RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/103 
3 August 2010 
 (10-4156) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
5 JULY 2010 
 
Chairperson: H.E. Ambassador Mothae Anthony Maruping (Lesotho
) 
 
 
 The meeting of the Council for Trade in Goods was convened by airgram WTO/AIR/3581 and the proposed agenda for the meeting was c ontained in document G/C/W/633.  The meeting 
proceeded on the basis of the following agenda.  
I.
 NOTIFICATION OF REGIONAL TRADE AGREEMENTS.............................................1  
II. FREQUENCY OF NOTIFICATIONS OF STATE TRADING ENTERPRISES 
UNDER ARTICLE XVII OF GATT 1994 AND THE UNDERSTANDING ON 
THE INTERPRETATION OF ARTIC LE XVII OF GATT 1994 (G/STR/7).....................2  
III. MEASURES BY ARGENTINA AFFECTING IMPORTS OF FOOD 
PRODUCTS – STATEMENT BY THE EUROPEAN UNION............................................3  
IV. OTHER BUSINESS................................................................................................................. .6 
A. CHANGES IN ECUADOR 'S TARIFF SYSTEM UNDER DECRETO EJECUTIVO 372.............................6  
B. JAPAN - CONCERNS REGARDING THE FEED -IN TARIFF (FIT)  PROGRAMME OF THE 
PROVINCE OF ONTARIO , CANADA ...............................................................................................7  
C. DATE OF THE NEXT MEETING ......................................................................................................8  
 
I. NOTIFICATION OF REGIONAL TRADE AGREEMENTS 
1.1 The Chairman  recalled that, under the working procedures agreed by the Committee on 
Regional Trade Agreements following adoption by  the General Council of the Transparency 
Mechanism, the Council for Trade in Goods was to be  kept informed of Members' notifications on 
new regional trade agreements.  He informed the CTG that the following regional trade agreements 
had been notified to the RTA Committee: 
A. Free Trade Agreement on goods between  the Eu ropean Union (EU) and Serbia, notified in 
document WT/REG285/N/1;  and  
 B. Free Trade Agreement on goods and services betw een  Korea and India, notified in document 
WT/REG286/N/1. 
 1.2 The Council took note
 of the information presented. 
 G/C/M/103 
Page 2  
 
  II. FREQUENCY OF NOTIFICATIONS OF STATE TRADING ENTERPRISES UNDER 
ARTICLE XVII OF GATT 1994 AND THE UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XVII OF GATT 1994 (G/STR/7)  
2.1 The Chairman
 drew Members' attention to a recommendation adopted on 16 June 2010 by the 
Working Party on State Trading Enterp rises and contained in document G/STR/71 for a continuation 
of the current frequency of notifications for a furt her two year period.   The Chairperson of the 
Working Party had asked him to introduce this recommendation and provided a statement which he 
read on her behalf:   
"On 11 November 2003, the Working Party on State Trading Enterprises adopted the 
recommendation contained in document G/STR/5 regarding the frequency of 
notifications. This recommendation, appr oved by the CTG on 26 November 2003, 
modified the frequency of state trading notif ications to new and full notifications on 
state trading enterprises every two years ra ther than every three years. It also 
eliminated the requirement for updating notifi cations in the intervening years (i.e it 
eliminated the need for Members to submit a notification, in some form, every year).  
This was an effort to reduce the notification burden and therefore help Members 
improve compliance with their notification obligations in the Working Party.  The recommendation as contained in document G/STR/5 took effect from 30 June 2004 and was implemented for an initial 4 ye ar trial period, until 30 June 2008. 
Paragraph 4 of the recommendation direct ed the Working Party to review the 
situation regarding the compliance with the new notification obligation at the end of 
the four year trial phase.  The objective of this review was to determine whether to 
extend the application of the recommendation, either as drafted in document G/STR/5 or in a modified form, for a further period.  At the conclusion of the four year trial 
phase, the Working Party held informal consu ltations in May 2008 in order to explore 
Members' views in this respect.  Members extended the recommendation for a further 
two year period, to 30 June 2010.  That recommendation is contained in document 
G/STR/6 and applies to the notification period due this year. 
On 12 May 2010 the Chair of the Working Party circulated, by fax, a draft 
recommendation following informal open-ende d consultations of the Working Party 
and bilateral consultations with some Members.  This recommendation was to 
continue the obligation of the biannual notifi cation, rather than revert to the more 
burdensome annual notification, for a fu rther two year period.  The final 
recommendation was circulated to delegations on Tuesday 1 June 2010; and, at a formal meeting on 16 June 2010, the Working Party on State Trading Enterprises adopted the recommendation.  
The expiry of the trial period is 30 June 2012 and given that the application of this 
recommendation is for two years, the Workin g Party shall review, before that date, 
the situation with regard to the frequency of  notifications.  This is with a view to 
determining whether to extend the applica tion of this recommendation, either as 
presently drafted or in a modified form, for a further period or for an indefinite period.  Thereby, the Working Party recommends to the Council that:  
(a) This extension shall enter into force as of the year 2010, with a new and full 
notification being due by 30 June 2012;  and 
                                                     
 
1 Circulated on 18 June 2010  G/C/M/103 
 Page 3 
 
 
  (b) The guidelines for completing the Questionnaire on State Trading Enterprises 
are those contained in G/STR/3/Rev.1". 
2.2. In the absence of comments, the Chairman  proposed that the Council take note of the 
Working Party Chairperson's statement and approv e the recommendation of the Working Party on the 
frequency of notifications c ontained in document G/STR/7. 
 
2.3 The Council so agreed . 
 
III. MEASURES BY ARGENTINA AFFECTING IMPORTS OF FOOD PRODUCTS – 
STATEMENT BY THE EUROPEAN UNION 
3.1 The Chairman  informed the Council that in a communication dated 22 June 2010, the 
delegation of the European Union (EU) had requested the Secretariat to include in the agenda of this 
meeting the issue of measures adopted by Argentina affecting import of food products. 
 3.2 The representative of the European Union
 stated that since May 2010, Argentina had been 
implementing, based on Internal Note 232 from the Stat e Secretary for Internal Trade to the Director 
of the National Food Institute (Instituto Nacional de  Alimentos – INAL),  a policy aimed at reducing 
imports and which had the effect of restricting fo od imports from third countries, including the EU.  
Since then INAL reportedly started to delay the is suance of  health certificates for foods imports.  
These certificates, necessary for releasing products  on the Argentine market, used to be a mere 
formality but now, according to Inte rnal Note 232, prior approval by the Secretary of State for 
International Trade was now required.  As a result of this, a number of goods from the EU, already in 
Argentina, had been affected by long delays in the issuance of certificates, some of them for many 
months.  The measure was not only a WTO inconsis tent quantitative import restriction but also had a 
chilling effect since it blocked food imports;  i.e., many orders to European Union exporters had been 
cancelled, even from longstanding customers in Ar gentina.  A letter dated 31 May 2010 from the 
Argentine Chamber of Importers (CIRA) to the Secr etary of State for Internal Trade in which the 
CIRA committed itself to import only foreign goods  in case there was no Argentine substitute, was a 
clear example of the trade chilling effect.  The pr eliminary legal assessment of the measure raised 
serious questions with regard to its  WTO consistency:  Argentina's de facto decision to fail or to delay 
to grant the INAL certificates allo wing the release on the market of the food products, amounted to a 
quantitative import restriction and a discretionary import licensing practice in breach of Article 4.2 of 
the Agreement on Agriculture  and Articles X and XI of the GATT 1994. Thus, the EU urged 
Argentina to halt the execution of the measure and re peal Internal Note 232.  Moreover, this measure 
came on top of the non-automatic import licensing system which for some time now Argentina had 
put in place, an issue on which the EU had also e xpressed its concerns to Argentina some months ago 
but unfortunately, the situation had not improved.  His authorities considered that Argentina had not 
responded satisfactorily to the questions on its im port licensing system;  therefore, the EU also 
remained seriously concerned about this measure.  Argentina also appeared  to be acting in clear 
contradiction with its political commitment in the G-20 framework since this measure was clearly 
protectionist.  He requested Argentina to inform th e WTO membership of the situation with regard to 
Internal Note 232 and to rapidly re-establish WTO compatibility of its food import regime.  
3.3 In response, the representative of Argentina
 expressed that his delegation was open to 
constructively listening to the concerns of its trade pa rtners.  In the view of his delegation, the EU had 
basically raised three issues:  it had referred to an internal note from the Secret ary of State for Internal 
Trade;  then it had referred to the Argentine licen sing system and thirdly, the EU had referred to the 
impact that Internal Note 232 had on Argentina's ob ligations vis-à-vis the GATT 1994.  He stated that 
statistics spoke for themselves and refe rred to data which indicated that during the first five months of 
2010, the total volume and sales of food products from the EU in the Argentinean market had 
increased by 60%.  Also, during the first quarter  of 2010, Argentina had imported about US$497 G/C/M/103 
Page 4  
 
  million worth of food products, wh ich represented 3.3% of the total imports.  Of these, US$51 million 
corresponded to imports from the EU;  thus, food pr oducts imported from the EU represented 1.8% of 
Argentinean imports.  The increase of imports of  food stuffs had taken place under every tariff 
heading: juices, chocolate, pasta, rice and canned products.  Foods accounting for the highest value of 
imports from the EU increased, namely in the case of  cocoa 37%; prepared or processed food 15%;  
and, in the case of beverages 0.9%.  Looking at all of the trade the EU had had with Argentina during 
the first five months of 2010, it could be noticed that Argentine imports from Europe had increased by 
almost 60% when compared to the value of goods im ported in 2009.  Therefore, imports of foodstuffs 
had increased this year despite the alleged barriers pointed out by the EU.  He also indicated that 
through Internal Note 232, the Secretary of State had requested INAL to put into place the necessary 
procedures describing each specific operation carried out  that enabled foreign products to enter their 
domestic market.  The note only requested information on goods arriving from other countries to ensure correct application of policies within the co mpetence of the Secretary of Internal Trade and did 
not contain any restriction to trade.  Thus, it could not  be inconsistent with Artic le XI of GATT/94.  In 
the view of Argentina, the EU had not been able to prove any damage to c onsignments of foodstuffs; 
there had not been massive seizures of any cons ignments, but local authorities had reported a few 
isolated and minor cases which had already been resolv ed, such as the case of a cheese container, in 
April 2010, worth US$57.000; the case of a container with balsamic vinegar worth US$26.000;  and a 
case on pasta imports worth US$14.000.  The issue of alleged delays concerni ng EU goods into the 
Argentinean market had recently b een discussed between EU officials and the Argentinean Ministries 
of Foreign Affairs and Agriculture;  it was therefor e disproportionate to raise the same issue in the 
CTG.  This reflected a political intention rather than a concrete and significant commercial problem.  
The  financial economic crisis that started in the No rth continued to have negative effects even on the 
EU;  the Argentinean authorities regretted this  situation and expressed the hope that northern 
economies would thrive and grow;  however, their domestic problems could not be solved by calling 
on vague issues in their trade relations with their partners. 
 
3.4 The representative of Canada
 thanked the EU delegation for its statement and Argentina for 
its explanations. His authorities had been closel y monitoring the implementation of Argentina's 
Internal Note number 232 and the significant barri ers it was presenting to import specific processed 
agricultural products.  Canada was concerned that these measures might be in direct violation of 
Argentina's WTO commitments.  The measures al so seemed to contradict the G-20 Toronto 
Declaration in which members of the G-20 had agreed to renew their commitment to refrain from 
raising barriers;  imposing new barriers to investme nt or trade in goods and services;  or implementing 
WTO inconsistent measures to stimulate exports.  Canada urged Argentina to notify its newly 
introduced trade measures to the WTO so that all Members could appraise their full extent in a 
transparent manner. 
 
3.5 The representative of Colombia   stated that her authorities had the concern that Internal Note 
232 was not specific as to the scope and assessment re quired to articulate INAL's policies with other 
areas of the government.  This note could open th e door to protectionist measures for the domestic 
market of foodstuff.  It has been said that the activ ity of the Secretary for Internal Trade would have 
the effect of improving the control of the secur ity policies while deregulating all sectors of the 
economy.  Her authorities were worried that in practi ce this would be translated into greater demands 
and requirements in technical regulations, sanitary  and phyto-sanitary measures, as well as in other 
fields in the customs area.  Her delegation, after having listened to the statement made by Argentina, 
hoped that what had been said would be adjusted to th e real application of Internal Note 232 since her 
authorities shared the concerns expressed by the EU. 
 
3.6 The representative of Australia  echoed the concerns expressed by the previous speakers;  
from what had been said, her delegation believe d there might be, on a prima facie basis, an 
inconsistency of the Argentine measures with its WTO commitments.  Thus, she urged Argentina to 
ensure compliance with its WTO obligations.  G/C/M/103 
 Page 5 
 
 
   
3.7 The representative of Japan  thanked Argentina for its explanations concerning Internal Note 
232 and echoed the previous speakers.  Japan was not  a main food exporting country to Argentina; 
nevertheless, his authorities had received reports that these measures had caused negative impact on some Japanese companies established in Argentina, as well as in other countries, with regard to the 
importation of food products to Argentina.  Japan also  had systemic concerns with regard to these  
measures and their consistency with the WTO provisi ons;  it also wondered whether these were in line 
with the G-20 Declaration.  He requested Ar gentina to notify its measures for appropriate 
consideration in the WTO.  
3.8 The representative of Switzerland
 thanked Argentina for its explanations on the recently 
introduced measures;  her delegation shared the c oncerns expressed by the previous speakers.    
Argentina's notification to the Committee on Impor t Licensing Procedures (CIL) of September 2008 
set out the rules of the Argentine import licensi ng system;  however, the Swiss industry had recently 
reported changes to this system, as mentioned by the EU and others.  It also seemed that currently 
Argentina was only giving licences to imports of products of which the im ported amount was smaller 
than the exported amount, or to im ports of goods which had no equivale nt in Argentina.  Not only had 
Argentina not notified these changes to the CIL but it was also applying the rules in a discretionary 
way, contrary to the provisions in Article 1 of  the Agreement on Import Licensing Procedures which 
state that the rules for import licensing procedures mi ght be neutral in application and administered in 
a fair and equitable manner.  Switzerland was al so of the view that these changes resulted in 
quantitative restrictions contrary to Article XI of GATT 1994.  According to an Article in "La 
Nacion", an Argentinean newspaper,  Switzerland had understood that retailers were given some time 
to remove foreign products from their shelves and to replace them with domestic ones where there 
existed an Argentinean equivalent of the same produ ct.  This clearly violated the national treatment 
principle as contained in Article III of GATT 19 94, as well as the obligation not to accord a less 
favourable treatment to imported products than that  accorded to like-products of national origin. She 
urged Argentina to re-establish the ex-ante situation concerning the import and sale of non-
Argentinean products and to reconcile its recently introduced measures with the G-20 Declaration and 
the commitment in it not to raise trade barriers as an offensive position in  the Doha agricultural 
negotiations on Market Access.  
3.9 The representative of Norway
 echoed the concerns expressed by previous speakers and 
requested Argentina to explain how these measures were in compliance with the WTO rules on import 
licensing and import restrictions.  3.10 The representative of the United States
 also echoed the concerns expressed by previous 
delegations on Argentina's new trade restrictive measures affecting food products.  He requested 
Argentina to provide the Council with  details about the situation, in cluding how and when it would be 
remedied.  3.11 The representative of the European Union
 thanked Argentina for its statement and the 
clarification it had provided.  However, he clarifie d that the reasons for bri nging up the issue to the 
CTG were concrete complains raised by European trad ers from at least ten of the EU member States.  
These complains referred to the almost impossible impor t of food products into Argentina due to very 
long delays in obtaining the approval from the nationa l authorities.  Thus, the issue was not only in 
terms of volume of trade but also with regard to future trade since there were a number of contracts 
being cancelled or that, in the best of cases, might  be suspended from well established service supplier 
and importer relations between the EU and Argentina and whose amounts were substantial.  The most 
recent figures in terms of imports might show a di fferent picture from the one to which Argentina had 
referred to during its explanation.  Although Argentina had explained th at the intentions of Internal 
Note 232 were not to restrict imports, its effect wa s that imports were restricted, as reported by EU 
companies. G/C/M/103 
Page 6  
 
   
3.12 The representative of Argentina
,  when responding to the previ ous speakers, stated that his 
delegation was displeased with the comments made by some Members regarding the Argentine import 
regime.  He added that Japan itself was not the best  example of WTO consistency and should not give 
lessons to his country, particularly when his count ry had been trying to export wheat to Japan for 
almost 30 years;  however this had been impossible due to alleged technical reasons and to the fact 
that Japanese authorities had always managed to lose the samples and when af ter years these had been 
retrieved, these had also already been too old to be tested.  He invited Switzer land to first look at its 
own licensing system, especially the issue of Swiss li cences in the agricultural sector and said that he 
preferred not to respond to Norway.  He stated th at his country had been complying with its WTO 
notification obligations, that nothing compelled a Memb er to notify all its internal legislation, that 
nobody had clearly demonstrated that the measure would have a trade restricting effect, nor was it stated in the note.  If Members were to follow news papers, his authorities could also refer to what the 
Argentine newspapers said about th e way in which the EU managed its domestic rules.  If there were 
issues related to ILPs then these should be raised in the Committee on ILPs.   
 
3.13 The Chairman
 invited delegations to opt for a cordia l dialogue and language of the debates in 
the Council and to take note of the statements made.   3.14 The Council took note
 of the statements made. 
 IV. OTHER BUSINESS 
A. C
HANGES IN ECUADOR 'S TARIFF SYSTEM UNDER DECRETO EJECUTIVO 372 
4.1 The representative of the European Union  stated that Ecuador's Executive Decree 372, 
adopted on 28th May 2010,  seemed to have changed the tariff structure for a number of products from 
an ad valorem  system to a system based on both, specific duties and ad valorem  duties.  This affected 
a large number of products mostly clothing, linen , textiles and footwear and noted that when a 
Member introduced changes to its tariff binding, it had to be assessed whether or not these changes 
affected other Members' rights.  Therefore, he invited Ecuador to notify Executive Decree 372 for a 
proper assessment to be conducted.  4.2 The representative of Ecuador
 stated that his authorities had complied and would continue to 
comply with all its notification commitments and tariff bindings adopted when joining the WTO.  
Nothing prevented a Member from carrying out its tariffs policy as it deemed appropriate, provided 
that it abided by its tariff binding, as was the case; th erefore, this issue should not be of concern to any 
Members.  Surprisingly it was the EU who had bro ught up this issue, particularly when it was well 
known that the EU had systematically refused to co mply with 100% of its tariff simplification system 
in the agricultural negotiations under the Doha R ound and who had claimed that it was complex to 
explain the matrixes and specificities of the ad valorem  equivalents in such an important sector of the 
world trade.  All the information requested by th e EU was available on the website of the Ecuadorian 
Foreign Trade and Investment authorities.  4.3 The representative of the United States
 echoed the concerns raised by the EU on the changes 
introduced in Ecuador's tariff schedule.  These reflected a mixed tariff of 10% ad valorem  plus US$6 
over 28 tariff lines corresponding to footwear and were  in effect as of 1 June 2010.  His delegation 
had also understood that the Ecua dorian Government had announced pl ans to establish a mixed tariff 
on imported textiles and apparel of US$5.50 per kilo plus 10% ad valorem  tariff to replace the current 
30% ad valorem  duty.  He requested Ecuador to provide additional information on these mixed tariffs 
and on why it had been modifying its duties on these  items.  Information on the specific duration of 
these changes and on their implementation would al so be appreciated, as well as on the methodology 
and calculations it had used to determine the ad valorem  equivalent.  While th e mixed tariffs were  G/C/M/103 
 Page 7 
 
 
  new, his delegation noted that these applied to so me of the same products on which Ecuador since 
January 2009, had maintained import surcharges, namely footwear, textiles and apparel.  His 
delegation during the discussions in the Committee on  Balance-of-Payments had expressed that it did 
not find these surcharges to be justified and had rep eatedly requested Ecuador to immediately remove 
the measures.  There were numerous press articles that indicated how these restrictions benefited local 
production and highlighted the increases in productio n experienced during the last year as well as the 
support for extending safeguards against imports.  In light of the above, his delegation sought 
additional information on the issues he had referre d to: background on why these changes had been 
made in its tariff structure, the methodology and calculations for the ad valorem  equivalent and on the 
expected duration and implementation of the measures. 
 
4.4. The representative of Japan  stated that his delegation also had concerns that the tariff  changes 
from ad valorem  to mixed tariff might breach the WTO bindi ng rates and asked Ecuador to provide 
further explanation on the methodolog y of calculation and other matters. 
 
4.5 The representative of Canada  thanked Ecuador for the transparency it had shown in the 
Committee on Balance-of-Payments, particularly its commitment to notify the WTO each time a 
change had been introduced to th e tariff surcharges.  He sought further information from Ecuador on 
the recent changes it had introduced to its tari ff schedule through Executive Decree No 3372.   
 4.6 The representative of China
 stated that being the largest exporter of clothing and footwear in 
the world, China would also like to encourage Ecua dor to notify its adjustment and changes to its 
tariff system.  4.7 The Council took note
 of the statements made.  
 
B. JAPAN - CONCERNS REGARDING THE FEED -IN TARIFF (FIT)  PROGRAMME OF THE PROVINCE OF 
ONTARIO , CANADA  
4.8 The representative of Japan  recalled that at the last meeting in May 2010, his delegation had 
raised the issue concerning the FIT programme of th e Province of Ontario, Canada.  Japan appreciated 
the prompt written replies received from Canada in the context of this Council and in the Committee 
on Subsidies and Countervailing Measures.2  However, Japan's concerns with regard to the 
consistency of this programme with the WTO provisions, including Articles III and IV of GATT 
1994, had not been resolved;  thus, his delegation would not only like to once again register its concerns but would also continue to follow-up on this issue.  4.9 The representative of Canada
 reiterated the support of its g overnment to the efforts of the 
government of Ontario to encourage the adoption of  renewable energy sources through the enactment 
of the Green Energy Act, 2009.  Canada continue d to work with Ontario to address the concerns 
expressed by its trading partners and was confiden t that Ontario's Green Energy Act and the FIT 
Programme were consistent with Canada's obligations in the WTO and in the Agreements on Tariffs 
and Trade and on Trade Related Investment Measur es.  His delegation had provided answers to a 
number of factual questions in the context of the Committee on Subsidies and Countervailing 
Measures and would be pleased to provide answers to  any additional factual questions on this issue. 
 4.10 The representative of the European Union
 expressed that his delegation continued to be 
interested in this issue.  
4.11 The council took note
 of the statements made. 
 
                                                      
2 See documents G/C/W/635 and G/SCM/Q2/CAN/44. G/C/M/103 
Page 8  
 
  C. D
ATE OF THE NEXT MEETING  
4.12 The Chairman  informed the Council that the next m eeting was scheduled to take place on  
Thursday, 25 November 2010.  The agenda  would close on Monday, 15 November 2010.3 
 4.13 The meeting was adjourned
. 
 
__________  
                                                      
3 The date of the next meeting of the Council had been moved to Monday, 22 November 2010.  The 
Agenda will close on Friday, 12 November 2010.