RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/80 
27 June 2005 
 
 (05-2737) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
10 MAY and 15 JUNE 2005 
 
Chairperson: H.E. Ambassador Himanen (Finland
) 
 
10 May 2005  
 1. The meeting of the Council for Trade in goods was convened by airgram WTO/AIR/2562 and 
the proposed agenda for the meeting was contained in document G/C/W/517.  The meeting was suspended until further notice.  The Chairman stat ed that he would consult Members on an urgent 
basis in order to find a solution which would enable  the Council to adopt its agenda and resume its 
work.  2. The meeting was suspended
. 
  15 June 2005
 
 
 The meeting of the Council for Trade in goods was convened by airgram WTO/AIR/2588 and 
the proposed agenda for the meeting was containe d in document G/C/W/521.  The meeting proceeded 
on the basis of the proposed agenda.  
I.
 REVIEW OF THE OPERATION OF THE AGREEMENT ON TRADE-
RELATED INVESTMENT MEASURES (TRIMS) UNDER ARTICLE 9 ........................2  
II. REGIONAL TRADE AGREEMENTS ..................................................................................2  
A. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND BULGARIA ..............................................2  
B. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND BOSNIA AND HERZEGOVINA ..................2  
C. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND THE FORMER YUGOSLAV 
REPUBLIC OF MACEDONIA ..........................................................................................................2  
D. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND CROATIA ................................................2  
E. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND SERBIA AND MONTENEGRO ...................2  
F. FREE TRADE AGREEMENT BETWEEN ROMANIA AND BOSNIA AND HERZEGOVINA ...................3  
G. FREE TRADE AGREEMENT BETWEEN ROMANIA AND SERBIA AND MONTENEGRO ....................3  
H. FREE TRADE AGREEMENT BETWEEN ROMANIA AND THE FORMER YUGOSLAV 
REPUBLIC OF MACEDONIA ..........................................................................................................3  
I. FREE TRADE AGREEMENT BETWEEN BULGARIA AND BOSNIA AND HERZEGOVINA ..................3  
J. FREE TRADE AGREEMENT BETWEEN BULGARIA AND SERBIA AND  MONTENE GRO.................3  
K. FREE TRADE AGREEMENT BETWEEN PANAMA AND EL SALVADOR ...........................................3  G/C/M/80 
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 L.
 FREE TRADE AGREEMENT BETWEEN CROATIA AND THE FORMER YUGOSLAV 
REPUBLIC OF MACEDONIA ..........................................................................................................3  
M. ECONOMIC PARTNERSHIP AGREEMENT BETWEEN JAPAN AND MEXICO ....................................3  
N. FREE TRADE AGREEMENT BETWEEN ROMANIA AND ISRAEL .....................................................3  
III. MARKET ACCESS MATTERS .............................................................................................3  
A. COMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE ............................3  
B. INTRODUCTION OF HARMONIZED SYSTEM 1996  CHANGES INTO WTO  SCHEDULES OF 
TARIFF CONCESSIONS – REQUESTS FOR A WAIVER FROM ARGENTINA , MALAYSIA , 
AND PANAMA ..............................................................................................................................4  
IV. UNITED STATES – REQUEST FOR WAIVER FOR THE AFRICAN 
GROWTH AND OPPORTUNITY ACT, THE CARIBBEAN BASIN 
ECONOMIC RECOVERY ACT, AS AMENDED AND THE ANDEAN TRADE PROMOTION ACT, AS AMENDED.....................................................................................4
 
V. ISSUES RELATED TO TRADE IN TEXTILES – SUBMISSION OF TUNISIA (JOB(05)/31) ................................................................................................................... ...........5
 
VI. ELECTION OF CHAIRPERSON FOR THE COMMITTEE ON TRADE-
RELATED INVESTMENT MEASURES ............................................................................10  
VII. OTHER BUSINESS................................................................................................................1 0 
A. DATE OF THE NEXT MEETING ....................................................................................................10  
 
I. REVIEW OF THE OPERATION OF THE AGREEMENT ON TRADE-RELATED 
INVESTMENT MEASURES (TRIMS) UNDER ARTICLE 9 
1.1 The Chairman  recalled that at the July meeting the Council had received a joint proposal by 
Brazil and India concerning a study on the impact of  TRIMs and of their elimination.  The terms of 
reference for this study were contained in documen t Job(04)/93.  His predecessor, Ambassador Choi, 
had briefed him on the results of the informal consu ltations he had carried out on the proposed study 
and on the issue of the Article 9 review in ge neral.  Although Members had considered several 
options to move forward on this issue, they had b een unable to reach a consensus on the  desirability 
of conducting the study.  Ambassador Choi had r ecommended that he keep this issue under review, 
and as far as he understood, there had been no new de velopments in Members' positions since the last 
CTG meeting.   He, therefore, was in Members' ha nds as to how to address this matter in the future.  
In the absence of statements, the Ch airman proposed to revert to this item at the next CTG meeting. 
1.2 It was so agreed . 
 
II. REGIONAL TRADE AGREEMENTS 
A. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND BULGARIA  
B. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND BOSNIA AND HERZEGOVINA  
C. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND THE FORMER YUGOSLAV REPUBLIC OF 
MACEDONIA  
D. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND CROATIA  
E. FREE TRADE AGREEMENT BETWEEN MOLDOVA AND SERBIA AND MONTENEGRO   G/C/M/80 
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 F. FREE TRADE AGREEMENT BETWEEN ROMANIA AND BOSNIA AND HERZEGOVINA  
G. FREE TRADE AGREEMENT BETWEEN ROMANIA AND SERBIA AND MONTENEGRO  
H. FREE TRADE AGREEMENT BETWEEN ROMANIA AND THE FORMER YUGOSLAV REPUBLIC OF 
MACEDONIA  
I. FREE TRADE AGREEMENT BETWEEN BULGARIA AND BOSNIA AND HERZEGOVINA  
J. FREE TRADE AGREEMENT BETWEEN BULGARIA AND SERBIA AND  MONTENE GRO 
K. FREE TRADE AGREEMENT BETWEEN PANAMA AND EL SALVADOR  
L. FREE TRADE AGREEMENT BETWEEN CROATIA AND THE FORMER YUGOSLAV REPUBLIC OF 
MACEDONIA  
M. ECONOMIC PARTNERSHIP AGREEMENT BETWEEN JAPAN AND MEXICO  
N. FREE TRADE AGREEMENT BETWEEN ROMANIA AND ISRAEL  
2.1 The Chairman  drew Members' attention to the fourteen Agreement listed under this 
item that had been notified under GATT Article XXIV.1  The texts of the Agreement and their 
notifications had been circulat ed in the documents listed.  In the absence of comments, he 
proposed that the Committee on Regional Trade Agreem ents carry out the examination of the above-
mentioned Agreements in accordance w ith the following terms of reference:  "to examine, in light of 
the relevant provisions of the GATT 1994, the trade agreements just referred to and to submit a report 
to the Council for Trade in Goods.  It is understood that the understanding read out by the Chairman 
of the Council for Trade in Goods under item 7 of th e agenda of the meeting of the Council for Trade 
in Goods on 20 February 1995, as contai ned in document WT/REG3/1, will apply mutatis mutandis  to 
the examination of the agreements.  It is also  understood that, during the examination, due account 
will be taken of the intrinsic differences between customs unions and free trade areas". 
2.2 The Council so agreed . 
  
III.  MARKET ACCESS MATTERS 
A. COMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE  
3.1 The Chairman  noted that the Market Access Committee had forwarded to the Council three 
requests for waivers, accompanied by the periodic re port of the Committee.  As the report was factual 
in nature and reflected the work undertaken in that b ody, he suggested that the Council take note of it.  
 
3.2 The Council so agreed . 
 
                                                      
1 The texts of the Agreements and their notifications had been circul ated, respectively, in documents 
WT/REG186/N/1, WT/REG186/1; WT/REG187/N/1, WT/REG187/1; WT/REG188/N/1, WT/REG188/1; 
WT/REG189/N/1, WT/REG189/1;  WT/REG190/N/1, WT/REG190/1; WT/REG191/N/1, WT/REG191/1;  
WT/REG192/N/1, WT/REG192/1;  WT/REG193/N/1, WT/REG193/1;  WT/REG194/N/1, WT/REG194/1; WT/REG195/N/1, WT/REG195/1;  WT/REG196/N/1, WT/REG196/1;  WT/REG197/N/1, WT/REG197/1,   
WT/REG197/2; WT/REG198/N/1, WT/REG198/1;  and WT/REG199/N/1, WT/REG199/1. 
  
 G/C/M/80 
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 B. I
NTRODUCTION OF HARMONIZED SYSTEM 1996  CHANGES INTO WTO  SCHEDULES OF TARIFF 
CONCESSIONS – REQUESTS FOR A WAIVER FROM ARGENTINA , MALAYSIA , AND PANAMA  
3.3 The Chairman  stated that this item concerned three re quests to waivers in connection with the 
introduction of HS 96 changes into WTO schedules.  He recalled that the Market Access Committee 
agreed some time ago that extensions of waivers on a collective basis would no longer be granted.  
However, this would not preclude Members from requesti ng waiver extensions on an individual basis.  
Three Members had forwarded to the Secretaria t requests for waivers in connection with the 
introduction of HS96 changes to their schedules.  Pu rsuant to Article IX of the WTO Agreement, 
these requests for waivers were before the Council for Trade in Goods for its consideration.  In each 
case, a draft decision had been circulated in the G/C/W/ documents to assist the Council in its 
consideration.  Since the Committee on Market Access had already taken note of the factual 
information provided by these three Members, he proposed that the Council take the three requests 
together, and unless there were any comments, forwar d the draft decisions to the General Council for 
adoption.  
3.4 The Council so agreed
. 
 
IV. UNITED STATES – REQUEST FOR WAIVER FOR THE AFRICAN GROWTH AND 
OPPORTUNITY ACT, THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT, 
AS AMENDED AND THE ANDEAN TRADE PROMOTION ACT, AS AMENDED 
 4.1 The Chairman
 recalled that the United States had circulated, in advance of the CTG meeting of 
11 March 2005, three requests for waivers in documents G/C/W/508, G/C/W/509, and G/C/W/510.  The 
first document consisted of a request for a waiver  for the Caribbean Basin Economic Recovery Act 
(CBERA), the second document consisted of a re quest for a waiver for the African Growth and 
Opportunity Act (AGOA), and the third document cons isted of a request for a waiver for the Andean 
Trade Promotion Act (ATPA).  The United States had also circulated information supplemental to each 
of these requests in G/C/W/508/Add.1, G/C/ W/509/Add.1 and G/C/W/510/Add.1.  At the C ouncil's 
meeting of 11 March 2005, the United States pres ented these waiver requests as well as provided an 
in depth description of these programmes.  Severa l Members took the floor to voice their support for 
the programmes and thus for the waiver requests, a nd a few took the floor to note potential concerns 
and to indicate their interest in participati ng in informal consultations on this matter. 
 
4.2 Following the formal meeting, he convened an informal consultation on 5 April 2005 among the Members which had spoken on this issue at the fo rmal meeting.  Questions were posed by three 
delegations, China, India and Pakistan.  These were circulated in G/C/W/516.  The United States responses to these questions were circulated in G/ C/W/518.  An open-ended consultation on this matter 
was held on 27 May to continue the question and answ er exchange.  At this consultation, follow-up 
questions were raised by China and Pakistan.  These were circulated in documents G/C/W/519 and 
G/C/W/520 respectively.  4.3 The United States
 stated that its responses to the second round of questions would be 
forthcoming.  Once these were circulated, his delegation looked forward to meeting again with 
concerned Members delegations to cont inue the discussion on these requests. 
 4.4 The representative of Bolivia
 stressed the significance of the ATPA programme for the 
Bolivian economy, and in particular for Bolivia's responsibility to combat the illicit trafficking of 
drugs.  The programme fostered the production of al ternative goods by providing a destination market 
for them.  She also stressed that this programme complied with specific, established criteria, had a 
periodic evaluation, and was limited in its duration.   G/C/M/80 
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 4.5 The representative of China  assured Members that her delegation appreciated the efforts made 
by developed Members to provide improved mark et access conditions for developing Members, 
especially the least-developed among them.  Her de legation was simply seeking clarification from the 
US in order to better understand the details of the pr eference programmes so as to  ensure real benefits 
for the beneficiary Members as well as the integrity  of the multilateral trading system.  As the US 
legislation relating to the pending requests were  complex and technical, she hoped that Members 
would bear with her delegation as it looked forwar d to the replies to its follow-up questions. 
 4.6 The representative of Colombia
 supported Bolivia's statement and noted her Ambassador's 
appreciation for the consultations held on the matter. 
 
4.7 The representative of Costa Rica  hoped that the Council would find an expeditious solution 
for these waiver requests once questions  and comments had been resolved. 
 4.8 The Chairman
 noted that the Council had now been considering these waiver requests for 
over 90 days and, in accordance with Article IX.3 (b) of the WTO Agreement, it was required to 
submit a report to the Ministerial Conference or, in this case, the General Council.  The next meeting 
of the General Council was not scheduled until 27 and 29 July 2005, which was after the CTG's next 
meeting on 15 July 2005.  This left one more me eting in which to consider these requests before 
making the report.  He therefore proposed that the CTG re vert to this issue at its next meeting in July.  
If the CTG did not conclude its consideration of these  requests at that meeting, he would provide, on 
behalf of the CTG, a brief and factual report to the General Counc il indicating that the CTG would 
need further time to consider the requests.  If necessary, he might also convene another informal 
consultation on the matter before the July meeting of the CTG.   4.9 The Council so agreed
. 
 
V. ISSUES RELATED TO TRADE IN TEXTILES – SUBMISSION OF TUNISIA 
(JOB(05)/31) 
 
5.1 The Chairman  recalled that since the last formal meeting of the Council on 11 March, as 
mandated by the Council, he held an open-ended in formal consultation on the follow-up to the work of 
the CTG on textile related issues.  This consultation took place on 19 Ap ril 2005.  At that meeting, in 
light of the divergence of views and no agreement at the last formal meeting of the CTG to revert to this 
item at the next meeting, he said that the item would not be inscribed on the agenda of the next CTG.  It 
would be for Members wishing to do so to make a formal request in accordance with CTG rules of 
procedure.  In a letter to the Se cretariat, dated 29 April 2005, Turkey and Jordan formally requested the 
addition of the item "Post-ATC Adjustment Related Issues" on the agenda of the 10 May 2005 CTG 
meeting.  That meeting was suspended.  Follo wing open-ended consulta tions on 31 May, Members 
supported resuming the 10 May meeting with the ne w phrasing of the agenda item which now read, 
"Issues Related to Trade in Textiles, Submission of  Tunisia in Job(05)/31".  Tunisia had submitted a 
communication regarding the post-AT C period at the 11 March 2005 formal meeting of the CTG which 
had not been discussed due to time and translation constraints.  This document, with the symbol 
Job(05)/31, was circulated at the last meeting in French only.  It was now available in the three 
working languages.  He added that Tunisia had intr oduced its communication at the March meeting.  
 5.2 The representative of Tunisia
 stated that his delegation's objective in presenting its paper was  
to spur an in-depth examination by the CTG to id entify the necessary adjustment measures to counter 
the negative impact of the expiry of the ATC on vulnerable developing and l east developed countries 
that were dependent on the textile and clothing sector.  The issues relating to post-ATC adjustment 
and adaptation to the new trade situation in the te xtiles and clothing area should be dealt with in a 
constructive and positive spirit.  It should be based  on dialogue, multilateral co-operation and on joint 
action because the contribution of this sector to worl d trade, employment, stability, and prosperity in G/C/M/80 
Page 6  
 
 the world had a strategic dimension.  All Members had a responsibility to address the situation.  No 
governments could remain insensitive to the urgent natu re of this issue, to the major challenges posed 
by the new economic situation, and to the signifi cant social, economic and developmental impacts on 
a number of a developing and least developed countries.   The issue of trade in textiles and clothing 
was not only an international trade issue, but al so a development issue.  Indeed, as the leading 
industrial activity and major employer of women, inter alia , this sector played an essential role in the 
economic and social development of several devel oping countries and LDCs.  Joint and coordinated 
action at the multilateral level, particularly in this forum, to find ways of adjusting to costs in the 
wake of the expiry of the ATC would unquestiona bly help to strengthen the credibility of the 
multilateral trading system, which was supposed to be equitable and at the service of development and 
poverty reduction.   
 5.3 It was in this spirit that Tunisia, in its communication, called upon all parties involved to consider measures to deal with the deterioration of the external competitiveness and profitability of 
the textile and clothing sector in the face of a pr ofound change in the industry and in anticipation of 
the fall in international prices of te xtiles and clothing in the export ma rkets of the developing and least 
developed countries.  Tunisia also urged those involved to:  i) find ways to stabilize market prices;  and ii) establish correlations between the fluctuations  in prices of textiles and clothing products and 
the adverse effect on countries which come up agains t this problem.  His delegation's proposals for 
action revolved around certain precise and specific provisions of the GATT 1994 (Part IV – Trade and 
Development:  Articles XXXVI, XXXVII and XXXVIII) that aimed to ensure that the developing 
countries and LDCs secured a share in the growth of world trade commensurate with their economic 
development needs.  In particular, it proposed devising measures designed to attain stable and 
equitable prices, thus permitting the expansion of  the trade of these countries and a dynamic and 
steady growth of their real export earnings.  
5.4 Studies conducted to estimate the impact of the dismantling of the Multi-Fibre Agreement 
(MFA) showed that several developing countries a nd LDCs would find themselves in a situation in 
which the textiles and clothing sector showed distur bing signs of weakness as a result of the falling 
prices in the international market.  In such cases, there was a need to ensure that those countries, 
which were in a particularly vulnerable situati on, secured a share in the growth of world trade 
commensurate with their economic development need s.  Our objective was to preserve the economic, 
social and developmental sustainability of a sect or faced with challenges of a highly strategic 
significance.  As stipulated in the Marrakesh Ag reement Establishing the World Trade Organization, 
relations in the field of trade should be conducted with  a view to raising standards of living, ensuring 
full employment, and a large and steadily growin g volume of real income  and effective demand, 
expanding production and trade, and boosting sustai nable development.   The complexity of the 
challenges facing a number of developing and least  developed countries called for a coherent and 
integrated approach by the WTO and competent in ternational organizations in order to ensure a 
smoother transition of the sector towards free trade.  It was with this in mind that Tunisia called upon 
all international and regional ins titutions and agencies to join forces in order to introduce new 
mechanisms and instruments specific to the developm ent policies of this sect or in the vulnerable 
developing countries that depended on textiles and clothing.  The WTO had a leading role to play in 
this effort by contributing to greater coherence in  the development of economic policies at the global 
level.  5.5 The contribution of all of the competent orga nizations was essential to complete the efforts 
made by the developing countries and LDCs at the national and regional levels to implement 
development strategies for the sector in the form of ambitious, creative and innovative programmes.  
These programmes would inevitably favour migra tion towards co-contracting activities and the 
development of high value-added production.  In this connection, his delegation urged these 
organizations to consider creating new mechanisms , preferably not involving fresh debts, as a new 
form of sectoral adjustment aid to the countries conc erned.  His delegation's intention was not to turn  G/C/M/80 
 Page 7 
 
 
 this issue into yet another problem to be solved  by the CTG, but there was an opportunity for all 
Members to act at the multilateral level, in a spirit of dialogue and cooperation,  in order to help the 
textiles and clothing sector to retain its economic a nd social sustainability.  The ultimate aim was to 
ensure that international trade re mained the engine of growth and development, thereby contributing 
towards the attainment of the Millennium Development Goals. 
 
5.6 The representative of Turkey  thanked the Chairman for his efforts in allowing Turkey to 
pursue its sovereign rights in bringing this issue to  the CTG for discussion.  Tunisia's paper touched 
upon the recent conditions in the global textiles a nd clothing market in which exporting countries 
were facing fierce competition with the risk of  being swept away from their traditional export 
markets.  He noted that China’s textile and appa rel exports to the EU, where any import surge had 
direct effects on the Turkish economy, had increased 73 per cent on a year-on-year basis.  In addition, 
exports had risen more than 500 percent in some categories (such as sweaters,  sweatshirts and linen 
fabric), and more than ten times for women’s pant y hose and tights since 1 January 2005.  Moreover, 
combined with sudden surges in imports from China, sharp declines in prices were experienced in the 
first quarter of 2005.  For example, imports of t-shirts originating in China into the EU market rose by 
187% and the prices decreased by 36 %.  The elim ination of quantitative restrictions had brought 
major adjustment challenges for many developing and least developed countries in all elements of the 
supply chain from cotton producers to retailers of te xtile and garment manufacturers.  The dramatic 
transformation of global production and sourcing patte rns in this sector were of great concern for 
these countries.  Their heavy reliance on the te xtile and clothing sectors exacerbated their 
vulnerability to the sharp consolidation of producti on into a few suppliers.  Continued declines in 
textiles and clothing would result in a further deteri oration in developing countries’ terms of trade.  
His delegation believed Members should not hesitate to talk about steady market prices.  As an 
example, deliberations under th e Sub-Committee on Cotton were aimed at correcting the problem of 
artificially low prices and at securing steady market conditions including the price levels.  All would 
gain from securing an environment for entrepreneurs where they could plan and trade in conditions of 
maximum predictability and minimum distortion. Th is had already been ta rgeted by the world’s 
largest traders and it was the duty of all governments to accomplish.    5.7 There was no doubt that changes in this sector brought more risks and challenges than 
opportunities for a great many developing countries.   In the post-ATC period, the challenge for 
governments was in devising a coherent textile and clothing policy framework for structural 
adjustment. This required governments to assess a nd improve their policy framework. Within this 
context, technical and financial assistance were needed to improve competitiveness and to create 
alternative employment opportunities.  Moreover, the complexity of the challenges that many developing countries were facing required policy c oherence at the global level where appropriate 
remedies could be developed collectively.  In fact, Part IV of GATT 1994 contained precise and 
specific obligations to find satisfactory solutions to the difficulties faced by many developing countries.  However, other international institutions  also had a responsibility to address the challenges 
and priority needs of developing countries in tr ade and development.  A collective approach among 
the related bodies of the WTO and among the intern ational organizations would clear the way for a 
compromise solution.  It was necessary to identify the exact problems which could be resolved in the 
WTO and then, as a further step, coordinate with other international organizations to address the 
financial and technical needs of the developing countries.  Any step taken in the WTO would also reduce the burden on other countries which were now  the target of countervailing measures.  Lastly, 
tackling this issue in the WTO would renew the s upport of all constituencies in Member countries for 
the Doha Development Round since they would witness the WTO comprehensively taking into 
account trade related issues of all stake holders.  Based on these considerations, establishment of a 
WTO work program was indispensable to handling the challenges and initiatin g action to maintain 
undisrupted markets and create new opportunities.  Hi s delegation has just completed the fine tuning 
on a paper containing proposals for further action which it would be submitting it to the Secretariat.  G/C/M/80 
Page 8  
 
 His delegation asked that it be considered by Me mbers in detail and be thoroughly discussed at the 
next formal CTG meeting. 
5.8 The representative of Jordan
 supported Turkey's statement a nd thanked Tunisia for expressing 
possible solutions to the problems in  the textile sector in a practical manner.  His delegation agreed 
with the need for small economies to be supported by a mechanism maybe through the WTO and with 
the support and cooperation of othe r international organizations.  Such support should be aimed at 
capacity building with the aim of eliminating any further need for such assistance.  As a newly-
acceded country which had embarked on an open, mark et-based trade policy, a variety of solutions 
could be implemented as expressed in several proposals,  including that of Tunisia.  There was a need 
to continue reflecting on how to pr ovide assistance in the future.  He  stressed the importance of this 
sector to his country’s economy, and that the spirit of consensus at this meeting made him optimistic. 
5.9 The representative of Morocco  thanked Tunisia for its submission which tackled one of the 
essential problems affecting the textiles and clothing sector.  She also thanked Turkey for its contribution and for the presentation of possible solu tions, which her delegati on would consider.  She 
supported the proposed actions contained in the Tunisian  paper, in particular finding ways to stabilize 
markets, the establishment of correlations between pri ce fluctuations of textiles and clothing products 
and the adverse effect on countries facing such problems, and collectiv e action in favour of concerned 
developing and least developed Members with a view  to setting up financing mechanisms specific to 
the development policies of this sector.  Such mechanisms would enable developing and least-
developed countries to keep up with growing difficu lties due to adjustment co sts.  It was equally 
important to point out that othe r measures should be encouraged to  ensure predictability.  Such 
measures, as pointed out by Tunisia and Turkey, wo uld encompass appropriate financial and technical 
assistance, improvements in the area of rules of origin, transfer of technology and the strengthening of South-South cooperation.  These should be examined  in the WTO as well as in other international 
organizations.  She also expressed concern about th e new situation in world trade in textiles and 
clothing, in view of the vital importance of this sector for the manufacturing industries at the regional 
and national level, and for empl oyment given that it was the first industrial exporting sector for 
Morocco.  The consequences of the elimination of  quotas were important, both at the economic and 
social level, as they eliminated many branches a nd sub-branches of production with consequences in 
terms of employment stability.  It was essential to re tain consideration of the textile issue within the 
appropriate bodies of the WTO for as long as Members we re not able to find appropriate solutions to 
the problems resulting from the expiry of the Agreement on Textiles and Clothing. 
5.10 The representative of China
 recalled that the most damaging effect of the old quota system 
was the distortion of prices which were supposed to be determined by market forces in a free trade 
context.  It was this context that WTO Members were struggling to maintain.  Under the old quota 
system, quota costs had constituted on average 40 per cen t, at least, of the prices of Chinese textiles 
and clothing exports to the EC market, and 50 per cen t of the export price in the case of T-shirts.   
Therefore, it was not surprising that after the quotas were removed prices would fall.  As far as 
volume was concerned, under the old quota system import-restraining Members had granted China 
the lowest growth rates and extremely low leve ls of quotas relative to its production and export 
capacity.  They were even lower than many so-ca lled relatively small suppliers.  In the period from 
1994 to 2004 the growth rate that China had b een granted by the two major import-restraining 
Members had been on average 1.9 per cent and 1. 3 per cent.  It was, therefore, clear how 
discriminatory the old system had been for China and how much damage it had caused to the Chinese 
people and enterprises.  Regarding the paper s ubmitted by Tunisia, the representative of China 
stressed that with the expiration of the ATC, and the full integration of the textiles and clothing sector into the WTO system, this sector should not be  treated as separate from normal GATT rules and 
disciplines as applied to other goods sectors.  This was a principle that Members must maintain.  Any 
action separating this sector from other sectors would defeat the purpose of the ATC and would not be 
conducive to the healthy development of the multila teral trading system.  Members knew that the  G/C/M/80 
 Page 9 
 
 
 WTO had been established to bring down barriers to trade.  The CTG was mandated to oversee the 
implementation of trade liberalization and other rules set out in the relevant Agreements, so that all 
Members of the WTO had equal opportunity to compete in the international trading arena.  Therefore, 
her delegation did not believe that the WTO was in  a position to accommodate the requests raised in 
the paper, i.e. to find ways to stabilise market pr ices, to establish correlations between market price 
fluctuations and its effects on certain Members, a nd to introduce a funding mechanism specific to the 
development policies of the textile sector in certain Members. 
5.11 The representative of the United States  noted with interest that Turkey would submit a paper 
on this issue with specific proposals.  His delegation knew that a number of WTO Members were experiencing problems in this sector, and it was of the view that further discussion of the issues that 
had been raised today and would be raised in th e Turkish paper were appropriate.  His delegation 
wished to participate in those discussions. 
5.12 The representative of  the European Communities
 stated that her delegation was fully aware 
and understood the problems faced by those count ries which traditionally had had access to the EU 
market for their textiles exports.  His delegation w as also interested in carrying on this discussion and 
would carefully examine carefully the Tunisian proposal.  It was also interested in actively 
participating in any subsequent consultations. 
5.13 The representative of Hong Kong, China  thanked Tunisia for its submission, Part I of which  
provided some useful background on the context of the discussion.  Basically, Members were facing 
the situation whereby the ATC had been conclude d as part of the single undertaking of the Uruguay 
Round in which it had been foreseen that there would be a ten-year transition period for all Members, 
importing and exporting alike, to make the necessary adjustment.  Therefore, the transition period for 
Members to make adjustments had started on 1 Janua ry 1995, not on 1 January 2005.  The situation 
had not been facilitated by the backloading of the ad justment programme by the restraining Members.  
A second point also made in the Tunisian paper w as that with the phase-out of the ATC, trade in 
textiles and clothing was subject to the normal WTO disciplines like any other sector.  These two 
points were very important to set the context of the debate and in helping Members think about how 
to proceed.  His delegation had taken note of Turk ey's intention to introduce a paper.  In taking 
forward the discussion, Members needed to be guided by the principle of avoiding introduction of any new, sector-specific distortion to trade in textiles ad clothing.  This was an important point. All 
Members should be guided by the fundamental WTO principle of setting ground rules to provide equal opportunities for Members to trade, not about  mechanisms to guarant ee market share or to 
regulate prices of the goods being traded. 
5.14 The representative of India
 said that for her delegation, the integration of the textiles sector 
into the multilateral trading system was part of an agreement reached ten years ago during which a 
transition period and a period of ad justment for all Members was foreseen.  As with any other sector, 
a post-quota regime would require some adjustments.   Her delegation appreciated the problems which 
may be faced by some Members as India was al so going through similar adjustmen problems.  
However, this was a systemic issue and her delega tion did not believe that Members could find sector-
specific solutions in this regard.  She noted that Tunisia had highlighted Part IV of the GATT which 
was relevant in that the role of other internationa l institutions was quite impor tant.  Part IV issues 
would be more usefully discussed in another fo rum in the WTO, i.e. the Committee on Trade and 
Development which was already engaged in discussi ng issues of adjustment.  Other bodies were also 
discussing adjustment issues.  It might be u seful to bring this issue to these bodies for a 
comprehensive view and solution, if any could be found.  She reiterated her delegation’s position that 
the WTO system was meant to provide equal opportunities for all Members.  The reintroduction of any kind of quantitative restriction or quota would go against the principles agreed to in the WTO. 
 G/C/M/80 
Page 10  
 
 5.15 The Chairman
 said that it seemed clear from the interv entions which had been made that there 
was no common understanding among Members on the item nor on the communication by Tunisia and the proposals contained therein.  He proposed, therefore, that the Council take note of the 
statements made which would be duly recorded in  the minutes of the meeting.  He understood that 
Turkey would be submitting a paper for discussion by th e Council.  Therefore, he also proposed that 
once this paper was received, the Council would revert  to this item to address this new contribution.  
If necessary, he was available to c onsult informally on the matter. 
 5.16 The Council so agreed
. 
 VI. ELECTION OF CHAIRPERSON FOR THE COMMITTEE ON TRADE-RELATED 
INVESTMENT MEASURES 
6.1 The Chairman
 informed Members that the Chairman-E lect of the TRIMS Committee would be 
leaving Geneva and therefore was un able to accept his nomination of Chairman for that Committee for 
2005-2006.  It was therefore necessary  for the Council to agree on a new nomination for this post.  
Given that the Guidelines for the Appointment of Of ficers to WTO bodies prov ide that the Chairperson 
of the CTG consult on the appointment of the Chairp ersons of subsidiary bodies, he proposed that the 
Council agree that he carry out consultations on a new can didate and that the Council revert to this item 
at its next meeting.  6.2 The Council so agreed
. 
 
VII. OTHER BUSINESS 
A. DATE OF THE NEXT MEETING  
7.1. The Chairman  informed Members that the next mee ting of the Council for Trade in Goods 
was scheduled to take place on Friday, 15 Ju ly 2005.  The agenda would close on Tuesday, 
5 July 2005.   
 
7.2 The meeting was adjourned . 
 
__________