RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/COMTD/RTA/M/4 
23 August 2010 
 
 (10-4411) 
Committee on Trade and Development 
Fourth Dedicated Session on Regional Trade Agreements  
 
 
 
NOTE ON THE MEETING OF 28 JUNE 2010 
 
Chairman:  H. E. Mr. Erwidodo (Indonesia)  
 
 
 
A. ADOPTION OF THE AGENDA .........................................................................................................1  
B. CONSIDERATION OF REGIONAL TRADE AGREEMENTS .................................................................1  
(i) Status of the work of the Dedicated Session – Report by the Chairman.....................................1  
(ii) Preferential Trade Agreement between Chile and India (Goods) ( WT/COMTD/N/ 30, 
WT/COMTD/RTA/ 4/1, WT/COMTD/RTA/ 4/2).................................................................................2  
C. OTHER BUSINESS .........................................................................................................................6  
 
 A. 
ADOPTION OF THE AGENDA  
1. The draft agenda as contained in Airgram WTO/AIR /3569 of 14 June 2010 was adopted . 
B. CONSIDERATION OF REGIONAL TRADE AGREEMENTS  
(i) Status of the work of the Dedicated Session – Report by the Chairman 
2. The Chairman  said that he wished to provide Members with a brief update on the regional 
trade agreements (RTAs) notified under the Enabli ng Clause that were to be considered in the 
Dedicated Sessions on RTAs of the Committee on Trade and Development (CTD).  
3. He informed the Committee that two notifica tions of RTAs under the Enabling Clause had 
been made thus far in 2010.  The notifica tion of the India-MERCOSUR Agreement had been 
circulated in document WT/COMTD/N /31, while the notification of the India-Afghanistan Agreement 
had been circulated in document WT/COMTD/N /32.  The Secretariat had requested the Parties to 
provide, by 13 July 2010 for India-MERCOSUR and by 26 July 2010 for India-Afghanistan, the data 
necessary to prepare the Factual Presentations on these two RTAs.  It was envisaged that the two 
agreements could be considered in a Dedicated Se ssion of the CTD in early 2011, though this would 
depend on whether the Secretariat received the data in good time.  
4. He also referred to the three RTAs involving non-WTO Members that had previously been 
notified under the Enabling Clause, and that would n eed to be considered by the CTD meeting in 
Dedicated Session.  With regard to the Pacific Island Countries Trade Agreement (PICTA), Members 
had already been informed that – in line with  the procedures being followed in the Committee on 
Regional Trade Agreements (CRTA) – the considera tion of this Agreement would need to wait until 
all the Parties had ratified it.  The same was true for the South Asian Free Trade Agreement (SAFTA).  
In particular, the Secretariat understood that Af ghanistan's membership in SAFTA had yet to be WT/COMTD/RTA/M/4 
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  ratified by all the Parties concerned.  Furthe rmore, for the Factual Presentation on SAFTA, the 
Secretariat had only received data from Bangladesh.  In  addition, no data had yet been received on the 
India-Bhutan Agreement, without which the Secretar iat could not prepare the Factual Presentation.  
He urged the concerned Parties to provide the data as soon as possible.      
5. The Committee took note
 of the Chairman's update. 
(ii) Preferential Trade Agreement between Chile and India (Goods) ( WT/COMTD/N /30, 
WT/COMTD/RTA/ 4/1, WT/COMTD/RTA/ 4/2) 
6. The Chairman  said that the Preferential Trade Agreement (PTA) between Chile and India, 
which entered into force on 17 August 2007 for Chile and on 11 September 2007 for India, had been notified to the WTO on 13 January 2009 under pa ragraph 4(a) of the Enabling Clause.  The 
notification had been circulated in document 
WT/COMTD/N/ 30.  The text of the Agreement, together 
with its annexes and attachments, was available on the Parties' official websites.  The Factual 
Presentation on the Agreement – circulated as document WT/COMTD/RTA /4/1 on 29 January 2010 – 
had been prepared by the Secretariat on its own res ponsibility in full consultation with the Parties, in 
accordance with paragraph 7(b) of the Transparen cy Mechanism for RTAs.  Written questions and 
replies on the Agreement had been distributed in document WT/COMTD/RTA /4/2 on 4 May 2010.   
7. He proposed to organize the consideration of th e Agreement by first asking the Parties, and 
then Members, to provide any general comments.  The Committee would then turn to the specifics of 
the Agreement using the Factual Presentation to gui de the debate, after which it would consider the 
questions and replies document.  The Parties woul d subsequently have the opportunity to respond to 
any questions raised during the meeting, and to make any final comments. 
8. The representative of India  said that his country had witnessed impressive and sustained  
growth rates for more than a decade.  Likewise, the Latin American region had proved to be one of 
the fastest growing regions in the world.  The Government of India had, therefore, identified Latin America as one of the focus regions with which to enhance economic engagement .  In this context, 
the economic engagement between India and Chile, a nd in particular the Chile-India PTA, played a 
key role. 
9. India recognized that Chile wa s one of the most dynamic, competitive and open markets in 
Latin America, with strong macroeconomic fundament als and the highest investment grading.  Since 
the early 1990s, the Chilean economy had been amo ng the best performing in Latin America.  Given 
the economic growth potential of Chile, as well as its liberal and transparent trade regime, the 
Government of India had signed a Framework Agre ement with Chile in 2005.  The aim of the 
Framework Agreement was to strengt hen relations between the Parties,  to promote the expansion of 
trade and to provide the conditions and mechanisms  to negotiate a free trade agreement (FTA) in 
conformity with the rules and disciplines of the WTO, and in accordance with the provisions of 
Article 4 of the Framework Agreement.   The Framework Agreement envisaged, inter alia , concluding 
a limited scope PTA as a first step towards increasing  bilateral trade in goods , through the granting of 
preferential market access by means of mutual concessions.  The PTA was signed by India and Chile 
in March 2006. 
10. Under the Agreement, India had offered tariff preferences to Chile on 178 tariff lines at the 
8-digit level with a margin of preference  ranging fr om 10 per cent to 50 per cent.  On its part, Chile 
had offered tariff preferences on 296 tariff lines to India at the 8-digit level with a margin of preference ranging from 10 per cent to 100 per cent.  The tariff lines on which India had offered 
concessions to Chile under the PTA included 84 tariff  lines on meat and fish products, one tariff line 
on rock salt, one tariff line on iodine, one tariff lin e on copper ore and concentrates, 13 tariff lines on 
chemicals, seven tariff lines on leather products, six tariff lines on newsprint and paper, 42 tariff lines  WT/COMTD/RTA/M/4 
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  on wood and plywood articles, 12 tariff lines on some  industrial products, three tariff lines on shorn 
wool & noils of wool and seven tariff lines on some  other products.  Chile's offer list to India under 
the PTA covered seven tariff lines on agricult ure products, 53 tariff lines on chemicals and 
pharmaceuticals, seven tariff lines on dyes and r esins, 14 tariff lines on plastic, rubber and 
miscellaneous chemicals, 12 tariff lines on leather products, 106 tariff lines on textiles and clothing, 
ten tariff lines on footwear, 82 tariff lines on industr ial products and five tariff lines on some 
miscellaneous products.  
11. He said that trade between India and Chile ha d seen an upward trend over the last several 
years.  Total bilateral trade between the two countries had increased from US$456.78 million in the 
2004-2005 Indian financial year to US$1,897.37  million in 2008-2009, showing a growth of  
approximately 315 per cent.  During the same pe riod, Indian exports to Chile had risen from 
US$111.20 million to US$393.47 million – registering a growth of about 253 per cent – while Indian 
imports from Chile had gone up from US$345.57 mi llion to US$1,503.90 million, indicating a growth 
of about 335 per cent.  India's exports to Chile currently accounted for 0.21 per cent of India's total 
global exports, while India's imports from Chile accounted for 0.50 per cent of India's total global 
imports.  In terms of total trade, Chile had been am ong India's top three trading partners in the Latin 
America region during the past five years.  Chile  was presently India's second largest trading partner 
in Latin America.  While the recent global ec onomic slowdown had caused trade between the two 
countries to contract in 2009 relative to the previo us year, he expressed confidence that the decline 
was only temporary, and that bilate ral trade would soon recover.  
12. He also informed Members that the PTA ha d provided additional ec onomic openings by way 
of bilateral investments.  Among the main Indian  investments was the acquisition of the Chilean 
business process outsourcing company COMICROM by  Tata Consultancy Services, with an 
investment of US$23 million.  He also gave the ex amples of Polaris, which was providing information 
technology services to a number of Chilean compan ies, and Evalueserve – a provider of global 
research, analytics and intellectual propert y services – making an initial investment of 
US$4.2 million.  In addition to these investments,  Memorandums of Understanding on cooperation in 
the field of geology and mineral resources and  in the field of new and renewable energy had been 
signed between the two countries when the Preside nt of Chile visited India in March 2009.  
Discussions were also under way on the finalizati on of a double-taxation avoidance agreement.  He 
concluded by noting that the process for wideni ng and deepening the concessions under the PTA had 
already been initiated.  At their first meeting for this purpose in January 2010, the Parties had 
exchanged their respective wish list of additiona l products.  The next meeting was scheduled for 
July 2010. 
13. The representative of Chile  expressed his delegation's support for transparency in the WTO.  
Several of Chile's RTAs – and most recently its  FTA with Australia – had been considered by 
Members in the context of the Transparency Mechanism for RTAs.  
14. He went on to say that Chile and India had announced the launching of negotiations in 
January 2005.  After four rounds of such negotia tions carried out between April and November 2005, 
the Chile-India PTA had been signed in March 2006,  becoming India's first trade agreement with a 
South American country.  At the time of entry in to force of the Agreement, 98 per cent of total 
Chilean exports and 91 per cent of Indian export s were subject to average tariff reductions of 
20 per cent.  With regard to the Agreement's institutional framework, a Joint Administration 
Committee and a Working Group on Customs Administra tion had been established.  The Parties had 
decided to grant the Administration Committee th e task of establishing Sub-Committees or Working 
Groups where necessary, so as to a llow the Agreement to remain rele vant and be able to respond to 
any trade challenge.  An important objective of the negotiating process was to have an agreement that 
would provide for a fruitful bilateral commercial rela tionship.  The PTA was a clear reflection of the 
Parties' commitment towards trade liberalization, and also represented a first step towards a more WT/COMTD/RTA/M/4 
Page 4  
 
  profound and liberalized relationship.  The Parties would soon be meeting for a second time as part of 
the process of expanding the current PTA.     
15. He informed the Committee that Chile's exports to India had risen by more than 25 per cent 
each year since 2005, and India's exports to Chile had averaged a yearly 17 per cent growth.  While 
bilateral trade fell by 46 per cent in 2009 relative to the 2008 peak of US$2.2 billion, it appeared to 
have recovered in 2010.  In partic ular, during the first trimester of 2010, Chilean exports to India had 
reached US$333 million – an increase of 72 per cent compared to the same period in 2009 – while 
Chilean imports from India reached US$60 million.  He concluded by expressing the view of his delegation that the Chile-India PTA met the basic requirements to be considered a sound RTA in 
goods, as it provided important benefits to the Partie s.  India was providing automobiles, machinery 
and other elements which added value to Chilean sm all and medium-sized enterprises.  Chile was also 
gaining from the opportunity to introduce some of  its world-class goods to India's emerging middle 
class.  
16. The representative of the European Union
 said that his delegation had taken note that the 
Framework Agreement between Chile and India aimed to promote the expansion of trade between the 
Parties and to provide the conditions and mechanisms to negotiate an FTA.  As a first step towards the 
FTA, Chile and India had concluded what they referre d to as a limited scope PTA.  In this regard, he 
indicated that the PTA in question was extremely lim ited in scope.  For example, India had not fully 
liberalized any tariff lines under the Agreement.  Chile had only four duty-free tariff lines under the 
Agreement, representing 0.5 per cent of imports from Indi a.  With regard to reductions of duties, India 
provided preferential rates on only 1.6 per cent of tariff lines, covering 94.8 per cent of imports from 
Chile.  On its part, Chile had lowered tariffs on only 3.7 per cent of tariff lines, which accounted for 
75.7 per cent of India's imports.  He also observe d that duty reductions on each Parties' major export 
products were limited. Overall, both countries' top 25 exports remain ed dutiable under the Agreement.  
The EU considered these reductions of duties, an d the preferential margins under the PTA, to be 
negligible.  
17. He recalled the requirement from paragraph 3(a)  of the Enabling Clause that any differential 
and more favourable treatment should be designed to  promote and facilitate trade, and not to raise 
barriers to or create undue difficulties for the trade of an y other contracting parties.  In this regard, he 
asked for an explanation from Chile and India as to how the PTA could promote the expansion of 
trade when the preferential margins were insignifi cant and the bulk of tariff lines were not covered 
under the Agreement.  Pointing to the marginal covera ge of the Agreement, and the indication that the  
Agreement did not offer conditions favouring the pr omotion or the diversification of existing trade 
between the Parties, he observed that there were sufficient factors to suggest that undue difficulties 
were being created in facilitating and expanding bilateral trade.  He asked why the Parties had 
engaged in the PTA if they were not ready to gran t each other substantial preferences in liberalizing 
their bilateral trade.  He also noted that Chile and India were strong economies, and both countries – 
and in particular Chile – had subs tantial experience in negotiating b ilateral agreements.  In light of 
this, he asked for clarification as to why the Parti es had considered it necessary to negotiate a very 
limited trade agreement as a first st ep towards a real FTA.  Finally, he noted from Section E.7 of the 
Factual Presentation that Chile and India were memb ers of a number of RTAs that had not yet been 
notified to the WTO.  He asked whether Chile and India could indicate a time-frame within which the 
outstanding notifications would be made.  
18. The representative of India  said that the Factual Presentation had been circulated in 
January 2010.  Since then, the India-MERCOSUR Agreement and the India-Afghanistan Agreement 
had been notified.  India's other RTAs would be no tified shortly.  He also indicated that an early 
announcement had been made of the India-Korea Agreement.  WT/COMTD/RTA/M/4 
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  19. The representative of Chile  said that the issue of notifications  raised by the EU was subject to 
consideration within the Latin American Integrat ion Association (ALADI).  He indicated that a 
response would be provided in due course.  
20. The representative of the United States  said that her delegation did not find all of the Parties' 
answers in the questions and replies document to be responsive.  Her dele gation's understanding from 
the Factual Presentation was that 100 per cent of Chile 's top 25 exports and 100 per cent of India's top 
25 exports remained dutiable under the Agreement.  Therefore, duties on those goods that were the most highly traded between the Parties were not eliminated under the Agreement.  She recalled the 
requirement from paragraph 3(a) of the Enabling Clause that any differential and more favourable 
treatment should be designed to pr omote and facilitate trade, and not to raise barriers to or create 
undue difficulties for the trade of any other contracting parties.  If the duties on those goods that were 
the most highly traded between Chile and India we re not eliminated, the US could not see how the 
treatment provided under the Agreement facilitated or  promoted the trade of developing countries in 
any real sense.  She requested the Parties to once again clarify what  were the economic benefits from 
this Agreement when very few tariffs were elimin ated and, for the tariffs that were reduced, the 
difference between the most-favoured-nation (MFN) tariff and the preferential tariff was in many 
cases very small. 
21. She went on to say that the US was not questioning the PTA's fulfillment of the requirement 
in the second part of paragraph 3(a) of the Enabling Clause, namely to ensure  that the Agreement did 
not raise barriers to or create undue difficulties for the trade of any other contracting parties.  
However, Chile and India could well have fulfilled the requirements in th e first part of paragraph 3(a) 
– to facilitate and promote trade – without violatin g the second part of the paragraph.  Her delegation 
did not agree with the assertion implied in the r esponses by Chile and India that full liberalization 
under paragraph 3(a) of the Enabling Clause necessarily raised undue barriers to third parties.  In this 
regard, GATT Article XXIV:5(b) contemplated pr ecisely such full liberalization occurring without 
duties being more restrictive, suggesting that th ere was no inherent inconsistency between maximum 
liberalization and avoidance of undue barriers to third parties.  In other words, whether under 
Article XXIV of the GATT or under the Enabling Cl ause, full liberalization did not result in more 
restrictive trade after an RTA went into effect.   
22. On the basis of the consideration of the US -Chile FTA in the CRTA, she said that her 
delegation wished to point to some of the economic  benefits that had accrued to Chile from the full 
liberalization of its tariffs.  In 2007, bilateral trade between the US  and Chile reached US$17.3 billion, 
which was a 170 per cent increase over bilateral trad e levels before the US-Chile FTA had taken 
effect.  Furthermore, US imports from Chile had grown from US$3.71 billion in 2003 to US$9.0 
billion in 2007, which was an increase of 143 per cent.  The US also noted from the CRTA's recent 
consideration of the Australia-Chile FTA that Aust ralia and Chile had eliminated tariffs on 100 per 
cent of tariff lines.  Given the proven economic benefits that had accrued to Chile from the full 
liberalization of trade under its other RTAs, and its willingness to enter into RTAs that facilitated and 
promoted trade, her delegation continued to be puzzl ed by both Chile's and India's apparent lack of 
trade liberalization in the Agreement under consideration.   
23. She said that the US did not agree with the Pa rties' conclusion in their responses that the 
Agreement satisfied the conditions of  paragraph 3(a) of the Enabling Clause – particularly with regard 
to the requirement to facilitate and promote trade – when tariffs were not meaningfully reduced or 
eliminated on the top 25 exports of either Chile or  India.  The Parties had not attempted to provide 
evidence to the contrary in their replies.  Given the disappointingly low level of tariff elimination or 
reduction under this Agreement, the US looked fo rward to the Parties providing further written 
information on how the PTA facilitated and promoted trade.  Finally, she expressed appreciation for 
the indication by the Parties that they were in the process of deepening and widening the concessions WT/COMTD/RTA/M/4 
Page 6  
 
  under the Agreement.  In this regard, she asked whether the Parties intended to make a future 
notification of the Chile-India Agreem ent under Article XXIV of the GATT. 
24. The representative of Japan
 requested clarification from the Parties as to what the expected 
value of the Agreement was for them, in view of th e points raised by the US.  At the same time, his 
delegation welcomed the Chile-India Agreement.  He noted that Chile was one of the best performers 
in the context of economic liberalization and was also  one of the important promoters of FTAs in the 
Asia-Pacific region.  
25. The representative of India  said that a significant amount of bilateral trade between Chile and 
India received preferences under the PTA.  He expl ained that the reciprocal concessions under the 
PTA were limited because the Agreement was only a stepping stone to a full-fledged FTA, as was 
mandated by the Framework Agreement.  In this re gard, the PTA was subject to a periodic review 
with the aim of expanding the list of concessions.  He said that there were no plans to notify the 
Agreement under Article XXIV for the moment, sin ce notification obligations under WTO rules had 
already been fulfilled. 
26. The representative of Chile  said that the process of deepening and widening the concessions 
under the PTA had already commenced, as had been expl ained.  He indicated that the PTA was fully 
compliant with Article 3(a) of the Enabling Clause, since it was designed to facilitate and promote the trade of developing countries and not to raise barri ers to or create undue diffi culties for the trade of 
any other contracting parties.  Furthermore, th ere was no requirement under the Enabling Clause for 
RTAs between developing countries to  cover substantially all trade, as was the case for RTAs notified 
under Article XXIV of the GATT.  In order for the Par ties to be able to respond in greater detail, he 
invited Members to submit their questions and observations in writing. 
27. The representative of the European Union
 made a distinction between the early 
announcement of an RTA and the notification of that RTA. In light of the provisions of the Transparency Mechanism for RTAs, his delegation i nvited Chile and India to fulfill their notification 
requirements as soon as possible. 
28. The representative of India
 said that there had been an early announcement of the India-Korea 
Agreement, and that work was in progr ess for this Agreement to be notified. 
29. The Chairman  said that the CTD's consideration of the Chile-India PTA had allowed 
Members to clarify a number of questions.  Oral di scussion of the Agreement could be concluded in 
accordance with paragraph 11 of the Transparency  Mechanism for RTAs.  Further questions by 
delegations on the Agreement were to be submitted in writing to the Secretariat within one week, by 
Monday, 5 July 2010.  The Parties would then be  given two weeks to submit written replies, by 
Monday, 19 July 2010.  In accordance with paragr aph 13 of the Transparency Mechanism, all written 
submissions as well as the minutes of the meeting woul d be circulated promptly in all WTO official 
languages, and would be made available on the WTO website. 
30. The Committee took note  of all interventions.   
C. OTHER BUSINESS   
31. No matter was raised under "Other Business". 
32. The meeting was adjourned . 
 
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