RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/104 
21 December 2010 
 (10-6829) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
30 NOVEMBER 2010 
 
Chairperson: H.E. Ambassador Mothae Anthony Maruping (Lesotho)
 
 
 
 The meeting of the Council for Trade in Goods was convened by airgram WTO/AIR/3669 and the proposed agenda for the meeting was c ontained in document G/C/W/642.  The meeting 
proceeded on the basis of the following agenda.  
I. NOTIFICATION OF REGIONAL TRADE AGREEMENTS.............................................2  
II. MARKET ACCESS MATTERS .............................................................................................3  
A. C
OMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE ............................3  
B. INTRODUCTION OF HARMONIZED SYSTEM 2002  CHANGES INTO WTO  SCHEDULES OF 
TARIFF CONCESSIONS – REQUESTS FOR EXTENSION OF THE WAIVER .......................................3  
C. INTRODUCTION OF HARMONIZED SYSTEM 2007  CHANGES INTO WTO  SCHEDULES OF 
TARIFF CONCESSIONS – REQUESTS FOR A WAIVER ....................................................................3  
III. EUROPEAN UNION - REQUEST FOR A WAIVER ON ADDITIONAL 
AUTONOMOUS TRADE PREFERENCE S GRANTED BY THE EUROPEAN 
UNION TO PA KISTAN...........................................................................................................4  
IV. EUROPEAN UNION ENLARGEMENT:  PROCEDURES UNDER  
ARTICLE XXVIII:3 OF GATT 1994...................................................................................12  
A. ENLARGEMENT OF THE EUROPEAN UNION 1 MAY 2004 ..........................................................12  
B. ENLARGEMENT OF THE EUROPEAN UNION ON 1 JANUARY 2007 .............................................13  
V. IMPORT LICENSING MEASURES AND PROCEDURES BY ARGENTINA – 
STATEMENTS BY THE UNITED STATES  AND THE EUROPEAN UNION..............13  
VI. MEASURES BY ARGENTINA AFFECTING IMPORT OF FOOD 
PRODUCTS – STATEMENT BY  THE UNITED STATES...............................................16  
VII.  ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE 
IN GOODS TO THE GENERAL COUNCIL......................................................................18  
VIII.  OTHER BUSINESS................................................................................................................1 8 
A. MEXICO - LESS PROCEDURES AND BETTER REGULATION TO ENHANCE 
COMPETITIVENESS ....................................................................................................................18  
B. ECUADOR MIXED TARIFFS – QUESTIONS FROM THE UNITED STATES , THE EUROPEAN 
UNION , CANADA , JAPAN AND PANAMA ....................................................................................18  
C. DATE OF THE NEXT MEETING ...................................................................................................20  
 G/C/M/104 
Page 2  
 
   When adopting the Agenda, the delegate of Ecuador
 indicated that, following instructions 
received from his capital, the issue entitled "Ecu ador Mixed Tariffs – Questions from the United 
States, the European Union, Canada, Japan and Pa nama" should not be included as an Agenda item.  
His authorities considered that the information publis hed on this matter was sufficiently clear to allay 
the concerns of Members who had proposed it.  Cuba, Argentina and Ven ezuela supported Ecuador's 
request.  The Chairperson  recalled that the issue figured in the Agenda because other Members had 
requested its inclusion according to the Council's Ru les of Procedure.  The delegate of the United 
States  indicated that the inclusion of an item in th e Agenda did not prejudice any of the rights and 
obligations of the Members on the issues being discussed under that Agenda item.  The WTO could 
not function if Members were to block the Agenda items simply because the Members concerned felt 
that the issues raised were in convenient.  The Chairperson  invited Ecuador and the United States to 
consult with him in order to find a solution.  Afte r consultations, he announced that it had been agreed 
that, at this meeting the issue of "Ecuador Mi xed Tariffs" would be dealt with under "Other 
Business"; and, that for the next meeting of the Council, it would be included as a substantive Agenda 
item. 
 
 It was so agreed . 
 
I. NOTIFICATION OF REGIONAL TRADE AGREEMENTS 
1.1 The Chairman  recalled that, under the working procedures agreed by the Committee on 
Regional Trade Agreements (CRTA), following adopti on by the General Council of the Transparency 
Mechanism, the Council for Trade in Goods (CTG ) was to be kept informed of Members' 
notifications of new regional trade agreements.1  He informed the CTG that the following regional 
trade agreements had been notified to the RTA Committee:  A. Free Trade Agreement between the Repub lic of Korea and ASEAN in document 
WT/REG287/N/1 – S/C/N/559 
 B. Free Trade Agreement between Turkey  and Serbia in document WT/REG288/N/1 
 C. Free Trade Agreement betw een Mexico and Colombia in document WT/REG289/N/1 – 
S/C/N/563 
 
1.2 The delegate of India
 indicated that in July 2010, at the last CTG meeting, the India-Korea 
FTA notification under GATT/94 Article XXIV was brought to its attention, however not the 
notification of the same FTA under the enabling clause in WT/COMTD/N/36.  In his delegation's view, both the Enabling Clause and the GATT Article  XXIV notifications were, in equal measure, 
legally valid and did not share any hierarchical relationship and should be brought to the Council's 
attention.  Both notifications dealt with the RT A transparency mechanism adopted by the General 
Council in December 2006, and were of equal relevan ce to the work of the CTG.  At this meeting and 
previous meetings, the Chair's intervention under this agenda item mentioned working procedures 
adopted by the CRTA.   India requested that, at the next CTG meeting, these procedures were to be 
shared with Members, as well as the details as to  when and where these were discussed and adopted.  
 
1.3 The delegate of Malaysia
, on behalf of ASEAN, informed  the Council that the ASEAN - 
Korea FTA was also notified by ASEAN memb ers States to the Committee on Trade and 
Development (CTD) under the Enabling Clause in document WT/COMTD/N/33.  
                                                     
 
1 See documents WT/REG16, WT/L/671 and G/C/M/88.  G/C/M/104 
 Page 3 
 
 
  1.4 The delegate of China  echoed India; China believed th at both notifications, under the 
enabling Clause and under GATT Article XXIV, were e qually legal and valid a nd of equal relevance 
to the work of the CTG; thus these shoul d be reflected in the work of CTG. 
 1.5 The delegate of Egypt
 supported the previous speakers.  
 
1.6 The Chairperson , when inviting the Council to take  note of the information on the 
notifications and of the statements made, indicated  that all the debates and points raised should be 
made in the relevant committees.  
1.7 The Council took note
 of the information presented and of the statements made. 
 
II. MARKET ACCESS MATTERS 
2.1 The Chairman  noted that the Market Access Comm ittee had forwarded three items for 
consideration to the Council for Trade in Goods.   
 
A. COMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE  
2.2 The Chairman  drew Members' attention to the peri odic report of the Committee on Market 
Access contained in document G/MA/243.  The repor t was factual in nature, and reflected the work 
undertaken in the Market Access Committee.    
2.3 The Council took note
 of the periodic report.   
 B. I
NTRODUCTION OF HARMONIZED SYSTEM 2002  CHANGES INTO WTO  SCHEDULES OF TARIFF 
CONCESSIONS – REQUESTS FOR EXTENSION OF THE WAIVER  
2.4 The Chairman  drew Members' attention to the draft waiver decision circulated in document 
G/C/W/637, which had been made in connection with the introduction of HS2002 changes into WTO 
schedules of tariff concessions.  The current waiv er decision was contained in document WT/L/786 
and was to expire on 31 December 2010.  The on e year extension of the waiver decision was 
considered at the formal meeting of the Market Access Committee that took place on  
11 October 2010.  It had been forwarded by that Committee to the CTG for ac tion.  He proposed to 
the Council to approve the draft waiver decision contained in G/C/W/637 and forwarded it to the 
General Council for adoption. 
 2.5 The Council approved
 the draft waiver decision contained in G/C/W/637 and agreed  to 
forward it to the General council for adoption.  
C. I
NTRODUCTION OF HARMONIZED SYSTEM 2007  CHANGES INTO WTO  SCHEDULES OF TARIFF 
CONCESSIONS – REQUESTS FOR A WAIVER  
2.6 The Chairman  drew Members' attention to the draft waiver decision circulated in document 
G/C/W/638, which had been made in connection with the introduction of HS2007 changes into WTO schedules of tariff concessions.  The current waiv er decision was contained in document WT/L/787 
and would expire on 31 December 2010.  The one year extension of the waiver decision was 
considered at the formal meeting of the Market Access Committee that took place on  
11 October 2010.  It had been forwarded by that Co mmittee to the CTG for acti on.  He proposed that 
the Council approved the draft waiver decision co ntained in G/C/W/638 and forwarded it to the 
General Council for adoption.  G/C/M/104 
Page 4  
 
  2.7 The Council approved
 the draft waiver decision contained in G/C/W/638 and agreed  to 
forward it to the General Council for adoption.   
III. EUROPEAN UNION - REQUEST FOR A WAIVER ON ADDITIONAL 
AUTONOMOUS TRADE PREFERENCES GRANTED BY THE EUROPEAN UNION 
TO PAKISTAN  
3.1 The Chairman
 drew the Council's attention to document G/C/W/640 circulated by the 
European Union containing a request for a waiver for the application of additional trade preferences 
by the EU to Pakistan.  
3.2 The delegate of the European Union
, when introducing document G/C/W/640, indicated that the 
EU, like the rest of the world, was very concerne d about the devastating impact of the floods in 
Pakistan which destroyed livelihoods and commun ities throughout the country. The disaster was 
unprecedented in Pakistan's history.  According to United Nation's sources, the flooding affected 
some 20 million people and 20 per cent of Pakist an's land; about 160,000 square kilometres and  
12 million people were in need of urgent humanitar ian aid.  This crisis demanded immediate and 
substantial response, also taking into account the strategic importance of Pakistan's development, 
security and stability in the region.  For those r easons the European Council, on 16 September 2010, 
requested a comprehensive package of short, me dium and long term measures to help underpin 
Pakistan's recovery and future development.  
3.3   The EU had already granted significant humanitarian and development assistance: an 
immediate allocation for humanitarian aid of  € 415 million from the EU, out of which €150 million 
alone was from the European Comm ission; and, an amount of €114.8 million reallocated through an 
amendment of on-going programmes directed towards early recovery in flood-affected communities.  However, the EU was of the view that trade measure s, and not just aid, were essential for a sustained 
recovery of Pakistan's economy. Trade was therefor e part of the EU's propo sed medium term response 
to this unprecedented natural disaster which required exceptional measures.  
 3.4 On 14 October 2010 and in response to the inv itation by the European Council, the European 
Commission adopted a proposal for the unilateral and temporary suspension of import duties on 75 
export items from Pakistan.  This was the content of the waiver request.  The proposed preferences 
would liberalize about a quarter of Pakistan's imports  to the EU and would be available for the next 
two years with a possible extension of another year.  The proposal would suspend import duties on 67 products while an additional eight products would be subjected to tariff rate quotas.  The EU was 
aware that any such trade concessions, especially in  sensitive sectors like textiles and garments, might 
have an impact on other supplier countries.  The trade concessions in question should be economically 
meaningful for Pakistan; but at the same time ta ke account of sensitivities of other WTO Members, 
especially the Least Developed Countries (LDCs).  Th e EU had been very careful in the selection of 
products suggested for temporary liberalization;  and,  had made great efforts to take into account the 
interests of other WTO Members, especially LDCs, by not proposing some of the most sensitive products for liberalization.  Thus, all items include d in the EU's Doha's De velopment Agenda (DDA) 
offer on preference erosion had been excluded from liber alization.  The EU was of the view that the 
limited number of products selected, the ceiling that it had proposed to set on the liberalization of very 
sensitive items, and the limited duration of the liberal ization, would ensure that the balance was kept 
between Pakistan's needs and the legitimate inter ests of other countries.  The EU concluded that it 
hoped the WTO membership would support its waiver  request.  His delegation remained ready to 
further discuss the terms of this request with Members. 
 
3.5 The representative of the United States
 indicated that his delegation fully supported the EU 
proposal for a waiver;  the US found it a proportio nate and appropriate request and hoped that the 
Council would also support it.  G/C/M/104 
 Page 5 
 
 
  3.6 China was one of the first countries which had provided aid to Pakistan immediately after the 
floods, said the delegate of China .  Moreover, on 23 September 2010, at the UN Conference in  
New York, the Chinese Premier announced an a dditional assistance of US$200 million to Pakistan, 
for a total of US$250 million aid from China, thus , the largest humanitarian  aid China had ever 
granted to a foreign country.  Besides humanitarian aid, WTO Members might find other instruments 
to help Pakistan get its economy back on track; Ch ina believed that the EU's initiative to grant trade 
preference to Pakistan for a certain period of time would contribute to its recovery; thus, China supported the EU waiver request.  3.7 The delegate of the Kingdom of Saudi Arabia
 indicated that, given the difficult and 
unfortunate circumstances that Pakistan continued to  face in the aftermath of the floods, his delegation 
supported the EU's waiver request from GATT Artic les I:1 and XIII to grant additional autonomous 
preferences for Pakistan.  The Kingdom of Saudi Ar abia recognized the EU's initiative, as well as the 
careful consideration it had given to the interests of  other WTO Members.  More than 30 per cent of 
Pakistan's exports went to the EU; the extraordin ary access to the EU market would shortly benefit 
Pakistan and help its people to recover from losses.  
 3.8 The delegate of Kuwait
, on behalf of Bahrain, Oman, Qa tar, the Kingdom of Saudi Arabia 
and the United Arab Emirates, expressed the fu ll support to the EU's request for a waiver on 
autonomous preferences for Pakistan.  In front  of such a major disaster and its aftermath 
consequences, the international humanitarian sy stem had to mobilize all necessary assistance to 
Pakistan. 
 3.9 The delegate of India
 expressed solidarity with Pakistan given the unprecedented flood which, 
apart from taking a heavy toll of more than 1700 liv es, had also damaged or destroyed crops, food 
grains, livestock, houses and valuable infrastructure like school buildings, hospitals, roads, bridges, 
railway lines and electrical transmission lines.  India w as familiar with the devastating effect of floods 
and other natural disasters and was also deeply con scious of widespread misery and hardship such 
calamities left behind.  The helpless victims of such circumstances were more often than not the poor 
and dispossessed that needed immediate relief and a ttention.  India's experience showed that the 
landless agricultural labour, the small and marginal farm ers and the rural artisans were the hardest hit.  
They needed their homes, their livestock replenished and their farms restored to productive use within 
weeks if they were not to slip into extreme pove rty.  They needed, on an emergent basis, food, 
clothing, medicine, shelter and rebuilding of damaged or washed away infrastructure.  New tools, raw 
materials, seeds and fertilizers we re also needed.  Temporary empl oyment to public work programmes 
and cash assistance were also important, but above all,  they needed reassurance that they had not been 
abandoned or left alone to fend for themselves by the more fortunate ones who had escaped nature's 
fury. 
 3.10 The EU proposal to provide zero tariffs for Pakistan exports for two years on 75 tariff lines 
deserved India's fullest consideration.  Its stated objectives were to help the flood affected people of 
Pakistan as well as to enable the system to move from humanitarian relief to the reconstruction phase 
in the flood affected areas.  However, to implemen t its proposal, the EU had sought a waiver from one 
of its most fundamental obligations to the WTO of  providing Most Favoured Nation - MFN treatment.  
Therefore, there was a need to see in greater detail  if the proposed measure really served the stated 
objectives.  This had raised systemic issues which dese rved deeper analysis and serious consideration.  
WTO Members needed to reflect on what impact su ch a waiver might have in the long run on the 
multilateral trading system; and, how such a waiver would impact the poor and disadvantaged people 
living in other countries and those who also work ed in the textiles and clothing industry.   
 3.11 With regard to the efficacy of the propo sal, he expressed that India's experience had shown 
that temporary tariff concessions limited to a few years, in this case only two years extendable by another year, were not going to lead to forei gn direct investments or creation of additional G/C/M/104 
Page 6  
 
  employment opportunities.  Studies showed that tem porary tariff concessions led to gains mainly in 
existing producers and merchant traders; only some  peripheral gains reverted to the existing labour 
employed in the industry, mainly by way of overtime payments.  If the objective was to encourage foreign direct investments and additional empl oyment opportunities and provide for an economic 
recovery, it had to take place in longer term me asures like FTAs, capital ass istance, infrastructure 
strengthening and others.   
 3.12 The industries sorted to be benefitted were  most unlikely to absorb significant numbers of 
landless agricultural labour or rural artisans from the flood affected areas due to another aspect of the 
proposed measures because of the export orientated na ture of the industries covered, the distances 
between most of the flood-affected areas and th e centres of production, as well as rigidities in 
inter-sectorial labour mobility in developing countries.    3.13 Since the waiver concessions were primarily in the sub-sectors of cotton, yarn and fabrics, 
and that unfortunately the cotton crop had been badly affected by the floods, some downstream 
industry bodies in Pakistan, like the bed-wear exporters association, the hosiery manufacturers 
association, the ready-made garments manufacturer s and exporters associations, felt that the tariff 
concessions would adversely affect the overall exports  of the country.  According to the Pakistani 
magazine "Dawn Economic and Business Review" (edition of 22-28 November) several businessmen 
had doubts about the efficacy of the EU measure and considered it inadequate.  
 
3.14 Finally, if there would not be direct gains for the flood affected people, would there be 
substantial and direct benefits to greater ta x buoyancy and allocation of extra amounts from the 
government, resulting from greater tax collections?  India did not find the answer encouraging, 
countries tried their best not to export its taxes along with its export products to schemes for duty waivers or duty reimbursements for the exported pro ducts.  This was most likely to happen, it was not 
clear why the EU had opted for such an indirect wa y of providing assistance to affected people and to 
restore the infrastructure in the fl ood affected areas of Pakistan.   
 3.15 Looking at the systemic implications of th e EU proposal, which were the main concerns of 
his delegation, it had to be borne in mind that the GATT, and subsequently the WTO, were framed 
inter alia , to provide certainty and predictability to th e multilateral trading regime.  Any waiver from 
one of the cornerstones of the GATT, the MFN treat ment, needed to therefore be considered with 
utmost seriousness.  Even in days of the GATT, when balance of payments (BOP) problems had led 
Greece to offer preferential trade concessions to Ru ssia, in that case the working party stated the 
following in paragraph 11 of its re port (dated 14 October 1970):  " A major objection of principle was 
raised by most Members of the working party to th e granting of a waiver to cover preferential tariff 
treatment.  The protocol was not compatible with  Greece's obligations under Article I of the General 
Agreement.  Approval of the provisions of the protocol to a waiver would set a serious precedent 
which could then be invoked by any contracting party.  It could also encourage pressure from non-
GATT countries for similar arrangements in conn ection with bilateral trading agreements.  
Furthermore, it would constitute a serious erosion of or der in international trade as formulated in the 
General Agreement.  Such a waiver even if granted in  the case with limited trade effects, could not 
fail to create a serious precedent which could well be  used in cases involving large trade effects. "  
India believed that the views expressed by the working party four decades ago were still as valid 
today as they were then.  3.16 Since 1948, natural disasters had never figur ed as a reason for providing GATT or WTO with 
waivers to grant tariff preferences.  Although each natural disaster was behind the trail of deaths and 
destruction, and no value could be put on even a single human life lost, in the 2004 Tsunami which 
accounted for more than 230,000 lives in 14 countries, including only developing countries and LDCs, no tariff-preferences were give n to any of the affected countri es, they were assisted directly 
through cash and kind.  With rega rd to Paragraph 1 of the Unders tanding in Respect of Waivers of  G/C/M/104 
 Page 7 
 
 
  Obligations under GATT 19942, India was of the view that the EU had not been able to provide a 
convincing explanation as to why it could not achie ve its policy objective of providing assistance in 
the wake of the flood devastation in Pakistan to any WTO consistent measure like additional aid in 
cash or kind.  If indeed tariff preferences were the only option available to the EU, no acceptable 
explanation had been put forward as to the reasons  why existing EU schemes of the General System 
of Preferences (GSP) could not be utilized for th e same purpose on a fast track basis.  Every year, 
many developing countries suffere d from natural disasters, in 2010 alone, one could mention the 
earthquake in Haiti, flash floods in Punjab and Raj astan, both provinces of India, floods in Thailand, 
Viet Nam, and the tsunami and volcanic eruption in  Indonesia.  If Members were to create a precedent 
for granting MFN waivers for natural disasters for th e first time in 63 years of GATT/WTO existence, 
this would seriously damage the certainty and pred ictability of the multilateral trading system.  Would 
such natural disasters also qualify as exceptional ci rcumstances justifying a waiver, he asked.   
 3.17 The criteria laid down within the meaning of  Article 9.3 of the Marrakesh Agreement was the 
question that was needed to be answered by WTO Members.  The EU's proposed measure was 
well-meant, however would unfortunately also cau se collateral damage.  Many developing countries 
and LDCs would be adversely affected by the proposed measure through trade diversion and preference erosion.  In most developing countri es, garments and textiles were produced in the 
unorganized or small scale sector, with the workers getting paid on a piece-rate basis.  Did the EU's 
proposal imply that poor workers in developing and least developed countries would contribute 
towards the EU's humanitarian aid and assistance through this current proposal?  Pakistan was one of 
the most important Indian partners.  South Asia, th e world, and certainly India remained committed to 
a prosperous and peaceful Pakistan.  India would ha ve desired that donors came up with efficient, 
quantifiable and direct assistance to the affected pe ople, as well as the areas to alleviate the negative 
impact of the floods, rather than a pr oposal whose outcome was uncertain.   
 
3.18 He invited Members to look at the issues India had flagged.  The EU proposal, as currently 
framed, appeared flawed, both in terms of its likely potential to help the flood affected victims and to 
help in the reconstruction effort.  It was also fl awed in terms of it causing collateral systemic and 
commercial damage to the MFN principle and respectively to the poor workers in other developing countries.  Therefore, the EU proposal would need  further consultations for addressing the concerns 
outlined by India. 
 
3.19 The delegate of Peru
 expressed solidarity with Pakistan fo r the heavy floods affecting it since 
July 2010, and regretted the human  and material loss.  A number of natural disasters had taken place 
in 2010 which had affected the poorest people in Peru and in other developing countries.  Peru 
considered the EU waiver request in the context of  international solidarity; nevertheless this kind of 
request had not been the case in th e past when natural disasters had o ccurred.  However, international 
solidarity should not affect third countries, esp ecially the weakest among them, notwithstanding the 
fact that the EU had ensured that the list of products limited the potential negative impact on other 
WTO Members, while maximizing the positive impact  on Pakistan.  Unfortunately, in the case of 
Peru, the EU proposal had the potential of creating a negative impact on exports of certain products 
like in the textile, clothing and footwear sectors, mainly exported to the EU.  The current waiver 
proposal did not limit the negative impact, therefor e Peru was concerned with the consequences the 
approval of the request would imply for it.  The EU had selected 75 tariff lines to which no tariffs 
would be applied, this over a two year period, with the possible extension for an additional year.   He informed the Council that more than 50 per cent of  these 75 items, exactly 44 tariff lines which Peru 
exported to the EU, would be adversely affected if the waiver was granted.  Of those 44 tariff lines 
                                                     
 
2 "Request for a waiver or for an extension of an existing shall describe the measures which the 
Member proposes to take, the specific policy objectives  which the Member seeks to pursue and the reasons 
which prevents the Member from achieving its policy objec tives by measures consistent with its obligations 
under GATT 1994." G/C/M/104 
Page 8  
 
  exported to the world in 2009, in some cases the EU  represented almost 10 per cent, but exports to the 
EU went up to 80 or even 100 per cent of total expor ts of those products.  This illustrated the adverse 
impact of the waiver measure which would especi ally affect the Peruvian micro and small-size 
enterprises in the textile and clothing sector.  If th e EU had decided to show  solidarity and provide 
concrete assistance to Pakistan, which Peru appla uded, it was also true that the EU would be 
responsible for all the effects the wa iver might create.  Peru looked fo rward to engage in consultations 
with the EU.   3.20 The delegate of Viet Nam
 conveyed his sympathy to the government and people of Pakistan 
on the heavy losses, both in life and property, caused by the recent floods.  Viet Nam had also 
suffered from natural disasters and supported all the e ndeavours to help victims in the aftermath of the 
disaster.  Viet Nam had understood the goodwill of the EU's proposal, and could support it; however 
Viet Nam had some concerns like the scope of the preferential measure and its possible social and economic impact on other WTO Members.  Viet Na m had become a WTO Memb er less than four 
years ago and since then it had done its utmost to fully implement Viet Nam's accession 
commitments.  Viet Nam maintained excellent rela tions with both the EU and Pakistan and was ready 
to discuss the EU proposal in a constructive manner so that Members could soon go ahead with this 
initiative.  3.21 The delegate of Sri Lanka
 indicated that, considering the EU request to waive from GATT 
Articles I:1 and XIII, the following issues should be discussed:  the impact of the proposed measure 
on other Members who exported like products to th e EU under the MFN or li mited concessions under 
the GSP; and, the impact of the continued and repeated violation of  the most basic WTO principles by 
the major WTO Members and if this would dilute confidence by the international community in the 
multilateral trading system.  Sri Lanka was conscious of the impact that a natural disaster of such 
magnitude could cause in a developing country c onfronting a terrorist menace. Her country had 
experienced a similar situation not long ago; theref ore, more than any other Member, Sri Lanka could 
understand the importance of a trade concession to a c ountry in such a critical juncture.  Turning to 
the impact of the waiver request on the multilatera l trading system, she quoted the Sutherland Report 
on the "Future of the WTO" which had underlined that "[...] At the heart of the GATT was the 
principle of non-discrimination, characterized by the most-favoured nation (MFN) clause [...] by the time the GATT had yielded to the WTO at Marrakesh , the principle of non-discrimination had been 
badly dented".  The report, also pointed out that discrimination was the central reality of the WTO and 
that "This is best illustrated by reference to the EU  which now has its MFN tariffs fully applicable to 
only nine trading partners, [....] All other tradi ng partners are granted concessional market access 
under Article XXIV, the Enabling Clause, GSP schemes, "Everything but Arms" and other 
relationships".  Sri Lanka exporte d products to the EU included in the waiver, under MFN or with 
limited concessions, which represented a share of its  total world exports.  The impact in Sri Lanka 
would be significant, but the welfare of the people of Pakistan was more valuable than contesting 
another waiver for the EU on the "non-discriminator y" principle; therefore, her delegation accepted 
the waiver.  3.22 The delegate of Uruguay
 indicated that his delegation was fully sympathetic towards the EU 
waiver request; it had a valid objective, but all requ ests for exception to the fu ndamental principle of 
the WTO might be thoroughly analysed, together with  the possible impact such a measure could have 
on the trade flows between Members, particularly  the possible negative impact on their trade.  
Uruguay was ready to support the waiver request with Pakistan on the understanding that the issue would be analyzed annually by this Council and that  Members would be duly informed of its effects. 
Uruguay also welcomed the EU's availability to cons ult with Members who could be affected with the 
waiver.  3.23 The delegate of Mauritius
, on behalf of the ACP Group, indicated that the ACP countries, 
comprising LDCs and SVEs already confronted with their inherent vulnerabilities, including  G/C/M/104 
 Page 9 
 
 
  vulnerability to national disasters and external for ces, had full solidarity w ith the government and 
people of Pakistan; and appealed to the internati onal community to provide adequate response for a 
speedy recovery. Pakistan faced humanitarian  and economic challenges for its recovery, 
reconstruction and rehabilitati on programmes.  ACP WTO Members considered trade as an 
instrument to meet their legitimate development goa ls, just as in the case for Pakistan, and therefore 
any further imbalance in the multilateral system might  be disruptive to their trade patterns.  Using 
trade preferences as a means to express solidarity was unprecedented, and it also raised systemic 
concerns if such a practice were to be extended and repeated.  Therefore ACP Members wanted to 
emphasise the uniqueness and one-off  nature of this initiative; they were very sensitive to the 
exceptional circumstances underpinning the request for a waiver, they were too sensible and 
vulnerable to national calamities and were fully awar e of the crippling consequences of such events 
on the social economic consequences.  But at the sam e time they had noted the limited time-frame of 
the waiver, the monitoring mechanism and the safeguard  provisions designed to ensure that the waiver 
would not be misused or abused.  Considering th ese circumstances, the ACP countries would not be 
an impediment to the waiver, but strongly believed that its impact would really reach out to the 
populations affected in the devastated areas. 
 3.24 The delegate of Madagascar
 expressed the support of his delega tion to the EU waiver request 
for Pakistan.  Being a member of the LDC, th e African and the ACP Groups, Madagascar would 
always join the decisions adopted by one or all of these Groups concerning waivers to the WTO rules, 
the products concerned, as well as the duration of such measures.      
 
3.25 The delegate of Bangladesh  when recalling the effects of the devastating flood in Pakistan 
which caused great suffering to 20 million people and claimed about 2000 lives, affected farmers and 
small businesses and caused damage to the crops, infr astructure, also indicated that Bangladesh was 
one of the worst affected countries in the world.  Every other year, there were vast floods and tropical 
cyclones affecting millions of people and submerging vast areas of the country.  According to some 
estimates, more than 2 per cent of Bangladesh's national economy was lost every year because of 
these natural calamities.  He expressed Bangladesh's solidarity with Pakistan, his country, with scarce 
means, had pledged a modest support and sent medical teams and relief matters to  Pakistan.  The best 
response of the international community would be to  help those particularly who had been directly 
affected by the disaster.  It was necessary to e xplore the best possible option to assist a disaster 
stricken country but also carefully consider the consequences on others, particularly those who were 
vulnerable and had a small basket of exports.  The socio-economic impact of the proposed instrument, 
especially on employment and women's empowerme nt and how to address the problem which might 
arise in these areas, should also be taken into  account.  Bangladesh supported the EU initiative;   
however, it had concerns about the future implicati on of granting such a waiver to a single country 
due to natural calamities.  It was also necessary to  assess the possible impact of such preferences to 
exports of LDCs, including Bangladesh, and to have  an idea about the comp ensatory mechanism that 
the EU was contemplating, if trade of poor and vulne rable countries was affected by its initiative.  In 
this regard, his delegation was therefore ready to co nstructively engage in any discussion to arrive at a 
concession.  
3.26 The delegate of Chile
 joined previous speakers in expr essing solidarity for the severe human 
and material losses due to the July floods.  Chile knew the suffering and distraction national disasters could leave behind.  His delegation considered the wa iver requested by the EU a useful tool to help 
Pakistan's economy to recover and overcome the negative effects of the flood and, therefore, 
supported the EU request for a waiver. 
 
3.27 Once again the delegate of Turkey
 expressed the solidarity and sympathy of the Turkish 
people and authorities to Pakistan.  Turkey was among the first donors to provide humanitarian aid to Pakistan, in the early hours after the disaster its authorities immediately donated US$10 million for the needs of the flood victims.  State agencies had launched fund raising campai gns to enhance the aid G/C/M/104 
Page 10  
 
  efforts, and as result of this US$130 million was collected; and, based on urgent requirements from 
the Pakistan authorities, Turkey delivered a total of 6000 tonnes of humanitarian aid valued at US$20 
million.  Additionally two mobile hos pitals were set up and a third one was at the planning stage.  The 
Turkish Crescent Society had set up pre-fabricated houses for approximately 10 000 people, and was 
currently working on establishing a new pre-fabri cated housing estate to provide shelter for 3500 
people.  Since it was a matter of emergency, every possible effort had to be exerted to heal the 
wounds of the Pakistani people; from this persp ective Turkey had assessed the EU waiver request 
which had had an unprecedented approach.  His author ities were also of the view that disasters of this 
magnitude needed to revert to unorthodox measures;  therefore they supported the two-year limited 
programme.  
 
3.28 The delegate of Uganda
 welcomed the EU waiver request to help Pakistan rebuild its 
economy and effects following the devastating flood.  While concerned about the implications that 
this waiver would have on other WTO Members, particularly the developing countries, Uganda 
welcomed the care and consideration that the EU had taken in identifying the products that would 
benefit from the waiver so as to minimize the ne gative impact on other WTO Members.  Uganda 
therefore supported the granting of a waiver for a two-year period.  3.29 The delegate of Zambia
 reiterated its condolences and sympathy for the lives lost and the 
continued pain and suffering of the people of Paki stan following the July 2010 floods.  The global 
community had and would continue to help Pakistan .  The EU had considered different options to 
help Pakistan's economy, including a trade susp ension of duties for a small selected number of 
products, as well as through humanitarian aid.  The e ffects of the aid measures, particularly those 
impeding on trade obligations, might be assessed and efforts made to utilize other avenues of support, 
which had the least impact on the weak and most vulnerable economies.  There was no doubt that a waiver facilitating the suspension of duties would play  a role in alleviating the impact of the flood 
victims in Pakistan, therefore, Zambia did not  oppose the general thrust of this initiative. 
 3.30 The delegate of Colombia
 joined previous speakers in expressing its sympathy and support to 
Pakistan given the devastating effects the foods ha d left.  Colombia supported the EU request for a 
waiver.  The WTO system provided special treatment for special cases; this was precisely one of those 
special and also exceptional cases of a highly humanitari an nature.  Colombia had understood that the 
analysis and studies carried out by the EU, on the impact of the measure and the attempt to avoid 
negative effect on third countries, especially LDCs, had made it possible for the EU to duly identify 
the products which would not be covered by the waiver.  3.31 The delegate of Hong Kong, China
 reiterated his delegation's sympathy with the 20 million 
people of Pakistan suffering from the worst ever floods in the country's history.  The International 
Labour Organization – ILO, estimated that some 5.3 million jobs had been affected by the floods, and 
urged that programmes aimed at generating new employment and other income producing 
opportunities be incorporated in the reconstructi on of Pakistan.  His delegation appreciated the 
humanitarian aid offered by the EU to Pakistan and shared the view that trade preferences could 
provide additional help to recover its economy.  His delegation was interested in knowing from the 
EU if it had conducted any assessment of the impact  of the trade preferences on other developing 
countries, in particular LDCs, and whether such ass essment would be taken into account when the EU 
would consider requesting further extension of the trade preference in the future. 
 3.32 The delegate of the Chinese Taipei
 also expressed his delegation's sympathy to the victims of 
the July floods in Pakistan.  His authorities had understood the challenges of the people and 
government of Pakistan.  His delegation appreciated and identified itself with the overall spirit of the 
EU request.  There were issues to  clarify, such as the impact of this proposal on other exporting 
developing country Members, in order to reach the common objective of providing aid for Pakistan,  G/C/M/104 
 Page 11 
 
 
  while not affecting the balance of trade in the rele vant markets in the interests of other potentially 
affected Members.  3.33 The delegate of Barbados
 on behalf of her government, expressed her deepest sympathy at the 
devastation caused.  Barbados was cognisant of the effects of natural disasters and climatic changes 
on developing countries, being in a region highly vul nerable to natural disasters.  The recovery from 
this event needed significant domestic, regional a nd international support.  Her delegation supported 
the EU efforts towards the recovery of Pakistan.  However, temporary unilateral trade measures were 
but one small, albeit important, plan at assisting in the recovery from this disaster.  Support might also 
include development assistance and rebuilding efforts directly addressed to the most affected person 
in the shortest possible time.  Recognizing th e unprecedented nature of the request, Barbados 
expressed its hope that a workable solution would be found in the interest of the people of Pakistan 
and, at the same time, maintaining the integrity of the multilateral trading system.  3.34 The delegate of Norway
 indicated that given the problems Pakistan experienced after the 
floods his delegation supported the EU request for a waiver. 
 3.35 The delegate of Brazil
 also expressed, on behalf of his aut horities, solidarity with the victims 
of the floods that devastated vast regions of Paki stan.  Brazil was one of the countries that promptly 
participated in international efforts to provide ai d to the affected people of Pakistan. It provided 
financial assistance to FAO, to the UN High Commi ssion for Refugees in Islamabad and also through 
its embassy in Islamabad.  His delegation was ready to continue providing assistance to Pakistan, 
either bilaterally or in the WTO context; accordingly Brazil wanted to engage with the EU in further 
consultations on this matter.  3.36 The delegate of Pakistan
 expressed appreciation to the EU for seeking a waiver to provide 
increased market access to Pakistan in the backdrop of devastating floods.  Along with humanitarian 
concerns, the floods also posed a massive economic challenge to the people and the government of 
Pakistan; the GDP growth this year would not be more than 2 per cent.  Pakistan was committed to 
the multilateral trade regime as one of the founding  Contracting Parties of GATT and of the founding 
Members of the WTO.  The rule based system also  contained provisions in the Marrakesh Agreement 
to obtain a waiver for multilateral commitment to address unforeseen situations.  The current 
Pakistan's situation was a classic case where this window needed to be opened.  He appreciated the 
wide support of the WTO Members who had stood by hi s country in their hour of need.  This would 
provide strength to the people of Pakistan who c ould not face the calamity by themselves.  Some had 
raised systemic concerns; the package developed by  the EU had taken into consideration the trade 
interest of all countries and would not adversely a ffect any developing or l east developed countries in 
a major way.  Members who wanted to get associated  and wanted to discuss it further with the EU or 
with Pakistan would be welcome.  The waiver was sought only for two years, extendable by a further 
year if required.  3.37 The delegate of the European Union
 thanked all Members who had spoken for their 
comments.  The number of Members who had spoke n and the depth and range of their remarks 
showed the recognition that Pakistan was facing an  unprecedented situation.  There was great support 
among Members for this request, and a great deal of solidarity with the unique plight in which 
Pakistan found itself, this proved that this Or ganization had a human face.  His delegation was 
particularly grateful to those Members, notably the ACP countries and many of Pakistan's immediate 
neighbours who, despite some concerns that these measures might affect their own commercial 
interests and their own preferences, were nonetheless ready to support the EU request, or at least in 
the words of one, "not stand in its way".  This al so demonstrated that the proposed measures were 
proportionate and through their relativ ely modest scope and limited dura tion, had been sensitive to the 
commercial concerns of others.    G/C/M/104 
Page 12  
 
  3.38 He hoped that in the course of the consulta tions with delegations wh ich had raised questions 
or concerns, the EU would be able to demonstrat e that the proposed measures, while far from being a 
panacea, would nonetheless aid economic recovery, si mply because every little helped.  Consultations 
would also demonstrate that this request had no systemic implications or precedent effects; it was an exceptional response to an unprecedented situation.   The EU looked forward to explaining and 
demonstrating to delegations, if  required, concerns regarding WTO consistency, the systemic 
dimension there, those concerns which were wholly ill-founded.  The EU had chosen this proposal to 
take the GATT-sanctioned multilateral route, in fact  a waiver was to protect the principles, precisely 
on which the WTO was based.  He finally invited dele gations interested in consultation not to lose 
sight of the main goal of assisting Pakistan's economic  recovery; and to act rapidly so as to maximise 
the beneficial effect of the measures that the EU had proposed and h oped would be ultimately 
approved by this Organization.  3.39 The Chairperson
 thanked Members for their statements; some of these indicated that 
Members wanted to consult further on this matter.  He encouraged Members to do so and indicated 
that he was available to facilitate such consultations if so requested.  The Council would revert to this 
item at the next meeting as necessary.   3.40 The Council took note
 of the statements. 
 
IV. EUROPEAN UNION ENLARGEMENT:  PROCEDURES UNDER 
ARTICLE XXVIII:3 OF GATT 1994  
4.1 The Chairman  informed Members that under this age nda item, the Council was to consider a 
request for extension of the time period for the wit hdrawal of concessions for the two enlargements of 
the European Union that took place on 1 May 200 4 and on 1 January 2007, respectively.   
 
A. ENLARGEMENT OF THE EUROPEAN UNION 1 MAY 2004   
4.2 The Chairman  drew Members' attention to documen t G/L/695/Add.12 which concerned the 
accession to the European Union on 1 May 2004 of Cyprus, the Czech Republic, Estonia, Hungary, 
Latvia, Lithuania, Malta, Poland, the Slovak Republic  and Slovenia.  In this communication, the EU 
indicated that it would not assert that Members who had submitted a claim pursuant to Article XXIV:6 of GATT 1994 were precluded fro m withdrawing substantially equivalent 
concessions under Article XXVIII:3 of GATT 1994 becau se this withdrawal occurred later than six 
months after the EC's withdrawal of concessions, provided that the claiming WTO Member withdrew concessions no later than 87 months after the EU's  modification of concessions.  He recalled that the 
General Council had on four earlier occasions, on the basis of similar communications from the EU, 
extended the deadline for withdrawal of concessions  referred to in Article XXVIII:3 of GATT 1994, 
namely, at its meetings in October 2004, and in March, June, and Decembe r 2005.  Similarly, the 
Council for Trade in Goods had exte nded the deadline on nine occasions, namely at its meetings of 
12 July 2006, 30 January, 21 May and 23 November 2007, 22 May and 18 November 2008, 29 June 
and 30 October 2009; and, 21 May 2010.    4.3 The representative of the European Union
 said that this request, circulated in document 
G/L/695/Add.12 referred to similar previous request s.  While negotiations had been finalised, the 
setting of the banana tariff for the EU-25 did not ye t have legal force, as the Geneva agreement on 
bananas had not yet entered into force.  The EU  had therefore circulated a message aimed at 
extending the period in which Members were allo wed to withdraw subs tantially equivalent 
concessions.  The message itself wa s identical to the one which th e CTG endorsed when extending the 
period for withdrawal at its meeting on May 2010.   
  G/C/M/104 
 Page 13 
 
 
  4.4 The Council took note  of the statements made and also of the EU communication contained in 
document G/L/695/Add.12.  It agreed  on the extension of the deadline as set out in the EU's document 
G/L/695/Add.12.    B. E
NLARGEMENT OF THE EUROPEAN UNION ON 1 JANUARY 2007   
4.5 The Chairman  drew Members' attention to docum ent G/L/821/Add.7 which concerned the 
accession to the European Union on 1 January 2007 of Bulgaria and Romania.  In this 
communication, the EU indicated that it would not assert that Members who had submitted a claim pursuant to Article XXIV:6 of GATT 1994 were precl uded from withdrawing subs tantially equivalent 
concessions under Article XXVIII:3 of GATT 1994 becau se this withdrawal occurred later than 
six months after the EU's withdrawal of concessions, provided that the claiming WTO Member 
withdrew concessions no later than 54 months after the EU's modification of concessions.  He recalled 
that the Council for Trade in Goods had extended the deadline on seven occasions, namely at its 
meetings of 21 May and 23 November 2007, 22  May and 18 November 2008, 29 June and 
30 October 2009; and 21 May 2010. 
 
4.6 The representative of the European Union
 informed the Council that the negotiations 
following the EU's enlargement on 1 January 2007 w ith Romania and Bulgaria were still on-going.  
The EU had reached agreements at negotiators le vel with most of the WTO membership; and had 
proceeded to ratification of several agreements.  However, due to still on-going negotiations, as well 
as the time required to ensure the entry into fo rce of the agreements already reached, another 
extension to the period in which Members were allowed to withdraw s ubstantially equivalent 
concessions was necessary.  The EU, therefore, circulated a message aimed at extending the period in which Members were allowed to withdraw substan tially equivalent concessions.  The message itself 
was identical to the one which the CTG endorsed wh en extending the period of withdrawal at its 
meeting in May 2010.  
 
4.7 The Council took note
 of the statement made and also of the EU communication contained in 
document G/L/821/Add.7.  It agreed  on the extension of the dead line as set out in the European 
Union's document G/L/821/Add.7.   
V. IMPORT LICENSING MEASURES AND PROCEDURES BY ARGENTINA – 
STATEMENTS BY THE UNITED STATES AND THE EUROPEAN UNION  
5.1 The Chairman
 informed the Council that the delegations of the United States and the 
European Union, in communications dated 17 and 18  November 2010, respectively, had requested the 
inclusion in the agenda of this meeting, the i ssue of Import Licensing Measures and procedures by 
Argentina.  He invited the delegations of the Un ited States and the European Union to introduce this 
agenda item.  
 5.2 The delegate of the United States
 indicated that his authorities were concerned over the nature 
and application of Argentina’s import license regime , which had significantly restricted imports into 
Argentina from a number of WTO Members, including his country. Since October 2008, the US had attempted to address this issue in the Committee on Import Licensing (CILPs), when Argentina began 
to progressively expand the number of products subject to licensing procedures.  Over the past two 
years Argentina had failed to provide a serious res ponse to this matter and the situation had become 
increasingly problematic for the US exporters.  In te rms of scope, it appeared that the great majority 
of the US exports to Argentina were now subject ed to non-automatic import licensing procedures.  
Administration of these measures was either form al, where applications were made based on 
published requirements, or informal, where a certific ate of free sale in the domestic economy was not 
forthcoming.  His authorities continued to rece ive numerous reports about the lengthy delays 
encountered in obtaining a non-automatic import license in Argentina.  Companies reported delays of G/C/M/104 
Page 14  
 
  100 to 120 days to obtain the necessary licence to import their goods.  The reports of unofficial 
requirements tied to import licensing approvals, such  as the requirement that an importing company 
had to commit to exporting a certain amount from Ar gentina in exchange for approval of its import 
license, were also troublesome.  Argentina appear ed to be using import licensing procedures as a 
measure to improve its trade balance by restri cting imports and promoting exports.  Although the 
same concerns had been raised by eight diffe rent WTO Members in various meetings of the 
Committee on ILPs, Argentina had failed to take any action to resolve this issue, and continued to 
deny that such a problem existed.    
5.3 Despite repeated requests, up to date Argen tina had also failed to provide a WTO consistent 
explanation of the measures it was implementing th rough its extensive and trade disruptive reliance 
on informal and non-automatic import licensing require ments.  In short, Argentina’s ILPs and its 
discretionary approvals raised serious questions with regard to its commitment to the WTO 
Agreement on ILPs, as well as the principles of GATT,  including Article XI on import restrictions.  
Therefore, he requested Argentina to inform the WTO membership of the specific steps it was taking 
to address the concerns raised by the US and other WTO Members.  This was including how and 
when it would reform its import licensing regime to ensure that licenses were (a) issued in a timely 
manner; (b) transparently applied and properly notif ied; and, (c) not disguised as trade-balancing 
measures, and not having trade restrictive effects.  
5.4 The delegate of the European Union
 indicated that the Argentine import licensing regime 
raised serious and systemic concerns; these had alread y been raised several times at the meetings of 
the Committee on ILPs.  Argentina had been progr essively extending the scope of its non-automatic 
IL regime originally from 38 products to an incr easingly broad range of more  than 400 products.  As 
reported on several occasions, both before the Arge ntinean authorities and at the Committee on ILPs, 
this extension, combined with the significant de lays in obtaining the required import licences, had 
been creating important difficulties to the EU exporte rs.  In general, the information exchanged, the 
political context and the implementation of non-au tomatic licences in Arge ntina seemed to confirm 
the protectionist motivation behind those measures.  Po litical context in Argentina showed that this IL 
regime was being used to implement an import s ubstitution policy and to improve trade balance on a 
systematic basis by restricting imports.  Up to date, despite repeated requests at WTO level and 
bilaterally, Argentina failed to provide an y convincing evidence to the contrary. 
 5.5 Far from alleviating the concerns expressed by WTO Members in the questionnaires submitted to Argentina in the Committee on ILPs, th e replies provided by Argentina had aggravated 
these.  Argentinean replies reflected  an approach to its WTO commitments that was fully inconsistent 
with the spirit and letter of its WTO obligations.  In its most recent replies, Argentina went as far as 
denying that non-automatic import licensing should only be applied when necessary to implement an 
underlying measure.  This was inconsistent with the spirit and letter of the WTO Agreement on ILPs, 
as shown, inter alia, by Article 3(2), which indicat ed that "non-automatic licensing procedures shall 
correspond in scope and duration to the measure they  are used to implement, and shall be no more 
administratively burdensome than absolutely necessar y to administer the measure".  Article 5(g) 
confirmed this, by requiring that the notification of non-automatic ILPs to the Committee included an 
indication of "the measure being implemented through the licensing procedure".  A different 
interpretation of the Agreement would render Article XI of GATT 1994 meaningless, since it would allow WTO Members to use arbitrarily import licensing regimes as a means to restrict imports for 
protectionist purposes.  
 5.6 The EU representative continued to indicate that Argentina, in its most recent replies, had also 
tried to justify its non-automatic IL regime by re ferring to the need to "e valuate changes in trade 
flows".  However, the EU was of the opinion that monitoring trade did not justify the recourse to a 
non-automatic ILP; this was only justified, wh ere necessary, to implement a WTO compatible 
measure.  Argentina's argument that these meas ures were necessary to verify compliance with  G/C/M/104 
 Page 15 
 
 
  technical standards was also weak.  Argentina's refe rence to technical regulations adopted back in the 
1990's to justify the introduction of non-automatic IL from 2007 onwards was difficult to understand. Why had non-automatic ILs become necessary for so me products for which the applicable technical 
standards had been in place for more than a decade?  
5.7 The application of such a non-automatic import licensing regime also posed significant 
difficulties.  First, delays in obtaining the licences went beyond the time-frames established in  
Article 3.5(f) of the Agreement.  This provision estab lished 30 days to issue an IL when applications 
were considered on a first-come first-served basis; and, a maximum period of 60 days if applications 
were considered simultaneously.  Bu t importers were experi encing delays of over 100 days to obtain a 
licence in Argentina.  Second, Argentinean authorities were reportedly imposing additional 
requirements on importers to those already included in  the legislation, such as:  commitments on trade 
balancing requirements with a view to reduce impor ts or increase production in Argentinean facilities, 
evidence of increase in exports of Argentinean products, or a process diagram showing the entire 
production cycle of the goods subject to the applica tion.  The EU found this incompatible with the 
core principle of the Agreement, according to wh ich import licensing requirements could not be more 
burdensome than absolutely necessary to implemen t the underlying measure.  Third, some rules 
applicable to the examination procedures for granting import licenses were not part of the 
Argentinean legislation (e.g. change from first- come first-served method of consideration of 
applications to simultaneous cons ideration). This was inconsistent  with Article 1.4 (a) of the 
Agreement, according to which rules concerning ILPs s hould be published.  As a result of this, and in 
addition to the negative impact on trade flows, the Argentinean ILPs also raised important systemic 
concerns, even more so if the G-20 commitment not  to introduce new trade-restrictive measures to 
deal with the economic crisis was considered.  Th e EU invited Argentina to bring its regime in 
compliance with its WTO obligations as soon as possible.  
5.8 The delegate of Canada
 supported the statements made by the US and the EU; her delegation 
continued to have systemic concerns on this issue,  namely in the context of Members' transparency 
with regard to IL practices and on the implication it had in predictability in the trading system.  Her 
delegation looked forward to obtaining  further responses by Argentina; this issue had been raised in 
other WTO instances and this reflected its importance and the need for greater transparency in ILPs. 
 
5.9 The delegate of Turkey  also supported the statements made by the EU and US.  The issue had 
been also raised in the Committee on ILPs by  Turkey and other Members.  Argentina had 
progressively expanded the number of products subject to non-automa tic licensing requirements.  The 
current implementation had restrictive, if not prohibitive characteristics over trade.  Turkish 
companies were still reporting problems as they were losing their markets in Argentina.  The reports 
from the industry also drew attention to the l ack of transparency and predictability in the 
implementation and in compliance with the time-fr ames established in the Agreement.  Also, the 
responses from Argentina to the written questio ns posed by Turkey in that Committee were 
insufficient and unsatisfactory.  His delegation once ag ain invited Argentina to bring its IL regime and 
implementation in accordance with WTO obligations.  
5.10 The delegate of Peru
 echoed the previous speakers; her authorities were also concerned by the 
increased number of products in Argentina subject  to non-automatic licenses.  Her authorities had 
concerns that the Argentine licensing system was exceeding the 60 days' time period in the 
Agreement.  This had a negative adverse effect on the importers and exporters  of Peruvian products 
into Argentina, because it lacked predictability and legal certainty.  According to Article 3.2 of the 
Agreement, non-automatic licences would be used to administer underlying measures that were 
consistent with the WTO legal framework and no tr ade restriction due to unnecessary delays which 
limited access to the Argentine market.  On a number of occasions, her delegation had submitted, 
individually and also collectively, its concerns about Argentina's compatibility with the GATT 1994 
and the Agreement on ILPs; and, about the nature of  the system, initially meant to be temporal and G/C/M/104 
Page 16  
 
  which continued to be in place broadening its scope .  In G/LIC/Q/ARG/8, Argentina mentioned that 
the main reason for imposing the non-automatic lice nces was the need to mo nitor changes in trade 
flows given the international economic crisis and its negative impact on the economy.  She 
emphasized that according to the economic projections made by the WTO, a recovery from the crisis 
could be appreciated for 2010 and asked Argentina to put an end to its regime which had a temporary 
nature. 
 5.11 The delegate of Switzerland
 recalled that at the last CTG meeting, his delegation had 
expressed its concerns regarding the discretionary a pplication of Argentina's ILPs, which resulted in 
quantitative restrictions on importation.  It seeme d that the market access problems of the Swiss 
industry could be solved bilaterally in the ne xt few months; he thanked Argentina for having 
considered his delegation's concerns.  Switzerland be lieved in a rule-based trade regime, therefore for 
systemic reasons his delegation s upported Canada on this point.  The lack of transparency in 
Argentina's ILPs continued to create a consider able amount of uncertainty among exporters.  His 
delegation invited Argentina to apply its IL regime in a neutral and equitable manner. 
 
5.12 The delegate of Japan  supported the previous speakers.  Japanese companies had also 
encountered difficulties derived from the Argentine IL scheme and the situation was getting more 
difficult.  Japan reiterated its request to the Ar gentinean authorities to appropriately conduct the 
licensing issues and to include transparency to the process. 
 
5.13 The delegate of Argentina  indicated that it would refer solely to statements made by the US 
and the EU, the only ones included in the Agenda of this meeting.  Argentina had made efforts to 
meet the concerns expressed by the US and the EU in the Committee on ILPs and, at its last meeting, the EU and the US submitted further questions wh ich would be answered by her authorities.  
Argentina had complied with all the notification requirements for import licensing before the WTO, 
Argentina's legislation on ILPs was consistent w ith the GATT 1994 and the Agreement.  Argentina's 
IL regime for non-automatic licences had nothing to  do with import quotas.  In compliance with 
Article 3.3 of the Agreement, Argentina had publ ished information regarding the basis for the 
granting of import licences.  As an example sh e cited the notifications made under the document 
symbol G/LIC/N/2/ARG.  With regard to what the EU stated at the last joint Argentina-EU 
Commission, held in September 2010 in Brussels, th e EU authorities considered that the concerns 
they had raised regarding import licensing had now been solved. 
 5.14 The Chairperson
 invited the Council to take note of the statements made, and invited 
Argentina and delegations that had expressed concer ns, to continue with their discussions to seek a 
solution to the situation that had been described.  He  also invited delegations to inform the Council of 
the outcome of such consultations. 
 5.15 The Council took note
 of the statements made. 
 
VI. MEASURES BY ARGENTINA AFFECTING IMPORT OF FOOD PRODUCTS – 
STATEMENT BY THE UNITED STATES 
6.1 The Chairperson informed the Council that, in a communication dated 17 November 2010, 
the United States requested the inclusion in the agenda of this meeting of the following item: "Measures by Argentina Affecting Imports of Food Pr oducts".  He invited the US to introduce this 
Agenda item.  
6.2 The delegate of the United States
 indicated that his authorities continued to be concerned by 
the apparent requirement, introduced earlier in 2010, th at importers of food products in Argentina sign 
a commitment to export products in order to receiv e import approval.  Importers continued to be 
asked to make this commitment in order to receive the "certificate for free circulation", issued by the  G/C/M/104 
 Page 17 
 
 
  National Food Institute (INAL) in Argentina.  Accord ing to reports, retailers were being pressured to 
purchase domestic production.  This was also a c oncern which created uncertainty and had had a 
negative impact on the willingness of importers and retailers in Argentina to place new orders for 
imported products.  The prohibition of discre tionary import licensing and similar quantitative 
restrictions was a major accomplishment of the WTO.  The US was concerned about any measures by 
WTO Members that appeared to have a similar effe ct and, requested Argentina to inform the WTO 
membership of the specific steps it was taking to  address these concerns.  This included how and 
when it would reform its procedures for issuing certifi cates of free circulation so as to ensure that such 
procedures were not delaying, discouraging, or ot herwise restricting importation of food products. 
 
6.3 The delegate of the European Union  stated that his delegation also continued to be concerned 
by the systematic nature of the import restricti on measures in Argentina and continued to closely 
monitor the situation on ground with regard to EU impor ts in Argentina.  In some cases the situation 
seemed to have improved somewhat and in most cases, blockages in issuing certificates had been 
released.  However, already these measures had a significant trade chilling effect which was now 
difficult to assess when some of the imports were blocked and EU export orde rs were cancelled.  
Argentina had assured that this policy would not be implemented in a systematic way, his delegation 
would insist and remain vigilant that Argentin a would refrain from any such import substitutions 
policy measures in the future. Moreover, the EU was of the opinion that any such measure would not 
be compatible with the spirit of G-20 commitments and with the WTO.  For some time, this measure 
had come on top of the non-automatic licensing regi me maintained by Argentina and which resulted 
in an aggravated negative impact on trade and uncerta inty for EU importers.  In the previous agenda 
item, the Argentinean delegate said that recently th ere was a meeting in Brussels where these matters 
would have been laid to rest.  From the instructi ons he got from his authorities, the EU was still very 
much concerned about the Argentinean licensing regi me as such and he did not see that this would 
have been a matter that would have been sorted out  in any such meeting.  Possibly, what Argentina 
was referring to, were the measures the C ouncil was currently discussing under Agenda item 
number 6.  6.4 The delegate of Argentina
, with regard to the last comment  by the EU representative on the 
joint commission meeting, indicated that she had di fferent instructions, but was of the opinion that 
both delegations could discuss about  this later.  With regard to the agenda item under discussion 
(Item 6), and specifically with regard to what the US  indicated, this was an issue that had been raised 
by the US in the regular Committee of Agriculture  on 23 September 2010.  Since then Argentina had 
not received any specific complaints in the bilate ral context as any measures affecting food products 
from the US.  As indicated in the Committee on Agri culture, Argentina was willing to hear concerns 
from its trading partners if these were duly and pr operly founded.  Argentine legislation for food 
imports was consistent with the WTO rules and provisions, particularly Note SCI232, dated 
24 April 2010, addressed to the Director of the National Food Institute, could be considered a 
"measure" in WTO terms which did not imply restri ctions.  All it requested was information on the 
entry of products in order to ensure the proper implementation and control of policies within the 
competence of the National Food Institute.    
6.5 The Chairperson
 invited the Council to take note of th e statements made and encouraged the 
parties to continue their consultations and to info rm the CTG of the outcome of the consultations in 
due course.  6.6 The Council took note
 of the statements made. 
 G/C/M/104 
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  VII. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE IN 
GOODS TO THE GENERAL COUNCIL  
7.1. The Chairman
 drew Members' attention to the draft report of this Council circulated in 
document G/C/W/641.  In accordance with the "Procedures for an Annual Overview of WTO 
Activities and for Reporting Under the WTO," (WT/ L/105) which were adopted by the General 
Council on 15 November 1995, it was agreed that "T he respective sectorial 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 sectorial Councils should be "factual in nature, 
containing an indication of actions and decisions taken, with cross re ferences to reports of subordinate 
bodies and could follow the model of the GAT T 1947 Council reports to the CONTRACTING 
PARTIES".  The draft report would be upda ted in light of today's meeting.   
 7.2 The Council adopted
 its annual report, subject to the updating and revision which would be 
required to take account of the Council's work at today's meeting.  VIII.  OTHER BUSINESS 
A. M
EXICO - LESS PROCEDURES AND BETTER REGULATION TO ENHANCE COMPETITIVENESS  
8.1 The delegate of Mexico  informed the Council that on 2 September 2009 the President of 
Mexico asked the authorities and entities of the Fede ral government to make an effort to simplify the 
regulatory framework.  This included regulations w ith an economic impact, in which those authorities 
had been working on, with the aim at eliminating the procedures and rules which, given their 
frequency or the number of people involved in th em, were burdensome for individuals and had an 
impact on the productivity of the national economy.  In that context, on 30 June 2010, a Decree was adopted on the provision of administrative facilities in order to simplify taxes and charges and to 
reduce the costs of tax declarations by 15 billion Mexican pesos a year.  On 17 August 2010, the President announced some additional simplification me asures to be implemented by the Secretariats 
of Economy, Health, Agriculture, Livestock, Ru ral Development, Fisheries and Food (SAGARPA) 
with a view to eliminating unnecessary costs in orde r to meet the procedures and regulations without 
compromising safety-health and security of products.  These additional simplification measures would enable natural and juridical persons to save US$3.5 million.  Among the measures announced were 
the following: trade facilitation for trade partners ; simplification procedures to register foreign 
investment; equip SMEs in order to ensure th ey access electronic products through the strengthening 
of the National Standardizing System; promote th e acquisition of the latest technologies; promote 
access to health for Mexican families; interlink the services dealing with the issue of Phyto-sanitary 
permits.  8.2 The Chairperson thanked Mexico for the info rmation provided and invited the Council to take 
note of the statement made. 
 8.3 The Council took note
 of the statement. 
 B. E
CUADOR MIXED TARIFFS – QUESTIONS FROM THE UNITED STATES , THE EUROPEAN UNION , 
CANADA , JAPAN AND PANAMA  
8.4 The Chairperson invited the delegations of th e United States, the European Union, Canada, 
Japan and Panama to introduce document G/C/W/639 which contained the questions they had posed 
to Ecuador on its mixed tariff system.  8.5 The delegate of the United States
 expressed the concerns of his delegation that Ecuador's 
Presidential Decrees 367 and 372 ha d changed Ecuador's tariff sche dule for footwear, textiles and  G/C/M/104 
 Page 19 
 
 
  apparel products from an a pplied rate of 30 per cent ad valorem , which also reflected Ecuador's 
binding, to a mixed tariff of 10 per cent ad valorem  plus US$6 per pair of shoes; and, US$10 per cent 
ad valorem  plus US$5.50 per kilo of textiles or apparel,  respectively.  Upon review, a pair of shoes 
imported into Ecuador at a value equal to or less than US$29 would be charged a duty higher than 
30 per cent of the value of the shoes.  Likewise, a ki lo of textiles or apparel imported at a value equal 
to or less than US$27 would be charged a duty higher than 30 per cent of the value of the goods.  
From the calculations the US had made, it was not clear how Ecuador was maintaining its WTO 
binding of 30 per cent on footwear, textiles and appa rel products under its new mixed tariff regime.   
 8.6 As outlined in the written questions submitted by the United States, European Union, Canada, 
Japan and Panama, his delegation requested Ecua dor to also provide  in written form, the ad valorem  
equivalent for each of the tariff lines covere d by Presidential Decrees 367 and 372; and the 
methodology and calculations it had used to determine the ad valorem  equivalents for these tariff 
lines.  The US also sought additional information fro m Ecuador on why it modified its tariffs on these 
items and if there was a specific duration for whic h Ecuador was planning to implement the new tariff 
structure on these items. 
 8.7 The delegate of Panama
 shared the concerns regarding the change in Ecuador tariffs 
concession into a mixed tariff system through Decrees 367 and 372 of May and June 2010, 
respectively.  His authorities were following-up this issue in his capital through different meetings, 
another bilateral meeting would take  place in Quito.  Panama had analyzed its exports to Ecuador in 
the tariff lines affected by Decrees 367 and 372; th ese changes would actually increase the tariffs for 
textiles by approximately 122 per cent and 322 per cent.  Thus, the changes that Ecuador had introduced to its bound ad valorem  tariffs might back on the commitments it had made in the WTO. 
 8.8 The delegate of Japan
 indicated that his authorities also had systemic concerns about the 
mixed tariff for certain products by the introducti on of Decrees 367 and 372.  He asked Ecuador to 
submit in writing the answers to the questions in G/C/W/639.  8.9  The delegate of Canada
 echoed the interventions made by the previous speakers.  Given the 
concerns of her delegation with the tariff modifi cations contained in Presidential Decrees 367 and 
372, she asked Ecuador to provide the informatio n requested in as timely a manner as possible.  
Canada was interested in receiving answers to a ll of the questions; and particularly in better 
understanding the methodology that Ecuador had applied in determin ing what these mixed tariff rates 
would be.  8.10 The delegate of Ecuador,
 in response to the concerns raised  by the previous speakers, stated 
that his delegation would like to be as transparen t as it had always been and would try to address the 
issues raised by the US, the EU, Canada, Japan a nd Panama.  He informed the Council that document 
G/C/W/639 dated 18 November 2010, came to the attention of his delegation only when the 
Secretariat circulated it.  Ecuador was of the view th at in July 2010,  after one year of a long and hard 
process of formal and informal meetings, as well as bilateral meetings, with a lot of Members including those who had circulated their written qu estions, the meeting of the Committee of Balance 
of Payments had clarified various doubts and concerns  regarding Ecuador's tariff schedule.  They said 
that the Committee had actually looked at and clarif ied all these issues, ther efore this was an issue 
which had already been dealt with.  Additionally, Ecuador did not consider, as mentioned by the EU, 
the WTO Agreements established and the obligation to  notify this type of decree.  What the GATT 94 
had established was the publication and Ecuador had published everything pursuant to WTO rules.  
That information had been publishe d and it was obvious that Members ha d learnt of this in order to 
submit their questions.  Ecuador was of the opinion th at Members' rights to adopt their tariffs within 
the framework of the WTO Agreements should be pr eserved.  That was precisely what Ecuador had 
done in the Committee.  Ecuador would submit, in due course, its written replies to the questions. 
 G/C/M/104 
Page 20  
 
  8.11 As agreed by the Council at the st art of the meeting, the Chairperson
 indicated that at its next 
meeting this issue would be included as a substantiv e agenda item.  He thanked delegations for their 
statements and invited the Council to take note of these.   8.12 The Council took note
 of the statements made. 
 
C. DATE OF THE NEXT MEETING  
8.13 The Chairman  informed Members that he had the inte ntion to hold the next Council meeting 
by the end of January 2011.  The exact date would be announced in due time. 3   
 
8.14 The meeting was adjourned . 
   
__________  
                                                     
 
3 By Fax dated 9 December 2010, it was announced th at the next meeting will be held on Monday  
31 January 2011.