WORLD TRADE  
ORGANIZATION  TN/RL/15 
30 November 2005 
 
 (05-5669) 
Negotiating Group on Rules  
  
 
NEGOTIATING GROUP ON RULES 
 
Report by the Chairman to th e Trade Negotiations Committee
 
 
I. ANTI-DUMPING AND SUBSIDIES AND COUNTERVAILING MEASURES 
 INCLUDING FISHERIES SUBSIDIES 
A. INTRODUCTION  
1. This report updates my July 2005 report to the Trade Negotiations Committee, focusing in 
particular on the achievements of the Negotiating Group on Rules since then, in all areas of its 
mandate, as well as looking ahead to the Hong Kong Ministerial Conference, and to our work in 2006.   
2. Members will recall that in my July report, I out lined five steps that I intended to implement 
so as to move the Group's work forward in an acceler ated and intensified manner.  First was a call to 
the Participants to bring more focus to their proposals, by submitting specific legal drafting for the 
changes they were seeking.  Second was the creati on of a process of plurilateral consultations on the 
basis of these proposed legal texts, with a view to sharpening the discussion to the greatest extent 
possible, so as to clarify the degree of acceptance of the proposals, and thus to identify areas of 
possible convergence.  Third was my intention to requ est some individuals to assist me as "Friends of 
the Chair", as a further means of deepening the discussions and thus  advancing work on particular 
areas.  Fourth was the intensification of the Group's meeting schedule, including with intersessional meetings as appropriate.  Fifth was establishment of a Technical Group, to examine possibilities for 
developing a standardized anti-dumping questionnaire,  with a view to reducing costs and increasing 
predictability for investigating authorities and expor ters;  this group is making progress toward its 
goals.  I am pleased to report not only that I have im plemented all of these steps,  but also that through 
this process, the Negotiating Group's work has substantively advanced this autumn.   
3. Of course there is no room for complacency.  An enormous amount of both technical and 
political work remains to be completed, and time grows ever shorter.  That said, I firmly believe that 
the process that we have put into place in the Ne gotiating Group is fundamentally sound.  Thus, as the 
Group even further accelerates its work in 2006, as it  must, it is essential that we preserve and build 
upon this existing process.   
4. The following sections provide a more detailed di scussion of the negotiations in the areas of 
anti-dumping/countervailing measures, horizontal subsid ies disciplines, and fisheries subsidies, and 
what I foresee for 2006.   
B. 
STATUS OF NEGOTIATIONS ON ANTI -DUMPING /COUNTERVAILING MEASURES  
5. Anti-dumping continues to be the most active ar ea of the negotiations.  Proposals tabled in 
this area are increasingly specific, to the point that the Negotiating Group's anti-dumping/countervail 
work is being carried out almost exclusively on the basis of specific legal texts.  Taking an overall 
view of the anti-dumping negotiations, certain broad pr inciples are discernible, in particular:  avoiding TN/RL/15 
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 unwarranted use of anti-dumping measures on the one hand, while preserving the basic concepts, 
principles and effectiveness of the instrument a nd its objectives where such measures are warranted, 
on the other hand; and limiting the co sts and complexity of proceedings for interested parties and the 
investigating authorities on the one hand, while stre ngthening the transparency and predictability of 
such proceedings on the other hand.   
6. In this regard, the Negotiating Group has been considering proposals to clarify and improve 
the rules regarding, inter alia , determinations of dumping, injury and causation, and the application of 
measures; procedures governing the initiati on, conduct and completion of anti-dumping 
investigations, including with a view to strengthe ning due process and enhancing transparency; and 
the level, scope and duration of measures, including duty assess ment, interim and new shipper 
reviews, sunset, and anti-circumvention proceedings.   
7. Specific proposals that the Group has been discussing in detail include proposals on 
determinations of injury/causation, the lesser duty rule, public interest, transparency and due process, 
interim reviews, sunset, duty assessment, circumve ntion, the use of facts available, limited 
examination and all others rates, dispute settleme nt, the definition of dumped imports, affiliated 
parties, product under consideration, and the in itiation and completion of investigations.  The 
desirability of applying to both the anti-dumpi ng and countervail rules any clarifications and 
improvements which are relevant to both areas is broadly recognized.  Additional proposals continue to be submitted, and the process of detailed discu ssion will certainly continue, and accelerate, after 
Hong Kong.   
C. 
STATUS OF NEGOTIATIONS ON HORIZONTAL SUBSIDIES RULES  
8. The negotiations in respect of subsidies di sciplines, as well as the calculation rules for 
countervailing measures, have accelerated since my Ju ly report.  Certain textual proposals have been 
submitted, and the process of detailed consideration,  including through plurilateral consultations, has 
begun for some of these proposals.   
9. Issues on which proposed amendments to the SCM Agreement have been submitted include 
definition of a subsidy, specificity, prohibited subsidies, serious prejudice, export credits and 
guarantees, and the allocation of benefits.  It is my understanding that additional proposals are being 
prepared and should be submitted in the near future.   
10. Many Participants have stressed from the outset of the negotiations the importance to them of 
subsidy-related issues in these negotiations.  To  date, however, far fewer and far less precise 
proposals have been tabled in this area than in  respect of anti-dumping, and these negotiations are 
considerably less developed than those on anti-dumping.   Given that Participants continue to state 
their strong interest in a substantial outcome in respect  of the subsidy rules, I thus am gratified to see 
the recent increase in activity here.  I must emphasi ze, however, that the Group will need to rapidly 
deepen its analysis of subsidy-related proposals after Hong Kong to ensure that this area can 
contribute to a balanced final outcome in the Rules negotiations.   
D. STATUS OF NEGOTIATIONS ON FISHERIES SUBSIDIES  
11. The negotiations on fisheries subsidies continue to be quite active, and have progressed since 
the beginning of the DDA.  There appears to be br oad agreement among Participants that disciplines 
on subsidies in the fisheries sector should be strengt hened, including through the prohibition of certain 
forms of fisheries subsides that contribute to ov ercapacity and over-fishing.  There also is broad 
agreement that any new disciplines should include a ppropriate and effective special and differential 
treatment provisions for developing and least-devel oped Members, taking into account the particular  TN/RL/15 
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 importance of the fisheries sector to such Members.  It is therefore very encouraging to see that the 
discussion of the developmental aspects of fisheries s ubsidies has started early enough in the process.  
12. There remains, however, a considerable distance to be travelled between the broad 
agreements in principle and the elaboration of preci se legal text setting forth the nature and extent of 
new disciplines, including the scope of a prohibi tion, exceptions, transparency and enforcement 
provisions, and special and differential treatment provisions. 
E. POST -HONG KONG WORK  
13. I believe that the process currently being used  by the Group is the right one for achieving 
substantial results in all areas of the Rules mandate , including its development dimension.  To this 
end, it is my intention, after the Hong Kong Minister ial, to build on and intensify this process, with a 
view to deepening all Participants' understanding of  the proposals, and identifying possible areas of 
convergence.  For anti-dumping, this means first and foremost an intensified schedule of negotiations 
on the precise textual proposals that already are befo re the Group or that may yet be submitted.  For 
subsidies, the first priority is to obtain from Par ticipants as soon as possible precise textual proposals 
on all of the areas in which they are seeking change s, as for the time being such proposals exist only 
in a few of the areas identified as being of interest.  Only on the basis of such textual proposals can 
sufficiently focused discussion be undertaken to  allow for identification of possible areas of 
convergence.  For fisheries subsidies what is required in the first instance is fo r Participants to table 
much more specific proposals, in the form of proposed text; this is a prerequisite to further progress.  
14. My goal for this intensified process in all are as of the mandate is for the Group to develop as 
quickly as possible the necessary elements that woul d allow me, if I am so mandated, to table a 
consolidated draft legal text of the AD a nd SCM Agreements that would be the basis  for the final 
stage of the negotiations.   
15. In this regard, I am fully conscious of the 2006 end date for the Doha  Development Agenda 
and I recognize that for an eventual Chairman's  text to serve its intended compromise-developing 
function, it will need to be preceded by very deta iled work of the Participants that illuminates the 
political as well as the technical dimensions of each proposal, and facilitates the identification of the 
necessary balance.  Thus, there is no time to be  lost in completing this detailed work.   
16. To conclude, I can only reaffirm my commitmen t to doing everything within my power to 
ensure that the Negotiating Group on Rules under takes the necessary substantive work, at the 
necessary pace, to clarify and improve the rules a ccording to the mandate in Doha and make its 
contribution to the final outcome of the negotiations.   
II. REGIONAL TRADE AGREEMENTS  
A. STATUS OF WORK 
17. The negotiations on WTO's disciplines and pro cedures on regional trade agreements (RTAs) 
continue to be very active and have progressed considerably in 2005.  Acknowledging the importance 
that RTAs have come to play in the trade po licies of virtually all Members, the Group shares a 
systemic interest in enhancing the transparency of all types of RTAs (Article XXIV of the GATT 
1994; Article V of the GATS; and paragraph 2(c)  of the Enabling Clause), and in ensuring the 
complementarity of RTAs' disciplines with the WTO.  Discussions on RTA Transparency have 
moved to text based negotiations while those on  RTA systemic issues have gained momentum, 
notwithstanding the existence of acute differences on the scope and substance of the negotiations in 
this area.  Overall it appears that the majority of Participants are seeking for a balanced outcome of TN/RL/15 
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 these negotiations through the clarification and im provement of procedures as well as the disciplines 
related to RTAs.    
18. With respect to RTAs Transparency, the Group is currently engaged in text-based 
negotiations on the "Elements for an RTAs' Transpar ency Mechanism" based on the latest informal 
note of the Chair.
1  This reinforced mechanism for the c onsideration of RTAs by the WTO includes a 
device for the early announcement of RTAs; a ti meframe for notification; precise guidelines on the 
type of information to be submitted by the par ties; a change from the currently required - but 
unattainable  - collective assessment of RTAs' consiste ncy to a fact-finding process that includes a 
Secretariat's factual presentation2 of RTAs; and streamlined and effective procedures for RTAs' 
subsequent notifications and reporting.  The provisi on of technical support by the Secretariat to help 
Members fulfilling their transparency obligations is also foreseen, as is the improved dissemination of 
RTA information. 
19. The remaining technical aspects of this work are being conducted in dedicated informal 
sessions of the Group.  Areas where detailed drafting and a few refinements are still needed include 
the type of information to be provided by RTA parti es, in particular statistics, and how to deal with 
unfinished examination work in the Committ ee on Regional Trade Agreements (CRTA).   
20. Differences remain on the application of the emerging transparency mechanism to RTAs 
notified under the Enabling Clause, with some Members strongly against it.  The Group devoted  two informal sessions to this question with no specific and concrete understanding.  
21. Negotiations on RTA systemic questions have attracted considerable interest and have 
recently shifted from their initial academic stance to technical consideration of the various issues 
tabled.  Discussions have focused on a core set of issues, on the basis of text proposals by 
Participants, in particular the clarification of the "substantially all the trade" (SAT) concept, the length 
of transition periods, and RTAs' development di mension (inclusion of special and differential 
treatment (S&D) provisions in Article XXIV of the GATT 1994).  In spite of the acknowledged 
linkages between these issues, their considerati on has been singled out in informal dedicated 
meetings.  Informal roadmaps by the Chair have further disentangled some of the elements falling 
under each issue. 
22. The main thrust of the discussions has to date been on the clarification and calculation of SAT 
and on RTAs transition period.  The quantitative elem ents of SAT have attracted most of the Group's 
attention through consideration of the pros and cons of tests base d on trade and on tariff lines, their 
respective benchmarks, how to combine them, the le vel of HS disaggregation for the calculations, the 
non-exclusion of "major sectors", and most recently the relationship of "other restrictive regulations 
of commerce" with SAT.  Views diverge among thos e Members favouring a trade based test, a tariff 
line test and a combined one; the latter one has received broader support, however, there too views 
differ on the weight to attribute to each benchm ark and on how to combine them.  Some Members 
favour a more holistic approach to SAT that woul d include consideration of "other restrictive 
regulations of commerce" as well as preferential rules of origin.  Qualitative benchmarks to 
complement the SAT evaluation have  been referred to but most Participants favour postponing such 
discussion to a later stage of the negotiations. 
23. With respect to RTAs' transition period, ther e appears to be convergence among Members on 
what should be the maximum length allowed.  View s diverge, however, on the definition and scope of 
application of the "exceptional cases" that woul d allow the parties to an RTA to go beyond the 
                                                     
 
1 JOB(05)171 
2 Since September 2004, this element has become operational in the CRTA, on a  provisional and 
voluntary basis.  TN/RL/15 
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 transition period and, in particular, on whether the exception should only be available to developing 
countries.  An additional issue being considered is  the relationship between RTAs transition period 
and the calculation of SAT, in particular the point in time during the implementation of an RTA when the SAT test is to be applied. 
24. The issue of S&D treatment permeates all aspects of these discussions.  The scope and extent 
of S&D to be included in Article XXIV of the GATT 1994 is however unclear, varying from all 
elements of the existing requirements as proposed by a group of developing countries, to specific 
elements such as differentiated SAT benchmarks as proposed by ot her Participants.  Support among 
Members for discussions on the introduction of S& D provisions in GATT Article XXIV is also 
unequally distributed.  Some Members argue in its favour so as to accommodate North-South RTAs, 
others hold that the question should be addressed at a later stage of the negotiations, and other 
Members, including some developing countries, ha ve expressed serious concerns in this respect. 
B. F
UTURE WORK 
25. Following the Group's dedicated informal meetings held since September of this year, I am in 
a position to revise my informal note on "RTAs tran sparency", to recapitulate the progress achieved in 
those discussions and to provide Participants with a new draft text.  I believe that on that basis the 
Group will be better positioned after the Ministerial Meeting to resolve the few outstanding issues (in 
particular, the questions of how to deal with RT As presently under examination in the CRTA and to 
improve transparency of RTAs notified under the Enabling Clause).  Depending on progress a 
provisional decision on RTA transparency may be envisaged before the end of the Round. 
26. On systemic issues, the proposals presently on th e table and the informal discussions held so 
far provide me with a solid base for a revised road map on RTA systemic issues.  I anticipate that its 
focus will be on the clarification of SAT and on the other questions so far di scussed, with a detailed 
breakdown of the concrete elemen ts underpinning each of the i ssues.  This will not preclude 
broadening the scope of the negotia tions provided that further text proposals on these and other issues 
are tabled.  The aim of the roadmap is to achieve  sufficient convergence on these questions to allow 
the Group to arrive at appropriate outcomes by end 2006. 
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