RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/84 
29 June 2006 
 
 (06-3146) 
Council for Trade in Goods  
  
 
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
9 MAY 2006 
 
Chairperson: H.E. Ambassador Yonov Agah (Nigeria
) 
 
 
 The meeting of the Council for Trade in Goods was convened by airgram WTO/AIR/2812 and the proposed agenda for the meeting was c ontained in document G/C/W/553.  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 MOROCCO ....................................................2  
B. FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF KOREA AND SINGAPORE ........................2  
C. DOMINICAN REPUBLIC – CENTRAL AMERICA – UNITED STATES FREE TRADE 
AGREEMENT ............................................................................................................................... .2 
III. MARKET ACCESS MATTERS .............................................................................................3  
A. COMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE ...............................3  
B. INTRODUCTION OF HARMONIZED SYSTEM 1996  CHANGES INTO WTO  SCHEDULES OF 
TARIFF CONCESSIONS – REQUEST FOR WAIVER EXTENSIONS ....................................................3  
IV. 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........................................................................................................................ ........3
 
V. CUSTOMS VALUATION AGREEMENT: REQUEST FOR EXTENSION OF 
WAIVER GRANTED UNDER ARTICLE IX OF THE WTO AGREEMENT - SENEGAL ........................................................................................................................ .......11
 
VI. EUROPEAN COMMUNITIES – REQUEST FOR AN EXTENSION OF 
ARTICLE XIII WAIVER FOR THE TARIFF RATE QUOTA FOR BANANAS 
OF ACP ORIGIN.................................................................................................................. ..12 
VII. EUROPEAN COMMUNITIES – REQUEST FOR A WAIVER FOR THE 
APPLICATION OF THE EUROPEAN UNION AUTONOMOUS PREFERENTIAL TREATMENT TO THE COUNTRIES OF THE WESTERN 
BALKANS ........................................................................................................................ .......15
 G/C/M/84 
Page 2  
 
  VIII.
 CONCERNS AND QUESTIONS RAISED TO COLOMBIA REGARDING 
CERTAIN CUSTOMS MEASURES APPLIED TO IMPORTS OF GOODS FROM PANAMA AND OTHER WTO MEMBERS ..........................................................16
 
IX. ISSUES RELATED TO TRADE IN TEXTILES – SUBMISSION OF TURKEY............20  
X. OTHER BUSINESS................................................................................................................2 6 
A. EUROPEAN COMMUNITIES REGULATION EC 1558/2005  REGARDING THE 
ADMINISTRATION OF THE QUOTA FOR CORN AND SORGHUM FROM SPAIN AND CORN FROM  PORTUGAL
......................................................................................................................26  
B. DATE OF THE NEXT MEETING .....................................................................................................26  
 
 
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 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 Brazil  drew Members' attention to the Brazilian intervention at the 
meeting of 10 March 2006.  At the last meeti ng he mentioned the Hong Kong developments which 
could be an important influence on the outcome of this process.  He reiterated that Brazil was pursuing flexibility on the TRIMs Agreement under th e implementation track of the negotiations, and 
there were other initiatives to extr act further flexibility under the sp ecial and differential treatment 
negotiations, particularly two proposals presented at the Committee on TRIMS.   Brazil was still 
interested in revising the Agreement and would wait for a clear picture of the developments in these 
two tracks with respect to its revision request.  
1.3 The representative of India
 supported the statement by Brazil and was also concerned with the 
lack of flexibility in the TRIMS Agreement.  1.4 The representative of China
 expressed his delegation's support for the statements of the 
previous two speakers.    
1.5 The representative of Argentina
 reiterated his delegation's pos ition on this issue and supported 
the previous statements.  1.6 The Chairman
 proposed that the Committee take note of the statements made and agree to 
revert to this item at a future meting. 
 
1.7 The Council so agreed . 
 
II. REGIONAL TRADE AGREEMENTS 
A. FREE TRADE AGREEMENT BETWEEN TURKEY AND MOROCCO  
B. FREE TRADE AGREEMENT BETWEEN THE REPUBLIC OF KOREA AND SINGAPORE  
C. DOMINICAN REPUBLIC – CENTRAL AMERICA – UNITED STATES FREE TRADE AGREEMENT   G/C/M/84 
 Page 3 
 
 
  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 
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. MARKET ACCESS MATTERS 
A. COMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE  
3.1 The Chairman  drew Members' attention to the periodic report of the Committee contained in  
document G/MA/191.  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.   3.2 The Council so agreed
. 
 
B. I NTRODUCTION OF HARMONIZED SYSTEM 1996  CHANGES INTO WTO  SCHEDULES OF TARIFF 
CONCESSIONS – REQUEST FOR WAIVER EXTENSIONS  
3.3 The Chairman  stated that this item concerned two re quests for waivers in connection with the 
introduction of HS96 changes into WTO schedules.  He recalled that the Market Access Committee 
agreed some time ago that extensions of such waivers on a collective basis would no longer be 
granted.  However, this would not preclude Me mbers from requesting waiver extensions on an 
individual basis.  Two Members had forwarded request s for waiver extensions in connection with the 
introduction of HS96 changes into their schedules.  Pursuant to Article IX of the WTO Agreement, 
these requests and the draft decisions in documents G/C/W/547 and G/C/W/546 for Argentina and Panama respectively were before the Council for its  consideration.  Since the Committee on Market 
Access had already taken note of the factual information provided by these two Members, he 
proposed that the Council forward the draft decision to the General Council for adoption.  3.4 The Council so agreed
. 
 IV. 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 
4.1 The Chairman
 recalled that, at the 11 March 2005 CTG meeting, the United States circulated 
three requests for waivers in documents G/C/W/508  and Add.1, G/C/W/509 a nd Add.1, and G/C/W/510 
and Add.1.  The first document consisted of a requ est for a waiver for the Caribbean Basin Economic 
Recovery Act (CBERA), the second  a request for a waiver for the A frican Growth and Opportunity Act 
(AGOA), and the third a request for a waiver for the Andean Trade Promotion Act (ATPA).  This matter 
                                                      
1The texts of the Agreements and their notifications  had been circulated, respectively, in documents 
WT/REG209/N/1, WT/REG209/1; WT/REG210/N/1, WT/REG210/1; WT/REG211/N/1, WT/REG211/1. 
 G/C/M/84 
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  had been discussed at the 11 March, 15 June, 15 Ju ly, and 10 November 2005 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 Counc il meeting.  Following his request, the General 
Council agreed that the CTG should cont inue its consideration of this ma tter and report back when it had 
completed this work.   
 4.2. During the informal consultations a series of questions and answers were exchanged.  The 
questions were circulated in doc uments G/C/W/516, 519, 520, 527 and 534, and the responses circulated 
in documents G/C/W/518, 526 and 531 and 540.  At the 10 November 2005 meeting, the Chair, 
Ambassador Himanen, had expressed his view that the information-gathering phase of the CTG's 
consideration of these waiver requests was reaching th e point of exhaustion.  He had indicated that it 
was his intention to bring this ph ase and the question and answer period to closure by circulating draft 
decisions at this meeting.  Subsequently, draft d ecisions were circulated for consideration at the 10 
March 2006 meeting of the Council.  Document G/C/W/541 contained the draft decision for the 
renewal of the US waiver for the Caribbean B asin Economic Recovery Act;  document G/C/W/542 
contained the draft decision for a waiver for the A frican Growth and Opportunity Act;  and document 
G/C/W/543 contained a draft decision for the renewal of the waiver for the Andean Trade Preference Act.  These three draft decisions stimulated a large number of statements, the majority supporting the adoption of these decisions at that meeting.  Howeve r, a few delegations voiced concerns with certain 
aspects of the Decision.    
 
4.3 The Chairman informed Members that he ha d held an open-ended informal consultation on 
this matter before this meeting.  He believed that Members were encouraged to learn that considerable 
consultations had been on-going between the Un ited States and the few Members which maintained 
concerns on the waiver draft decisions, as well as between beneficiary Members and the Members 
with concerns.  Although no definitive progress w as reported, it was hoped that today's meeting 
would do so.  In the consultations, the issue also ar ose as to whether these three draft waiver decisions 
constituted one set, to be taken together, or three i ndividual  waiver requests.  The Secretariat reported 
its understanding that the waiver requests were three separate requests for three distinct waivers, and 
therefore, could be dealt with separately.    
4.4 The representative of the United States
 asked WTO Members to approve his delegation's 
requests for waivers for three major programmes, the African Growth and Opportunity Act, the 
Caribbean Basin Economic Recovery Act, and the And ean Trade Preference Act.  At the last meeting 
of the Council, many WTO Members took the floor to  share their views on the vital contribution of 
these programmes to the economic growth and deve lopment of their countries and to express support 
for completing the CTG review by approving these requ ests.  In the course of the CTG review of the 
US requests over the past year, the Council had al so heard specific concerns expressed by a few 
Members, including concerns with respect to the ru les of origin associated with these programmes.  
His delegation wanted to restate that these programmes were not designed to raise barriers or create undue difficulties for the trade of other WTO Members.  The US saw compliance with its WTO obligations, including obligations  relating to consultations with  other Members, as an essential 
element of WTO Membership.  As stated in the draf t decisions for approval, the US would enter into 
consultations, on request, with any interested WTO Me mber with respect to any difficulty that might 
arise as a result of preferential treatment provided under these programmes.  The US stood by these programmes as important elements in its collec tive efforts to increase developing country 
participation in the global trading system.  His delegation hoped all Member s would join today in 
signalling the WTO's critical endorsement of this  goal through the approval of these waivers. 
 4.5 The representative of Benin,
 speaking on behalf of the African Group, confirmed that his 
delegation was also intensively consulting with certain Members on this matter since the Council's 
last meeting.  Consideration of this waiver had been  on-going for more than a year.  It was also raised  G/C/M/84 
 Page 5 
 
 
  during the Fourth Session of the Conference of African Ministers of Trade, held on 14 April 2006.  In 
this regard, the Nairobi Declaration, recognisi ng the contribution and potential of AGOA for the 
economic and social development in Africa, ur ged WTO Members to speed up the process for the 
granting of the AGOA waiver and to have this process completed by the next session of the WTO General Council in May 2006.  African Ministers were  most concerned about the uncertainty that this 
delay could cause as well as the serious social  and economic consequences in the beneficiary 
countries.  In fact, a number of African countries were already experiencing the negative impact of 
this delay, which was adversely affecting the gr owth of trade, flows of investment, level of 
employment, incomes and balance-of-payments.  It was imperative that a positive decision be taken at 
this meeting of the Council for Trade in Goods, so th at this matter could be finalized at the next 
meeting of the General Council, as called for in the Nairobi Declaration.  His delegation was, 
therefore, making an appeal to all its trading partners and WTO Members to give the necessary 
support for this waiver.  African countries had been ma rginalised in the international trading system.  
The AGOA initiative was one of the developmen tal instruments in promoting growth and 
development in Africa.  He brought this message from African Ministers.  Following the Nairobi 
Declaration, he informed Members that African Mini sters were following developments closely.  This 
was not the time for long statements, but for positiv e action.  Africa was looking forward to a 
successful closure of this important issue.    4.6 The representative of Colombia
 considered that the US request for an extension of the waiver 
for the ATPA programme was based on the existen ce of special circumstances which had been duly 
considered when the original waiver had been a pproved.  The circumstances referred to providing 
opportunities to these countries for the substitution of  illicit goods through more liberal access to the 
US market.  This could be seen as co-responsibility in the fight against drug trafficking which was a 
responsibility for all countries to share.  The request for an extension was for the period to 
31 December 2006.  Colombia, together with other Andean countries had just terminated negotiations 
for a free-trade agreement and, as a consequence, would no longer need these kinds of waivers in the 
future.  Hence, his delegation wished to underscore  the US declaration that these programmes in no 
way were aimed at raising additional barriers to  the trade of third countries.  Under these  
circumstances, his delegation would appreciate the flexibility of Members who had voiced difficulties with the adoption of these draft decisions.   
4.7 The representative of Ecuador
 repeated the request made to some developing countries, in 
particular, Paraguay and China which still had reservati ons on this matter, to facilitate the adoption of 
these waiver requests.  These schemes had been cons idered in the WTO as favourable to creating 
market access for some countries, especially for substitution products.  If not continued, they would 
generate uncertainty.  Her delegation understood the difficulties in adopting these schemes, however, 
it believed that there was an international, shar ed commitment to fighting the illicit trade of drugs 
which had been highlighted in various internationa l fora.  The ATPA would help towards this goal 
which recognized that any individual action would not be enough to fight against the international 
dimensions of the problem.  Ecuador contributed  proportionally through scarce economic resources to 
this struggle.  The US request was for a programme that was temporary in nature and did not effect 
systemic action in this organization;  it was not to be applied in the long term, in view of its 
immediate results.  Presently her country was negotiati ng with the US on further liberalization efforts.  
While Ecuador supported these un ilateral schemes and had benefited from them, it did recognise the 
importance of the permanent results to be achieve d by the WTO.  In the long run, her delegation 
trusted that Members would allow, as had been the case in the past, the approval of the extension of 
this programme. 
 
4.8 The representative of Guatemala  also stated that the US request was most important for his 
delegation.  Though his Government had recently finished negotiations for a Free-Trade Agreement 
with the US, it was still a beneficiary of these initiatives.  They contained deadlines for their G/C/M/84 
Page 6  
 
  implementation aimed at the economic and social  development of his country.  His delegation 
requested all to support this request.   4.9 The representative of Antigua and Barbuda
, on behalf of Barbados, Belize, Dominica, 
Grenada, Guyana, Jamaica, St. Kitts & Nevis, St. Lucia, St. Vincent & Grenadines, Suriname, and 
Trinidad and Tobago,  stressed that this matter was of utmost importance to CARICOM countries at 
the highest political level.  It was with this hi gh level of importance that Ministers from CARICOM 
countries agreed to table the communication ci rculated in document G/C/W/550 as a means to 
encourage Members to resolve this issue.  Th e CARICOM delegation in Geneva and its political 
leaders in the capitals hoped for conclusion as soon  as possible.  His was a region with limited 
resources, open economies and absence of economies of scale which made for a small range of viable 
economic opportunities.  The dependence of the bene ficiary countries on the export of a narrow range 
of commodities, the products exported thr ough the CBERA and the Caribbean Basic Trade 
partnership, as well as through similar non-reciprocal  trading arrangements, were important sources of 
foreign exchange thereby providing employment for a large percentage of the population.  His was 
also a region susceptible to natural disasters a nd exogenous economic shocks  which heightened its 
economic vulnerability and made more difficult the challenges of trade liber alization.  CBERA had 
proven very useful in supporting the developmental aspirations of beneficiary countries, contributing 
to poverty eradication and facilitating their integrat ion into the multilateral trading system.  Both the 
US and the beneficiaries had had consultations w ith Members who addressed some of the concerns 
raised.  Today, his delegation was pleased to see the understanding that Members had shown by being 
flexible with regard to the waiver request.  His delegation looked forward to further resolving the 
issue with any other Member that still had such concerns.  4.10 The representative of Jamaica
 associated her delegation with the statement by Antigua and 
Barbuda.  In its previous interventions on this i ssue, it had emphasised the importance of the CBERA 
in the Jamaican economy and had urged Members to approve the waiver request which had been in 
the CTG for over a year.  Her delegation was deeply  concerned about the delay in reaching a decision 
on the waiver request.  Hence, it had joined other CBERA and CARICOM beneficiary countries in circulating the statement contained in G/C/W/550 ur ging Members to reach con sensus on this issue.  
Her delegation urged Members to adopt the draft decision at this meeting, bearing in mind the 
significance of the programme for the beneficiary countries and the important role it played in 
allowing greater participation of these countries in the world economy. 
 4.11 The representative of China
 stressed that his delegation fully understood the importance of 
these programs for the beneficiary countries.  At th e last Council meeting, China suggested adding in 
each of the draft decisions a sentence which read “T he United States shall promptly start working on 
improving its rules of origin in the preference progr am so as to make sure that all the beneficiaries 
will fully and effectively benefit from the duty free treatment and at the same time it shall not raise 
barriers or other undue difficulties for the trade of  other developing Members.” This suggestion was 
made because of legitimate and systemic concer ns, and was aimed at accruing benefits to the 
preference beneficiaries and other developing Members. Since the last Council meeting, his 
delegation had had good-faith  consultations with the US delega tion and had managed to make some 
progress.  Unfortunately they had not yet reached agreem ent.  As stated at the last meeting, the rules 
of origin had been designed to greatly favour Am erican content which hi s delegation believed ran 
counter to the spirit and objective of the pref erential programs per se.  During China's accession 
negotiations, his delegation was told, especially by  developed Members, that any local content 
requirement would be contradictory to the multilatera l principles and therefore were not permitted.  In 
this case, there were local content requirements in the preferential programs through the restrictive 
rules of origin.  4.12 His delegation understood that the beneficiar ies would like to see a quick approval of these 
waivers.  His delegation had been assuring devel oping countries of its full support to the spirit and  G/C/M/84 
 Page 7 
 
 
  objective of the relevant programs. In fact, AGOA was enacted in 2000 and had since been 
implemented without any waiver.  The old waiver s for ATPA and CBERA also expired in 2001 and 
2005 respectively. Again, the implementation of th e three programs had neither stopped nor ever been 
affected at all.  In view of the strong pleas by our fellow developing country  friends, and bearing in 
mind that this was without prejudice to his delegation's rights as set forth in the Understanding in 
Respect of Waivers of Obligations under GATT 1994  or any other relevant provision of GATT 1994, 
his delegation had shown great flexibilities during consultations with the US and had made new 
proposals on the language to be included in the waiv ers, which was exactly the same language of the 
previous waivers, together with a proper statemen t from the US delegation.  The new language read, 
“Such duty-free treatment shall be designed not to  raise barriers or create undue difficulties for the 
trade of other Members.”  In conclusion, his de legation was not requesting anything new and hoped 
that the US delegation could also show flexibility in order to settle this issue as soon as possible. 
 4.13 The representative of Senegal
 voiced his delegation's support for the statement by Benin on 
behalf of the African Group.  His delegation requ ested other Members to show understanding so that 
this decision could be adopted at the meeting today.  It would support the US action to ensure that 
African countries were fully integrated into the multilateral trading system.  4.14 The representative of Pakistan
 thanked the US delegation for reiterating that the preference 
programmes were not designed to create barriers or undue difficulties for the trade of other WTO Members and that the US saw compliance with the WTO Obligations as an essential element for 
membership in this organization.  He believed that  China was simply seeking to put this US claim in 
into language which should not be a problem since the US reiterated this claim in the CTG.  He noted 
that it had become clear from the questions and an swers exchanged with the US delegation that these 
schemes also involved a departure from other US ob ligations and so far there had never been any 
instance of a waiver from Article III.  He assure d developing countries that his delegation did not 
have any difficulty whatsoever with the benefici aries continuing to benefit from the improved market 
access that they were enjoying.  These schemes had been in operation for several years without a 
waiver and his delegation had neve r challenged them.  His delegation was simply asking the US for 
some flexibility as had been shown by most Members present.  4.15 The representative of Nicaragua
 said that for more than 10 years her country had benefited 
from the Caribbean Basin initiative which had help ed to improve exports of products and had 
contributed, therefore, to the strengthening of exte rnal sectors.  The recent signing of the free-trade 
accord and its implementation would enable Nicaragua to have preferential bilateral relationships with 
the US.  Therefore, the programme would no longer  apply to Nicaragua.  Her delegation hoped that 
the extension request would be approved as soon as possible so that beneficiary countries could  
maintain possibilities for market access provided by these programmes.  Her delegation was confident 
that Paraguay would also be able to benefit s oon from this programme or from the ATPA programme 
to also be able to contribute to its economic development.  4.16 The representative of Peru
 reiterated that the ATPA progra mme had provided benefits for her 
country which had made use of this programme to fight drug trafficking and to fund alternative crop 
production.  She supported the points made by Ecuador  with regard to the uncertainty generated by 
the delay in adopting these programmes.  Finally, she urged Members to intensify consultations for 
the speedy adoption of the waiver reque sts for these three preference schemes. 
 4.17 The representative of Nigeria
 supported the statement made by Benin on behalf of the African 
Group.  She requested that her delegation's statement made at the informal consultations be reflected 
in this report.  At the informal consultations, she voiced her delegation's support for the US waiver 
request as her country was one of the beneficiar ies of the AGOA programme.  She noted the various 
achievements of the AGOA programme, initiated by the US Government in 2000 with the main 
objective of assisting sub-Saharan Africa's economic development by promoting trade and investment G/C/M/84 
Page 8  
 
  between the US and sub-Saharan Africa.  The AG OA also aimed at encouraging regional economic 
integration consistent with the WTO tenets of re gionalisation.  The AGOA, since inception, had been 
able to achieve its basic objectives as highlight ed above as well as make it possible for some 
beneficiary countries, Nigeria included, to receive some form of technical assistance projects to 
encourage production at competitive prices for the US and other international markets.  Nigeria, for 
instance, received technical assistance from the US in setting up its gum arabic laboratories.  Thus, 
gum arabic produced in Nigeria analysed at the la boratories met not only the US standards but also 
the internationally acceptable standards.  4.18 AGOA had also offered beneficiary sub- Saharan countries duty-free and quota-free market 
access for products originating from these countri es to encourage their industrial and economic 
development.  Sensitization seminars had been  organised by the government of Nigeria in 
collaboration with the US government to encourage Ni gerian industrialists to produce goods that met 
international standards.  A practical effect of this  effort was that Nigerian textile manufacturers, who 
in the past used to produce products for the domestic market only, had now been making concerted 
efforts in capturing the US market as well as some  regional markets as a result of an Intra-AGOA 
marketing drive.  It was also worth mentioning that since the AGOA programme came into effect, 
there had been a considerable amount of US investme nt in sub-Saharan Africa.  In the light of the 
numerous achievements and developmental impact on the various economies, Nigeria wished to lend 
its support for the extension of the waiver for th e implementation of the programme and encouraged 
Members to continue to show understanding and flexibility on this important issue. 
 
4.19 The representative of Mauritius
 fully supported the statement by Benin on behalf of the 
African Group.  His delegation was deeply concerne d that so far Members had not been able to 
approve the AGOA waivers.  He did not wish to repeat the statements explaining the critical 
importance of AGOA in promoting trade and generating employment and investment in African 
beneficiary countries.  He, therefore, appealed to Members to show the nec essary flexibilities so that 
the AGOA waiver request could be a pproved without any further delay. 
 4.20 The representative of Burkina Faso
 also supported the statement by Benin on behalf of the 
African Group.  His delegation appreciated the contribution this programme had made in African countries which were marginalised in terms of multila teral trade.  Any kind of preferences that could 
be accorded would always be beneficial to allo wing these countries to integrate into the multilateral 
trading system.  His delegation asked all delegati ons to show solidarity and much flexibility by 
supporting African countries in bringing a positive result to  this waiver request at today's meeting.   
 4.21 The representative of the Dominican Republic
 said that his country had been benefiting from 
these preferences but had now concluded an Agreement with the US which transformed these 
preferences into contractual obligations.  With rega rd to its economy,  preferences had been extremely 
important for economic development in important sectors, especially in the free zone.  This programme had contributed to investment and incr eased employment opportunities and the growth of 
the economy.  Consequently,  his delegation called upon the Membership to approve the US requests, 
particularly for the CBERA, because these progr ammes favoured a large number of developing 
countries and provided them the opportunities to achieve  better levels of econom ic development.  At 
the same time, his delegation applauded the flexib ilities demonstrated by certain countries so that 
definitive adoption of the waiver requests could be done as soon as possible.  As a beneficiary 
country, the Dominican Republic had had a positive e xperience and this should be taken into account 
when taking the final decision on this waiver request.  It was true that this programme was limited in 
duration and would terminate at a fixed point.  Howe ver, when important decisions were adopted, it 
was essential to take into account specific situati ons of economies and their paths of development 
throughout the world.  His delegation requested that the US waiver requests be adopted now and that the lessons learned be applie d to other situations.   
  G/C/M/84 
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  4.22 The representative of Kenya  focused on the AGOA programme in his presentation.  He 
recalled the recent visit of the Head of State of China to Kenya during which his Minister handed a note from the African Union to his counter-part, the Minister of Commerce for China, requesting 
China's support for the AGOA waiver .  He was, therefore, keen to listen to the statement from the 
Ambassador of China because he thought that a de cision would have been made.  He believed that 
China's concerns regarding the rules of origin a nd the need to ensure that other countries did not 
suffer, had been taken care of in the AGOA becau se the rules of origin allowed for third country 
sourcing.  Given this situation and that the Secretar iat had made clear that these were three distinct 
waiver requests, he asked if China still oppo sed the approval of the AGOA programme.  Couldn't 
those with problems allow for the adoption and come back to any problems later?  The US was quite 
clear when it said that the programmes were not d esigned to raise barriers or undue difficulties for the 
trade of other Members, and that they were read y to enter into consultations on request from any 
Member who felt affected.  This was sound assuran ce and those who had difficulties could at least 
approve the waivers and then initiate the process of  consultations.  As Benin said on behalf of the 
African Group, African Ministers were waiting a nd it would be helpful to them to know which 
individual delegations had problems with AGOA and what those problems were so they could be 
informed accordingly.  4.23 The representative of Bolivia
 also considered the ATPA scheme a part of shared 
responsibility, a principle raised with regard to th e fight against drug trafficking in two contexts:  
consumption in the developed country, and the fi ght or eradication of products leading to the 
production of these drugs.  In Bolivia's case this pr ocess had socio-political and economic costs that 
were very high.  Compensation was in terms of market access to allow small farmers to have benefits and a better standard of living to encourage products that would be a lternatives to narcotic crops.  The 
scheme therefore had a high socio-political compone nt and important consequences.  This scheme 
complied with the requirements and specificities with  regard to periodic evaluation and was limited in 
time, ending in December 2006.  Although his delegation understood the concerns expressed by 
China and Pakistan and shared the systemic pr oblems, these should not delay the adoption of the 
waiver request.  His delegation, therefore, invited Pakistan and China to reconsider and allow for the 
adoption of the waiver.  4.24 The representative of the United States
 thanked Members who expressed their support for the 
waiver requests.  He also appreciated the fact th at the Ambassadors of China and Pakistan attended 
this meeting, reflecting the seriousness in which they  treated this subject.  He responded to a couple of 
the points they put forward.  First, there was c oncern that, particularly in the case of AGOA, the 
programme was designed in a way to favour US conten t.  The fact was that more than 98.5% of US 
apparel imports from AGOA countries used third count ry fabrics.  So, regardless of the provisions, 
the fact was there really was not a problem in tryi ng to tilt benefits towards the US or any scope to 
further enhance the benefits through beneficiary coun tries.  The vast majority of this apparel was 
already using third country fabrics.  This led to  the theoretical question of why not inserting the 
language that was in the original ATPA wavier into  these three waivers.  The response was a legal one 
not a pragmatic one.  A conscious decision was made  to leave that language out of these waivers 
because the WTO had evolved since then.  A pane l decision in the EU GSP case indicated that 
inserting the ATPA language into the waivers would raise the possibility of a legal challenge.  His 
delegation had explained at great length and recognised that what it was asking for a waiver to our 
WTO obligations.  No Member had expressed a s ubstantive objection to the provisions of the 
programmes, in fact the contrary.  He had heard support from Members who had a problem with specific text of the waiver decision.  His delegati on believed that the waiver decisions currently gave 
his Government the legal cover it needed to pro ceed with these programmes.  The proposed language 
put that legal basis into question and therefore w as unacceptable to his delegation.  He acknowledged 
the points made by both the Ambassador of China an d Pakistan that they were willing to discuss the 
matter, and firmly believed that they wanted to find a solution.  His delegation would continue to 
work in good faith and hoped that a mutually satisfactory solution could be found. G/C/M/84 
Page 10  
 
   
4.25 The representative of Paraguay
 said that he would not repeat the arguments he had made at 
the last meeting of the Council.  However, he wi shed to inform Members that, through Paraguay's 
initiative, discussions were taking place in Asunc ión as well as in Washington to find a common 
ground of understanding with the US.  Paraguay and the US shared a common set of objectives and 
worked together to meet these objectives.  It was al so important to highlight  that the delegation of 
Paraguay maintained its position of  not supporting the US waiver requests.  This was not only because 
the Government believed it was necessary, but also because the Paraguayan business sector 
considered preferences granted to some developing countries harmful to their legitimate interests and 
constituting unfair competition in common areas of production.  This was why in early 2002, his 
delegation had approached the US to express its c oncern and propose a solution to those concerns.  
The delegation of Paraguay regre tted that its position could pose problems to some countries which 
were beneficiaries of these preferences.  But it was important to bear in mind that the delay in 
authorising these waivers would not cause effective dama ge to their trade and exports to the US since 
these preferential schemes had been applied long befo re the request for the waiver was made.  This 
was a situation which would not resist a claim before the WTO dispute settlement system.  It was a 
pity that small economies often had no alternativ e other than presenting their concerns through 
unpopular means since they lacked the negotiating st rength of larger economies.  This long-standing 
reality had led a Paraguayan statesman at the start of the 20th century to say that "if we cannot make 
the weak strong we should make sure that the strong are fair".  This was question of principles which 
had lead Paraguay to reject preferences in fa vour of developing countries when these preferences 
constituted an injury to other de veloping countries.  This had th e effect of dividing developing 
countries which was not propitious fo r consolidating and fostering the multilateral trading system.  He 
concluded that his delegation was ope n to dialogue and negotiation in order to achieve this objective. 
 4.26 The representative of China
, in reference to Kenya's recollection of his Minister's visit to 
Kenya and the discussion on this matter, reiterated that  his Minister attached great important to this 
issue.  Indeed, it was under his Minister's instructi on that his delegation had carried out its good faith 
consultations with the US delegati on.  While understanding the importance of this matter to many of 
the beneficiaries, he noted that his delegation ha d systemic concerns and hoped that these could be 
solved.  In response to the US explanation rega rding AGOA and the differe nces between it and the 
other two programmes, his delegati on would adopt a flexible attitude in future consultations towards 
dealing with the three programmes separately.  His delegation looked forward to further consultations 
and hoped that all parties would show flexibility for a good result as soon as possible.   4.27 The representative of Chile
 regretted the Council not being able  to adopt the waiver decisions 
at this meeting.  These programmes helped the beneficiary countries and did not add additional 
barriers to trade.  The WTO was established on the basis of the most-favoured-nation clause and 
exceptions to this rule were not looked highly u pon.  Such waivers added complexity to countries 
which were not Members.  His de legation believed it was necessary to  continue with consultations 
and bilateral negotiations among effected Members a nd would like to count on the good offices of the 
Chair to solve any systemic problems.  
4.28 The representative of Uruguay
 wished to associate her delegati on with the Chilean statement. 
 4.29 The representative of the United States
 wished to respond to the statement from Paraguay.  
He believed that his delegation was moving towards a solution with China and Pakistan based on the 
consultations held.  However, this was not his sen se with Paraguay.  The problem was that, although 
Paraguay asserted that it was being damaged by these wa ivers, his delegation had no evidence this the 
case.  He did not believe that a negative e ffect on Paraguay from the programmes could be 
demonstrated.  Paraguay believed it should be compensat ed in order to rectify the situation, but his 
delegation was not in a position to do that.  Based on the discussions held in the respective capitals, he  G/C/M/84 
 Page 11 
 
 
  believed that a solution was not far.  Therefore,  he urged, through the Paraguayan Ambassador 
present at this meeting, for Paraguay to re-consider  its position and allow the approval of the waivers. 
 4.30 The representative of Argentina
 said that his delegation viewed with concern the fact that 
systemic problems raised by some delegations did not find due reply by the proponent delegation.  His 
delegation was concerned by the US statement th at China's proposed sentence might create legal 
interpretative problems.  His delegation did not un derstand why a similar sentence found in the EC's 
request for a waiver for certain Balkan countries di d not create any difficulties for the EC delegation, 
whereas its inclusion in the US draft waiver deci sion would involve legal problems for the US.  His 
delegation did not understand what th e legal problem was that the US had mentioned and wished to be 
included in future meetings on finding a solution to this matter.  This was a systemic problem with 
significant importance.  As concerned the question ra ised by Paraguay, his delegation had pointed out  
at the last meeting that Paraguay was not asking fo r compensation.  Once more the US alleged that 
Paraguay has requested compensation.  Paraguay was requesting simply to be treated in a similar manner to other beneficiaries of these programmes.  Paraguay had announced that consultations were 
being carried out in respective capitals in order to  find a field for mutual agreement with the US. 
 4.31 The representative of Kenya
 thanked the Chinese Ambassador for responding to his question, 
in particular whether the waivers could be looke d at separately.  He believed that Paraguay was 
raising two issues:  one related to preferences being ha rmful to their trade;  and the other was its view 
that the delay in approval would not cause damage to the trade to the beneficiaries.  In its previous 
statement, Paraguay cited a number of statistical  examples but none of them related to African 
countries.  Therefore, he asked if Paraguay did not suffer any harmful effects of the AGOA preferences and, therefore, did not have any problem with the AGOA programme.  If it did suffer effects, he asked for specific information which A frican Members could transmit to their Ministers.  
The delay in approval would certainly not help US trade but would harm African trade by scaring the 
potential investment that African countries wished to  harness.  His delegation appealed to Paraguay to 
view the AGOA waiver separately so that it could be approved while examination continued on the 
other two requests.    4.32 The Chairman
 urged those Members with concerns to contact the US directly to seek to 
resolve them.  He proposed that the Council take note of the statements made and revert to this matter 
at its next meeting.  He was available, if n ecessary, for further consultations on the matter. 
 4.33 The Council so agreed
. 
 
V. CUSTOMS VALUATION AGREEMENT: REQUEST FOR EXTENSION OF 
WAIVER GRANTED UNDER ARTICLE IX OF THE WTO AGREEMENT - 
SENEGAL  
5.1 The Chairman  recalled that Senegal had circulated a request, in document G/C/W/524, 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.  The General Council on 17 May 2004 
approved Senegal's request for a waiver 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 .  Senegal had also 
presented a report on the status of its implementation of the officially established minimum values for the products concerned.  This was circulated to  the Council as document G/C/W/523.  On the basis of 
consultations with interested Members, a draf t decision, in document G/C/W/551, was proposed 
granting Senegal's request for a waiver from the provi sions of the Customs Valuation Agreement.  He 
proposed that the Council approve Se negal's waiver request and recomme nd that the draft decision  be 
forwarded to the General Council for adoption.    G/C/M/84 
Page 12  
 
  5.2 The Council so agreed
. 
 
VI. EUROPEAN COMMUNITIES – REQUEST FOR AN EXTENSION OF 
ARTICLE XIII WAIVER FOR THE TARIFF RATE QUOTA FOR BANANAS OF ACP ORIGIN   
6.1 The Chairman
 drew Members' attention to document G/C/W/529 in which the EC requested an 
extension of the current GATT Article XIII waiver c oncerning the tariff rate qu ota (TRQ) for bananas of 
ACP origin which is contained in document WT/MIN( 01)/16 of 14 November 2001.   At the November 
2005 meeting, the Council agreed to defe r consideration of this agenda item  until its next  meeting.  This 
was because some Members believed that further time was needed in capitals to digest the arbitrator's 
report, to assess the relevant context in which th is waiver was being requ ested, and for additional 
information.  At the following meeting on 10 March 2006, the EC proposed to postpone consideration of 
its waiver request until after the monitoring and review process of its new banana regime was 
concluded.  This was met with st atements by some concerned Memb ers who did not agree with this 
proposal.    He reported that he ha d held an informal consultation on this matter on 5 May with Members 
who had spoken on this issue at the last meeting.  At this consultation, many of the positions stated at the 
March meeting were maintained.    6.2 The representative of the European Communities
 reiterated that his delegation was not seeking 
to divert the debate on its new import regime by re questing a postponement of the consideration of this 
waiver request.  In fact, the EC had always been ready to discuss this regime with MFN suppliers 
notably, but not exclusively, in the context of some  dispute settlement cons ultations that had been 
requested by Honduras, Nicaragua an d Panama, and in the on-going monitoring process in which other 
MFN suppliers were participating under the good o ffices of Norway.  The only reason behind his 
delegation's proposal to delay the di scussions on its waiver request was the evident lack of a sufficient 
basis to start a dialogue on such a request.  This seem ed to be confirmed to his delegation by the various 
interventions by a number of Latin American banana -supplying countries at the last meeting and, to 
some extent, repeated in the Chair's consultations .  Some, it would appear, wanted his delegation to 
withdraw the request completely and some wanted an in -depth debate.  Many, if not all, wanted to bring 
in the entire issue of the banana regime, in partic ular, the question of binding.  So, given that his 
delegation was not, in any way, trying to hide anyt hing or withdraw from the discussion, he provided 
some justification of the request. 
 
6.3 At the last meeting several Members expressed the view that the waiver requested, unlike the 
waiver in force until 31 December 2005, was not justif ied by exceptional circumstances.  His delegation 
did not share this view.  The old waiver was justifie d by the need to reconcile the interests of various 
WTO Members, both Latin American and ACP suppliers, on the banana question.  This still remained 
relevant today.  The EC had the challenging task of ensuring total market access for MFN suppliers 
while maintaining equivalent preferential access for ACP suppliers, as required under the Cotonou Agreement and allowed by the Doha waiver of GATT Article 1.  The EC believed that the current import regime struck this difficult balance.  Some Members argued that the EC request was incomplete since it did not describe the trade measure concerne d, the policy objectives pursued, or the reasons for 
not using GATT consistent me asures.  The EC believed that its request provided sufficient information 
on these three points.  Essentially, the ACP TRQ aime d at maintaining an equi valent preferential access 
for ACP suppliers and was the best means to ensu re that the MFN suppliers were also accorded 
equivalent market access.  With regard to the actu al TRQ regime, his delegation was ready to provide 
specific information to those who requested it.  Fi nally, his delegation wished to note again that its 
request for a waiver should not be interpreted as a recognition that the ACP TRQ was inconsistent with 
Article XIII.  The objective of the request was not to fulfil a legal requirement but rather to provide legal 
certainty for ACP, but also MFN, operators.   G/C/M/84 
 Page 13 
 
 
  6.4 The representa tive of Honduras  considered the statement by th e EC erroneous and wanted its 
views recorded in the minutes of this meeting.  The EC was requesting the Council to accept that the requirements necessary to examine its waiver request  had been met, yet the EC was also requesting 
that this examination be postponed until after the exercise they called "monitoring" was completed.  
His Government could not accept the EC's request to postpone the examination because the request 
did not keep with the necessary legal requirements.  Th ere were at least three reasons for this.  First, 
the report issued by the Appellate Body in Bananas III laid down clearly that  waivers to obligations 
arising from Article XIII should be reserved for tr uly exceptional circumstances.  The circumstances 
before the Council today were far from truly exceptional, as opposed to 2001 when the first Article XIII waiver requested by the EC was granted for special circumstances created by the 
understanding on bananas.  There was no special circ umstance with regard to the request before the 
Council.  On the contrary, there was now a significa nt legal dispute and formal claims which would 
be presented in the near future.  The interests of one Member to sidetrack, in a trade dispute, its 
responsibilities under Article XIII should be denounced by  this Body and not rewarded with a waiver, 
which should be truly exceptional.   
 
6.5 Second, the EC's waiver request did not comply with the requirement to present an 
appropriate explanation of the co mmercial arrangement to which its request referred, nor the trade 
policy objectives it was pursuing, nor the reasons which made these measures necessary.  In sum, the request did not meet the basic conditions and te rms of the Understanding relating to waivers from 
obligations arising from GATT 1994.   Third, the monitoring process linked to this request was 
irrelevant to a waiver from obligations under Article XIII and was procedurally incorrect in 
accordance with the WTO provisions which governed th e granting of any waiver.  It had nothing to 
do with the disciplines laid down in Article XIII nor  with the WTO procedures which were developed 
to deal with waiver requests. Monitoring was a process which referred only to the gathering of 
information;  the parameters applied by the EC to monitoring were not defined, were subjective and 
unacceptable to his Government and for other affected  interests.  If the EC's request for postponement 
was accepted, consideration of the waiver request re lating to obligations arising from Article XIII, for 
which circumstances had to be truly exceptional,  would be conditional on an ad hoc, information 
gathering procedure.  This would irreparably un dermine the rules and practices the WTO established 
for the granting of such waivers.    
6.6 The European Communities affirmed that they  were requesting this extension because of the 
increase in volume of exports from ACP countries.  However, we should like to remind Members that 
the obligations of the EC under the Annexes, and th e results of the arbiters called for a tariff-only 
system for all MFN supplying countries.  It did not call for linking this to a monitoring system.  Since the EC's request was legally erroneous and was dangerous from a systemic point of view, his 
Government had no alternative but to contest a ny action on the part of this Council which would 
directly or indirectly allow for the EC's requ est to be formally examined by this Council. 
 6.7 The representative of Panama
 joined Honduras in its opposition to this Council starting an 
examination of the EC request.  The EC had said that  their request for a waiver was presented in order 
to provide legal certainty.  However, the EC's request  lacked legal clarity.  In  accordance with the first 
paragraph of the Understanding re garding waivers, the EC was obl iged to present a coherent and 
comprehensive description of the commercial arrangement.  The waiver request was far from complying with this essential requirement.  The Membership had no way of clearly seeing what 
advantages the ACP would gain from the TRQ and it  could not make this calculation because the EC 
had refused to reveal the bound MFN tariff which woul d establish the preference for ACPs within the 
quota.  Panama and other Members had put pressure on the EC to clarify the bound tariff but officials 
from the EC had said that the matter would be dealt w ith later.  Similarly, the EC had not fulfilled the 
obligation to clarify the reasons it had not used ot her alternatives in compliance with GATT 1994.  In 
the exchanges held with EC officials, they limite d themselves to saying that, in their opinion, it was 
no longer necessary to demonstrate the legal or ec onomic necessity of the MFN or the preferential G/C/M/84 
Page 14  
 
  margin of ACP countries, which was now in forc e.  Until the EC was willing to provide more 
clarification with regard to the information it should  be providing, the Council could not deal with this 
agenda item.  For his delegation, it was clear that the EC's request should be denied. 
 
6.8 The representative of  Nicaragua
 believed that the EC's request did not meet the legal 
requirements for the granting of a waiver extension according to decisions and practices of the WTO.  
Requirements governing any extension should be interpre ted strictly and applied carefully.  It was not 
possible to reconcile the strict legal framework and the lack of procedural requirements linked to this 
request.  In addition to the legal considerations , Members did not know the economic aspects.  This 
was an illegal measure which would damage countries such as Nicaragua.  This request did not only 
concern a tariff quota;  there were unknown elements.  The autonomous tariff preference was increased more than two times.  The volume of the new tariff quota was greater than the ACP volume.  
As opposed to the past, ACP bananas now had lim ited access and were paying a lower in-quota tariff 
than what they paid before.  Now, the EC was saying that these measures could be worse and that 
MFN suppliers had no alternative but to accept them .  MFN suppliers were saying that it was not 
possible for discrimination on the part of the EC to be  greater than at present.  The reality was that 
Nicaragua's banana industry had lost all its market access in the EC.  She re iterated that the legal 
uncertainties were unacceptable as was the Council initiating or accepting the EC waiver request.   
 
6.9 The representative of Ecuador
 said that her delegation's position had not changed.  It was 
concerned with the legality of this request and its relationship with the EC's new banana import 
regime.  On the basis of the understanding signed between the EC and Ecuador, as well as with the 
United States, following the Banana III panel, the EC  was to have introduced a tariff-only scheme, at 
the latest 1 January 2006 and rebind its tariff under Article XXVIII.  These two understandings also 
agreed on the application of three types of TR Qs until 31 December 2005, including a TRQ for ACP 
countries.  Members approved an exemption to Article XIII.1 and XIII.2 of GATT to 31 December 2005 so that the EC could apply this TR Q (the Doha Article XIII waiver).  Furthermore, 
for the EC to provide this preferential treatment to ACP bananas as required under Article XXXVI of 
Annex 5 and the Protocol to the ACP/EC Agreem ent, the EC was granted a waiver under GATT 1994 
during which time the system would be brought to an end by 1 January 2006.  Although not on this 
date, the EC did implement a new import regime  was implemented where the tariff level for MFN 
bananas was 176 Euros per ton.  Ecuador did not be lieve that this regime was in compliance with 
GATT 1994 for various reasons.  The inconsistency between the MFN suppliers' tariff and the zero 
tariff for ACP countries could not be justified.  Th e EC had not observed the terms for the waiver nor 
had bound the banana tariff to maintain access fo r MFN suppliers, undermining its commitments to 
the WTO.  Furthermore, Ecuador had participated constructively and in good faith in the process led 
by Norway to monitor the new banana import regi me and to have a bridge of good offices between 
banana exporters and the European Union.  However, in spite of the great effort made and the time 
taken by the facility, this process had not led to the EC taking seriously the main issue of concern to 
Ecuador:  the tariff level, which c ontinued to be high, and its binding in the WTO.  Therefore, her 
delegation reserved its right under the WTO, and in the interest of defending its trading and economic 
interest.  With these difficulties, as well as the uncertainty relating to the EC's attitude, Ecuador was 
not in a position to support the EC's waiver request.  6.10 The representative of Colombia
 recalled that the bananas issue had several dimensions to it.  
While not wishing to make a lengthy presentation he highlighted that there were decisions and awards 
made by the arbitrators in favour of MFN suppliers  with the obligation for the EC to put in place a 
tariff-only import regime.  All these issues should be c onsidered together.  Therefore, at this time, his 
delegation was not prepared to approve this request , but was open to working constructively with the 
EC to come to a solution that was fair for all parties concerned. 
  G/C/M/84 
 Page 15 
 
 
  6.11 The representative of the European Communities  stressed that his delegation had always tried 
to make a neutral move to a new import regime.  It was in this regard that the EC had introduced an 
ACP TRQ which reflected the actual preferential access by ACP bananas to the EC market in a representative period, 2002 - 2004, wh ich took into account the EC enlargement.  In the case of the 
MFN suppliers, the move to a single tariff with "un limited" access had been done without prejudice to 
the right of the EC to establish a quantitative limit to the preference granted for ACP bananas.  His 
delegation thought that maintaining a quantitative limit to the ACP preference w as, in fact, the best 
means to ensure that the ACP preference would not be detrimental to the objective of maintaining 
total MFN access to the EC market.    
6.12 On the MFN tariff, which was not directly no r formally linked to the waiver request, the EC 
did try to find a negotiated solution with MFN supplie rs but to no avail.  The two arbitrations that 
were pursued under the Annex to the Doha waiver al so showed that determining a tariff on the basis 
of economic projections was not really practicable.  As a result, it was under those circumstances that 
the EC was forced to move to the long-awaited, new import regime on 1 January 2006, in order to 
provide the necessary legal certainty for economic operators.  However, the EC remained open to 
pursue the dialogue with MFN suppliers now on the basi s of market realities.  It was for this reason 
that the new MFN tariff was introduced as an applied tariff, pending the conclusion of such a 
dialogue.  The EC believed that the applied tariff maintained, possibly even  increased, market access 
for MFN suppliers.  The statistical data provided so far, and albeit for a limited period, did not provide 
any evidence to suggest otherwise.  Today, some  Members voiced their desire to see a complete 
withdrawal of the request;  they questioned the lega l form and the content.  Some wanted a clearer 
picture of the rest of the banana regime, in particular, the question of  binding.  Some simply wished to 
maintain the debate.  The EC recognised the impor tance of bananas and its import regime to the 
livelihood of farmers and the economies of those who had spoken and others.  It genuinely sought to 
settle all the matters concerning this in a mutually  satisfactory way and was willing to continue the 
consultations bilaterally or plurilaterally.   
 
6.13 The representative of Honduras
 reiterated that the EC had not complied with its obligations 
under Article XXVIII nor had recognised the rights of  Honduras.  Even when a WTO panel had found 
that Honduras had a substantial inter est,  it continued to deny this ob ligation.  It had not fulfilled its 
commitment either on Article XXIV:6 with regard  to enlargement.  It had not complied with 
arbitrational awards.  The obligation of the EC was to  have a single tariff, not to have a mixed system 
that would run counter to what was negotiated at Do ha in 2001 and to what had been laid down in the 
arbitrational awards.  His delegation supported the delegations who said that this request should be 
withdrawn.  It asked that the EC's WTO obligatio ns be respected, that they commit themselves to 
complying with arbitrational awards and maintain  market access for his country, which presently was 
at zero. 
 6.14 The Chairman
 proposed that the Council take note of th e statements made and revert to this 
item at its next meeting.  He was available, if necessary, for consultations on the matter.  6.15 The Council so agreed
. 
 
VII. EUROPEAN COMMUNITIES – REQUEST FOR A WAIVER FOR THE 
APPLICATION OF THE EUROPEAN UNION AUTONOMOUS PREFERENTIAL TREATMENT TO THE COUNTRIES OF THE WESTERN BALKANS 
7.1 The Chairman
 drew Members' attention to document  G/C/W/552 which had recently been 
circulated at the request of the European Communities.  In this document, the EC requested a waiver for 
the application of the European Union Autonomous Preferential Treatment to the Countries of the 
Western Balkans.    G/C/M/84 
Page 16  
 
  7.2 The representative of the European Communities
 acknowledged that some Members may not 
have had time to study the request since it had only been circulated a few days prior.  He explained that since the year 2000, the EC had granted the co untries of the Western Balkans some exceptional 
trade preferences, suspending tariffs on basically all imports originating in these countries.  The scheme had been the subject already of a waiver wh ich was due to expire on 31 December 2006.  The 
original scheme ran until the end of 2005.  In N ovember 2005, the Council of Ministers decided to 
prolong the validity of the preferential scheme for a further 5 years, until 31 December 2010.  The 
prolongation did not change the scope nor the othe r modalities for these prefer ences.  The main reason 
for this prolongation was that the Western Balkan  countries still needed economic help from the EC.  
They had all made progress, the trade preferences ha d contributed to enhancing export trade to the 
EC, but the economies of the countries were still not strong enough.  In additio n, not all countries had 
completed bilateral negotiations with the EU on the so-called Stabilisation and Association 
Agreement, which would eventually take over th e preferential scheme through the creation of free 
trade zones, compatible with Article XXIV of the GATT.  He added that the EC was the Western Balkan's first trading partner, by far.  At the same time, the Western Balkans only represented a small 
fraction of the EC's import trade.  In line with its obligations, the EC was thereby submitting a request 
for a waiver in order to continue applying the schem e of trade preferences that had been applied since 
the year 2000.  His delegation was ready to enter into  consultations with all pa rties interested in this 
affair.  7.3 The Chairman
 proposed that the Committee take note of the statement made and revert to this 
item at the next meeting. 
 7.4 The Council so agreed
. 
 
VIII.  CONCERNS AND QUESTIONS RAISED TO COLOMBIA REGARDING CERTAIN 
CUSTOMS MEASURES APPLIED TO IMPORTS OF GOODS FROM PANAMA 
AND OTHER WTO MEMBERS  
8.1 The Chairman  drew Members' attention to document G/ C/W/548 circulated at the request of the 
delegation of Panama.  In this document, Panama  voiced concerns over certain Colombian customs 
measures that were affecting trade from Panama, a nd specifically, the trade generated by the Colón 
Free Zone.  Panama stated that Colombia had issued a number of resolutions that affected its trade as 
well as also affected the trade of other WTO Member s, including the People's Republic of China;  the 
Republic of Korea;  Hong Kong, China;  India;  Ind onesia;  Malaysia;  Pakistan;  Thailand;  Chinese 
Taipei;  Singapore;  and the Philippines.  The document also contained a list of questions for 
Colombia.  He noted that this matter was also raised at the 25 April 2006 meeting of the Committee 
on Customs Valuation and that this document, in an almost identical version, was circulated for that 
meeting, in document G/VAL/W/154.  
 8.2 The representative of Panama
 said that this agenda item came in the wake of numerous 
bilateral efforts to find solutions to normalize the trade flows between the two countries.  Since no 
solutions had been found, his Government was bo und to submit this issue to multilateral review, 
owing to the economic injury it had already sust ained as a consequence of the customs measures 
applied by the Colombian National Customs and Excise Directorate (DIAN) since June 2005.  The 
customs measures imposed by the DIAN fell into three categories: 
  (a) indicative prices for certain products or iginating in and/or consigned from Panama 
and other WTO Members; 
 
 (b) restrictions on the use of ports through th e authorization of certain points of entry into 
Colombia for goods classified under Chap ters 50 to 64 (footwear and textiles) 
originating in and/or consigned from Pana ma and the People's Republic of China,  G/C/M/84 
 Page 17 
 
 
  (which in practice meant that the goods could enter only through El Dorado Airport if 
arriving by air, and only through Barranquilla if arriving by sea); 
  (c) additional requirements included in the commercial invoice applying to goods 
consigned from a commercial free zone located in Panama. 
 
8.3 The establishment of indicative prices by the DIAN for certain goods originating in and/or consigned from Panama ha d adversely affected activity in a commercial free zone of Panama, the 
"Colón Free Zone".  This was the largest free zone in the country and was lo cated at the entrance to 
the Atlantic sector of the Panama Canal.  It w as an important motor for the Panamanian economy, 
generating 8 per cent of its GDP.  Currently, over 2,500 firms, employing more than 25,000 people, 
operated within the 400 hectare zone.  Since its foundation over 50 years ago, the Colón Free Zone 
had served as a centre for the collection, storage a nd distribution of goods originating in various parts 
of the globe (Hong Kong, China; Japan; United St ates; China; Chinese Taipei; Italy; Singapore; 
Korea; among others).  These goods were ultimately destined for the major La tin American markets, 
the Colombian market being one of the main market s since the zone's creation.  The most recent 
statistics on re-exports to Colombia showed that the approximate volume of trade stood at over 800 
million dollars per year.  The rules approved by the DIAN to establish indicative prices affected a 
wide variety of goods, including: footwear, stocki ngs, socks, textiles, electrical or gas domestic 
appliances, lighters, blankets and travelling rugs, ex ercise books and made-up textile articles.  Further, 
these measures were selectively applied to goods originating in or consigned from certain WTO 
Members:  Panama;  China;  Korea;  Hong Kong, Ch ina;  India;  Indonesia;  Malaysia;  Pakistan;  
Thailand;  Chinese Taipei;  Singapore and the Philippines. 
 8.4 The application of indicative prices by the customs authorities of Colombia must be assessed 
in relation to the application of Article V II of the GATT 1994 and the Agreement on Customs 
Valuation.  As regards valuation, the rules in force established a clear preference for applying the 
transaction value in determining customs value and prohibited the use of minimum values and 
arbitrary or fictitious values.  The restrictions on  entry points and the addi tional requirements to be 
included in commercial invoices must be assessed in th e context of the application of Articles XI and 
V of the General Agreement on Tariffs and Trade 1994 among other provisions.  It was clear that the 
restrictions had a limiting effect on imports comi ng from Panama and China to Colombia, blocking 
the free transit of goods entering the territory of Co lombia.  Moreover, the restrictions violated the 
principle of non discrimination , in that they were applied selectiv ely.  His delegation had prepared a 
series of questions for the delegation of Colombia, contained in G/C/W/548, to ascertain in greater detail the regime applicable in these cases.   He read out the following questions: 
 
(i) The DIAN was maintaining in force a number of resolutions
2 by which it applied "indicative 
prices" to certain goods originating in or impor ted from Panama, China and other WTO Members.  
                                                      
2 The resolutions are: 
●  Resolution No. 05474 of 29 June 2005  (establishing indicative prices  for footwear from China and 
Panama); ●  Resolution No. 08628 of 20 September 2005  (establishing indicative prices for stockings and socks 
from South Korea; North Korea;  China;  Hong Kong, China;  India;  Indonesia;  Malaysia;  Pakistan;  
Panama;  Thailand;  and Chinese Taipei); ●  Resolution No. 08743 of 22 September 2005 (establishing indicative prices for textile products 
under subheadings 52.0811.00 to 60.06.34.00 of Chapters 52, 54, 55, 56, 59, 60 and 63 of Colombia's 
Import Tariff, originating in and/or coming from South Korea;  North Korea;  China;  Hong Kong, China;  India;  Indonesia;  Malaysia;  Pakistan;  Panama;  Thailand;  and Chinese Taipei); 
●  Resolution No. 09477 of 12 October 2005  (establishing indicative prices  for certain electrical or 
gas domestic appliances from China and Panama); ●  Resolution No. 10760 of 15 November 2005  (establishing indicative prices for lighters from China 
and Panama); G/C/M/84 
Page 18  
 
  Would Colombia clarify this information and expl ain the reasons and legal basis for adopting these 
resolutions;  (ii) In this connection, how did Colombia rec oncile the measures listed above with its general 
national treatment and MFN obligations and the re quirement to refrain from imposing discriminatory 
restrictions on imports from Panama and other WT O Members, when indicative prices were applied 
in particular instances;  (iii) Did Colombia currently have any legislation,  technical regulations, or  measures of any other 
kind which provided that, for certain types of goods , there was a list of ports through which access to 
the country's customs territory was allowed.  If so, how would Colombia seek to reconcile the 
measures adopted against Panama and other trad ing partners limiting access of goods from those 
countries to certain ports;  (iv) We understand that Colombia requested a r eservation under paragraph 2 of Annex III of the 
Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, 
adopted by the Committee on Customs Valuation on 18 May 2000 for certain textile products for periods of 1, 2 and 3 years respectively.  Was this information correct;  (v) Did this reservation expire in 2003?  If it had expired, on what provisions of the WTO 
Agreements did Colombia base its application of minimum or indicative prices for certain goods in 
respect of certain countries only?  What was the legal basis for such measures and for the products 
they covered;  (vi) Could Colombia explain how the adoption of th e resolutions at issue could be reconciled with 
the obligations set forth in Article VII of the GATT 1994.  Could Colombia explain the valuation 
methods that it normally used for the importation of goods into its territory and how they tallied with 
the measures adopted against Panama and other countries.  8.5 The representative of Indonesia
 shared the views raised by Panama as contained in 
document G/C/W/548 with respect to the measures ma intained by Colombia's National Customs and 
Excise Directorate.  Therefore, his delegation would also like to seek clarification on this policy. 
 
8.6 The representative of China  thanked Panama for bringing this matter to the attention of the 
Council and for the document G/C/W/548. His delega tion had sent the document back to its capital 
for analysis and was happy to hear that a paper containing the responses to the questions had been 
tabled.  His delegation would be interested to look at these responses.  His delegation echoed the 
concerns raised by Panama and was of the view that  it was in the interest of all Members to minimise 
the impact on trade by trade policies which may not be WTO-consistent.  Therefore, in the spirit of 
cooperation, the concerns raised by Panama should be taken into considera tion and an appropriate 
way could be found to settle the issue in question.    8.7 The representative of Chinese Taipei
 shared Panama's concerns that the indicative prices used 
by Colombia may well be minimum customs prices for duty collection.  While Panama was the main 
                                                                                                                                                                     
●  Resolution No. 10953 of 18 November 2005  (establishing indicative prices for blankets and 
travelling rugs from South Korea;  China;  and Panama); 
●  Resolution No. 11285 of 25 November 2005  (establishing indicative prices  for exercise books from 
China;  Indonesia;  and Panama; 
●  Resolution No. 11439 of 29 November 2005  (establishing indicative prices for textile products 
under subheadings 610120000 to 6302510000 from South Korea;  North Korea;  China;  Philippines;  Hong Kong, China;  India;  Indonesia;  Malaysia;  Pakistan;  Panama;  Singapore;  Thailand;  Chinese 
Taipei;  and Vietnam).  G/C/M/84 
 Page 19 
 
 
  victim of the indicative pricing system and othe r restrictions, his country, as well as some other 
Members, were also affected by these measures.  His delegation asked Colombia to kindly review carefully whether the indicative pricing system and other restrictions it applied to a wide-range of 
textiles and footwear from certain sources could be justified under the relevant  WTO agreements.  His 
delegation would also suggest that Colombia re view whether it had been observing the key WTO 
principles, non-discrimination and transparency in the application of these measures.  If it failed the 
test mentioned above, Colombia was urged to make the necessary adjustments without delay. 
 8.8 The representative of Korea
 had been following the issues raised by Panama with keen 
interest and was attentive about their possible impl ications on traders and investors.  His delegation 
hoped that all the concerns, queries and poten tial misunderstandings would be solved soon. 
 8.9 The representative of Thailand
 thanked Panama for submitting its questions on Colombia's 
various resolutions, including the indicative pricing sy stem.  His delegation had a systemic interest as 
well as a substantive interest in this because at least  three of the resolutions targeted important Thai 
export commodities and products.  His delegation was looking forward to seeing more clarification on 
the different resolutions and questions and was plea sed to hear that Colombia had already tabled a 
paper with its responses.  His delegation also ask ed if there were English translations of the 
Colombian resolutions.    8.10 The representative of Singapore
 said that his delegation, as one listed under one of the 
Colombian resolutions, looked forward to receiving Co lombia's response.  It also registered its 
interest in being kept informed of developmen ts and in being involved in any consultations. 
 8.11 The representative of Malaysia
 said that his delegation had a particular interest in the 
questions raised by Panama and was glad to hear that Colombia had submitted a paper with some 
explanations on the questions raised.  His delegati on looked forward to looking at those replies in 
detail and reserved its right to reve rt to this issue in the future. 
 8.12 The representative of the Philippines
 echoed the points made by his Asian colleagues. 
 8.13 The representative of Hong Kong, China
 thanked Panama for the paper in document 
G/C/W/548 regarding certain Colombian measures wh ich established indicative prices for certain 
goods imported from a number of WTO Members, in cluding textiles and clothing from Hong Kong, 
China.  According to footnote 2 of the documen t, Colombia's Resolution Nos. 0862808, 08743 and 
11439 were relevant to H ong Kong, China.  As textiles and clothing was a key industry for Hong 
Kong, China and for transparency, his delegation looked forward to obtaining more information from 
Colombia and welcomed its responses to the questions  raised by Panama, particularly on how the list 
of targeted economies and price levels were estab lished, and how the mechanism was implemented. 
 8.14 The representative of Pakistan
 thanked Panama for bringing this issue to this fora and for the 
questions raised in their paper.  His delegation also had a substantial substantiv e interest in this issue 
and looked forward to reviewing carefully the paper provided by Colombia.  His delegation wished to 
revert to this issue at the next meeting. 
 8.15 The representative of Colombia
 noted that his country had deep historical links with the 
Republic of Panama and considerable trade exch ange.  His delegation thanked Panama for the 
bilateral consultations before sending these questi ons to the different WTO bodies.  His delegation 
attached the greatest importance to the concerns that had been expressed .  It also regretted that this 
issue was not dealt with in the Committee on Cust oms Valuation and had been referred to this 
Council.  However, his delegation was willing to answ er the questions in any forum.  It had supplied 
answers to Panama's questions and requested that  these be circulated as a formal WTO document for 
both the Committee on Customs Valuation and this Council.   G/C/M/84 
Page 20  
 
   
8.16 The representative of Panama
 thanked Colombia for its responses, to which he wished to 
provide preliminary comments.  First, in reaction to  what Colombia said today, this matter had been 
on the bilateral agenda for some time.  The firs t rapprochement with the Colombian Government 
dated to August 2005 with a number of bilateral me etings and discussions, at the highest level since 
then.  However, as it was not an issue that speci fically referred to Panama but involved other 
delegations as well, his delegation considered it import ant to discuss this issue in a multilateral forum.  
His delegation brought this issue to the CTG becau se the Colombian measures had diverse elements 
including not only customs valuation, but the qu estion of access to ports which went beyond the 
competence of the Committee on Customs Valuation.   
 
8.17 With regard to the answers provided, his dele gation considered that they did not contain much 
substance.  From what Colombia had stated, it was cl ear that this was not the first time that Colombia 
had used these prices for customs valuation.  In 2000, Colombia had made a reservation to maintain 
minimum values for a list of goods for a temporar y period (G/VAL/W/53/Add.1) in the Committee on 
Customs Valuation.  Colombia said that mini mum values were necessary for certain products 
including textiles, footwear and cotton. Colombia promised that it would eliminate these minimum 
values and would implement measures that would be in full compliance with the WTO on the basis of 
this reservation.  The country was undergoing a crisis with negative effects on industry and 
employment, in particular for the textiles a nd footwear sectors.  The Committee on Customs 
Valuation in document G/VAL/26 agreed to this request and allowed Colombia to apply minimum 
values up to 2003.  This was confirmed by Colombia 's responses which also confirmed that Colombia 
was using a system of Indicative Prices for footwear  and clothing – the same products subject to the 
previous reservation.  The previous reservation fo r minimum values applied to 58 sub-headings of 
textile and footwear products and today Colombia replied that there was a new scheme being applied 
for these same 58 sub-headings.  He asked Colomb ia to consider these questions:  what was the 
purpose of these indicative prices;  what did the cu stoms authorities do with these indicative prices;  
and what was the impact of those prices on imports?    8.18 In its responses, Colombia referred to the ri sk of under-invoicing as justification for applying 
these measures.  It seemed to be referring to pr oducts from Panama, China, Chinese Taipei, Singapore 
and other countries listed.  It seemed that some products from certain origins had a global  monopoly 
on the issue of under-invoicing;  this was the h eart of the problem.  What happened to the under-
invoicing for products from other origins?  Finally, Colombia applied the scheme to all countries.  
Therefore, what would be the purpose of the list of  countries provided?  What would be the treatment 
received by the countries on the list, vis-à-vis  those who did not appear on the list?  It was obvious 
that the Colombian customs measures had a discrim inatory effect and constituted trade restrictions 
that were geared towards a limited number of Members.  Panama was experiencing restricted access 
and requested Colombia to correct the situ ation to avoid problems in the future. 
 8.19 The Chairman
 proposed that, in view of several Me mbers' interest in this matter and the 
recently received responses, the Council take note of th e statements made and revert to this matter at 
its next meeting. 
 
8.20 The Council so agreed . 
 
IX. ISSUES RELATED TO TRADE IN TEXTILES – SUBMISSION OF TURKEY  
9.1 The Chairman  recalled that at the meeting of the Council on 10 March 2006, Turkey had 
introduced a new proposal for terms of reference of the work programme.  This had been presented by 
Turkey as "Turkey’s proposal regarding the 'outlin e' of the work programme, the details of which 
should be elaborated by the concerted efforts of all the WTO Members."  It seemed clear from the 
interventions which had been made at that m eeting that there was no common understanding among  G/C/M/84 
 Page 21 
 
 
  Members on the item and, in particular, on the proposal  for a work programme.  This was in part, but 
not only, because the Turkish proposal had just been made available to Members.  It was, therefore, 
agreed to revert to this item at the present meeti ng.  It was also agreed that the outgoing Chairman 
would brief the  incoming Chairman of the situati on in order for him to carry out consultations with 
Members on this matter.  
 
9.2 The new Chairman convened open-ended consultations on 8 May 2006.  Before the 
consultations, on 28 April, Turkey had circulated a communication, contained in document G/C/W/549, 
in which it presented the proposal for a work pr ogramme it had made at the 10 March 2006 Council 
meeting.  Members came to these open-ended consu ltations with a very cooperative spirit and the 
discussions were very useful and constructive.  Ev en though the comments were mostly of a preliminary 
nature, many Members had found the new proposal subm itted by Turkey in document G/C/W/549 to be 
an improvement over the previous one.  In particular , it stated that the work programme should not lead 
to a roll-back of the market openings achieved so far.  The consultations also helped to clarify the 
confusion that the work programme on which the CTG should now focus was the one contained in 
document G/C/W/549 and not G/C/W/522.   That being said, it was also clear that this Council was not 
yet at a point where there was convergence of views.  In particular, many Members had reiterated their systemic concern with dealing with the textile s and clothing sector in a specific manner. 
 9.3 The representative of Turkey
, recalled that his delegation had voiced its concern several times in 
the Council regarding the future of the textiles an d clothing sector which, it believed, was shared by 
many.  For more than a year, Turkey had been work ing towards the establishment of a work programme 
in the CTG, its efforts finally culminating in a proposal on the terms of reference of the work 
programme presented at the previous CTG meeting.  Turkey appreciated the cons tructive discussions in 
the informal meeting held, and for the positive approach by all Members.    
9.4 There was no need to restate the current state of affairs in the textile and clothing sector as all 
were aware of the delicate  times the sector was going through.  He  mentioned the findings of a recent  
World Bank analysis on the issue, whic h had also been referred to in Turkey’s proposal.  This analysis 
indicated that, after the terminati on of the Agreement on Textiles and Clothing (ATC), certain countries 
had witnessed large declines in th e value of their exports of text iles and clothing products that may 
entail substantial adjustments.  The analysis also  said that in the absence of other employment 
opportunities, workers made redundant fr om the textiles and clothing sector may fall back into poverty.  
In this context, for many countries, getting their expo rt trends back on track, to gether with minimising 
the costs incurred by released workers and facilita ting their adjustment into  alternative employment 
would be a major challenge.    
9.5 The representative of Turkey had no doubt that , despite divergences in opinions as to its 
magnitude, none of the Members denied the existence of the problem regarding international trade in the 
textiles and clothing, which had be come more concentrated in the major importing countries.  Members 
should work on the way out of this situation and look into the options for facilitating the smooth 
functioning of trade in the sector.  In order to do that, a thorough and objective diagnosis of the problem 
itself was necessary.  This could best be done in th e context of the work programme, through a review of 
the global textiles and clothing production, and trade and market circumstances after the termination of 
the ATC.  Having provided the necessary analytical  groundwork, the rest woul d be easier.  A well-
prepared analytical framework would lead to ef fective decision making by governments regarding the 
sector and render any action, based on that, effici ent.  Through the work programme, the CTG would 
also be in charge of assisting the governments in  their decisions by making possible recommendations 
and by making policy optio ns available to them. 
 9.6 He further stated that while the quota free tr ading environment for textiles and clothing did not 
leave the domestic policymakers unarmed, the term ination of the ATC obliged them to deal with 
adjustment pressures in accordance with the rules of the multilateral trading syst em.  He was certain that G/C/M/84 
Page 22  
 
  Members would acknowledge the fact that it was almo st impossible, with the limited capabilities of a 
single developing country, to do the vast amount of wo rk required to take ad vantage of, and overcome, 
the challenges.  Moreover, the efforts of individual countries often fell short of reaching their objectives 
in today's world of interdependence, due to the ac tions of other actors.  Consequently, his country 
believed that the most appropriate and reasonable way to deal with current adjustment challenges was to 
explore what response could be found within the scop e of the multilateral trading system.  To sum up, 
achieving sustainable textile and clothing trade required a comprehensive multilateral approach and the participation of the relevant international or ganisations.  Among them , the WTO had the major 
responsibility as the main global organisation dea ling with the conduct of trade relations among its 
Members.  The Preamble of the Marrakesh Agreement foresaw the need for positive efforts, designed to 
ensure that developing countries secure a share in the growth of international trade commensurate with 
the needs of their economic development.  In this context, the proposed work  programme foresaw that 
the WTO would act as a coordinator to examine ways to develop collaborative efforts with international 
organisations, including the World Bank and the Intern ational Monetary Fund, to direct resources under 
the programmes. 
 
9.7 The representative of Turkey reiterated that all Members were welcome to participate in the efforts to establish the details of this work program me since they were the very stakeholders and would 
be the beneficiaries of its outcomes.  By this, he did not simply mean those Members which faced 
difficulties today, but all Members, since even countries that ha d continued to increase their exports 
might experience significant adjustment towards more efficient economic operators, and this would be 
facilitated through the recommendations of the prog ramme.  He understood that some Members had 
concerns with certain aspects of the proposed work programme.  Firs t, on systemic concerns, he noted 
that the programme already had a predecessor in  the Sub-Committee on Least-Developed Countries 
where discussions had been taking place and certain policy options ha d been recommended to LDCs.  
Second, he assured all Members that the proposed wo rk programme in no way aimed at a roll-back of 
the market opening achieved so far, or a stifling of the potential gains from increased international trade 
and investments.  As stated in its  terms of reference, the work progr amme would be developed in a way 
that would fully respect the basic principles and ru les of the WTO and the rights and obligations of the 
Members.    9.8 The main objective of the progr amme was to foster a broader understanding of the unique needs 
of the textile and clothing sector a nd to provide guidance for national a nd multilateral policies as well as 
solutions to deal with related issues.  This includ ed giving technical advice, practical assistance and 
support to developing countries.  In this context, the programme aimed at el aborating and implementing 
integrated strategies from a global to a local level, in order to adjust to the new global realities brought 
about by the ATC termination.  In conclusion, he  reemphasised the fact that the current challenges 
experienced by developing c ountries regarding trade in textiles an d clothing required the collaborative 
efforts of all Members and of the relevant intern ational organisations, am ong which the WTO had prime 
responsibility.  He reminded Member s that the work programme proposed by Turkey would provide the 
deeply needed analytical basis for effective decision making and any subsequent action.  9.9 The representative of El Salvador
 said that although the proposal made by Turkey was still 
being analysed in-depth by her authorities, on a pre liminary basis, it was a very positive contribution.  
Many of the problems confronted by the developing countries were underscored;  this sector being of 
vital importance for the generation of employment and for the economies of countries such as El 
Salvador.  As the paper stated, and according to the studies mentioned therein, some developing 
countries had experienced important reductions in their exports as well as closure of firms and loss of 
employment.  Space should be provided to discuss th ese concerns, with a view to finding solutions for 
the developing countries who were facing these types of problems, in view of the fact that a high 
percentage of such country’s exports  were precisely in this sector.  It was important that the main 
objective for the work programme proposed by Turk ey be to promote a grea ter understanding of the 
unique requirements in the textiles and clothing sector.  It was important likewise that, through a work  G/C/M/84 
 Page 23 
 
 
  programme, technical and practical assistance and su pport be given to the developing countries.  Her 
delegation agreed with Turkey that all the above s hould be carried out by respec ting the basic principles 
as well as the rights and obligations of the Member s in the WTO.  Finally, she considered that the 
proposal presented by Turkey was good progress in orde r to enable Members to continue discussions on 
this subject. 
 
9.10 The representative of Indonesia  stated that the Turkish paper was an improvement over the 
previous proposal, whose discussion had started be fore the ATC had terminated.  The difference was 
that the present proposal st ated that the measures to be followed  should not lead to a roll-back of the 
market opening achieved so far.  However, his delegati on still saw this proposal as  peculiar as it would 
differentiate the textiles and clothing sector from the other sectors in the WTO.  His delegation could not 
accept treating the textile and cl othing sector differently from other sectors in the WTO.  Indonesia 
continued to be of the view that it was not neces sary to set up a work programme in the WTO for 
reviewing the global textile and cl othing production, trade and market circumstance after the termination 
of the ATC. 
 
9.11 The representative of the United States  said that his delegation continued to believe that 
Members should ensure that issues of concern over the implementation of any WTO agreement of interest to any Member could be raised and considered in the CTG.  Therefore the United States would be willing to work with Turkey and with any ot her Member to draft a work programme, based on 
Turkey's proposal, that would ensure a cons tructive and productive debate and outcome. 
 
9.12 The representative of Honduras
 pointed out that this sector was of great importance for the 
creation of employment and the development of his country.  Honduras was examining the proposal, but 
on a preliminary basis could point out that the work programme and the mandate were viewed 
positively.  The details would have to be worked out and his delegation was willing to participate in all 
consultations.  
 9.13 The representative of Jordan
 stated that this sector had been subject to a different treatment 
being newly integrated in to the multilateral trading system after the termination of the ATC and that it 
was an area of concern for some countries.  This sect or was not only about trade.  It had a lot to do with 
the socio-economic development in many countries.  It  was a source of employment for many countries 
and any deterioration in this sector would lead to a significant negative impact, which had to  be resisted.  
It was necessary that the CTG establish and administer a work programme in order to consider the global textile and clothing production and trade, a nd the impact of trade liberalization, and to 
recommend ways that would overcome the challenges which might be faced by countries with a very 
high share of their exports coming from this sector.  His delegation fully supported all the elements in 
the proposed terms of reference for the work progr amme.  Such a work programme should be fully 
administered by the CTG in coordination with the IMF, the World Bank and any other relevant 
international organisation.  He e xpressed the hope that the spirit which had prevailed in the Chair's 
informal meeting would continue.  9.14 The representative of Sri Lanka
 referred to the proposal put forward by Turkey in document 
G/C/W/549 as a positive step to take  the Council’s deliberation forward.  The textile and clothing sector 
remained the most important sector in the multilateral trading system for Sri Lanka, as it accounted for more than half of the country’s expor ts and employed most of the work force of the industrial sector.  In 
addition, it was a sector which had recently been in tegrated into the multilat eral trading system and 
therefore had certain unique features.  In view of th is and of the very complex nature of the issues 
involved, his delegation welcomed any attempt to ad dress these complex issues within the WTO in a 
comprehensive manner.  9.15 The representative of Tunisia
 stressed once again the importance of the textiles and clothing 
sector for his country, in particular for employme nt, revenue generation and investment.  Tunisia had G/C/M/84 
Page 24  
 
  always expressed its interest and ha d presented a proposal in this conne ction.  His delegation wished to 
reiterate its support for the Turkish proposal to set up a work programme under the auspices of the CTG.  
He was convinced that the work programme propose d would help developing  countries to better 
evaluate the situation of the textiles  and clothing trade and hence to be better prepared to face up to the 
challenges presented by the elimination of the quota  system.  He expressed his appreciation for the 
positive atmosphere which had prevailed lately in this discussion. 
 9.16 The representative of Morocco
 stated that her delegation favoured setting up the work 
programme presented by Turkey in document G/C/ W/549.  Her delegation wi shed to proceed to a 
higher level by discussing in an in-depth and conc rete manner the provisions of the work programme. 
 
9.17 The representative of Pakistan  said that it was evident from all the statements made at the 
meeting, that this sector was th e most important sector for devel oping countries, including Pakistan.  
There was also no doubt that this se ctor had been in the past treated on a different level than other 
sectors in global trade, and his country has been one  of those which has been working very hard during 
the last 20 years to relieve this sector from its shack les.  He did not agree with the Turkish paper which 
said that the termination of the ATC had failed to r each its basic aim of levelling the playing field for all, 
in that the ATC expiration was only one element for creating a level playing field.  The other element was to be addressed in the ongoing WTO negotiations.  All kinds of alarms had been raised since the 
ATC had expired, for example, the Turkish paper and a World Bank study that stated that certain countries had experienced large declines in the value of their exports of textiles.  On the other hand, 
those who had made the same alarmist statements and studies could now be told that there were not only 
LDCs, but also developing countries, which had witnessed tremendous gr owth in the past two years in 
this sector.  It had been argued that countries su ch as Bangladesh, Vietnam and Cambodia would be left 
with millions of jobs lost but there was evidence to the contrary.    
9.18 The representative of Pakistan had no problem  with helping developi ng countries in dealing 
with isolated problems through this transition phas e.  There were bodies which had the technical 
capacity and had shown in the past that they were more than willing and competent to deal with these 
problems.  There were mechanisms within the ITC and expertise within the ITCB.  Countries had, could and would be benefiting from  consultations and help from these orga nisations.  That being said, Pakistan 
had problems in dealing with the textile sector as  an independent sector for any work programme.  
Though he did not have the final conf irmation from his capital , Pakistan would not be able to agree with 
any work programme that would deal independently w ith the textile sector from the other sectors.   
 9.19 The representative of the Dominican Republic
 supported Turkey's proposal, which provided an 
opportunity to look at new problems th at had arisen in this sector in  many economies.  The Dominican 
Republic could bear witness to the short term effect s of the termination of the ATC: i.e. a number of 
companies had closed.  In the clothing sector, importa nt exports had taken place in the Caribbean zone.  
However, with the liberalization of this sector there had been problems re lated to unemployment, 
closure of companies, and reducti on in investment, all leading to more poverty.  There should be a 
mechanism for these effects to be discussed in th e context of globalization in the framework of the 
WTO.  His delegation, therefore, was of the view that the Turkish proposal wa s appropriate and timely 
because it sought a mechanism for diagnosing new problems and fostering a broader understanding of 
the different parts of the WTO, an d providing guidance in order for af fected Members to be able to 
design more acceptable na tional policies in keeping with reality.  Although his country was studying this 
proposal, as a preliminary reaction he sympathise d with it.  Members should approve the work 
programme proposed by Turkey because it would he lp to solve a problem which had gradually been 
growing in many developing countri es and which tended to create  poverty which was a scourge in 
developing countries.  The subseq uent discussion would help his delegation to have a clear 
understanding of all the aspects of the proposal.   G/C/M/84 
 Page 25 
 
 
  9.20 The representative of Egypt  reiterated that his country was in favour of establishing a work 
programme to address the developmen ts in international trade in text iles and clothing.  A significant 
number of Members had expressed the importance of th is subject for them.  He shared these views that 
the CTG was the appropriate forum to discuss this matter.  
9.21 The representative of Japan
 welcomed Turkey's new proposal.  As to the work programme 
suggested by Turkey, Japan could support the idea of  conducting a study on the issue of the textiles and 
clothing sector in order to assist  developing countries in  improving their competitiveness, based on the 
understanding that this proposal in the CTG had no re lation to the Turkish proposal regarding textiles in 
the NAMA negotiations.  As to the appropriate forum to  take up this issue, Japan was of the view that it 
might depend on the scope of the work programme, but was open on this point and was ready to work in 
a constructive manner.  9.22 The representative of Mexico
 considered that the proposal subm itted by Turkey was acceptable.  
In view of the improvement it co nstituted, it would lead Members in  the right direction and therefore 
Mexico could approve the work programme. 
 9.23 The representative of Guatemala
 stated that the textiles and cl othing sector was fundamental for 
his country and had a very important socio-economic impact.  Therefore, the discussion in the CTG was 
very relevant for Guatemala, which viewed positively the discussions relating to Turkey's proposal.  His 
delegation was open and ready to analyse this propos al in greater detail and to discuss and contribute 
ideas with all Members on how such a work programme could help developing countries. 
 9.24 The representative of China
 said that he had found the informal  consultations useful.  He found 
the new document presented by Turkey well refined a nd better presented.  On substance, his delegation 
believed that the singling out of any sector led to systemic concerns and therefore China was not in a 
position to agree to any work progr amme being set up by the CTG. 
 9.25 The representative of Brazil
 supported what Pakistan had sa id, in particular the systemic 
implications of this and the fact that some other organizations were in a be tter position to undertake 
studies, to address the competitiveness of different countries, technical assistance and many of the issues mentioned in the work programme.  At this stage,  Brazil could not support the Turkish proposal but was 
still willing to continue the constructive dialogue on this matter.   
 9.26 The Chairman
 concluded that from the interventions  made it was clear that even though 
progress had been made on the item there was still no common understanding among Members on the 
item raised by Turkey in G/C/W/549, nor on the terms of reference of the work programme as sponsored 
by Turkey.  However, he believed it was worthwhile  to capitalise on the positive spirit which had been 
shown by Members, particularly in the recent past.  He, therefore, encouraged those Members who were 
particularly interested in the issue to engage in bila teral and plurilateral consultations so that the issue 
could be further clarified.  He also proposed that the CTG take note of the statements made and revert to 
this item at the next me eting.  In the meantime, he proposed to hold consultations to continue the 
discussion on the work programme as proposed by Turkey in G/C/W/549.  At the next meeting he 
would report on these consultations.   
 9.27 The representative of Pakistan
 asked for clarification.  As th ere was no consensus to discuss the 
work programme, he asked whether the Chairman meant to say that he would hold consultations on the proposal submitted by Turkey. 
 
9.28 The Chairman
 clarified that most Members had expresse d interest in continuing discussions to 
clarify the issues relating to the proposal by Turk ey.  It was not possible to say there was a work 
programme to look at until Members agreed as such .  He proposed to hold consultations on Turkey's 
proposal and not on the work programme. G/C/M/84 
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9.29 The representative of China
 said that he had the same concern which had now been clarified. 
 9.30 The Council agreed
 on the Chairman's proposal. 
 X. OTHER BUSINESS 
A. E
UROPEAN COMMUNITIES REGULATION EC 1558/2005  REGARDING THE ADMINISTRATION OF 
THE QUOTA FOR CORN AND SORGHUM FROM SPAIN AND CORN FROM  PORTUGAL  
10.1 The Chairman  recalled that this matter had been put on the agenda at the request of the 
delegation of Argentina.   
 
10.2 The representative of Argentina  referred to a new European Communities' regulation, 
EC 15 58-2006 which modified the provisions of the Administration of Quotas for Corn and Sorghum 
from Spain and Portugal.   This regulation related to an admi nistrative regime for corn and sorghum 
from those two EC Members.  Since the EC had issued this regulation his delegation had sought 
clarification from the EC.  Despite the questions presen ted by his delegation with regard to the text of 
the new regulation on corn and sorghum imports, r esponses were not forthcoming.  His delegation 
was concerned with the new administration of the quota, established on the basis of the said regulation, for the EC's trade concessions with regard to corn and sorghum.  Argentina was a 
considerable supplier of these products to the EC.  His delegation would be grateful for a reply from 
the EC on the questions it already transmitted to the EC. 
 
10.3 The representative of the European Communities
 took note of Argentina's intervention.  Her 
delegation had received these questions in the Agri culture Committee and would reply to them at its 
next meeting since they concerned quot as dealt with in that Committee. 
 
10.4 The Committee took note  of the statements made. 
 B. 
DATE OF THE NEXT MEETING  
10.5 The Chairman  informed Members that the next CTG meeting was scheduled to take place on 
Thursday, 6 July 2006.  The agenda would close on Monday, 26 June 2006.  
10.6 The meeting was adjourned. 
 
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