RESTRICTED  WORLD TRADE  
ORGANIZATION  G/C/M/91 
18 December 2007 
 
 (07-5648) 
Council for Trade in Goods  
  
MINUTES OF THE MEETING OF THE COUNCIL FOR TRADE IN GOODS 
23 NOVEMBER 2007 
 
Chairperson: H.E. Ambassador Karsten Vagn Nielsen (Denmark
) 
  The meeting of the Council for Trade in Goods was convened by airgram WTO/AIR/3120 
and the proposed agenda for the meeting was c ontained in document G/C/W/590.  The meeting 
proceeded on the basis of the following agenda.  
I.
 NOTIFICATION OF REGIONAL TRADE AGREEMENTS.............................................2  
II. MARKET ACCESS MATTERS .............................................................................................2  
A. COMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE ...............................2  
B. INTRODUCTION OF HARMONIZED SYSTEM 2002  CHANGES INTO WTO SCHEDULES OF 
TARIFF CONCESSIONS – REQUESTS FOR EXTENSION OF THE WAIVER ..........................................2  
C. INTRODUCTION OF HARMONIZED SYSTEM 2007  CHANGES INTO WTO SCHEDULES OF 
TARIFF CONCESSIONS – REQUESTS FOR A WAIVER ......................................................................3  
III. 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
 
IV. SENEGAL - CUSTOMS VALUATION AGREEMENT: REQUEST FOR AN 
EXTENSION OF WAIVER  GRANTED UNDER ARTICLE IX OF THE WTO 
AGREEMENT ...................................................................................................................... ....4 
V. EUROPEAN COMMUNITIES ENLARG EMENT:  PROCEDURES UNDER 
ARTICLE XXVIII:3 OF GATT 1994.....................................................................................5  
A. ENLARGEMENT OF THE EU ROPEAN COMMUNITIES ON 1 MAY 2004 ............................................5  
B. ENLARGEMENT OF THE EU ROPEAN COMMUNITIES ON 1 JANUARY 2007.....................................6  
VI. ISSUES RELATED TO TRADE IN TEXTILES ..................................................................6  
VII. TRANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL 
OF ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA........................................8  
A. REPORTS OF THE SUBSIDIARY BODIES OF THE COUNCIL FOR TRADE IN GOODS ..........................8  
B. CTG-SPECIFIC REVIEW ...............................................................................................................12  
VIII.  CONSIDERATION OF ANNUAL REPORTS OF SUBSIDIARY BODIES OF 
THE COUNCIL FOR TRADE IN GOODS.........................................................................17  
IX. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE 
IN GOODS TO THE GENERA L COUNCIL (G/C/W/501)...............................................17  
X. OTHER BUSINESS................................................................................................................1 8 
A. DATE OF THE NEXT MEETING .....................................................................................................18  G/C/M/91 
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I. NOTIFICATION OF REGIONAL TRADE AGREEMENTS 
1.1 The Chairman
 recalled that, under the working procedures agreed by the Committee on 
Regional Trade Agreements following adoption by  the General Council of the Transparency 
Mechanism, the Council for Trade in Goods was to be  kept informed of Members' notifications of 
new regional trade agreements.  He informed the CTG that the following regional trade agreements 
had been notified to the RTA Committee:  
A. Agreement between Japan and the Kingdom of  Thailand for an Economic Partnership in 
document WT/REG235/N/1  
B. Agreement between Japan and the Republic of Chile for a Strategic Ec onomic Partnership in 
document WT/REG234/N/1  
C. Agreement on amendment of and accession to the Central European Free Trade Agreement in 
document WT/REG233/N/1  
D. Free Trade Agreement between the Arab Republic  of Egypt and the EFTA  states  in document 
WT/REG232/N/1 
 
1.2 He proposed that the Council takes note of the information just presented.  
1.3 The Council so agreed. 
 
II. MARKET ACCESS MATTERS 
2.1 The Chairman
 noted that the Market Access Comm ittee had forwarded three items for 
consideration to the Council for Trade in Goods.   
 
A. COMMITTEE ON MARKET ACCESS – PERIODIC REPORT OF THE COMMITTEE  
2.2 The Chairman  drew Members' attention to the peri odic report of the Committee on Market 
Access contained in document G/MA/197.  As the repo rt was factual in nature, and reflected the work 
undertaken in the Market Access Committee, he s uggested that the Council take note of it.   
 
2.3 The Council so agreed . 
 B. 
INTRODUCTION OF HARMONIZED SYSTEM 2002  CHANGES INTO WTO SCHEDULES OF TARIFF 
CONCESSIONS – REQUESTS FOR EXTENSION OF THE WAIVER  
2.4 The Chairman  drew Members' attention to the draft waiver decision circulated in document 
G/C/W/585/Rev.1, which had been made in connec tion with the introduction of HS2002 changes into 
WTO schedules of tariff concessions.  The curre nt waiver decision was contained in document 
WT/L/674 and would expire on 31 December 2007.  The one year extension of the waiver decision was the subject of consultations in the Market Acce ss Committee where it was considered at the formal 
meeting that took place in October 2007.  He pr oposed that the Council a pprove the draft waiver 
decision contained in G/C/W/585/Rev.1 and forwar d it to the General Council for adoption. 
 
2.5 The Council so agreed
. 
  G/C/M/91 
 Page 3 
 
 
  C. INTRODUCTION OF HARMONIZED SYSTEM 2007  CHANGES INTO WTO SCHEDULES OF TARIFF 
CONCESSIONS – REQUESTS FOR A WAIVER  
2.6 The Chairman  drew Members' attention to the draft waiver decision circulated in document 
G/C/W/584, which had been made in connection wi th the introduction of HS2007 changes into WTO 
schedules of tariff concessions.  The current waiver decision was contained in document WT/L/675 
and Adds.1 - 3 and would expire on 31 December 2007.  The one year extension of the waiver decision 
was considered at the formal meeting that took pl ace in October 2007.  He proposed that the Council 
approve the draft waiver decision contained in G/C/W/584 and forward it to the General Council for 
adoption.   
2.7 The Council so agreed . 
 
III. 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  
3.1 The Chairman
 recalled the Council's consideration of the three waiver requests presented by 
the United States for the African Growth and O pportunity Act, the Caribbean Basin Economic 
Recovery Act and the Andean Trade Preference Ac t.  The United States had submitted revised waiver 
requests for these three progra mmes in documents G/C/W/508/Rev.1, G/C/W/509/Rev.1, and 
G/C/W/510/Rev.1.   At the July 2007 meeting of the CT G, it was agreed to revert  to this matter at this 
meeting.   
 
3.2 The representative of the United States  said that his delegation had been consulting with 
Members which raised issues under this agenda item si nce the last meeting.  It was continuing these 
consultations with the hope that it would have positive  developments to report to this Council by its 
next meeting.  
 
3.3 The representative of Paraguay  said that his delegation was, unfortunately, not yet in a 
position to be able to join the consensus on the deci sion to authorize waivers for the application of the 
preferential schemes mentioned in this agenda item.   During the weeks following the last meeting of 
the Council, the Paraguayan Government contin ued working intensively in contact with the 
Government of the United States in order to resolv e the issue.  After numerous consultations it was 
agreed to hold a meeting of the Paraguay-USA Bilateral Council on Trade and Investment next 
Tuesday, 4 December 2007.  The subject of preferen ces was included in the agenda and it was to be 
hoped that both delegations woul d make efforts to reach a compromise solution.  His delegation 
would do its best to reach such a conclusion.  In addition, next week would see the arrival in 
Paraguay, on the invitation of his Government, of  an important delegation of six United States 
senators, headed by the Democrat Majority Leader, Senator Harry Reid, and including two 
Republican senators.  That would also provide an opportunity for this  issue to be discussed. 
 3.4 These events, among various others that were not  mentioned, were part of the efforts that 
were being made by the Paraguayan Government with a view to being able to give its agreement to 
the waivers requested by the United States, aware as it was that it was the only delegation which at 
this stage was still opposing such measures.  However, it was worth pointing out that the 
MERCOSUR Heads of State had expressed their understanding and support for Paraguay's position 
with a view to ensuring fair and appropriate tr eatment in cases that involved a divergence from the 
principle of non-discrimination in the implemen tation by WTO Members of preferential schemes 
under the Enabling Clause.  This statement formed part of the joint declaration of the MERCOSUR summit held in Rio de Janeiro in January this year.  G/C/M/91 
Page 4  
 
  3.5 Meanwhile, it was important to note that Pa raguay's trade balance with the United States had 
been worsening year after year, while the trade ba lances of the countries benefiting from preferences 
under the Andean Trade Promotion and Drug Eradi cation Act (ATPDEA) had continued to increase 
in their favour.  Thus, in 2006 all the countries be nefiting under the ATPDEA showed a surplus in 
their trade balance with the United States.  Overall, this  surplus amounted to US$10,874 million.  Of 
this trade, 62 per cent was under preferential regi mes, while trade under the Generalized System of 
Preferences (GSP) represented only 2 per cent.  Simi lar figures could be adduced with regard to the 
countries benefiting under the Caribbean Basin Ec onomic Recovery Act (CBERA) and the African 
Growth and Opportunity Act (AGOA).  On the ot her hand, Paraguay recorded a deficit of US$853 
million during the same period, since its exports  to the United States only amounted to US$58 
million, while it recorded imports to the value of  US$911 million, that was to say, 15.7 times more 
than what it managed to export to the largest econom y in the world.  All this clearly showed the 
importance that preferences could have in increasing  trade, and also the seriousness of the situation 
facing countries which, though finding themselves in a similar situation, were refused receiving the 
same treatment.   
 
3.6 On 15 September 2007, the White House issued a press release in which it listed the countries 
regarded as major producers of illicit drugs or as tran sit countries.  It also published a list of the 
countries that had not fulfilled their internationa l obligations in the struggle against illicit drug 
trafficking.  Paraguay was included among the tran sit countries, which was only natural, given the 
fact that drug traffickers use Paraguayan terr itory to transport goods coming from other South 
American countries.  The Paraguayan Government expended huge resources in the struggle against 
this trade and went to great lengths to cooperate with the governments concerned in this struggle.  
Consequently, Paraguay was not on the list of countries th at had failed to fulfil their obligations in this 
area.  On the contrary, on several occasions it ha d been congratulated on the successes it had achieved 
in seizing consignments of drugs, capturing criminals, prosecuting them and cooperating on their 
extradition in conformity with the law.   
 3.7 For the above-mentioned reasons Paraguay cons idered itself to be unjustly discriminated 
against under the preferential schemes which the Unite d States had established in order to cooperate 
in the development of countries which required such  help.  It was worth pointing out that Paraguay 
was a land-locked developing country and had a small and vulnerable economy.  Finally, he 
welcomed this opportunity to emphasize that Paraguay  would continue to make every effort to find a 
satisfactory solution that would enable it to join the consensus regarding th e draft decisions submitted 
to this Council.  3.8 The Chairman
 proposed that the Council take note of th e statements made and revert to this 
item at its next meeting. 
 3.9 The Council so agreed
. 
 
IV. SENEGAL - CUSTOMS VALUATION AGREEMENT: REQUEST FOR AN 
EXTENSION OF WAIVER GRANTED UNDER ARTICLE IX OF THE WTO 
AGREEMENT 
4.1 The Chairman  drew Members' attention to documents G/C/W/581 and G/C/W/582 submitted 
by Senegal.  The first documen t contained a report by Senegal on its use of minimum values 
following adoption of the waiver decision in  document WT/L/655.  The second document, 
G/C/W/582, contained a new request for an extensio n of this waiver decision on the use of minimum 
values for customs purposes.  He understood that consultations among interested Members were on-
going.  Unless any Member wished to take the floor, he proposed that the Council agreed to revert to 
this matter at its next meeting.   G/C/M/91 
 Page 5 
 
 
  4.2   The Council so agreed . 
 
V. EUROPEAN COMMUNITIES ENLARGEMENT:  PROCEDURES UNDER 
ARTICLE XXVIII:3 OF GATT 1994  
A. ENLARGEMENT OF THE EU ROPEAN COMMUNITIES ON 1 MAY 2004 
5.1 The Chairman  drew Members' attention to document G/L/695/Add.6 which concerned the 
accession to the European Union on 1 May 2004 of Cyprus, the Czech Republic, Estonia, Hungary, 
Latvia, Lithuania, Malta, Poland, the Slovak Republic  and Slovenia.  In this communication, the EC 
indicated that it would not assert that Members who had submitted a claim pursuant to Article XXIV:6 of GATT 1994 were precluded fro m withdrawing substantially equivalent 
concessions under Article XXVIII:3 of GATT 1994 becau se this withdrawal occurred later than six 
months after the EC's withdrawal of concessions, provided that the claiming WTO Member withdrew concessions no later than 51 months after the EC's modification of concessions.    5.2 Under the provisions of Article XXVIII:3 – and following the most recent extension of the 
deadline as agreed at the 21 May 2007 meeting of  the Council for Trade in Goods – Members could 
withdraw substantially equivalent concessions no late r than 45 months after the EC's withdrawal and 
modification of concessions, in other words, no la ter than 1 February 2008.  Furthermore, these 
Members had to provide at least 30 days' notifica tion of their intent to withdraw substantially 
equivalent concessions – in other words, no later than  2 January 2008.  In the light of these impending 
deadlines under Article XXVIII:3, and the ongoi ng negotiations under Article XXIV:6, the EC 
proposed that this deadline be extended a further six months for a total of 51 months following the 
EC's modification of concessions, in other words un til 1 August 2008.  If this extension was agreed, 
Members would have to provide notification of in tention to withdraw substantially equivalent 
concessions by no later than  2 July 2008. 
5.3 The representative of the European Communities
 informed Members that, under this item, it 
was seeking the approval of the extensions of th e periods during which Members could withdraw 
substantially equivalent concessions in respect of the modifications of the EC's and the new member 
states' schedules for both the 2004 and 2007 enlargemen ts.  His delegation hoped that both requests 
for extensions would be approved at this Council meeting.  5.4 The representative of Ecuador
 said that, with regard to communication G/L/695/Add.6, her 
delegation had no problem in accepting th is new request for an extension.  It did wish to point out that 
the European Communities had recognized Ecuador  as having initial negotiating rights and/or a 
principal supplying interest and/or a substantial suppl ying interest not only in the exports of bananas, 
but also in other products of export interest for Ecuador.  Accordingly, any final settlement on the 
banana issue could not be offset against the resu lting compensations to which Ecuador had a right for 
the other products recognized by the European Communities.  Furthermore, as regarded the 
information provided by the EC in the case of th e compensation due to Ecuador with regard to 
bananas on account of the withdrawal of concessions owing to the enlargement of the EC in 2004, her 
delegation calculated that the amount of the compensation due to Ecuador since 1 May 2004 amounted to €217,925,273 annually, that was to say,  a total amount to date of over €700 million, 
which did not include the amount of the rest of th e compensation for other products recognized by the 
EC. 
 5.5 The Chairman
 proposed that the Council take note of  the statements made and agree on the 
extension of the deadline as set out in the Eu ropean Communities document G/L/695/Add.6.   
 
5.6 The Council so agreed . 
 G/C/M/91 
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  B. 
ENLARGEMENT OF THE EU ROPEAN COMMUNITIES ON 1 JANUARY 2007 
5.7 The Chairman  drew Members' attention to docum ent G/L/821/Add.1 which concerned the 
accession to the European Union on 1 January 2007 of Bulgaria and Romania.  In this 
communication, the EC indicated that it would not assert that Members who had submitted a claim pursuant to Article XXIV:6 of GATT 1994 were precl uded from withdrawing subs tantially equivalent 
concessions under Article XXVIII:3 of GATT 1994 because  this withdrawal occurs later than six 
months after the EC's withdrawal of concessions, provided that the claiming WTO Member withdraws concessions no later than 18 months afte r the EC's modification of concessions.  The EC 
was therefore proposing an extension of the 6 mont h period for withdrawal of concessions, in other 
words, to no later than 1 July 2008.  If the extens ion was agreed, Members would have to provide at 
least 30 days' notification of their intent to withdr aw substantially equivale nt concessions – in other 
words, no later than 1 June 2008.    5.8 The representative of Ecuador
 said that with regard to  the European Communities' 
communication G/L/821/Add.1, Ecua dor had no problems in accepting th is request for an extension 
of the period.  It wished to point out that th e European Communities recognized, on 30 January 2007, 
Ecuador's rights as principal supplier of bananas to  Bulgaria.  Her Government, therefore, expected 
from the European Communities the compensation due.   Ecuador once again reserved its right to 
withdraw substantially equivalent tariff concessi ons on products of interest to the European 
Communities, in the event that it was not gran ted proper compensation for the two enlargement 
processes of the European Communities in 2004 and 2007, in conformity with Article XXVIII:3 of 
GATT 1994. 
 5.9 The Chairman
 proposed that the Council take note of the statement made a nd also of the EC 
communication contained in document G/L/821/Add.1.  He proposed that the Council agree on the extension of the deadline as set out in the Eu ropean Commission's document G/L/821/Add.1.  
 
5.10 The Council so agreed
. 
 
VI. ISSUES RELATED TO TRADE IN TEXTILES  
6.1 The Chairman  recalled that at the CTG meeting on 9 July 2007 the discussion had focused on 
the proposal submitted by Turkey on 6 March 2007, contained in document G/C/W/573 and Corr.1,  
presenting a draft outline for the work programme pr oposed in document G/C/W/549.   This latter 
document itself contained the terms of reference of  a work programme proposed by Turkey for the 
consideration of the Council.   Members had expr essed their views, but there remained no common 
understanding on the submission presented by Turkey or on the terms of reference of a work 
programme.  Several delegations had supported Turkey and welcomed  the proposed outline, several 
others had remained unconvinced of the need for su ch a work programme and, therefore, were not 
prepared to discuss a possible outline.  One Member had found, without favouring the work 
programme proposed by Turkey, that it could be useful if Turkey, a Member, or the Secretariat, compiled the relevant studies already prepared by other organizations. In view of this, and since 
Members remained willing to con tinue the discussion, the Chairman  had proposed that the Council 
revert to this item and, as requested by Turkey, have open-ended consultations on the issue.  Such 
consultations had been held on 14 November and had not provided any significant movement on the 
substance of the issue.  One Member had proposed th at, in view of the fact that there was no real 
change in the positions of Members and delegations we re short of time, the issue be taken up only if 
and when the position of any Member changed.  
6.2 The representative of Turkey
 underlined his country's interest in this work programme.  
Turkey's intention was to have a better understandi ng of present and future needs of the textiles and 
clothing sectors and to provide an inventory and gu idance for the developing countries on policies to  G/C/M/91 
 Page 7 
 
 
  adjust to new global realities. The proposal should be discussed under the umbrella of the WTO, the 
only international organization mandated to deal with  international trade rules.  He informed the 
Council of the consultations which Turkey had held  with some Members since the CTG meeting of 
9 July 2007 in order to look into the possibilities of moving forward on this issue.  It was his delegation's understanding from previ ous meetings that such a work programme was supported by a 
substantial number of Members and that more in-d epth discussions on the details of the issue could 
help Members reach consensus.  He proposed, therefore, that Members should engage in a more 
constructive discussion regarding the proposal.  Turk ey was open and ready to work constructively 
with any Member who might be worried about any po ssible adverse effects of such a study, of which 
his delegation believed there were none .  He, therefore, urged all inter ested parties to discuss the issue 
so as to find a common ground. 
 6.3 The representative of Jordan
 stated that his delegation supp orted the proposal and believed 
that there was value in the work programme proposed by Turkey.  
6.4 The representative of China
 stated that his delegation had not changed its position.  He 
referred to a bilateral discussion with Turkey, wher e his delegation had expressed its appreciation for 
the fact that Turkey was willing to consider some thing new and abandon its original proposal, a sign 
of constructive engagement.  He sought confirmation from Turkey that it was prepared to abandon the 
position expressed in the documents listed on the Counc il's agenda.  His delegation had already asked 
in the past, without getting a clear answer, whether, since Turkey wa s concentrating its statements on 
document C/G/W/573, the proposal contained in docum ent G/C/W/522 remained valid.  It would help 
his delegation if Turkey would clarify its intention regarding this agenda item.  He agreed with the 
suggestion, which had been made at the last inform al meeting of the Council, that since there had not 
been any movement of positions from the part of  Members on this item for quite some time, it was 
time to stop taking it up.  Since Turkey had spoken to  the contrary, he presented some of his ideas on 
this issue.  For instance, if Turkey was willing to  discuss something else other than what it had itself 
proposed so far, his delegation could discuss that.  At the meeting of the Council on 9 July 2007, one Member had suggested that, instead of taking the Turkish proposal as a basis, the Members or the 
Secretariat could compile studies prepared by othe r international organizati ons.  His delegation had 
evoked this idea bilaterally with Turkey.  There was no written proposal, but this was something new, 
not based on the Turkish proposal, which had been conveyed to his capital for consideration.  Once 
his delegation had confirmation from Turkey that it  would be prepared to abandon its current position 
and try something new, his delegation could itself take a new position.  At present, that position 
remained unchanged. 
6.5 The representative of India
 recalled that his delegation had been constructively engaged in 
this issue, attending all the meetings of the Council,  including informal meeti ngs, and having bilateral 
meetings with Turkey.  It had been some time si nce his delegation had really seen any change in the 
proposal itself either from the proponents or from the other side of the table. No possible constructive engagement was possible given the fact that there had been absolutely no change in position.  He 
thanked Argentina for laying out some of the probl ems, as reported in page 9 of document G/C/M/90. 
India did not see the Turkish proposal as a work pr ogramme but as a proposal where the Secretariat 
was being asked to recommend to Members certain options on an issue which was under negotiation. 
Turkey was a proponent in a particular way on that  issue in the NAMA Negotiating Group itself.  The 
point was made to bring other Organizations, includi ng the World Bank, to assist, and it was not clear 
whether this was trade or aid-related. There would,  however, be some form of engagement or an on-
going review.  These were far reaching proposals, not a work programme, nor a study of a static 
situation.  Members had engage d constructively but this had not lead anywhere. Under the 
circumstances, his delegation thought that this was a matter which needed to be taken off the agenda. 
The proposal was that if there was any substantive changes or new, substantially different proposals, 
the Council would revert to the issue and discuss it. G/C/M/91 
Page 8  
 
  6.6 The representative of Honduras
 reiterated that the approval of this work programme could be 
very useful. 
6.7 The representative of Egypt  also reiterated his delegation's position in favour of a work 
programme to study the changes in textiles and cl othing.  His delegation was willing to work with 
other Members to explore ways to see how to do th is in a manner that would be suitable for all. 
6.8 The representative of Thailand  referred to bilateral consultati ons his delegation had had with 
Turkey on this issue, and reiterated that Thailand' s position had not changed for the reasons which had 
been stated previously in both formal and inform al meetings.  His delegation supported the proposal 
by India that this issue be taken off the age nda unless there was a change in Members' positions. 
6.9 The representative of Hong Kong, China  observed that his delegation had been actively 
engaged in this discussion for some time.  Its positi on remained that the singling out of the textiles 
and clothing issue was inappropriate as it was agains t the fundamental objective of integrating textiles 
under GATT rules. It would be useful for Turkey to  further clarify its position regarding its proposal, 
as suggested by China. The records of the previous  meeting of the Council, in particular paragraph 
6.19 of document G/C/M/90, indicated that Argentin a had observed that the Turkish proposal was not 
a simple study or work programme.  The records also described that it was difficult to reach a 
balanced solution on its basis.  On the idea of the Secretariat or Members compiling studies already 
prepared by other Organization, more clarification could be useful. 
6.10 The representative of Turkey  stated that the proposal before the Members was not written in 
stone.  There could be amendments and/or changes.  There was no limit as to what the Members could do.  He observed, for the information of the delega tion of China, that in his opening remarks he had 
been discussing document G/C/W/573.  He was of the view that with some additional work on this 
issue the Members could come to a text  which would be satisfactory for all. 
6.11 The Chairman
 concluded that there was no common understanding among the Members on 
this item.  He appreciated that  discussions were going on among them and, once again, encouraged 
Members to seize opportunities to get a better appreci ation of positions.  He proposed that the CTG 
take note of the statements made and revert to th e matter at the next meeting.  He would remain 
available for open-ended consultations if there was an evolution of positions that would make 
progress on the matter likely. 
6.12 The Council so agreed . 
 
VII. TRANSITIONAL REVIEW UNDER PARAGRAPH 18 OF THE PROTOCOL OF 
ACCESSION OF THE PEOPLE'S REPUBLIC OF CHINA  
A. REPORTS OF THE SUBSIDIARY BODIES OF THE COUNCIL FOR TRADE IN GOODS  
7.1 The Chairman  informed Members that, in accordance with paragraph 18 of the Protocol of the 
Accession of the People's Republic of China in docum ent WT/L/432, this Council was to report to the 
General Council on the Transitional Review.  He suggested proceeding in two stages.  The CTG 
subsidiary bodies had, as required, transmitted their re ports to the CTG.  As a first step, he would give 
Members the opportunity to make general comments on those reports and then he would propose that 
the Council take note of these Reviews.  Then, he  would move on to the CTG's own Transitional 
Review in which the CTG was required to review the information provided by China pursuant to 
designated parts of Annex 1.A of the Protocol.    
7.2 He reminded Members that the following CT G subsidiary committees had carried out the 
Review:  Market Access - the report was contained in document G/MA/196 and Corr.1;  Agriculture -  G/C/M/91 
 Page 9 
 
 
  the report was contained in document G/AG/24;  Cu stoms Valuation - the report was contained in 
document G/VAL/61;  Sanitary and Phytosanitary Measures - the report was contained in document 
G/SPS/47;  Technical Barriers to Trade - the re port was contained in document G/TBT/22;  Import 
Licensing - the report was contained in document G/LIC/17;  Rules of Origin - the report was contained in document G/RO/64;  Anti-Dumping - the report was contained in document G/ADP/16;  
Subsidies and Countervailing Measures - the report was contained in document G/SCM/121;  
Safeguards - the report was contained in document G/SG/84;  and TRIMs - the report was contained 
in document G/L/835.  While not wishing to reopen any of these reviews, he asked if Members wished to take the floor on these reports.  
7.3 The representative of the United States
 recalled that this was the sixth Annual Transitional 
Review Mechanism for China.  As in the past, th e US approached the TRM with the understanding 
that it was designed to help Members understa nd and assess the progress that China had made in 
adopting and complying with WTO disciplines.  From that perspective, the US believed that the TRM 
continued to be a useful mechanism.  It helped to  provide needed additional transparency for China's 
trade regime, as it allowed Members to seek and obtai n clarifications regarding China's various trade 
policies and practices.  It also provided Member s with a multilateral forum for conveying their 
expectations of China and their concerns with Chin a's implementation and complia nce efforts.  In that 
regard, the TRM was a useful supplement to bilatera l discussions with China.  By now, after nearly 
six years of WTO membership, China should have im plemented almost all of the commitments that it 
made in its accession protocol.  As a result, it ma y be expected that the TRM would focus more on 
China's ongoing adherence to WTO rules than on Ch ina's implementation of specific commitments 
that it made in its Protocol of Accession.    7.4 In his delegation's written submission befo re this Committee (G/C/W/587 and G/C/W/589), 
the US focused on adherence to WTO rules.  The US  raised a number of questions.  Some questions 
were asked during transitional revi ews conducted by subsidiary bodies, but China did not respond to 
them, so they were asked again.  Other questions raised new questions.  He highlighted a few of the 
concerns that underlay the questions.    
 (i) Export Restrictions on Raw Materials:   
 7.5 His delegation had submitted questions about China's export restrictions on raw materials, a 
matter that raised serious WTO concerns, to th e Marked Access Committee.  China continued to 
maintain export quotas and sometimes export duties on at least a dozen raw materials that were particularly important to US industry, even though China was the world's leading producer of these raw materials.  WTO rules generally prohibited ex port quotas.  The same was true for the export 
duties that China sometimes used to further discour ages exports, as China had made a commitment in 
its WTO Protocol of Accession circumscribing their use.   It was long past time for China to get rid of 
its export restrictions on raw materials.  China s hould have eliminated them when it acceded to the 
WTO nearly six years ago.  His delegation wanted to see a level playing field, where competition was fair.  However, with China's export restrictions , the US and other WTO Members were significantly 
disadvantaged.  The export restrictions artificially  raised world raw material prices and lowered 
China's domestic prices.  That gave a substantia l artificial advantage to China's downstream producers 
over US and other foreign downstream producers.  China had suggested that its export quotas were 
justified because it was only trying to protect raw ma terials that were exhaustible natural resources.  
But, his delegation had not seen any facts to support that claim.  In order to protect its exhaustible 
natural resources, China would have to limit domestic sales just as it did exports.  But China did not 
appear to do that.  Take the example of coke, a ke y steel input.  China's production of coke had been 
rising every year, reaching the point last year wher e it produced nearly 300 million metric tons (MT).  
But almost all of that 300 million MT of produc tion was sold domestically;  China only allowed a 
small fraction of its domestic coke production to be exported.  The principal restriction China used 
was an export quota of 14 million MT.  China also rest ricted exports by adding on export duties, even G/C/M/91 
Page 10  
 
  though China committed in its WTO Protocol of Accession not to impose export duties on coke.  If a 
WTO Member was taking action to protect an exhaus tible natural resource, WTO rules required it to 
treat the domestic and export sides comparably.  China's system did not appear to do that. 
 
 (ii) VAT on Agricultural Goods:   
 
7.6 The United States raised straightforward questions about China's value-added tax (VAT) on agricultural goods in the Committee on Agriculture.  It  appeared that many agricultural products were 
exempted from China's 13 per cent VAT normally app licable to agricultural products when sold 
domestically.  For example, it appeared that dome stic sales of agricultural commodities produced and 
sold by farmers in China, such  as wheat, cotton and corn, were exempted from the VAT.  However, 
when imports of these same products  were sold in China, it appeared that they were assessed the VAT 
at the rate of 13 per cent.  His delegation had ask ed China to explain this apparent discrimination, 
which raised national treatment concerns.  Howe ver, China had so far offered no explanation. 
  (iii) Subsidies:   
 
7.7 As was evident from the US submission to this Council (G/C /W/587), China simply refused 
to respond to numerous questions that his delegati on raised about its subsidies practices.  These 
questions sought to address some critical issues, including potentially prohi bited subsidies provided 
by provincial governments in China.  The US requ ested that China answer those questions today. 
 
 (iv) Export duties on lead metal:   
 
7.8 One of the new questions that his delegati on asked related to refined metal lead.  China 
recently imposed export duties on refined metal lead, which contributed to a steep decline in China's 
exports of refined metal lead and had contributed to a sharp rise in world prices.  Meanwhile, Chinese 
domestic prices had reportedly declined because of China's captive refined metal lead production, 
giving China's downstream producers a significant competitive advantage over foreign downstream producers.  However, in its Protocol of Acce ssion, China committed not to impose export duties on 
refined metal lead.  His delegation asked that China explain how it justified its use of export duties in 
this case.   (v) Import restrictions on technologies:   
 
7.9 Another new question related to China's Catalogue of Technologies Whose Imports Are 
Banned or Restricted, issued by China's Ministry  of Commerce earlier this month.  This catalogue 
listed technologies whose imports were banned or rest ricted.  In his delegation's questions, it sought a 
number of clarifications from China, including how it  justified import bans and import restrictions on 
technology imports in light of its obligations under Article XIII of the General Agreement on Tariffs 
and Trade 1994.  He concluded by noting that China had made a submission in the last few days to the 
Council which related to this area.  To the extent  that the submission answered these questions, he 
apologised for taking the Council's time.  The US looked forward to China's responses to its 
questions. 
 7.10 The representative of the European Communities
 opened his statement by saying that it would 
cover both sections of this agenda item.  He  raised it now because it contained a number of 
conclusions which emerged from the discussions held in the subsidiary bodies on the TRM of China.  
His delegation remained seriously concerned over th e lack of co-operation shown by China in most 
aspects of the TRM discussions.  It was disappointed by the paucity and lack of Chinese replies in the 
majority of the subsidiary bodies and was troubled by the statement made by China in the Market 
Access Committee that "China is under no obligation to provide answers in this exercise".  It was 
hardly to be underlined that transparency was a vital element for the WTO and applied to all  G/C/M/91 
 Page 11 
 
 
  Members, even China.  He recalled that the speci al scrutiny provided for in the TRM was approved by 
China itself as part of its Protocol of Accession.   This lack of co-operation, transparency, 
unwillingness to respond to many questions and to ot her Members was a systemic concern.  Indeed, 
China itself, on discussions on the previous agenda ite m on textiles, stressed to Turkey the importance 
of transparency and getting clear answer to questi ons posed by China to Turk ey as well as the need to 
have written answers, not only oral statements.  He  invited China to apply the same requirements to 
itself in future discussions under the TRM.  His de legation remained optimistic and hoped that China 
would give detailed replies, in writing, to this C ouncil to all questions that  his delegation and other 
Members had posed in Committees.    
7.11 He highlighted a number of specific areas of particular concern to the EC.  These were issues 
that had been outlined in his delegation's earlier communications and did not constitute an exhaustive 
list of concerns but a number of its more important concerns.  First, on the theme of transparency and 
predictability of trade relations,  China was committed in its accession protocol to provide a 
reasonable period for comments to the appropriate regulatory authorities before measures affecting 
trade in goods were implemented.  His delega tion looked to China to fully implement that 
commitment on advance notice and comment for trade regulations.  Secondly, on export restrictions,  
his delegation shared the concerns expressed by the US and questions raised by them and others that 
China should notify the quantities associ ated with the export restrictions that it applied;  that it should 
transmit to the WTO its justification for each specific export restriction;  and when there was no such justification, his delegation expected China to no tify to the WTO how and when it would bring those 
export restrictions for numerous raw materials into  line with WTO rules.  In its submission, dated 
19 November 2007, China had provided some informa tion on its export restrictions and its regime 
there.  But as far as his delegation could see, th e information was basic and did not indicate the 
quantities associated with the restrictions nor give any kind of detailed product-by-product, or sector-
by-sector, justification for the maintenance of these rest rictions.  It also did not explain, in the case of 
unjustified restrictions, how and when China would bring its regime into WTO rules and China's own 
accession commitments.  Further work would be n eeded from China to answer those outstanding 
questions.  7.12 In the TBT area, his delegation had made the point in the past that, for a range of sectors, 
China's conformity assessment, the compulsory certifica tion system, appeared to be a technical barrier 
to trade and, as such, an unnecessary restriction on tr ade.  He reiterated his delegation's request that 
China seriously try to develop a system less heavy, less onerous, less burdensome and less a barrier to 
trade.  Similarly, he reiterated his delegation's c oncerns over China's automotive policy and wished to 
record in the minutes of this meting his delegati on's request that China allow foreign majority 
investment in the automotive sector and that it rem ove the so-called two-plus-two regulation affecting 
foreign participation in both passenger and commercial vehicle sectors.  He also wished to record its 
request that China accede to the UN-EEC 1958 Agreement on Automobile and Auto-parts 
Promulgation which would have the effect of removing this important obstacle to trade. 
 7.13 He added that in the Market Access Committe e, his delegation had also raised a number of 
further concerns affecting sectors such as steel, sh ip-building, petro-chemicals, pharmaceuticals and 
cosmetics.  Concerns relating to Chinese regula tions and policies in these areas, varying from joint-
venture limitations, unjustified subsidies, local content requirements which appeared to be 
inconsistent with Article III of the GATT and the TRIMs and the Technical Barriers to Trade 
Agreements.  Again, his delegation remained unsatisfi ed with the answers given so far.  However, it 
remained optimistic that China would provide co mprehensive, written answers to the legitimate 
questions it and other delegations ha d raised.  He also asked if, at this time, China could provide 
information on its state of preparation for nego tiating its accession to the Government Procurement 
Agreement, which was an important step his delega tion was looking forward to and, again, constituted 
an important commitment in China's Accession Protocol.  G/C/M/91 
Page 12  
 
  7.14 The representative of Cuba
 reiterated her delegation's system ic concerns which it had voiced 
last year in this Council as well as this year in  the Market Access Committee.  Her delegation's on-
going concern was with regard to the discrimina tion in the Transitional Review Mechanism.  Her 
country was suffering because of export restrictions imposed by a WTO Member.  She had no intention of notifying goods and products and did not understand why a transitional process was being 
imposed on China.  All Members were subject to rules.   However, to her delegation, it appeared that 
some might be more subject to the rules than others .  She requested the US to be as forceful when it 
came to requesting elimination of restrictions which had been in place against her country for 
decades.  All Members must abide by the rules.  A Member could not ask another Member to do 
something when it was not doing what it was requ esting.  Members had to practice what they 
preached and people living in glass houses should not  throw stones.  She understood the concerns 
expressed by the US and the EC.  She believed there had to be further dialog ue but above all greater 
compliance with the rules of the WTO a nd she asked all Members to do so.   
 7.15 The representative of China
 voiced confusion as to where the Council was on its agenda with 
respect to this agenda item.  He understood that under the first sub-item, Members were supposed to 
make comments about the subsidiary body reviews.  Listening to some Members, it seemed that they 
had raised some substantial questi ons.  It appeared that some Members had difficulty in understanding 
what the Chairman was suggesting and in following th e WTO rules.  The EC delegate mentioned that 
his delegation was still requesting China to provide written answers but the rules in paragraph 18 of 
China's Accession Protocol did not require that.  Hi s delegation hoped that Members, before coming 
to this exercise, would study the rules carefully.  Otherwise it would be difficult to continue this 
exercise.  7.16 The Chairman
 proposed that the Council take note of the statements made and of the reports 
submitted by the subsidiary bodies. 
 
7.17 The Council so agreed . 
 B. 
CTG-SPECIFIC REVIEW  
7.18 The Chairman  recalled that China was required to provide information to the Council for 
Trade in Goods in accordance with paragraph 18.1  of the Protocol of Accession. The relevant 
information requirements were listed in Annex 1A.  China had submitted information as required 
under Annex 1A of the Protocol of Accession in document G/C/W/591.  He also drew Members' 
attention to the questions from Japan which were  circulated in document G/C/W/586;  and the 
questions from the United States circulated in documents G/C/W/587 and 589.  
7.19 The representative of China
 said that his delegation's submis sion spoke for itself.  He added 
that some of the questions raised by the US and th e EC had already been addressed by his delegation's 
submission in G/C/W/591.  He noted that the US said that it had not had time to study this submission and apologised if the questions were answered in th e document.  However, the US asked the questions 
again.  China had provided responses but other Memb ers said they had not seen any response.  There 
was a question about communication.  China would like to show that it had effective communication 
with other Members but if Members were turning a blind eye to this fact by saying something or 
insisting on allegations that were untrue, then his delegation had to remind Members to study this 
document that China had provided for information.   If Members still had questions they would be 
welcome to raise them.  In this stage, his delega tion would listen to other Me mbers and if they still 
had questions, his delegation woul d try to respond to them.   
 
7.20 The Chairman
 acknowledged that some Members might not have had the time to study the 
Chinese submission.  He asked Japan and the Un ited States if they wished to introduce their 
submissions.  G/C/M/91 
 Page 13 
 
 
   
7.21 The representative of Japan  said that, having submitted its questions and comments on 
1 November 2007, it did not have a chance to ex amine the information submitted by China on 
19 November 2007.  After quickly glancing through China's submission, she considered that her 
delegation still needed more information from Chin a.  She highlighted the 5 issues her delegation 
raised before this Council.  Regarding the ex port prohibition of natural sand, her delegation 
understood that China maintained this prohibitio n for the purpose of environment protection and 
natural resource preservation.  She asked if China had any restrictions on domestic production or 
consumption of natural sand.  If so , her delegation wanted to know the details and, if not, it would like 
to hear China's justification for maintaini ng export prohibitions contrary to WTO rules. 
 
7.22 Regarding the export restrictions on fluor ite, her delegation had raised this concern 
consecutively for the past few years.   It repeated the same questions  because it was not convinced that 
China's justification was sufficient.  Last year Japan  had asked China to give concrete data to show 
that China's domestic production controls were effectively conducted.  Her delegation had not 
received such data and could no t find any concrete data in th e report submitted by China on 
19 November.  This was why her delegation was not  convinced that this export restriction was 
inconsistent with the WTO Rules.  7.23 Third and fourth, her delegation also rai sed export restrictions on cokes and non-ferrous 
metals, issues already raised by the US, at the Market Access Committee this  year.  Her delegation 
had not received convincing justification from China fo r maintaining these restrictions neither.  As for 
cokes, her delegation wished to see the quantitati ve effects of China's measures for reducing the 
domestic production and consumption of cokes.  Her delegation also wished to know if there were any 
plans to reform the export licensing measures.  If so, she asked China to provide the details about it.  
As for non-ferrous metals, China had so far expl ained that resource protection and environmental 
conservation and a trade surplus reduction were the reasons for these quantitative trade restrictions.  
In terms of resource protection, she asked if Ch ina had restrictions on domestic production and 
consumption of these metals and, if that was the case, how effective were these domestic restrictions.  In terms of a trade surplus reduction, she requested  clarification on the consistency of the quantitative 
trade restriction with the rules in GATT 1994 for that purpose.   
7.24 Finally, she asked when China would star t its negotiation for its accession to the Government 
Procurement Agreement.  Her delega tion had raised the same issue l ast year at the Council for Trade 
in Goods, and China had responded that it wa s working on the initial offer for the accession 
negotiation.  Her delegation would be grateful if it could start the negotiations in the near future and 
would be happy to hear from China an update  on the current situation of this issue. 
 
7.25 The representative of the United States
 did not believe that the matter could be dealt with by 
Members reviewing China's submission under An nex I.A and coming back with any additional 
questions.  The Annex I.A submission was not long and he glanced through it during the previous 
intervention.  With respect to his delegation's firs t area of concern, export restrictions, there was a 
section in China's submission that dealt with export restrictions but it was simply an assertion that its 
export restrictions were in conformity with Artic le XX.  His delegation had gone to the trouble to 
make a specific presentation, both written and or al.  Coke was the primary example where China's 
production continued to rise and exports were almost  entirely limited.  His delegation believed that it 
deserved an answer and not just an assertion that China's restrictions were in conformity with 
Article XX.  How could this be so given the histor y of this particular product?  His delegation cited 
other products as well, e.g., fluorspar, indium, ma gnesium carbonate.  There were lots of examples, 
and his delegation looked forward to having substantive answers from  China on how its policies were 
in conformity with its WTO obliga tions, given the points raised.   
 G/C/M/91 
Page 14  
 
  7.26 Other issues that his delegation raised we re not addressed in the Annex I.A submission, for 
example, the value-added tax on agricultural goods, specific questions on textiles, technology, and the 
banking and financial sectors.  His delegation ha d extensive questions on state trading entities and 
enterprises.  China gave a short response basically sa ying that there had been no change in this area 
since the last review, plus a couple of specific r esponses to other areas.  These responses were not 
nearly as responsive to the questions as his delega tion believed would be pro portionate to the points 
put forward.  His delegation also raised the No rth-East Revitalization Programme's sections on 
disclosure and transparency.  His delegation had made an extensive presentation in its written submission as well as in its oral  submission on export duties, on lead metal, on import restrictions, on  
technologies, on mergers and acquis ition regulations, and on medical de vice border examinations.  It, 
therefore, considered that, in conformity with how this process was supposed  to work, it expected a 
corresponding effort on China's side to demonstrate how the questions raised, with respect to their 
compliance with their WTO obligations, were or were not valid.  7.27 The representative of China
 said that his delegation would respond to the questions one-by-
one.  His delegation had responded but he noted th at these responses were not satisfactory to some 
delegations.  Nevertheless , one could not say that his delegation had not responded.  He also thanked 
Cuba for the point it made that the WTO rules applie d to different Members in different ways and that 
there was some discrimination between some Me mbers.  Everybody knew that Paragraph 18 was  
discriminatory against China because no other Member  was required to go through this Review every 
year.  But, China had signed an agreement and, ther efore, was prepared to respect it, but strictly in 
accordance with paragraph 18.  He passed the floor to his colleague, the expert on CTG matters. 
 7.28 The representative of China voiced his disappoi ntment with some Members' statements which 
did not show any respect for China's efforts in the past six years under the transitional review 
mechanism.  He also believed that some Members ha d tried to misinterpret China's policies.  Having 
said that, he still wished to provide the inform ation in response to the questions and comments 
submitted to China prior to the meeting.  First of  all, he noted that, since its accession, China had 
ensured transparency in trade its policy regi me, including policies regarding export quantitative 
measures.  China reported to the Committee on Mark et Access a new and full notification on import 
and export quantitative measures every year.  Besid es, other export measures such as tariff and VAT 
rebates were included in the A nnex 1A information China had s ubmitted to this Council.  He 
considered that Members who raised questions rega rding this notification should have acquired the 
necessary information.  7.29 In regard to the export control imposed on natural resource products, he clarified that both 
export controls and domes tic production and consumption controls  were in place, consistent with 
Article XX of GATT 1994.  Coke, for example, wa s an exhaustible resource, and the industry was 
highly polluting and energy consuming.  In order to  protect the environment and achieve sustainable 
development, China had implemented a series of m easures to exercise control over export and at the 
same time limit the domestic pr oduction and consumption of coke, including the following measures: 
 
(1) On 1 September 1999 and 1 January 2000, the former State Economic and 
Trade Commission (SETC) published the First Batch of Catalogue of 
Prohibitions of Repetitive Project Inv estment in Industrial and Commercial 
Area, and the Second Batch of Catal ogue of Outdated Production Capacity, 
Techniques and Products; 
 
(2) On 27 May 2004, nine ministries jointly published the Circular on Streamlining 
Administration on Coke Industry, which stipulated that: 
 
(a) small coke factories must be s hut down and qualified manufacturers 
had to pay a heavy fee for causing serious pollution;  G/C/M/91 
 Page 15 
 
 
  (b) all coke projects since 2000 must be reviewed and those failed to meet 
the published standards have been terminated; 
(c) enforcement against illegal sales of export quota licence for coke 
should be made more effective. 
(3) On 16 December 2004, the NDRC published Announcement No. 76 of 2004, 
which set the standard for market access to coke industry.   
7.30 However, it may still take some time to see the result of China's efforts in terms of restricting 
the coke production of the domestic industry.  Besi des, the allocation of quotas, such as the applied 
quantity and historical performance, was consiste nt with the WTO requirements and China's accession 
commitment.  Commercial interest was the primary consideration of the Chinese coke exporting 
companies when choosing their trade partners and, th erefore, the price of coke was determined by the 
market and not by the export quota system.  China hoped that WTO Members duly recognized the sacrifices China had made, as well as the pressu re and dilemmas China was facing in environmental 
protection and natural resource conservation.  Its e fforts to achieve sustainable development should be 
understood and supported by Members. 
7.31 Regarding VAT exemption for some agricu ltural products, currently the major players in 
China's grain market included farmers, grain purch asing and trading entities at various levels, and end 
users.  The sale of agricultural products produced  by small farmers was exempted from VAT.  This 
was due to the fact that at the present stage in Ch ina, agricultural production was still characteristic of 
extremely small scale farming.  The current VAT system could not effectively cover the sales of grains produced by small farmers.  Howeve r, it should be noted that when farmers bought agricultural input, 
the price of which contained VAT, they had to unde rtake the VAT burden.  This part of VAT was not 
deducted when farmers sold their gr ains and thus generated a loss of their due income.  Therefore, 
when selling agricultural products, farmers were unde rtaking a de facto VAT burden, although they 
did not have to pay a de jure  VAT.  Moreover, transactions among grain trading or purchasing entities 
and sales by them to end users were subject to VAT.  Since imported grain was also purchased by the 
same grain trading or purchasing entities and since both domestic and import grain purchased by these 
entities or sold to end users by these entities were subject to VAT, China believed that such practice 
was in line with Article III of the GATT 1994 an d Article 3 of the Subsidies and Countervailing 
Measures Agreement. 
7.32 Regarding the consistency between the subsidy policy of local governments and the WTO 
rules, China had implemented a unified trade po licy framework across the entire country.  After 
China's entry into the WTO, the central government had sent clear in structions to local governments 
to abolish measures inconsistent with WTO rules at the earliest.  During recent years, local governments had begun to review lo cal subsidies to ensure their consistency with WTO rules.  
Regarding incentive policies in support of the deve lopment of the software industry, the policy 
objective of these incentives was to up grade the industry structure, wh ich would in turn enhance the 
development of the service industry, e.g., softwa re outsourcing.  These trade promotion measures and 
initiatives were permitted according to WTO rules.  Regarding integrated circuits, the incentives 
enjoyed by those 94 enterprises in the list releas ed by the NDRC, the Ministry of Information 
Industry, the General Customs Administration and the State Administration of Taxation, had been 
specified in the Notice of the State Council on Issuing Relevant Policies on Encouraging the 
Development of Software Industry and IT Industry  (GUO FA (2000) No. 18).  Related policies were 
not contingent upon export performance. 
7.33 Regarding the banking sector, state industrial policies indicated the direction and objective of 
industrial development, i.e. optimizing the indust ry structure, limiting the development of sunset 
industries and high energy-consuming industries in order to protect the environment and achieve G/C/M/91 
Page 16  
 
  sustainable development.  Therefore, taking into account the state industrial policies when issuing 
loans would help the commercial banks avoid risks a nd maximize their return.  He added that state-
owned enterprises in China had been responsible fo r their loss or profit, and for making independent 
commercial decisions since China's accession to the WTO.  How state-owned enterprises were 
managed or what privatization programmes woul d be implemented had nothing to do with the 
Subsidies and Countervailing Measures Agreement.  The Blueprint for the Northeast Revitalization 
Programme  encouraged the development of private sect ors, and provided state owned enterprises and 
other enterprises with equitable treatment in  the areas of market access, import and export 
administration, land use, credit loans and bond issuance. 
7.34 Regarding transparency, as it had committed in the Accession Protocol, China established a 
single journal to publicize all the trade-related la w regulation and rules.  Currently, all the major 
trade-related competent authorities sent copies of their newly published documents or draft to the 
MOFCOM Gazette.  Moreover, on 5 April 2007, the State Council published its Decree No. 492 of 
2007 the Regulation on Government Information Disclosure,  which would further enhance 
transparency of trade policies.  For the direc tive No. 95 of the ICAO, his government had responded 
to the questions under the Technical Barriers to  Trade Committee which was fully reflected in 
paragraph 24 of the WTO document G/TBT/22.  Members could revisit this document to asses 
China's response.  For the mergers and acquisition re gulation which concerned the US, as stated in the 
TRIMs Committee, China did not believe that this issue was, in any way, related to the TRIMs 
Agreement, or to the mandate of this Council. 
7.35 For technology import restrictions and prohi bitions, Members could have access to the two 
catalogues of technologies through Chin a's central government website at 
http://www.gov.cn/ziliao/flfg/2007-11/02/content_79 3830.htm.  The two catalogues mainly included 
out-dated technology used to produce high ener gy consumption or high pollution products, 
technology that might be used for illegal purposes, and technology that might harm national security.  
China believed its practice was in line with the WTO rules especially Article XXI, while not relevant 
to Article XI. 
7.36 The representative of Japan
 stressed that her delegation appreciated the efforts put forth by 
China in the TRM.  She found China's last interv ention very informative, adding that it would be 
helpful if China could circulate its oral interven tion in a non-paper.  She made this request on the 
understanding that this was not an obligation for China in relation to the TRM.   
7.37 The representative of China  thanked Japan for its appreciation.  With regard to the request for 
a copy of his delegation's oral statement, his de legation was willing to discuss an arrangement with 
the Japanese delegation after this meeting.  O fficially, it had stated that, under the TRM, his 
delegation had no obligation to provide a written stat ement.  However, it understood the need for the 
Japanese delegate to have such a copy and it was w illing to help.  He added, with respect to the 
Government Procurement Agreement, that China ha d been preparing its negotiations on the possible 
accession to Government Procurement Agreement, according to its accession commitment.  He 
assured Members that China had been taking me asures to fulfil its commitment to join the 
Government Procurement Agreement as soon as possibl e   He also drew attention to the oral 
statement by the European Communities and consid ered it odd that the EC was requesting a written 
statement from his delegation while it provided its statement in only an oral format.  He urged 
Members to study the rules of the WTO TRM so that all would have an understanding of how this 
exercise should be conducted and of the nature of  its limitations.  In this way, the co-operation 
between China and other Members under the TPR would be effective. 
7.38 The Chairman  proposed that the Council take note of the statements made.  He suggested that 
the Council proceed in the same manne r as last year with respect to the form of its report of the 
Review.  This would mean that a brief factual report would be prepared with references to the  G/C/M/91 
 Page 17 
 
 
  documents and attached to it the portion of the minutes of this meeting which related to the 
Transitional Review.  The report from the Council for Trade in Goods, as well as the reports of the subsidiary bodies, would then be transmitted to the General Council. 
 7.39 The Council so agreed
.   
 
VIII.  CONSIDERATION OF ANNUAL REPORTS OF SUBSIDIARY BODIES OF THE 
COUNCIL FOR TRADE IN GOODS 
8.1 The Chairman  recalled that, pursuant to the "Procedures for an annual overview of WTO 
activities and for reporting under the WTO" (WT/L/105)  which were adopted by the General Council 
on 15 November 1995, all bodies constituted under agre ements in Annex 1A of the WTO Agreement 
were required to submit annually a factual report to the Council for Trade in Goods, and the Council 
was to take note of these reports.    8.2 In the absence of comments, the Chairman
 proposed that Council take note of the reports of 
the following Committees:  (i) Co mmittee on Market Access, document G/L/839;  (ii) Committee of 
Participants on the Expansion of Trade in Info rmation Technology Products, document G/L/838 and 
Corr.1;  (iii) Committee on Agriculture, document G/L/828;  (iv) Committee on Customs Valuation, document G/L/833;  (v) Committee on Sanitary and Phytosanitary Measures, document G/L/842;  (vi) Committee on Technical Barriers to Trade,  document G/L/843;  (vii) Committee on Import 
Licensing, document G/L/836;  (viii) Committee on Rules of Origin, document G/L/831;  
(ix) Committee on Anti-Dumping Practices, document G/L/830;  (x) Committee on Subsidies and 
Countervailing Measures, document G/L/840;  (xi)  Committee on Safeguards, document G/L/832;  
(xii) Committee on Trade-Related Investment Meas ures, document G/L/837;  (xiii) Working Party on 
State Trading Enterprises, document G/L/829;  and (xiv) the Independent Entity, document G/L/841. 
 
8.3 The Council so agreed
. 
 
IX. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE IN 
GOODS TO THE GENERAL COUNCIL (G/C/W/501) 
9.1 The Chairman  drew Members' attention to the draft report of this Council circulated in 
document G/C/W/563.  In accordance with the "Proced ures for an annual overview of WTO activities 
and for reporting under the WTO" (WT/L/105) which were adopted by the General Council on 15 
November 1995, it was agreed that "The respective sectoral Councils should report in November each 
year to the General Council on the activities in the Council as well as in the subsidiary bodies" and that 
the reports of the sectoral Councils should be "factual in nature, cont aining an indication of actions and 
decisions taken, with cros s references to repor ts of subordinate bodies and c ould follow the model of the 
GATT 1947 Council reports to the C ONTRACTING PARTIES".  The draf t report would be updated in 
light of today's meeting.    9.2 The representative of Australia
 asked that the spelling of the name of the Australian Chair of 
the Committee on Anti-Dumping Practices be corrected in the text.   
 
9.3 The representative of Egypt  said that the Chair of the Committee of Participants on the 
Expansion of Trade in Information Technology Produc ts (ITA Committee) had been changed to Mr. 
Khalid I. Emara, also from Egypt.    9.4 The Chairman
 noted out that this change was included  in the following para graph and suggested 
keeping the paragraph as it was drafted.   
 G/C/M/91 
Page 18  
 
  9.5 The Chairman
 proposed that the Council agree to adopt the report updated to include the 
current meeting and corrected as requested.  9.6 The Council so agreed
. 
X. OTHER BUSINESS 
A. DATE OF THE NEXT MEETING  
10.1 The Chairman  stated that the next meeting of the Council for Trade in Goods was scheduled 
for Tuesday, 11 March 2008.  The agenda would close on Friday, 29 February 2008.   
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