RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/79 
20 May 2005 
 
 (05-2054) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
11 MARCH 2005 
 
Chairperson: H.E. Ambassador Choi (Korea
)    
 
 
 The meeting of the Council for Trade in goods was convened by airgram WTO/AIR/2524 and 
the proposed agenda for the meeting was containe d in document G/C/W/513.  The meeting proceeded 
on the basis of the proposed agenda.  
I.
 REVIEW OF THE OPERATION OF THE AGREEMENT ON TRADE-
RELATED INVESTMENT MEASURES (TRIMS) UNDER ARTICLE 9 ........................2  
II. REGIONAL TRADE AGREEMENTS ..................................................................................2  
A. FREE TRADE AGREEMENT BETWEEN THE EFTA  STATES AND CHILE – NOTIFICATION 
FROM THE PARTIES TO THE AGREEMENT ....................................................................................2  
B. FREE TRADE AGREEMENT BETWEEN ALBANIA AND ROMANIA – NOTIFICATION FROM 
ALBANIA ............................................................................................................................... ......2  
C. FREE TRADE AGREEMENT BETWEEN ALBANIA AND BOSNIA AND HERZEGOVINA – 
NOTIFICATION FROM ALBANIA ...................................................................................................2  
D. FREE TRADE AGREEMENT BETWEEN ALBANIA AND THE FORMER YUGOSLAV 
REPUBLIC OF MACEDONIA – NOTIFICATION FROM ALBANIA .....................................................2  
E. FREE TRADE AGREEMENT BETWEEN ALBANIA AND MOLDOVA – NOTIFICATION 
FROM THE PARTIES TO THE AGREEMENT ....................................................................................3  
F. FREE TRADE AGREEMENT BETWEEN THE UNITED STATES AND AUSTRALIA – 
NOTIFICATION FROM THE PARTIES ..............................................................................................3  
G. FREE TRADE AGREEMENT BETWEEN THAILAND AND AUSTRALIA – NOTIFICATION 
FROM THE PARTIES ......................................................................................................................3  
III. ALBANIA – REQUEST FOR A WAIVER TO EXTEND THE STAGING 
PERIOD OF IMPLEMENTATION FOR A NUMBER OF PRODUCTS..........................3  
IV. UNITED STATES – REQUEST FOR WAIVER FOR THE AFRICAN GROWTH AND OPPORTUNITY ACT, THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT, AS AMENDED AND THE ANDEAN TRADE 
PROMOTION ACT, AS AMENDED.....................................................................................5
 
V. EUROPEAN COMMUNITIES ENLARG EMENT:  PROCEDURES UNDER 
ARTICLE XXVIII:3 OF GATT 1994...................................................................................11  
VI. POST-ATC ADJUSTMENT-RELATED ISSUES ..............................................................14  
VII. STATUS OF NOTIFICATIONS UNDER THE PROVISIONS OF THE 
AGREEMENTS IN ANNEX 1A OF THE WTO AGREEMENT......................................20  
VIII.  APPOINTMENT OF OFFICERS TO CTG SUBSIDIARY BODIES...............................20  G/C/M/79 
Page 2  
 
IX.
 OTHER BUSINESS................................................................................................................2 1 
(i) Request by Pakistan for extension of the transition period under the TRIMs 
Agreement ...................................................................................................................... ...........21  
(ii) Date of the n ext meeting ....................................................................................................... ....21  
X. ELECTION OF CHAIRPERSON OF THE COUNCIL FOR TRADE IN 
GOODS .......................................................................................................................... ..........21  
 
 
I. REVIEW OF THE OPERATION OF THE AGREEMENT ON TRADE-RELATED 
INVESTMENT MEASURES (TRIMS) UNDER ARTICLE 9 
1.1 The Chairman  recalled that at the July meeting the Council had received a joint proposal by 
Brazil and India (document Job(04)/93) concerning a study on the impact of TRIMs and of their 
elimination.  At the meeting in November, the Counc il agreed that the Chair should carry out informal 
consultations on the issue so as to give Members adequate time to reflect on the proposed study and 
on the issue of the Article 9 review in general.  He  reported that he had held two rounds of informal 
consultations with interested dele gations.  Members had considered several options on how to move 
forward.  However, no consensus was reached on th e desirability of conducting the proposed study 
and he did not sense that a solution was possible presen tly.  It was, therefore, for Members to decide 
how to address this matter in the future.   
1.2 The representative of Brazil  thanked the Chairman for holding consultations on this issue and 
stated his delegation's understanding that the re view of the TRIMs Agreement required objective 
inputs and data to base the Council's discussions.  His delegation considered it unfortunate that a 
consensus could still not be reached on its propo sed terms of reference for a joint UNCTAD/WTO 
study on different aspects of TRIMs and how they actually affected countries during the course of  and since the entry into force of the TRIMs Agreem ent.  His delegation believed that Members should 
still strive to achieve a consensus on an objective st udy that could help or guide Members through the 
review of the TRIMs Agreement, and in this re gard, still supported the joint proposal contained in 
JOB(04)/93.  1.3 The Chairman
 concluded that he would report to his successor on the status of the discussions 
and recommend that he keep the issue under review.  He proposed that the Council take note of the 
statements made. 
 
1.4 It was so agreed . 
  
II. REGIONAL TRADE AGREEMENTS 
A. F
REE TRADE AGREEMENT BETWEEN THE EFTA  STATES AND CHILE – NOTIFICATION FROM 
THE PARTIES TO THE AGREEMENT  
B. FREE TRADE AGREEMENT BETWEEN ALBANIA AND ROMANIA – NOTIFICATION FROM 
ALBANIA  
C. FREE TRADE AGREEMENT BETWEEN ALBANIA AND BOSNIA AND HERZEGOVINA – 
NOTIFICATION FROM ALBANIA  
D. FREE TRADE AGREEMENT BETWEEN ALBANIA AND THE FORMER YUGOSLAV REPUBLIC OF 
MACEDONIA – NOTIFICATION FROM ALBANIA   G/C/M/79 
 Page 3 
 
 
E. FREE TRADE AGREEMENT BETWEEN ALBANIA AND MOLDOVA – NOTIFICATION FROM THE 
PARTIES TO THE AGREEMENT  
F. FREE TRADE AGREEMENT BETWEEN THE UNITED STATES AND AUSTRALIA – NOTIFICATION 
FROM THE PARTIES  
G. FREE TRADE AGREEMENT BETWEEN THAILAND AND AUSTRALIA – NOTIFICATION FROM THE 
PARTIES  
2.1 The Chairman  drew the Council's attention to the seve n Agreements listed under this agenda 
item, notified under GATT Article XXIV.1  In the absence of comment s, he proposed that the 
Committee on Regional Trade Agreements carry out the examination of the above-mentioned 
Agreements in accordance with the following terms of re ference:  "to examine, in light of the relevant 
provisions of the GATT 1994, the trade agreements ju st referred to and to submit a report to the 
Council for Trade in Goods.  It is understood that the understanding read out by the Chairman of the 
Council for Trade in Goods under item 7 of the age nda of the meeting of the Council for Trade in 
Goods on 20 February 1995, as containe d in document WT/REG3/1, will apply mutatis mutandis  to 
the examination of the agreements.  It is also  understood that, during the examination, due account 
will be taken of the intrinsic differences between customs unions and free trade areas". 
2.2 The Council  so agreed. 
  
III. ALBANIA – REQUEST FOR A WAIVER TO  EXTEND THE STAGING PERIOD OF 
IMPLEMENTATION FOR A NUMBER OF PRODUCTS 
3.1 The Chairman
 recalled that at its last meeting, the C ouncil had agreed to revert to this item at 
this meeting.  Albania had submitted a written co mmunication at the last meeting concerning its 
request for a waiver.  This was circulated in  document G/C/W/504.  More recently, Albania had 
submitted some corrections and additional informa tion which was circulated to delegations in 
document G/C/W/504/Add.1.  A draft decision on this waiver request had also been circulated in 
document G/C/W/507 and Corr.1. 
 3.2 The representative of Albania
 expressed gratitude to the WTO Secretariat for enabling his 
delegation to present its request for a waiver of the obligations linked to the application of his 
Government's commitments for 2004 and 2005 concerni ng the tariffs for a series of products.  As a 
Member of the WTO since 2000, his delegation al so expressed gratitude to Members such as 
Australia, Canada, Bulgaria, Brazil, US, Turkey, Czech Republic, Croatia, Malta, the EU and others 
who, through their support and constructive advi ce, enabled Albania to carry out this process 
successfully.  The Government of Albania was convinced that being a WTO Member opened new 
ways to cooperate and opportunities to tackle differe nt problems in a more structured manner.  His 
Government had demonstrated a continuing co mmitment to implement the necessary economic 
reforms.  These reforms indicated the political will to aim for stable economic development and full 
integration within the international community throu gh the implementation of international standards.  
Despite the changes and reforms in society, th e priorities of the Government remained (i) 
harmonization of costs and benefits of the liberali zation and integration process, (ii) macroeconomic 
stability, (iii) new market economic structures to develop domestic capacity in several sectors of the economy, and (iv) compatibility with  international obligations.   
                                                     
 
1 The texts of the Agreements and their notifications had been circul ated, respectively, in documents 
WT/REG179/N/1, WT/REG179/1; WT/REG180/N/1, WT/REG180/1; WT/REG181/N/1, WT/REG181/1; WT/REG182/N/1, WT/REG182/1;  WT/REG183/N/1, WT/REG183/1; WT/REG184/N/1, WT/REG184/1;  and 
WT/REG185/N/1, WT/REG185/1. 
 G/C/M/79 
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 3.3 Favourable consideration of the request by WTO Members would be an extremely valuable 
contribution to the rapid process of Albania's deve lopment, and would avoid unnecessary damage to 
the commercial and economic interests.  This would pr ovide precious help to Albania in its efforts to 
expand internal markets, eliminate trade instability an d promote investment in various industries.  He 
confirmed Albania's firm commitment to predictabili ty and balanced liberali zation in accordance with 
the basic principles of the WTO, and his Government counted on the co-operation of Members.  On this occasion, he expressed highest appreciation for support and cooperation, both from Members and 
from the Secretariat of the WTO, for his delegation's economy and all new economies. 
 
3.4 The representative of Turkey
 noted that Albania was a brother country and a small 
transitional economy.  It had been spending huge efforts in reforming its economy during the last 
decade which indicated the country's commitment to  further reforms.  The country was currently 
experiencing some temporary economic problems and, in this context, was demanding a waiver for a 
limited number of products.  Considering the country's  quite liberal tariff structure and the fact that 
there were no changes in the implementation peri od and the final rates for these products, his 
delegation was sympathetic to Albania's demand, a lthough it noted the systematic importance of the 
issue.  3.5 The representative of Japan
 stated that his delegation had reviewed document G/C/W/504 and 
Add.1.  It understood that Albania was requesting a waiver based on the justification laid out in these 
documents, including potential fiscal problems associ ated with the loss of customs revenue resulting 
from the liberalization commitments in the form of  tariff rate reductions.  His delegation had two 
questions.  Firstly, while his delegation underst ood that fiscal revenue was dependent on customs 
revenue, it also believed that Albania must have been  fully aware of such dependency at the time of 
negotiations for accession.  In other words, didn't  Albania foresee such dependency, given the fiscal 
revenue structure prevailing at the time of negotia tions.  Secondly, his delegation asked Albania to 
explain or clarify whether the process it intended to go through was so as to fulfil its commitments in 
2000?  Without some explanation or clarificati on on projected improvement of Albania's fiscal 
standing, his delegation was somewhat puzzled as to why a temporary relief from the accession obligations would eventually lead to better fiscal  conditions by 2009.  In the absence of such 
explanation or clarification, his delegation regre tted that Albania had decided to seek a waiver, and 
strongly hoped that Albania would not request another waiver in the future.  While Japan would like 
to have these questions answered, it would not block the consensus in this matter.  It was posing these 
questions from a systemic point of view as it believed that the integrity of the WTO system must be maintained for all Members, big and small.  His delegation appreciated the efforts Albania had made 
in this matter and hoped that Albania would be ab le to honour its commitments as soon as possible. 
 
3.6 The representative of the United States
 supported granting Albania's request for a waiver on 
the implementation of specific concessions provided in parts A and B of the Annex to G/C/W/504.  
The US had submitted a number of questions to Albania concerning the document and Albania had 
provided responses which were included in the co rrigendum.  His delegation had not had time to 
compare the revised document with its own commen ts.  Therefore, it would be in a position to 
approve this request ad referendum until such time as his Government could satisfy itself that its 
comments were incorporated in the decision.    3.7 The representative of Canada
 stated that his delegation had carefully examined the request 
presented by the Government of Albania.  Although it shared the view that any waiver to WTO 
obligations was regrettable and s hould be avoided, it had taken account of the cause expressed by 
Albania and the economic situation specific to Albani a.  Given the very exceptional nature of this 
request and the explanations provided by the Alba nian authorities, his delegation considered this 
request positively.  In this decision his delegation ha d taken particular note of the fact that the final 
bound tariffs in Albania's schedule of commitments were not too high, that this waiver in no way  G/C/M/79 
 Page 5 
 
 
changed the value of these final bound tariffs, and it was a question of extension of the transition 
period.   In light of these factors, Canada was ready to endorse Albania's request for a waiver.   3.8 The representative of Australia
 associated itself with Canada's statement and could support 
the adoption of the waiver. 
 
3.9 The representative of Brazil  supported Canada's statement and the acceptance of this waiver.  
It further commended the delegation of Albania for th e consultations it had held and the transparency 
with which this process was carried out.  
3.10 The representative of the European Communities
 thanked Albania for the explanations 
provided.  His delegation had sympathy for a count ry which had committed to a very liberal tariff 
regime.  Moreover, taking into consideration the reasons which had been forwarded by Albania and 
the fact that the final tariff commitments would not  change, his delegation wa s fully supportive of the 
waiver request.   
 
3.11 The Chairman  proposed that the Council take note of  the statements made, approve the  
waiver request and recommend that the draft decisi on contained in document G/C/W/507 and Corr.1 be 
forwarded to the General Council for adoption.  3.12 It was so agreed
. 
 
 
IV. UNITED STATES – REQUEST FOR WAIVER FOR THE AFRICAN GROWTH AND 
OPPORTUNITY ACT, THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT, 
AS AMENDED AND THE ANDEAN TRADE PROMOTION ACT, AS AMENDED 
4.1 The Chairman  noted that the United States had recently circulated three requests for the above 
waivers in documents G/C/W/508,  G/C/W/509, and G/C/W/510.   
 4.2 The representative of the United States
 noted that her Government pl ayed an important role in 
fostering the further integration of developing countries into the multilateral trading system.  An essential element in its strategy to increase developi ng country participation in the global trading 
system was to provide these countries duty-free access to its market for most products.  Her 
delegation was asking Members to consider its requests for waivers for three major programmes referred to in its submissions as the African Gr owth and Opportunity Act (AGOA), the Caribbean 
Basin Economic Recovery Act (CBERA), and the Andean Trade Preference Act (ATPA).  These programmes were in addition to its comprehensive Generalized System of Preferences (GSP) 
programme which included enhanced benefits for the least-developed countries.  These programmes, 
which were initiated at different times, shared a common philosophy:  increased trade and investment 
with the US offered tangible, long-run benefits  not readily achievable through our development 
assistance programmes.  The waivers requested toda y were for the time periods specified in each 
statute – and not for an indefinite period.  It was th e view of the US that the most beneficial way to 
integrate these countries into the global trading sy stem was through multilateral liberalization in the 
Doha Round.  An ambitious result would provide greater market access for these countries than what 
the US alone could provide.    4.3 The AGOA programme was designed with the express intent to alleviate poverty and promote sustainable economic development through increased  trade and investment between the US and 
beneficiary countries in sub-Saharan Africa.  Countries in this region faced unique and pressing 
development challenges.  More than 350 million peopl e in this region lived on less than a dollar a day, 
and daunting challenges existed re lated to high debt and pandemic disease, including HIV/AIDS.  
Moreover, many sub-Saharan African countries ha d traditionally found themselves on the margins of 
international commerce and had yet to reap the benef its of fuller participation in the global economy.  G/C/M/79 
Page 6  
 
Sub-Saharan African's share of developing country fo reign direct investment had fallen over the last 
few decades.  AGOA built on the US GSP programme to provide enhanced access to the US market 
for substantially all goods produced in the beneficiar y sub-Saharan African countries.  In the past few 
years, AGOA had substantially increased beneficiary country exports to the US across a broad spectrum of sectors, including energy, appare l, agriculture, and transportation products. 
 
4.4 She added that ATPA was intended to pr omote export diversification and broad-based 
economic development in the Andean region.  It  was designed to promote sustainable economic 
alternatives to drug-crop production by offering produ cts of beneficiary countries (Bolivia, Colombia, 
Ecuador and Peru) broader access to the US market .  The production of and trade in illicit narcotics 
had had a severe negative impact  on the ATPA beneficiary countries.  Drug trafficking fuelled 
terrorism, fomented corruption, and undermined democr atic institutions in the Andean region, thereby 
discouraging the foreign investment and stability be neficiary countries needed to develop economic 
opportunities for their citizens.  The ATPA contributed to the fight against drug production and trafficking by strengthening the legitimate economi es in beneficiary countries and creating viable 
alternatives to the profitable drug trade.  The AT PA was proving to be an important component of 
efforts to contain the spread of these illicit activities.  Over the last decade, the beneficiary countries 
had bolstered their capacity to combat illegal dr ug production, thanks in part to development 
programmes in each of these countries that had suc cessfully provided former drug-crop cultivators, 
pickers and producers with viable income alternativ es.  The original ATPA generated significant job 
opportunities in a variety of sectors, including cu t flowers, non-traditional fruits and vegetables, 
jewelry, and certain electronics inputs.  The ATPA  as amended sought to expand on the successes of 
the original ATPA by providing additional legitimat e commercial opportunities for the people of the 
Andean region.    4.5 The CBERA continued to generate important  benefits for the beneficiary countries, and 
represented an important affirmation of the ongoing  US commitment to economic development in the 
Caribbean Basin, by providing duty-free access to the US market for CBERA goods.  In conjunction 
with economic reform and trade liberalization by be neficiary countries, the trade benefits of CBERA 
had helped countries in the region diversify thei r exports and had contri buted to their economic 
growth.  At the inception of the CBERA in 1984, traditional and primary products such as coffee, 
bananas, and mineral fuels accounted for a majority of US imports from the region.  By 2002, 
manufactured products such as apparel and electrical  and non-electrical machinery amounted to over 
half of CBERA exports to the US.  This export dive rsification had led to a more balanced production 
and export base, reducing the region's vulnerability to fluctuations in markets for traditional products.  
In closing, she thanked Members for their consider ation of her Government's request for waivers from 
WTO obligations to permit it to provide benefits  under these important programmes.  Further details 
relevant to this request would be circulated by th e Secretariat in the next week.  Her delegation was 
open to taking questions and would be pleased to consult informa lly with any delegations that would 
like to discuss these requests in more detail at a later date.  4.6 The representative of Paraguay
 expressed sympathy for the efforts being made to cooperate 
with countries which needed this kind of collabora tion.  He did not understand why the US request 
came at this particular session of the CTG.  His delegation was not yet ready to consent to these 
requests.  However, it was ready and available for cons ultations in order to note its particular concerns 
with these requests.    4.7 The representative of Rwanda
 spoke on behalf of the African Group which supported the 
waiver request by the US.  It kindly requested WTO Members to permit the US to provide duty-free 
treatment to eligible products originating from be neficiary sub-Saharan African countries entering the 
US under the AGOA.  He recalled AGOA's objec tive which was to support prosperity and 
development in African countries by boosting trade and investment between the US and sub-Saharan 
Africa.  The scheme was designed to raise the per capita income of eligible sub-Saharan African 
countries by encouraging those eligible for the pr ogramme to expand and diversify their exports and  G/C/M/79 
 Page 7 
 
 
build their manufacturing and production base.  Th at would support long-term economic growth.  The 
policy objectives of AGOA had made a positive im pact in beneficiary African economies and 
consequently AGOA had boosted the trade and investment  climate in Africa.  Since its inception in 
2000, US imports from sub-Saharan Africa increased by 39 per cent, from 18.2 billion in 2002 to 25.5 
billion in 2003.  It was reported that the US is  the only major world trading nation whose imports 
from sub-Saharan Africa had considerably increase d in the last decade.  Furthermore, AGOA had 
provided an incentive for foreign direct investment , due to the provision of duty-free access to the US 
market for certain products designated in this GSP scheme.  For instance, s ub-Saharan Africa received 
8.5 billion dollars in new foreign direct investment , with the US investment flows to Africa totalled 
1.4 billion dollars in 2003.  Incr eased investment flows in the ex port processing zones due to AGOA 
had not only improved the trade flows from Africa to  the US but also between African countries.  The 
AGOA initiative had encouraged diversification fro m agricultural to industrial production, increased 
the competitiveness of African enterprises, incre ased employment and supported technical assistance 
and capacity-building.    
4.8 He added that the preferential treatment that the US had extended to sub-Saharan poor 
countries was deeply rooted in the spirit of the Doha Development Agenda and thus should not only 
be endorsed by WTO Members but should also serve as a development model to be followed by countries able to do so.  Sub-Saharan African  countries faced exceptional circumstances which 
severely limited their participation in global trad e.  Therefore the request was warranted.  By 
increasing global trade flows in African countries, it would create a new dynamic in sub-Saharan 
African countries and would contribute to the attain ment of the millennium development goal to cut 
poverty by half by 2015.  In conclusion, the Afri can Group supported all the elements of the waiver 
request and asked WTO Members to support this app lication.  The African Group would also like to 
reiterate its commitment to the Doha negotiations a nd to the attainment of the development dimension 
of the Doha Development Agenda as agreed by Mi nisters in the Doha Ministerial Declaration. 
 
4.9 The representative of Jamaica
 spoke on behalf of the delega tions of Antigua and Barbuda, 
Barbados, Dominica, Grenada, Trinidad and Tobago, St. Lucia, St. Kitts and Nevis, St. Vincent and 
the Grenadines.  He expressed these delegations' a ppreciation to the US for bringing the waiver 
request regarding CBERA as amended, before the CT G.  As beneficiary countries of this programme, 
these delegations supported this request, particularly  in view of its stated objectives, which were, inter 
alia, to facilitate the economic development and e xport diversification of the countries of the 
Caribbean Basin.  With limited natural resour ce bases, open economies and an absence of economies 
of scale, the range of viable economic opportuniti es for small developing countries such as these was 
highly restricted.  This was compounded by a susceptibility to natural disasters and exogenous economic shocks which heightened vulnerability and made more acute the challenges of trade 
liberalization.  At present, more than 80 per cent of  the region's current exports entered the US market 
duty-free as a result of this scheme.  These expor ts included products such as beverages, agri-
processing products, baked goods, biscuits, electronic components and petroleum-related products.  In 
addition to duty-free entry for particular products, another important element of this scheme was the 
provision of assistance aimed at improving the busin ess environment of beneficiary countries through 
support for investors and exporters.  Thus, the signi ficance of this programme for the region could not 
be overstated.  Jamaica and the previously listed delegations stressed the importance of preferential 
arrangements which played a critical role in enablin g greater participation in the world economy.  The 
CBERA was an important example of such an arra ngement which had benefited these economies.  In 
this regard, he noted that one of the criteria used to determine eligibility for CBERA was that 
beneficiaries met their WTO obligations.  On behalf  of the Caribbean countries, he urged Members' 
expeditious and favourable consid eration of this waiver request, and would be interested in 
participating in future consultations th at may be undertaken on this matter. 
 4.10 The representative of Peru
 expressed gratitude to the US for its request for a waiver in favour 
of the four Andean countries.  As indicated in the request, since its creation, the ATPA had promoted 
diversification of the beneficiary countries' goods for export.  This had been particularly important for G/C/M/79 
Page 8  
 
the substitution of illegal crops, since the ATPA strengthened the internal programmes for the 
development of alternative crops, as part of the str uggle against drugs and narcotraffic.  This system 
had promoted a significant increase of Peruvian expo rts, in particular of manufactured products and 
agro-industrial products.  This in tu rn generated jobs and benefits fo r the country and illustrated that 
people had benefited from the programme.  He high lighted two general aspects of importance for his 
country.  Peru, as a beneficiary country, was not against preferences.  Peru recognised that preference 
schemes could play an important role for the develo pment of exports and for market access.  At the 
same time, however, Peru acknowledged that the unil ateral trade preference systems were temporary, 
transitional, and of an exceptional nature.  The MF N principle was a pillar of this Organization.  In 
this sense, no unilateral preference system should impe de trade liberalization at the multilateral level.  
Her country was fully committed to that end.  The request for a waiver presented this morning was 
limited in its scope with respect to the covered pr oducts.  This programme did not alter the benefits 
that other developing countries received under the GSP,  which the US also offered.  Having said this, 
he requested Members' understa nding and support for the US waiver request, since it was an 
important programme for his country and for the ot her Andean countries, and because this programme 
was of a temporary nature. 
 4.11 The representative of Mauritius
 thanked the US for requesting these waivers as it was grateful 
for the facilities that had been put at the disposal of the sub-Saharan African countries.  His delegation 
supported the statement made by the coordinator of  the African Group, and agreed entirely with the 
process that was proposed by the US for conducting this request. 
 
4.12 The representative of Madagascar  expressed her delegation's support for the waiver requests 
presented by the US, given the objectives enunciated in the US statement.  Her delegation also supported the statement made by Rwanda on behalf of the African Group.  
4.13 The representative of Bolivia
 said that, with respect to the ATPA, her delegation was now 
complying with the eligibility criteria as well as with  the periodic evaluation requirement.  In order to 
be a beneficiary of the ATPA, criteria included main taining high levels of protection of intellectual 
property and internationally recognised labour rights , and towards the struggle against the traffic and 
the eradication of illegal crops such as coca, reor ienting production to alte rnative products.  Bolivia 
had to bear a huge social cost to meet these crite ria but this cost had been assumed with a view, inter 
alia, of having access to the Ameri can market.  The products included in the ATPA were part of the 
negotiations for access to this multilateral forum.  Therefore her delegation hoped for treatment in line 
with its economic conditions.  Her delegation urged Members, given th e aforementioned, to facilitate 
the procedure to enable an early  acceptance of the US request.   
 
4.14 The representative of Colombia  thanked the US for its waiver requests as this process would 
give more legal certainty, transparency and predic tability to the preferential schemes granted to a 
group of developing countries which, for certain ci rcumstances, required particular support.  In the 
case of ATPA, the US request described clearly th e exceptional circumstances which justified the 
waiver request.  He noted that the programme c onstituted an undeniable support to countries such as 
Colombia which were committed to combating and er adicating the production and trade of drugs.  As 
mentioned in the WTO and in all international fo ra in which Colombia participated, the struggle 
against the universal scourge of drug trafficking was based on solidarity and cooperation among countries, leading to programmes, including in the area of trade.  His delegation reiterated its support 
for the assistance it was receiving from the US in th e struggle against drug production and trafficking.  
The latter had an enormous impact in Colombia including the loss of lives, terrorism, corruption, 
among other effects.  This notwithstanding, Colombia was committed to the eradication of drugs that,  
while long-term, was a struggle that had to be shared at the international level.    4.15 Regarding some concerns that had been expr essed, his delegation, at the last session of the  
Agriculture Committee, had pointed out the importanc e of preferential systems granted on a unilateral 
and temporary basis by countries;  they were of  special importance for Colombia's main export  G/C/M/79 
 Page 9 
 
 
products.  The US and the EU, in particular, had o ffered these preferences.  The preferences for which 
the US was seeking a waiver constituted an exceptio n to the MFN principle and was of a temporary 
basis.  In this regard, his delegati on was asking for Members' understanding. 
 4.16 The representative of Ecuador
 also thanked the US for requesting the waivers, particularly for 
the ATPA.  He spoke of the trade in drugs and narcotics in which enormous volumes of unrecorded 
exchanges took place to meet a great demand.  Effo rts to eradicate and protect against the harmful 
effects of these drugs was at huge costs.  Co-res ponsibility was needed in order to combat this 
scourge;  the income generated by these illegal produc ts through international market mechanisms had 
virtually no competitors.  It was impossible to gene rate an agricultural product which would have a 
similar profit level.  The plants from which these dr ugs were produced were being sowed in areas in 
which the farmers were the poorest, in the poorest c ountries.  A vicious circle was created for an 
individual who lacked resources, living in abject pove rty, to note that, with the same effort, much 
more money could be obtained by planting illegal ve rsus legal crops.  Prices of legal crops were 
falling every day, whereas the prices of illegal crops, dr ugs, and narcotics, were growing daily.  This 
illicit crop production was an international problem that  should be resolved jointly.  The principle of 
international co-responsibility was a principle whic h had been broadly recognized and promoted.  
Ecuador did not have many budgetary resources but it did allocate a huge proportion of its budget to 
the struggle against drug trafficking.  The polic ies and programmes executed by the Government of 
Ecuador had been widely acknowle dged and contributed on a daily basis to fighting against the 
production and consumption of ille gal drugs and narcotics.   
 
4.17 The waiver request, to Ecuador's understanding,  was part of this international cooperation and 
would facilitate access to markets of legal products as a replacement for illegal products.  This should 
be recognized and supported.  A preferential syst em, as proposed by the US, offered the opportunity 
for Ecuadorian products and for pr oducers of non-traditional products to  have market access.  They 
would thereby be able to substitute the temptati on to export illegal products .  Programmes of this 
nature that supported productive di versification, an atmosphere of  stability, trust and encouragement 
of investments, were naturally welcomed.  Wit hout prejudice to the aforementioned, his delegation 
considered preference systems to be contained in  the WTO rules.  The US had devised a clearly 
pre-established programme which was one of the criter ia for the granting of tariff preferences, which 
did not affect any systemic interest.  In this sense, it complied with the conditions for granting an 
exemption, as his delegation saw in Article IX of the WTO Agreement.  His delegation also 
considered it important to note that, for Ecuador, the preferences proposed by the US were of a 
transitional nature; it was not a long-term programme.  It did not replace substantial aspects of the WTO system of rules. His delegation thereby appeal ed to Members to grant this waiver proposed by 
the US without further delay. 
 
4.18 The representative of Uganda
 supported the statement by Rwa nda on behalf of the African 
Group.  The AGOA programme linked together all el ements of development,  and had helped the 
countries that truly required this kind of assistance to  be able to increase thei r trade.  The programme 
was aimed at helping the concerned poor countries incr ease at least their share of trade and income so 
that they could help raise the standards of living of the very poor people living in these areas.  His 
delegation believed the programme to be a tempor ary, not permanent measure, so all WTO Members 
would be supportive of this request.     4.19 The representative of the Dominican Republic
 thanked the US for their request for a waiver to 
continue to apply preferences for the Caribbean re gion.  His delegation agreed that the Economic 
Recovery and Expansion Act and the Caribbean B asin Trade Partnership Act were to assist the 
Caribbean countries in developing their economies and diversifying their exports.  This had 
contributed to offering opportunities for the expansi on of trade between the US and countries that had 
benefited from these policies.  His delegation believe d that this policy, to a large extent, had been 
aimed at reducing illegal immigrati on and improving international regi onal cooperation in the struggle 
against narcotics and illegal drugs.  The objectives of  this policy had resulted in contributing to the G/C/M/79 
Page 10  
 
stability of the economies of the region, which had been affected by natural disasters at different times.  For these reasons his delegation requested the approval of the US waiver request.  His delegation believed that trade preferences on a unilatera l basis continued to play an important role in 
trade relations between developing and developed countries.  Appropria te treatment of non-reciprocal 
trade preferences may result in significant economic be nefits for many countries in various areas of 
the world.  In focusing on this programme, Members should take into account the fact that it was 
being applied to promote economic development and trade of the LDCs.  For all of these reasons his 
delegation asked for Members' support for the waivers requested.  4.20 The representative of Kenya
 supported the US request for the three waivers.  While Kenya 
was a beneficiary of one of the programmes for which a waiver was being sought, his delegation 
supported all three programmes.  His delegation assoc iated itself with the statement made by Rwanda 
on behalf of the African Group supporting the waiver  request for the AGOA scheme.  The majority of 
Members who had taken the floor had indeed indicated that preferential market access increased export earnings, promoted industrialization and accelerated rates of economic growth.  Therefore his 
delegation saw this kind of scheme as a credible inst rument of development that helped beneficiaries 
strengthen their industrial base to face long-run co mpetition.  His delegation therefore hoped that all 
Members would treat this request favourably.  4.21 The representative of Australia
 said that his delegation coul d go along with a consensus in 
favor of the adoption of the proposed waivers.  He  added that his delegation however would hope that 
no developed country Member would wait until the end of the Doha Round  to extend to all LDC    
Members duty free and quota access for all products with generous rules of origin.  He also said that 
his delegation would urge all Member s to intensify their efforts in the Doha Round to ensure that all 
developing country Members could benefit from the s ubstantial liberalization of market access on a 
most-favored-nation basis without any further delay. 
 
4.22 The representative of Pakistan  appreciated the US initiative of providing additional trade 
facilitative measures to the Caribb ean states under the CBERA and extending preferential treatment to 
a few more developing countries in the African a nd Andean regions.  The document requesting the 
waiver had been sent to the capital only recentl y and his Government was still examining the 
proposals.  His delegation would come back in due course with its views.   
 
4.23 The representative of China  thanked the US delegation for presenting its preference schemes 
and welcomed the proposal for the Chairman to hold informal consultations before the CTG made any 
decisions.  Her delegation was interested in participating in the informal consultations. 
 
4.24 The representative of Sri Lanka  also thanked the US for introducing its request for three 
waivers.  As a developing country, his delegati on fully understood the need for preferential access 
into main markets.  The waiver requests had been referred to his capital but his delegation had not yet 
received instructions.  His delegation looked forward to  participating in the informal consultations on 
the matter.  However, it was necessary to point out that whenever preferences were given to a small 
group of countries, it was necessary to  ensure that such preferences di d not have adverse implications 
on other countries, particularly low-income developing countries. 
 4.25 The representative of India
 joined the previous speakers in  thanking the US for its waiver 
request.  His delegation agreed fully with th e suggestion that the Chair conduct open-ended 
consultations where certain interested Members could clarify whatever issues they had;  his delegation 
wished to participate in them. 
 4.26 The representative of Brazil
 also thanked the US for tabling the three requests for waivers.  
They related to arrangements already in place and it was very important for the CTG to assess these 
requests duly.  His delegation looked forward to  receiving the complementary information on the  G/C/M/79 
 Page 11 
 
 
programmes and to engaging in the Chair's consultations.  His delegation shared the concerns of 
developing countries in this matter but also had some systemic issues at stake.    4.27 The Chairman
 proposed that the Council take note of the statements made and revert to the 
matter at the next meeting.  In the interim, he invited the incoming Chairman to carry out 
consultations on the matter. 
 4.28 The Council so agreed
. 
  V. EUROPEAN COMMUNITIES ENLARGEMENT:  PROCEDURES UNDER 
ARTICLE XXVIII:3 OF GATT 1994 
5.1 The Chairman
 recalled that the General Council agreed  at its 22 October 2004 meeting to adopt 
the agreement that had been reached in the CTG meeting of 1 October 2004 to extend the deadline for 
the withdrawal of concessions re ferred to in Article XXVIII:3 of GATT 1994 from six months to 12 
months following the EC's modification of concessi ons.  Recently, a communication had been received 
from the delegation of Japan, submitted on behalf of  Australia, Brazil, Canada, India and the United 
States requesting this item to be  included on the agenda of this meeting.  A communication had also 
been received from the delegation of the European  Communities, contained in document G/L/695/Add.1 
of 9 March 2005.  He further recalled that he ha d held an open-ended informal consultation on this 
matter.  Most of the Members who spoke indicated a de sire for a longer extension for the withdrawal of 
concessions than that proposed in  the recent EC communication.   
 5.2 The representative of Japan
 stated that his delegation, along with Australia, Brazil, Canada, 
India and the US, inscribed this agenda item b ecause the negotiations that were being conducted 
between the EC and capitals appeared to require mo re time than initially envisaged by the extension 
agreed last year.  Japan and the EC had cert ainly made much progress in the course of the 
negotiations, but there still remained many points  yet to be resolved.  On 9 March, the EC 
communicated to Members in G/L/695/Add.1 an ex tension of the deadline by two months.  While 
appreciated, his delegation's view remained that two months was too short, judging by the state of play of negotiations and from all pragmatic points of consideration.  His delegation, therefore, would 
like the EC to reconsider a period longer than just  two months.  Needless to say, it was not in the 
interest of Japan nor of any other Member of  the WTO to prolong the negotiations under Article 
XXVIII of the GATT.  In this sense, Japan would like to urge the EC to respond to the request made 
by the interested Members promptly, so that the negotiations could be conc luded in a timely manner. 
 5.3 The representative of Colombia
 recalled that six months ago,  Members endorsed the request 
for an extension of the period referred to in Ar ticle XXVIII:3 of the GATT in application of the 
provisions under Article XXIV:6.  At that time , his delegation understood that the complexity 
represented by negotiations in the context of new tariff conditions and EU enlargement amply 
justified this request.  Today, his delegation w as aware of the tremendous difficulties Members at 
different levels of development were facing in  these negotiations, all of whom had a right to 
compensation due to a change in negotiating conditi ons.  The extension being requested today, was 
seeking to prevent trade wars which would generate  a massive withdrawal of negotiating concessions 
in the face of a negative reaction from the EC, i.e. to compensate, through unilateral tariff changes.  
Colombia was discouraged in this negotiati on process with the EC because its request for 
compensation had not been met for any product.  In particular, for one of the most important export 
products, bananas, not only had the bound tariff been  raised much higher with the addition of ten new 
members, but, in addition, a free trade regime had b ecome to a totally restricted quota regime.  This 
had meant that consumers of bananas in the ten new members saw a 100 per cent increase in the price 
of bananas.  His delegation's claim for compensation had not been met by the EC.  Therefore, as other 
Members, it hoped that the two month extension woul d be sufficient to reach a mutually satisfactory G/C/M/79 
Page 12  
 
agreement with the EC and to avoid the applica tion by all Members of trade remedies which were 
allowed but would not be convenient in the pr esent state of international trade negotiations. 
 5.4 The representative of the United States
 said that his delegation continued to work with the EC 
to reach an adequate EU enlargement compensati on agreement, but believed that more time was 
needed to conclude these negotiations.  His delegati on took the point put forward by the delegation of 
Japan that the two month extension proposed by the EU may not be enough time and it requested the EU to consider whether a longer time period would be more appropriate. 
 5.5 The representative of India
 thanked the EC for its communication in G/L/695 where it  
extended the time period by two months.  He inform ed Members that his delegation was engaged in 
consultations with the EC and, while it wished to  wrap up the process as soon as possible, as was in 
the interests of both the EC as well as India, his de legation considered that the two-month time period 
may not be sufficient.  It therefore requested the EC to reconsider this time period and to extend a 
longer time period to enable his dele gation to conclude its negotiations. 
 
5.6 The representative of Australia  indicated that his delegation w as engaged in negotiations with 
the EU and was working constructively and intens ively in Brussels to try and reach a mutually 
satisfactory conclusion.  Like others, his delegati on was in the position where it had to consider how 
long it would realistically take to conclude the negotiations.  His dele gation appreciated the EU efforts 
and considered that it was working constructively and negotiating in good faith as were so many of 
the negotiations underway.  Despite these efforts, mo re time would be needed.  His delegation asked 
the EU to reconsider the 14 months that it had ear marked in its communication, and consider a more 
realistic time frame for the conclusion not only of its  bilateral negotiations with the EU, but also for 
the EU's negotiations with other Members, beari ng in mind that there were many such negotiations 
underway.  This would be a very considerable nego tiating effort facing the EU in the months ahead. 
 
5.7 The representative of Canada  echoed the comments made by the previous speakers.  It was in 
everybody's interest to agree on an extension of the period during which Members could exercise their rights under GATT Article XXVIII:3 so as to allow r easonable time for the conclusion of the bilateral 
GATT Article XXIV:6 negotiations related to the EU enlargement.  His delegation considered that a 
two month extension was not sufficient to ensure  the completion of the negotiating process.  One 
factor that could take time was the translation of the EC legislation once the negotiations were 
completed.  In defining an appropriate time peri od for the extension, his delegation would appreciate 
any details that the EC could provide on estimation of the time required to complete this translation.  
His delegation shared the view that it was in everybod y's interest to ensure that this important GATT 
Article XXIV:6 negotiation was completed in a ti mely fashion given the number of other tasks 
pending in the WTO.  It, therefore, strongly urged the EC to reconsider its position and accept a 
longer time period to enable Members to exercise their GATT Article XXVIII:3 rights. 
 5.8 The representative of the Philippines
 considered that, given the co mplexity of the issues, and 
the number of consultations and in terested delegations, the two-mont h extension may be too limited.  
His delegation therefore encouraged the ongoing efforts to arrive at a mutually satisfactory resolution, 
taking into account the spirit and intent of the WT O Agreements in maintaining the balance of rights 
and obligations.  As regards specific and syst emic concerns on the process adopted for the 
modification of schedules in the context of the EU enlargement, he reiterate d the points his delegation 
had already raised at the CTG meeting on 1 Oct ober 2004, and at the General Council meetings on 20 
October 2004 and 13 December 2004.  The minutes of  these meetings accurately reflected the points 
raised and rights reserved by his Government. 
 5.9 The representative of Thailand
 was also currently in the pro cess of negotiating with the EC on 
procedures under Article XXVIII:3 of the GATT.  His delegation also wished to conclude the 
negotiations as soon as possible for the mutual benefit of both delegations, and also in light of the 
important negotiations to be carried out thro ugh the second half of 2005.  His delegation was  G/C/M/79 
 Page 13 
 
 
sympathetic to the views expressed by many delegati ons that the time frame for the extension of the 
deadline for withdrawal of the concessions would pr obably take longer than the two months proposed 
by the EC.  This view had been expressed at the CTG meeting in October 2004.  Therefore, his 
delegation supported the request for an extension longer than the proposed two-month period.  
 
5.10 The representative of Brazil  thanked the EC for its communica tion.  His delegation shared the 
interest in reaching a common understanding as s oon as possible to avoid the extreme measures 
provided for in Article XXVIII.  His delegation did not consider the two-m onth additional extension 
proposed by the EC sufficient.  It was not be pract icable to expect the negotiations to be concluded 
within that time frame considering the complexity of the exercise, the number of interested parties 
carrying out negotiations, and the rate at which they  were progressing.  His Government's negotiations 
were progressing but some information from the EC  was still lacking.  From his Government's 
bilateral perspective, it would not be practicable to have an agreement in the time proposed.  His 
delegation joined others in requesting the EC to devise a more practicable solution. 
 
5.11 The representative of Pakistan  noted that his Government was also engaged in a bilateral 
dialogue with the EC under Article XXVIII of GATT 1994.  Notwithstanding the items of export 
under preliminary discussion, it seemed unlikely that th e dialogue or consultations  could be fruitfully 
concluded within the time frame proposed by the EU .  There were complicated issues involved in the 
consultations which were expected to take longe r than the time period proposed by the EC.  His 
delegation, therefore, strongly requested the EC  to reconsider the time frame proposed.   
 
5.12 The representative of Malaysia  thanked the EC for their comm unication.  He indicated that 
his delegation was carrying out consu ltations with the EC on this matte r.  Given that it was at the 
initial stages of the consultations, it was also con cerned that the proposed two month extension might 
be insufficient.  His delegation joined others who had asked the EC to consider a longer extension. 
 
5.13 The representative of Ecuador  indicated that his delegation was interested in negotiating with 
the EC on the withdrawal of concessions and ur ged a longer extension of the deadline for these 
negotiations.  His delegation supported the statem ent made by other delegations, particularly 
Colombia.    
5.14 The representative of New Zealand
 also indicated his delegation's support for a longer 
extension of the deadline because it sh ared the concern that two months would not be sufficient.  Like 
other delegations, his delegation be lieved that it was in all Members' interest to conclude the 
negotiations as quickly as possible.    
5.15 The representative of Chile
 indicated that his delegation also shared the objective of 
concluding these negotiations as quickly as possible.    5.16 The representative of the European Communities
 expressed his delegation's reassurance at 
hearing that Members wished to conclude these negotiations rapidly.  His delegation was in discussions and negotiations with a number of Members and considered that it was making good 
progress.  It was about to conclude negotiations with  some Members within the next weeks, i.e. even 
within the extended deadline as had been agreed in October last year .  However, his delegation also 
recognized that some more time may be needed for other Members and it was looking positively at 
such requests.  It proposed a two month extension because it thought it would be helpful to some Members and in order to keep the momentum in th e negotiations.  However, in an effort to be 
sensitive to the concerns expressed that two months  would be insufficient, his delegation was willing 
to extend this deadline to three months instead of two.   He, therefore, asked the Secretariat to circulate 
a revision to his delegation's communication in G/ L/695/Add.1 to replace the figure "14" with the 
figure "15".  He hoped that delegations would agree to proceed in this way. 
 G/C/M/79 
Page 14  
 
5.17 The representative of  India
 indicated a positive initial reaction to the proposal by the EC.  
Given that she needed to verify with her capital as to whether this time-period would suffice to 
conclude its negotiations, she could agree with  the proposal on an ad referendum basis.  
 5.18 The representative of Japan
 said that his delegation could agree with the new proposal by the 
EC for a 15 month extension.  
 5.19 The representative of Australia
 indicated a positive first reaction to the EC proposal and 
supported India's request for its adoption on an ad  referendum basis, pending further consultations 
with his capital.   
 
5.20 The representative of the United States  appreciated the proposal by the EC and expressed 
hope that his delegation would be able to complete  its negotiations within the additional three month 
time period.  
5.21 The representative of Canada
 also appreciated the positive effort by the EC.  His delegation 
supported India and Australia in seeking adopti on on an ad referendum basis pending consultation 
with Canadian authorities.    5.22 The representative of Pakistan
 supported the position of India, Australia and Canada to adopt 
the EC proposal on an ad referendum basis. 
 
5.23 The Chairman  proposed that the Council take note of the statements made, in particular the 
commitment by Members to the early conclusion of the negotiations, and to the EC communication in document G/L/695/Add.1.  He further proposed that  the Council agree, on an ad referendum basis 
until 17 March 2005, on the extension of the deadline as proposed by the EC at this meeting, on the 
understanding that delegations that find themselves still in need of a further extension beyond what 
was agreed today, could raise the matter at the ne xt CTG meeting on 10 May 2005.  The Secretariat 
would issue a revision to document G/L/695/Add.1 to reflect the time-period proposed at this meeting.    5.24 It was so agreed
. 
 
 
VI. POST-ATC ADJUSTMENT-RELATED ISSUES 
 
6.1 The Chairman  recalled that at the 25 November 2004 meeting of the CTG he had informed 
Members about his consultations on th is matter.  He had stated that he would keep this item on the 
agenda for the present meeting and at the same time hold consultations.  He informed the Council that 
since that meeting he had held informal consulta tions on this matter on 28 February 2005 with a view 
to exploring any further possible progress on this it em.  In opening these informal consultations he 
had noted three core issues that Members needed to address under this item:  the substance of the 
proposal by the proponents, the reactions by Me mbers and whether the item should remain on the 
CTG agenda.  He reported that after these cons ultations had been conducted divergent views 
continued to exist.  There had, nevertheless, been  willingness on the part of the Members to consider 
the new approach suggested by Tunisia to examin e the post-ATC adjustment-related issues in the 
context of Part IV of the GATT 1994.  Tunisia had b een encouraged to elaborate its ideas in a more 
detailed proposal, which it submitted today.  At the consultation he had also informed Members of the 
progress made at the 39th session of the Sub-Committee on Least-Developed Countries on 19 and 
20 January 2005, which had agreed to mandate th e Secretariat to prepare a paper on options for 
improving LDCs' competitiveness in the textiles and clothing business.  He had indicated to Members that this positive outcome in the LDCs Sub-Comm ittee might offer a useful way forward.  In 
concluding the informal consultations, he had st ated that the positions of Members remained 
unchanged.  Some argued that the item should not be retained on the agenda of the Council, given the  G/C/M/79 
 Page 15 
 
 
inconclusive nature of the discussions.  Neverthele ss, given the Tunisian proposal just tabled, he 
sensed that the CTG needed to cont inue to reflect on this item.  
6.2 The representative of Tunisia  stated that its communication had been submitted in response to 
the interest expressed during the informal discussion on 28 February 2005.  He apologized for the late 
submission of the communication and for the fact that  it was available at this point only in French. He 
hoped that at the next meeting of the Council all Members would have the possibility to discuss the 
details of this proposal.  He explained that the doc ument was part of the efforts to find a solution in 
the WTO to the adverse effects that some developing countries and LDCs could suffer as a consequence of the elimination of quotas on textiles and clothing products.  The document contained 
three sections.  The first presented the general frame work of the development of trade in clothing and 
textiles.  It dealt with the international framewo rk which had governed trade in these goods over 40 
years.  The second part analyzed the present situati on of trade in textiles and clothing and its prospects 
since the Agreement on Textiles and Clothing (ATC ) had been terminated. The way world trade in 
textiles and clothing was evolving suggested that certain exporting countries were seriously at risk of being excluded, particularly least-developed or de veloping countries which had evolved within the 
framework of preferential agreements.  An analysis of the intensity of the competition affecting these 
countries would be more relevant if two major eff ects were taken into account:  the volumetric effect 
and the effect on prices.  Future effects had al so been calculated by simulating a drop in the 
international prices of the products concerned on th e international market and, particularly, on the 
markets of trading partners.  This fall in prices w as estimated at 30 per cent. Consequently, there was 
a need to consider urgent measures to support the efforts already made by these countries to revitalize 
their sector, consolidate their current position, and pr eserve their potential and scope for development, 
while helping them to deal with the deterior ation of their external competitiveness and their 
profitability in that area.  These efforts could not be achieved without collective action by WTO Member countries and interna tional financial institutions. 
6.3 He added that the third section of the subm ission contained suggestions and proposed action 
to remedy this situation, namely the establishmen t of a fair multilateral trading system providing 
benefits for all.  The first paragraph of the Ma rrakech Agreement stipulat ed the need to achieve 
certain objectives in the framework  of the relations between Memb ers in the field of trade and 
economic endeavour.  These objectives related to raising standards of living, ensuring full 
employment and a large and steadily growing vol ume of real income and effective demand, 
expanding the production of trade in  goods and in services and sustaina ble development.  This same 
paragraph had, in view of its importance, been included in several sections, in particular in GATT 
1994, second paragraph.  However, co nsidering the unique situation of the international textiles and 
clothing market, and at a time when the developi ng and least-developed countries that depended on a 
limited range of products had done all they could to remedy their sector's situation, the abolition of 
MFA quotas was likely to destabilise the market at these countries' expense.  This was likely to 
jeopardise the fulfilment of the Agreement's ultimate  objectives.  An urgent and generous solution to 
this situation had therefore to be found.  In th is respect, the GATT 1994 contained precise and specific 
obligations that should help prov ide solutions to the difficulties faced by the countries concerned.   
6.4 It was clear from Part IV of GATT, "Trade  and Development", that the Member countries' 
key objectives included the promotion of the trade of developing and least-developed countries and 
increased trade opportunities for their products.  Article XXXVI spelled out these objectives, while 
Article XXXVII laid down the commitments that Member countries were willing to undertake in 
order to attain them.  Article XXXVIII set out  the modalities for joint action both within the 
framework of the General Agreement and in collabora tion with international financial organizations.  
As indicated in the submission, the developing and least-developed countries which depended on the 
exportation of a limited range of products might find themselves in a situation where the sector 
concerned would show disturbing si gns of weakness as a result of the fall in prices of those products 
on the international market.  In such cases, there was a need to ensure th at these countries secured a 
share in the growth in world trade commensurate with the needs of their economic development, G/C/M/79 
Page 16  
 
particularly by devising measures designed to atta in stable, equitable and remunerative prices, thus 
permitting the expansion of their trade and a dynamic a nd steady growth of their real export earnings.  
In order to guard against the risk of a shortfall in export earnings, the General Agreement established 
a close relationship between trade and the financia l assistance to development provided by competent 
financial institutions, thus enabling such institutions to contribute more effectively to alleviating the 
current and future burdens facing the countries con cerned in the interest of ensuring their economic 
development.  In this regard, it should be noted that although Part IV did not contain a paragraph 
specifically addressing all the concrete concerns  expressed by the developing and least-developed 
countries interested in problems relating to trade in  textiles and clothing, these products were covered 
by the general provisions of Part IV.   
6.5 Under Article XXXVII all countries were obliged  to find satisfactory solutions to the above-
mentioned objectives, on the understanding that any cons ultations referred to in paragraphs 2 and 4 of 
the Article must allow for an urgent and sympat hetic examination of the problems faced by the 
textiles and clothing sector and must explore possi ble constructive solutions to these problems. The 
developing and least-developed countries expected to  benefit both from these provisions and from the 
provisions of Article XXXVIII on joint action to be  taken to further the objectives set forth in 
Article XXXVI, and consequently hoped to redress the situation of the textiles and clothing market 
and that of their own national sector.  To do so , three fundamental aspects had to be taken into 
consideration.  Firstly, ways had to be found to stabilise market pri ces.  Secondly, correlations had to 
be established between the fluctuations in prices  of textile and clothing products and the adverse 
effect on countries which came up against this pr oblem.  Thirdly, the WTO Member countries and 
international financial institutions were urged to participate in a collective effort in favour of the 
developing and least-developed countries concerne d in order to introduce funding mechanisms 
specific to the development policies of this sector  in those countries.  The WTO had the important 
responsibility of ensuring that development would be integral for all and not just for some at the 
expense of others. 
6.6 The Chairman
 thanked the representative of Tunisia for introducing the proposal.  He 
understood that it had not been circulated prior to the meeting, so he requested that discussion be 
postponed until after delegati ons had an opportunity to examine it thoroughly.   
6.7 The representative of El Salvador  stressed that this subject was extremely important for El 
Salvador because of the impact of the textiles and clothing sector on exports and on the employment 
level of the country.  It was clear that the elimination of quotas in the textiles and clothing sector 
would bring with it an important change in the trad e flows in this sector.  El Salvador, having small 
exporter status, would suffer the most from these ch anges.  This had been confirmed by data and 
terms of trade expectations.  This would also l ead to major social problems which would jeopardize 
the stability of the country.  Given this situation,  it was extremely important to recognize the real 
adjustment problem for some developing countries.   She encouraged all Members to participate 
constructively in discussions on how to avoid a dverse effects in this sector.  Her delegation 
considered it important that this issue be mainta ined on the table given that there was still much 
uncertainty as to the real impact faced and to be faced by some countries.  In addition her delegation 
believed that it was crucial to keep open an arena to discuss Tunisia's proposals as well as new 
proposals which may appear out of the discussions aime d at solving this issue. The Government of El 
Salvador was carrying out efforts to identify oppor tunities and seek solutions to the problems being 
faced in this sector.  However, these efforts had to be complemented by solutions which could be 
offered through international organizations includin g the WTO.  Her delegation wished to participate 
constructively in subsequent discussions on this issue in order to try to find possible solutions. 
6.8 The representative of China  clarified that at the last info rmal meeting which had taken place 
on 28 February, China had stated that it was not pr epared to examine the Tunisian proposal in the 
context of the current agenda item given the reasons that it had already made very clear in the CTG.  
Secondly, as the Chairman had rightly pointed ou t, Members' positions re mained unchanged.  Her  G/C/M/79 
 Page 17 
 
 
delegation's position remained unchanged for two well-known reasons: first, once the textile sector 
had been integrated, it should be, like other sector s in the goods area, subject to normal GATT rules 
and disciplines.  Therefore no special treatment in any form should be created for this sector.  Secondly, issues concerning adjustment or competitiveness were not the business of the CTG nor of the WTO.  The WTO was established to bring do wn barriers to trade and provide market access 
opportunities to Members.  This point has been made by China as well as by a number of other 
Members in the CTG.  She believed it was also sh ared by Members which remained silent.  The 
Council had been reminded at the 28 February informal  meeting that at the annual trade policy review 
session conducted in the General Council, a shared vi ew among Members had been that it was up to 
individual Members to handle their adjustment pr ocess.  International development agencies and 
donor countries were well placed to provide adjustment assistance, whereas the WTO provided 
technical assistance to its Members on implemen tation of their obligations arising from trade 
liberalization negotiations.  Her delegation did not see any possibility for the CTG to do anything in 
this regard.   
6.9 Like many other Members, China was increasi ngly worried about the systemic implications 
or repercussions of this discussion on other areas covered by the WTO, especially areas subject to 
multilateral liberalization negotiations in the Doha agenda, such as agriculture.  Members must have 
frequently heard about some agricultural products, wh ich were subject to a re gime similar to some 
categories of textiles products where there was close competition among developing exporting Members.  Since the item had been put on th e CTG agenda, she had been asking herself why 
Members didn't voice concerns or worries about th e Doha negotiation progress.  Members knew that 
the results of this round, as in the previous rounds, would inevitably cause necessary adjustment due 
to tariff reduction or competition from more compe titive trading partners.  Members knew that they 
were either importing or exporting Members in one particular sector and that there were Members 
which had a competitive edge over China in a partic ular sector.  Trade in textiles and clothing was 
dynamic and there were variables other than quota a ffecting its trade.  Data over the past few years 
showed that textiles exports from one of the proponents of this item had been decreasing since 1996; 
another large proponent's exports in this sector  had started to decrease in 2001;  and another 
proponent’s exports had started to  decrease in 2000.  All had enjoyed quota free treatment in their 
export markets.  However during the same period, so me Members in the same region exporting to the 
same markets had been increasing their exports steadily or sharply.  Some exporting Members from another region enjoying the same quota free treatment in the same market had also witnessed a similar 
increase in their exports.  China fully shared the co mment made by the Chairm an at the most recent 
informal meeting that Members needed to continue to take trade-related actions after the ATC expired 
on 1 January 2005.  Looking at the barriers affectin g market access of textile and clothing exporting 
members, it was easy to pick up a number of such  barriers:  tariffs, tariff peaks and tariff escalation 
were prominent in this sector. Trade remedial me asures, favoured by protectionist domestic interest 
groups, would continue to disturb trade in textiles and clothing.  Cases cited by the ITCB in its paper 
submitted to the Negotiating Group on Rules demonstr ated how anti-dumping investigations had been 
used to achieve protectionist policy goals. Restrictiv e preferential rules of origin not only restricted 
the supply capacity of preference-receiving Members, but also hindered the development of South-South trade and distorted international trade by  providing protection to uncompetitive domestic 
producers in the preference-giving Members.  Chin a was ready at any time to discuss such market 
access problems with affected exporting Members to ach ieve meaningful liberalization of textile and 
clothing trade in the post-quota era, because this w as what the WTO was supposed to do.  In this 
regard, she believed that negotiating bodies such  as the Negotiating Group on Non-agricultural 
Market Access and the Negotiating Group on Rules offered opportunities to address some of the 
problems.  Her country hoped that Members would m ove towards bringing down tariffs in the textiles 
and clothing trade and strengthening the disciplines for anti-dumping measures. 
6.10 The representative of Mauritius
 thanked the delegation of Tuni sia for submitting its paper.  
However, having just received it, his delegation was not in a position to make any comments at this G/C/M/79 
Page 18  
 
point.  He thanked the Chairman for giving his dele gation the opportunity to engage in discussions in 
due course.  He would consult with hi s capital and revert to this issue. 
6.11 The representative of the United States
 said that the elimination of quota restraints would 
certainly cause a substantial shift in production patt erns towards the large exporting countries.  The 
United States was willing to listen to the concerns of developing countries.  Since the paper had been 
circulated by Tunisia only in the morning, the delegation of the United States would review it with 
interest and was willing to discuss its contents at a future meeting.  
6.12 The representative of Jordan  thanked the Chairman for his report on the informal 
consultations.  His delegation appreciated the Tunisian  paper and Tunisia's introduction to it.  Since it 
had just been received, his delegation supported the idea of discussing it at future meetings of the  
Council.  This item should, therefore, be ke pt on the agenda for the next meeting. 
6.13 The representative of Kenya  thanked Tunisia for its paper and for introducing the document.  
Her delegation was interested in the subject-m atter and would encourage more meaningful 
discussions on this topic.  A translated copy of the document would be appreciated, so that it could be 
submitted to the capital.  
6.14 The representative of Uganda  also thanked Tunisia for its paper.  His delegation was looking 
forward to receiving a translation of it to submit to its capital, and to constructive discussion on this 
paper to find a way forward. 
6.15 The representative of Turkey  recalled that his delegation ha d spoken on this issue at the 
informal discussions and did not wish to repeat what his delega tion had said then.  He thanked  
Tunisia for its communication and commended it for its valuable contribution.  Turkey would review 
this paper and share its comments as soon as possible.   His delegation did not believe that by having 
an item dealing with textiles on the Council's age nda, textiles and clothing were being treated 
separately.  This sector had been treated separatel y for 40 years until 2005.  His delegation, from the 
beginning, was simply trying to see market trends  through data and sources of supply.  Competition 
was a duty of the WTO, which contained its own agreements on competition.  Ensuring competition 
was important in international trade and Turkey was striving for a fair competitive environment in its 
trade relations.  His delegation agreed with China that this issue had to be dealt with in other 
committees as well and in the Doha Round.  Turkey was ready to discuss this sector and other sectors 
in other committees.  Turkey strongly believed that th is item should be kept on the Council's agenda 
and it would revert at its next session to the Tunisian proposal and with available data. 
6.16 The representative of Hong Kong, China  thanked Tunisia for its paper and reserved 
comments until his delegation could read the English translation.  He reiterated an important point 
made at the informal consultations on 28 February , which was that before the Council entered into 
any discussion on specific proposals, it was importa nt for the entire Membership to establish the 
objective or parameters to guide the discussion.  No one could argue that, with the expiry of the ATC, trade in the textile and clothing sector should be subject to normal GATT and WTO disciplines.  
Whatever measure the Council talked about should have the objective of promoting adjustment, not  
further postponing adjustment. This was an important point which Members had to bear in mind in guiding future discussion.  His delegation also shar ed China's systemic con cern that a precedent could 
be established for other sectors, like the agricult ural sector.  Members had to be vigilant in 
safeguarding fundamental WTO principles.  On the way forward, he believed that the outgoing 
Chairman brief the incoming Chairman on today's di scussion and on the earlier informal consultation.  
The incoming Chairman might wish to talk to so me delegations ahead of the next formal meeting 
without his hands tied.  His delegation stood read y to discuss this question either formally or 
informally in whatever context.  G/C/M/79 
 Page 19 
 
 
6.17 The representative of the European Communities  stated that her delegation was going to 
consider the Tunisian proposal and hoped to revert to it at the next meeting of the CTG.  The European Communities intended to pursue the discussion within this Council. 
6.18 The representative of India
 associated her delegation with the remarks of the delegation of 
Hong Kong, China.  She also suggested that it might be more useful for the incoming Chairman to 
conduct some informal consultations on the issue be fore taking a decision on the best way forward. 
6.19 The representative of Guatemala  stated that the textiles and clothing sector was of major 
importance for his country and therefore the Tunisian  proposal had been received with gratitude.  It 
would be sent to his capital as soon as it was translat ed into Spanish.   Guatemala would then make 
comments on it in consultations which will be held on the issue. 
6.20 The representative of Fiji  thanked the Tunisian delegation for its proposal and looked forward 
to receiving the English version.  Fiji remained very  interested in this topic and would like to see it 
maintained on the agenda. 
6.21 The representative of Morocco  joined other Members in thanking the delegation of Tunisia 
for its proposal.  It helped clarify the impact of the expiration of the ATC, particularly on LDCs and 
developing countries, and pointed out the importance of a homogenous development of this sector in 
all countries.  Textiles and clothing was a sector of major importance for the economic and social activities of his country.  Since this document had just been received, his delegation would share its 
comments after examining it in-depth. 
6.22 The representative of Mexico
 also thanked Tunisia for its proposal.  He would send it to his 
capital and would comment on it after informal consultations in the next Council meeting. 
6.23 The representative of Colombia  was grateful for the Tunisian proposal.  Her delegation 
associated itself with the views expr essed by Hong Kong, China and In dia regarding the next steps to 
be taken in dealing with this issue. 
6.24 The representative of Pakistan  associated his delegation with the statement made by Hong 
Kong, China and requested the Chairman to suggest to the incoming Chairman to continue informal 
consultations with a view to reaching a meaningful  consensus on promoting adjustments rather than 
postponing adjustments. 
6.25 The Chairman  proposed that the Council take note of the report by the Chairman on his 
consultations and of the statements made.  Given th e new proposal from the delegation of Tunisia, he 
proposed that the Council reverts to this item at its next meeting.  
6.26 The representative of China  associated her delegation with th e proposal made by Hong Kong, 
China and India, supported by Colombia and Pakistan , that the Council should not tie the hands of the 
incoming Chairman on the issue of whether to revert to this item at the next meeting.  Her delegation 
looked forward to the informal consultations to be conducted by the incoming Chairman on this issue. 
6.27 The Chairman  stated that China's view had been noted and that he would consult with the 
incoming Chairman before this matter would be discussed  at the next meeting.  He suggested that the 
Council agree with this understanding. 
 6.28 It was so agreed
. 
 
 G/C/M/79 
Page 20  
 
VII. STATUS OF NOTIFICATIONS UNDER THE PROVISIONS OF THE 
AGREEMENTS IN ANNEX 1A OF THE WTO AGREEMENT 
  
7.1 The Chairman
 drew Members' attention to document G/L/223/Rev.12 containing the status of 
notifications under the provisions of the Agreement in Annex 1A of the WTO Agreement.  This was 
recently circulated to Members.  He noted that the Secretariat had informed him that the document did 
not include notifications by Members which did not take any anti-dumping or countervailing measures 
during the year 2004 and that a corrigendum would be issued to rectify this omission.    
 7.2 The representative of China
 drew Members' attention to page 50 of this document where the 
first four boxes associated with China should read "not applicable".  This matter had been raised 
previously and all other concerns of the same nature had been addressed except this one.  He 
suggested that a corrigendum be issued as soon as po ssible after the meeting with this correction.   
 7.3 The Chairman
 proposed that the Council take note of  the document and the statements made, 
and that the Secretariat issue a corrigendum to this document. 
 7.4 The Council so agreed
. 
  
VIII.  APPOINTMENT OF OFFICERS TO CTG SUBSIDIARY BODIES 
 
8.1 The Chairman
 stated that the Guidelines for the Appointment of Officers to WTO bodies 
contained in document WT/L/510, adopted by the General Council on 10 December 2002, provided 
that the Chairperson of the Council for Trade in Goods would conduc t consultations on the 
appointment of the Chairpersons of the subsidiary bodies of the Council for Trade in Goods.  The 
Chairman stated that he had carried out consultati ons and was in a position to propose to this Council 
the following agreed slate of names for the Chairs of the subsidiary bodies.   
 
Customs Valuation Joo Ha WOO (Korea)  
Agriculture Dr. Magdi FARAHAT (Egypt)  
Sanitary and Phytosanitary Measures Gregg YOUNG (US) 
Anti-Dumping Practices Frida COLLSTE (Sweden)  
Subsidiesand Countervailing Measures Victoria CAMPEANU (Romania) 
Safeguards Ana NOVIK (Chile) 
State Trading Enterprises Benjamin KATJIPUKA (Namibia) 
Rules of Origin Vera  THORSTENSEN (Brazil) 
Import Licensing Pamela COOPER (Canada)  
Market Access Martin POSPISIL (Czech Republic)  
Technical Barriers to Trade Margers KRAMS (Latvia)  
TRIMs Mr. Antonio BUENCAMINO (Philippines)  
ITA Simon CHAN (Hong Kong, China) 
 
8.2 The Chairman  proposed that the Council agree with the nominations above.   
 8.3 The representative of the European Communities
 considered that the slate of names of the 
services committees and the slate of the names of th e CTG subsidiary bodies should be agreed at the 
same time.  Therefore, he could agree on the nominations on an ad referendum basis, pending 
agreement on the slate of na mes for the services committees. 
 8.4 It was so agreed
. 
  G/C/M/79 
 Page 21 
 
 
8.5 The Chairman  stated that while all the other subsidiary bodies of the Council had provisions 
in their respective Agreement or rules of proce dure requiring them to elect Chairpersons, Working 
Parties did not have any procedural rules on electing Chairpersons.  As a result, in the case of the Working Party on State Trading Enterprises, he proposed that the Council appoint the nominated 
Chairperson.  In the case of all the other subsidiary  bodies, he proposed that the Council take note of 
his proposals.   
 8.6 The Council so agreed
. 
 8.7 The Chairman
 further added that it was his understandi ng that it would be for the subsidiary 
bodies to decide if they needed a Vice-Chairp erson in cases where the option existed under the 
Agreement or rules of procedure, and that it was for the respective Chairperson to hold the necessary 
consultations.    8.8 It was so agreed
. 
 
 
IX. OTHER BUSINESS 
 
(i) Request by Pakistan for extension of the transition period under the TRIMs Agreement 
 9.1 The Chairman
 informed Members of the status of the request for the extension of the 
transition period submitted by Pakistan at the end of 2003 and circulated in document G/C/W/478.   
Questions by the United States concerning this requ est and the replies provided by Pakistan were 
contained in documents G/C/W/480 and G/C/W/487, respectively.  Since the last meeting of the Council, he had convened informal consultations with a number of  interested delegations on two 
occasions.  Notwithstanding Members' readiness to settle this issue as soon as possible, from his 
consultations he sensed that some of them still needed  more time to work on an appropriate solution.  
He proposed that the Council take note of his statement.   9.2 It was so agreed
. 
 (ii) Date of the next meeting 
9.3 The Chairman
 stated that the next meeting of the Council was scheduled to take place on 
Tuesday, 10 May 2005.  The agenda would close on Thursday, 28 April 2005.   X. ELECTION OF CHAIRPERSON OF TH E COUNCIL FOR TRADE IN GOODS 
 
10.1 The Chairman
 informed Members that the Chairman of the General Council had carried out 
consultations on a slate of names for Chairpersons to the different WTO standing bodies in accordance with the established Guidelines for Appointment of Officers.  These proposed 
nominations were approved by the General Council at  its meeting on 15 February 2005.  In line with 
the nominations, he proposed that the Council fo r Trade in Goods elect H.E. Ambassador Vesa 
Tapani Himanen of Finland as Chairperson of this body by acclamation.  10.2 It was so agreed
. 
 
10.3 The Chairman  thank all delegations and the Secretariat,  the interpreters and all support staff, 
for their untiring efforts and dedication to carrying out the work of the Council in 2004.  10.4 The incoming Chairman
 thanked the outgoing Chairman and delegation for the honour and 
vote of trust in electing him Chair.  He paid warm tribute to the hard work and achievements of the G/C/M/79 
Page 22  
 
outgoing Chairman in steering the Council.  Under hi s solid leadership, the Council had been able to  
tackle difficult issues, face challenges and make progress.  He assured Members that he remained 
always open to contacts at any time.    10.5 The meeting was adjourned
. 
 
__________