RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/83 
1 May 2006 
 
 (06-2067) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
10 MARCH 2006 
 
Chairperson: H.E. Ambassador Himanen (Finland
) 
 
 
 The meeting of the Council for Trade in Goods was convened by airgram WTO/AIR/2770 and the proposed agenda for the meeting was c ontained in document G/C/W/544.  The meeting 
proceeded on the basis of the following agenda.  
I.
 REVIEW OF THE OPERATION OF THE AGREEMENT ON TRADE-
RELATED INVESTMENT MEASURES (TRIMS) UNDER ARTICLE 9 ........................2  
II. REGIONAL TRADE AGREEMENTS ..................................................................................3  
A. FREE TRADE AGREEMENT BETWEEN MEXICO AND NICARAGUA .................................................3  
B. CLOSER ECONOMIC PARTNERSHIP AGR EEMENT BETWEEN THAILAND AND NEW 
ZEALAND ............................................................................................................................... ......3  
C. FREE TRADE AGREEMENT BETWEEN THE UNITED STATES AND MOROCCO .................................3  
III. UNITED STATES – REQUEST FOR WAIVERS FOR AFRICAN GROWTH 
AND OPPORTUNITY ACT, CARIBBEAN BASIN ECONOMIC RECOVERY ACT, AS AMENDED, AND ANDEAN TRADE PREFERENCE ACT, AS AMENDED........................................................................................................................ ........3
 
IV. CUSTOMS VALUATION AGREEMENT: REQUEST FOR EXTENSION OF 
WAIVER GRANTED UNDER ARTICLE IX OF THE WTO AGREEMENT - SENEGAL ........................................................................................................................ .......13
 
V. EUROPEAN COMMUNITIES – REQUEST FOR AN EXTENSION OF 
ARTICLE XIII WAIVER FOR THE TARIFF RATE QUOTA FOR BANANAS OF ACP ORIGIN.................................................................................................................. ..13
 
VI. ENLARGEMENT OF THE EUROPEAN COMMUNITIES – NEGOTIATIONS 
UNDER ARTICLE XXIV:6 – STATEMENT BY COLOMBIA .......................................20  
VII. ISSUES RELATED TO TRADE IN TEXTILES – SUBMISSION OF TURKEY............23  
VIII.  STATUS OF NOTIFICATIONS UNDER THE PROVISIONS OF THE AGREEMENTS IN ANNEX IA OF THE WTO AGREEMENT ......................................29
 
IX. APPOINTMENT OF OFFICERS TO THE SUBSIDIARY BODIES OF THE 
COUNCIL FOR TRADE IN GOODS ..................................................................................29  
X. OTHER BUSINESS................................................................................................................3 0 
A. REQUEST BY PAKISTAN FOR EXTENSION OF THE TRANSITION PERIOD UNDER THE 
TRIM S AGREEMENT .................................................................................................................30  
B. DATE OF THE NEXT MEETING .....................................................................................................31  G/C/M/83 
Page 2  
 
  XI.
 ELECTION OF CHAIRPERSON OF THE COUNCIL FOR TRADE IN 
GOODS .......................................................................................................................... ..........31  
 
 
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 2004 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.  As far as he understood, there had 
been no new developments in Members' pos itions since the last CTG meeting.    
1.2 The representative of Brazil
 recalled that his delegation ha d submitted a joint proposal with 
India in November 2002 (document G/C/W/428) to am end Article 4 of the TRIMs Agreement.  Since 
the end of the Uruguay Round doubts had been raised about the a priori  prohibitions of TRIMs based 
on the assumption that such measures would always have  trade distortive effects.  This had not been 
supported by conclusive, empirical evidence.  In  fact, examples abounded of successive recourse to 
investment measures to address developmental object ives as well as to offset trade distorting effects 
of certain forms of corporate behaviour.  One of  the major problems of the implementation of the 
TRIMs Agreement was that it established equal oblig ations for all Members, irrespective of their 
stage of development.  In practice, the blatan t disparities among Members ranging from technological 
compatibilities to social, regional and environmental conditions made it difficult, if not impossible, 
for the TRIMs Agreement to generate balanced benef its for all.  This had been shown by a number of 
studies, including the WTO/UNCTAD joint paper circul ated in document G/C/W/307.  It pointed out 
that TRIMs had been important policy tools for de veloped countries in the early stages of economic 
development.  That was why Brazil and India calle d for an amendment to Article 4 of the TRIMs 
Agreement allowing developing countries to use trad e-related investment measures in order to (a) 
promote domestic manufacturing capabilities in high-value-added sectors or technology-intensive 
sectors;  (b) stimulate the transfer or indigenous  development of technology;  (c) promote domestic 
competition and/or correct restrictive business pract ices;  (d) promote purchases from disadvantaged 
regions in order to reduce regional dispariti es within their territories;  (e) stimulate 
environment-friendly methods or products and to contribute to sustainable development;  (f) increase 
export capacity in cases where structural-current account  deficits would be the cause or threaten to 
cause a major reduction in imports;  and (g) promot e small and medium-sized enterprises as they 
contributed to employment generation.   
 1.3 Two decisions taken in Hong Kong in relation to TRIMs were relevant .  First, paragraph 39 
of the Hong Kong Ministerial Declaration mandated: "the Director-General, without prejudice to the 
position of Members, to intensify its consultativ e process on all outstanding implementation issues 
under paragraph 12(b), if need be by appointing Chairpersons of concerned WTO bodies as his 
Friends and/or by holding dedicated consultations.  The Director-General shall report to each regular 
meeting of the TNC and the General Council.  The Council shall review progress and take any 
appropriate action no later than 31 July 2006."  Second, Annex F to the Hong Kong Ministerial also 
granted LDCs additional flexibilities in the TR IMs Agreement.  Brazil was assessing how these 
decisions might effect the mandated revision fo reseen under Article 9 of the TRIMs Agreement. 
 
1.4 The representative of Argentina
 supported the statement by Brazil.  The matter was still an 
implementation issue that needed to be resolved.  Paragraph 39 and Annex F of the Hong Kong 
Ministerial Declaration both dealt with the flexibilitie s granted to LDCs.  The latter demonstrated that 
there was a lack of flexibility in  the TRIMs Agreement.  While Anne x F was a first step in the right 
direction, it demonstrated the need to deal w ith this issue  seriously over the next months. 
  G/C/M/83 
 Page 3 
 
 
  1.5 The representative of India  associated her delegation with the statement from Brazil.  Her 
delegation, like Argentina, welcomed the decision on the TRIMs Agreement for LDCs in Annex F of 
the Hong Kong Declaration.  Her delegation partic ularly welcomed the great flexibility shown by 
several Members in order to accommodate the concerns  of the LDCs.  The decision also reflected the 
fact that the present TRIMs Agreement did not provide the flexibilities required by developing 
countries to pursue their development needs.  In th e light of this decision, her delegation called upon 
all Members to revisit their position on the review of the TRIMs Agreement so that there could be a serious and productive engagement as provide d for in Article 9 of the Agreement. 
 1.6 The representative of China
 added its support to the proposal by Brazil and India and shared 
the views of Argentina and Brazil concerning the LDCs.  The proposal for a study was valid and 
deserved positive consideration from Members.  B earing in mind that the current review was 
mandated by Article 9 of the TRIMs Agreement, a study, as recommended by Brazil and India, would 
be in line with the mandate and would be helpful for the review process.   
1.7 The Chairman
 proposed that the Committee take note of the statements made and agree to 
revert to this item at a future meting.  1.8 The Council so agreed
. 
 
II. REGIONAL TRADE AGREEMENTS 
A. FREE TRADE AGREEMENT BETWEEN MEXICO AND NICARAGUA  
B. CLOSER ECONOMIC PARTNERSHIP AGREEME NT BETWEEN THAI LAND AND NEW ZEALAND  
C. FREE TRADE AGREEMENT BETWEEN THE UNITED STATES AND MOROCCO  
2.1 The Chairman  drew Members' attention to the thr ee Agreements listed under this item that 
had been notified under GATT Article XXIV.1  The texts of the Agreements and their notifications 
had been circulated in the documents listed.  In  the absence of comments, he proposed that the 
Committee on Regional Trade Agreements carry out the examination of the above-mentioned 
Agreements in accordance with the following terms of re ference:  "to examine, in light of the relevant 
provisions of the GATT 1994, the trade agreements ju st 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 the age nda of the meeting of the Council for Trade in 
Goods on 20 February 1995, as contained in docum ent 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. UNITED STATES – REQUEST FOR WAIVERS FOR AFRICAN GROWTH AND 
OPPORTUNITY ACT, CARIBBEAN BASIN ECONOMIC RECOVERY ACT, AS AMENDED, AND ANDEAN TRADE PREFERENCE ACT, AS AMENDED 
3.1 The Chairman
 recalled that, at the 11 March 2005 CTG meeting, the United States circulated 
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 Cari bbean Basin Economic Recovery Act (CBERA), the 
                                                      
1The texts of the Agreements and their notifications  had been circulated, respectively, in documents 
WT/REG203/N/1, WT/REG203/1; WT/REG204/N/1, WT/REG204/1; WT/REG205/N/1, WT/REG205/1. 
 G/C/M/83 
Page 4  
 
  second
 document consisted of a request for a waiver for the African Growth and Opportunity Act 
(AGOA), and the third document consisted of a requ est for a waiver for the Andean Trade Promotion 
Act (ATPA).  The United States also circulated supplemental information to each of these requests in G/C/W/508/Add.1, 509/Add.1 and 510/Add.1.  This matter had been discussed at the 11 March, 
15 June, 15 July and 10 November 2005 meetings of the Council as well as in three informal meetings.  
At the 15 July meeting, it was agreed that he would make a report on his own responsibility to the 
General Council on the CTG's consideration of this  matter.  This report was made to the 27 and 
29 July 2005 General Council meeting.  Following his re quest, the General Council agreed that the CTG 
should continue its consideration of this matter a nd report back when it had completed this work.   
 
3.2. During the informal consultations a series of questions and answers were exchanged.  The 
questions were circulated in doc uments G/C/W/516, 519, 520, 527 and 534, and the responses circulated 
in documents G/C/W/518, 526 and 531 and 540.  At the last meeting, he had expressed his view that 
the information-gathering phase of the CTG's consid eration of these wiaver requests was reaching the 
point of exhaustion.  He had indicated that it was his intention to bring this phase and the question and 
answer period to closure by circulating draft decisions  at this meeting.  Consequently, draft decisions 
were circulated.  Document G/C/W/541 contained the draft decision for the renewal of the US waiver 
for the Caribbean Bsin Economic Recovery Act;  document G/C/W/542 contained the draft decision 
for a waiver for the African Growth and Oppor tunity Act;  and document G/C/W/543 contained a 
draft decision for the renewal of the waiver for the Andean Trade Preference Act.  He proposed that 
the Council approve these draft decisions and reco mmend that they be forwarded to the General 
Council for adoption. 
 3.3 The representative of China
 recalled that his delegation subm itted questions to the US on this 
matter.  After careful study of the US answers, his delegation's understanding of the three schemes 
had improved, and his delegation fully appreciated  the spirit and objective of these programmes.  
However, the questions and answers had made it clear that the schemes were structured in such a way 
that they would benefit US producers of yarns and fa brics to a large extent.  In order to address this 
problem, his delegation suggested adding the followi ng sentence to each of the draft decisions: "the 
United States shall promptly start working on improving its rules of origin in the preference programmes so as to ensure that all the benefici aries will fully and effectively benefit from the 
duty-free treatment, and at the sa me time it shall not raise barrier s or other undue difficulties for the 
trade of other developing Members." 
 3.4 The representative of the United States
 recalled that these waiver requests had been pending 
for the last year.  He thanked all Members who pa rticipated actively in the consultations and the 
question and answer exercise.  His delegation belie ved that the Council had reached the point where a 
decision should be taken on the requests.  The pr ogrammes offered substantial benefits to the 
beneficiary Members.  The decision that faced the Council today was whether it was in a position 
collectively to approve these waivers with the benefits that would flow from them to the beneficiaries.  
The structure of these programmes imposed limita tions that his delegation was not in a position, 
certainly as part of the waiver decisions, to change .  Therefore, it was not an option to modify the 
draft decisions in the manner that China had suggested. 
 
3.5 The representative of Benin,  speaking on behalf of the African Group, expressed his 
delegations' concern that this issue had still not been concluded and was on the Council's agenda for 
such a long period.  When the US first requested the waiver fo r the AGOA, the African Group made a 
statement expressing the importance of this progra mme to African exports and to economic growth 
and development in Africa.  In addition, several Members, individually, had repeatedly recalled the 
need for this waiver to be approved given the fact that Africa had the smallest share in world trade 
which was even regressing.  African countries were the most vulnerable and marginalised countries in the multilateral trading system.  The AGOA initiative therefore was an important contribution to the 
efforts which could be made to help these countri es move out of poverty and bring them into the  G/C/M/83 
 Page 5 
 
 
  multilateral trading system.  Since it was launched,  AGOA had contributed to stimulating the trade 
and investment climate in African countries, both di rectly and through different multiplying effects.  
The statistics available showed that American im ports from Africa had increased by 88% in 2003 and 
2004.  This clearly proved the potential of AGOA  to raise the living standards in Africa and 
contribute to achieving the millennium development goals.  The African Group supported all elements 
contained in the waiver request made by the US.  As a component of the Doha Work Programme and 
with a view to supporting this region towards ac hieving the millennium goals so that African 
countries would be included in the multilateral system, this waiver was a timely and logical tool.  It 
would make it possible to continue implementi ng the AGOA initiative.  The African Group invited 
Members to support this waiver request.  Listening to the proposal made by China, his delegations  
believed that the Members of the Council would work  rapidly to approve this waiver this morning. 
 3.6 The representative of Ecuador
 noted that growing illegal tr ade in drugs constituted an 
enormous volume of unregistered tr ade which was putting an incredible demand on larger markets.  
ANDEAN countries were producing this drug at a huge cost that even conservative calculations could 
not estimate.  It was impossible to produce agricu ltural goods which would fetch, outside the country, 
the same price levels, and thus the problem was aff ecting the poorest sectors of the population.  It was 
also paradoxical to note that whilst the prices of b asic commodities were constantly dropping in value, 
the prices of drugs were gaining in price.  Because of the international dimensions of the problem, a co-responsibility at international levels to fight th is scourge had been rec ognized.  Ecuador, with its 
limited budgetary means, devoted enormous economic sums against illegal drug trafficking.  The 
policies of the Ecuadorian Government had been recognised as contributing to limiting the scope of 
the production and consumption of dr ugs and illegal substances.  The US waiver request fitted with 
Ecuador's commitment to fight this scourge and, ther efore, her delegation supp orted this request.  Her 
delegation was seeking to facilitate access to mark ets of legal products which could replace the illegal 
products through cooperative  programmes, aimed at diversifying production in a climate of stability, 
trust and investment.  Her delegation also deemed it important to express its opinion on the system of 
preferences.  Ecuador considered that the US programme, which was clearly pre-established, was 
within the criteria for the granting of tariff prefer ences and did not have any impact on the systemic 
interests of the WTO.  For Ecuador, the US preferen ces fell within this scope, were not to be applied 
in the long term and did not replace the substantive aspects of the WTO system.  That is why her delegation trusted that WTO Members would allow fo r a consensus to grant this waiver as soon as 
possible. 
 3.7 The representative of Lesotho
 associated his delegation with the statement by Benin, on 
behalf of the African Group.  The importance of  AGOA to Lesotho's economy and people could not 
be over-emphasised.  Since its inception, AGOA had facilitated textiles and apparel investment in 
Lesotho.  Growth in the manufacture sector and sub- sector had been encouraged by the provisions of 
AGOA, which had led to an average growth of ab out 7% between 2001 and 2004.  Apparel exports 
accounted for 65% of the total merchandise exported from Lesotho.  In 2004 textiles and clothing 
employed 87% of the workforce within the manufacturing sector. AGOA was indeed contributing 
towards development of the most economically disadvantaged and the most vulnerable in the 
multilateral world trading arena.  Against this background, his delegati on approved the elements 
contained in the draft decisions and requested the CTG to finalise this matter in a speedy fashion. 
 3.8 The representative of Pakistan
 assured beneficiary Members that his delegation fully 
supported the spirit and objective of these progra mmes.  His delegation had no difficulty with 
improved market access conditions for beneficiaries' exports.  This was shown by the fact that his 
delegation had not, so far, contested the impairme nt caused by these programmes to the benefit that 
would otherwise be due to Pakistan since these pr ogrammes were put into effect.  His delegation's 
concern was that these programmes were intended to provide benefit and prot ection to US textiles' 
industry at the cost of developing countries including the beneficiaries themselves.  This concern  was 
not addressed through the process of question/answers.   As indicated, his delegation did not wish to G/C/M/83 
Page 6  
 
  deprive the beneficiaries of the benefits of these preferential schemes and its interests did not run 
counter to the interests of these countries.  Theref ore, his delegation could go along with the waiver 
requests if China's proposal was added to the deci sion.  It should be noted that these schemes had 
been operational for several years and adding Chin a's proposed text would only result in making the 
beneficiaries' exports more competitive.  Therefor e, it was in their interest that his delegation 
supported China's proposal. 
 3.9 The representative of Uganda
 said that his delegation also supported the US waiver requests 
and associated itself with the statement made by Be nin on behalf of the African Group.  He recalled 
that AGOA had brought real benefits to Uganda and his Government viewed AGOA as an initiative 
aimed at boosting Uganda and countri es in a similar situation out of poverty.  Uganda's experience 
with this initiative thus far had been positive.  Before the AGOA programme, Uganda did not export 
to the US market;  today it did.  His delegation believed that other beneficiary countries were in a 
similar situation.  AGOA had boosted income at the grass roots level and had had a positive impact, especially for the rural poor.  AGOA had improved thei r livelihood through stimulating the growth of 
cotton and other products, as well as other industri es.  His delegation therefore called upon the WTO 
to expedite the process of approving these waivers for poor countries.  They should not be seen as 
going against the multilateral trading system but rather a step towards integrating the poor WTO Members into the multilateral trading system through a win-win situation.    3.10 The representative of Nigeria
 supported the statement made by Benin on behalf of the African 
Group.  As a beneficiary, his delegation was concer ned with the length of time that this matter had 
been on the Council's agenda;  it required an expediti ous solution.  It underlined the importance that 
southern African countries attach to trade grow th associated with economic development.  The 
programme had the potential for promoting growth and poverty reduction by providing access to the US markets.  It was an important initiative for fostering trade and investment co-operation between 
the US and South African countries.  His delega tion, therefore, solicited the co-operation and 
understanding of Members on the need for the approval of the AGOA waiver. 
 3.11 The representative of Senegal
 said that his delegation also s upported the statement made by 
Benin on behalf of the African Group.  His delegation believed that the US, through the AGOA Programme, translated into fact the WTO provisions a nd the spirit and letter of the enabling clause.  It 
welcomed this initiative and asked the Council for its understanding in approving this waiver request.  
The beneficiary countries truly benefited from th e preference programme as was illustrated by the 
statement from Benin.  Agreement on this waiver w ould be consistent with the prevailing spirit of 
Hong Kong to do more for developing countries a nd LDCs in the implementation of the Doha 
Agenda.  This spirit and momentum must be mainta ined so that developing countries and LDCs could 
rapidly enhance their level of de velopment and hence the well-being of their population through the 
multilateral trading system.    3.12 The representative of Peru
 said that her delegation supporte d the statement of Ecuador.  
ATPA was a fundamental element in the struggle carri ed out by Peru against illicit narcotic trafficking 
and associated terrorism.  In this context, ATPA also  played a fundamental role in the efforts made to 
replace certain crops in Peru.  The timely nature of this initiative was strengthened by the recent 
conclusion of the negotiations for the Free-Trade Ag reement between Peru and the US.  Therefore, 
her delegation launched an appeal to the Council to approve the US waiver request. 
 3.13 The representative of Costa Rica
 stated that his delegation fully supported the approval of the 
three waiver requests.  Costa Rica believed that th ese three programmes contributed to the insertion of 
the three regions concerned into the multilatera l trading system.  The three programmes were 
instruments in favour of developing countries and his delegation supported them knowing that they 
would not hinder multilateral liberalization.   G/C/M/83 
 Page 7 
 
 
  3.14 The representative of Guatemala  said that his delegation granted a lot of importance to the 
request made by the US as his country had benefited and could continue to bene fit from this initiative.  
It was a programme limited in time and which enha nced the economic development of his country.  
His delegation asked Members to support the three re quests and asked the Chairman to continue to 
use his good offices to find a solution as soon as possible. 
 
3.15 The representative of Honduras  said that her delegation supported approval of the US waiver 
requests at this meeting.  These programmes enable d some developing countries, and especially small 
countries such as Guatemala, to achieve a greater in sertion into international trade.  The CBERA was 
a preference programme which had, over more th an 10 years, made it possible for farming and 
industrial development of the countries concerned.   
 3.16 The representative of Bolivia
 also said how important the ATPA programme was for the 
Bolivian economy, for the same reasons mentioned by  the delegations of Ecuador and Peru.  This 
mechanism responded to the principl e of shared responsibility in the fight against the illicit trafficking 
of narcotics and sought a transformation from illicit na rcotics to legitimate produc ts.  It was important 
to highlight that it was a scheme which fulfilled specific eligibility criteria, periodic evaluation and 
was temporary in nature.  Her delegation ackno wledged China's proposal, but given that the 
programmes had specific ending dates, with ATPA to conclude at the end of 2006, it believed that the 
three draft decisions could be adopted at this meeting.  
3.17 The representative of Jamaica
 reiterated the important role the CBERA had played in 
facilitating Jamaica's integration into the world eco nomy through export diversification, expanding 
manufacturing capacity and investment and job crea tion.  Her delegation c onsidered this a vital 
programme for beneficiaries in the Caribbean regi on and an important development mechanism for 
small/vulnerable economies.  Since it was submitted to  the CTG, the request for the renewal of the 
waiver had undergone an examination process whic h had provided ample oppor tunity to identify and 
discuss issues of concerns.  A decision on the waiv er request for CBERA beneficiaries would provide 
the necessary predictability and legal certainty rega rding this Proramme's continuation.  Jamaica 
urged Members to agree to its approval today so th at it may be forwarded to the General Council. 
 3.18 The representative of Trinidad and Tobago
 said that, as a beneficiary of the CBERA 
programme, Trinidad and Tobago wished to under score the importance which it attached to this 
programme as a critical medium-term instrume nt for the economic development and export 
diversification of its economy.  It had served to  expand trade between the US and Trinidad and 
Tobago thus promoting the growth of free ente rprise and economic opportunity not only for her 
country but also for the wider CARICOM region.  Petroleum oils, methanol distillate, and residual 
fuel oil and naphtha constituted 95% of the pro ducts which entered the US market in 2004 under 
CBERA.  Therefore the preservation of this arra ngement would afford her country stability and 
predictability to further reform its economy and thus  achieve key development objectives.  As a small 
and vulnerable developing economy, Trinidad an d Tobago's share of total merchandise exports 
averaged approximately 0.06% of global trade which was insufficient to disrupt, impede or harm the 
global welfare gains of free trade.  The CBERA initiative was without a doubt an indispensable tool to 
assist her region in integrating in the international trading system.  Her delegation considered that the 
ongoing consultations and the constructive exchange of questions and answers begun almost one year 
ago had enabled Members to learn more about th e CBERA and the other programmes and that they 
were now at the stage of bringing closure to this issue and adopting a draft decision.  
3.19 The representative of Mauritius
 associated his delegation with the statement made by Benin 
on behalf of the African Group and with all tho se who have emphasised the importance of the AGOA 
scheme for sub-Saharan Africa.  His delegation w as also concerned with the delay and accordingly 
would urge all Members to approve this wa iver request without any further delay. 
 G/C/M/83 
Page 8  
 
  3.20 The representative of Colombia
 echoed the statements made by  the delegations of Ecuador, 
Peru and Bolivia.  Her delegation had also c oncluded a Free-Trade Agreement with the US.   
 3.21 The representative of Swaziland
 associated her delegation with the statement by Benin on 
behalf of the African Group.  In  Swaziland, the AGOA initiative had made significant contributions to 
the economy particularly in terms of industrialisati on and employment.  The textiles industry had been 
strengthened as a result of the AGOA initiative and the industry alone accounted for more than 50% 
of employment in the industrial sector.  Therefor e, in Swaziland, AGOA had led to the alleviation of 
poverty and her delegation requested the approval of the draft decisions.  
3.22 The representative of Nicaragua
 stated that her delegation al so supported the approval of the 
US request for the extension of the CBERA waiver.  This had been an instrument for development in 
Central America which had fostered the progressive  integration of these economies into the world 
trading system.   
3.23 The representative of Barbados
 also expressed his delegation's hope that Members would  
approve the draft decisions.  Other Members had spoken on the importance of these waivers, on the 
trade and investment interest, on employment a nd development generally,  and on the benefits 
achieved and to be achieved in the years ahead.  A lot of time had been spent on the consideration of 
these requests.  He had not seen any strong claims of  serious injury likely to fall upon any Member as 
a result of these schemes.  In addition, the draft deci sions contained a provision which stated that the 
US shall promptly enter into consultations at the request of any interested Member, with respect to 
any difficulty or matter that may arise as a result of preferential treatment provided under these programmes.  He hoped that this expression would give colleagues comfort that serious concerns 
would be addressed.   
3.24 The representative of the Dominican  Republic
 also believed that the programmes had fostered 
economic development in important sectors of the beneficiaries' economies.  They had increased 
investment, fostered employment, and had an imp act on important industrial sectors.  His delegation 
believed that Members should approve the requests fo r the waivers because they would be of benefit 
to all countries.  
3.25 The representative of El Salvador
 echoed the statements by other delegations urging a 
positive reply to the US requests for the waivers.  3.26 The representative of Kenya
 stressed that his delegation supported all three waivers because 
they were aimed at achieving one of the main objectives of the WTO:  raising the standard of living 
for all people.  Members which might have issues  to raise could do so during the review process 
inherent in the waivers.  He was encouraged by the spirit exhibited by a majority of Members in 
support of these waivers and his delegation h oped that they could be approved today. 
 3.27 The representative of Côte d'Ivoire
 said that her delegation also supported the declaration 
made by Benin on behalf of the African countries.  This was the first time that he had witnessed such 
support for a waiver request and hoped that this att itude would continue in other areas as well.  He 
noted that Côte d'Ivoire had benefited from these measures and thanked the US, who through 
consultations, had proposed to con tinue providing these benefits to hi s country.  This was the reason 
why he added his delegation's voice to those ask ing for approval of these waiver requests.  
 
3.28 The representative of Panama  supported those Members who e xpressed their belief that these 
waiver requests had reached the stage where Members could conclude the consideration.  Undeniably, 
a large group of developing countries and LDCs had received preferential treatment through these 
programmes, and had witnessed how these progra mmes had facilitated their exports, created  G/C/M/83 
 Page 9 
 
 
  investment in their countries and, in general, had be en an instrument for development.  This was why 
his delegation supported the requests and asked Members to consider them favourably.  3.29 The representative of Brazil
 noted that his delegation had b een engaged in the consultations 
convened by the Chairman.  Regarding the proposed draft decisions, his delegation reserved its right, 
should its interests be affected, to make use of the provision in the draft waivers that stated that the 
US would promptly enter into consultations on request  with any interested Members, with respect to 
any difficulty or matter that may arise as a result of implementation of those agreements.  His delegation shared the concerns expressed by China and supported by Pakistan, and did not believe 
that China's proposed amendment should be discarde d upfront.  It seemed a constructive alternative 
and raised some important issues:  that the rules of origin should benefit the beneficiary countries and 
not the sponsor of the programmes, and that there s hould not be a burden to third parties.  While the 
language could be worked upon, his delegation di d not believe the amendment should cause major 
difficulties.  However, Brazil was not conditioning its support for the waivers to China's proposed 
amendment.  His delegation shared the concerns of  beneficiary countries on the delay in dealing with 
the US waiver requests and encouraged a solution accep table to all.  His delegation would expect the 
same spirit of flexibility from the US and others in relation to requests by developing countries for 
waivers from the MFN clause, shoul d that occur in the future. 
 3.30 The representative of Sri Lanka
 recognised the importance of preferential market access in the 
developed country markets for developing countries, in particular for weak and vulnerable Members. 
Free-trade arrangements for which waivers had been gr anted had contributed to the expansion of trade 
and investment in the beneficiary countries.  Ho wever, it was necessary to also recognize that they 
had reduced the competitiveness of some other c ountries in particular markets.  Sri Lanka, had 
experienced both trade and investment diversion as a result of these arrangements and was concerned 
with some developments, particularly investors m oving out of Sri Lanka to take advantage of these 
arrangements.  Sri Lanka would not block a ge neral consensus on these waivers but, like Brazil, 
would reserve its right to take advantage of the para graph cited by Brazil and similar paragraphs in the 
decisions if the need should arise.  It was hoped that the US would take Sri Lanka's concerns into 
account during these negotiations.  Fina lly, his delegation hoped that the waivers and their preferential 
access would not hinder the multilateral liberalization process.    
3.31 The representative of India
 said that her delegation supporte d the spirit and objectives of the 
US programmes which had improved the conditions of  market access for some developing countries 
and LDCs.  However, to ensure that the progra mmes continued to foster improved market access for 
the beneficiaries, her delegation believed that Ch ina's proposed amendment would add greater clarity 
and she encouraged Members to consider it in a pos itive spirit.  Like the previous two speakers, her 
delegation also reserved its right for consultations should the need arise. 
 3.32 The representative of Paraguay
 stated that his delegation could not endorse the drafts at this 
time, for the following reasons.  First, Paraguay had consistently suppor ted the position that a 
preference granted to one developing country or group of developing countries should not prejudice 
other developing countries.  If this  were to be the case, attention should be paid to the prejudice 
incurred by the countries concerned and equitable compensation should be provided to them.  This 
position was by no means new and was not invented by  Paraguay.  On the contrary, it was enshrined 
in WTO provisions, such as the 1979 Decision known as the "Enabling Clause".  The draft decisions before the CTG today included an obligation for th e United States to enter into consultations with 
respect to any difficulty or matter that might arise as a result of the provision of preferential treatment.  
Looking at past experience, he recalled that when the European Communities (hereafter, EC) 
requested a waiver in order to apply the Cot onou Agreement to the ACP countries, Paraguay held 
consultations with the EC and came to support th e EC's request once a satisfactory agreement had 
been reached.  Paraguay had been a third party in  the WTO dispute between the EC and India in 
connection with the application of the GSP Drug Arrangements, a dispute known as "Conditions for G/C/M/83 
Page 10  
 
  the Granting of Tariff Preferences to Developing Co untries." This concluded with a sanctioning of the 
principle of non-discrimination in applying preferen ces under the Enabling Clause.   More recently, in 
the Doha Round discussions on special measures in fa vour of LDCs, Paraguay held that the granting 
of waivers for such countries should not jeopardize the rights of other developing countries.  Paraguay's stand regarding the US requests for waiver s currently before the CTG, therefore, did not 
stem from any lack of interest in or consideration for the beneficiary countries, but from a desire to 
ensure that the WTO rules concerning the granting of waivers for the provision of preferences were 
applied both correctly and fairly.    3.33 Second, Paraguay had repeatedly informed the US Government that it considered itself to be 
discriminated against and prejudiced in the application of preferences, especially those provided under 
the Andean Trade Preference Act, and that it would wish to be included among the beneficiaries, 
since its own circumstances were the same as or even  less favourable than the beneficiaries.  Many of 
the products covered by this preferential scheme, including textiles and clothing, leather, fruit, fruit 
juices, and so forth, were part of Paraguay's curre nt production, so this was clearly a case of distortion 
of competition in South America.  At the latest  meeting of the Bilateral Council for Trade and 
Investment between Paraguay and the United Stat es, held in Asunción on 12 October 2005, his 
Government reiterated its request for facilities that woul d enable it to export products of interest from 
Paraguay.  According to the report published in March 2006 by the United States Bureau for 
International Narcotics and Law Enforcement Affa irs, known as the International Narcotics Control 
Strategy Report, "Paraguay remains a transit count ry for significant amounts of Colombian, Bolivian 
and Peruvian cocaine".  The report went on to d escribe the various measures taken by the Paraguayan 
Government in order to combat narcotics trafficking and the cooperation it had lent in this regard to 
the United States and other countries, inter alia,  through the extradition of major drug traffickers, 
seizing of large shipments, participation in joint operations, and the adoption and implementation of 
legal provisions.  His country essentially had only its own resources to rely on in all these endeavours, 
because international assistance for the struggle agains t drug trafficking amounted to no more than 
500,000 dollars.  On the other hand, the national budget allocated the equivalent of over 2 million 
dollars to the National Anti-Drug Secretariat (SE NAD), not counting the vast amounts required to 
fund the Police, the Army, the municipalities, and so forth.  Paraguay also had to, year after year, 
secure certification from the US Congress.  
3.34 Third, Paraguay was a Latin American country  like all the other beneficiaries of preferences 
in this part of the world.  A look at its situati on and potential for trade development and promotion of 
its own economic growth, however, s howed that Paraguay was at a notable disadvantage in relation to 
all those countries.   It was, inter alia,  a landlocked nation that lacked infrastructure and natural 
resources such as petroleum and gas, had a population of no more than 5.5 million and an annual per 
capita income of barely US $1,223.  Paraguay's tota l exports accounted for only US $1,626 million in 
2004, confirming the country's chronic trade balance deficit since imports reac hed US $2,651 million.  
According to figures given by the USTR, Paragua y exported barely US $59 million to the United 
States in 2004, while its imports from that country totalled US $622 million, representing a deficit of 
US $563 million.  On the other hand, figures were mu ch more favourable for a few comparable Latin 
American economies benefiting from preferences.  Bolivia, for example, exported US $260.4 million 
to the United States, with a surplus of US $84 million;  the figures for Ecuador were 
US $4,184 million with a surplus of US $2,700 mill ion;  for El Salvador US $2,053 million with a 
surplus of US $185 million;  for Honduras US $3,641 million with a surplus of US $565 million;  for 
Nicaragua US $990 million with a surplus of US $399 million;  for the Dominican Republic 
US $4,528 million with a surplus of US $186 milli on;  and for Guatemala US $3,154 million with a 
surplus of US $606 million.  On average, 42 % of these exports to the United States were carried out 
under the preferential scheme.    3.35 Paraguay expressed sincere satisfaction for the trade benefits earned by these and other 
countries that participated in the US preferential schemes.  Paraguay was in favour of the continued  G/C/M/83 
 Page 11 
 
 
  expansion of such trade and its contribution to the well-being of these countries.  Paraguay  was 
simply seeking to benefit, in turn, from these adva ntages, because it believed that it was eligible for 
them, not only because of its economic and social s ituation, but also because of its contribution to 
global peace-keeping, development and security.  Pa raguay wondered what explanation there could be 
for the tremendous discrimination being exercised agai nst a country with a system of government that 
was recognized as democratic, which observed human rights and fulfilled its international 
undertakings, struggled to pay its external debt, firm ly contributed to the fight against terrorism and 
for international security, maintained an open econo my, and worked hard in the WTO to establish a 
rules-based and fair system of trade.  By rej ecting the draft decision tabled by the Chair for 
consideration by the CTG, Paraguay appealed for cons ideration to be given to its just claims and for 
observance of the letter and the spirit of specific WTO provisions.   
 3.36 The representative of Korea
 said that his delegation supporte d the US waiver requests.  
However, it also shared the concern raised  by China, Brazil, India and Sri Lanka. 
 
3.37 The representative of the United States  briefly responded to some of the points made. He 
grouped Members' reservations into three categories.  In the first category, Brazil, Korea and Sri Lanka considered the Chinese proposal a good idea but would not block adop tion of the waivers if 
there was otherwise a consensus.  He re-assure d those three Members that his Government was 
willing to stand behind the provision in the draft d ecisions which foresaw consultations if issues arose 
with a view to giving greater assurances on the pr ovisions of the programme.  In a second category he 
placed China, Pakistan and India, the latte r Members having expressed unqualified support for 
China's proposal.  He considered it ironic that Chin a stated that the purpose of its proposal was to 
benefit further the beneficiary countries.  In the extraordinary outpouring of support from beneficiary 
countries at this meeting, none had asked for what  China had proposed supposedly on their behalf.  
There was good reason for that.  In the consultations held on these waiver requests and in the question 
and answer exercise that was held, his delegation had ma de it clear that the aspects of the waivers that 
made China, India, Brazil, and others, uncomfortab le were set in US law.  Alleviation of their 
concerns could not simply be written into the waiver  draft decision;  the option was basically "take it 
or leave it".  He also noted that China, Pakistan  and India were the Members that were doing very 
well, particularly with respect to the textile and cl othing sector, the centre of concern and the focus of  
the questions received and the answers provided.  Th e rules of origin provisions of the programmes 
were of particular interest.  The fact was that ove r the last 12 months, textile and clothing exports to 
the United States had declined from the benefi ciaries under all three Programmes as opposed to 
exports of textile and clothing from China, Pakist an and India which had increased strongly.  The 
conclusion to be drawn was that the beneficiary c ountries knew their interests and they supported the 
waiver as it stood because they recognised the limit of what was possible.  As was made clear in the 
consultations, it was not possible for the US delegati on to change these requests in the way that China 
had suggested.  If China, India and Pakistan insi sted on modifying the draft decisions, they were 
saying that they did not want to see these preferences go to the beneficiary countries.   He, therefore, 
appealed to China, Pakistan and India to move  themselves into the category comprising Brazil, 
Sri Lanka and Korea.  His delegation was willing to  consult further on these issues to try to address 
the concerns put forward, but it appealed to these Members to withdraw their objection to the waiver 
request as it was currently proposed by the Chairman.   
 3.38 He added that the final category include d Paraguay.  Paraguay said that it must be 
compensated if it was going to agree to these waivers.  No other Member was making a similar request and it was made clear that it was not possible for his delegation to pursue this claim.  
Paraguay insisted on standing in the way of the a doption of these waivers because of its demands for 
compensation.  His delegation did not believe that  this was required by the WTO agreements.  It 
would be unfortunate if such opposition was to prev ent these waivers from being adopted.  Therefore, 
he appealed, through the Chairman, to those Member s with concerns about one or another aspect of 
the waiver requests, to put those aside temporarily, to allow these wa ivers to be adopted by consensus G/C/M/83 
Page 12  
 
  at today's meeting and then to make use of the consultation provisions of the waivers in order to 
continue a dialogue with a view to reaching some accommodation in the future.  3.39 The representative of China
 said that his delegation understood that many beneficiary 
countries benefited a great deal from the current  programmes which had been operating for quite 
some years, and that nobody was trying to affect the continuation of those benefits.  But his delegation 
had some systemic concerns.  He  provided statistics to show that through the rules of origin 
provisions of these programmes, these kinds of arrangements greatly increased US exports of yarns and cloth to the beneficiary countries, thereby crea ting significant trade diversion.  For example, in 
1989 US exports of yarn to the world was US $628 m illion;  this increased to US $1.43 billion by 
2004. This represented an increase of 127.5 per cent.  However, looking at exports of yarn to the 
countries benefiting from the CBERA programme dur ing the same period, an increase of 1718 per 
cent can be seen (US $31 million to US $566.7 million).  In addition, the share of exports of yarn to 
these countries was 5 per cent in 1989 and increased to 40 per cent in 2004.  A similar situation could 
be seen with US exports of fabrics.  Exports in 1989 to the world totalled US $2.15 billion, and in 
2004 exports of fabrics to the world totalled US $8. 06 billion – an increase of 276 per cent.  However, 
the value of these exports to beneficiary countries of the CBERA programme rose from US $222 million in 1989 to US $2 billion in 2004 – an increa se of 814 per cent.  The share of US exports of 
fabrics to these countries also rose from 10 per cent in 1989 to 25 per cent in 2004.    3.40 If the rules of origin could be improved, other developing countries could export their yarns 
and fabrics to the beneficiary countries and also  still qualify for the preference treatment.  The 
provision cited in the draft decisions regarding c onsultation with the US on any difficulty which might 
arise would be relevant for an issue which might ha ppen in the future.  Here was a situation that had 
already occurred and his delegation hoped that through present consultations, the matter could be 
addressed and a satisfactory solution found now, rather than in the future.  As Brazil had mentioned, 
when the US considered other waiver applicati ons from LDCs or other developing countries, they 
could probably have more systemic  or coherent positions on them. 
 3.41 The representative of India
 clarified her delegation's position.   It believed that the Chinese 
proposal added greater clarity to the draft decisi ons and encouraged Members to consider this 
language.  Her delegation had also reserved its rights for consultations  as had been indicated by Brazil 
and Sri Lanka under paragraph 4 of the respective decisions.  At the outset, her delegation had stated 
that it didn't doubt the benefits which were accruing to the beneficiaries under these schemes.  
However, these programmes should continue to bene fit only the beneficiaries and not to act as 
protection for the U.S. textile industry as was ev idenced by the figures quoted by China.  Her 
delegation's position was not to oppose or to stand in the way of a consensus on the decisions. 
 
3.42 The representative of Pakistan  added that one of the reasons that the beneficiary countries 
were losing ground in the textile sector was because th ese countries were restricted in the use of their 
imports;  they were not competitive because they  had to import from non-competitive sources.  If the 
US was to let them use imports from cheaper sour ces, they would not be losing ground.  Secondly, 
these schemes were already operational and nobody w as asking that they be stopped.  They had 
existed for years.  His delegation saw two aspects to th is issue:  the first was not  to spoil the initiative 
so that beneficiary countries continued to avail them selves of the benefit already in operation;  and  
the second was to agree to the waiv er requests which would allow the US to continue to protect its 
local industries.  His delegation appreciated the in itiative and would like the beneficiary countries to 
continue to avail from the benefits.  However,  it was difficult for his delegation to supporting 
protection for the U.S. industry. 
 3.43 The representative of Sri Lanka
 reiterated that these three arrangements had eroded his 
country's competitiveness in its main market.  The Chinese proposal, as he understood, would further 
strengthen the competitiveness of the beneficiaries of these arrangements and that would immediately  G/C/M/83 
 Page 13 
 
 
  result in further erosion of his country's competitiveness.  His Government had already seen a similar 
situation in the Canadian market with regard to their LDC tariff with very liberal preferential rules.  It 
made it impossible for a country like Sri Lanka to comp ete in that market.  If ru les were liberalised as 
China and others had requested, that would lead to  further erosion of the competitiveness of countries 
like Sri Lanka.  He would consult his capital to un derstand his delegation's pos ition with regard to the 
waiver requests. 
 3.44 The representative of Argentina
 agreed that the systemic issues raised deserved the Council's 
consideration given the importance of these preferential programmes offered by the United States to some groups of countries.  He added that, in his view, the US had not unders tood Paraguay's request.  
It was not asking for compensation.  Paraguay stated  that its situation was similar to that of the 
countries that were benefiting from the programme.  Paraguay asked that the United States take into 
account their situation and provide similar treatment  with respect to the preference programmes.   
 3.45 The Chairman
 noted the wide support for his proposed draft decisions, but acknowledged that 
the Council was not yet in a position to approve th em.  There was a clear objection from one Member 
and there was a proposal for an amendment to the draft decisions from another Member.  He, therefore, proposed that the Council take note of the statements made and urge the Members with 
difficulties to contact the United States directly to try to address their concerns.  There was a need for 
further consultations and he would ask his successor to be available to consult on  this matter.  Finally, 
he proposed that the Council revert to this matter at its next meeting.   
 
3.46 The Council so agreed
. 
 
IV. CUSTOMS VALUATION AGREEMENT: REQUEST FOR EXTENSION OF 
WAIVER GRANTED UNDER ARTICLE IX OF THE WTO AGREEMENT - 
SENEGAL  
4.1 The Chairman  recalled that Senegal had circulated a request, in document G/C/W/524, for an 
extension of its waiver under Article IX of the WTO Agreement for the use of a system of officially 
established minimum values for a limited number of products.  The General Council on 17 May 2004 
approved Senegal's request for a waiver from its obligations under the Agreement on Implementation 
of Article VII of the General Agreement on Tariffs  and Trade 1994 (Customs Valuation Agreement).  
This Decision, contained in document WT/L/571, expired on 30 June 2005 .  Senegal had also 
presented a report on the status of its implementation of the officially established minimum values for the products concerned.  This was circulated to  the Council as document G/C/W/523.  As interested 
Members were still consulting with Senegal on this matter, he propo sed that the Council allow these 
consultations to continue in order that action may be taken at the ne xt meeting of the Council.  If no 
action could be taken at the next meeting, the Council would report to the General Council on the 
state of consideration of this waiver requ est, in accordance with Article IX:3(b).   
 4.2 The Council so agreed
. 
 
V. EUROPEAN COMMUNITIES – REQUEST FOR AN EXTENSION OF 
ARTICLE XIII WAIVER FOR THE TARIFF RATE QUOTA FOR BANANAS OF 
ACP ORIGIN   
5.1 The Chairman  drew Members' attention to document G/C/W/529 in which the EC requested an 
extension of the current GATT Article XIII waiver c oncerning the tariff rate qu ota (TRQ) for bananas of 
ACP origin which is contained in document WT/M IN(01)/16 of 14 November 2001.   At its last 
meeting, the Council agreed to defer consideration of  this agenda item until this meeting.  This was 
agreed in light of the general level of uncertain ty surrounding the issuance of the second arbitrator's 
report concerning the rebinding of the EC tariff on bananas, and because some  Members believed that G/C/M/83 
Page 14  
 
  further time was needed in capitals to digest the ar bitrator's report, to assess  the relevant context in 
which this waiver was being requested,  and for additional information.   
 5.2 The representative of the European Communities
 confirmed that his delegation had, in 
October 2005, made a request for an extension of its  Article XIII waiver on the ACP tariff rate quota 
for bananas.  The duty free tariff rate quota on imports of ACP bananas, introduced on 
the 1 January 2006, had been in fact calculate d on the basis of access by ACP bananas to the 
European Community market during a representativ e period, namely 2002 to 2004.  The European 
Community was confident that maintaining this TR Q was the best means to ensure the same market 
access conditions for both ACP suppliers and MF N suppliers, as those available under the TRQ 
system that was in place up to December 2005.  Hi s delegation expected this to be proved by the 
monitoring exercise in which the EC had engaged since the start of the new regime.  In this context, 
the EC believed that adoption of the waiver would in crease legal certainty for th e benefit of all banana 
suppliers to the EC market, including obviously MF N suppliers.  However, his delegation was aware 
that there remained residual important concerns on th e part of certain banana suppliers;  it was in this 
context that his delegation was suggesting to revert  to the matter of its waiver request once the 
monitoring and review process that was under way with  certain interested Latin American suppliers, 
was concluded.  It expected that market realities would ease the concerns that had been and would be 
raised, and therefore would allow WTO Members to c onsider the adoption of this waiver proposed at 
that time.  
5.3 The representative of Ecuador
 asked whether the statement made  by the EC meant that the EC 
was withdrawing its request for a waiver, and how did it justify this?  5.4 The representative of the European Communities
 said that he did not have any instructions to 
withdraw the request but, if Ecuador was requ esting this, his delegation would consider it. 
 
5.5 The representative of Ecuador  said that her delegation was actually seeking an explanation 
from the EC regarding its request.  Without this, it felt compelled to express its concerns with regard 
to the legality of the request, and the state of play of  leaving it pending.  As an outcome to the Banana 
3 dispute, the EC signed an agreement with Ecua dor and the United States in which they identified 
elements in order to solve the dispute.  Acco rding to these understandings, the EC should introduce a 
single tariff regime for banana imports no later than  1 January 2006.  They should bind their banana 
tariff and begin negotiations unde r Article XXVIII.  Both of those understandings provided for the 
application of three types of quotas until 31 December 2005, including one non-tariff quota of 
750,000 tons for bananas coming from ACP countries.  So that the EC could authorise this tariff quota, WTO Members, in Doha, approved an extensi on of the waiver of Articles XIII:1 and XIII:2 of 
GATT 94, until 31 December 2005.  Fu rthermore, so that the EC could provide preferential treatment 
to ACP bananas, as was required by Article XXXVI:3 , Annex 5, and its Protocols, with the ACP/EC 
Agreement, the EC obtained a waiver from the Ar ticle I obligations of GATT 94 until December 2007 
for bananas.  The waiver of Article I provisions w as subject to a number of conditions and criteria.  
One was that the EC should bind its tariff on bananas at a level which would maintain, at least, total 
market access for MFN suppliers.  A multilateral c ontrol of arbitration was set up in the waiver 
decision in which it was stated that, not only Ar ticle XXVIII negotiations , but also arbitration 
procedures outlined in the Annex to the Doha waiv er, should enter into force with this new single 
tariff by 1 January 2006.  The first arbitration stat ed that the proposed tariff of €230 per ton would not 
result in maintaining at least total market access for MFN suppliers.  To correct this, the EC set a new 
tariff of €187 per ton and a tariff quota of 775, 000 tons per year for ACP bananas.  On 
27 October 2005, the second arbitration decided that the EC once again had failed to rectify the 
situation as laid out in the annex of the Doha waiv er.  On 1 January 2006, the EC implemented a new 
banana import regime in which the tariff leve l for MFN bananas was €176 per ton and for ACP 
countries was 0 with an annual tariff quota of 775,000 tons.     G/C/M/83 
 Page 15 
 
 
  5.6 Ecuador believed that the regime in force w as inconsistent with GATT 94 for various reasons.  
Implementation of a 0 tariff rate only for ACP coun tries was inconsistent with Article I:1 of GATT 
94.  This inconsistency could not be justified under the Doha waiver to Article I because, according to 
the provisions of the Annex to the waiver decision,  the waiver ceased to apply as of 1 January 2006 
because the EC did not rectify the situation with re gard to MFN suppliers. Furthermore, the EC had 
not respected the terms and conditions set out in the waiver.  They had not bound the tariff for 
bananas and the level which was in force did not maintain total access for markets for MFN suppliers, 
taking into account all the EC's WTO commitments.  During the Hong Kong Ministerial Conference 
the Norwegian Minister of Foreign Affairs served as a facilitator in order to monitor the new import 
regime on bananas, and to provide a bridge and "g ood offices" for exporters of bananas from Latin 
America.  In this lengthy trade dispute, the Ecua dorian delegation had constructively participated in 
good faith.  Nevertheless, the "good  offices" did not mean that any party could renounce legal rights 
that were recognised in the multilateral system.  This  had already been stated by the facilitator.  The 
lack of a bound tariff in accordance with the conditions  that were agreed creat ed uncertainty to more 
than 1,000 independent suppliers a nd to all of Ecuador's export companies.  This made it impossible 
for her delegation to provide stable information on import conditions for Ecuador's major exporters in 
the negotiations of modalities in the agriculture sector  of the Doha Round.  With the legal issues and 
the inconsistency of this request so closely tied, Ecuador did not believe that  the EC waiver request 
could be granted today.  5.7 The Chairman
 asked that further interventions focu s on the acceptability or not of the EC's 
proposal to postpone consideration of this ma tter until the monitoring and review process was 
concluded.    5.8 The representative of Honduras
 said that other elements, besides the monitoring and review 
process, should be taken into account in the discussion of the EC request.  Honduras was concerned 
that the EC's request had come up once again on the Council's agenda.  As confirmed by the WTO 
Appellate Body, a waiver of Article XIII obliga tions was only authorised in truly exceptional 
circumstances.  In the 20 01 Decision granting the EC an Article XIII waiver, it was clearly stated that 
it was only granted because of the exceptional circ umstances surrounding the settlement of the banana 
dispute.  The decision stated specifically that the EC, Ecuador and the United States had reached 
terms of an agreement necessary for the authorisatio n and granting of the waiver of obligations from 
Article XIII.  Although Honduras was not part of that particular process, it accepted the waiver 
because it recognised the special circumstan ces surrounding the 2001 waiver request.   
 5.9 The present situation was different.  The ne w EC measures were not taken under exceptional 
circumstances.  On the contrary, there was a signi ficant legal dispute under way.  In January 2006 
Honduras had consultations under Article XXI:5 with  the European Communities.  The Governments 
of Honduras, Nicaragua and Panama made it clear that  they did not consider that the new EC banana 
regime complied with the recommendations and re solutions which emanated from the Banana III 
dispute, nor with the decisions which were take n thereafter.  Tariff measures and the quota for ACP 
suppliers discriminated against Latin America.  This was an obvious violation of Article I and 
Article XIII of the GATT.  This discrimination was not theoretical or abstract;  it inflicted irreversible 
injury on the economy and the development of H onduras and other countries in Latin America.  On 
many occasions, Honduras had asked the EC to negotia te an acceptable agreem ent for market access.  
Unfortunately, instead of negotiating, the EC had de cided to ignore Honduras' concerns and use this 
waiver request to divert legal claims.  The EC said that the systems set up for monitoring were the 
solution.  But Honduras had always said no to this  which was why it carried out consultations under 
Article XXI:5 and why it insisted that there was s till a legal dispute.  These circumstances could not 
be considered as genuinely exceptional, nor comp atible with WTO objectives and aims.  That was 
why Honduras believed that there was no acceptable basi s for considering this request, even when the 
EC considered that the monitoring process, with  which Honduras did not agree, was concluded.   
 G/C/M/83 
Page 16  
 
  5.10 The representative of Colombia
 considered the present proposal by the EC creative in trying 
to divert the substance of the debate on this i ssue, i.e. the legality of multilateral negotiations. Her 
delegation was also surprised at the new proposal given the awareness by Members that this item was 
going to be on the Council's present agenda, and give n that the October 2005 debate of this issue was 
postponed.  She considered this element of surp rise unfair given that such waiver requests were 
usually subject to advance consulta tions, of which none were requested by the EC.  Clearly, today the 
Council would not have approved the EC's request for an extension of the waiver.  Her delegation 
would not agree to such a request;  the rules of the WTO were the same for all Members.  The EC 
could not ask this Council or the WTO for a waiver in order to apply a licensing regime that was specific to the imports coming from ACP countries, ignoring other elements, such as the tariff rate.  
The EC committed itself in 1993 to move to a single tariff-only regime for bananas by 
1 January 2006.  The EC, in requesting the extension of this waiver last October did not listen to the 
second arbitrator's decision, and, in fact, set up a mixed regime for banana imports.  This was what 
she was referring to as a double standard.  Because th e request for a waiver still stood, the EC was not 
complying with its commitment for a single tari ff-only regime.  This was why the 2005 ECs' 
Regulation 19 did not meet with Colombia's understa nding.  Regulation 19 stated that the EC was not 
capable of negotiating an agreement acceptable to Ec uador and Panama as main  supplier interests, nor 
with Colombia and Costa Rica as parties with substa ntial interests.  Consultations the EC carried out 
with other WTO Members did not give rise to an acceptable agreement either.  However, the EC 
never even negotiated with Colombia.  In the very few meetings which did take place, the EC simply 
informed or notified Colombia what internal EC de cisions were made.  Ther e were no negotiations on 
tariff rates, on a quota, nor on anything else.  The EC  wanted to change to a different regime for the 
EC.  However it would be managed, the issue for her delegation was a legal one.   The EC notified, its 
decision to renegotiate banana concessions and to c onsolidate a €230 per ton TRQ.  This notification, 
which was a legal document, was still alive in the WTO.   The EC was now obliged to clarify or add to 
this legal document because it provided the legal stat us with which the entire procedure was started.  
Her delegation was surprised at the way in which it was being treated because there were acceptable 
mechanisms in the WTO for advance consultations in  order to avoid the type of surprise with which 
her delegation met today.     5.11 The representative of Costa Rica
 said that his delegation would continue to work 
constructively in examining this waiver request.  It was true, as the EC acknowledged, that concerns 
still existed.  He noted that paragraph 5 of the waiver request read, "Noting that, in light of the Annex 
to the Doha Waiver, it is appropriate for the EC to  maintain a TRQ for bananas of ACP origin so as 
to ensure that the envisaged rebinding of the EC tariff would result in at least maintaining total 
market access for MFN banana suppliers."  This paragraph recognised that  the reconsolidation of the 
TRQ had been provided and foreseen in order to maintain market access for MFN banana suppliers.  
Even if the EC recognised this in its waiver request , it had not rebound the rate as had been envisaged.  
If the way in which the EC had intended to uphold their obligation to maintain total market access 
was to rebind the tariff and to combine it with a TRQ for ACP countries, by not rebinding, it was quite normal that Members could not decide on the TR Q.  The other half of the solution that the EC 
was suggesting was still missing.  When the waiver  was initially approved in 2001, all Members had 
agreed that the EC would, as of 1 January 2006, m ove to a tariff-only regime exclusively and that it 
would rebind its tariff.  He belie ved that hidden behind the EC's pr oposal to postpone consideration of 
its waiver request until after the unilaterally implemented monitoring and review process was 
concluded, was the rebinding of the tariff and not de ciding on the TRQ.  In other words, the EC did 
not intend to rebinde the tariff until the monitoring w as finished.  This was the real reason behind the 
proposal to postpone consideration of this waiver re quest.  His delegation considered it a serious error 
vis-à-vis the obligations contained in the 2001 waiv er annex, which established 1 January 2006 as the 
date for the binding of the new tariff.  It was also serious because the EC intended to arrive at the end 
of April without a bound rate for bananas.  This was an important date for the Doha Round.  Did the  
EC expect that modalities for agriculture and fo r market access would be adopted without knowing 
how they would be applied on the most important export product for many Latin American countries?   G/C/M/83 
 Page 17 
 
 
  Even if decisions on the threshold and the existence of pivots could be made, Members would not 
know how the modalities would be a pplied to bananas because ther e was no agreed TRQ to which 
such modalities would be applied.  He believed that this was the card that the EC was keeping up its 
sleeve, and by doing so was playing with fire.  By  not consolidating tariffs for bananas and expecting 
Members to agree upon modalities in April was obviously placing mines on the road for modalities.  it 
was important to make this warning now as he di d not want banana producin g countries to be accused 
later of courting problems in the Doha round of negotiations. 
 5.12 The representative of Panama
 said that his delegation agreed with the statement by Honduras 
because it considered that the EC's request for a waiv er was unjustified.  Not only did the EC request 
not meet the "truly exceptional circumstances" cr iterion for granting an exceptional waiver of the 
obligations set forth in Article XIII of the GATT, but  it did not even comply with the basic terms and 
conditions of the  Understanding in Respect of Waivers of Obligations Under the GATT 1994.  
Paragraph 1 of this Understanding  required that all waiver requests include a thorough description of:  
1) the trade arrangement to which the request refe rred;  2)  the specific policy objectives which the 
Member sought to pursue;  3)  the reasons which prevented the Member from achieving its policy 
objectives by measures consistent with its obliga tions under the GATT 1994.  The EC's request of 
7 October 2005 fell far short of these requirements.  First, it did not provide a proper description of 
the ACP tariff quota arrangement for which it had requ ested the waiver.  Without the elements needed 
for a full understanding of the bound treatment app licable to MFN suppliers, it was impossible to 
understand the treatment accorded to the ACP countri es.  According to the arbitrators in 2005, the 
ACP and MFN treatment were "two sides of the same coin".  Since the EC never explained what the 
bound level for MFN bananas would be, it was impos sible to understand precisely the advantages that 
ACP bananas would enjoy under the tariff quota referred to in the request.   
 5.13 Moreover, the request failed to describe th e specific policy objectives that the EC sought by 
the measures in question.  Although the EC stated  that the new arrangement "would maintain full 
market access for MFN suppliers", there was no economic  analysis to support this claim.  Indeed, his 
delegation's analyses showed that Latin America would probably lose 1 million metric tonnes of 
access as a result of these new measures.  Similarly, it was impossible to back the EC's claim that the 
tariff quota arrangement for the ACP countries would "m aintain an equivalent level of preferences for 
the ACP banana supplying countries".  His delegation was convinced that granting a much wider 
margin of preferences for the volumes included within an expanded ACP quota simply did not 
produce an "equivalent level of preferences".  Sin ce the EC request did not provide credible policy 
objectives, it clearly did not comply with the last of the three requirements in the Understanding in 
Respect of Waivers :  the EC did not explain the reasons which prevented it from achieving its policy 
objectives by measures consistent with the GATT.  In  Panama's view, until the EC fully satisfied all 
of the requirements set forth in paragraph 1 of the Understanding in Respect of Waivers , the Council 
could not even initiate the 90-day period established in the Marrakesh Agreement  for its consideration 
of the waiver request.  In any case, since the EC  request undermined pending legal remedies, the CTG 
should not support it.  5.14 The representative of Nicaragua
 believed that the EC was asking Members to remain in an 
unlawful situation.  This was not possible for he r country and was the reason behind her delegation's 
intervention.  Nicaragua considered that this requ est was an unacceptable effort to ignore the rights 
and trading interests of Latin America.  Over th e past months her delegation had submitted to WTO 
Members the legal elements contained in the ne w EC regime.  The present request confirmed the 
existence of these violations and demonstrated that th e EC was aware that they existed.  Therefore, to 
postpone discussion of the request meant remaining in the same unlawful or illegal situation.  Her 
delegation had also explained the injury that this  new regime would cause, which was far too onerous 
for developing and poor countries such as Nicaragua.  It was not necessary to speculate on the extent 
of this injury because there was clear evidence, which had been expressed in the two WTO 
arbitrations.  In these two cases, the arbitrators conc luded that even if the EC were to impose a limit G/C/M/83 
Page 18  
 
  on the ACP volumes, any preferential TRQ treatme nt over and above €75 per metric ton would 
increase the advantage to the ACP suppliers, which was a clear disadvantage for the Latin American 
banana suppliers.  The 2006 EC regi me had totally ignored the conclusions in fact and in law.  It 
increased by more than two-fold the tariff prefer ences enjoyed by the ACP countries, increased by 
75,000 metric tons the TRQ for ACP countries, and also allowed the ACP countries to enjoy 
unlimited access outside the quota with a lower new tariff for out of quota volumes.  
 5.15 She quoted from the arbitrators' report regard ing this regime:  "The gains obtained by the 
preferential suppliers as a result of these additional advantages will be obtained at the expense of the 
MFN banana suppliers."  The EC said that the quot a was the best way of maintaining market access.  
This implied that there was the possibility that discrimination in favour of ACP countries could be 
increased and that, therefore, currently existing discrim ination levels should be tolerated.   Since the 
new EC regime came into force, Nicaragua had lost  all hope of gaining access to the EC market and, 
even more serious, could lose its entire banana indus try.  Quite frankly, her delegation could not see 
how the situation and discrimina tion suffered could get worse.  Furthermore, this discussion on 
whether to maintain the discrimination clearly illustrated why Nicaragua n suppliers and Latin 
American suppliers did not have any other option but to exercise their rights under Article XIII and 
under other WTO provisions so as to restore fair ac cess to the EC market.  Because truly exceptional 
circumstances which were required to grant a waiver did not exist, and because the EC request did not 
fulfil the terms and basic conditions established in  the Understanding on Waiv ers, her delegation was 
not ready to give up its rights and therefore did not ag ree that examination of this request be initiated.  
It did not agree as well that the unlawful situatio n be pursued with the excuse that a monitoring 
mechanism was to be started.  5.16 The representative of Guatemala
 supported the statement by Colombia.  On such a complex 
and sensitive issue, it was important that consultati ons take place with interested Members to avoid 
surprises.  His delegation was concerned with linking  the examination of the waiver request with a 
monitoring system which Members didn't know how l ong would last because this would add obvious 
uncertainty to the current situation.  Because of th e systemic and trading interests which his country 
had with this issue, it fully supported the concerns  aired by other Latin American countries and would 
need more time to study the proposal.  
5.17 The representative of Colombia
 stated that, at this stage, it was irrelevant to decide whether to 
examine, postpone or withdraw the EC waiver request .  Indeed, the EC, Latin American countries, the 
Government of Norway and the Secretariat of the WTO should note that Colombia promoted the 
mechanism of good offices before the Hong Kong Mini sterial Conference as well as in Hong Kong.  
Colombia believed in this mechan ism.  Members had the good fortune of having Minister Jonas 
(Norway), take seriously the possibility of me diation between the EC and the Latin American 
countries.  She expressed gratitude for Minister J onas's efforts to establish a coordination mechanism 
so that the "good offices" mechanism could r eally work.  She also expressed gratitude to 
Ambassador Erik Glenne and the Norwegian dele gation who were also fully committed to this 
project.  She was certain that they were as surp rised as her delegation that the EC sabotaged the 
mechanism with its behaviour at this meeting.  It was for this reason that sh e wished to inform the 
Council that Colombia was withdrawing from th e "good offices" mechanism managed by the 
Norwegian Government.  There was no meaning in ta king part in such a mechanism when one of the 
parties showed no loyalty.  5.18 The representative of Honduras
, given the surprise element in  the EC proposal, asked the 
following questions: first, since the examination of th e request did not begin today, did this mean that 
the EC was withdrawing this item from the agenda ;  second, would the EC raise the ACP quota that 
had been legalised by Article III while it was considering submitting the request once again for 
consideration by the Council;  th ird, how could the EC justify th e request presented to the Council 
today knowing that Honduras did not accept the monito ring system;  and fourth, how did the EC plan  G/C/M/83 
 Page 19 
 
 
  to fulfil its obligations under the WTO Agreements , or should it be understood that the proposal made 
today was, in fact, a request for an extension so th at the EC could continue to violate WTO rules;   
and finally, should the WTO Members support this in this Council?  5.19 The representative of the European Communities
 took note of the interventions on this 
divisive subject.  His delegation was aware of the serious social and economic concerns of many of 
the countries that had spoken as well as others.  Th e political question had to do with access to the EC 
market both for MFN and ACP suppliers of bananas.  However, the difficulty with this particular 
agenda item was that it was a partial element of the bigger picture.  As stat ed by Costa Rica, this 
agenda item brought into question the new banana regime, potentially the enlargement of the EC, the 
unbinding and rebinding of tariff rates, the Article XXVIII negotiation process, the timing of all these 
measures, and even the modalities for agriculture.  He acknowledged that some in the EC did not 
believe that an Article XIII waiv er should be sought while others be lieved that it would increase legal 
certainty.  But it was clear that it could not be treated in isolation.  Under these circumstances, it was better to concentrate the debate on establishing a ne w regime that worked, that would bring in the 
equivalence of market access that the MFN supp liers were seeking while retaining the access 
opportunities for ACP suppliers.  The only way that this could be done was by watching whether the 
tariff that had been put in place worked.  His dele gation was aware that a number of Latin American 
suppliers considered the tariff too high while a numb er of ACP suppliers considered it too low.  The 
only way to find out was by seeing what would happ en in the market which was the reason why the 
EC autonomously set up a monitoring process.  Through the "good offices" of the Norwegian 
Minister, interested Latin American producers woul d be able to enter into consultations.  His 
delegation was not trying to shock or surprise, nor  to give the impression that it was not concerned 
about the interests of other Members.  It took th eir concerns very seriously which was why it was 
engaged in the "good offices" process.  He urged Colo mbia to reconsider its stance because it was still 
his delegation's intention to follow thr ough on this open dialogue process.   
 
5.20 He acknowledged that there was still uncerta inty because with such strong differences of 
views, only the market would show the results in te rms of market access.  It would not, in his view, 
resolve the particular problem of Article XIII, i. e. restricting the access of ACP countries to the EC 
market on a preferential basis.  This problem should be resolved at the right moment and his delegation did not consider this the right moment.  It would be better  to allow the processes to unfold, 
to determine what was the correct tariff level,  and then the regime would settle into place. 
 5.21 In response to the specific questions from Honduras, first, he had already explained the instructions that he had received as well as th e reasoning behind the postponement;  second, the EC 
was not eliminating the ACP quota.  It would be bo th politically and economically incorrect to do so.  
With respect to how the EC would fulfil its obligati ons, his delegation had trie d to determine a tariff 
which operated fairly for both sides.  It was likely that the debate on this would continue until more 
information was had on the way the market worked  under the new tariff arrangement.  He reiterated 
that his delegation treated all Members' concerns caref ully and was not trying to stifle the debate on 
this subject.    
5.22 The Chairman
 noted that there was no agreement on the substance of this waiver request.  The 
question before the Council was one  of procedure.  He asked whet her Members could agree on the EC 
proposal to postpone consideration of this waiver  request until the monitoring process was concluded. 
 5.23 The representative of Honduras
 stated that, with the element of surprise in the EC proposal, it 
was not acceptable to his delegation.   He request ed that the Chair carry out consultations on this 
matter.  G/C/M/83 
Page 20  
 
  5.24 The Chairman
 proposed that the Council take note of th e statements made and revert to this 
matter at its next meeting.  He would inform hi s successor about the situation and ask that he be 
available for consultations on this issue.    5.25 The Council so agreed
. 
 
VI. ENLARGEMENT OF THE EUROPEAN COMMUNITIES – NEGOTIATIONS 
UNDER ARTICLE XXIV:6 – STATEMENT BY COLOMBIA 
6.1 The Chairman  noted that this item had been placed  on the agenda by the delegation of 
Colombia.  He asked Colombia to make its statement. 
 
6.2 The representative of  Colombia  said that her delegation had placed this item on the agenda of 
the CTG.  Colombia was involved in three proces ses concerning bananas which it attempted to avoid 
mixing.  Colombia understood that the Membership was confused about the entire banana debate, and 
it therefore wished to emphasize that the topic a ddressed under the previous agenda item concerned 
the Communities' obligation to adopt a single tariff re gime for banana imports into its market.  She 
would not address this topic but only the question of  the enlargement of the EC.  As a reminder to 
Members, the third negotiating process concerned th e Round.  The negotiations in which other WTO 
Members took part related to the ECs' enlargemen t from 15 to 25 members as from 1 May 2004.  On 
19 January 2004, the EC notified the accession of 10 new members and consequently the withdrawal 
of the commitments contained in the Schedules of  Concessions of those 10 countries, which, as a 
result of the expansion, undertook the commitments of countries that were already part of the EC 
membership.  In its notification, the EC st ated that it was initiating the procedures under 
Articles XXIV:6 and XXVIII of the GATT 1994.  With  a minor share in the markets of the 10 new 
EC members according to the standards unilaterally determined by the EC, Colombia exported only a 
few products to those markets with the exception of one key commodity for Colombia and its exports 
- bananas. 
6.3 Colombia was exporting bananas to several new EC members under the Generalized System 
of Preferences or through the duty-free or low-ta riff quotas established in the Schedules of various 
countries.  The EC's expansion significantly affect ed our access to the markets of several of these 
countries since, before 1 January 2006, the EC a pplied a complex banana import system involving 
payment of a tariff of €75 per tonne, restricted access through licensing, and an intricate quota 
administration system.  So severe was the injury sustained by Colombia that on 15 September 2004 
the EC officially recognized the country's negotiatin g rights in view of the existence of substantial 
interest, because of the discrepancy in paym ent of import duties on bananas classified under 
subheading 08030019.  The EC also quantified the prejudice caused, arriving at a sum that she did not disclose out of loyalty to WTO principles and Arti cle XXIV:6, that totalled several million euros.  
This was not an inconsiderable amount for any Memb er, developing or devel oped.  Colombia had had 
only one session of negotiations unde r Article XXIV:6 and hence Article XXVIII.  On that occasion, 
it was informed that the EC viewed the banana ques tion as a single issue and that it wished to put on 
the table both the negotiations on the binding of a single tariff on bananas and those relating to the 
enlargement.  Colombia never agreed to that, and since September 2004 it had sent five written 
communications to the EC, seeking payment of comp ensation.  Also since 2004, Colombia had taken 
part in every General Council meeting dealing with the item that Honduras and Guatemala had 
regularly placed on the agenda, at which it had resp ectfully requested space for negotiation with the 
EC.  Colombia had always supported the EC's re quests for extension of the negotiating deadline, 
which the EC had consistently stated that it needed  to be able to concl ude negotiations with all 
Members affected by the enlargement. 
6.4 After the latest General Council meeting on 8 February, at which her delegation delivered a 
statement objecting to the fact that the EC had conducted negotiations sole ly with developed and  G/C/M/83 
 Page 21 
 
 
  certain major countries, her delega tion was called to a briefing by the EC on 16 February.  At that 
meeting her delegation learned that the several million euros which the EC had acknowledged owing 
Colombia had been reduced to cons iderably less than five million.  The EC all but suggested that it 
was for Colombia to offer compensation for the en largement.  The EC told Colombia that it had 
accorded it compensation for 2004 in the form of an  autonomous tariff rate quota of 300,000 metric 
tonnes granted to all MFN exporters for access to th e markets of the 10 new members, and for 2005 in 
the form of a quota of 460,000 tonnes granted to all MFN exporters to those same markets.  Her delegation responded that that was unacceptable simp ly because the quota had not been set in order to 
give Colombia market access but to maintain firm  control of and access for bananas to the EC-15 
market and hence to afford protection for EC and ACP production.  Her delegation, therefore, did not 
believe that a TRQ constituted compensation, as it w as presented.  Her delegation was then advised 
that as of 2006, with the new tariff of €176 per tonne and application of the same method for 
calculating prejudice, the value of the latter had fallen to less than 3 million euros.   
6.5 It was for this reason that her delegation had placed this item on the agenda and requested that 
her statement be circulated as a WTO document.  In this statement, Colombia was trying to 
demonstrate that some Members were not observing the principles and legal provisions and that the 
EC had failed to observe them and had so far disr egarded its right to compensation.  It had never 
negotiated with Colombia even if it had claimed to do so.  All the linkages established with the 
negotiations on the single tariff for bananas, which was not negotiated either, but imposed, were but 
ways devised by the EC to avoid assuming its res ponsibility to provide compensation as a result of the 
enlargement.  The only aspect that these two processe s had in common was their coincidence in time.  
How fortunate were those countries that encountered no such difficulties.  All those who were granted 
compensation received it only because their access was jeopardized.  As for Colombia, because 
bananas were an emblematic pr oduct and two completely different processes in both nature and 
substance coincided, it had nothing so far.  Colomb ia was participating in these negotiations in good 
faith and had made a constructive contribution so th at the EC could complete its negotiations under 
Articles XXIV:6 and XXVIII of the GATT 1994.  Thanks  to its endorsement of the five requests for 
extension, the EC was able to conclude the negotiati ons with the major trading partners in the WTO.  
Her delegation, therefore, wanted to voice before this Council its profound disappointment at the way 
in which the EC had treated Colombia in this process.   
6.6 Rules were made to be respected and that  the EC was bound to abide by its obligations 
towards Colombia.  If they did not, her delegati on would resort to the rules and would apply 
retaliatory measures, as an alternative that was la wful but bad for all parties and for the multilateral 
trading system.  She noted how and when the rice problem between the EC and the United States was resolved.  The issue was settled immediately afte r the United States announced retaliatory measures 
against products from Europe's Mediterranean countri es, which induced the EC to settle the matter.  
Obviously in this instance the other party was a Me mber with a very important and sizeable market.  
Colombia hoped that by 1 June 2006 the EC would have compensated it for the prejudice caused by 
the modification of the bound tariffs of its 10 new members.  If not, Colombia would announce the 
application of a measure that would affect a me mber of the EC with a good understanding of the 
complexity of the banana sector, because it was the leading exporter of a luxury product to our market.  Such a measure would unfortunately affect other exporters. 
6.7 The representative of Honduras
 noted, again, the EC's violations in not meeting the rights that 
they had recognised under Article XXIV:6 and XXVIII of the GATT 94.  It was surprising that after 
the WTO Membership had contributed positively to ensuring that the EC concluded its negotiations 
under Article XXIV:6 and XXVIII by granting its request s for an extension five times, the EC refused 
to grant compensation to Colombia and it continue d to refuse to recognise the rights of small 
countries, like her own.  This type of action caused great problems for the credibility of the 
multilateral trade system, particularly during the ne gotiations of a new round  called the development 
round.  Honduras had always respected its obliga tions which it accepted when  it became a Member G/C/M/83 
Page 22  
 
  of the WTO, but it appeared that the EC made clear distinctions among Members when negotiating 
compensation or recognising rights.  This was a rene wed appeal to the EC to respect its obligations 
within the WTO framework.  6.8 The representative of Panama
 shared the concerns expressed by the distinguished delegation 
of Colombia with respect to negotiations under Article XXIV:6 of the GATT and the process of EC 
enlargement.  The Republic of Pa nama had been recognised by the Communities as a main supplier of 
bananas in the markets affected.  Despite that re cognition and the fact that it had sought formal 
consultations with the European Union on this matte r, it had not received any reply to its request for 
negotiations on enlargement.  Two years after the w ithdrawal of the commitments in the schedules for 
the ten new EC members, and following the resulting injury to its banana exports, it was still in a 
period where its rights were not being recognised a nd suitable compensation had not been offered.   
 6.9 The representative of Ecuador
 also supported what had been said by Colombia.  Not only did 
her delegation share the difficulties but also the disappointment and frustration at the way in which 
the EC had carried out such negotiations.  Ecuador  had suffered some 75,000 Euros in damage.  That 
had been recognised yet nothing had been done by the EC thus far to compensate for this injury.  Her 
Government had been waiting for almost two year s for a positive approach from the EC.  Given its 
limited human resources, it could not continue to dedicate time to a fruitless dialogue on this topic.  It seemed a paradox that the EC, a political and economic union composed of 25 industrialised, 
developed States with immense economic resources, was putting forth all types of excuses as to why 
it could not offer compensation to exporting countri es like Colombia and Ec uador.  Ecuador had done 
everything it could to maintain competitiveness fo r its exports in the European market.  If the 
technical difficulties it had in terms of trade retaliatio n were added, the situation became more critical.  
However, this did not mean that it would renounce use of its rights if that was the path that the EC 
forced it to take.  Moreover, it was a paradox that th is process was being interpreted by the EC as part 
of the outcome of the Doha development programme.  Even if the processes were linked, her 
delegation did not understand how economic growth and greater in tegration of Latin American 
economies in the international economy would be help ed by the the EC's actions, which appeared to 
cast aside their development aspirations.  She asked that the CTG carefully follow the development of 
the process in the EC to see if it contributed to the strengthening of the intern ational trade system and 
the development dimension therein. 
 
6.10 The representative of Nicaragua
 said that her delegation supported the comments made by the 
delegations of Colombia, Ecuador and Panama.  It stressed to the WTO membership that the EC was 
further violating the international trade system.  References to Articles XXIV:6 and XXVIII brought 
into question the credibility of the international trading system  because these pr ocesses endangered 
progress in the negotiations on th e Doha Development Agenda. 
 6.11 The representative of the European Communities
 said that he would transmit Colombia's 
statement to his capital.  He understood that the re presentative of Colombia had tried to avoid merging 
the three banana-related processes which he would also  try to do, but which was difficult.  He also 
noted a positive meeting with a Colombian Vice-Minist er and other senior officials there.  But it was 
obvious that further technical or high-level contacts were necessary.  On Ar ticle XXIV:6 generally, he 
believed that his delegation had scrupulously followed the procedures laid down and, in that regard, 
had reasonable success in managing to conclude a nu mber of agreements with a significant number of 
trading partners.  There were one or two outst anding issues, of which bananas was one.   
 
6.12 With respect to bananas, he noted that his delegation had been replacing the quota regime 
with a tariff-only regime under the Article XXVIII process, and it was simultaneously completing the 
EC enlargement process and Article XXIV:6 nego tiations.  The idea was that on 1 January 2006, a 
certain unique tariff would apply to EU 25 members, i.e. EU old 15 members, plus new 10 members.  This was designed to provide market access opportun ities for the replacement of the old tariff rate  G/C/M/83 
 Page 23 
 
 
  quotas for the original EU 15, as well as whatever access opportunities that were there, and provide 
some kind of compensation with regard to th e new EU10, because the tariff-only regime would 
constitute a single tariff for the entire EU 25.  Regardi ng the particular tariff level, he noted that some 
Members think it's too high, some think it's too low, and some think it's just about right.  Whatever it 
was, it was designed ultimately to provide market access opportunities for all suppliers into EU 25 not 
EU 15 plus10.  He added that the monitoring exercise referred to earlier was designed to assess 
whether the regime "effectively provides market acc ess to MFN suppliers, at least equivalent to that 
provided under previous banana regime", or regimes.  That referred to the EU 25.  
 6.13 During the period 1 May to 31 December 2004, the EU introduced a special TRQ of 300,000 
tons.  In the calendar period of 2005, a TRQ of  460,000 tons was introduced, the purpose of which 
was to make the market work for the EU and provi de bananas for the EU 10, but also, equivalently, 
provide MFN access for MFN suppliers.  Whether that was sufficient was certainly a point that his 
delegation was willing to discuss.  But he was trying to meet the concerns as best he could within the 
CTG.  He would convey them to Brussels, along with the comments of Honduras, Panama, Ecuador 
and Nicaragua.  With respect to the question of negotiating rights about which the Ambassador of 
Honduras spoke, discussions were held in the Genera l Council although this was still not yet resolved.  
It was, of course, the right of Honduras and Guatemala to maintain that point on the agenda.  With regard to the Ambassador of Panama's point, he not ed that the Ambassador did not say there had been 
no compensation, just that it was not adequate.  In  other words, tariff rate quotas were designed to 
provide some kind of access during 2004-2005.  It could be argued whether these were adequate as 
well as whether the tariff that ha d been fixed in 2006 was right or wrong.  He reiterated that his 
delegation understood the concerns and would be happy to engage in  further debate, both bilaterally 
and in the CTG.    6.14 The representative of Colombia
, noted that the EC's explanation again linked the issue of the 
single tariff with the enlargement of the European  Communities.  The statement just made showed, 
quite rightly, that Colombia did suffer injury as a r esult of the enlargement of the EC and that this 
injury had not been compensated.  Moreover, it had not  even been negotiated.  The single tariff matter 
and the enlargement of the EC were two separate issues.  The single tariff issue was mixed with the ACP quotas and this had been paid.  She expressed  appreciation that the EC representative would 
transmit her concerns to its capital and also for th e statements of support from other Members.  
Colombia hoped this matter would be resolved and would like to avoid further conflicts with the EC 
on bananas.  The matter was important to Colombia and her delegation also believed that it should be 
important to the entire WTO Membership.    6.15 The Chairman
 proposed that the Council take note of the statements made.   
 
6.16 The Council so agreed . 
 
VII. ISSUES RELATED TO TRADE IN TEXTILES – SUBMISSION OF TURKEY  
7.1 The Chairman  recalled that at its last mee ting on 10 November 2005 the Council had 
continued to discuss the submission by Turkey  as contained in document G/C/W/522.  Seven 
Members had taken the floor and the statements were recorded in the minutes, contained in 
G/C/M/82.  It seemed clear from the interventi ons that there was no common understanding among 
the Members on the proposals contained in the Turkis h communication.  He briefly recalled that in 
this communication Turkey, inter alia , called for the preparation of a study by the Secretariat to 
"examine adjustment-related issues and make recommendations on measures in order to assist 
developing and least developed co untries experiencing challenges in the short and medium term as a 
result of the expiration of the ATC".  It also asked for the establishment by the CTG of a work 
programme for a full and periodic review of global textile and apparel production, export and market 
circumstances so as to develop appropriate remedi es within the multilateral trading system.  As a G/C/M/83 
Page 24  
 
  number of delegations had expressed the strong wish th at this issue be kept on the agenda of this 
Council, it was agreed to revert to the item "Iss ues Related to Trade in Textiles" at the present 
meeting.  Open-ended consultations were also c onvened on 21 February 2006.  While the discussions 
were useful and constructive, pos itions had not radically changed. 
7.2 The representative of Turkey
 stated that Turkey’s efforts to  keep the textiles and clothing 
related issues on the agenda and initiate work to  avoid the emerging negative outcomes went beyond 
the completion of the Agreement on Textiles and Clothing.  Each and every day, Turkey observed that its concerns becoming reality.  In Turkey, the bad course of events had led the sector representatives 
to have a special meeting with the Prime Minister at the end of February 2006. During the meeting, 
they had voiced their apprehension regarding the futu re of the sector and had stated that, unless action 
was taken, the sector would not last long.  In fact, recent developments justified their worries.  
According to 2005 statistics, the textiles and clothi ng sector in Turkey has endured an export loss 
worth almost US$2 billion.  In the same year, 11 60 facilities had been closed and about 151 thousand 
jobs had been lost.  Moreover, a survey of the Central Bank of Turkey on various sectors' balance 
sheets for 2005 displayed the fact that the textiles sector had worked  with zero profit and that the 
profit/capital ratio for the clothing sector had turned out  to be as low as 0.5 percent.  These numbers 
were expected to regress  further in 2006. 
7.3 Turkey was not the only Member that suffe red from transition-rela ted problems after the 
quota phase-out. In Morocco, for instance, textiles an d clothing exports had decreased by 10.2 percent 
during the January-November 2005 period.  In para llel, the exported items' unit price had also 
gradually gone down.  Discussions under agenda item 3 of today's CTG meeting on preference 
programmes had also concentrated mainly on the te xtiles and clothing sector.  This sector in some 
instances accounted for as much as 80 percent of to tal exports and more than 50 percent of total 
employment in developing countries.  It had spread into the economic and social lives of many countries to such an extent that any deterioration in the conditions could lead to the destruction of 
many economies. Under the current circumstances, m illions of workers faced a dire future. The threat 
to the livelihoods of millions of workers and thei r families in developing countries demanded urgent 
action. 
7.4 All these facts pointed to the obvious necessity to act without wasting time. It was worth 
exploring what response could be found within the context of the multilateral trading system through 
a work program established within the CTG.  As the main global organization dealing with trade 
matters, the WTO should be utilized to discuss an d decide on ways to provide support for those 
countries that faced adjustment challenges in the po st-quota era.  He presented an "outline" of the 
work program, the details of which should be ela borated by the concerted efforts of all the WTO 
Members, as followed:  " Fully respecting the basic principles and rules of the WTO and rights and 
obligations of the Members, the CTG will establish a work program that will review the global textiles 
and apparel production, trade and market circumstances after the termination of the ATC; look into 
options for developing countries to improve their competitiveness in the textiles and clothing sector; 
scrutinize the adjustment-related issues and make re commendations on measures in order to assist 
developing countries experiencing challenges; examine the ways to develop collaborative efforts with 
the relevant international organizations, including the World Bank, IMF in order to effectively direct 
resources under existing programs toward diversificati on of economies relying heavily on the textiles 
and clothing sector ." 
7.5 It was of great importance to clarify that  Turkey's initiatives regarding the textiles and 
clothing sector targeted no country in particular.  Its sole objective was to ensure a smooth transition 
of the sector to the free trade envi ronment.  Turkey's efforts were not intended to make the sector 
work for the benefit of all those involved.  Turkey was only trying to  ensure a safe future for many 
developing countries and believed such an outcome w as desirable for all.  Furthermore, Turkey had 
adjusted its proposal, dated 30 June 2006, in line with  the criticisms received.  For example, the price  G/C/M/83 
 Page 25 
 
 
  control mechanism had been omitted from the scope  of the program. Turkey was not looking for the 
adoption of a solid formula that it had itself prom oted.  The work program was a means of going 
through this transition period w ithout being harmed.  Turkey, therefore, urged each Member to 
participate in efforts to establish the details of  the work programme in a cooperative manner.  
7.6 With respect to the Members which had syst emic concerns, he noted that discussions were 
taking place and certain policy opti ons were being given to the LDCs in the Sub-Committee on the 
Least Developed Countries (LDCs).  Moreover, one should not forget that the Doha Round was 
marked by the ideal of "development".  Thus, deve lopment was within the system itself, it constituted 
its very objective.  He also believed that the sm ooth functioning of trade in textiles and clothing, in 
view of its role in the economies of developing countries, put social responsibility on each Member’s 
shoulders.  In this regard he reminded Members th at the Marrakesh Agreement foresaw the "need for 
positive efforts designed to ensure that developi ng countries, and especially the least-developed 
among them, secure a share in the growth in internat ional trade commensurate with the needs of their 
economic development."  He concluded by saying  that appalling news regarding the textiles and 
clothing sector was making headlines everyday.  Milli ons of people were losing their jobs, and there 
was a need for Members to take action in relation to this issue.  He, therefore, implored Members to 
start working on the details of the work program's outline. 
7.7 The representative of China  observed that this issue had been on the Council’s agenda for a 
long time.  He had listened carefully to the stat ement made by the Turkish representative and he was 
glad to sense some flexibility.  This was positive a nd he hoped that this kind of constructive and 
cooperative atmosphere would last. 
7.8 On substance, China’s position was well known and had not changed.  As a systemic concern 
after the termination of the ATC, his delegation wa s not convinced that the textiles and apparel sector 
should again be treated differently, either in the fo rm of a comprehensive work programme or in the 
form of a study of implications.  China was sympathetic to the fact that some of its developing country partners faced adjustment difficulties becau se China had also been, and still was, facing the 
same difficulties.  At the last Council meeti ng his delegation had drawn attention to China’s 
formidable adjustment experience.  Since it had take n the world half a century to finally bring to an 
end the unfair trading system in textiles and clothi ng, Members must not go back.  In order to address 
the special concerns of developing country Members,  China called for all developed countries to meet 
their commitment to improve their rules of or igin and to provide genuine duty-free quota-free 
treatment for LDCs, so that these countries could c ontinue to increase their participation in world 
textiles and clothing trade.  China also would intens ify its current efforts to assist these countries in 
strengthening their ability to compete under normal trad e rules.   His delegation believed that this was 
the right direction to go.  Unfortunately, some individuals from the industrial sector of developed 
countries had openly advocated WTO minus arrangement s for the textiles and clothing sector.  This 
kind of demand, if translated into government  positions, would put the Round in jeopardy.  He, 
therefore, strongly urged the relevant Members to  take a cautious stance on this sensitive issue. 
7.9 The representative of Mongolia
 observed that the present C ouncil had just witnessed how 
complicated and vital was one single export item - bananas.  The discussion now bore on entire sector,  textiles and clothing, which was complicated, vast an d important for many developing countries that it 
should be dealt with by the appropriate bodies of the WTO.  To the extent that it was a small country, 
Mongolia had suffered a lot in terms of volume, that it had had to adjust its domestic policy to keep 
the sector running.  This was not about the post- ATC process.  It was about how Members could 
adjust to the new situation.  His delegation w as not blaming any country because it was only natural 
that this should have happened.   He was seeking so me sort of support on the part of the Membership 
and the WTO Secretariat to help and assist Member  countries, especially those small and affected 
developing Member countries, to deal with the existi ng and new situation in the sector.  Therefore, his 
delegation supported the Turkish proposal in G/C/W/522.   G/C/M/83 
Page 26  
 
  7.10 In particular, his delegation was interested in having a comprehensive study, if not by the 
Secretariat, at the initiative of the Secretariat involving institutions such as the World Bank, the 
International Monetary Fund and UNCTAD.  In Mo ngolia, there was a lack of understanding of the 
situation because of a lack in human resources and ac ademic capacity to undertake such a study.  His 
delegation would expect the study to examine the situation, provide a clear picture and certain 
recommendations.  For example, his Government had not taken any steps to take advantage of the 
Trade Integration Mechanism of the IMF because it di d not know much about that special mechanism.  
The work programme could advise how to make the best  use of it.  There were many ways to help his 
country adjust to the new situation but it was lack ing capacity to cover everything in the negotiations. 
In this respect, such a study was very important.  The suggested work programme would be helpful in 
dealing with the post-ATC situation in a system atic and organized manner for those countries who 
had been badly affected by the expiration of the ATC.  The point was not to deal with the issue in a conflicting manner.  His delegation wanted to put on  record that it would like the establishment of the 
work programme as suggested by Turkey.  He re iterated his delegation's position that the issue of 
textiles and clothing should remain on the agenda of the CTG. 
7.11 The representative of El Salvador
 stated that the proposal introduced by Turkey for modified 
terms of reference for a work programme on textiles and clothing was a valuable contribution to re-
stimulate the debate on this important topic.  Sh e pointed out that the dr afting presented by Turkey 
was being closely studied with a great deal of interest by her authorities.  She reiterated the 
importance of the textiles and clothing indust ry for El Salvador for both employment and 
development.  Therefore, her dele gation hoped to continue to partic ipate in a constructive manner to 
all consultations regarding this issue. 
7.12 The representative of the United States  agreed with the representative of China that there had 
been an evolution in positions and in the tone w ith which this issue had been approached.  In both 
cases this was a positive development.  He also understood and accepted the point that China had 
been the victim of restraints on textiles and was relu ctant to put it's foot on a path that might lead to 
further victimisation of its industry.   On the other hand, since Turkey had modified its proposal and 
had put out an idea for a work programme, Members should at least be willing to talk about it.  He questioned whether there were some issues that th e WTO as a body, but the CTG in particular, could 
discuss.  An issue of principle was, for example,  not re-imposing the quotas on textiles.  But, as an 
issue of principle, not to be willing to discuss an issue of interest to Members in a WTO body, struck 
him as potentially stressful.  All Members ran into situ ations where they needed to at least discuss as a 
way to help the policy process in the capital.  He, therefore, urged Members to separate the 
consideration of whether the Turkish proposal w as entirely acceptable as was from the willingness to 
at least consider that some process to discuss this issue within the WTO was not unreasonable. 
7.13 The representative of Jordan
 said that the transparent manner in which the Chairman and the 
Secretariat had conducted the work on the issue w ith a view to bringing Members closer to an 
agreement could be felt.  It woul d be redundant to repeat what had been said in the past year on the 
importance of the sector in the economy of his country.  He believed that this sector had been integrated in the multilateral trading system wit hout having analysed the impact on the development 
of some countries.  He believed that the terms of  reference proposed by the Turkish delegation could 
form an excellent basis for the WTO work pr ogramme in coordination with other relevant 
international organisations, to review the global textile and clothing production and trade.  He 
strongly supported the elements of the Turkish pr oposal and hoped that other Members would be able 
to enrich the discussion on these elements for the pur pose of reaching a solution in the Council on this 
important subject. 
7.14 The representative of Mauritius
 welcomed the Turkish proposal for a work programme in a 
sector which was of vital importance for his country  and in which it was facing numerous challenges.   G/C/M/83 
 Page 27 
 
 
  His delegation was giving favourable consideration to th e proposal and intended to revert back to it in 
future meetings with more detailed comment s on the various elements of the programme. 
7.15 The representative of Pakistan  agreed that the recent proposal by Turkey was more 
constructive, including the fact that it was not seeking any development of appropriate remedies.  
However, he was concerned that, after the full inte gration of textiles and clothing in the WTO rules, 
this sector was being singled out for the establishm ent of a work programme.  While any study or 
discussion should not create any problems one ha d recently witnessed, as pointed out by China, 
proposals by some industry representatives from developed countries for “NAMA minus” solutions for textiles and clothing.  He felt that any wo rk programme by the CTG would encourage such 
proposals which were against the “rai son d’être” of the WTO, i.e. to  get rid of tariff and non-tariff 
barriers, and also against the Doha mandate.  Ther efore, he agreed with China that Members should 
close this chapter. 
7.16 The representative of Morocco
 thanked Turkey for it's proposal and for having referred to 
Morocco as one of the countries which was being injure d by the expiry of the ATC.  Given the nature 
of the debate, she had no doubt that there were ot her countries in a similar situation.  Morocco was 
undertaking adjustment measures in this sector.  There was a clear will on the part of her government 
to adjust the domestic policy regarding the textile sector and to assist the industry.  Support measures 
were necessary and Turkey's proposal to establish a work programme and, above all, to undertake a 
comprehensive study, was, in her view, an idea worth elaborating.  In this sen se the U.S. proposal to 
be able to discuss the process in the framework of consultations was also feasible and interesting.  
Therefore, she invited Members to reflect in specifi c terms as to the next stages, i.e. how Members 
could go about drawing up, in concrete terms,  a study or a work programme on this item. 
7.17 The representative of Colombia  said that given that the textile sector had been subject to 
international trade restrictions, it was quite natural that once these restrictions had been lifted the flow 
of textiles and clothing trade would change and ther e would be a certain number of problems.  Turkey 
was suggesting that, as a result of the work progr amme which Members would undertake, measures 
required in order to eliminate such problems in th e market would be adopted .  Her delegation believed 
that markets could change due to a number of other circumstances:  economic cycles, technological innovations, change in consum ers' tastes.  A number of parameters  could come into play.  Given the 
multiplicity of circumstances, it was difficult to keep all disturbances out of the market.  And it was in 
the nature of markets to undergo changes at any poi nt in time.  Her delegation was, therefore, not 
convinced that it would be pursuant to the objectives of the WTO to adopt practices so that whenever 
such disturbances arose in a given market, a work  programme is undertaken in order to eliminate 
them.  The preamble of the Marrakesh Agreement contained a commitment to reduce customs duties, 
tariffs and other obstacles to trade, as well as to e liminate discriminatory practices in trade relations.  
Within the WTO Agreements it was provided that, in the case of injury or threat of injury due to 
unlawful trade practices or liberalisation, na tional governments be entitled to undertake trade 
remedies.  But she found it difficult to understand w hy, whenever there was some kind of disturbance 
for a given product on a market, be it for steel or for textiles or whatever other product, one would 
need to establish a work group and a work programme in order to see what re medies needed to be 
adopted.  She believed that the WTO agreements had provided for mechanisms that could resolve 
problems such as those laid out by Turkey. 
7.18 The representative of Guatemala
 stated that textiles and clothing were extremely important 
industries,  which played an important part in th e economic and social development of his country.  
The Turkish proposal had been transmitted to the cap ital and Guatemala wished to be included in any 
consultations on this topic. 
7.19 The representative of Honduras  said that her delegation had previously stated its interest in 
taking part in any consultations on this topic.   Her delegation maintained this interest. G/C/M/83 
Page 28  
 
  7.20 The representative of India
 said that her delegation had some systemic concerns with regard 
to undertaking separate specific studies or work pr ogrammes on individual sectors.  As mentioned by 
the delegation of Colombia, when any sector was integrated into the trading system, certain 
adjustments were required in moving towards a mo re market-oriented system.  These adjustments 
took place not only in the textiles and clothing sect or, which admittedly was one of the important 
sectors for developing countries, but in a few other s ectors as well.  Her country did not want to set a 
precedent in the WTO of undertaking separate work  programmes on a sectoral basis.  The issues 
which were troubling developing countries’ exports in  the textiles and clothing sector, namely tariff 
peaks, escalation, and non-tariff barriers, were th e subject of on-going negotiations in NAMA and her 
delegation hoped that appr opriate solutions to these issues would be found. 
7.21 The representative of Sri Lanka  found that the atmosphere of the deliberation on this subject 
had improved significantly during the last few mont hs.  He understood the concerns of the Chinese 
delegation and others with regard to this extremely sensitive sector.  He also understood the systemic 
concerns of some delegations but it was necessary to point out that the textiles and clothing sector 
remained a very complex sector which had some systemic problems.  For example, his country faced 
discriminatory treatment in its main market and it was not alone in that category.  The challenges 
were of a very serious nature for most Members and the sector remained the most important sector for a large number of countries dependent on textiles and clothing for more than 50 per cent of their total 
exports, in some cases up to 90 per cent.  Within th e last two years market sh are had been lost, some 
up to 90 per cent.  The challenges here remained uni que and Members had to approach this issue in a 
careful manner.  Because of that, he believed th at the Turkish proposal, especially the modified 
proposal, had its merits and should be considered very carefully by the Membership.  In the coming 
months, approaching the end of the present round of negotiations, this sector was going to be one of 
the most sensitive areas of negotiation.  Therefore, clo ser attention to this sector, even if it led to some 
kind of systemic issues, was required. 
7.22 The representative of Benin
 observed that the textile and garment sector in African countries 
was an important one.  Its contribution to budgetary  resources was also quite important.  This was a 
job creating sector, particularly for women.  Afte r the expiration of the Agreement on Textiles and 
Clothing, this sector was experience great difficu lties which was why the African Group wished to 
take a balanced and consensual approach in seeki ng solutions and measures to reinvigorate this sector 
and save jobs in Africa.  The African Group, to that  end, wanted to be included in any consultations 
and would contribute to any work done in this area. 
7.23 The representative of Egypt  said that it would be regrettable at this stage to hinder the 
momentum which Members had demonstrated in the discussion both before and at this meeting.  A 
significant number of countries had raised an issu e of importance to them and his delegation would 
not stand in the way to having their concerns di scussed in the CTG.  He believed that the CTG 
provided a forum for discussing anything related to  trade in goods.  He expressed his delegation’s 
acceptance of the proposal put forward by Turkey, which was an improvement in the language.  The 
language also provided a point of departure that c ould pave the way for further discussions.  He did 
not share the view that discussing this issue or ha ving a work programme posed  systemic difficulties.  
It was not time to terminate the discussion on this issue.  He hoped that the Chairman would continue 
to have informal discussions and that the Council w ould revert to this issue at its next meeting. 
7.24 The representative of Mexico  pointed out the importance of the sector for Mexico and 
observed that there might be improvements with respect to the wording proposed by Turkey as 
compared to previous proposals.  His delegation would be in a position to give more detailed 
comments on the proposal after it had been analysed. 
7.25 The representative of Brazil  stated that the informal paper submitted by Turkey contributed to 
a positive atmosphere.  However, the position of hi s delegation in substance had not changed and he  G/C/M/83 
 Page 29 
 
 
  supported what had been said by a number of dele gations.  He re-stated his delegation’s systemic 
concern about the negative precedent for the WTO to undertake a work programme on a specific 
sector.  From a pragmatic point of view, he did not think that there would be any value added by the 
CTG pursuing this discussion.  It was clear that the CTG was not going to agree on the substance of 
any possible practical conclusion of any work progr amme.  If the sector was complex then it was yet 
another reason for the Members who had concerns to  raise these different concerns and the different 
dimensions of their problems in the appropriate bodies of the WTO.  If the problem was tariffs, 
Members were under negotiations in NAMA.  If the problem was adjustment, there was the CTD.  
And for any other problem, Rules and Rules of Orig in were available and each separate part of the 
problem could be tackled there. 
7.26 The representative of Bolivia  stated that the textile and garment sector was very important for 
her country, especially for exports to the U.S. market .  For that reason, she not ed with great interest 
the proposal made by Turkey and would send it on to he r authorities.  She asked that her delegation be 
included in any of the consultations that the Chairman might hold in the future on this topic. 
7.27 The Chairman  concluded that it seemed clear from th e interventions which had been made 
that there was still no common understanding among Memb ers on the item as raised by Turkey.  He 
noted Turkey's new proposal for terms of referenc e for the work programme proposed earlier.  He 
proposed that the Council take note of the statements  made, and revert to the item "Issues related to 
trade in textiles" at its next meeting.  In the me antime, he would brief the incoming Chairman of the 
situation in order for him to carry out co nsultations with Members on this matter. 
7.28 The Council so agreed . 
 
VIII.  STATUS OF NOTIFICATIONS UNDER THE PROVISIONS OF THE 
AGREEMENTS IN ANNEX IA OF THE WTO AGREEMENT  
8.1 The Chairman  drew Members' attention to document G/ L/223/Rev.13 containing the status of 
notifications under the provisions of the Agreement in Annex 1A of the WTO Agreement.  In the 
absence of comments on the document, he proposed that the Council take note of the document.   
 8.2 The Council so agreed
. 
 
IX. APPOINTMENT OF OFFICERS TO THE SUBSIDIARY BODIES OF THE 
COUNCIL FOR TRADE IN GOODS 
9.1 The Chairman  informed Members that the Guidelines for the Appointment of Officers to 
WTO bodies, document WT/L/510, adopted by th e General Council on 10 December 2002, provided 
that the Chairperson of the Council for Trade in Goods would conduc t consultations on the 
appointment of the Chairpersons of the subsidiary  bodies of the Council for Trade in Goods.  He had 
carried out consultations on this matter in a hi ghly transparent and open manner whereby all Members 
were informed that he would be accepting propo sals for candidates for these positions.  Based on the 
proposals and suggestions from Members which responded to his call, he formed a draft slate of names.  This draft was the basis for further consultations among those Members, as well as the 
coordinators of the regional groups , and some other interested Members.  It was not an easy task.  
Nevertheless, he did believe that he was in a position to propos e to this Council an agreed slate of 
names for the Chairs of the subsidiary bodies which reflected this open, transparent manner, as well as 
the wide diversity of the WTO Membership.  The slate of names was as followed: 
 
Customs Valuation Diana REAICH (New Zealand) 
Agriculture Christian HÄBERLI (Switzerland)  
Sanitary and Phytosanitary Measures Ju an Antonio DORANTES SANCHEZ (Mexico) G/C/M/83 
Page 30  
 
  Anti-Dumping Practices Victoria CAMPEANU (Romania)  
Subsidies and Countervailing Measures Keiya IIDA (Japan) 
Safeguards Seung-ho KIM (Korea) 
Import Licensing Evelio ALVARADO ROMERO (Guatemala) 
Rules of Origin Vera THORSTENSEN (Brazil)  
Market Access Mohammad SAEED (Pakistan)  
Technical Barriers to Trade Margers KRAMS (Latvia)  
TRIMs Alexis MASSOT (France)  
State Trading Enterprises Benjamin KATJIPUKA (Namibia) 
Committee of Participants on the Expansion of 
Trade in Information Technology Products (ITA Committee) Martin POSPISIL (Czech Republic) 
 
9.2 The Chairman  proposed that the Council agree with the nominations read out.   
 
9.3 The Council so agreed . 
 9.4 The Chairman
 stated that while all the other subsidia ry bodies of the Council had provisions in 
their respective Agreement or rules of procedur e requiring them to elect Chairpersons, Working 
Parties did not have any procedural rules on electing Chairpersons.  As a result, in the case of the Working Party on State Trading Enterprises, he proposed that the Council appoint the nominated 
Chairperson.  In the case of all the other subsidiary  bodies, he proposed that the Council take note of 
his proposals.    9.5 The Council so agreed
. 
 
9.6 The Chairman  stated his understanding that it would be for the subsidiary bodies to decide if 
they needed a Vice-Chairperson in cases where the option existed under the Agreement or rules of 
procedure and that it was for the respective Chairper son to hold the necessary consultations.  He asked 
if this could be agreed.  9.7 The Council so agreed
. 
 
X. OTHER BUSINESS 
A. R EQUEST BY PAKISTAN FOR EXTENSION OF THE TRANSITION PERIOD UNDER THE TRIM S 
AGREEMENT  
10.1 The Chairman  recalled that Pakistan had submitted a re quest for an extension of the transition 
period under the TRIMs Agreement at the end of 2 003 which was circulated in document G/C/W/478.  
Questions by the United States concerning this requ est and the replies provided by Pakistan were 
contained in documents G/C/W/480 and G/C/W/487, respectively.  10.2 The representative of Pakistan
 said that following the request submitted in December 2003 for 
an extension of the transition period under the TR IMs Agreement for a period of three years, his 
delegation entered into c onsultations with interested Members.   His delegation believed that the 
TRIMs Agreement today did not cater to the specific development and trade needs of developing countries.  Pakistan, during the extension period, ha d successfully deleted more  than 85 such schemes 
but that was not without economic difficulties.  Desp ite these difficulties, Pakist an wished to formally 
withdraw its request for the remaining 16 schemes in  the automobile sector.  He thanked the Members 
for their support and reiterated Pa kistan's firm commitment to the multilateral trading system.    G/C/M/83 
 Page 31 
 
 
   
10.3 The representative of the United States  appreciated Pakistan's statement and asked if removal 
of the request for the 16 schemes completed presented the complete picture.    10.4 The representative of Pakistan
 said that his Government was in the process of eliminating the 
schemes but that there were still some loose ends to  tie.  The intention was to eliminate them.   
 10.5 The Chairman
 proposed that the Council take note of the statements made. 
 10.6 The Council so agreed
. 
 
B. DATE OF THE NEXT MEETING  
10.7 The Chairman  informed Members that the next CTG meeting was scheduled to take place on 
Tuesday, 2 May 2006.  The agenda would close on Friday, 21 April 2006.  XI. ELECTION OF CHAIRPERSON OF TH E COUNCIL FOR TRADE IN GOODS 
11.1 The Chairman
 informed Members that the Chairman of the General Council had carried out 
consultations on a slate of names for Chairpersons to the different WTO standing bodies in accordance with the established Guidelines for Appointment of Officers.  These proposed 
nominations were approved by the General Council at its meeting on 8 February 2006.  In line with 
the nominations, he proposed that the Council fo r Trade in Goods elect H.E. Ambassador Yonov 
Frederick Agah of Nigeria as Chairper son of this body by acclamation.   
 11.2 The Council so agreed
. 
 11.3 The outgoing Chairman
 thanked all delegations and the Secr etariat, the interpreters and all 
support staff, for their untiring efforts and dedication to carrying out the work of the Council in 2004. 
 11.4 The incoming Chairman
, on behalf of himself and the Ni gerian delegation, expressed his 
appreciation to the entire Membership for thei r confidence in him.  He thanked the outgoing 
Chairman, Ambassador Himanen of Finland, the Chairp ersons of the various subsidiary bodies, of the 
Council and the Secretariat for their hard work, pe rseverance and commitment at sometimes difficult 
periods.  He committed himself to leadership that  would earn the trust and confidence of the entire 
Membership, that would be transparent and accountable  and above all, that w ould be committed to the 
task set out.  He thanked the new Chairpersons of the subsidiary bodies for making themselves 
available to serve in their various capacities.  He was confident that they c onstituted a dynamic team 
that would assist in achieving collective goals.  He  was entirely in Members' hands and counted on 
their cooperation and support.  He would consult regularly, as the need aros e.  Based on a formal 
request made to him, and for the purpose of the efficient conduct of future meetings, he requested 
delegations to make copies of their statements ava ilable to the interpreters in advance.  He also 
proposed that delegations deliver their statements at a pace that would facilitate the interpreters' work.  
He counted on Members' support and cooperation on this matter at all future meetings.   
 
11.5 Following statements of appreciation by the delegations of China , Benin , Romania , the 
United States , Côte d'Ivoire , the European Communities , Turkey , Nigeria , Jordan , Kenya , and Haiti , 
the meeting was adjourned.   
__________