be carried into force if the other 
Members dealt with them in a manner that was consistent, official, efficient and useful.  If the answer 
from the other side were that they did not believe  that they had to recognize that commitment, for 
whatever reason, that would be a recipe for disast er.  A situation like that would not serve anyone's 
interest.  He was therefore disappointed by the tone adopted in this TRM.  Second, it seemed that the specific questions that were put forward by the Un ited States were caught in the cross-fire.  He hoped 
the Committee could go back to the specific issues be fore it, because he knew that it had never been 
the Chinese position to ignore commitments that it  had undertaken.  He wa s willing to acknowledge 
that this was a sensitive issue for China, but the US had put forward some specific questions in a 
reasonable and rational manner and would, th erefore, appreciate getting a response. 
 7.12 The representative of the European Communities
 shared the feelings of the delegate of the 
United States.  She was convinced of the seriousne ss of China, but found herself puzzled by the 
answers.  She insisted that she was not looking fo r a written answer, but for an answer which could be 
written and stressed the need to get a response, even if it were in other forum which China considered 
more appropriate.  She also noted that the key word to interpret the EU's attitude was "rules" and that 
China seemed not to be living up to some of the commitments signed in their accession, in particular 
those referring to the TRM.  She found unacceptabl e the words of the Chinese delegate referring to 
Europe as promoting unsustainability, because the EU was one of the largest donors for sustainable 
development schemes in China.  The TRM was not an imposition on China, but rather an advantage 
for them as a beginner.  She was concerned by the lack of answers and noted that she had not found them in any of the documents which had been cited by China.  She hoped that, by putting the questions in extenso  for this session, they would be getting the answers from the capital based 
officials in the room and begged for the unders tanding of the rest of participants.   
 7.13 The representative of China
 noted that he did not believe a step backwards had been taken.  
The Market Access Committee had conducted a trans itional review each and every year according to 
Paragraph 18 and he hoped the exerci se would continue until the day it expired.  On the request by the 
United States, he noted he would try to answer so me of the questions orally, although they might 
differ from the exact wording of the documents cited.  On the issue of distribution of books, 
newspapers and audio-visual products , he believed that China's policy was completely consistent with 
WTO rules, regulations and China's accession comm itment.  There was indeed a question of moral 
concern and public moral.  For instance, Playboy ma gazines may be allowed to be distributed in the 
United States, but they would never be allowed to be  distributed freely in China.  This was a moral 
issue because the overwhelming majority of the Ch inese people had a strong believe that this kind of 
publication was not good for the public moral and it could, therefore, not be allowed for free 
distribution.  As to the issue raised by both th e US and the EC on the expor t tax on coke, he believed 
that it could be viewed as part of the Chinese effo rts to try to reduce a heavily polluting industrial 
sector.  This would help China to undertake an i ndustrial restructuring in a direction that their 
industries would gradually shift towards more envir onmentally friendly or cleaner forms of energy.  
He noted that there was nothing wrong with that and that it conformed with the general goal of many 
important decisions of other international orga nizations.  He was puzzled because the US had 
previously imposed anti-dumping duties on Chines e coke, but was now concerned by the export 
restrictions.  So, on one hand they imposed th e anti-dumping duty on Chinese coke, which was like a 
request for China to export less or fewer cokes to the US, but on the other hand they were now 
concerned by the export restrictions.  He stated th at China stood ready to discuss this type of issues 
bilaterally and noted that bilateral discussions a nd consultations had never stopped, including for all 
the issues raised by the US  for the meeting.  The same was true  for all of the issues that had been 
raised by EC and Japan.  For example, on the Japanese concern on photographic materials, the 
technical teams of both countries had been working together and agreed on a methodology to convert  G/MA/M/42 
 Page 13 
 
 
  the duties.  But Japan still believed that the duties were higher as compared to Chinese products.  As 
far as China was concerned, they were prepared to  continue consulting with Japan to explore this 
process and find a mutually acceptable solution.  China's attitude towards TRM exercise had been 
very positive and they were committed to continue along this conviction. 
 
7.14 The Chairman  noted that the report1 of the review to the CTG, as in previous years, would be 
a brief factual report indicating that the revi ew had taken place, an acknowledgment of the 
documentation submitted pursuant to the review, and a reference to the discussions that had taken 
place, as reflected in the minutes of this meeting.    
7.15 The Committee took note
 of the statements. 
 
8. Draft Report (2006) of the Committee to the Council for Trade in Goods 
(G/MA/SPEC/34) 
8.1 The Chairman  noted that the Committ ee was required to submit annually a report on its 
activities to the CTG.  A draft report, covering th e activities of the Committee in 2006, was circulated 
in document G/MA/SPEC/34.  The report woul d be updated in light of the meeting.  
 
8.2 The Chairman  noted that following the previous year 's procedure, the updated draft report 
would be sent to the Members by fax, and if no comments were forthcoming within a certain time 
period then it would be considered adopted.  If th ere were minor changes, a revised report would be 
circulated with the changes mark ed clearly and if no comments were  submitted within a certain time 
frame, the revised report would be c onsidered adopted. If the changes we re more substantive in nature 
he would then had to consider convening an informal meeting 
  8.3 It was so agreed
.     
 
9. Election of the Vice-Chairperson 
9.1 The Chairman  noted that, as he had indicated at the last formal meeting, he intended to hold 
informal consultations on a Vice-Chair of th e Committee for 2006.  He had completed those 
consultations and, on this basis, proposed to el ect Mr. Fakhry Hazimeh (Jordan) as Vice-Chairperson 
of this Committee by acclamation.   9.2 The Committee elected
 Mr Fakhry Hazimeh as Vice-Chair. 
 
10. Other Business  
- The Access of the African Union to the IDB and CTS database  
 10.1 The Chairman
 recalled that on 12 June 2002 it had a dopted document G/MA/115 containing 
the dissemination policy of the IDB and CTS database.  Certain organizations (UNCTAD, IMF, 
World Bank, ITC) were given automatic access to these two databases.  However, the Committee 
agreed that other intergovernmental organizations  wishing to have access would need to obtain 
approval from the Committee on a case-by-case basis.   This was contained in Paragraph 5 of 
document G/MA/115.  
 
                                                     
 
1 Issued as G/MA/193. G/MA/M/42 
Page 14  
 
  10.2 In this connection, the Chairman noted th at Committee had receive that day a request from 
the African Union wishing to have access to the ID B and CTS database, in accordance with the terms 
and conditions laid out in document G/MA/115, which would be circulated shortly.  For that reason, 
the Chairman expressed his intention to convene a meeting of the Committee on 3 November 2006, 
which would be held back to back with the HS 2002 Multilateral Verification meeting, in order to 
consider access of the African Union to these two da tabases.  The Chairman proposed to take note of 
this suggestion.  10.3 It was so agreed
 
 
- Date of the next meeting  
 10.4 The Committee took note
 that the next meeting of the Committee would take in the Spring of 
the following year.  However, he noted that no definite date had been fixed yet.  
 
 
  G/MA/M/42 
 Page 15 
 
 
  ANNEX I 
Secretariat's Report on the Modalities and Operation  
of the Integrated Data Base (IDB)  
 
 IDB Submissions
 
 
 Since the circulation of the Status of S ubmissions document, G/MA/IDB/2/Rev.24, the 
Secretariat received the following submissions:  
• Chile tariff for 2004 
 
IDB Dissemination and Uses
 
 
 As of  22 September 2006, files for 111 Members2 and five acceding countries are available 
on the IDB website. 
             On the uses of IDB and CTS data I would like to mention: 
 
• IDB and CTS data were used in simulation exercises prepared for the NAMA Negotiating 
Group (JOB(06)/210); 
• IDB and CTS continue to be used for the calculation of AVEs for both, NAMA; 
• I would like to announce our intention to i ssue a new publication called World Tariff Profiles 
which is co produced with ITC and UNCTAD.  It will contain three parts: 
 
1. The first part would contain summary ta bles with some 10 indicators on bound and 
applied tariff rates.  This is very simila r to the summary tables which were published 
in past years in the World Trade Review as  Annex tables.  This year's WTR does not 
contain them any more in view of the forthcoming new tariff publication. 
2. The second part would contain a one-page summary per Member also non-Members 
with tariff and trade information:  
(a) by duty ranges  
(b) by sectors (MTN)    
(c) by major markets from an exporter perspective  
3. There will furthermore be a part where sp ecial methodological or empirical issues 
will be addressed and discussed. It is proposed to deal in this first edition with aggregation issues and AVEs calculation methods. 
 
 This publication is expected to be issued by th e end of 2006 or early 2007.  It is planned to 
make available in connection with this publication al so IDB and CTS data at the level of HS 6-digit 
subheadings on the WTO website.   
 
 
                                                     
 
2 This counts the European Communities as one for its 25 Members and Switzerland and Liechtenstein as one  
 G/MA/M/42 
Page 16  
 
  Technical Assistance
 
 
 Since the last meeting of the CMA in April the following TA activities have been undertaken: 
  Regional NAMA workshops in:  
 
• Kenya for Anglophone Africa 
• Jamaica for the Caribbean region 
• Singapore for Asia 
• Tunisia for Arab speaking countries 
• Peru for Latin America 
 National NAMA workshops in:  
• Benin 
• Bolivia 
 National IDB workshops in:  
• Jordan 
• Burkina Faso 
  The IDB and CTS was also presented in 2 regional Trade Policy courses.  
 
IDB/CTS Software Development
 
 
 A new version of the IDB/CTS Internet Analysis Facility (IAF), containing improved navigation facilities, will be available in November.  G/MA/M/42 
 Page 17 
 
 
  ANNEX II 
Secretariat's Report on the HS2002 transposition  
using the Consolidated Tariff Schedules (CTS) database  
 
Consolidated Tariff Schedules Database  
 
Brief summary of the work on the HS2002 files:   
• The HS02 files of 49 Members have been reviewed so far.   
 
• Of these, the HS02 files of 36 Members have no objections pending, but cannot be certified 
because the Member itself needs to approve its file.  The Chairman sent letters to these 
Members urging them to either approve their file  or to provide specific comments to the work 
by the Secretariat, but no response has been forthcoming. 
 
• The Secretariat is currently preparing paper c opies of the approved HS02 files of 5 Members 
and will circulate them under the G/MA/TAR/RS/ series, in accordance with Paragraph 13 of the HS2002 procedures.  Pursuant to the 1980 procedures, these documents will be certified  
by the Director General 3 months after the date  of circulation, provided that no objection is 
raised by other Members.   
 
• The HS02 Files of 71 Members remain to be reviewed.  At the next multilateral review 9 of 
these will be taken up for the first time.  In  addition, 2 resulting from revisions and some 
further 2 because their review had been postponed.   
 
• 44 draft HS02 files remain to be prepared and sent to Members. 
  An updated version of the report contained in th e JOB(06)/8/- series will be issued shortly to 
assist Members during the next multilateral review.  
__________