RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/82 
28 November 2005 
 
 (05-5620) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
10 NOVEMBER 2005 
 
Chairperson: H.E. Ambassador Himanen (Finland
) 
 
 
 The meeting of the Council for Trade in Goods was convened by airgram WTO/AIR/2711 and the proposed agenda for the meeting was c ontained in document G/C/W/536.  The meeting 
proceeded on the basis of the following agenda.  
 
I.
 REVIEW OF THE OPERATION OF THE AGREEMENT ON TRADE-
RELATED INVESTMENT MEASURES (TRIMS) UNDER ARTICLE 9 ........................2  
II. REGIONAL TRADE AGREEMENTS ..................................................................................2  
A. FREE TRADE AGREEMENT BETWEEN TURKEY AND TUNISIA .......................................................2  
B. INTERIM FREE TRADE AGREEMENT BETW EEN TURKEY AND THE PALESTINE 
LIBERATION ORGANIZATION FOR THE BENEFIT OF THE PALESTINIAN AUTHORITY .....................2  
C. FREE TRADE AGREEMENT BETWEEN CR OATIA AND SERBIA AND MONTENEGRO ........................2  
III. TRANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL 
OF ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA........................................3  
IV. MARKET ACCESS MATTERS .............................................................................................8  
A. COMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE ............................8  
B. INTRODUCTION OF HARMONIZED SYSTEM 1996  CHANGES INTO WTO  SCHEDULES OF 
TARIFF CONCESSIONS – REQUEST FOR A WAIVER FROM ISRAEL ................................................8  
C. INTRODUCTION  OF HARMONIZED  SYSTEM  2002  CHANGES  INTO  WTO  
SCHEDULES  OF TARIFF  CONCESSIONS  – REQUESTS  FOR  A WAIVER ........................8  
D. BACKGROUND INFORMATION ON CERTAIN UNCERTIFIED COMMITMENTS ................................8  
V. UNITED STATES – REQUEST FOR WAIVERS FOR AFRICAN GROWTH AND OPPORTUNITY ACT, CARIBBEAN BASIN ECONOMIC RECOVERY ACT, AS AMENDED, AND ANDEAN TRADE PREFERENCE ACT, AS AMENDED........................................................................................................................ ........9
 
VI. CUSTOMS VALUATION AGREEMENT:   REQUEST FOR AN EXTENSION 
OF  WAIVER GRANTED UNDER  ARTICLE IX OF THE WTO 
AGREEMENT - SENEGAL..................................................................................................12  
VII. EUROPEAN COMMUNITIES – REQUEST FOR AN EXTENSION OF ARTICLE XIII WAIVER FOR THE TARIFF RATE QUOTA FOR BANANAS OF ACP ORIGIN.................................................................................................................. ..13
 
VIII.  ISSUES RELATED TO TRADE IN TEXTILES – SUBMISSION OF TURKEY............13  G/C/M/82 
Page 2  
 
 IX.
 CONSIDERATION OF ANNUAL REPORTS OF SUBSIDIARY BODIES OF 
THE COUNCIL FOR TRADE IN GOODS.........................................................................19  
X. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE IN GOODS TO THE GENERA L COUNCIL (G/C/W/501)...............................................19
 
XI. ELECTION OF CHAIRPERSON FOR THE COMMITTEE ON 
AGRICULTURE (REGULAR SESSIONS).........................................................................20  
XII. OTHER BUSINESS................................................................................................................2 0 
A. DATE OF THE NEXT MEETING ....................................................................................................20  
 
 I. REVIEW OF THE OPERATION OF THE AGREEMENT ON TRADE-RELATED 
INVESTMENT MEASURES (TRIMS) UNDER ARTICLE 9 
1.1 The Chairman
 recalled that at the July 2004 meeting the Council had received a joint proposal 
by Brazil and India concerning a study on the impact of TRIMs and of their elimination.  The terms of reference for this study were contained in documen t JOB(04)/93.  As far as he understood, there had 
been no new developments in Members' pos itions since the last CTG meeting.    
1.2 The representative of India
 reiterated the importance that he r delegation attached to this 
agenda item and requested that the submission by  her delegation and Brazil be discussed further. 
1.3 The representative of Brazil  supported the Indian statement.  His delegation also attached 
importance to this issue and was currently undertak ing consultations to enable the subject to move 
forward.  
 
1.4 The Chairman  proposed that the Committee take note of the statements made and agree to 
revert to this item at a future meting.  1.5 The Council so agreed
. 
 
II. REGIONAL TRADE AGREEMENTS 
A. FREE TRADE AGREEMENT BETWEEN TURKEY AND TUNISIA  
B. INTERIM FREE TRADE AGREEMEN T BETWEEN TURKEY AND THE PALESTINE LIBERATION 
ORGANIZATION FOR THE BENEFIT OF THE PALESTINIAN AUTHORITY  
C. FREE TRADE AGREEMENT BETWEEN CR OATIA AND SERBIA AND MONTENEGRO  
2.1 The Chairman  drew Members' attention to the thr ee Agreements listed under this item that 
had been notified under GATT Article XXIV.1  The texts of the Agreements and their notifications 
had been circulated in the documents listed.  In  the absence of comments, he proposed that the 
Committee on Regional Trade Agreements carry out the examination of the above-mentioned 
Agreements in accordance with the following terms of re ference:  "to examine, in light of the relevant 
provisions of the GATT 1994, the trade agreements ju st referred to and to submit a report to the 
Council for Trade in Goods.  It is understood that the understanding read out by the Chairman of the 
Council for Trade in Goods under item 7 of the age nda of the meeting of the Council for Trade in 
                                                      
1The texts of the Agreements and their notifications  had been circulated, respectively, in documents 
WT/REG203/N/1, WT/REG203/1; WT/REG204/N/1, WT/REG204/1; WT/REG205/N/1, WT/REG205/1. 
  G/C/M/82 
 Page 3 
 
 
 Goods on 20 February 1995, as contained in docum ent WT/REG3/1, will apply mutatis mutandis to 
the examination of the agreements.  It is also  understood that, during the examination, due account 
will be taken of the intrinsic differences between customs unions and free trade areas". 
 2.2 The Council so agreed
. 
 
III. TRANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA 
 
3.1 In accordance with paragraph 18 of the Protoc ol of the Accession of the People's Republic of 
China ("the Protocol") in document WT/L/432, the Chairman  explained that the CTG would report to 
the General Council on the Transitional Review Mech anism (TRM).  He sugg ested that the Council 
proceed in two stages.  First, the CTG subsidiary b odies were required to transmit their reports to the 
Council for Trade in Goods.  This they had done and,  as a first step in the review process, he gave 
Members an opportunity to make general comment s on those reports, and then proposed that the 
Council take note of the Reviews that had been ca rried out in these bodies.  Then the Council would 
turn to its own report.  The Chairman recalled that  the following subsidiary bodies had carried out the 
Review:  Committee on Market Access (documen t G/MA/164 and G/MA/W/74 which contained 
information China supplied after completion of th e Review);  Committee on Agriculture (G/AG/21);  
Committee on Customs Valuation (G/VAL/59);  Co mmittee on Sanitary and Phytosanitary Measures 
(G/SPS/38);  Committee on Technical Barriers to Trade (G/TBT/17);  Committee on Import 
Licensing (G/LIC/14);  Committee on Rules of Or igin (G/RO/61);  Committee on Anti-Dumping 
(G/ADP/14);  Committee on Subsidies and Countervailing Measures (G/SCM/118);  Committee on Safeguards (G/SG/80);  and Committee on Trade-Related Investment Measures (G/L/751).  3.2 The representative of the United States
 recalled that the WTO was nearing the end of the 
fourth annual transitional review of China's efforts to implement the commitments in its Protocol of 
Accession to the WTO.  His delegation believed th at the TRM remained an important and useful 
mechanism, serving the interests of China and of other WTO Members.  It provided Members with the opportunity to seek clarifications on China's policies and practices.  China, in turn, had the 
opportunity to clarify its approaches and actions, in  order to prevent misunderstandings that could 
lead to trade frictions.  Perhaps the most importa nt aspect of the TRM was that it also provided a 
forum for Members to convey to China their views,  expectations and con cerns regarding China's 
efforts to comply with its WTO obligations.  China then had the opportunity to explain its views and to inform Members about how it had addressed their expectations and concerns.   The TRM was an 
important and useful exercise in transparency, one  of the fundamental principles underlying the WTO 
Agreement.  His delegation believed that many of  the TRM exercises in th e subsidiary Committees 
generated productive exchanges and it was evident th at China put a lot of time and effort into 
reviewing and considering Members' questions and preparing responses.  However, there were areas 
in which China could improve.  It would be helpfu l if China could bring experts from capital to the 
reviews;  in some cases, their absence prevented productive exchanges during or around the reviews. 
 3.3 His delegation highlighted concerns that it ha d raised during the reviews in the subsidiary 
Committees.  Several areas of concern were rai sed in the SPS and Agriculture Committees, and his 
delegation focused on two BSE-related issues.  It s strongest concern involved China's BSE-related 
ban on US beef.  It was nearly two years since China imposed its ban on US beef, and China had still not offered any explanation of its actions or the ne cessary regulatory steps for lifting the ban.  Dozens 
of countries lifted their bans on US beef.  Each of them had, at a minimum, provided the US with a 
detailed explanation of the regulatory steps necessary to  decide on the US request to lift the ban.   His 
delegation strongly urged China to take immediate steps to ensure that its regulatory authorities 
moved quickly to address this problem.  His delegation also expressed concern about the de facto  ban 
that China maintained on low-risk, non-ruminant origin products from the US.  China's ban was 
ostensibly based on concerns about BSE, but th ese products should never have been banned under G/C/M/82 
Page 4  
 
 existing OIE (World Organization for Animal Health ) guidelines.  His delegation continued to urge 
China to take immediate steps to lift this ban.  3.4 Another area of concern related to China's c ontinued fire blight-relate d ban on the importation 
of US apples, pears and plums.  His delegation had asked China to move quickly to modify its ban to 
allow the importation of mature fruit which were free of symptoms, consistent with the decision of the 
Appellate Body in Japan – Measure Affecting the Importation of Apples (WT/DS245/AB/R) .  As in 
prior reviews, his delegation also focused on China' s Quarantine Import Permit (QIP) system.  China's 
regulatory authorities seemed to frequently use this sy stem to intervene in the market in order to 
control the pace and quantity of tr ade in agricultural commodities.  This was one of the most 
important issues affecting the United States and Ch ina's other agricultural trading partners.  His 
delegation also expressed continued concern about Ch ina's VAT policies and practices as they related 
to corn.  This was an area where US exporters had complained about ad hoc  treatment and other 
irregularities that favoured domestic producers.  As a result, his delegation sought, and continued to seek, needed clarifications from China.   
 
3.5 Before the Market Access Comm ittee, his delegation raised three important issues.  The first 
concerned one of the initial measures implementing Ch ina's new automobile industrial policy.  Here, 
the United States, like other Members, expressed str ong concern over regulations issued earlier this 
year addressing tariffs on imported auto parts.  Th ese regulations would likely break China's tariff 
bindings by applying the higher tariff rate for complete vehicles to many imported parts.  The 
regulations also called into question China's commitm ent to eliminate local content requirements.  So 
far, these regulations had created significant uncerta inty for US and other foreign suppliers, and his 
delegation looked forward to China remedy ing this situation as soon as possible. 
 3.6 The representative of the European Communities
 also attached great importance to the 
functioning of the TRM.  Transparency was an essential element of WTO Membership, and while the 
TRM was specific to the China Protocol of Accession to the WTO, it was not terribly different from the trade policy reviews to which every Member wa s subject.  China had reaped enormous benefits 
from its access to the liberal and transparent trad e environment provided by the WTO.  China was 
now a major trading partner, and had a key stage in  the proper functioning of this institution.  His 
delegation looked to China to show  leadership in setting the example of providing detailed answers to 
legitimate concerns of all Members.  This could only  contribute to mutual trust and dispel concerns 
about, for example, the enactment of industrial po licies that appeared to feature elements not 
compatible with WTO commitments.  His delegation was grateful for the replies received in the 
various subsidiary bodies and the efforts China had made to resolve some of the concerns.  
Nevertheless it hoped for more detaile d replies than in the past to the questions that his delegation and 
other Members had raised in the subsidiary bodies.   His delegation had provided advance questions 
for the CTG-specific review also.  Some questions overlapped with the US and these were in three 
domains.  The first concerned Chinese export restric tions, in particular coke.  The second concerned 
the measures for the import of automobile component s fulfilling the characteristics of a whole vehicle, 
which the US had also raised.  The third was his delegation's concern over lack of subsidies 
notifications.   He added that a fourth area of c oncern was the timing of the opening of negotiations 
with China to join the Government Procurement Agreement.   
 3.7 The representative of China
 stated that his delegation had made tremendous efforts to respond 
to questions and concerns raised by Members.  It believed that it had clarified and explained its 
positions on all of these issues, and that it had legitimat e reasons and concerns with regard to all of the 
issues raised which had been dealt with in a WTO-consistent manner.  The review process was 
certainly helpful for Members to understand better the positions and the background in China with 
regard to the issues raised.  That said, his delegati on also had some concerns with the review process 
itself.  In its view, some of the questions had b een raised repeatedly and China's positions had been 
explained many times over the years, as reflected in the minutes of all the subsidiary Committee  G/C/M/82 
 Page 5 
 
 
 meetings in which the TRM took place.  Members should refrain from giving such extra burdens to 
developing Members like China, particularly in light of the heavy tasks leading to the Hong Kong Ministerial.  Another concern was the late presen tation of questions to China which made them 
difficult to deal with.  His delegation would work professionally and pragmatically to respond to the 
questions raised but did not want its efforts distur bed by the late presentation of questions.  Finally, 
his delegation thanked Members for their interest in  China's trade policies and regime;  China had the 
same interest in other Members.  His delegation looked forward to further exchanges with Members 
on issues of mutual trade interest, and to more stab ilising trade relations which were healthy not only 
for China but for other Members.  
3.8 The Chairman
 proposed that the Council take note of the statements made and of the reports 
from the subsidiary bodies on their respective TRM ex ercises.  Afterwards, he proposed that the 
Council move to the CTG-specific TRM.  3.9 The Council so agreed
. 
 
3.10 With respect to the CT G-specific Review, the Chairman  stated that China was required to 
provide information to the CTG in accordance with paragraph 18.1 of the Protocol of Accession.  The 
relevant information requirement s were listed in Annex 1A.  China had submitted the required 
information in document G/C/W/539.  He also drew  attention to questions from Japan in document 
G/C/W/532, questions from the United States in document G/C/W/530 and 537, and questions from 
the European Communities in document G/C/W/538.   
 3.11 The representative of Japan
 agreed with the US and the EC on the value of the TRM process 
and also commended China for its great efforts to respond to the questions that made this process 
most productive.  Japan was also pleased to see th at there was some good productive and informative 
clarifications for progress.  At the same time, there were still issues that concerned his delegation.  On 
the specific issues raised in his delegation's submi ssion, he made some brief points.  His delegation 
had raised the system of complete automobile feat ures several times, and it carefully listened to the 
past explanations by China.  However, it remained c oncerned in light of the consistency with the spirit 
of China's commitment in paragraph 93 of the Report of the Working Group on the Accession of 
China, and with Article II of the GATT.   His delegation would appreciate additional efforts by China 
to address the concern which was also shared by ot her Members as well.  With regard to fluorite and 
coke, Japan questioned the justification under Article XX(g) of GATT.  This Article stipulated that 
regulation on domestic production and consumption should accompany trade restrictions introduced 
for conservation of exhaustible na tural resources.  All natural resources except for renewables were 
exhaustible in principle.  However, his delegati on did not believe that this was the way in which 
Article XX(g) should be interpreted.  Japan requ ested solid reasons why the measures noted were 
GATT-consistent.  Japan acknowledged that the pro duction of coke had environmental impacts that 
China was trying to address very seriously.  The envi ronmental problem was also a serious problem in 
Japan in the past and his delegation understood the importance of solving these problem.  However, 
the policy measures chosen should be most straig htforward to avoid pollution.  His delegation 
believed that environmental regula tions and their effective enforcement were primary means;  trade-
restrictive policies should be avoided.  With regard  to government procurement, his delegation shared 
the views of the US and Japan and looked forw ard to good news from the Chinese delegation. 
 3.12 The representative of China
, before responding to the detailed questions, noted that some of 
these questions had already been dealt with in the s ubsidiary bodies.  In this respect, he reiterated 
China's position with regard to the relationship of the mandate of the subsidiary bodies vis-à-vis the 
mandate of the CTG.  His delegation provided the following clarifications regarding the questions 
raised by Members.  Regarding importation and distribution of books, newspaper and magazines, 
pursuant to Articles 14 and 16(a) of the revised Foreign Trade Law, the Chinese government had the 
right to restrict the importation or exportation of pr oducts to protect public moral, public interest and G/C/M/82 
Page 6  
 
 national security.  This was not contradictory to  Article XX of GATT 1994.  In accordance with the 
Foreign Trade Law , the Administrative Regulations on Publishing  and the Catalogue for the 
Guidance of Foreign Investment Industries stipulated that any Chinese enterprise, foreign invested 
enterprise or wholly-foreign owned enterprise could engage in exportation of newspapers, books and 
magazines, while for the purpose of protection of public moral, importation of foreign publications 
should be done only by certain enterprises. 
 
3.13 Regarding distribution of imported publica tions, China’s service schedule read, “For these 
products, foreign service suppliers  will be permitted to engage  in the distribution of books, 
newspapers, magazines, pharmaceutical products, p esticides and mulching films within three years 
after China's accession, and to engage in the distri bution of chemical fertilizers, processed oil and 
crude oil within five years after China's accessi on.”.  In accordance with the commitments in the 
Accession Protocol, China had already opened its ma rket to foreign invested and wholly foreign 
owned enterprises to engage in wholesale and distribution of Chinese books, newspapers and 
magazines in China. 
 3.14 Regarding trade in coke, it should be noted that the raw material for making coke, coal, was 
an exhaustible resource and coal mines had already been excessively exploited.  At present, reserved 
coal mines in China, which could be used in coke  production, were estimated to guarantee sustainable 
use for coke production for, at most, only 100  years. Taking into account the losses from the mining 
and production processes, the coal reserves could act ually last for only 40 years.  Under these 
circumstances, China car ried out a series of measures to control the domestic production and 
consumption of coke.  First, on 1 Septem ber 1999 and 1 Jan 2000, the SETC published the first batch 
of Catalogue of Prohibition of Repetitive Project  Investment in Industrial and Commercial Area,  the 
Second Batch of Catalogue of Outdated Production Capacity, Techniques and Products.  Second, on 
27 May 2004, nine ministries jointly published the Circular on Streamlining Administration on Coke 
Industry, which stipulated that small coke factories mu st be shut down and qualified manufacturers 
have to pay a high pollution fee;  that all the c oke projects after 2000 must be reviewed and those 
failing to meet the published standards were terminated;  and more effective enforcement against 
illegal sales of export quota licenses for coke.  Third, on 16 December, 2004, the National 
Development and Reform Commi ssion published Announcement No. 76 of 2004, which set the 
standard for market access in th e coke industry. The standard applied to both domestic and foreign 
enterprises. It showed the Chinese Government’s dete rmination to streamline and restore market order 
in the coke industry.  
 
3.15 At present, as a result of those effective measures, domestic order in the coke market was restored.  The export price of coke was only 130 US $/ton, which equalled the coke import price of the 
United States.  Therefore, it was not proper to say that, “a significant portion of the export price 
remained attributable to the practice of selling e xport quota certificates“ or that, “the export price 
remained artificially high ”. Moreover, as the present coke pri ce in the international market was 
already lower than the production cost of many coke producing countries, maintaining the quota 
system on coke could guarantee the international mark et price remaining at a rational level, estimated 
to be 200-220 US$/ton.  However, he pointed out  that one Member, on one hand, implemented an 
anti-dumping tax on China’s coke export, while on the other, urged China to abolish its export control 
on coke. He asked if the Member could provide th e rationale for such self-contradictory behaviour? 
 
3.16 Regarding the Agreement on Government Pr ocurement, the Chinese government was taking 
positive steps to initiate negotiations. Recently, a jo int study group at the Ministry level had been 
established under the leadership of the Ministry of Finance. His delegation expected the study group 
to turn out concrete outcomes in the near future .  Regarding transparency, the Chinese Government 
had been faithfully implementing its accession commi tment. At present, Ministries and agencies were 
supposed to submit copies of their newly pub lished laws and regulati on to MOFCOM, which was 
trying to include all the trade related laws and regulations in the Foreign Trade and Economic  G/C/M/82 
 Page 7 
 
 
 Relation Gazette published by MOFCOM. However, it should be noted that although the MOFCOM 
Gazette may include all the trade-related laws, regulations and administrative measures, other 
ministries or agencies could still publish their own ga zettes to make their policies known to the public.  
This had proven to be an effective method for publ ic opinion solicitation.  As for the public opinion 
solicitation process, most of the drafted trade relate d laws and regulations we re to be published on the 
websites of respective competent government bodies , which provided an easy  access for interested 
parties to make their voices heard.  Besides, pub lic hearings, symposiums and discussion groups were 
also held to involve interested parties.  
 
3.17 Regarding the rationale for export controls on fluorspar, his delegation had been clear during 
the previous TRM and it seemed unnecessary to re peat the points which remained unchanged.  
Regarding border trade, China did not maintain any country-specific preferential treatment at present.  
Regarding iron ore, the Chinese Government had not been informed by the industry association of the 
promulgation of any standard yet.  Regarding the tax base for the consumption tax applied to imported 
goods, his delegation believed that there was a misunder standing due to translation of the regulation;  
the formulas to calculate the tax base were the same though the Chinese wording may seem different. 
His delegation would welcome a bilateral tec hnical communication after today’s meeting.  
 
3.18 The representative of the United States  thanked China for the detailed responses.  To follow-
up on a couple of points, he noted that with rega rd to the importation of  books, newspapers and 
magazines, his delegation had a difference in view.  China's commitment to allow the importation of 
books, newspapers and magazines was clear from its  accession agreement.  China was allowed to 
reserve for state trading certain products listed in Annex 2, and books, ne wspapers and magazines 
were not among the products listed in Annex 2.  His delegation understood China's stated concerns 
about protecting public morals.  Whatever mechanism China wanted to use to do that, it still needed to 
figure out a system that would allow foreign ente rprises and individuals to import books, newspapers 
and magazines at the same time.  With regard to the distribution of books, ne wspapers and magazines, 
his delegation was happy to hear that China consider ed this sector to be fully open.  His delegation 
raised one measure in its questions, the admi nistrative measures on subscription of imported 
publications which seemed to, in part, restrict distribution to state trading enterprises.   
 3.19 With regard to the coke export quota system, his delegation appreciated the detailed comments from China on that issue.  Whatever system China implemen ted, it must not discriminate in 
its efforts to protect the exhaustible natural resour ces.  The current quota system was discriminatory 
against exports of coke.  He appreciated the Ch inese delegate's comments about the consumption tax 
issue and looked forward to discussing bilaterally the translation issue.  Lastly, there was one question 
regarding border trading for which his delega tion would welcome information from China.  
Specifically, what were the currently applicable value added tax rates for logs and for sawn wood? 
 
3.20 The representative of China
 briefly responded to these points.  On newspapers and magazines, 
his delegation maintained that China's commitme nt with regard to these products, both in the 
distribution and the import and export side, was fa ithfully implemented and did not affect China's 
right to take necessary measures for the protection of  public morals and other legitimate concerns.  
That being said, his delegation's position was quite clear .  On the issue of coke, he did not have much 
to add since the positions of China had been ex plained clearly.  Lastly, on border trade and 
specifically regarding a preferential arrangement with Russia, his delegation explained clearly that China did not presently have any country-specific preferential arrangements.  3.21 The Chairman
 thanked the delegation of China for th e answers that it had provided and also 
those delegations that had raised questions and ma de comments.  He proposed that the Council agree 
to proceed with the preparation of a brief factual report on the TRM with references to the relevant 
documents and with the portion of the minutes of th is meeting relating to the TRM attached.  The G/C/M/82 
Page 8  
 
 CTG report, together with the reports of the subs idiary bodies, would then be transmitted to the 
General Council.  3.22 It was so agreed
. 
 IV. MARKET ACCESS MATTERS 
A. C
OMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE  
4.1 The Chairman  drew Members' attention to the periodic report of the Committee contained in  
document G/MA/163.  As the report was factual in na ture and reflected the work undertaken in that 
body, he suggested that the Council take note of it.  
 
4.2 The Council so agreed . 
 B. I
NTRODUCTION OF HARMONIZED SYSTEM 1996  CHANGES INTO WTO  SCHEDULES OF TARIFF 
CONCESSIONS – REQUEST FOR A WAIVER FROM ISRAEL  
4.3 The Chairman  stated that this item concerned a request for a waiver in connection with the 
introduction of HS96 changes into WTO schedules.  The request was contained in document G/L/744.  
Pursuant to Article IX of the WTO Agreement, this request for a waiver extension and a draft decision 
in document G/C/W/528 was before the Council for its consideration.  Since the Committee on 
Market Access had already taken note of the factual information provided by Israel, he proposed that 
the Council forward the draft decision to the General Council for adoption. 
 
4.4 The Council so agreed . 
 C. INTRODUCTION
 OF HARMONIZED  SYSTEM  2002  CHANGES  INTO  WTO  
SCHEDULES  OF TARIFF  CONCESSIONS  – REQUESTS  FOR  A WAIVER 
4.5 The Chairman  drew Members' attention to the draft waiver decision circulated in document 
G/C/W/533, which had been made in connection wi th the introduction of HS2002 changes into WTO 
schedules of tariff concessions.  This draft waiver  decision was the subject of consultations in the 
Market Access Committee and had been forwarded by  that Committee to the CTG for action.  He 
proposed that the Council forward the draft de cision to the General Council for adoption. 
 
4.6 The Council so agreed . 
 D. B
ACKGROUND INFORMATION ON CERTAIN UNCERTIFIED COMMITMENTS  
4.7 Turning to the agenda item entitled "Cer tain uncertified commitments", the Chairman  drew 
Members' attention to document JOB(05)/167 which gave background information on certain 
approved but uncertified commitments and proposed a way of  bringing them into force.  He 
understood that this situation arose due to the lack of  entry into force of two legal instruments at the 
time, namely the Geneva ( 1994 ) Protocol and  a proposed Supplementary Protocol to the Marrakesh 
Protocol.  The Committee on Market Access had been  discussing this matter during the course of the 
year, and reached agreement that the solution outlined  in this document should be followed in order to 
remedy the legally anomalous situation currently existing with respect to those commitments. The 
solution would consist of  the CTG agreeing that  these uncertified commitments should be brought 
into force by  means of  certifications issued by  the Director-General.  The certifications would state 
that the modifications would enter into force from th e date on which they were  annexed to the Geneva 
(1994) Protocol or, in the case of the proposed Supplementary Protocol to the Marrakesh Protocol, the date on which they were deemed approved or veri fied.  Additionally, each certification would also  G/C/M/82 
 Page 9 
 
 
 explicitly state that it was without prejudice to any modifications or rectifications to tariff concessions 
made effective subsequent to that date.  He pr oposed that the Council agree to the procedures and 
course of action outlined in the background note.  4.8 The representative of Ecuador
 noted that paragraph 9 of the document spoke about the 
certified schedule of the EC 12 Member States.  She asked why there was not a legally valid schedule 
after the enlargement of the EC to 15 Members?  Why had so much time elapsed without a certified 
schedule for the 15 Members?  She also asked wh at the legal difference was between approved and 
certified commitments?  She was concerned that coun tries had no legal certainty as to what had been 
bound in the EC after the enlargement to 15 Member s and how this would affect the enlargement to 
25 Members?  Ecuador was concerned because it w as in the process of Article XXVIII(c) and XXVIII 
negotiations due to the EC enlargement.  4.9 The representative of the European Communities
 regretted that without advance notice, he 
was not able to provide much information on the question.  As he understood matters, the lengthy 
certification procedures after the XXIV:6 negotiations  occurred when the last Member of the 148 
Members agreed with the schedule.  But he would ha ve to check the records to give a more precise 
explanation.  4.10 The representative of Ecuador
 asked whether the Chairman or the Secretariat could provide 
further explanation as to why almost ten years were needed in order to have this document.  Maybe 
negotiations were not terminated w ith all the Members of the WTO. 
 4.11 The Secretariat
 noted that a response to this questi on had been provided during the relevant 
discussions in the Committee on Market Access.  However, the issue of the EC enlargement 
negotiations was separate from the issue addressed in  the background note.  This issue focused on 
certain commitments at the end of the Uruguay Roun d which were not certified.  A large number of 
uncertified commitments existed in the CTS database;   some of them happened to be in the EC 
schedule, but this was separate from the issue of the enlargement of the EC to 25 Member states.   
 4.12 The Council agreed
 on the solution outlined in the background note to bring into force the 
outstanding uncertified commitments. 
 
V. UNITED STATES – REQUEST FOR WAIVERS FOR AFRICAN GROWTH AND 
OPPORTUNITY ACT, CARIBBEAN BASIN ECONOMIC RECOVERY ACT, AS AMENDED, AND ANDEAN TRADE PREFERENCE ACT, AS AMENDED 
5.1 The Chairman
 recalled that the United States circulated, in advance of the CTG meeting of 
11 March 2005, three requests for waivers in docu ments G/C/W/508, G/C/W/509, and G/C/W/510.  The 
first document consisted of a request for a waiver  for the Caribbean Basin Economic Recovery Act 
(CBERA), the second  document consisted of a request for a waiver for the African Growth and 
Opportunity Act (AGOA), and the third document cons isted of a request for a waiver for the Andean 
Trade Promotion Act (ATPA).  The United States also circulated supplemental information to each of these requests in G/C/W/508/Add.1, 509/Add.1 and 510/Add.1.  This ma tter had been di scussed at the 
11 March, 15 June and 15 July meetings  of the Council as well as in three informal meetings.  At the 15 
July meeting, it was agreed that he would make  a report on his own responsibility to the General 
Council on the CTG's consideration of this matter.  This report was made to the 27 and 29 July 2005 
General Council meeting.  Following his request, the General Council agreed that the CTG should 
continue its consideration of this matter and re port back when it had completed this work.   
 
5.2. He added that during the informal consulta tions a series of questions and answers were 
exchanged.  These questions were  circulated in docu ments G/C/W/516, 519, 520, 527 and 534.  The 
responses were circulated in  documents G/C/W/518, 526 and 531.  The most recent consultations on G/C/M/82 
Page 10  
 
 this matter were on 27 October 2005.  At that meet ing, some delegations i ndicated that they were 
waiting for reactions from their capitals on the la test series of responses to Brazil's questions 
circulated by the United States.  5.3 The representative of the United States
 provided responses to the questions posed by India.  
Copies of the responses were provided to the Secretariat for Members' immediate review.  His 
delegation would also submit these responses forma lly for circulation as a WTO document.  This 
would be the fourth written submi ssion his delegation had made in its efforts to assist Members in 
fully understanding these important programmes.  This  was also the fourth formal meeting in which 
these requests had been examined, and his delegation had also participated in three informal sessions 
on these requests.  His delegation considered that  Members had had by now ample opportunity to 
explore fully any questions and concerns with regard to the requests.  In addition, the beneficiaries of 
these programmes had also presented at some lengt h their views on the importance of the positive 
economic impact these programmes had on trade and i nvestment in their countries.  His delegation 
and beneficiary Member delegati ons believed that the Council should move towards completing the 
examination phase of the requests so that the positive impact on the economies of the beneficiaries 
could be enhanced by the greater predictability and certainty that WTO approval of the requests 
would provide.  His dele gation hoped that the Council would be in  a position to take a decision on this 
issue at its next meeting.  5.4 The representative of India
 informed Members that her de legation had forwarded a list of 
follow-up questions to the United States, to which she understood that had provided answers.  These 
questions had been circulated in document G/CW/534.  5.5 The representative of Colombia
 requested that a solution be found as soon as possible to this 
matter which had been pending for a long time.  As stated by the US representative, replies had been 
given to all the questions which Members had pr esented.  For his Government, the programme of 
preferences granted by the US was important b ecause of the beneficial impact of substitute 
programmes to curbing the drug problem in Colombia .  The approval of this request for a waiver 
would give greater legal certainty as concerns  obligations for all Members of the WTO.  
Consequently, his delegation wished  to conclude this process as soon as possible, hopefully by the 
next General Council. 
 
5.6 The representative of Mauritius  reiterated the importance that sub-Saharan countries attached 
to the AGOA initiative in promoting export-led gr owth and sustainable economic development in 
these countries.  The enactment of AGOA since 2000 had provided the necessary impetus to many 
sub-Saharan countries to enhance exports to the US market.  AGOA had given hope to the sub-
Saharan African countries that they could better integrate into the international trading system, 
particularly at a time when such economies were facing the daunting challenges of globalisation.  
AGOA was also contributing towards achieving the main objective of the Millenium Development 
Goals.  AGOA had also helped to generate investment  and create jobs in the region.  The benefits of 
AGOA also had a spill-over effect to other sectors.  In  light of this, it was of great importance for the 
AGOA initiative to be more predictable in the futu re, to continue promoting sustainability, stability 
and sustainable development in the region by fost ering increased trade between the US and the sub-
Saharan African countries, as well as  investment by the US in the regi on.  For this to be possible it 
was crucial that the AGOA initiative be compatible  with WTO rules.  His delegation therefore 
supported the request for a waiver by the US for the African Growth and Opportunities Act and hoped 
for an expeditious resolution of the examination process and a favourable outcome to the requests. 
 
5.7 The representative of China , while appreciative of the US responses to its questions, was still 
confused about certain points and might need some further clarifications.  Since it had the answers 
from the US to the Brazilian questions, and there were new questions from India and answers from  G/C/M/82 
 Page 11 
 
 
 the US, his delegation hoped that its understa nding of the programmes and requests would be 
clarified.  His delegation believed that there was need  to revert to this issue at the next meeting. 
 5.8 The representative of Peru
 emphasised that this was a programme of the highest importance 
for her Government.  The programme was noteworthy fo r its trade impacts and its decisive support for 
the alternative development plan.  It showed th at Peru was fulfilling the principle of shared 
responsibility against the production and trafficking of  illicit drugs.  Her delegati on considered that all 
the questions raised and the replies given covered the variety of subjects linked to this waiver request.  
Her delegation urged Members to consider the time  spent already on this matter, as well as the 
numerous replies given so as to achieve a satisf actory result as soon as possible to the requests. 
 
5.9 The representative of Jamaica  noted that Jamaica was a beneficiary of the Caribbean Basin 
Economic Recovery Act, CBERA.  The CBERA had pl ayed a very important role in the Jamaican 
economy.  Over the years it had facilitated incr eased trade and investment opportunities between 
Jamaica and the US.  Jamaica had also benefited in  terms of export diversif ication, job creation and 
the development of productive capacity, particular ly in non-traditional sectors such as textiles and 
apparel.  The CBERA had also facilitated greater integration between the Jamaican and US economies 
and had provided the platform for facilitating Ja maica's integration into the global economy.  Her 
Government attached great importance to the CBE RA and urged Members to give favourable and 
expeditious consideration to the request for a wa iver.  Jamaica supported the wish expressed by the 
US to have a decision on this matter by the next meeting of the CTG. 
 
5.10 The representative of Kenya , as a beneficiary of the AGOA programme, also attached great 
importance to this scheme.  AGOA had assisted his Government in creating jobs and enhancing rural 
development, particularly in the area of cotton.  Like Mauritius and some other Members who spoke, 
his delegation would like to see a decision on the US  request as soon as was practically possible.  He 
requested Members to take note of the US statem ent and those of others benefiting from these 
schemes so that, at least, these Members could continue to benefit from these programmes. 
 5.11 The representative of Ecuador
 was grateful to the US delegation for having presented the 
waiver requests.  Her delegation would be grat eful to the CTG for maintaining the informal 
consultations on this matter.  Her delegation indicated that the US responses were still not complete.  
However, her delegation was fully engaged in consultations  and in a process of considered analysis 
which had given satisfaction to some questions asked by developing countries.  Her delegation 
considered these preferential agreements and syst ems purely provisional and temporary which may be 
justified when focusing on drug problems.  Obvious ly this had a social and economic impact on some 
countries.  These programmes contributed to ec onomic development and offered sustainable 
economic alternatives for drug economies.  Her delega tion therefore believed it  was time to approve 
the requests and recommended that this be done at the next session of the Council.  5.12 The representative of Pakistan
 thanked the US for its patience and for providing answers to 
queries raised by different Members, including Pakistan.  His delegation had studied the answers provided by the US to the Brazilian questions and the Indian follow-up questions presented recently.  
The questions raised in the latter were not only pertinent but also raised some interesting issues vis-à-
vis the commitments undertaken by the Membership of the WTO under the GATT.  He reiterated that 
the schemes such as the ones for which waivers were be ing sought were laudable in that they provided 
some developing countries with help in their efforts to better integrate into the world trading system.  
However, assurance was needed that these waivers di d not construe or contai n elements contrary to 
the dictates of the multilateral trading system under the GATT.  More clarity was needed to ensure 
that these schemes delivered what they promised but not at the cost of other developing countries or 
other Members of the WTO.  This was the basis for Members' questions on these waivers.  Bearing 
this in mind, his delegation would revert to the matter after further studying the US answers and 
receiving additional instructions from the capital. G/C/M/82 
Page 12  
 
  
5.13 The representative of Costa Rica
 said that it was clear that these schemes were of the greatest 
importance for the countries they affected.  The statements by the US, Colombia, Ecuador and Peru 
amongst others, showed the obvious  importance of adoption of these requests as soon as possible.  
The US had presented answers to the questions po sed, including at this fourth meeting.  His 
delegation hoped that at the ne xt meeting there could be formal agreement on these issues. 
 5.14 The representative of Senegal
 pointed out that countries such as his were intent on integrating 
into the international trading system by improving their offer capacity.  Such preferential schemes as 
AGOA helped to consolidate their o ffensive positions in foreign markets.   In view of these facts and 
circumstances, such policies should be supported.  This was the reason why his delegation urged other 
countries to accept the requests made by the US in respect of such preferential schemes. 
 5.15 The representative of Brazil
 reacted to some of the comments on how this process had been 
evolving.  The waiver requests had been presented belatedly and the beneficiary countries had been 
benefiting, as a number of them had noted, in spite of not having the waiver coverage.  It was indeed 
the on-going consultations and the constructive exch ange of questions and answers that was enabling 
Members to learn more about the programmes, to clarify some of the issues and to make sure that their own interests as developing countries were  also being protected.  The Brazilian delegation 
believed that the Council was now approaching a time when it would be able to take an informed 
decision on this issue.  His delegation looked forward to debating this issue at the next CTG meeting. 
 
5.16 The Chairman
 concluded by stating his view that, at this stage of consideration of this item, 
the question and answer exercise was reaching the poin t of exhaustion.  He, therefore, proposed that 
the Council take note of the statements made and th at the Council revert to this matter at its next 
meeting.  He intended to hold another round of consultations on these requests before the next 
meeting because it was his intention to circulate a draft decision on each of these requests at that 
meeting in order to move the process towards closure.  5.17 The Council so agreed
. 
 
VI. CUSTOMS VALUATION AGREEMENT:  REQUEST FOR AN EXTENSION OF 
 WAIVER GRANTED UNDER ARTICLE IX OF THE WTO AGREEMENT -
 SENEGAL 
6.1 The Chairman  noted that, in document G/C/W/524, Senegal circulated a request for an 
extension of its waiver under Article IX of the WTO Agreement for the use of a system of officially 
established minimum values for a limited number of products.  He recalled that the General Council 
on 17 May 2004 approved Senegal's request for a waiv er from its obligations under the Agreement on 
Implementation of Article VII of the General Agreement on Tariffs and Trade 1994 (Customs 
Valuation Agreement).  This Decision, contained in document WT/L/571, expired on 30 June 2005.  
He also noted that Senegal, in accordance with its obligations under this Decision, had presented a 
report on the status of its implementation of th e officially established minimum values for the 
products concerned.  This was circulated to the Council as document G/C/W/523.  He noted his 
understanding that Senegal was consulting with Members on this request.  In the absence of 
statements, he proposed that the Council reve rt to this matter at its next meeting. 
 6.2 The Council so agreed
. 
  G/C/M/82 
 Page 13 
 
 
 VII. EUROPEAN COMMUNITIES – REQUEST FOR AN EXTENSION OF 
ARTICLE XIII WAIVER FOR THE TARIFF RATE QUOTA FOR BANANAS OF ACP ORIGIN. 
7.1 The Chairman
 drew Members' attention to the recent request circulated by the European 
Communities in document G/C/W/529.  In this do cument, the European Communities requested an 
extension of the current GATT Article XIII waiver c oncerning the tariff rate qu ota (TRQ) for bananas of 
ACP origin which was contained in document  WT/MIN(01)/16 of 14 November 2001.    
 7.2 He had carried out consultations among interest ed Members on this request.  By all indications, 
it appeared that given the general level of uncertainty during this pe riod following the issuance of the 
second arbitrator's report concerning the rebinding of the EC tariff on bananas, some Me mbers pr eferred 
not to have a discussion of this request today.  He believed that further time was needed in capitals to 
digest the arbitrator's report, to assess the relevant context in which this waiver  was being requested, and 
for additional information.  He, therefore, proposed to revert to this matter at the next meeting of the 
Council.   
 
7.3 The Council so agreed
. 
 
VIII.  ISSUES RELATED TO TRADE IN TEXTILES – SUBMISSION OF TURKEY 
8.1 The Chairman  recalled that at the last meeti ng the Council had begun discussions on the 
submission by Turkey as contained in document G/ C/W/522.  19 Members had taken the floor and the 
statements, as was the usual procedure, had been re corded in the minutes of the meeting, contained in 
G/C/M/81.  It seemed clear from the numerous interventions made that there was no common understanding among the Members, particularly  on the proposals contained in the Turkish 
communication.   It was agreed, however, that th e Council would revert to the issue at the present 
meeting.  It was also clear that there was a need for consultations in advance of the meeting.  An 
open-ended consultation on the issue was, therefore,  organised on 3 November.  At the consultation, a 
frank, open and informative exchange of views took place among Members and some clarifications were made.  However, he could not detect much  convergence at the consultations in so far as 
substantive issues were concerned and urged Member s to reflect on the situation before the present 
meeting. 
8.2 The representative of Turkey
 drew Members’ attention to some major developments which 
had taken place since the July Council meeting.  A considerable number of goods, affected by the 
Agreement reached between China a nd the European Union, had been blocked at the European Union 
borders as the quota limits had already been reached.  The solution to the problem had been devised 
by cooperative work between the EU and China, within the limits  of the Agreement.  The United 
States, which had for their part already imposed r estrictions on seven categories of items, had initiated 
bilateral talks and had recently reached a compre hensive deal with China resembling the agreement 
between China and the EU.  Not only had textile a nd clothing producers from the EU and the US been 
negatively affected after the removal of quotas, but  so had many others from various parts of the 
world.  Nevertheless, it should be emphasized that the real impact of the quota phase-out was still not 
felt to the fullest extent due to the safeguard measu res which had been introduced.  Still, winners and 
losers were starting to appear among supplier countries. 
8.3 The representative of Turkey referred to an ITCB paper dated 18 October 2005,  which 
identified China as the major winner of the post- ATC period.  The figures showed that China had 
experienced a strong surge in its textile and clothing  exports to the US as well as to the EU market.  
The increase in exports to the US in eight months had been 64% in value and 46% in volume, whereas 
it had been 48% in value and 40% in volume to th e 25 EU Member States.  In the US market, the G/C/M/82 
Page 14  
 
 AGOA countries, Mexico and Turkey were among the losers.  In the EU market, the major losers 
were Sri Lanka, Thailand, South Korea, Indonesia, Morocco, Tunisia, Bangladesh and Romania. 
8.4 He observed that, since the last meeting, th ere had been a mounting interest on the part of 
certain international organizations on the repercu ssions of the quota phase-out in the textile and 
clothing sector.  The International Labour Organiza tion, which had included fair globalization in the 
textiles and clothing sector in its Sectoral Activ ities Program, constituted one of the outstanding 
examples in this regard.  The ILO had convene d a tripartite meeting to provide guidance to 
governments, employers' and workers' organizati ons on how to share strategies, lessons and 
experiences throughout the supply chain;  how to b est adapt to challenging circumstances;  and how 
to promote fair globalization in textiles and clothi ng in this post-ATC environment.  The meeting had 
also highlighted the need for the ILO in this extrao rdinary situation.  All of the above pointed to an 
incontestable fact, i.e. that Members did have a pr oblem which should be further studied with a view 
to finding a satisfactory solution for all. 
8.5 He drew Members’ attention to the fact  that the WTO was the primary place to solve 
problems originating from the conduct of trade relati ons among its Members in matters related to the 
WTO Agreements and other associated legal instrume nts.  Therefore, he asked all WTO Members to 
demonstrate goodwill to take stock of the issues wi th the broader perspectiv e of making globalization 
work for the benefit of all.  He had no doubt th at they could all compromise on common and mutually 
satisfactory ground.  Turkey strongly believed that the WTO, which constituted the basis for 
international trade, should not remain idle on th is problem.  Moreover, he recalled the significant 
number of countries that were willing to discuss this issue. 
8.6 He also responded to the argument that there was no reason to treat this sector differently 
from the others.  Discussions regarding the textile and clothing sector had already taken place in the 
Sub-Committee on Least-Developed Countries.  In a ddition, issues relating to the post-ATC trading 
environment deserved special attention since this se ctor had received comprehensive and persistent 
protection, with the support of quotas, which had not been the case for any other industrial sector.  
Moreover, no other sector had been as dispersed in the social and economic lives of developing 
countries as the textile and clothing sector, with e ffects on employment and income generation.  As a 
matter of fact, the discussions in the Sub-Committee on LDCs, and thus the demands of the least-developed countries, had many common points with num erous developing countries' concerns.  In this 
framework, Turkey's proposal for the development of  a work program pointed to an enlargement of 
these discussions through the inclusion of deve loping countries.  The CTG should be the body 
responsible for devising the program, while the Memb ers collectively prepared the outline.  As had 
been indicated by the WTO Direct or-General, it was "our common responsibility to ensure that the 
trade engine was switched on for everyone".  In this respect, Members ha d a small but important 
window of opportunity for the development and im plementation of a collaborative and sustainable 
approach since they were in a period of transiti on.  Turkey suggested, therefore, that the WTO 
Secretariat examine the adjustment-related issues and make recommendations to assist developing and 
least developed countries.  Members should bear in  mind that the Marrakech Agreement foresaw the 
"need for positive efforts designed to ensure th at developing countries, and especially the least 
developed among them, secure a share in the growth  in international trade commensurate with the 
needs of their economic development." 
8.7 Certain LDCs and developing  countries had, according to the representative of Turkey, been 
facing great challenges to take th e measures necessary in order to sustain their textile and clothing 
sectors in this transition period.  This situa tion, if not overcome, would have far-reaching 
consequences, both economic and social, in those count ries.  In this regard, an indispensable element 
of fair globalization in textile and clothing trade s hould be the avoidance of shortfalls in the export 
earnings of developing countries.  To this end,  Turkey believed that the Committee on Trade and 
Development should join the CTG in the program a nd cooperate with releva nt international bodies,  G/C/M/82 
 Page 15 
 
 
 and also share any results of its work with the CTG.   In fact, the cross-dimensional nature of this 
sector, which harboured significant economic and social  aspects, called for collaborative actions of all 
the relevant international organizations in orde r to address the specific needs and concerns of 
developing countries.  In this regard, Turkey belie ved that the WTO should work in close cooperation 
with other international organizations such as the World Bank, the IMF and the ILO for technical and 
financial assistance activities. 
8.8 In its submission, Turkey had also indicated the possible implications of the Doha agenda on 
the textile and clothing sector.  There was no doubt that the textile and clothing sector would also be affected by the negotiations taking place in the mark et access, agriculture and rules areas.  In this 
respect, the indispensable element of the Doha age nda, development, also required a comprehensive 
and exhaustive study of this sector.  For example, the cotton initiative was of the highest importance 
to creating a fair trading environment for all WTO Members.  However, the impact of these negotiations on other raw materials,  man-made fibres and textile a nd clothing goods should also be 
considered, in order not to create any unforeseen externalities.  Moreover, the discussions taking place 
in the framework of the Negotiating Groups on Ma rket Access and Rules would also have very 
significant ramifications for the textile and clothing sector.  NAMA negotiations offered an 
opportunity to obtain greater balance in trade conditions  in the sector worldwide, and in particular to 
develop South-South trade, which was considered ess ential in view of its great potential to create new 
markets.  The rules negotiations, on the other hand, al so needed to be discussed in detail.  In this 
connection, Turkey strongly believed that cons ultations among the chairs of these committees and 
groups were essential to develop the appropriate tr ade policies for the textile and clothing sector. 
8.9 The problems of this sector were so complicat ed that they were almost impossible to tackle 
through efforts by the individual countries th emselves.  All actors concerned had certain 
responsibilities and this sector could only be sustained if each of them played its role according to the 
rules.  Adjustment to the new environment coul d only be ensured by collaborative and concerted 
efforts at the global level.  In this respect, th e WTO should play the leading role in promoting 
international policy coherence for achieving the goal of sustainable development.  Moreover, Turkey 
considered that a comprehensive approach was nece ssary in order to set a level playing field for all 
developing countries at the e nd of the Doha negotiations. 
8.10 To conclude, the representative of Turk ey found it almost impossible to understand the 
reasoning behind the objections and oppositions from so me Members to a work program that would 
be tailored by all Members and administered under th e supervision of the CTG.  For one thing, this 
was what a non-negligible number of WTO Members requested.  These demands had to be addressed 
simply because the WTO was the primary body r esponsible for issues concerning trade among its 
Members.  Besides, even without such demands, a work program would still be required as the textile 
and clothing sector was undergoing a revolutionary tran sition period that implied drastic changes.  In 
this regard, he believed that Me mbers had to move fast to prepare the outline of the CTG work 
program, which would bear fruitful results for all at the end of the day. 
8.11 The representative of China
 considered that Turkey had quoted the ITCB paper selectively by 
omitting the paper's observation that Turkey’s export s, which were concentrated in the EC market, 
had maintained an upward trend and increased by 5. 9% in value, though they had increased less in 
volume.  The ITCB paper also noted that Turkey’s ex ports to the US market had declined, but that, for 
the two markets combined, Turkey’s exports ha d increased by some US$ 400 Million.  The ITCB 
paper also observed in its conclusion, that in mo st cases the problems were caused by some clauses in 
the preferential agreements certain  Members had agreed with the major importing countries.  It added 
that such problems were inherent in the preferen tial schemes, and affected Members should look into 
these problems instead of looking for scapegoats. G/C/M/82 
Page 16  
 
 8.12 The representative of China referred to the informal consultation which, he believed, had 
indicated that there would not likely be any break through at the present meeting, as it was clear that 
the positions of major stakeholders were still far ap art.  He recalled that China’s detailed comments on 
the Turkish submission in document G/C/W/522 could be found in the minutes of the CTG meeting of 
15 July 2005. Members interested in knowing wh y the Turkish paper was not acceptable to China 
could refer to paragraphs 6.6 thro ugh 6.9 of document G/C/M/81.   
8.13 He observed that during the last CTG meeti ng, the representative of Turkey had admitted that 
his country had been the second largest supplier of textiles and clothing to the European Union for many years.  The representative of Turkey had c ontinued by saying that Turkey had achieved this 
level under fair market conditions.  This should not be that surprising because Turkey was exporting 
under preferential treatment.  This seemed to be ho w he defined “fair market conditions”.  It was 
widely recognized in the trade community that preferential schemes,  like the one Turkey had been 
enjoying was a deviation from the fundamental WTO principles of non-discrimination and MFN.  There had to be better ways of defining fair mark et conditions than citing one’s preferential status, 
because to the vast majority of the WTO Members who were denied access to such preferences, the 
system was not fair at all. 
8.14 During the last CTG session, some delegati ons had asked whether China was willing to share 
its experience of adjustment or how China had coped with the trans ition.  In China, the net annual 
population increase was approximately 15 million.  Therefore, the government faced huge pressure to create jobs.  These jobs came from the sectors wher e China possessed a compara tive advantage, such 
as textiles and clothing.  This sector was cruc ial since it provided 19 million jobs in China, 
representing 22% of total employment in the manuf acturing industry.  Another 80 million people were 
estimated to be indirectly dependant on the textil es and clothing sector.  In other words, the textile 
industry in China was a business that affected direct ly or indirectly the livelihood of approximately 
one hundred million people.  The majority of th ese workers were women from the poor areas of the 
country.  The Chinese textiles and clothing industr y had endured a very rough period of structural 
adjustment in the 1990s in the context of the ma rket oriented reforms.  Soon after the ATC had 
entered into force, the industry had had to restru cture and modernize by scrapping, between 1997 and 
2000, ten million outmoded cotton sp indles,  280,000 wool spindles and one million silk spindles.  
Better textile machines, worth US$30 billion, ha d been imported, thus improving technological 
standards and productivity.  Since then, many textile enterprises had gone bankrupt or had been forced 
to merge, causing layoffs or the reallocation of 1.4 million textile workers. 
8.15 Another feature of the Chinese clothing indus try was an open trade and investment policy, 
which meant that businesses had free access to the mo st competitive inputs.  China’s exports of 
garments depended heavily on imports  of fabric, raw material and tex tile machinery.  Half of China’s 
apparel exports were made  from imported textiles.  China was alre ady the world’s thir d largest textile 
importer after the EU and the US.  China was the biggest importer of raw cotton, and last year it had 
imported 1.9 million tons of cotton.  China was among the top importers of wool, importing 220,000 
tons of wool in 2004.  It was the number one im porter of textiles machinery and parts, having spent 
US$ 4.48 billion on them in 2004.   Thus the benefits of healthy growth of the Chinese textiles and 
clothing industry were shared by workers in textile  mills and chemical plants, cotton farmers, sheep 
ranchers, and machine factories in various parts of the world.  Foreign partners also had opportunities 
to supply many of the services consumed by the industry such as design and transportation.  In 
addition, welfare gains of textile-related tradi ng activities through distribution links from wholesalers 
to retailers and consumers were al so enormous.  In a nutshell, the experience of China pointed to a 
diligent people under tremendous pr essure of competition, a spirit of perseverance and self-sacrifice 
in the face of various challenges, an eagerness to  embrace new technologies and invest in the future, 
and a staunch devotion to improving themselves thr ough reform and opening-up. This was what had 
made China’s textiles and clothing industry today.    G/C/M/82 
 Page 17 
 
 
 8.16 Experience from the earlier stages of liber alization under the ATC had shown that the 
removal of a quota was often followed by an imme diate surge of imports, and that this fleeting 
phenomenon would subsequently  subside.  The case of baby garmen ts illustrated this well.  In 2002, 
China’s year-on-year growth of its exports to th e EC was 240% in terms of volume, while in 2004, 
this figure dropped drastically to 10%.  In the U.S.  market, China’s year-on-year export growth rate 
for all the liberalized categories was 317% in volume terms in 2002, 100% in 2003 and only 18% in 
2004.  The markets would smooth out over time, hence there was no need to panic.  He believed that, generally speaking, the development of trade in te xtiles in 2005 had been quite positive, contrary to 
the doomsday scenario predicted by some and despite various efforts to prolong the restrictive regime 
continue along the path of discrimination.  China had been saying that trade restrictions or 
protectionism was not the right way.  Rather, th e process of liberalization and opening-up would help 
improve competitiveness and contribute to the health y growth of the sector.  China firmly stood for 
the principle of fair competition under the multilatera l trade system and was ready to work with other 
WTO Members to consolidate the hard-earned achi evements of integration and liberalization.  
China’s deep conviction was that a strong multilatera l trading system based on the principle of non-
discrimination covering all products and sectors would be in the best interest of all WTO Members. 
8.17 The representative of Jordan
 said that much of what he wanted to say had already been 
presented by Turkey.  He was of the view that the full effect of trade liberalization had not yet been 
felt - the last period of trading in this sector ha d been characterised by correction measures while 
returning to market mechanisms, and little time ha d passed since agreements had been reached among 
the major players.  More time was necessary in order to be in a position to make the correct 
judgements.  He agreed with China that there was no need to panic.   He observed, however, that the 
Members were at this time engaged in the Develo pment Round and that, in a country like Jordan 
where this specific sector amounted to one-third of exports, that sector should be at the heart of its 
development.  On that basis, Jordan wanted to  keep this issue on the agenda of the Council and 
possibly garner assistance from the competent international organizations. 
8.18 The representative of Tunisia  expressed satisfaction that the discussion was taking place in a 
constructive and positive spirit.  In China's statem ent, the representative explained that China had 
been able to achieve progress through adjustments in  the 1990s.  The experience of other countries in 
the textiles and clothing sector was precisely one  of the aspects his delegation would like to see 
examined in the CTG and which could be included in the work programme, along with questions of 
preferences, tariff cuts and their impact on the text iles and clothing sector, and the reliance of several 
Members on the textile sector.  The WTO was an or ganization which aimed at achieving benefits for 
all and guaranteeing an equitable and just trading system in which all countries may benefit.  He strongly hoped that the Council would take a decision on the work programme in order to continue to examine this matter. 
8.19 The representative of Pakistan
 recalled that his delegation was not only interested in textiles 
and clothing but that his country was dependent on this sector for its livelihood.  He remarked on 
some points raised by other delegations.  The represen tative of Turkey had referred to the ICTB paper 
from which he had quoted figures and facts.  In this  regard, certain numbers indicated that Pakistan 
also had immense problems in this sector, alt hough growth levels could be seen.  Regarding 
preferences, he cited an example of Pakistan's experi ence.  Pakistan’s exports of one particular textile 
product had been booming through certain prefer ences received from trading partners.  Suddenly 
those preferences were removed and these exports b ecame subject to anti-dumping duties.  Exports 
plummeted from a healthy figure of 500 million to an unhealthier figure, which was still decreasing in 
that particular market.  Through the ingenuity of Pa kistani exporters and producers, Pakistan had been 
able to move into other markets through aggressi ve marketing, and to increase exports in that 
particular sector.   He noted that this sector was not selectively important to Members, but it was a 
matter of extreme importance for all the developing c ountries which were in this business.  As regards 
anti-dumping, he observed that remedial measures coul d work positively, but in Pakistan's case, it had G/C/M/82 
Page 18  
 
 worked negatively.  Pakistan had waited for the ATC expiration.  Studies had shown that had it not 
been for the predecessor of the AT C and the ATC itself, Pakistan's textiles industry would look much 
different and much larger than it actually was.  Pakistan had suffered through the MFA and the ATC 
but had strived to make the necessary adjustments, and to compete.  Subsequently Pakistan had found itself in a position where it could see a certain semblance of fairness in the multilateral trading system 
for a sector which had been kept out of it for a very long time.  Pakistan, therefore, could not accept 
the proposal contained in G/C/W/522 as a work programme for the CTG. 
8.20 The representative of India
 reiterated her country’s position w ith regard to the suggestions 
made by Turkey in its submission (G/C/W/522).  Textiles and clothing was a very significant sector 
for all developing countries, including India where it employed a large proportion of the workforce 
and was the second-largest employer.  Members had been  striving and, in her country even more so, 
because the majority of manufacturers were concentrat ed in the small-scale sector.  Despite all these 
constraints, India had been looking forward to th e integration of this sector into the multilateral 
trading system for the past 10 years.  Now that this  had arrived, there would be some adjustment costs 
for some or all Members.  Her country was also going through it.  At any other point of time the 
Turkish proposal would have ma de an interesting academic study and probably would still do.  
However, at this stage, caught up as Members were in negotiations which were addressing some of 
these issues, her delegation did not think it would be a ve ry useful use of time to get into another work 
programme which would only look at adjustment is sues.  These issues were being taken up by other 
bodies in the WTO in development-related issues.  At  this point of time, her delegation was not ready 
to start a work programme on this issue. 
8.21 The representative of Indonesia  agreed with Turkey that textiles and clothing played an 
essential role in the economy.  Indonesia considered  that Members had greater opportunities with the 
termination of the ATC and was not of the view that the situation was now extremely different and getting more complicated.  The ATC had terminated less than one year ago and Members were enjoying freedom in textiles and clothing trade.  Therefore, Indonesia did not see any merits in 
establishing a work programme for a full and pe riodic review of global textiles and apparel 
production, exports and market circumstances to de velop appropriate remedies within the multilateral 
trading system, as proposed by Turkey.  In addition,  his delegation could not accept the idea that the 
Committee on Trade and Development should work on th e problems created by the decline in prices, 
for which the WTO was not responsible. 
8.22 The representative of Turkey
 answered certain questions put by Members.  As regards the 
ITCB paper, Turkey had been selec tive because the important points related to what was happening in 
the two big markets, the European Union and the Unit ed States.  On Turkey's performance, which was 
discussed at the last Council meeting, he could not  understand why countries were taking up this issue 
again and again.  Looking at the same ITCB paper, th e increase in imports of textiles and clothing into 
the EU for the same period was 5.3% whereas Turk ey's increase was 5.9%.  These numbers could 
show something or could show nothing , depending on how they were inte rpreted, but they were facts.  
There were other numbers showing how countries had performed, but this was not the issue.  At the 
present meeting, Turkey wanted to stress the need for a Work Programme.  Before coming to that, he 
wanted to respond to the question of preferential tr eatment, fairness of treatment, and the fundamental 
principle of globalisation, which had been stress e d  b y  C h i n a .   A r t i c l e  2 4  f o r m e d  p a r t  o f  t h e  
globalisation system, and at least Turkey had always approached this as a complement to 
globalisation.  Turkey’s relationship with the EU was not only a preferential trade agreement, but  
targeted full membership in the EU.  This was a regional trade agreement issue which should be 
assessed in its own context. 
8.23 Turkey was ready to address the challenge  of assessing how Members had performed since 
the expiration of the ATC.  At the end of the day, the study might say that Turkey was not very 
competitive, or that the conditions, for example in terms of investment, were much better in other  G/C/M/82 
 Page 19 
 
 
 countries, compared to Turkey.  Turkey wanted to see whether Members had set truly fair market 
conditions after the expiration of the ATC.  It w as interested in how quotas had affected the economic 
performance of countries and what lessons could be learned for other sectors from ten years of quota 
regime.  There were lessons to be drawn from thes e ten years, which were reflected in the numbers 
and performance of countries in 2005.  The roots of the 2005 performance was in the ten or forty 
preceding years.  The point was to show these facts and share them with other countries.  Another 
point was whether other international organizations  could help countries which had real adjustment 
problems.  The study proposed could reflect on these points.  He was of the view that Members should concentrate on the outline of the work prog ramme and he was confident that it would be 
possible to come to some understanding on how this work programme could work for all Members. 
8.24 The Chairman
 said that it seemed clear from the inte rventions that again there was again no 
common understanding among the Members on the proposal s contained in the Turkish submission.  
He noted, however, that there was a strong wish that this issue be kept on the agenda of the Council.  
Therefore, he proposed that the Council take note of the statements made and agree to revert to the 
item ‘Issues related to trade in textiles” at its next meeting.  He also proposed  to hold consultations to 
continue the discussion on substantive issues.  At  the next CTG meeting the Chairman would report 
on these consultations.  
8.25 The Council so agreed . 
 
IX. CONSIDERATION OF ANNUAL REPORTS OF SUBSIDIARY BODIES OF THE 
COUNCIL FOR TRADE IN GOODS 
9.1 The Chairman  recalled that pursuant to the "Proce dures for an annual overview of WTO 
Activities and for reporting under the WTO" (WT/L/1 05) which were adopted by the General Council 
on 15 November 1995, all bodies constituted under ag reements in Annex 1A of the WTO Agreement 
were required to submit annually a factual report to the Council for Tr ade in Goods, and the Council was 
to take note of these reports.   
 
9.2 In the absence of comm ents, the Council took note  of the reports of the following 
Committees:  (i) Committee on Market Access, documen t G/L/748;  (ii) Committee of Participants on 
the Expansion of Trade in Information Technolog y Products, document G/L/756;  (iii) Committee on 
Agriculture, document G/L/746;  (iv) Committe e on Customs Valuation, document G/L/750;  
(v) Committee on Sanitary and Phytosanitary M easures, document G/L/755;  (vi) Committee on 
Technical Barriers to Trade, document G/L/760;   (vii) Committee on Import Licensing, document 
G/L/753  (viii) Committee on Rules of Origin; document G/L/747  (ix) Committee on Anti-Dumping Practices, document G/L/758;  (x) Committee on S ubsidies and Countervailing Measures, document 
G/L/754;  (xi) Committee on Safeguards, documen t G/L/761;  (xii) Committee on Trade-Related 
Investment Measures, document G/L/752;  (xiii ) Working Party on State Trading Enterprises; 
document G/L/749;  and (xiv) the Independent Entity, document G/L/757. 
X. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE IN 
GOODS TO THE GENERAL COUNCIL (G/C/W/501) 
10.1 The Chairman
 draw Members' attention to the draft report of this Council circulated in 
document G/C/W/535.  In accordance with the "Pro cedures for an annual overview of WTO Activities 
and for Reporting under the WTO" (WT/L/105) wh ich was adopted by the General Council on 15 
November 1995, it was agreed that "The respective sectoral Councils should report in November each 
year to the General Council on the activities in the Council as well as in the subsidiary bodies" and that 
the reports of the sectoral Councils should be "factual in nature, cont aining an indication of actions and 
decisions taken, with cros s references to repor ts of subordinate bodies and c ould follow the model of the G/C/M/82 
Page 20  
 
 GATT 1947 Council reports to the C ONTRACTING PARTIES".  The draf t report would be updated in 
light of today's meeting.    10.2 In the absence of comments, the Chairman
 proposed that the Council agree to adopt the report 
updated to include the current meeting. 
10.3 The Council so agreed . 
XI. ELECTION OF CHAIRPERSON FO R THE COMMITTEE ON AGRICULTURE 
(REGULAR SESSIONS) 
11.1 The Chairman  said that it had come to his attention that the Chairman of the Agriculture 
Committee in Regular Sessions had left his governmen t function and was, therefore, unable to serve as 
Chair any longer.  In accordance with The Guidelines for the A ppointment of Officers to WTO bodies 
contained in document WT/L/510, adopted by the General Council on 10 December 2002, the 
Chairman of the CTG was to carry out consultatio ns on a new candidate for Chairmanship of the 
subsidiary bodies.  He reported that he had carried out consultations and was pleased to be in a position 
to propose to the Council Mr. Christian Häberli of Switzerland as candidate for the Chairmanship of 
the Agriculture Committee.  He proposed that the Council agree with this nomination.   
 11.2 The Council so agreed
. 
 
XII. OTHER BUSINESS 
A. DATE OF THE NEXT MEETING  
12.1 The Chairman  stated that the next meeting of the Council for Trade in Goods was scheduled 
for 15 March 2006.  The agenda would close on Friday, 3 March 2006. 
 
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