WORLD TRADE  
ORGANIZATION  RESTRICTED 
G/MA/M/54 
28 October 2011 
 (11-5424) 
Committee on Market Access  
  
 
 
MINUTES OF THE MEETING HELD ON 14 OCTOBER 2011 
 
Chairman: Mr. Attila Bastirmaci (Turkey) 
 
  
Subjects discussed                      Page 
 
1.  Periodic report of the Committee to the Council for Trade in  Goods ................................ 2  
2.  Extension of the Harmonized System 2002 waiver ................................................................ 2  
3.  Extension of the Harmonized System 2007 waiver ................................................................ 2  
4.  Introduction of Harmonized System 2012 Changes into WTO Schedules of 
Tariff Concessions - Draf t waiver decision ............................................................................. 3  
5.  Introduction of Harmonized System 1996 (HS96) changes to schedules of 
concessions ................................................................................................................... .............. 3  
(i)  Submission of HS96 documentation ............................................................................................ 3  
(ii)  Decision on Procedures leading to the ver ification and certification of HS96 changes 
relating to the schedules of 64 Members contained in WT/L/756 - Report by the Chairman ...................................................................................................................... .............. 3  
6.  Introduction of Harmonized System 2002 changes to schedules of concessions 
using the Consolidated Tariff Schedules (CTS) Database (WT/L/605) - Report 
by the Secretariat on th e status of work ................................................................................. 4  
7.  Introduction of Harmonized System 2007 changes to schedules of concessions 
using the CTS Database (WT/L/673) ...................................................................................... 4  
(i)  Amendment to the Procedures leading to  the certification of HS2007changes .......................... 4  
(ii)  Transposition of Members' CTS Files to  the HS2007 nomenclature - Notes on 
Methodology ................................................................................................................... ............ 4 
8.  Draft Procedure for the Introduction of  Harmonized  System 2012 changes to 
schedules of concessions us ing the CTS database .................................................................. 5  
9.  Operation of the Integrated Data Base (IDB) and the CTS database .................................. 5  
10.  Timeliness and completeness of notificati ons - Draft decision on Notification 
Procedures for Quantitative Rest rictions (JOB/MA/71/Rev.5) ............................................ 6  
11.  Transitional Review under Paragraph 18 of the Protocol of Accession of the 
People's Republic of China .................................................................................................... .. 8 
12.  Draft report (2011) of the Committee to the Council for Trade in Goods 
(G/MA/SPEC/49) ................................................................................................................ .... 15 
13.  Election of the Vi ce-Chairperson .......................................................................................... 15  G/MA/M/54 
Page 2  
 
  14.  Other Busi ness ................................................................................................................ ......... 15 
(i)  Japan and Korea - Increase of the industrial product tax on imported cars by Brazil ............ 15  
(ii)  Date of the next meeting ...................................................................................................... ..... 17 
 
 
 The Committee adopted the agenda as reproduced in WTO/AIR/3816 with the inclusion of the 
following items under Other Business:  "Japan and Korea - Increase of the industrial product tax on 
imported cars by Brazil" and "Date of the next me eting."  An annotated agenda was circulated in 
document JOB/MA/991. 
_______________ 
 
 
1. Periodic report of the Committee to the Council for Trade in  Goods  
1.1 The Chairman drew attention to document G/MA/SPEC/48 which contained the draft periodic 
report of this Committee.  He noted that this repor t, which would be finalized in the light of the 
discussion that would take place at this meeting,  would be submitted to the Council for Trade in 
Goods (CTG) for examination.  He noted that as th ere were no requests for extensions of Harmonized 
System 1996 (HS96) waivers, no factual information on this issue had been provided in the annex.    1.2 The Committee took note of the periodic report and agreed to forward the finalized report
2 to 
the CTG for its consideration. 
 
2. Extension of the Harmonized System 2002 waiver  
2.1 The Chairman recalled that a number of Memb ers had been given an extension or granted a 
new waiver  - through the form of a "collective decision"-  in order to introduce Harmonized 
System 2002 (HS2002) changes domestically and to subsequently introduce these changes to their 
respective schedule of concessions and to undertake ne gotiations if required. This waiver decision 
was contained in document WT/L/808 a nd would expire on 31 December 2011.   
 2.2 He proposed that the Committee approve the ex tension of the waiver for another year as the 
Members concerned had yet to complete the HS2002 procedures.    
2.3 The representative of Malaysia requested that Malaysia be included in the annex of the waiver 
decision as Malaysia had withdrawn its HS2002 file  at the Committee's last multilateral review. 
 2.4 The Committee agreed to forward a revised ve rsion of the draft decision (to be issued as 
G/C/W/653/Rev.1 in order to include Malaysia in the annex), to the CTG for appropriate action. 
 
3. Extension of the Harmonized System 2007 waiver 
3.1 The Chairman recalled that a number of Memb ers had been given an extension or granted a 
new waiver,  - through the form of a "collective decision"-  in order to introduce Harmonized 
System 2007 (HS2007) changes domestically and to subsequently introduce these changes to their 
respective schedule of concessions and to undertak e negotiations if required. This decision was 
contained in document WT/L/809 a nd would expire on 31 December 2011.    Given that the HS2007 
exercise had only recently been resumed, he propos ed that the Committee approve the extension of 
the waiver for a year. 
                                                      
 1 A corrigendum was issued subsequent to the meeting. 
 2 Issued as G/MA/257.  G/MA/M/54 
 Page 3 
 
 
  3.2 The Committee agreed to forward the draft waiver decision (G/C/W/654) to the CTG for 
appropriate action.   
 
4. Introduction of Harmonized System 2012 Changes into WTO Schedules of Tariff 
Concessions - Draft waiver decision 
4.1 The Chairman recalled that at its last formal meeting, the Committee had agreed that the 
Secretariat should put together a draft waiver decision for the Harmonized System changes coming into 
force on 1 January 2012 (HS2012 changes).  The draft decision was circulated in document JOB/MA/94 
and was first considered during a consultation on 22 July and then at the informal meeting of the 
Committee on 13 September.  There were no comments on the text of the draft waiver decision.   
 
4.2 A fax was sent out on 15 September by the Se cretariat inviting those Members wishing to be 
covered by the waiver to so indicate in writing.  Those Members had now been included in the annex to 
the waiver decision now ci rculated in G/C/W/655.   Hong Kong, China and Korea in the interim had 
also sent such requests.  The intention therefore woul d be to issue a revised document in order to include 
Hong Kong China and Korea in the annex. 
 4.3 The representative of Malaysia requested that Malaysia be covered by this waiver. 
 
4.4 The Committee agreed to forward a revised ve rsion of the draft decision (to be issued as 
G/C/W/655/Rev.1 in order to include Hong Kong,  China, Korea and Malaysia in the annex)3 to the 
CTG for appropriate action.    
 
5. Introduction of Harmonized System 1996 (HS96) changes to schedules of concessions  
(i) Submission of HS96 documentation 
5.1 The Chairman drew the Committee's attention to document G/MA/TAR/2/Rev.47 which 
reflected the present situation concerning the s ubmission of documentation required pursuant to the 
procedures which were adopted in October 1991 by the GATT Council to introduce HS changes to 
schedules of concessions.   The main change introd uced to this document was the recording of the 
certification of Argentina's HS96 documentation in WT/Let/763.    5.2 The Committee took note of document G/MA/TAR/2/Rev.47.    
 
(ii) Decision on Procedures leading to the verification and certification of HS96 changes relating 
to the schedules of 64 Members contained in  WT/L/756 - Report by the Chairman 
5.3 The Chairman reported that a multilateral review pursuant to this decision was held on 
27 May.  The latest status report of this ex ercise was circulated by the Secretariat in 
JOB/MA/41/Rev.2.   He further recalled that 61 out  of the 64 files had fully completed the procedures 
by means of a certification. This meant that only the files of Bangladesh, Ecuador and South Africa 
remained open.   In the case of Bangladesh, errors had been discovered in the file, so it would be 
circulated again for multilateral review once the co rrections had been introduced.  In the case of 
Ecuador, its HS96 file was linked to the HS2002 work and awaited completion of the latter.  So, only 
South Africa's file was the subject of a review at the May session.  The same questions which had 
been raised on South Africa's file during the December 2010 review session were raised at the 
May 2011 session.  The Committee would need to revert  to South Africa's file at the next multilateral 
review. 
                                                      
 3 Subsequent to the meeting, Costa Rica, Guatemala and Singapore requested to be covered by the 
waiver decision and were included in the annex.  G/MA/M/54 
Page 4  
 
  5.4 The Committee took note of the report.  
 
6. Introduction of Harmonized System 2002 chan ges to schedules of concessions using the 
Consolidated Tariff Schedules (CTS) Database (WT/L/605) - Report by the Secretariat 
on the status of work 
6.1 A member of the Secretariat (Ms. Antonia Di akantoni) stated that a revised full report was 
issued as JOB/MA/42/Rev.3 on 30 August 2011.  The situation of the HS2002 transposition work, 
after the 27 May and 13 Septembe r multilateral reviews, was the following:  99 HS02 files were 
certified and one HS02 file was in the process of be ing certified; 15 HS02 files were released for 
multilateral review and had comments from other Me mbers; one draft HS02 file had been completed 
and was sent to the Member for the first review; a nd two draft HS02 files remained to be prepared. 
 6.2 The Committee took note of the report.   
 
7. Introduction of Harmonized System 2007 chan ges to schedules of concessions using the 
CTS Database (WT/L/673) 
(i) Amendment to the Procedures leading to the certification of HS2007changes  
7.1 The Chairman recalled that at the Committee' s formal meeting on 12 May, the Committee had 
agreed that the Secretariat should elaborate an  amendment to the procedures leading to the 
certification of HS2007 changes. Such an amendment was to be elaborated along the lines of the amendment to the procedures leading to the cer tification of HS2002 changes which the Committee 
had noted had expedited the certification of the HS2002 files.  Consultations were held on a first draft 
on 17 June and on a revised version on 22 July.  A further revision was considered at the informal 
meeting of the Committee on 13 September.  Revi sion 3 which was now before the Committee took 
into account the comments made at that informal meeting.    
7.2 The Committee approved document JOB/MA/92/Rev.3
4 and agreed to forward it through the 
CTG to the General Council for adoption.   
 
(ii) Transposition of Members' CTS Files to the HS2007 nomenclature - Notes on Methodology 
7.3 The Chairman recalled that in light of the co mments made at an informal consultation held on 
17 June, corrections were introduced to the methodol ogical notes which were subsequently circulated 
as JOB/MA/97 (replacing JOB(O9)/24 and its addendum).   The document was then considered at the informal meeting of the Committee on 13 September.  
7.4 A member of the Secretariat  (Ms. Antonia Di akontoni) stated that the changes introduced in 
this new version of the document (JOB/MA/97) were  the following:  (1) corrections were introduced 
to paragraphs 6.5 and 6.6 rela ting to product coverage and the agriculture and non-agriculture 
breakdown of HS subheadings;  (2) the addendum to  JOB(09)/24 was introduced to the new document 
as "Section VII - Format and Contents of the HS07 Transposition Files";  (3) a column was added to 
Table 2 of the concordance table on page 21 to reflect the WCO non c onsensus tariff line correlations;  
(4) Annex 1: HS2007 to HS2002 correlations was revi sed to reflect the latest updates in the WCO 
standard correlation;  and (5) a footnote was added to paragraph 5.8 to reference the WCO correlation 
document G/MA/W/76 which would need to be revi sed to reflect the latest updates in the WCO 
standard correlation.  
                                                      
 4 This document was re-issued as G/MA/W/108.  G/MA/M/54 
 Page 5 
 
 
  7.5 The representative of the United States stated that with regard to the proposed format for the 
concordance tables presented in JOB/MA/97, her de legation had previously commented that it would 
be better to continue including two concordance ta bles in the HS2007 concordance transposition files 
rather than a single concordance table.  Her de legation had understood from previous discussions that 
that change would be introduced but the change di d not appear to have been made in the updated 
document.  The US believed that including two c oncordance tables would enhance transparency and 
would facilitate easier review and verification of the transposition files.  So, her delegation would 
appreciate it if the Secretariat could make that  change.  On the point about the non-consensus 
correlated tariff items, the US appreciated that the Secretariat had included a column in the 
concordance table to indicate whether there was a consensus in the WTO for the correlation.  
However, her delegation still thought that the qu estion of correlations for non-consensus items 
warranted further discussion in the Committee.  Sh e recognized that other Members would like to 
begin the HS2007 transposition work as did her de legation, and saw no reason why further discussion 
on the non-consensus items w ould hold up that work. 
 
7.6 The Chairman reported on the consultation he ld on 17 June on the subject of the correlated 
lines on which there was no consensus in the WCO.   He  recalled that this issue was raised at the last 
formal meeting of the Committee and it was agreed that the Committee should discuss the matter.    
 7.7 The following points were, in his view, the more salient ones emerging from those 
consultations:  First that the WCO correlation was not legally binding and Members had deviated in 
the transposition of their schedules from the WCO standa rd in the past and such deviations were in 
many cases accepted by the WTO membership in their re views; second, the issue was limited in that 
not many HS subheadings were involved; and thir d the Secretariat would, in its work, adopt a 
pragmatic approach, using national applied schedules'  nomenclature as point of reference and flagging 
the use/non-use of non-consensus correlations.  This  was also mentioned in document JOB/MA/97. 
 
7.8 The Committee took note of the reports and the comments.  It agreed to revert back to 
document JOB/MA/97 at its next meeting.  On  the non-consensus correlated tariff items, the 
Committee agreed to further discuss the issue.  
 8. Draft Procedure for the Introduction of Ha rmonized  System 2012 changes to schedules 
of concessions using the CTS database  
8.1 The Chairman stated that at its formal m eeting in May, the Committee had agreed that the 
Secretariat should elaborate a draft procedure for the introduction of the HS2012 changes to schedules 
of concessions using the CTS database, basing itsel f on the existing HS2002 and HS2007 procedures.  
A first draft (JOB/MA/98) was considered at the informal meeting of  the Committee held on 
13 September and in light of some preliminary comments, a revision was issued as 
JOB/MA/98/Rev.1.  8.2 The Committee approved document JOB/MA/98/Rev.1
5 and agreed to forward it through the 
CTG to the General Council for adoption.   9. Operation of the Integrated Data  Base (IDB) and the CTS database 
9.1 The Chairman drew attention to document G/MA/IDB/2/Rev.34 which contained information 
on the status of submissions of the required documentation. 
 9.2 A member of the Secretariat  (Ms. Antonia Diakantoni) reported that regarding submissions 
to the IDB, since the circulation of document G/MA/IDB/2/Rev.34, the Secretariat had received 
                                                      
 5 The document was re-issued as G/MA/W/109. G/MA/M/54 
Page 6  
 
  submissions from:  Costa Rica: 2010 imports; Do minica: 2011 tariffs; El Salvador: 2010 imports; 
Indonesia: 2010 imports; Israel: 2009 and 20 10 imports; and Mauritius: 2010 imports. 
 9.3 On dissemination of the IDB, 1264 country-periods covering all 125 WTO Members
6 and 
eight acceding countries7, were now available on the IDB websites Tariff Analysis Online (TAO) and 
File Transfer Facility (FTF).  
 9.4 On the CTS database, there were currently  112 files in the new CTS formats in HS2002 
nomenclature (described in JOB/MA/13/Rev.1) available on the FTF site.  The certified HS2002 
documentation had been included in 103 CTS files.  The CTS database continue d to be updated with 
other rectification documents.   9.5 The new Release of the CTS CD-ROM would be issued by early December.  It would include 
for most Members their CTS file in the HS 2002 nomenclature with certified HS2002 changes. 
 
9.6 On technical assistance, sin ce the last formal meeting of Committee in May 2011, the IDB 
and CTS database were presented at the following regional NAMA workshops in: Abu Dhabi for the 
Arab region; Casablanca for French speaking Africa;  and Vienna for Central and Eastern Europe.  
The databases were also presented in the Advanced  Trade Policy Course in Geneva and the Regional 
Trade Policy Course in New Delhi. 
 9.7 On software developments, a new version of  TAO (Tariff Analysis Online) was implemented 
in June, allowing for an easier download of IDB ta riff and import files, CTS files and reference data 
in XML or MS Access format.  Currently the S ecretariat was working on providing the analytical 
functionality of TAO in the form of web services wh ich would allow other applications to leverage 
the WTO platform and incorporate TAO (IDB and C TS) data and analytical services into their own 
set of reporting tools.  This new data disseminati on framework would initially be made available to 
in-house WTO applications such as the Preferen tial Trade Arrangements (PTA) database, with the 
prospect of eventually being able to provide acces s to these services to author ized external users and 
agencies. 
 
9.8 The Committee took note of document G/MA/IDB/2/Rev.34 and of the report.  
 
10. Timeliness and completeness of notifications - Draft decision on Notification Procedures 
for Quantitative Restrictions (JOB/MA/71/Rev.5) 
10.1 The Chairman recalled that in the context of timeliness and completeness of notifications, the 
Committee had been examining the Decision on Notification Procedures for Quantitative Restrictions 
(G/L/59).   Since the last formal meeting of th e Committee, various consu ltations (17 June, 22 July 
and 13 September) had been held on updated versions of the draft.  The latest revision before the 
Committee took into account comments made during an  informal meeting of the Committee held on 
13 September.   
 
10.2 The representative of Brazil indicated that his delegation had received a last minute note from 
capital indicating that the Ministry of Trade had rais ed a number of questions on the implications of 
the notification procedure on quantita tive restrictions.  As far as he could see, these questions were 
technical and procedural in nature.  The Ministry of External Relations was engaged in consultations 
with the Ministry of Trade but unfortunately they ha d not been able to clarify all the points as yet.  
                                                      
 6 The information provided by the European Communities covers its 27 member States as of 1 January 2007; the 
information provided by Switzerl and covers also Liechtenstein.  
 7 Algeria; Bahamas; Belarus; Iran, Islamic Republic of; Lao People's Demo cratic Republic; Russian Federation; 
Serbia and Vanuatu.  G/MA/M/54 
 Page 7 
 
 
  Therefore at this juncture, his delegation was compelle d to reserve its position in relation to the draft.  
The internal process of consultation would continue and Brazil expected that all the issues would be 
clarified soon.   10.3 The representative of Hong Kong, China stated  that Hong Kong, China took their obligations 
regarding notifications under various WTO agreemen ts very seriously.  His delegation believed that 
this was an effective way to ensure that other Members were aware of Hong Kong China's latest 
measures that might have a bearing on trade.  Hi s delegation also firmly took the view that 
compliance with these notification obligations woul d help Members exercise peer reviews and take 
necessary actions accordingly. 
 
10.4 Members had contributed a lot of useful ideas during the deliberation process for this draft procedure, which certainly was an improvement ove r the previous practice which, as his delegation 
observed, had not been strictly followed.  His de legation believed that the new decision represented a 
good balance of various considerati ons that had been expressed in the consultations before this 
meeting.  The draft decision was workable , and he urged its early implementation. 
 10.5 He took note that the delegation of Brazil mi ght have some final technical and procedural 
concerns on the proposal.  His delegation would be ready to work with Brazil, the Chairman, the 
Secretariat and other Members in resolving these concerns.  Subject to this, his delegation would endorse this draft decision, and recommende d that other Members do so too.   
10.6 The representative of Costa Rica pointed out th at, as mentioned by Hong Kong, China, this 
decision would bring transparency and improve comp liance.  His delegation therefore supported the 
text and hoped that the decision could be implemented swiftly.  
 10.7 The representative of the United States thought  that the Committee had a consensus document 
but noted that Brazil had expressed a reservation on it .  Like Hong Kong, China and Costa Rica, her 
delegation believed that this was a very good do cument.  She believed that it would advance the 
overall objective of transparency.  Her delegation was disappointed that the Committee could not send 
this document forward but having said that she we lcomed further engagement with Brazil.   
 10.8 The representative of New Zealand stated that in  the last six months there had been significant 
progress made on the draft and her delegation was heartened at the last informal meeting when it felt 
that there was a consensus on this point.  So like other Members, her delegation was disappointed that 
concerns were being potentially raised and looked forward to working with other Members to finalize 
this draft decision and to make the no tification procedure more functional.  
 
10.9 The representative of Australia expressed re gret that the Committee could not finalize the 
document today but hoped that the Committee could move forward on this draft decision as fast as 
possible.  He added that Members might have to  re-consider the implementation time-frames, but 
hoped that all issues could be resolved as soon as possible.   10.10 The representative of the European Union stat ed that the improvements made to the decision 
and in the transparency could bring more timely a nd complete notifications.  His delegation wished to 
work with Brazil in trying to bring this  decision to fruition as soon as possible.  
 10.11 In response to a question from the Chair, the representative of Brazil expressed a preference 
to having another round of discussions on the dr aft decision in the Committee once comments had 
come in from his capital rather than adopting the decision on an ad referendum  basis at this meeting.  G/MA/M/54 
Page 8  
 
  10.12 The Chairman noted that the Committee ha d worked on this decision for a long time and 
Members had been close to finalizing it.  He w ondered whether Brazil could clarify whether Brazil 
had further concerns on the text or whether the issue was the internal procedure regarding the 
approval of the draft decision.   
10.13 The representative of Brazil stated that his delegation had received the note from capital the 
previous day.  As far as he was aware the Ministry of Trade had raised some concerns about the text.  
The concerns seemed to be only technical and proce dural. However, given that he had received clear 
instructions to reserve Brazil's position vis-à-vis the te xt, he preferred to keep the draft decision in the 
Committee and to have another round of discussions  on the draft once he had received the comments 
from his authorities.   
 10.14 The Committee agreed to revert to this matte r at its next meeting and to hold informal 
consultations in the meantime based on i nput to be provided by Brazil.   
  11. Transitional Review under Paragraph 18 of th e Protocol of Accession of the People's 
Republic of China 
 Questions and comments submitted by Japan (G/MA/W/106) 
 
11.1 The representative of Japan stated that Japan was of the view that the TRM exercise had been 
an important opportunity to ensure transparen cy, to regularly update the state of China's 
implementation of its commitments under the WTO,  and to mutually improve understanding on the 
interest and concerns among Members.  11.2 In this respect, Japan appreciated China's effort s so far to answer some of the questions posed 
by Members and the document presented today as well. However, as pointed out in Japan's 
communication (G/MA/W/106), there still remained  a number of unresolved issues which Japan 
wished to raise; mainly those relating to export rest rictions and export taxes.  Although the details of 
Japan's concerns could be found in the document, he wished to share with Members the points on 
which Japan sought responses from China.  11.3 Firstly, on the issue of export restricti ons and export taxes on non -ferrous metals, Japan 
understood that the Chinese government had issued  export restrictions on several raw material 
products, including rare earths, tungsten, antimony, i ndium molybdenum, tin, coke and so on.  As for 
rare earths, China's Ministry of Commerce had pub lished that the total amount of export quotas was 
set at approximately 8.000 tons in 2010, marking a 40 per cent decrease compared to 2009.  The total 
amount for the year 2011 was expected to be appr oximately the same as 2010.  However, ferroalloys 
were recently included in the export quotas; as a result, the amount of q uotas had also decreased 
significantly.  China also imposed export duties on  various raw materials, including rare earths, 
tungsten, antimony, indium, molybdenum, tin, fluorite  and hydrogen fluoride.  The export duties had 
been raised several times since November 2006.   Japan sought an explanation on how China justified 
its export restrictions on these metals under the GA TT and on how China planned to eliminate export 
restrictions if any. 
 
11.4 Secondly, on the issue of export restricti ons and export taxes on coal, Japan understood that 
China had been implementing export licensing on coal. Whereas a sufficient number of export licences used to be issued in terms of China's export amount of coal, the numbers issued had decreased over the past few years.  Japan was therefore concerned that this trend might hamper 
smooth trade flow of coal.  Since China's domestic  production and consumption of coal seemed to be 
in expansion, it was unclear if the export licensi ng measures on coal had been adopted in conjunction 
with the restriction on domestic production and/or c onsumption, as stipulated in GATT Article XX(g).   G/MA/M/54 
 Page 9 
 
 
  Japan was thus concerned that such measures were not consistent with the GATT Article XI.   Japan 
wished to seek a clarification on how China ju stified the export licensing on coal under the GATT. 
 11.5 And lastly, on the issue of export prohibition on  natural sand, and on the issue of export taxes 
on chemical fertilizers and their raw materials, simila r to the points made earlier, Japan wished to seek 
clarification from China on how China justified these measures under its WTO commitments. 
 11.6 Japan had made several inquiries regarding China's future plans to eliminate these export 
taxes on the aforementioned items in TRM and Trad e Policy Review (TPR). However, Japan had not 
received any concrete explanation from China.  Japan looked forward to hearing the responses from 
China and where necessary, Japan w as willing to discuss the matter with  China further in detail.  If 
China was willing to respond to these questions in the meeting of CTG, Japan would be duly 
submitting the same questions to that Council meeting.   11.7 The representative of Mexico welcomed the f act that China had made significant efforts to 
open its economy and improve its business environmen t.  However, the Mexican private sector had 
indicated that it continued having certain market access concerns which included export restrictions 
that continued to be applied by China to some pr oducts.  Mexico had already expressed such concerns 
in the past.  Specifically on 4 November 2010, Mexico had requested a panel to examine the restrictions being imposed on China on nine raw ma terials including silicon carbide, fluorspar and 
yellow phosphorous.  It was important to bear in mind that 14 Members expressed a willingness to be 
third parties to this panel.  On 5 July, the pane l had found that the tariffs applied to these commodities 
were not in compliance with the provisions of China's WTO Protocol of Accession.  The Mexican 
private sector was concerned by the fact that there co ntinued to be restrictions applied on rare metals 
used in the manufacturing of consumer products such as mobile phones, computers and electronic 
products. Export restrictions on rare minerals might have a negative impact on global production 
chains of the consumer products mentioned above.  This was partic ularly the case given the economic 
weight of China and its potential to exert influen ce on international trade flows. It also gave an 
advantage to its own producers and incentives for in vestments in its economy.  Mexico urged China to 
lift its export restrictions pursuant to the commitm ents entered into during WTO accession.  Finally, 
Mexico's private sector had also informed his author ities that the available trade volume data in some 
of the web sites of the Chinese government were ba sed in other units than those commercially used, 
for example, kilograms instead of piece. Statistics which were presented in different formats did not 
allow for their proper analysis.  11.8 The representative of the United States stated  that when China had signed its WTO Protocol 
of Accession ten years ago, it had agreed to an annual TRM to be conducted before 16 committees 
and councils each fall for 8 years, with a final review by year 10.  It was now year 10.  For this final 
TRM, the US wished to share its observations  on China's first 10 years of WTO membership. 
 11.9 As Members might recall, the TRM was creat ed largely because China was admitted to WTO 
membership before it had revised all of its tr ade-related laws and regulations to become 
WTO-compatible, and because China was allowed a variety of transition periods before it took on 
certain WTO obligations.  The annual TRM meeti ngs therefore provided Members with opportunities 
to review with China, in a multilateral setting, the efforts that China had taken to implement specific 
commitments made in its WTO Protocol of Accession as well as China's efforts to comply with the obligations that it had taken on under the many agreements that make up the WTO Agreement. 
 
11.10 Looking back on the past transitional reviews,  one could see that the focus of the transitional 
reviews changed over time.  For the first five y ears of China's WTO membership, the transitional 
reviews focused primarily on the scheduled phase-in of key commitments that China had made in its 
WTO Protocol of Accession.  However, once that phase-in period had ended, and China could no 
longer be considered a new WTO Member, the focu s of the TRM shifted.  At that point, the G/MA/M/54 
Page 10  
 
  transitional reviews focused more on China's adhere nce to the range of WTO rules that obligate all 
Members.    11.11 During the initial phase-in period, China had implemented a set of sweeping commitments, 
including reducing tariffs, eliminating non-tariff barr iers that denied national treatment and market 
access for goods and services imported from other WT O Members, and making legal improvements 
in intellectual property protection and in transparency.  These actions  deepened China's integration 
into the international trading system, facilitating and strengthening China's ru le of law and economic 
reform.  Trade and investment also expanded dr amatically between China and its many trading 
partners.      
 
11.12 Even though China had taken many impressive steps to reform its economy since joining the 
WTO ten years ago, the overall picture remained complex, given a troubling trend in China toward increased state intervention in the Chinese economy in recent years.  Frequently, trade frictions with 
China could be traced to China's pursuit of industr ial policies that relied on excessive, trade-distorting 
government intervention intended to promote or pr otect China's domestic industries and state-owned 
enterprises.  This government intervention reflected  that China's rapid transition from a centrally 
planned economy to a free-market economy governed  by rule of law remained incomplete.   
 11.13 As one looked at developments relating to the jurisdiction of this Committee in particular, it 
could be recalled that, as a result of its acc ession negotiations, China committed to significant 
reductions in tariff rates on a wide range of industria l products over a period of years.  To date, China 
had made timely implementation of these tariff reduction commitments each year.  These tariff cuts had significantly increased market access for U.S. expor ters in a range of industries, as China reduced 
tariffs on goods of greatest importance to U.S. in dustry from a base average of 25 per cent to 7 
per cent during the first five years of its WTO memb ership.   U.S. exports had also benefited from 
China's on-going participation in two significan t tariff initiatives, the Information Technology 
Agreement and the Chemical Tariff Harmonization Agreement.  11.14 China had also committed to eliminate numerous trade-distortive non-tariff measures (NTMs), including import quotas, licenses and tende ring requirements covering hundreds of industrial 
products.  Notably, China had fully adhered to the ag reed schedule for the elimination of all its import 
quotas as well as all its other NTMs, the last of which China eliminated in 2005.  
 11.15 China had further agreed to implement a system of tariff-rate quotas (TRQs) designed to provide significant market access for certain industrial products, including fertilizer, a major U.S. export.  While China had implemented a TRQ system for these products, China's administration of 
this system had never functioned smoothly, as it conti nued to be impaired by inadequate transparency 
and administrative guidance.  Despite repeated bila teral engagement and multilateral engagement at 
the WTO, including formal consultations with Chin a in Geneva under the headnotes in China's Goods 
Schedule, these concerns had persisted.  In additi on, despite China's implementation of a TRQ system 
for fertilizer, U.S. fertilizer exports to China had d eclined sharply since China acceded to the WTO, as 
separate Chinese government policies promoting dom estic fertilizer – including export duties and 
discriminatory internal taxes – appeared to have had a significant impact on China's fertilizer market. 
 11.16 Meanwhile, serious market access problems had arisen over the last 10 years as a result of various Chinese industrial policies.  Many of  these problems had involved fundamental WTO 
obligations, such as national treatment, non-discrimination and transparency. 
 
11.17 In 2001, China began announcing discriminator y value-added tax (VAT) policies in an effort 
to develop its domestic integrated circuit industry.  Pursuant to a series of measures, which became 
operational in 2004, China had provided for the reba te of a substantial portion of the 17 per cent VAT 
paid by domestic manufacturers on their locally pr oduced integrated circuits.  A similar VAT rebate  G/MA/M/54 
 Page 11 
 
 
  was available to imported integrated circuits, but only if they had been designed in China.  China 
charged the full 17 per cent VAT on all other imported integrated circuits.  These policies 
disadvantaged imported integrated circuits and put pressure on foreign enterprises to shift investment 
in integrated circuit manufacturing to China.  In 2004, following unsuccessful bilateral engagement, 
the US had initiated a WTO dispute settlement case ag ainst China in which it alleged violations of 
Article III of GATT 1994.  Following WTO consultati ons and further bilatera l meetings, the parties 
had reached a settlement, pursuant to which China agreed to withdraw the challenged measures.  
 11.18 In 2005, another WTO compliance matter arose when China began to issue measures 
implementing its new automobile industrial policy and,  in particular, regulations that imposed charges 
that unfairly discriminated against imported auto parts and discouraged automobile manufacturers in 
China from using imported auto parts in the assembly of vehicles.  These regulations appeared to be 
inconsistent with several WTO provisions, incl uding Article III of GATT 1994 and the commitment 
in China's accession agreement to e liminate all local content requir ements relating to importation, 
among other provisions.  Despite strong criticism fr om the US, the EU, Ja pan and Canada, China 
refused to withdraw these regulations.  As a result,  in 2006, the US, the EU and Canada challenged 
China's regulations, and in 2008 a WTO panel ruled in favour of the US and the other complaining 
parties.  Later that year, China appealed the pane l's decision, and the Appellate Body issued a ruling 
upholding the panel's decision.  China took steps to comply in 2009 by repealing the regulations at 
issue.  
11.19 Another WTO compliance matter arose when Ch ina failed to remove its restrictions on the 
right to import and distribute copyright-intensiv e products such as books, newspapers, journals, 
theatrical films, DVDs and music as of 11 December 2004, as required by the terms of its accession to the WTO.  Instead, China continued to wholly re serve the right to import these products to state 
trading enterprises and place restrictions on their dist ribution within China, as reflected in a complex 
web of measures issued by numerous ministries.  Af ter bilateral engagement had failed to persuade 
China to revise its measur es, the US had initiated a WTO dispute settlement case in 2007, challenging 
China's importation and distribution restrictions.  The panel hearing the case had issued its decision in 
2009, ruling in favour of the US on all significant i ssues.  Later that year, China had appealed the 
panel's decision, and the Appella te Body had rejected China's appeal on all counts.  China 
subsequently had agreed to come into complian ce by March 2011, but had not yet taken all of the 
steps necessary for compliance. 
 11.20 For most of the past 10 years, China had also imposed various types of restraints on exports of a wide range of raw materials, including e xport quotas, related export licensing and bidding 
requirements, minimum export prices and export duties, as China's economic planners sought to guide 
the development of downstream industries.  China' s export restraints had affected US and other 
foreign producers of a wide range of downstream  products, from steel, aluminium and chemicals to 
hybrid and electric cars, energy efficient light  bulbs, wind turbines and aircraft, among numerous 
others.  The export restraints c ould create serious disadvantages fo r foreign producers by artificially 
increasing China's export prices for the raw materials at issue.  At the same time, the export restraints 
appeared to have artificially lowered China's dome stic prices for the raw materials due to significant 
increases in domestic supply, enabling China' s domestic downstream producers to produce 
lower-priced products from the raw materials and th ereby creating significant advantages for China's 
domestic downstream producers when competing ag ainst foreign downstream producers both in the 
China market and in other countries' markets.  Th e export restraints could also create incentives for 
foreign downstream producers to move their operations and technologies to China.  In 2009, after 
extensive bilateral engagement had failed to lead to any positive changes in China's policies, the US, 
the EU and Mexico had initiated a WTO case in whic h they had challenged China's export restraints 
on nine raw materials as incons istent with China's obligations  under various provisions of the 
GATT 1994 and China's WTO Protocol of Accession.  In 2011, a WTO panel had rejected all of G/MA/M/54 
Page 12  
 
  China's defences and ruled in favour of the US a nd its co-complainants.  China subsequently had 
taken a limited appeal to the Appellate Body, and that appeal remained pending. 
 11.21 China's export restraints on raw materials th at were not included in the pending WTO case 
continued to generate serious c oncerns among WTO Members, partic ularly when it came to rare 
earths, a collection of 17 different chemical elemen ts used in a variety of green technology products, 
among other products.  Even though it accounted fo r more than 95 per cent of global rare earths 
production, China had been imposing increasingly r estrictive export quotas and export duties on rare 
earth ores, oxides, metals and alloys.  In 2010, following a sharp reduction in China's export quotas, world prices for most of the rare earths had risen dr amatically higher than China's domestic prices and 
further hindered efforts in other countries to  develop expertise in the increasingly important 
downstream manufacturing of green technology pr oducts.  The US and other WTO Members had 
been urging China to abandon its use of export restra ints on rare earths, but to date China had been 
unwilling to do so.  
11.22 Finally, it appeared that China had made progress but had not yet implemented all of the 
cross-cutting transparency commitments that it ha d made when it acceded to the WTO.  Serious 
concerns remained, even after 10 years of WTO membership.  11.23 First, with regard to China's commitment to  publish all laws, regula tions and other measures 
pertaining to or affecting trade in goods or services (as set forth in paragraph 331 of China's Working 
Party Report), China had complied with this commitment in many respects.  However, it still did not 
appear that China published measures that provided "internal guidance".  11.24 Second, with regard to China's commitment to publish measures for comment before implementing them (as set forth in paragraph 2(C)2 of Part I of China's WTO Protocol of Accession), 
China had made improvements, but it appeared that China had still not institutionalized a 
notice-and-comment mechanism for all Chinese agencies.  To date, while the State Council had been 
regularly publishing proposed regulations for pub lic comment, it appeared that Chinese agencies had 
more difficulty publishing proposed departmental rules and other proposed measures.  The US noted 
that, at the meeting of the US - China Strategic and Economic Dialogue in May 2011, China had committed to issue a measure in 2011 requiring Chin ese agencies to publish all proposed trade and 
economic-related administrative regul ations and departmental rules on the State Council Legislative 
Affairs Office website for a public comment peri od of not less than 30 days from the date of 
publication, subject to specified exceptions.  11.25 Third, with regard to China's commitment to  make available all laws, regulations and other 
measures pertaining to or affecting trade in goods or services in one or more WTO languages (as set 
forth in paragraph 334 of China's Working Part y Report), it appeared that China had made no 
progress in implementing this important commitment.   11.26 Going forward, the US urged China to more  fully embrace the fundamental WTO obligations 
of national treatment, non-discrimination and tran sparency when it came to providing access to its 
market.  The US also urged China to pursue more  responsible policies on raw materials.  The US 
would continue to engage China,  both here at the WTO and bilaterally, until these outstanding issues 
were satisfactorily resolved.   11.27 The representative of the European Union st ated that China had now ended its transitional 
period of WTO membership.  This meeting marked the end of China's TRM and it was interesting to 
see how China's trade had developed since it joined  the WTO ten years ago.  The figures clearly 
showed that China had greatly benefitted from WTO membership with its exports increasing six fold 
since 2001.  Indeed China's export performance had b een remarkable with the annual average increase 
of 18 per cent between 2001 and 2010 compared to th e world average of 9 per cent.  This increase in  G/MA/M/54 
 Page 13 
 
 
  exports was accompanied by a rise in imports where China's import performance had also been above 
the world average. So the entire WTO membersh ip had benefitted from China's membership.  
However, the world's trade deficit with China ha d also increased, more than proportionally by over 
700 per cent which had sometimes led to concerns  in the world trading community.  The EU 
welcomed China's success in trad e but at the same time encourag ed China to live up to its 
responsibilities as an emerged power and a major trad ing power and to open up its markets to level 
similar to those equivalent countries and econom ies.  The TRM that was part of China's WTO 
Protocol of Accession had been useful overall in  increasing transparency on how China had lived up 
to its accession commitments.  In this respect, it ha d given China an opportunity to demonstrate its 
commitment to the principles of transparency and had allowed Members to better understand and 
assess progress China had made in complying with WT O rules and disciplines.  The EU had therefore 
seen the TRM as a mutually beneficial and supportive  process.  During the different reviews, the EU 
had raised a number of issues in this Committee as  it had done in other WTO bodies.  While the EU 
had seen some progress on some of their concerns, a number of measures that negatively affected EU exporters' access to the Chinese markets still remain ed.  Measures which the EU believed were not 
consistent with China's accession commitments. In this  final review, the EU wished to raise a number 
of concerns that continued to persist and the EU would be grateful if China could address the 
following issues that cause problems in  the EU trade with China.   
 11.28 The EU continued to have concerns with China's compulsory certification schedule ("CCC 
Scheme"), which remained a burdensome, comple x, expensive and time- consuming conformity 
assessment scheme in particular for small and medium-sized enterprises (SMEs).  The EU appreciated 
China's continued engagement on this issue with European authorities as well as the recent promise 
made to reduce the administrative burden of the certification scheme.  However, much more was 
needed in order to alleviate the EU industry's concer ns in this regard.  The EU's primary concern was 
that the one-size-fits-all approach of the certifi cation schedule with comprehensive product testing 
and factory audits; assigning the same level of risk to  very diverse products in making them subject to 
the same heavy third party certification requirement w as not in tune with the reality of the market or 
with good regulatory practice principles to whic h the EU and China, as WTO Members, were 
committed.  The EU therefore enc ouraged China to consider light er procedures for low-to-medium 
risk products and to engage in a substantive review  of the certification system taking into account the 
need for a risk-based approach.   
 
11.29 Further, in the information and communication technology sector, the EU was highly concerned with the complex, non-transparent and at  times even discriminatory practises in China's 
regulatory approaches which contributed to an in creasingly unpredictable business environment and 
serious market access problems for foreign and forei gn-based companies.   The combined effect of 
these practises was to severely hamper the ability of  these companies to operate and even survive in 
the Chinese market.  In this respect , two issues were particularly worrying for the EU industry.  The 
first was the revision of the 1999 Regulation on Co mmercial Encryption Products by the Office of 
State Cryptology Administration. The second was the on-going implementation of the Multilevel Protection Scheme (MLPS) under the leadership of the Ministry of Public Security. The EU reiterated 
its hope that the upcoming revision of the Regul ation on Commercial Encryption Products would 
effectively solve market access c oncerns and urged China to once again conduct this revision with a 
high degree of stakeholder participation and transparen cy already in the drafting stage.  On the MLPS, 
the EU noted with increasing concern that impl ementation was carried out with a high degree of 
opacity in that the provision discriminating against foreign technology, instead of being eliminated, was being reinforced by various implementing me asures. Once fully in place the MLPS, might well 
constitute the most serious market access barrier  for foreign information technology and security 
industry in China.  The EU looked forward to provi ding more details on these issues in the framework 
of the TBT Committee which was taking place in November.    G/MA/M/54 
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  11.30 The EU had also wished to raise the issue of export taxes. China in its WTO Protocol of 
Accession of 2001 had taken the commitment to not impose export taxes beyond commonly agreed list of 84 tariff lines at the HS 8-digit level and to not go beyond an agreed duty rate on these lines.  
The WTO trade policy review of China of May 20 10 mentioned that statutory export taxes were 
applied to 95 tariff lines, and interim taxes were ap plied to 258 lines again at the HS 8-digit level.  
This could be found in paragraph 76,  page 42 of the secretariat report.  Thus, there was an important 
divergence between China's practise and China' s commitment under its WTO Accession Protocol both 
in terms of the scope of taxed goods  but also in terms of duty rates. Moreover, China had taken the 
commitment under Annex 6 of its WTO Accession Prot ocol to "consult with affected Members prior 
to increasing applied tariffs with a view to finding a mutually acceptable solution."  The EU regretted 
that no such systemic consultation had taken place on this matter.  Export taxes by limiting 
availability of materials outside China and/or crea ting an artificial competitive advantage in favour of 
domestic producers operating in China proved harmful to EU-based industry   The EU had repeatedly 
endeavoured to find a constructive solution to this  issue through dialogue. But noting the reticence of 
China to engage, the EU had had to revert to WT O litigation with other WTO Members. In view of 
the clear report from the panel in of July 2011, the EU was ready to again engage with China with a 
view to finding a systemic solution to the export tax issues.  11.31 The EU looked forward to working constructiv ely with China in the WTO and bilaterally in 
view of finding satisfactory solution to these and other outstanding issues.   
11.32 The representative of China thanked Japan, Mexico, the United States and the EU for their 
statements.  China also appreciated the constructiv e silence of all other Members which had not taken 
the floor at this meeting or in the past under this  agenda item.  During the past decade, China had 
spared no efforts to fulfil most comprehensivel y and seriously the tremendous commitments it had 
made upon its accession to this organization.   
 
11.33 During the past ten years, China had reduced tariffs, eliminated all non-tariff measures, made 
available to all the right to trade which had drasti cally reduced the threshold for all individuals to 
trade with China.  With full implementation of  tariff reduction commitments agreed during accession, 
China's tariff on good was reduced from an averag e of 15.3 per cent to 9.8 per cent today. This 
average was much lower than the average tariff le vel of other developing country Members in this 
institution.  Also, during the past decade, there were  over 2,300 laws and regul ations and departmental 
rules at the central level being overhauled. There were over 190,000 policies and trade-related 
regulations at the local level being reviewed or amen ded.  So, all in all, guided by the same most open 
and cooperative spirit, China had under this age nda item submitted information as requested in 
Annex 1A of its Protocol of Accession which was circulated on 13 October 2011 (G/MA/W/107).  
China looked forward to further effective discussi ons with other Members under both this final TRM 
as well as the regular mechanism of this Committee. China also noted with appreciation the questions 
received from Japan prior to the meeting.  Howeve r, Japan's questions were focused on cases related 
to export measures.  As just explained by Japan, Annex 1A of China's Protocol of Accession clearly stipulated that issues regarding export administra tion should be dealt with under the TRM in the CTG. 
Although China had shown maximum good faith in the past and would cooperate under this agenda 
item in this Committee, it would be only legally pr oper to consider those questions, if Japan submitted 
them to the CTG under the agenda item of the TRM.   11.34 The Chairman noted that the report
8 of this final review to the CTG, as in previous years, 
would be a brief factual paragraph indicating that  the review had taken place, an acknowledgment of 
the documentation submitted pursuant to the review , and a reference to the discussions that took 
place, as reflected in the minutes of this meeting.    
                                                      
 8 Issued as G/MA/258.  G/MA/M/54 
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  11.35 The Committee took note of the statements.  
 
12. Draft report (2011) of the Committee to the Council for Trade in Goods 
(G/MA/SPEC/49) 
12.1 The Chairman noted that the Committee w as required to submit annually a report on its 
activities to the CTG.  A draft report, covering th e activities of the Committee in 2011, was circulated 
in document G/MA/SPEC/49.  The report woul d be updated in light of the meeting.  
 12.2 The representative of the United States noted th at in the draft report there was text within 
square brackets about the consultation by the Chair on the HS2007 transposition files. She wished to 
remind the Committee about her comments made under  a previous agenda item on the non-consensus 
correlated tariff lines.   12.3 The Chairman proposed that following the prev ious year's procedure, the updated draft report 
would be sent to Members by fax, and if no comment s were forthcoming within a certain time period, 
the updated would be considered adopted.  If ther e were minor changes, a revised report would be 
circulated with the changes mark ed clearly and if no comments were  submitted within a certain time 
frame, the revised report would be considered adopted.    12.4 The Committee took note of the comment and agreed to the Chairman's proposal
9.     
 
13. Election of the Vice-Chairperson 
13.1 The Chairman noted that he had been unabl e to complete his informal consultations on a 
Vice-Chairperson.  He proposed that the Committee elect a Vice-Chairperson at  the next meeting of 
the Committee to be held in 2012.  
13.2 The Committee so agreed.  
 
14. Other Business 
(i) Japan and Korea - Increase of the industrial product tax on imported cars by Brazil  
14.1 The representative of Japan noted that as all Members were aware there was no clear way out 
from the current economic and financial difficulties,  and in times like this, some countries could be 
tempted to take measures to protect their domestic industry and employment.  His delegation regretted 
that protectionist measures were increasing as a re sult of the rapid change in international economic 
conditions including exchange  rate fluctuations. However, Japan believed that protectionist measures 
would reduce world trade and economic recovery.  So  it could not be an appropriate prescription to 
recover from economic difficulties.  Members had to co llectively tackle protectionism in line with the 
commitments made at the highest level in various fora. 
 14.2 In this regard, Japan wished to refer to the recent Brazilian measure of increasing the 
industrial product (IPI) tax on imported cars. R ecently, the Brazilian government had announced a 
30 per cent increase of the IPI tax by Government Order No. 7567. According to this Order, the 
increase of the IPI tax was applicable only to cars with a high content of imported parts and 
components.  On the other hand, the measure excl uded cars, produced or imported, if they met the 
following conditions:  first, more than 65 per cent of their parts and components had to be from 
MERCOSUR countries;   second, 0.5 per cent of the gr oss profit at a minimum had to be invested in 
innovation, research and technical development activiti es; and third, the production process had to be 
                                                      
 9 The final report was issued as G/L/967. G/MA/M/54 
Page 16  
 
  entrusted to domestic companies in some stag es.  Among those conditions, the local content 
requirement was the most problematic.  14.3 Japan's view was that these measures by the Brazilian government allowed for discriminatory 
treatment of imported cars on the basis of the local content ratio, which appeared to be inconsistent 
with Articles I and II of GATT 1994 in terms of MFN treatment, national treatme nt and other relevant 
WTO provisions.  Furthermore, Japan was concerne d that this discriminatory measure negatively 
affected Japanese manufacturers which did not have  production facilities and therefore could not fulfil 
the above mentioned three requirements.  
14.4 Japan was deeply concerned about this measu re both in terms of its possible inconsistency 
with WTO agreements and its economic impact on tr ade. Also this kind of measure contradicted 
Members' collective commitment to resist all forms of protectionist measures and it affected the multilateral trading system under the WTO.   Accordi ngly, Japan wished to hear Brazil's views on the 
background to this measure and its  consistency with WTO Agreements in due course.  Japan wished 
to discuss this issue further with Br azil bilaterally as well as multilaterally. 
 14.5 The representative of Korea sh ared Japan's concerns on increasing protectionism.  Korea, in 
particular, also wished to draw attention to Brazil's recent measure related to imported automobiles.   
 14.6 Brazil had increased its IPI tax rates for autom obiles by 30 per cent.  In order to avoid this 
increased tax, three conditions had to be met:   more than 65 per cent of domestically produced 
components, which included components produced in MECOSUR countries, had to be used;  for 80 per cent of production, certain core manufactur ing processes had to be conducted in Brazil; and 
0.5 per cent of the total revenue had to be  re-invested in Research & Development. 
 
14.7 Korea shared the view that such a measure was inconsistent with Brazil's obligations under 
the TRIMs Agreement and the Most-Favoured-Na tion and National Treatment provisions in the 
GATT.   This was also what the Brazilian lawyers had said, as quoted by the "Latin Lawyer" in its 
23
rd September edition.  They said that Brazil had chosen “protectionism, which was exactly what 
Brazil had fought against at the WTO dispute settlement body when other countries seek to protect their domestic industry".  
 
14.8 The world economy had remained sluggish for so me years now.  Due to future uncertainties, 
everyone was doubtful about the possibility of a qui ck economic rebound.  Korea understood that this 
type of difficulty could induce some Members to re sort to a protectionist measure. However, Korea 
believed that this was not the right solution to ec onomic difficulties.  Brazil was widely recognized as 
one of the major players in the WTO forum.  T hus, Korea also shared the concern that Brazil's 
measure could be a precedent that would incentivize ot her Members to follow suit.  This was exactly 
what Members had to avoid in order to protect the multilateral trading system. 
 14.9 Korea thought that the timing of the measure was particularly regrettable, as the 8th WTO 
Ministerial Conference (MC8) was approaching.   Members' common understanding was that MC8 
had to prove the value of this multilateral trading system. 
 14.10 Korea wished to see any WTO-inconsistent el ement to be expeditiously removed by Brazil 
from its industrial product tax measure.  
14.11 The representative of Australia supported the co mments made by Japan and Korea. Australia 
had systemic and commercial concerns with the natu re of the measure and its consistency.  This 
measure discriminated again cer tain imported vehicles and fa voured domestic and regional 
production. His authorities would be monitoring the situation very closely.     G/MA/M/54 
 Page 17 
 
 
  14.12 The representative of the Eur opean Union shared the concerns  expressed by Japan and other 
delegations about the Brazilian decision to grant a tax advantage to vehicles which contained at least 
65 per cent local content. These measures app eared to be incompatible with basic WTO 
non-discrimination principles since Brazil would be treating domestic products in a more favourable 
way than imported goods. The EU also believed that  this measure was at odds with the overall G-20 
commitment to refrain from taking protectionist me asures.  The EU understood that Brazil had taken 
these measures in response to the surge of vehicle im ports recorded this year. However, this should 
not justify the use of measures that were incompa tible with WTO rules. The EU was of course ready 
to discuss this matter further with Brazil and other affected Members and work together in order to 
remedy the situation as soon as possible. 
 
14.13 The representative of the United States expr essed her delegation's concern about the recent 
Brazilian government move and wished to note th at her authorities were closely monitoring the 
situation.  
14.14 The representative of Brazil indicated that he had taken note of th e statements which he 
intended to transmit to his capital.  On a preliminary note, he observed that this was the first time that 
the Decree 7567 of 15 September 2011 was being raised in a multilateral setting.  Since this question 
was being brought up under "other business" and the Brazilian delegation was informed by the 
delegations of Japan and Korea of their intention to do so at very short notice, Brazil did not find itself 
in a position to provide a comprehensive response. Nevertheless by way of a preliminary reaction, 
Brazil could make the following remarks: (1) the Decree 7567 of 2011 constituted a temporary 
measure and was due to expire on 31.12.2012 in accordance with its  second paragraph; and (2) the 
Brazilian delegation was at the disposal of any de legation that might be interested in receiving 
additional clarification about this question.  
14.15 The Committee took note of the statements.  
 
(ii)  Date of the next meeting 
14.16 The Committee took note that its next m eeting would take place in early May 2012. 
 
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