WORLD TRADE  
ORGANIZATION  TN/TF/W/64 
19 September 2005 
 
 (05-4110) 
Negotiating Group on Trade Facilitation Original:   English 
  
 
COMMUNICATION FROM CUBA 
  
 The following communication, dated 16 Sept ember 2005, from the Delegation of Cuba, is 
being circulated in advance of the Negot iating Group meeting of 19-20 September 2005. 
 
 
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IMPROVEMENT AND CLARIFICATION OF ARTICLE V OF THE GATT: 
STRENGTHENING OF THE PRINCIPLES OF NON-DISCRIMINATION AND 
 MOST FAVOURED NATION TREATMENT 
 
 
I. INTRODUCTION 
1. With a view to achieve wide, balanced and useful results of these negotiations on trade 
facilitation, we consider it appropriate to focus our  efforts in the clarification and improvement of 
provisions of Article V and the principles of non- discrimination and most-favoured-nation treatment, 
which stand as fundamental pillars to maintaining the confidence in the Multilateral Trading System. 
2. Article V is a basic rule for the normal functi oning of international trade and the success of 
the Trade Facilitation negotiations if the target is to ensure the expeditious movement of goods and 
means of transport, including in-transit traffic. 
3. As indicated in document TN/TF/W/35 on Freedom of Transit, "despite existing GATT 
rules aimed at ensuring the smooth and non-di scriminatory flow of trade across borders for 
transit, freedom of transit is often absent or compromised in practice" . 
4. Our proposal is aimed at eliminating unnecessary barriers to freedom of transit, which is 
incompatible with the existing rules of the Multilateral Trading System by strengthening the 
principles of non-discrimination and most-favoured-nati on treatment in the application of Article V.  
This proposal is not comprehens ive and Cuba reserves the right to  make new contributions on this 
issue in the future. 
II. MAIN OBLIGATIONS 
5. The right interpretation of Article V should be enough that no Member can prevent goods and 
means of transport of any origin from passing through its territory, in the exercise of the right to free 
transit.  However, in practice there are measures adopted that annul this right to which all WTO 
Members are entitled. TN/TF/W/64 
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 6. Article V defines that in-transit traffic is the "transit across the territory of a contracting 
party, when the passage across such territory, with or without trans-shipment, warehousing, 
breaking bulk, or change in the mode of transp ort, is only a portion of a complete journey 
beginning and terminating beyond the frontier of  the contacting party across whose territory 
the traffic passes" .  Only goods (including ba ggage), and also vessels and other means of transport 
constitute traffic in the sense of Article V. 
7. The main objective of Article V is allowing th e freedom of transit through the territory of 
each Member for in-transit traffic with a destination in the territory of other Members or coming from 
them, that uses the "routes most convenient for international transit" .  To achieve this free 
movement of in-transit traffic, Article V establishes two main obligations: 
- No obstacles to in-transit traffic by imposing delays or unnecessary 
restrictions or imposing charges that are not reasonable; and 
- Granting the most-favoured-nation treatment (MFN) to the goods in transit of 
all Members, in relation with all cargoes, regulations and formalities 
concerning transit. 
III. NEED TO REINFORCE THE PRINCIPLES OF NON-DISCRIMINATION AND MFN 
TREATMENT 
8. Since the work on Trade Facilitation began in the Council for Trade in Goods, Members have 
shown interest in strengthening the principle of no n-discrimination, (a) in relation to the different 
modalities of transport regarding transit procedures, (b) among individual carriers in relation to transit 
procedures, and (c) among types of goods being tr ansported.  Likewise, proposals have been 
submitted to strengthen the principle of non-discrim ination between origin and destination of in-
transit goods, routes used and among goods themselves. 
9. While the spirit and the letter of Article V ar e very clear in the sense of abiding by the 
obligation of observing the principles of non-discr imination and MFN treatment, the commercial 
practice also show the need to strengthen the di sciplines of paragraph V.2 in order to avoid the 
discretional compliance and the abuse of r ecurring to exceptions foreseen in GATT 1994. 
10. Article V obliges all parties to grant freedom of transit, as it expressly establishes in 
paragraph 2 that "no distinction shall be made which is based on the flag of vessels, the place of 
origin, departure, entry, exit or destination, or any circumstances relating to the ownership of 
goods, of vessels or other means of transport" . 
11. However, this obligation of non-discrimination is systematically breached by some WTO 
Members who apply, unilaterally and for no n-commercial reasons, laws and measures of 
extraterritorial scope that ignore the legitimate intere st of other Members' right to free transit and to 
carry out normal trade practices in the enjoyment of their rights as full Members of this Organization, as well as the commercial interests of third parties affected. 
IV. PROPOSAL 
12. The objective of the proposal is to strengthen the principle of non-discrimination stated in 
Article V, in order to prevent the application of trade laws that limit the free transit of goods and 
means of transport among Members due to non-commerc ial reasons.  Nowadays, this sensibly affects 
the trade of many WTO Members.  TN/TF/W/64 
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 13. We agree with some Members when they st ate that presenting proposals in the Negotiating 
Group does not involve in any sense the commitmen t of legitimate objectives of public order; 
therefore Members must preserve their right to impl ement appropriately and justifiably the exceptions 
included in Articles XX and XXI of the GATT, but they cannot appeal to them without justified reason. 
14. In light of the above, Cuba considers that, ev en when paragraph 2 of Article V of the GATT 
is clear regarding the obligation of non-discriminati on in the freedom of transit, this provision should 
be strengthened by adding a new pa ragraph with the following text: 
"The Contracting Parties shall not apply discrimina tory measures to goods in transit, as well as 
vessels or other means of transport of other co ntracting parties for non-commercial reasons.  
This does not exclude the right to recourse to the exceptions already established in WTO 
agreements" . 
V.  COSTS, SPECIAL AND DIFFERENTIAL TREATMENT, TECHNICAL 
ASSISTANCE 
15. This proposal does not have an impact on the cost s; therefore, in its application there is no 
need for any measures of Special and Differe ntial Treatment or Technical Assistance. 
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