RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/77 
24 January 2006 
 
 (06-0317) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
11 NOVEMBER 2004 
 
Chairperson: H.E. Ambassador Choi (Korea
) 
 
 
 
The Chairman  recalled that this dedicated session of the Council for Trade in Goods (CTG) 
had been convened by Airgram WTO/AIR/2426 in or der to continue the major review of the 
implementation of the Agreement on Textiles and Clot hing (ATC) in the third stage of the integration 
process, pursuant to Article 8.11 of the ATC. He  proposed that the Council adopt the provisional 
agenda for this Dedicated Session as contained in the Airgram. 
I. MAJOR REVIEW OF THE IMPLEMEN TATION OF THE AGREEMENT ON 
TEXTILES AND CLOTHING IN THE THIRD STAGE OF THE INTEGRATION PROCESS PURSUANT TO ARTICLE 8. 11 OF THE AGREEMENT (G/C/W/396) 
1.1 The Chairman reminded Members that the process of the Major Review of the 
Implementation of the ATC in the Third Stage of  the Integration Process, had been initiated on 
1 October 2004.  At that Session, Members had provided initial overall comments to the TMB Report prepared by its Chairman, Mr. András Szepesi.  He  believed that all delega tions had welcomed the 
TMB Report as comprehensive, professional and balan ced.  He considered that it had provided an 
invaluable basis for the Council’s work.  In providing overall initial comments, Members had 
emphasised several issues, expressed concerns  on aspects of ATC implementation, and 
recommendations for decisions had also been proposed  by ITCB Members.  In the end, the CTG had 
decided to proceed with dedicated sessions in order to focus more closely and examine more 
scrupulously the indicative list of issues, as had been reflected in the agenda for the first dedicated 
session on 25 October, and repeated on th e agenda adopted for this meeting. 
1.2 He also reminded Members that, at the first dedicated session on 25 October, they had met for 
a full day and covered all the six issues.  They had exhausted the list of speakers who had requested to 
intervene in the discussions.  There was no outsta nding list of speakers who would like to take the 
floor and intervene.  However, on the "carry forwar d" issue, the CTG had agreed to convene urgent 
informal consultations in response to the request  by Indonesia, and had been supported by several 
ITCB Members. 
1.3 He had, therefore, convened informal consultations with the Members involved on 
8 November 2004.  At the consultations, Indonesia had repeated its request for the urgent need for the 
use of the "carry forward" flexibility provision in respect of two product cate gories.  Several Members 
present at the consultations had supported the reque st by Indonesia and emphasised the commercial 
and systemic implications of the issue of "carry  forward".  These Members had also underlined the 
critical importance of timing and pressure on their dom estic industry for certainty on contract orders.  
They had also drawn attention to the relevant asp ects of the TMB Report that restraining Members 
should consider the issue constructively a nd seek a mutually satisfactory solution. G/C/M/77 
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  1.4 The Chairman also recalled that the European  Union had stated that its position, firmly 
established in the records, was definitive and re mained unchanged. The United States had informed 
the consultations that it had contacted Washingt on, where the request was under consideration, and 
that they would try to get an answer for the present session. 
1.5 The Chairman proposed that the United States first provide information on the "carry 
forward" issue.  Then, any Member who desired to revert to any of the six issues identified for the 
review could do so.  Thereafter, the CTG might wish to have a short exchange of views on the process 
Members might wish to establish in order to take any appropriate decisions to wrap-up the review 
process. 
1.6 The representative of the United States
 stated that since consultations had taken place he had 
been in contact with his authorities in Washington a nd that, for the reasons he had stated previously, 
the United States would not be in a position to provide "Carry forward" in the final year of the Agreement.  
1.7 The representative of the European Communities
 said that he was a little puzzled at the 
specific request which had been presented by Indonesi a, because he believed there might be a logical 
error in its presentation.  He observed that he sa w that "carry forward" was requested from the 
United States, Canada and the EC and that the word ing was the return of "carry forward" used in 
2003.  Logically speaking, that would be the carry forward asked for in 2003 of the quantities in 2004.  
The EC had checked the figures and they did not  quite correspond to the request presented by 
Indonesia.  They were willing to give back the " carry forward" which had not been utilized, but for 
category 5, this amounted to 115 671 pieces whereas the request was for 2 600 000 pieces.  It was the 
same for category 6 where the amount available was around 41 000 pieces whereas Indonesia, in the 
request, was asking for 935 000 pieces.  So he asked the representative of Indonesia whether the 
wording in the request was wrongly formulated.  What  was asked for, but what was not written in the 
paper, was in fact "carry forward" from 2005 into 200 4.  Because, on the basis of  the percentages, that 
would make sense, that would correspond to the am ount of the 2 500 000 and almost 1 million pieces.  
He regretfully noted that the EC were not presently  in a position to change their views on the general 
issue of "carry forward", let alone on the specific re quest presented by the representative of Indonesia.   
1.8 The representative of Egypt  noted that Members had been over this ground before but that he 
had hoped that after consultations with their capitals, colleagues from the United States and the 
European Communities would see fit to look at the issue of "carry fo rward" in a more positive light.  
He said that this issue of "carry forward" repr esented a real problem for a number of developing 
countries and he believed Indonesia was certainly on e of those feeling the pressure because of this 
problem.  He added that before adding a coupl e of points to what had been submitted in 
document G/C/W/495, it was important to clarify a relevant question that had been posed by the 
representative of the European Commu nities at the meeting earlier.  He had enquired if any "carry 
forward" of quotas had been allowed in the first year  of the ATC.  In response to that query, they 
could confirm that the carry over facility in the first year of the ATC, which was 1995, did remain 
available and had been made use of by a number of  exporting countries.  Likewise, "carry forward" 
from 1995 had been available and had been made use of in 1994.  He recalled to Members that the 
TMB Report had gone through this issue very carefully and he read just one sentence form that Report 
that he believed summarized the whole thing: "In fact, it would be absurd if a more restrictive 
application of the flexibility provisions had been foreseen for the last year of ATC implementation, 
compared to the preceding years."  He believed that  this summarized his basic understanding, in that 
the reduction of market access was contrary to the objectives both of the ATC and of the WTO system as a whole.  He believed that, in a nutshell, the overriding purpose of the WTO was to increase market 
access and not reduce it, that the ATC should allow, or at least should have allowed for continuous 
adjustment and increased competition in all Members' markets.  He urged the restraining countries to  G/C/M/77 
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accept the TMB’s analysis and allow for the use of th e "carry forward" facility to lessen the burden on 
exporters, importers a nd consumers alike. 
1.9 The representative of Indonesia  thanked the Chairman for the report on the informal 
consultations, when they had discussed very comprehe nsively what they wished to have, the "carry 
forward".  He had listened very carefully to the answer given by the United States where they stated 
that they had not yet received a response but that they were positive that they would have good news 
for this meeting.  He also thanked the European  Communities for having made their calculations and 
subsequently commenting that he had given wrong numbers.  He explained that since he was not 
familiar with this, he would refer this issue to th e expert from his capital and suggested the possibility 
of  bilateral consultations.  On the statement made  by the United States, he reminded Members that he 
would not discuss the legal issue because the ATC was silent on the "carry forward" issue.  What he 
wished to emphasis was that carry forward was urgently needed for the two remaining months 
because countries such as his could, then, maintain their exports.  That would contribute to reducing 
poverty in poor countries like his because, as it was known, most people working in this sector were 
well below the poverty line.  He asked whether Me mbers were going to leave these people in a poor 
situation only because of legal considerations.  He be lieved they would not be justified to do so.  It 
would be a very bad result for the implementation of the ATC that they could not comply with the Agreement, that they could not create prosperity through this Agreement for the poor people in Third-
World countries.  He requested the Chairman note hi s comment.  He emphasized that this could not be 
considered on a commercial basis only but also on social grounds. He noted he had requested this 
informal consultation because Indonesia considered th is an extremely important issue.  He also 
wished to inform Members that th e following week was the Eid al-Fitr for Muslim people and most of 
the workers were Muslim and were very poor people.  
1.10 The representative of India
 thanked the Chairman for holding  informal consultations on the 
issue of "carry forward", as requested by some ITCB Members at the previous dedicated session.  He 
urged all delegations to reconsider their positions.  He noted that the representative of Egypt and 
Acting Chairman of the ITCB had intervened on this issue and he simply took the floor to express his 
delegation's disappointment that no flexibility in positions had been forthcoming from Members and 
as a result Members were not in a position to make progress at this meeting on the issue of "carry forward". 
1.11 The representative of Thailand
 shared the disappointment of the colleagues speaking before 
her.  She believed that the question of "carry forw ard" was just not that developing countries were 
asking for large concessions but that they were just asking for more flexibility from the importing 
countries.  She reaffirmed her disappointment for the negative consideration by the importing 
countries.  She also wanted her statement to be made clear in the report of the review. 
1.12 The representative of China  thanked the Chairman for holding consultations on "carry 
forward" and for reporting to the CTG.  She fully supported the views expressed by the ITCB Vice-
Chairman on behalf of ITCB Members and shared th e concerns of the delegation of Indonesia on the 
issue of "carry forward".  She noted that, as coul d clearly be seen from the TMB Report, this was an 
issue of both systemic and commercial implications, but  not an issue that could not be resolved.  She 
hoped that the importing restraining Members would adopt a positive attitude and work constructively 
with concerned exporting Members. 
1.13 The representative of Brazil  noted that there was not much that he could say but he could only 
agree with those who had preceded him from the IT CB.  He expressed his disappointment with the 
lack of possibility of having "carry forward".  He be lieved that a denial of "carry forward" would run 
counter to the basic principles of progressi ve liberalization which was in the ATC. 
1.14 The representative of Hong Kong, China  thanked the Chairman for the report on the informal 
consultations.  He also thanked th e delegation of the United States fo r reporting back his instructions G/C/M/77 
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  from capital.  His delegation associated itself with the statement made by the delegate of Egypt and 
also shared some of the disappointment expressed by the previous speakers. 
1.15 The representative of Pakistan
 joined his other colleagues in stating that his delegation was 
also disappointed at the kind of interpretation that had been made of the ATC.  He seconded what had 
been said by the Vice-Chairman of the ITCB and al so supported the statements made by China, 
Brazil, Hong Kong, China, and India. 
1.16 The Chairman  noted that the statements made would be duly reflected in the report of the 
meeting and he also noted that the situation rema ined unchanged.  He moved to the next topic and 
asked Members whether they would like to revert to any of the six issues on the indicative list of 
issues. 
1.17 No Member wished to revert to any of the six issues. 
1.18 The Chairman, therefore, sought the view s of the Members on how the CTG should proceed 
from this point on.  He put this question in acco rdance with Article 8.12 of the ATC which provided 
that "[i]n the light of its review the Council for Tr ade in Goods shall by con sensus take such decisions 
as it deems appropriate to ensure that the bala nce of rights and obligations embodied in this 
Agreement is not being impaired."  He added that he had been made to understand that in previous 
practice, the Chair had been mandated to convene in formal consultations to assist in contributing to 
elements for the preparation of a draft decision fo r adoption by the CTG.  However, he believed the 
Third Stage of Implementation was somewhat differe nt from previous stages and, in this light, the 
CTG might wish to proceed differently.  This procedure could involve authorization for the Chairman to prepare a brief Summary Report of the views, positions and concerns expressed, in the course of 
the Major Review of the Third Stage of Integration.  This very brief summary could invite the CTG to 
agree to four decisions:  (i) take note of the TMB Report, which provided the basis for the Major Review;  (ii) take note of the repeated unanimous re-affirmation of all CTG Members of the expiry of 
the ATC on 1 January 2005;  (iii) take note of all st atements made in the course of the Major Review, 
which shall be reflected in the records of the CTG;  and, (iv) agree that the CTG shall continue to 
monitor the implementation of the ATC until 31 December 2004. 
1.19 The representative of Egypt
 noted that it had been the tradition of the CTG to come up with a 
much more substantial report at each stage of the ATC implementation.  He added that ITCB Members, for whom he was speaking, had been very open.  They had participated in detail in all the 
debates but he did feel that it was essential that the CTG came up with a substantial report including 
recommendations and conclusions.  That would be a part of maintaining the tradition of this august 
body but also something which would serve Members in  the future, should there be a need for it.  He 
further mentioned that, although he would very much like to help the Chairman with his proposals, he 
still believed that the Chairman s hould try and convene an informal  meeting whereby Members could 
possibly write a draft report with conclusions  about this third and final Major Review. 
1.20 The representative of China
 endorsed the statement and suggestion made by the ITCB Vice-
Chairman on this point.  
1.21 The representative of Hong Kong, China  agreed entirely with what had just been said by the 
representative of Egypt.  He noted that this was a very important exercise both for practical and also for systemic considerations.  He believed they  had had a good discussion at the CTG meeting on 
25 October.  A number of Members had made substantive statements based on the indicative list that the Chairman had prepared and a number of exporting Members had made certain specific 
recommendations for the CTG to consider.  He be lieved Members owed it to themselves to have a 
process in order to come up with a CTG report consis tent with the practice that they had had during 
the first two reviews.  One final point was th at for his delegation, the review mandate under  G/C/M/77 
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Article 8.11 and 8.12 was the same for every stage of the review exercise.  So, from a systemic point of view, he urged the Chairman to undertake some sort of informal consultations to see if Members 
could come up with a consensus report by the CTG.   He believed that this was the only way Members 
could fulfil their mandate. 
1.22 The representative of India
 fully endorsed the views express ed by the distinguished Vice-
Chair of the ITCB as to where they st ood in terms of the expectations from this review.  He  believed, 
as Hong Kong, China had mentioned, that this revi ew was extremely important for various reasons.  
Members had had a good debate on the last two meeti ngs on 1 and 25 October and at this meeting.  
He noted that it was clear that the Council was operating under Article 8.11 of the ATC and it had a 
mandate.  The Vice-Chair of the ITCB had also recal led that the practice established in the CTG was 
to have a report with conclusions as agreed by Me mbers.  He also noted that some ITCB Members 
had put forward some specific sugg estions which they expected to see in this review and felt that 
Members should attempt to have a report of this review process.  His delegation stood ready to participate in any consultations or discussions th at the Chairman may wish to organize so that 
Members could fulfil the mandate that they had in front of them and follow past practice. 
1.23 The representative of Pakistan
 supported what had been said by the delegate of Egypt on 
behalf of the ITCB Members and also shared what had been said by Hong Kong, China and India.  He 
said that he did not see the need for deviation from the norms that were within the ATC.  He added 
that there were lessons to be learnt from the implementation process.  These lessons had been alluded to in many interventions during the past month.  This should be part of any report that needed to be presented.  He expressed his willingness to participate in any consultations that were proposed to be 
held under this item. 
1.24 The representative of the United States
 also expressed willingness to participate in any 
consultations that the Chairman proposed on drafting a report for the third stage.  He observed that the 
problem was that, based on the last  dedicated session, there really had not been, as near as he could 
tell, much agreement beyond perhaps the four point s that the Chairman had put forward in this 
meeting.  It was a fact that the ITCB had put fo rward a number of recommendations but he believed 
that those had been directly challenged by his de legation and others.  When one reached the report 
writing stage, in some ways that was the easiest pa rt of the process: going through the records of the 
substantive meetings, finding the areas of agreement a nd the report, in a sense, wrote itself.  It was a 
record of what had happened in the substantive di scussions.  If the expectation was, that despite the 
diametrically opposed views expressed, one could to  move to a report writing stage that would 
support one or the other position of the participants, th at expectation was not realistic.  He believed, if 
one looked at the history of the first and the second major reviews, he/she would come to the conclusion that a modest expectation of what c ould come out of this process would be necessary. 
1.25 The representative of Indonesia
 fully supported and endorsed the statement made by the 
delegate of Egypt and Vice-Chairman of the ITCB. 
1.26 The representative of Brazil  noted that, as the delegate of Hong Kong, China had said for 
practical and specially for systemic reasons, his delegation believed that the CTG should have a 
substantive report with recommenda tions and conclusions.  For that , Brazil was ready to help and 
participate. 
1.27 The representative of the European Communities  noted that he could go along with the 
Chairman's proposal.  He notably drew Members' atte ntion to the point made by the Chairman that he 
would note in the report all the statements made .  It seemed obvious that it would be extremely 
difficult to make a report where full consensus was reach ed on all the points at issue.  He believed that 
the deliberations in the Council and also in the TMB and all the consultations which Members had 
had pointed in that direction.  He added that th e Community was not opposed to the Chairman calling 
for informal consultations but he believed that it w ould be a very hard task, from that melting pot of G/C/M/77 
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  statements, to get to a consensual report.  Therefor e, he appreciated the Chairman's suggestion that all 
statements would be duly taken note of. 
1.28 The representative of Canada
 said that he thought that the Chairman's proposal was 
reasonable and his delegation would be ready to go along with that approach.  However, listening to 
the representative of Egypt, speaking on behalf of the ITCB, he had noted two elements.  One was 
that he had indicated, quite accurately, that the trad ition of this body had been to adopt a report that 
was more substantive.  He had in front of him the last report of the Major Review on the implementation of the ATC in the second stage.  It was a document that was quite informative, eight 
pages long.  It provided a good summary of the discussions that had taken place, a number of considerations and certain conclu sions.  The second point he had noted in the intervention by the 
representative of Egypt was the reference made to the need for recommendation.  He believed that it 
might be a very challenging task, given the differe nces of views that had been expressed. He added 
that in the previous report he could not see anything  that would take the form of a recommendation.  
Furthermore, Members were at a very unique stag e in the history of th e ATC because they were 
counting in terms of days the termination of the Ag reement.  So, he could not refrain from wondering 
what would be the form or the purpose of the re commendation - if they would be related to the 
implementation of the ATC or to how, for example, trade in textiles should be managed or handled in 
the post-ATC phase.  This was an issue that had, in  other contexts, raised passionate discussion.  The 
last point he noted was that a reference had been made to the conclusion.  If by conclusion it was 
meant that Members would draw some conclusion as to how the Agreement had been implemented 
during the third stage, in a way similar to th e conclusion that were in paragraph 22 of 
document G/L/556, he would not have any problems.   If one meant conclusions that were more 
forward looking, he believed that was going back to  the issue of recommendation and it seemed that 
that task would be quite challenging.   He concluded by stating that Canada stood ready to participate 
in informal consultations.  He sa w merit in having something a bit more substantial than what the 
Chairman had initially suggested but would cautio n against trying to reach forward and make 
recommendations. 
1.29 The representative of Turkey
 thanked the Chairman's for his proposal which he thought were 
quite reasonable.  During discussions, there had be en disagreement between Members on some points, 
and it seemed to his delegation that the best way to pr oceed would be to reflect them in the report.  It 
might prove particularly difficult to try to agree on recommendations by the CTG with regard to those 
points where there had been disagreement.  In any event, if Members would like to engage in this 
exercise in informal meetings, his delegation w as ready to participate to such an exercise. 
1.30 The representative of Egypt  thanked all the delegations that  had spoken and said that he was 
glad to hear that nobody was against having a more  substantive report.  This was something that 
maintained tradition in the Council and also gave comfort to many delegations in the CTG.  He 
appreciated the fine distinction between recommend ations and conclusions.  He believed that ITCB 
members could live with conclusions rather than recommendations, although a number of them would 
like the Council to come up with something more subs tantial than just conclusi ons.  However, he took 
comfort from the fact that the TMB had been quite clear in its very exhaustive report on a number of issues and he would like to build on that and partic ipate as an ITCB member in any consultations that 
the Chairman might undertake in this respect. 
1.31 The representative of Hong Kong China
 added two points to what he had said previously.  
First, he agreed with the point just made by the de legate of Egypt that there seemed to be no objection 
to having a more substantive report by the CTG.  In this regard, he had listened very carefully to the 
arguments that had been used by the delegations of the United States, the European Communities and 
Canada.  He suggested not to prejudge what w as going to happen during the informal session under 
the Chairman's guidance.  In the previous two revi ews, there had always been a way to find some 
common ground for the CTG to come up with a consensus report.  Therefore, to  prejudge what would  G/C/M/77 
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be achievable and what would not was a bit prematur e.  He was a little bit concerned about one of the 
main arguments which had been used that because Members’ positions were diametrically opposed to 
one another one could simply concl ude the review by taking note of th e statements made.  As he had 
said in his previous statement, he had systemic c oncerns about this argument.  Under different WTO 
Agreements, Members had had mandated reviews.   For instance, under the TRIPS Agreement, 
Members had a mandated review under Article 24.2 on the operation of geographical indications.  
Members had another review on the operation of the TRIPS Agreement under Article 71.  They had 
had several years of discussion in the TRIPS Counc il and Members positions, lik e in the present case, 
were quite opposed to one another.  But he ha d never heard Members making the suggestion that 
because the gaps in positions were so wide, the re view would be concluded by taking note of the 
statements and by referring to the minutes. He believed this was a very important point and all the 
Members should reflect further. 
1.32 The representative of India  had little to add after hearing the comments that had been made by 
various Members.  He believed Members had a good te mplate in the form of the two reports of the 
previous major reviews, which the de legation of Canada had also allude d to.  He fully agreed with the 
point made by Hong Kong, China that Members shoul d perhaps not prejudge what form of a report 
they would come out with.  As had been said,  the Council had had a good discussion.  The ITCB 
Members had presented a paper, which was the only paper under this agenda item.  Members had the 
TMB's report in front of them as well as some sp ecific suggestions made by ITCB Members as to 
what the CTG could do in terms of this review.  It was very clear that Members were operating under 
Articles 8.11 and 8.12 of the ATC.  That should perhaps address the concerns that the representative 
of Canada had mentioned.  He fully supported what Egypt and Hong Kong, China had mentioned and 
he believed that Members should make an effort .  He would follow the Chair’s leadership and 
guidance as to how the Council would proceeded in te rms of developing a consensus report of this 
review. 
1.33 The Chairman  observed that 14 delegations had intervened and noted that evidently there 
were different views on how to proceed.  While he  recognized and accepted the merits of tradition, 
lessons for the future and systemic importance, cl early, Members were at a different stage of ATC 
implementation.  What he wanted to seek to achieve , if Members agreed, was to prepare a short draft 
report, with conclusions, with the assistance of the S ecretariat.  This report and the conclusions would 
be factual.  When it was ready, he  would reconvene a meeting in the fo rm of informal consultations to 
hear from Members whether they could go further on  the basis of the draft report he had prepared. 
1.34 The representative of Colombia  noted that  in principle she would have no objections to the 
proposal that the Chairman had outlined.  She asked whether the informal consultations the Chairman 
had in mind would be open-ended.  She hoped that  the whole process would be an open-ended one. 
1.35 The Chairman  stated that the informal consultati ons would be open-ended.  He saw no 
objection to his proposal and said that he took it th at Members agreed with the approach he had 
suggested in terms of the Council’s proceedings. 
1.36 It was so agreed . 
1.37 The Chairman  thanked Members for their participati on and contributions.  He suspended the 
meeting, explaining that this would make it po ssible to reconvene the Council without the 10-day 
notice requirement.  He found this necessary in the li ght of the limited time available for delegations 
before reconvening the next formal dedicated CT G session for the continuation of the Major Review, 
which had been set for 19 November.  
1.38 The dedicated session was suspended . 
__________