RESTRICTED
WORLD TRADE WT/COMTD/1/Add.4/Rev.1
11April 1997
ORGANIZATION(97-1558)
Original: Spanish
SOUTHERN COMMON MARKET (MERCOSUR) AGREEMENT
Questions andReplies
Revision
Thepresent document, which contains theupdated replies from MERCOSUR appearing in
document WT/COMTD/1/Add.4 andreplies tothenewquestions raised inthecontext ofthereview
undertaken intheCommittee onRegional Trade Agreements, hasbeenreceived from thedelegation
ofParaguay initscapacity asPro-Tempore Chairman ofMERCOSUR.WT/COMTD/1/Add.4/Rev.1
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REFORMULATION OFANSWERS TOTHE QUESTIONNAIRE WT/COMTD/1/Add.4
I. ELIMINATIONOFDUTIES,CHARGESANDOTHERRESTRICTIONSAPPLIEDINTHE
STATES PARTIES 'TRADE
1. Could theParties explain thecriteria forselecting products forinclusion intheAdaptation
Regime?
ThefinalAdaptation Regime oftheSouthern Common Market (MERCOSUR) (Decisions
Nos. 5/94and23/94), consists ofalistofproducts foreachcountry. Products wereselected according
tocriteria ofeligibility established forthose products which wereincluded intheListsofExceptions
oftheEconomic Complementarity Agreement (ECA) No.18(Treaty ofAsunción), orasproducts
towhich safeguard clauses applied asprovided forinAnnex IIIoftheTreaty ofAsunción. The
Adaptation Regime, which applies toafixed andlimited group ofproducts, aims tofacilitate the
processes ofreorganization andstructural change forspecific sectors ofproduction.
2. Wastheceiling foreseen forthenational exceptions of300products eachforArgentina,
Brazil andUruguay and399products forParaguay reached? Canthisceiling bechanged?
Thelistofexceptions applying totrade withthirdcountries wassetoutinDecision 7/94by
theCouncil oftheCommon Market (CMC). Since MERCOSUR hashadtoadapt itsnomenclature
basedontheSpanishandPortugueseversionsadjustedtotheamendmentstotheHarmonizedCommodity
Description andCoding System, andtothesingle version inSpanish, which theprescribed limits have
currently beenexceeded, innowayhastherange ofexempted products inquestion beenchanged.
Itisnotforeseen thattheceiling ofexceptions, established byDecision 7/94oftheCMC willbechanged.
3. Could theParties provide acomplete listoftheheadings oftheHarmonized System that
arestillnotdutyfree? Could theyindicate thetrade volume involved foreachofthese products?
Seedocument WT/COMTD/1/Corr.1 (Decision 24/94).
Anychanges arising inthelistwillbesubmitted byMERCOSUR induecourse.
Thetrade volume affected bytheAdaptation Regime willbesubmitted assoonaspossible.
TheStates Parties havesubmitted totheSecretariat oftheWTO totalimport figures for1995
intheirnational nomenclature ineffect in1994. They hope tosubmit information using statistical
databased ontheMERCOSUR Common Nomenclature (MCN) assoonaspossible.
4. Please provide adescription oftheextent towhich theduties, charges andother measures
havealready beeneliminated ontheParties 'reciprocal trade. Please listsectors orproducts which
arestillprotected, either bytariffs orbynon-tariff barriers, andthecurrent schedule forthe
removal oftheremaining barriers.
Duties andcharges ontrade within MERCOSUR havebeeneliminated forallproducts with
theexception ofthose included intheadaptation listforeachcountry andinthelistsofproducts of
theautomotive andsugar sectors. Inorder toharmonize orremove non-tariff barriers, MERCOSUR
hascreated aspecial Technical Committee. Thelistofnon-tariff measures hasalready beensubmitted
andappears indocument WT/COMTD/1/Add.2 of9October 1995. Thelistofmeasures toberemoved
wasincluded asAnnex IItodocument WT/COMTD/1.WT/COMTD/1/Add.4/Rev.1
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5. TheParties explained thatintheautomotive sector, anadhoctechnical committee was
setuptodraft aproposal foracommon MERCOSUR regime. CantheParties clarify whether
theMERCOSUR regime leads totheelimination ofduties andother restrictive regulations of
commerce withregard totheautomotive trade between constituent territories ofthecustoms union?
Thebasic guidelines oftheCommon Automotive Regime, which willcome intoforce asfrom
1January 2000, cover thefollowing points:
1. Freetrade within thecommon market;
2. Common External Tariff;
3. Harmonization ofnational incentives which distort competition intheregion.
6. Asstipulated inGATT Article XXIV.8, acustoms union isrequired toeliminate duties
andother restrictive regulations ofcommerce withrespect tosubstantially allthetrade between
theconstituent territories oftheunion.
(a) Concerning theexceptions totheelimination ofduties onreciprocal trade between
theStates Parties:
(i) Could MERCOSUR provide alistofthose tariff linestobeexempted, the
trade dataofthose products indicating their share inthewhole reciprocal
trade?
Seereply No.3.MERCOSUR doesnotenvisage anypermanent exception.
(ii) Could MERCOSUR explain thecriteria forexempting those products?
Reply inprevious item(i).
(b) With respect totheexceptions totheelimination ofother restrictive regulations
ofcommerce, could theStates Parties totheMERCOSUR provide alistofthe
exemptive restrictive regulations?
(i) With respect torestrictions subject toaharmonization process, could the
States Parties totheMERCOSUR provide alistofthose restrictions?
Thenon-tariff barriers which willnotbeeliminated willbeharmonized. MERCOSUR has
already submitted thelistinAnnex IItoWT/COMTD/1.
(ii) Please explain thecriteria forexempting those regulations.
Thecriteria which willbeusedareinaccordance withArticle 50ofthe1980 Treaty of
MontevideoandwithArticlesXXandXXIoftheGATT/94.ForfurtherclarificationseeWT/COMTD/1
(Spanish), page5.
(iii) Could States Parties totheMERCOSUR indicate thetime-frame ofthe
elimination/harmonization oftherelevant regulations?
AtitsXXIV Meeting inFortaleza, Brazil (December 1996), theCommon Market Group of
MERCOSUR agreed toestablish atime-frame fortheelimination orharmonization soastoset,by
31July1997, dates atwhich themeasures andrestrictions could beeliminated andharmonized.WT/COMTD/1/Add.4/Rev.1
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7. Annex II(restrictions forlimitation and/or harmonization bySubgroups) listsliterally
hundreds ofmeasures thatareeither slated forelimination orharmonization.
(a) Atwhat stage isthisprocess? Have import restrictions identified inAnnex IIby
theCommon Market Subgroups been eliminated orharmonized byallthe
MERCOSUR Parties?
Seereply 6(b)(iii).
(b) What precisely does thecitation ofaregulation inAnnex IImean? Will a
regulation cited forelimination simply beeliminated without promulgation of
additional legislation?
Anyelimination and/or harmonization ofrestrictions willbethesubject ofadecision bythe
CMC orresolution bytheGMC andinaccordance withArticle 42oftheOuro Preto Protocol, where
necessary willbeincorporated inorremoved from, asappropriate, thedomestic legalsystems through
theprocedures laiddown bythelegislation ofeachcountry.
8. Therepresentative ofMERCOSUR mentioned inhisopening statement totheWorking
Party thatsome non-tariff restrictions arebeing eliminated among themembers ofMERCOSUR.
Isthere anytimelimit forthecomplete phasing outofexisting non-tariff restrictions? Ifnot,
howcantheresidual restrictions bejustified interms oftheobligation ofacustoms union to
eliminate duties and"other restrictive regulations ofcommerce" withrespect tosubstantially all
thetrade between theconstituent territories oftheunion, assetforth inparagraph 8(a)(i) of
Article XXIV ofGATT 1994?
Seereply 6(b)(iii).
Another related question concerns anynon-tariff restrictions which maybeintroduced
following theimplementation ofthetrade liberalization programme, suchasBrazil 's1995import
quotaonautomotiveproducts.Aresuchrestrictionsequallyapplicabletomemberandnon-member
countries ofMERCOSUR, oraretheyapplicable tothemembers ofMERCOSUR onareciprocal
basis?
Restrictions applied byBrazil in1995 were withdrawn inthesame year.
9. Please specify theexisting non-tariff restrictions currently applicable among themember
countries ofMERCOSUR.
Seereply 4.
10. Does MERCOSUR contemplate theretention ofanybarriers totrade after thephase out
period iscomplete?
Seereplies 6(a)(i) and6(b)(ii).
11. What willresult from restrictions listed forharmonization?
(a) Isthere atimetable fordecisions bytheCommon Market Group, andarethere
consequences intrade terms ifthattimetable isnotadhered to?
Seereply 6(b)(iii).WT/COMTD/1/Add.4/Rev.1
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Thedefinition ofthetimetable presupposes thecommitment oftheStates Parties tomeetit.
Ifthetimetable isnotadhered to,thisdoesnotentail perseanyconsequences interms oftrade.
(b) What istheprocess fordetermining howarestriction isharmonized? Atwhat
level willrestrictions beapplied? Themost restrictive, least restrictive? Will
harmonization ofanimport standard result inidentical import requirements for
allMERCOSUR Parties?
Toharmonize ameasure, firstofallthelegalregimes which aretobeharmonized areidentified,
afterwhich aharmonization formula isagreed atthemostappropriate leveltomeettheobjectives of
theTreaty ofAsunción. Themeasures tobeharmonized mustbeidentical forallpartsofMERCOSUR.
(c) How doMERCOSUR harmonization objectives comply withtherequirement of
theWorld Trade Organization Agreement ontheApplication ofSanitary and
Phytosanitary Measures, inparticular provisions requiring measures tobebased
onriskassessment, asappropriate tothecircumstance (Article 5.7), andthat
measures areadapted tothecharacteristics oftheareatowhich theproduct is
destined (Article 6.1)?
Under Decision 6/96oftheCommon Market Council, theWTO Agreement ontheApplication
ofSanitary andPhytosanitary Measures wasadopted astheregulatory framework fortheapplication
ofsanitary andphytosanitary measures bytheStates Parties ofMERCOSUR. Inorder toimplement
theDecision, thenewstructure created under theauspices ofTechnical Subgroup No.8(Agriculture)
ofMERCOSUR, willconsist of:
- Animal Health Committee;
- Plant Health Committee;
- Committee forProducts ofAnimal Origin; and
- Committee forProducts ofPlant Origin.
Thework onharmonizing sanitary andphytosanitary measures andthework undertaken in
different spheres oftheCommon Market Group willhavetobeinlinewiththedisciplines setdown
intheWTO Agreement ontheApplication ofSanitary andPhytosanitary Measures.
(d) Howdotheobjectives ofharmonizing sanitary andphytosanitary measures within
political borders coincide withtheinternational trend towards application ofsuch
measures based onregionalization?
Seereply 11(c).
(e) Doesharmonization ofanimport standard foragiven product imply thatproduct
willmove without restrictions among MERCOSUR Parties?
Products willmove inaccordance withtherequirements setoutintheharmonized standard.
(f) What aretheobjectives ofMERCOSUR 'sharmonization efforts fornon-tariff
importrestrictionsfor:planthealth,animalhealth,foodsafety,technicalstandards
(including processed foods), andenvironmental protection. (Please address each
areaindividually.)
Withregard toanimal andplanthealth, theobjectives oftheharmonization ofnon-tariff import
measures arebased ontheneedtoavoid thespread ofcertain diseases and/or illnesses andtopreserveWT/COMTD/1/Add.4/Rev.1
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thehealth ofplants andanimals, inorder notonlytosafeguard theinterests oftheregion, butalso
toadapt tointernational standards inthese areas, suchastheRome International Plant Protection
Convention andtheInternational Office ofEpizootics. Fortechnical standards, theapplication of
harmonized internal standards orregulations onclassification, quality control ormarketing ofproducts
destined forinternational trade aredesigned tomake iteasier forminimum levels forthefourStates
Parties tobemet.
Theharmonization objective ofenvironmental provisions inMERCOSUR istopromote
sustainable development, soastosatisfy theeconomic andsocial needs oftheexisting population,
without compromising theneeds offuture generations, thatistosay,thatenvironmental measures do
notbecome barriers tofreetrade intheregion andlikewise thatfreetrade doesnotbecome afactor
which damages theenvironment.
(g) Specifically, what aretheexpected results regarding harmonization ofeachofthe
following restrictions listed inAnnex II:
Theguidelines onrestrictions andnon-tariff measures aredetermined byDecision 3/94ofthe
CMC andbyResolution 123/94 oftheGMC which provide thattheTechnical Committee oftheCMC
must: consolidate andupdate thelistofrestrictions andmeasures tobeeliminated andsubject to
harmonization, respectively; identify unnotified restrictions andmeasures andpropose thetimetable
fortheirelimination andharmonization; anddraftharmonization proposals.
Thelisted measures subject tothisprogramme donotcorrespond tothe"other restrictive
regulations ofcommerce" concept referred toinArticle XIV.8(a)(i) andarecompatible withtheWTO
rules. MERCOSUR hasputtogether apreliminary listofnon-tariff measures andasaresult these
havebeenclassified inthree groups: harmonized, eliminated orjustified. Work isprogressing on
these measures intheharmonization process.
(i) Technical standards, page 23,Uruguay, tobeharmonized, Measure 63:
pre-inspection forimportation offoodproducts;
Thismeasure isbeing studied by"Technical Subgroup No.3";specific results regarding its
harmonization havenotbeenachieved to-date.
(ii) Technical standards, page26,Argentina, tobeharmonized, Measure 70:
pre-inspection offresh, dried anddehydrated fruit;
Thismeasure isbeing studied by"Technical Subgroup No.3";specific results regarding its
harmonization havebeenachieved to-date.
(iii) Agricultural policy, page 41,Brazil, tobeharmonized, Measure 116:
wines: prohibition onimports incontainers larger thanonelitre;
Under theMERCOSUR Grape andWine Growing Regulations, Resolution 45/96 oftheGMC,
thisprohibition isbeing eliminated.
(iv) Agricultural policy, page49,Paraguay, tobeharmonized, Measure 172:
establish sanitary regulations forimported meat destined forinternal
consumption.
Theoutcome envisaged bytheharmonization ofthismeasure istoallow freemovement of
thisproduct intheregion, whilst protecting human andanimal health.WT/COMTD/1/Add.4/Rev.1
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(h) Howarethird countries informed ofnewimport policies andprocedures developed
through theharmonization process?
ThePro-Tempore Chairman ofMERCOSUR undertakes tonotify thedecisions andresolutions
totheWTO, where appropriate.
(i) How willthird parties beassured thattheharmonization willnotcreate new
barriers tocurrent trade with MERCOSUR Parties? Specifically, will
harmonization result innewmarket access restrictions forthirdcountries exporting
toanyoftheindividual countries inMERCOSUR?
Harmonizations achieved upon bytheStates Parties ofMERCOSUR seektofacilitate trade.
Withregard totrade withthirdcountries, MERCOSUR willscrupulously meetitsWTO obligations.
(j) What istherelationship between theplant quarantine activities inMERCOSUR
andtheplant health activities ofCOSAVE? Howarethese twoactivities linked?
Dotheyhave separate missions?
COSAVE isapurely technical regional organization, thatis,itsassessments andstandards
areconsidered asoptions forimplementation bythemember countries. Asregards MERCOSUR,
theresolutionsadoptedarebinding:theStatesPartieshaveabindingobligationtoimplementagreements
which theyhavesigned. However, itisimportant topointoutthat,asageneral rule,COSAVE technical
regulations areendorsed byMERCOSUR andprepared foradoption andimplementation bythemember
countries.
(k) What istheregional body foranimal health matters (i.e., thecounterpart of
COSAVE intheanimal health area)? Towhat extent haveharmonization efforts
been carried outintheareaofanimal health?
TheMinistries andMinisters ofAgriculture oftheCONASUR member countries (Argentina,
Brazil, Paraguay, Uruguay andChile) constitute theRegional Committee forAnimal Health (CORESA)
withthemain objective ofcoordinating andincreasing regional capacity toprevent, lessen andavoid
impactandrisksofproblemsaffectingtheproductionandmarketingofliveanimals,andanimalproducts,
sub-products andby-products, taking intoaccount theanimal health situation, sustainable economic
development, human health andenvironmental protection.
Harmonizations agreed upon under CORESA weremostly endorsed byMERCOSUR inthe
animal health area.
12. What non-tariff measures arestillinforce ontechnical standards, plant andanimal health,
environmentalprotectionandsafety?CouldthePartiesprovidemoredetailsonhowthesemeasures
willbeharmonized?
Seereply 4.
13. Could theParties provide specific information onthetypeandcoverage oftheresolutions
sofaradopted regarding theharmonization ofstandards?WT/COMTD/1/Add.4/Rev.1
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Thelistofharmonized technical standards andtheirimplementation status hasbeentransmitted
totheSecretariat forconsultation byinterested delegations.1
14. Could theParties clarify themeaning of"asawhole" in"theduties covered byArticle VIII
oftheGeneral Agreement arefixed asawhole inaccordance withtheprovisions ofthatArticle
andtheobligations assumed bytheStates Parties toMERCOSUR intheUruguay Round", in
thereply toquestion 1.10ofWT/COMTD/1?
Themeaning of"asawhole" isthatthisisinaccordance withtheprovisions ofArticle VIII
oftheGeneral Agreement ofGATT.
15. Could theParties mention every measure inforce ineachcountry adopted inthesituations
envisaged inArticle 50ofthe1980 Treaty ofMontevideo?
Itisunderstood thatthenon-tariff measures which theStates Parties haveadopted andwhich
arebeing examined bytheTechnical Committee (CT8-Non-Tariff Restrictions andMeasures) of
theTrade Commission respond tothesituations foreseen inArticle 50ofthe1980Treaty ofMontevideo.
TheTechnical Committee (CT8)hasclassified these measures oftheStates Parties asfollows:
harmonizable, justifiable, ortobeeliminated. Seereplies 4and11.
II. THE COORDINATION OFMACROECONOMIC POLICIES
16. Please update theinformation provided inWT/COMTD/1 ontheplans MERCOSUR
members have intheareaofeconomic harmonization, whether infiscal, monetary, orfinancial
policy areas, andindicate what progress hasbeen made inthisarea.
Thedocument "MERCOSUR Action Programme totheyear2000" hasdefined thecourses
ofaction, based onmacroeconomic coordination asdefined inArticle 1oftheTreaty ofAsunción,
placing emphasis ontheoverall assessment oftheeconomic problems oftheregion asaninitial stage
forfuture coordination. Inthiscontext, andwithregard inparticular tofinancial policy, there have
beendiscussions about procedures forharmonizing accounting standards, consolidated supervision of
financial institutions, among other aspects, andithasalready beenagreed toissuefinancial standards
based ontheBasel Agreements.
Likewise, agreements havebeenreached intheinsurance market relating toparticular services
(multimodal transport andcivilliability) andthere havebeenperiodical assessments oftheregional
monetary andexchange situation, andoftrends incapital markets andofthestandards regulating them,
withaviewtofuture harmonization.
17. Thetaxburdens imposed bythefourMERCOSUR members differ substantially. Brazil
inparticular hasacomplicated taxstructure withagreater variety ofindirect taxes onbusiness
operations thantheother countries. Theneteffect ofdiffering levels oftaxburden istopotentially
concentrate capital andeconomic activity inacountry withmore favourable taxtreatment. What
areMERCOSUR 'splans foraddressing suchtaxandfiscal issues?
Studies havebegun onaspects offiscal policy which distort regional trade flows.
18. Could theParties provide anupdated version ofalltheDecisions orResolutions adopted
bythehigh-level bodies ofMERCOSUR onthecoordination ofsectoral policies?
1Thisdocumentation isavailable intheSecretariat (Office 3006) forconsultation byinterested delegations.WT/COMTD/1/Add.4/Rev.1
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Decision No.8/93oftheCMC "Minimum Regulations oftheCapital Market"; No.10/93
oftheCMC "Adoption ofPrinciples andStandards setdown bytheBasel Committee"; No.12/94
oftheCMC "Adoption ofthePrinciples ofConsolidated Banking Supervision"; andResolution
No.120/94 oftheGMC "Civil Liability Insurance".
These decisions andresolutions havealready beensubmitted totheWTO.
III. THEESTABLISHMENT OFACOMMON EXTERNAL TARIFF AND THEADOPTION
OFACOMMON TRADE POLICY INRELATION TOTHIRD STATES ORGROUPS OF
STATES
19. Anumber ofchanges intariff rates byindividual members ofMERCOSUR since
1January 1995 have created substantial uncertainty astowhat thecurrent rates are. Please
provide acomplete tariff schedule forbothintra-MERCOSUR andthird country trade.
TheCET(Common External Tariff), theListsofExceptions, Adaptation, Exceptions resulting
fromAdaptation, Capital Goods, Information Technology andTelecommunications, andspecial import
regimes oftheStates Parties areavailable indocument COMTD/1 Annexes IandII.Seelistsofthe
fourcountries.
20. Indocument WT/COMTD/1, thereply toquestion 3.6gives theinformation thatthe
common external tariff (CET) isconstructed as"aweighted average whose level willbelower
thanthetariffs applied bytheStates Parties prior tosignature oftheTreaty ofAsunción". While
thereply toquestion 3.7states thattheweighted average islower thanthatapplied individually
bythemember countries prior totheconclusion oftheTreaty ofAsunción. Wewould liketo
know whether thisprinciple hasalready beenrespected since 1January 1995orisscheduled for
nextyear? Isthisruleapplicable foralltariff items (item-by-item) orfortheaverage rateof
incidence?
IntheCETeffectiveasfrom1January1995,theweightedaverage(theaveragerateofincidence)
ofthetariffs islower thanthenational tariffs which were applied previously byeachState Party of
MERCOSUR. Inorder tocompare theaverage ratesofincidence inaccordance withArticle XXIV:5
andtherelevant Understanding oftheUruguay Round, itwould benecessary tocarry outthecalculation
onthebasis ofimport datafrom theperiod 1988-90 (prior totheTreaty ofAsunción) andtomake
acomparison withthedatafor1995.
Theproblem which arises incarrying outthiscomparison derives fromthedifferent national
tariffnomenclatures usedbyeachcountry intheperiod 1988-90 andthegreat difficulty indeveloping
atableofcorrelation orequivalence between these nomenclatures andtheCommon Nomenclature of
MERCOSUR.
Given thistechnical difficulty, anddespite having evidence thataverage ratesofincidence of
national tariffs from1988-90 arehigher thanthose oftheCET1995, theStates Parties ofMERCOSUR
consider itappropriate tocarry outthecomparison using theperiod 1992-94. Thiscould speed up
theexamination oftheconsistency ofMERCOSUR withArticle XXIV. Forthispurpose, wehave
already submitted totheSecretariat oftheWTO theimport dataforthisperiod and,wewillshortly
provideacorrelationbetweeneachnationalnomenclatureinforcein1994andthecommonMERCOSUR
nomenclature.
WehopethattheSecretariat oftheWTO would beabletocarry outacomparative analysis
oftheaverage ratesofincidence fortheinformation ofallthemember countries.WT/COMTD/1/Add.4/Rev.1
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21. Certain temporary exemptions were made totheMERCOSUR common external tariff
following themeeting oftheCommon Market Group heldinApril 1995. Could theParties confirm
thatthe20percentdutywhich wasoriginally foreseen forfootwear products willbereturned
toasfrom 1April 1996?
TheStates Parties areapplying theappropriate ratesinaccordance withtheCommon External
Tariff.
22. Weunderstand thatattheAsunción meeting inAugust 1995, themembers ofMERCOSUR
considered requests foranexpansion ofthelistofexempted products, or,ataminimum, the
right toadditems toreplace other items already onnational "exemptions lists" every 90days.
(a) Please describe theoutcome ofthisdecision.
Through Resolution 69/96 MERCOSUR allows temporary exceptions totheCommon External
Tariffs ofupto20products peryearperState Party duetosupply shortages intheregion. This
Resolution willbeinforce untilJuly1998. Theapplications byeachcountry must beagreed by
consensus intheMERCOSUR Trade Commission.
TheTrade Commission 'sguidelines relating totheimplementation ofResolution 69/96 are
available intheSecretariat forconsultation byinterested delegations.
Theceilings ofthenational "lists ofexceptions" havenotbeenchanged. (Seereply 2.)
(b) Does afinal listofexceptions nowexist?
Seereply 22(a).
(c) Doyouenvision additional changes tothelists?
Seereply 22(a).
(d) Please summarize theexceptions eachoftheMERCOSUR Parties isentitled to
andthelisteachhasadopted. Please alsoprovide thefull,final exceptions list
tothemembers ofthisWorking Party.
Seereply 19.
(e) What process willMERCOSUR usetoensure thatitsWTO partners arenotified
ofchanges thataremade totheCET andindividual country tariff schedules?
ThePro-Tempore Chairman ofMERCOSUR regularly notifies theWTO Secretariat ofthe
Decisions andResolutions approved byMERCOSUR.
23. Please describe MERCOSUR 'splans withregard toacommon sugar regime.
Inaccordance withDecision 16/96, theAdHocSugar Group hasuntilMay1997 tosubmit
aproposal totheGMC foratariff reduction scheme forthesugar sector.
24. Weunderstand some products were exempted from theapplication oftheCET asof
1January 1995. What isthespecified timeschedule forthegradual inclusion ofsuchexempted
products intoitsCET schedule?WT/COMTD/1/Add.4/Rev.1
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Forthe300exceptions ofArgentina, Brazil andUruguay, thetime-limit istheyear2001,
Paraguay canexempt its399products fromitslisttotheCETuntiltheyear2006. Forcapital goods,
thetime-limits forArgentina andBrazil lastuntiltheyear2001andforParaguay andUruguay, until
theyear2006. Inthecaseoftheinformation technology sector, allthecountries haveuntil2006 for
itsgradual inclusion intotheCET. Seereply 2.
25. Could theParties specify theproducts forwhich theconvergence period isexpected to
lastuntil 2006?
Seereply 24.
26. There isawide range ofexceptions totheCET andtheconvergence oftheexceptions
totheCET willinsome cases take11years. Inthisrespect, wethink thatthisCET isexceptional
andthatthorough examination isneeded tosecure thecompliance oftheCEToftheMERCOSUR
withArticle XXIV.8(a)(ii), which reads "substantially thesame duties".
(a) From thispoint ofview, cantheMERCOSUR members elaborate ontherationale
orcriteria forsetting down suchexceptions andthereason forthe11-year transition
period?
TheCETisdesignedtoencompassalltariffitems.TheCETconvergenceguidelinesforexisting
exceptions havealready beenestablished (seereply 24). Exceptions stillexisting after2001 havea
defined convergence andaccount foralowvolume oftrade. MERCOSUR considers thisprocedure
preferable tosimply excluding these products, withnofixed timetable fortheirinclusion intheCET.
Moreover, Mercosur considers thatthetimetables indicated above comply withthecriterion established
inArticle XXIV:5(c).
(b) Could theMERCOSUR provide uswithtrade dataonthose exceptions andalso
dataindicating their shares inthewhole trade?
Mercosur willprovide thisinformation assoonaspossible.
27. MERCOSUR envisages fivecategories ofexceptions totheapplication ofaCET. Isthere
anestimate available ofthemagnitude ofMERCOSUR 'strade affected bythese exceptions?
Inother words, what amount oftotalimports from member countries would have been subject
tosuchexceptions onthebasis ofimport statistics for,say,1994?
Mercosur willprovide thisinformation assoonaspossible.
28. Inorder toestablish acustoms union, asstated inArticle XXIV.5(a), "theduties andother
regulations ofcommerce... shall notbehigher ormore restrictive thanthegeneral incidence of
theduties andregulations ofcommerce applicable intheconstituent territories prior tothe
formation ofsuchunion...".
Seereply 20.
(a) CouldMERCOSURprovideacomparisonoftheoverallleveloftariffratesbetween
theCET andeachState Party 'sapplied rateonthebasis ofthetrade-weighted
average ofapplied rates?
Seereply 20.WT/COMTD/1/Add.4/Rev.1
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(b) Could MERCOSUR explain thesituation concerning theestablishment ofcommon
regulations ofcommerce, andcould MERCOSUR confirm thatthecommon
regulations arenotmore restrictive thantheprevious regulations ofeach State
Party?
Inneither ofthecases, beitinthecommon regulations effective asfrom1January 1995, or
intheregulations which arebeing drafted, haveprovisions andobligations beenestablished which
could beconsidered more restrictive thantheregulations previously applied byeachState Party of
MERCOSUR.
Likewise, thestandards thathavebeenorarebeing prepared, which affect trade withthird
countries, havebeendeveloped inaccordance withtheWTO Agreement andthecommitments ofthe
States Parties ofMercosur asmembers oftheWTO.
29. Inthecasewhere theleveloftariffs oftheCET goesbeyond thatoftheUruguay Round
schedule ofeachmember country, thiswould constitute abreach oftheobligation provided in
Article IIoftheGATT. Insuchacase, inaccordance withArticle XXIV.6 ofGATT andthe
Understanding ontheInterpretation ofArticle XXIV ofGATT 1994, theprocedure setforth in
Article XXVIII must becommenced before tariff concessions aremodified orwithdrawn upon
theformation ofacustoms union. However, theCET wasenforced asof1January 1995without
respecting thisprocedure and,asaresult, theinterests ofathird country have been adversely
affected.
(a) Forthisreason, could theStates Parties totheMERCOSUR provide alistofthe
CET lineswhich exceed thelevelofthebound tariff rates oftheUruguay Round?
MERCOSUR hasalready provided theWTO withthelistofCET linesofwhich theduties
exceed thebound tariff ratesoftheUruguay Round. Document WT/COMTD/1/Add.5/Rev.1.
(b) CouldtheStatesPartiestotheMERCOSURalsosubmittherelevantdatanecessary
forArticle XXVIII negotiations:
(i) Statistics ofimports oftherelevant products involved, bycountry oforigin,
forthelastthree years (i.e.from 1992 to1994 andtheir average); and
MERCOSUR willprovide thisinformation assoonaspossible.
(ii) anindication ofwhich countries areaffected byorder ofprincipal supplying
countries andcountries withasubstantial interest?
MERCOSUR willprovide thisinformation assoonaspossible.
30. WhileitisenvisionedinArticleXXIVthatcountriesmaybreaktariffbindingsintheprocess
offorming acustoms union, there arespecific procedures thatmust befollowed tonotify the
breach ofabinding, tonegotiate compensation withaffected countries andtoreplace thetariff
schedules ofindividual countries withaschedule forthenewcustoms union. Itisouranalysis
thatoneMERCOSUR Party -Brazil -hasbroken anumber ofitstariff bindings intheprocess
ofadopting theMERCOSUR CET. WTO rules clearly specify thatnegotiations withaffected
countries aretobegin PRIOR tothebreach oftariff bindings. When doesBrazil intend tonotify
these modifications toitsbound tariffs properly, provide therequired trade andtariff dataand
begin compensation negotiations?WT/COMTD/1/Add.4/Rev.1
Page13
Brazil fulfils allitsobligations under theWTO. Together withtheotherMERCOSUR partners,
Brazil hasnotified thetariff items which willbesubject toachange inthebound duty. MERCOSUR
hasalready shown itswillingness toengage injointconsultation withtheaimofassessing thechanges
which theStates Parties areseeking tomake intheirindividual schedules ofconcessions.
31. The MERCOSUR Parties currently maintain their WTO schedules asindividual
governments. AWTO tariff andservices schedule forMERCOSUR does notexist, butthe
individual schedules ofArgentina, Brazil, Paraguay andUruguay exist. What intentions dothe
Parties havetowithdraw theirindividual schedules andreplace them withaMERCOSUR schedule
intheWTO?
Seedocument L/7615 of23/12/94.
32. Inaccordance withArticle XXIV.5 andtheassociated Uruguay Round Understanding,
theWTO Secretariat ischarged withproducing anassessment ofthegeneral incidence ofthe
duties andother regulations ofcommerce before andafter theformation oftheMERCOSUR
customs union. Thisassessment istobemade onthebasis oftheweighted average applied tariff
rates. This information isvitalfortheWorking Party 'sassessment oftheconsistency ofthe
MERCOSUR Agreement withArticle XXIV. Todate, theMERCOSUR countries havesupplied
onlypartoftheinformation requested andrequired forthisanalysis. When dotheMERCOSUR
Parties plantosupply thisinformation?
Seereply 20.
33. IntheUnited States, specific Congressional authorization isrequired toaltertariff levels.
DoanyorallofthefourMERCOSUR countries require legislative approval tomake changes
totheCET ortotherates charged onproducts currently excluded from theCET? Please provide
copies oftherelevant pieces ofnational legislation.
Argentina issending acopy ofArticle 75andArticle 76ofthe1994 National Constitution
andacopyofLawonMinistries, Article 19,which provides forthepower tosettariffs.2
TheBrazilian Government isempowered bythelegislature, toaltertariffs (Law 3244, of
14.08.37).
InParaguay nolegislative approval isrequired toaltertheCET. LawNo.1095/84 isapplicable,
Article 10ofwhich provides: "TheExecutive Branch isempowered to:(a)Establish andalterlevels
ofcustoms duties andcharges onimported goods."
InUruguay nolegislative approval isrequired toaltertariff levels: Laws Nos. 14629 of
5May1977and12670 of1959areapplicable. These lawsempower theGovernment tosetandalter
tariff levels.
34. Please specify through which legal instruments MERCOSUR hasimplemented, orplans
toimplement, thezerointernal tariff andtheCET.
MERCOSUR hasprovided forthezerotariff fortrade among itsmembers through Common
MarketCouncilDecisionsNos.5/94and24/94.TheCommonExternalTariff(CET)isappliedpursuant
toCommon Market Council Decisions Nos. 7/94and22/94.
2Thisdocumentation isavailable intheSecretariat (Office 3006) forconsultation byinterested delegations.WT/COMTD/1/Add.4/Rev.1
Page14
Argentina applies theCET pursuant toDecree 2.275/94 and998/95 asamended.
Brazil applies theCET pursuant toDecree No.1767, of28December 1995 andNo.1840,
of29April 1996.
Paraguay applies theCETandthezerointernal tariff, withitsparticular exceptions, pursuant
toDecrees Nos. 12.056 and15.512/96.
Uruguay applies theCETandthezerointernal tariff withitsexceptions pursuant toDecrees
564/94 and568/94, asamended.
35. Could theParties explain thefeatures oftheinstitutional functioning ofMERCOSUR
which required theadaptation oftheprovisions oftheSafeguard Clause aslaiddown inArticle XIX
ofGATT? Could theParties provide acopy ofthislegislation?
Decision 17/96 oftheCouncil oftheCommon Market, which approves the"Regulation relating
totheapplication ofmeasures ofsafeguards forimports originating from non-member countries of
theCommon Market oftheSouth (MERCOSUR)", isinaccordance withArticle XIXoftheGATT 94
andwiththeWTO Agreement onSafeguards.
36. What kind oftrade policy instruments dotheParties envisage adopting? What trade
measures have already beenadopted? Under what criteria aretheyimplemented? Aretheyin
conformity withtheUruguay Round provisions? Ifso,please explain how.
Thecommon tradestandards which havebeendrawn upsofarinMERCOSUR cover aspects
related toCommon Trade Policy andtheCommon External Tariff, suchascustoms administration,
non-tariff restrictions, standards oforigin, technical standards, anti-trust measures, consumer protection
andsafeguards.
Common regulations onunfair trade practices (dumping andsubsidies) arebeing drawn up.
Standards which havebeendrawn uporarebeing drawn up,which affect trade withthird
countries, havebeendeveloped inaccordance withtheWTO Agreement andthecommitments ofeach
State Party toMERCOSUR asamember oftheWTO.
Thedocument "MERCOSUR Programme ofAction totheYear 2000" approved bythe
Council oftheCommon Market inDecision 9/95outlines theobjectives andtheactions/guidelines
which willguide theMERCOSUR negotiations inorder todevelop andstrengthen theframework for
integration.
Allthetrade policy provisions adopted bytheStates Parties toMERCOSUR willbenotified
totheWTO induecourse.
IV. RULES OFORIGIN
37. MERCOSUR 'sRules ofOrigin appear toprovide forthefollowing:
- Thetariff heading oftheproduct inquestion must bedifferent from thatofthe
third country inputs usedduring production;WT/COMTD/1/Add.4/Rev.1
Page15
- ifthetariff change didnotoccur inproduction, orifthechange intariff heading
happened onlythrough "simple assembly" orother non-substantial means, then
theimported product isexamined toseeifitmeets a"reverse content" test(i.e.
thec.i.f. value ofimported inputs/parts cannot begreater than50percentfor
theproduct tobeeligible forthepreferential tariff rate).
General questions:
(a) How dotheRules ofOrigin forMERCOSUR products adhere toprinciples set
outinAnnex II,paragraph 3(a), oftheAgreement onRules ofOrigin inthe
GATT 1994, which require thatrules beclearly defined?
Itisconsidered thattherulesoforigin which apply tointra-MERCOSUR tradearecompatible
withtheAgreement onRules ofOrigin intheGATT 1994 andthattheyaredefined clearly.
(b) IsMERCOSUR currently considering making anychanges totherules oforigin
agreed toatthetimetheTreaty ofAsunción wassigned? Ifso,what istheimpetus
forthose changes andwhat process willbeused forrenegotiating therules of
origin?
TheTreaty ofAsunción ofMarch 1991setoutinitsAnnex IItherulesoforigin tobeapplied
during transition period 1991-94. Asfrom 1January 1995, itwasagreed thatanewsetofrules of
origin would come intoforce, tobeapplied onlyforproducts included inthelistofexceptions ofthe
States Parties.
(c) Nocentralized authority regulates certificates oforigin todetermine which products
should enjoy theMERCOSUR preferential tariff rates. Currently, either
governmental bodies orprivate sector designates areauthorized toissuecertificates
forspecific sectors. Attachment IItotheAgreement contains rules andguidelines
governingthedecisionsoftheseorganizations,butwhatmechanismexiststoaddress
questions either about individual decisions orabout theconsistency ofpractices
among thedifferent groups?
EachStateParty hasabodyresponsible fortheissuing andapplication ofrulesoforigin. The
body inquestion isempowered todelegate theissuing ofcertificates oforigin toother public
organizations orhigher levelentities atthenational, stateorprovincial level. Anofficial department
isresponsible forthesupervision oftheissuing ofcertificates oforigin.
TheCommonMarketGroup,theTradeCommissionandtheTechnicalCommitteeNo.3"Trade
Rules andDisciplines" ofthiscommission, arethebodies ofMERCOSUR withthepowers andcapacity
toadopt decisions ofanykindinthisarea. Directive 12/96 oftheCouncil oftheCommon Market
ensures compatibility ofprocedures between thedifferent certifying bodies andentities.
38. MERCOSUR 'sopening statement totheWorking Party indicated thateligibility for
intra-regional trade willbegranted toproducts withaminimum regional content of60percent
orwhich undergo achange intariff heading within theregion. Thisstatement contradicts the
50percentregional content requirement stated inMERCOSUR 'soriginal response toquestions
posed bycontracting parties, ascontained indocument L/7540 of26October 1994. Hasthere
beenanychange intheregulations andpolicies ofMERCOSUR members leading toanagreement
onahigher regional content requirement? Ifso,what wastherationale forintroducing astricter
requirement?WT/COMTD/1/Add.4/Rev.1
Page16
TheRules ofOrigin inforce during thetransition period 1991-1994 were applicable until
31December 1994 andsetdown a50percentnational content requirement foreachState Party of
MERCOSUR. TheRules ofOrigin inforce from1January 1995 wereapproved byDecisions 6/94
and23/94 oftheCMC. Thenational content requirement hasrisen to60percent, butallows for
regional accumulation byconsidering goods ofaMERCOSUR StateParty asnational products ofthe
other MERCOSUR States Parties forthepurposes ofthisrequirement. Seereply 37(b).
39. WillMERCOSUR adopt common non-preferential rules oforigin andinwhich sectors
willtheybeapplicable? Could acopy beprovided?
Atthemoment MERCOSUR doesnothavecommon non-preferential rulesoforigin. Insome
countries non-preferential rules oforigin areapplicable forsome sectors.
40. With respect torules oforigin, thework programme concerning harmonizing rules of
origin willbecompleted within three years ofinitiation ofthework asstipulated inArticle 9of
theAgreement onRules ofOrigin. Canitbetaken forgranted thattheresults ofthework
programme willbereflected intherules oforigin ofMERCOSUR? Until suchatime, what kind
ofrules oforigin willbeapplied?
Concerning thepossible adoption ofnon-preferential rulesoforigin theresults oftheWTO 's
Working Party inthisareawillbetaken intoaccount.
Thepreferential rulesoforigin areapplicable inintra-MERCOSUR trade inaccordance with
Additional Protocol VIII oftheLatin American Integration Association (LAIA) Economic
Complementarity Agreement onrules oforigin, equivalent toDecisions Nos. 694and2394 ofthe
CMC.
41. Atthefirstmeeting oftheWorking Group, theParties informed thatthegoods originating
from freezones, processing zones, etc.willbesubject totheCET withsome exceptions. Could
theparties specify what these exceptions are?
Goods originating fromfreezones orexport-processing zones areconsidered tobefromoutside
theareaandassucharesubject tothepayment oftheCommon External Tariff (CET), except for
products exempted fromtheCET, towhich thedutyprovided forinthelistsofexceptions willapply.
42. What willbetheruleororigin applicable togoods coming from freezones, processing
zones etc.?
Insofar astheCommon External Tariff (CET) islevied onthegoods, acertificate oforigin
isnotrequired.
43. Please describe thetreatment afforded toproducts offree-trade zones inMERCOSUR.
Seereplies 41and42.
44. InArticles 3and4ofAnnex IItotheMERCOSUR Agreement, specific requirements
oforigin arementioned. Could MERCOSUR explain thedevelopments among member countries
onthispoint?
Seereply 38.SeeDecisions Nos. 6/94and23/94. (Annex IIIDoc. WT/COMTD/1)WT/COMTD/1/Add.4/Rev.1
Page17
45. Articles 3and4ofAnnex IIindicate that State Parties toMERCOSUR may
establish/determine "more specific requirements oforigin".
(a) Arethese published rules?
Yes.
(b) Aretheydeveloped byMERCOSUR countries asacomprehensive exercise orare
theyaretheresult ofadhocindividual cases which evolve intorules?
MERCOSURdevelopsrulesasacomprehensiveexercise,whichmustbeapprovedbyconsensus
inallcases.
(c) Were these specific requirements notified toWTO ?
Thelistofproducts with specific requirements oforigin currently ineffect appears in
Decision23/94,communicatedtotheWTO(WTO/COMTD/1)whichwassubmittedinDecember1994.
46. Isacertificate oforigin requested fortheimportation ofallproducts from third countries
orjustforcertain products? What information, apart from thecountry oforigin, isrequired?
Could acopy beprovided?
Incases where animporting country grants apreference onaproduct, acertificate oforigin
must berequested forthepreference tobeobtained. Therelevant texthasalready beensubmitted
inDocument WT/COMTD/1, Annex III.
47. Thesequence appears tobethatthecertificate/declaration oforigin hastobeissued by
aproducer orexporter, after which itis"certified" byanofficial department orauthorized
association. According toArticle 13,itisvalid for180days"from thedateoftheir issue".
(a) Does thismean thatthedateofcertification isnotrelevant tohowlongaperiod
itisvalid?
Theperiod of180daysrunsfrom thedateonwhich thecertificate oforigin isissued bythe
authorized association. Theproducer isnotauthorized toissue thiscertificate.
(b) Ifanassociation delays certification for179daysaftertheproducer issued it,would
thatmean thatthecertificate isonlygood foroneday,the180th after itwas
"issued" bytheproducer?
Seereplies 47(a) and47(c).
(c) Articles 11and12:isa"declaration" thesame thing asa"certification"?
They arenotequivalent. The"declaration" iscarried outbytheproducer inorder toobtain
thecertificate andthe"certification" istheactofissuing thecertificate.
(d) Article 13:doesthismean thatacertificate oforigin canbea"blanket" forall
imports ofsuchgoods for180days? Ordoesitmean thatthecertificate isgood
onlyforaparticular shipment for180days?
Thecertificate oforigin isonlygood foraparticular shipment.WT/COMTD/1/Add.4/Rev.1
Page18
48. Rulings/appeals:
(a) How willimporters andexporters obtain binding advice orguidance intheform
ofruling, asWTO Parties agreed toensure inAnnex IItotheWTO Agreement
onRules ofOrigin?
(b) Isadvice from animporter toonecountry "binding" onanother country? ifnot,
isthere relief foranimporter whohasrelied ontheadvice from oneMERCOSUR
country astoorigin when, intheopinion ofanother MERCOSUR country, itwas
incorrect?
(c) What avenue isavailable toimporters andexporters toobtain anindependent
review ofanorigin determination (e.g. asituation under Article 16),asWTO
Parties agree toensure inAnnex IItotheWTO Agreement onRules ofOrigin?
Since MERCOSUR isanintergovernmental body, bothquestions andcomplaints byindividuals
mustbeaddressed tothejointbodies through national organizations. ThefourStates Parties alsohave
theirownlegalprovisions forchallenging administrative actions, which provide asatisfactory guarantee
ofcompliance withthelaw.
Oneofthefunctions oftheMERCOSUR Trade Commission istotakedecisions onthe
administration andapplication oftrade policy instruments agreed upon bytheStates Parties. Itcan
alsoconsider theapplications made byindividuals totheirrespective national sections andeither settles
them directly ortransmits them totheCommon Market Group foradecision.
V. MEASURES RELATED TOIMPORTS FROM THIRD COUNTRIES
49. Could theParties explain thesituation asregards regulations concerning unfair trade
practices? What istheir specific coverage? Hasanypiece oflegislation been adopted? Ifso,
please provide copies. Ifnot,when arethese expected?
TheStates Parties ofMERCOSUR have ratified theUruguay Round Agreement on
Implementation ofArticle VIandtheAgreement onSubsidies andCountervailing Measures. Common
rules arealsobeing developed intheareaofunfair trade practices (dumping andsubsidies).
50. Could theParties explain indetail thecommon setofrules governing unfair trade practices
theyareworking on?
Seereply 49.Technical Committee 6isaddressing theissueandhasnotyetreached thislevel
ofdefinition initswork.
51. Canitbeunderstood thatifaState Party invokes safeguard measures, thesafeguard will
beinvoked without excluding trade withother States Parties?
The"Regulations Concerning theApplication ofSafeguard Measures forImports Originating
fromnon-member countries ofMERCOSUR" wasapproved through Decision 17/96. Guidelines have
beendrafted concerning theapplication and/or improvement ofthisregulation.WT/COMTD/1/Add.4/Rev.1
Page19
52. Isitcorrect tounderstand thatonecommon safeguard willbeapplied byMERCOSUR?
Ifthisisthecase, could acopyofthelegalinstrument andmore information onhowthesafeguard
instrument willfunction, forinstance which authority willapply theinstrument, howwillthe
injury bedetermined, etc.beprovided? Willasingle MERCOSUR instrument alsobecreated
foranti-dumping andanti-subsidies proceedings? Could theParties provide acopyofthecommon
regulations onsafeguards inrelation tothird countries?
Seereplies 35,49and51.
53. Anti-dumping andcountervailing duties:
(a) Could theStates Parties toMERCOSUR provide asynopsis ofthethree documents
(mentioned intheresponse toquestion 5.3ofdocument WT/COMTD/1) approved
pursuant toArticle 4oftheMERCOSUR Agreement? What sortofconsultations
andexchanges ofinformation onunfair trade practices areenvisioned among the
Member States ?
Thedocuments towhich thereply toquestion 5.3ofdocument WT/COMTD/1 refers are:
- Decision 3/92: "Procedure forcomplaints andconsultations onunfair trade practices
applicable during thetransition period". Thisisananti-dumping system which was
ineffect intheMERCOSUR region inthetransition period.
- Decision 33/92: Extension oftime-limits tomeetobjectives setoutintheTreaty of
Asunción forthetransition period.
- Decision 63/93: Procedure fortheexchange ofinformation inconnection with
anti-dumping investigations relating toimports fromoneoftheMERCOSUR States
Parties. Information isexchanged between MERCOSUR members before orwhen
commencing aninvestigation. Theobjective ofthisexchange istransparency among
thepartners ofMERCOSUR inanti-dumping investigations.
(b) Thepurpose ofanti-dumping andcountervailing dutymeasures isnottoprevent
orevenrestrict imports butrather tooffset themargin ofunfair trade ortheinjury
caused byit.TheParties havestated thatcommon regulations havebeenapproved
byMERCOSUR torestrict imports which arethesubject ofdumping orsubsidies
bynon-Member countries, yettheParties havealsostated thattheywillonlyapply
domestic legislation torestrict imports resulting from unfair trade practices.
(i) IsittheParties 'intent toharmonize theadministration oftheir domestic
legislation inthecontext ofMERCOSUR ortoadminister acommon law?
Ifthelatter isthecase, when dotheParties foresee theadoption ofa
common law?
In1993theCouncil ofMinisters ofMERCOSUR approved Common Regulations onSubsidies
andCountervailingMeasureswhichwasdulysubmittedtotheGATTWorkingParty.WhentheUruguay
Round negotiations were concluded, thecommon setofrules hadtobeadapted totheagreements
stemming fromtheUruguay Round negotiations. Forthisreason, anewcommon setofMERCOSUR
rulesonsubsidies iscurrently being drawn up,which willcome intoforceassoonastheyareapproved.
MERCOSUR hasnever hadcommon anti-dumping regulations, butiscurrently drawing them
up.Forthemoment, eachState Party maintains andapplies itsdomestic legislation intheareaofWT/COMTD/1/Add.4/Rev.1
Page20
anti-dumping. Subsidies andcountervailing measures havebeendulynotified totherelevant committees
oftheWTO.
(ii) Inthefuture, dotheParties envision aunified approach toregulating unfair
trade from non-Member nations, perhaps administered byacentral
institution? Ifso,what might bethecentral institution?
Seereply 49.
(iii) Willdumped orsubsidized imports from other MERCOSUR countries be
treated anydifferently from suchimports from non-Member countries?
Within thecontext ofcreating acommon market, isittheParties 'intent
toabolish unfair trade regulations between Member States?
Inaccordance withtheProtocol forthedefence ofcompetition approved byDecision 18/96
oftheCMC, MERCOSUR States Parties willcontinue applying domestic legislation until2000inthe
areaofdumping. Asfromthisdate,MERCOSUR willhavetodecide ontheapplication ofacommon
setofrules forthedefence ofcompetition.
54. Please make available therelevant anti-dumping andcountervailing duties legislation.
Please explain alsohowananti-dumping proceeding which iscarrying outtheanti-dumping or
countervailingdutyinvestigationandtheinjuryinvestigationwouldwork?Willaproductimported
intooneMERCOSUR country besubject toananti-dumping orcountervailing duty covering
thetotal territory oftheMERCOSUR countries? Willfuture measures beequally applicable
toimports inevery MERCOSUR country? Inwhat respect isthesituation different during and
after thetransition period? Does thisalsoimply thatexisting national anti-dumping and
countervailing dutylegislation willdisappear? Ifso,bywhatdate? What willhappen withnational
anti-dumping andcountervailing measures thatareinforce?
Seereplies 49,50and53(b).
55. Canitbeunderstood that, ifaState Party invokes anti-dumping orcountervailing duty
measures, these willbeinvoked without excluding trade withother States Parties? Ifthisisnot
thecase, canMERCOSUR explain thelegal grounds forthis?
Todate,national provisions areapplied which alsoapply toother countries ofMERCOSUR.
Anti-dumping andcountervailing duties willbeapplied tothecountry under investigation inaccordance
withinternational usage.
56. Canitbeunderstood thatifaState Party invokes balance-of-payments measures, these
willbeinvoked without excluding trade withother States Parties? Ifthisisnotthecase, can
MERCOSUR explain thelegal grounds forthis?
GATT Article XVIII andtheUruguay Round Understanding willberespected inthisregard.
VI. NATIONAL TREATMENT
57. Please confirm thatArticle 7hasnodetrimental effect ontherights ofWTO Members.
Article 7oftheTreaty ofAsunción hasnodetrimental effect ontherights ofother WTO
Members.WT/COMTD/1/Add.4/Rev.1
Page21
VII. MERCOSUR 'SEXTERNAL RELATIONS3
58. Please confirm thatArticle 8doesnotimpair therights ofWTO Members.
Article 8oftheTreaty ofAsunción doesnotimpair therights ofother WTO Members.
59. Please describe MERCOSUR 'splans regarding theaccession ofnewcountries tothe
Agreement, aswellasMERCOSUR plans forother types ofassociation withother countries,
short ofaccession.
Commitments under theLAIA
Thepurpose ofnegotiations between MERCOSUR andother member countries ofLAIA,
including those referred toinArticle 25ofthe1980 Treaty ofMontevideo, istoreplace bilateral
agreements inforce prior totheformation oftheCustoms Union withnewagreements between
MERCOSUR andeachcountry. Theprogress made towards theconclusion ofthese newagreements
currently varies.
Resolution GMC 9/95wasapproved in1995, authorizing theadhocMERCOSUR-LAIA group
topursue negotiations ontheextension andrenegotiation ofbothbilateral agreements withother LAIA
countries aswellasthose referred toinArticle 25ofthe1980 Treaty ofMontevideo.
Since itwasnotpossible toconclude negotiations toenable theseagreements tocome intoeffect
on1January 1996, itwasdecided toextend thebilateral agreements previously inforce until
31December 1996.
Agreements forfree-trade areas havebeensigned withChile andBolivia, witheffect from
1October 1996 forChile andfrom 1March 1997 forBolivia.
With theother countries oftheAndean Group, agreements continue tobenegotiated forthe
creation offree-trade areas. Bilateral agreements which werepreviously inforce havebeenextended
until30September 1997.
InthecaseofMexico anagreement isbeing negotiated which willfixtariff preferences.
European Union
InDecember 1995, MERCOSUR signed withtheEuropean Union aFramework Agreement
onInterregional Cooperation laying down thebasis forthegradual reciprocal liberalization oftrade
between thetworegions inthemedium term.
Thecooperation agreement underlined bothParties 'political willtoestablish, asanultimate
objective, aninterregional association andagradual reciprocal liberalization ofalltrade, taking into
account thesensitivity ofcertain products andinaccordance withWTO rules. Inaddition, bothParties
initiated regular political dialogue tosupplement andreinforce therapprochement between theEuropean
Union andMERCOSUR.
3Includes questions under sections 7(Commitments under LAIA), 8(Accession) and12(MERCOSUR and
integration efforts inthewestern hemisphere) indocument WT/COMTD/1.WT/COMTD/1/Add.4/Rev.1
Page22
Free-Trade Area fortheAmericas
Thedecision toconclude thenegotiations onaFree-Trade AreafortheAmericas (FTAA) at
thelatest bytheyear2005wasadopted bythePresidents andHeads ofStateoftheAmericas atameeting
heldinMiami, United States, inDecember 1994.
Seven Working Groups were setupinJune1995. On21March 1996 thesecond meeting
ofMinisters fortradetookplaceinCartagena, Colombia, during which reports fromthevarious groups
werereceived, andtheDeputy-Ministers wereinstructed todirect andevaluate theworkofthesegroups.
Thefollowing Working Groups havebeensetup:
1. Market Access;
2. Customs Procedures andRules ofOrigin;
3. Investments;
4. Technical Standards andBarriers toTrade;
5. Sanitary andPhytosanitary Measures;
6. Subsidies, Anti-Dumping andCountervailing Measures;
7. Small Enterprises;
8. Government Procurement;
9. Intellectual Property;
10. Services; and
11. Competition Policy.
Group 12ontheSettlement ofDisputes willbeestablished atthemeeting ofTrade Ministers
atBello Horizonte asagreed intheMinisters 'Declaration ofCartagena of21March 1996.
MERCOSUR -United States Framework Agreement onTrade andInvestment
InJune1991aframework agreement wassigned between theMERCOSUR States Parties and
theUnited States ("Rose Garden Agreement") fortradeandinvestment promotion. Numerous meetings
havetaken place pursuant tothisagreement.
MERCOSUR/JAPAN
Afirstmeeting tookplace on1October 1996 inSanPablo, Brazil. Discussions areunder
waywithaviewtoarranging asecond meeting during thesecond halfof1997.
MERCOSUR/CIS -RUSSIA
Afirstmeeting withtheCommonwealth ofIndependent States tookplace inBrasilia on
25November 1996. Thesecond meeting isplanned forthefirstweek inJuly1997, inMoscow
(2to3July1997) andSt.Petersburg (4to5July1997).
MERCOSUR/INDIA
AfirstmeetingbetweentheForeignMinistersofMERCOSURandIndiatookplaceinNewYork
during theFifty-First General Assembly oftheUnited Nations.WT/COMTD/1/Add.4/Rev.1
Page23
MERCOSUR -ANZCERTA ("Australia-New Zealand Closer Economic Relations Trade Agreement")
Talks
MERCOSUR isdeveloping closer linkswithAustralia andNewZealand, theANZCERTA
member countries. Afurther meeting isscheduled toconsider waysofstrengthening economic relations
between thetworegions.
MERCOSUR/PANAMA
Afirstmeeting isplanned during theXXV meeting oftheCommon Market Group duetotake
place inAsunción on23April 1997.
VIII. SETTLEMENT OFDISPUTES4
60. PleaseprovideacompletedescriptionoftheMERCOSURdisputesettlementsystem.Please
explain therelationship oftheBrasilia Protocol tothedispute settlement system.
TheMERCOSUR Dispute Settlement System issetoutinAnnex IIIoftheTreaty ofAsunción;
theProtocol fortheSettlement ofDisputes intheCommon Market oftheSouth: Brasilia Protocol
(document WT/COMTD/1); andtheAdditional Protocol totheTreaty ofAsunción ontheInstitutional
Structure ofMERCOSUR: Ouro Preto Protocol, which refers tothesystems ofdispute settlement
intheBrasilia Protocol, effective inthisarea. These documents weresubmitted totheWTO Secretariat
induecourse.
61. Isinternational arbitration anintegral partofthedispute settlement process?
No,however theProtocol ofBrasilia provides fortheestablishment ofanadhocarbitration
tribunal forthesettlement ofdisputes between States Parties when direct negotiation andmediation
bytheGMC anditsexperts havefailed.
62. IsMERCOSUR giving anyconsideration tothecreation ofapanel process, similar to
thatusedintheWTO?
Seereply 60.Arbitration isprovided forintheBrasilia Protocol, butthepossibility ofcreating
apanel process isnot.
IX. TRADE CREATION/TRADE DIVERSION5
63. Now thatMERCOSUR hasbeen inoperation fornearly ayear, cantheStates Parties
please provide preliminary dataonthetrade creation andtrade diversion effects ofMERCOSUR?
StatisticaldatashowthattheimplementationofMERCOSURwasanintegralpartoftheunilateral
processes oftrade liberalization carried outbytheStates Parties. Intheperiod between 1990, the
yearwhen theTreaty ofAsunción wassigned, and1995, together withaconsiderable increase in
intraregional trade there wasalsoasignificant growth inimports bycountries ofMERCOSUR from
thirdcountry suppliers, which grew by120percent(from US$25 billion toUS$55.1 billion). That
4Section 9ofdocument WT/COMTD/1.
5Section 11indocument WT/COMTD/1.WT/COMTD/1/Add.4/Rev.1
Page24
isanannual average rateofover20percent, more thandouble theaverage growth ofworld trade
during thatperiod.
Atthesame time, theparticipation oftheeconomically more dynamic regions asmarkets for
imports fromMERCOSUR increased, which isevidence oftheincreasing economic efficiency ofthe
regional grouping. In1995, forexample, theitem"machinery andtools" accounted foralarger share
ofBrazilian exports toNAFTA thantoMERCOSUR (21percentagainst 18percent). Thesame
wasalsotruewithrespect toironandsteelproducts (13.2 percentagainst 7.3percent).
X. SERVICES6
64. InArticle IoftheTreaty establishing MERCOSUR, theParties state thattheir goalis
the"free movement ofgoods, services andfactors ofproduction...". However, theAgreement
doesnotaddress liberalization inservices trade.
(a) HowdotheMERCOSUR States Parties plantoaddress thequestion offreetrade
inservices?
TheMERCOSURStatesPartieshavedecidedtoaddressthequestionoftradeinservicesthrough
thestudy ofaspecial protocol which willformpartofthetextsinstituting thecommon market among
thefourStates Parties. Inorder tomaintain political andlegalconsistency, MERCOSUR hasconsidered
itappropriate touseasamodel theGeneral Agreement onTrade inServices (GATS) adopted bythe
WTO. However theMERCOSUR Agreement Project isadjusting itsarticles inlinewithitsownends,
which istheformation ofaregional common market.
(b) Willcoverage beuniversal; ifnot,which sectors willbeexcepted?
TheMERCOSUR draftagreement intheareaoftrade inservices hasuniversal coverage and
doesnotexclude anyservices sector inprinciple.
(c) Will thesame rules apply whether services providers areestablished or
cross-border? Ifnot,please listthedifference.
TheMERCOSUR draftagreement includes thefourmodes ofdelivery ofservices envisaged
intheGATS, thusincluding services which arealready established (commercial presence) and
cross-border provision.
(d) Willthisliberalizationprovidefortheeliminationofsubstantiallyalldiscrimination?
Yes.TheMERCOSUR draftagreement proposes theelimination ofallforms ofdiscrimination
intradeinservices among theStates Parties within a10yeartime-limit envisaged intheliberalization
programme.
(e) What istheplanned timetable forliberalization inservices?
Seereply 64(d).
6Section 13indocument WT/COMTD/1.WT/COMTD/1/Add.4/Rev.1
Page25
(f) CanMERCOSUR member States indicate whether suchliberalization willraise
theoveralllevelofbarriersforcontractingPartiesnotmembersoftheMERCOSUR
Agreement?
TheAgreementProjectwillnotraisetheoveralllevelofregulations(barriers)forWTOMembers
which arenotpartofMERCOSUR.
(g) DotheMERCOSUR countries provide national treatment insome orallservices
sectors toservices providers ofother MERCOSUR countries? Ifso,what isthe
provision ordecision bywhich thistreatment isoffered? Issuchnational treatment
extended toservice providers from third countries?
Thedraft agreement provides fornational treatment inaccordance withtheGATS model.
Fortherest,seereply 64(f).
(h) DotheMERCOSUR States Parties have anyplans toharmonize professional
standards, forexample, intheaccounting, legal, engineering andmedical fields?
Theharmonization ofprofessional standards within MERCOSUR iscurrently being examined
atministerial level, andinworking groups andspecialized meetings withcontributions fromdifferent
professional associations. Thecomplexity ofrules, educational systems, special setsofrules for
exercising aprofession andothers means thatextensive andin-depth negotiations arerequired toidentify
areas ofagreement andtoagree ontheirimplementation intheterritories oftheMERCOSUR States
Parties.
XI. OTHER AREAS7
65. Articles 38and42oftheProtocol ofOuro Preto indicate thatallMERCOSUR decisions
andfindings arebinding onallfourParties totheAgreement.
(a) Isthiscorrect? Ifso,howisthisprovision enforced?
Thisiscorrect. When rulesareincorporated intodomestic lawinaccordance withArticle 42
oftheProtocol ofOuro Preto, thedomestic legislation isenforced through thecourts ofeachState
Party.
(b) Please provide anupdate onthe11working groups thathave been established
byMERCOSUR. What progress hasbeen made ineachofthegroups?
Theinformation requested isavailable intheSecretariat forconsultation byinterested
delegations.8
66. Since Argentina hasexempted MERCOSUR members from thestatistical taxonimports,
wewould appreciate anexplanation ofthenewcostcalculations forassessing thistaxon
non-MERCOSUR imports.
7Section 14indocument WT/COMTD/1.
8Thisdocumentation isavailable intheSecretariat (Office 3006) forconsultation byinterested delegations.WT/COMTD/1/Add.4/Rev.1
Page26
Forreasonsoftransparency,sincethequestionreferstooneofthememberStates,MERCOSUR
reiterates thatthestatistical taxapplied byArgentina istotally consistent withtheGATT 1994.
67. Could theParties provide acomplete listing oftheexport duties (ormeasures having
equivalent effect) presently inforce onrawhides andskins on"wet-blue products" andonfinished
leather? Isthere aproposal fortheelimination ofthese charges andifsocould theParties provide
details?
Through Resolution 154/96 anAdHocLeather Group wascreated under Working Group 7
"Industrial Policy", inorder toassess thesituation ofthechain ofproduction ofleather andfootwear
inMERCOSUR. Working Group 7willsubmit aproposal totheGMC forthetreatment ofthesector
ofleather andfootwear manufacture, fromthestandpoint ofthedevelopment oftradewithin andoutside
MERCOSUR. Theproposal willencompass whatislaiddown inResolution GMC 154/96.
Argentina hasexport duties onleather inaccordance withResolution ME722/95, which is
available intheSecretariat forconsultation byinterested delegations.
Paraguay doesnothaveexport duties onanyproduct.
Under Decree 456/84, Uruguay currently hasexport duties ontheleather products mentioned
inDecree 432/83, which isavailable intheSecretariat forconsultation byinterested delegations.9
68. Weunderstand thatMERCOSUR hasdesignated specific points ofentry intoeachcountry
tofacilitate themovement ofgoods, particularly agricultural products. Could youexplain how
thisdesignated portsystem operates? Isitopentoimports from third countries? What approval
documents areusedinthissystem, ifany,andcanyouprovide acopyofthatapproval document?
There isnoportselection system inthesense ofdirecting trade. Resolution 8/94oftheGMC
specifies theborder points thatarethemostimportant operationally, where therewould beanintegrated
control mechanism.
69. Please describe MERCOSUR 'splans withregard tocreation ofacommon automotive
regime?
Seereply 5.
70. Several MERCOSUR countries haveinstituted orareconsidering instituting trade-related
investment measures, primarily intheautomotive area. Argentina 'sinvestment regime requires
aspecified amount oflocal content, Uruguay provides animport duty preference onfinished
vehicles tolocal carassemblers andspare parts producers thatexport their ownproducts. The
effect ofsuch distortionary measures wasemphasized bytherecent appeal ofBrazil tothe
Committee onBalance-of-Payments Restrictions tojustify newTRIMs inresponse toexisting
MERCOSUR TRIMs.
(a) Since allinconsistent TRIMs properly notified totheTRIMs Committee by
developing countries must beeliminated within fiveyears, isMERCOSUR
considering theearlier removal ofTRIMs toeliminate theproblems caused by
suchdistortionary measures?
9Thisdocumentation isavailable intheSecretariat (Office 3006) forconsultation byinterested delegations.WT/COMTD/1/Add.4/Rev.1
Page27
Decision 29/94 oftheCMC provides fortheestablishment ofacommon regime asfrom
1January 2000, which willbecompatible withWTO rules.
(b) Inaddition totheautomotive sector, dotheMERCOSUR Parties have other
inconsistent measures notified totheTRIMs Committee under thetransitional
arrangements? What aretheir intentions withrespect totheelimination ofsuch
measures?
No.
71. Concerning therecently adopted MERCOSUR Agreement onpromotion andprotection
ofinvestment, howarebilateral agreements previously signed byaMERCOSUR member with
athird country affected?
Bilateral agreements previously signed byaStateParty ofMERCOSUR withthirdcountries
willnotbeaffected.
72. WhatkindofcompetencedoesMERCOSURassuchhaveintheareaofintellectualproperty
rights?
MERCOSUR doesnothavesupranational bodies andtherefore allitsdecisions aretaken at
intergovernmental level, forwhich theformula ofadditional protocols totheTreaty ofAsunción is
adopted. Issues related tointellectual property rights arehandled byWorking Group No.7.Working
Group No.7submits itsresults forexamination bytheGMC, forapproval bytheCouncil ofthe
Common Market.
73. Which precise action hasbeentaken inthisareauptodate(please provide copies ofany
relevant documents suchasproposals forregional treatment ofintellectual property rights.)
A"Protocol ofHarmonization ofRules onIntellectual Property inMERCOSUR intheArea
ofTrade Marks, Indications ofSource andAppellations ofOrigin" hasbeenagreed. Itwasratified
bytheRepublic ofParaguay, asLawNo.912,on1August 1996.
Inorder forthisProtocol toenter intoforce, ratification isrequired bytwoStates Parties of
MERCOSUR.
InthecaseofBrazil, theprotocol isatthelegislative stage. Itisanticipated thattheProtocol
willbeapproved inthenextsixmonths.
Questions applicable toboththeTrade Mark andCopyright Agreements
74. What isthestatus ofthisAgreement?
Seereply 73.
(a) Have itsform andcontent been finalized?
TheProtocol on"Trade Marks, Indications ofSource andAppellations ofOrigin" hasbeen
finalized interms ofitsform andcontent, butforthemost partrefers tonational legislations.WT/COMTD/1/Add.4/Rev.1
Page28
(b) Which MERCOSUR countries have accepted ittodate?
TheProtocol wasapproved bytheCouncil oftheCommon Market ofthemember countries
ofMERCOSUR, andhasbeensubmitted forratification tothedifferent parliaments. Todateithas
beenlegally ratified intheRepublic ofParaguay.
(c) Ifithasnotyetbeensigned bymember States, what istheschedule fordoing so?
There isnotimetable. Itdepends onthetimetaken byprocedures ineachoftheparliaments.
75. Once ithasbeensigned bymember States, what status willithaveintheir domestic legal
systems?
Inaccordance withtheirparticular legalsystems, oncetheinternational agreements aresigned
bytheState Parties, theprocedure ofArticle 42oftheProtocol ofOuro Perto willbefollowed. A
textexplaining theintegration ofMERCOSUR rules intothelegal systems oftheStates Parties is
available intheSecretariat forconsultation byinterested delegations.10
(a) Willithave toberatified bytheir legislatures?
Yes.
Seereply 74(c).
(b) Willadditional legislation berequired tobring itintoforce onanational level?
Ifso,what isthelikely schedule, form andcontent ofthatlegislation?
Seereply 75.
(c) Willthissystem have retroactive effect?
None ofthelegislation provides thatthelawswillhaveretroactive effect.
76. Why hasanAgreement ofthistypebeen pursued?
(a) What perceived deficiencies inthelegal regimes ofthemember States arebeing
addressed bythisAgreement?
(b) What perceived inconsistencies inthelegalregimes ofthemember States arebeing
addressed bythisAgreement?
Asacustoms union MERCOSUR hasperceived theneedtohaveharmonized legislation on
intellectual property. Ithaschosen toapproach theissue using astep-by-step methodology.
The"Protocol onTrade Marks, Indications ofSource andAppellations ofOrigin" isthefirst
stepinthese negotiations.
Intheirattempts toharmonize, theStates Parties aretaking intoaccount prevailing international
agreements inthearea.
10Thisdocumentation isavailable intheSecretariat (Office 3006) forconsultation byinterested delegations.WT/COMTD/1/Add.4/Rev.1
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77. What treatment willforeign nationals begranted under thisregime?
(a) Willnational treatment ormost-favoured-nation treatment beprovided?
(b) Ifnot,what must foreign nationals dotogetthistypeofprotection?
Themember countries oftheParis Union andtheWTO arecovered bynational treatment
(Article II)under theParisConvention andofArticle IIIoftheTRIPS Agreement. Asaconsequence,
the"ProtocolonTradeMarks,IndicationsofSourceandAppellationsofOrigin"laysdownthisprinciple
initsArticle III.
78. Willanyadministrative mechanism beestablished tocarry outthese Agreements andany
other future arrangements contemplated bythem?
MERCOSUR doesnothave anadministrative body which enforces itsdecisions. When
individuals findthattherights conferred byagreements reached within theframework ofMERCOSUR
havebeenimpaired, theymustsubmit theircomplaint totheNational Section oftheTrade Commission,
andthedispute willbesettled inaccordance withtheprovisions ofArticle 25oftheProtocol.
79. When must theprovisions ofthese Agreements befulfilled?
Article 26provides asfollows: "thepresent Protocol, which forms partoftheTreaty of
Asunción, willcome intoforce forthefirsttwoStates which ratify it30daysafterthedeposit ofthe
second instrument ofratification. Fortheother signatories itwillcome intoforce 30daysafterthe
deposit oftheirinstruments ofratification intheorder inwhich theywere deposited".
Questions concerning theAgreement onTrade Marks
80. Why doesArticle 6notspecifically provide thatpersonal names, numbers andletters are
within thescope oftrade mark subject matter, asrequired byArticle 15.1oftheTRIPS Agreement?
Seereply 77.
81. Onwhat grounds willanapplication foratrade mark bedenied ifit"affects therights
ofthird parties", assetforth inArticle 9.3? Would thispreclude theregistration ofamark in
oneMERCOSUR country ifsomeone hadmade some minor amount ofuseofthemark inanother
MERCOSUR country? What ifthemark waswellknown andtheprior usewasinbadfaith?
Inanyevent, what purpose isthisprovision intended topromote?
Theprovisions ofArticle 9ofthe"Protocol onTrade Marks, Indications ofSource and
Appellations ofOrigin" seektosafeguard therights ofpersons who, ingood faith, areusing atrade
mark within themember countries ofMERCOSUR peacefully andinanuninterrupted manner. This
doesnotprevent thenullity ofatrade mark applied forinbadfaithwhich demonstrably affects the
rights ofthirdparties, andisinkeeping withArticle 17oftheTRIPS Agreement.
82. Why doesArticle 9.4provide thatanapplication willbedenied ifthemark islikely to
cause confusion withanexisting mark andrequire thattheapplicant must know orought toknow
thathismark issimilar totheexisting mark? Should itnotbeenough thatthere isalikelihood
ofconfusion todeny registration? Additionally, whydoesthisprovision onlyrelate tomarks
belonging toowners thatare"established orliving inanyofthesignatory States"? Isthisnot
aclear violation ofnational treatment asrequired byArticle 3oftheTRIPS Agreement?WT/COMTD/1/Add.4/Rev.1
Page30
Article 9.4provides thattheStates Parties willinparticular bantheregistration ofasymbol
which imitates orreproduces asawhole orinpartamark which theapplicant could clearly notbe
unaware ofasbelonging toanowner established orliving inanyoftheStates Parties andwhich could
create confusion orassociation. ThisArticle onlyconcerns amark which could beconsidered
well-known within eachState Party.
Protection given towell-known marks assuchwasnotaddressed intheAgreement: forthis
purpose reference wasmade towhatissetoutintherespective domestic legislations.
83. What "market" isreferred toinArticle 13?Doesthismean thataslongasthegoodbearing
thetrade mark isproduced inthe"market", however defined, itcanbeimported inparallel into
aMERCOSUR country?
Article 13provides that"theregistration ofatrade mark cannot prevent thefreemovement
oftrade marked products lawfully introduced, leaving ittonational legislations todecide thescope
withrespect totheexhaustion ofintellectual property rights, sothatthemarket willbetaken intoaccount
inaccordance withwhatisprovided forineachlegislation".
84. Bywhat timeareallMERCOSUR countries expected toadhere totheNiceAgreement,
pursuant toArticle 18?
Article 18provides that: "theStates Parties which donotusetheinternational classification
ofproducts andservices fortheregistration ofmarks established bythe1957NiceAgreement, orits
current revisions andupdates, undertake toadopt thenecessary measures forthepurposes ofits
application".
Seereply 77.
85. What typeofplant-related protection iscontemplated under Article 21,andwhat isthe
deadline fortheestablishment ofsuchprotection?
86. What typeof"effective measures" arecontemplated under Article 22,andwhat isthe
deadline fortheestablishment ofsuchmeasures?
87. What other Agreements arecontemplated under Articles 23and24?When would such
arrangements oragreements bedeveloped/concluded?
Meetings ofWorking Group No.7todealwiththese issues havenotyetbegun.
Questions concerning theCopyright Agreement
88. Under what grounds willfullnational treatment andmost-favoured-nation treatment be
granted tonationals ofnon-MERCOSUR countries? Doestheanswer tothisquestion differ based
onthetypeofprotection atissue(i.e.TRIPS-level protection versus TRIPS-plus-level protection)?
How doesthisrelate tothenational treatment andmost-favoured-nation treatment required by
Articles 3and4oftheTRIPS Agreement?
89. What level ofproof willregistrations from non-MERCOSUR countries begranted, in
lightofArticle 6?WT/COMTD/1/Add.4/Rev.1
Page31
90. What istheintended purpose ofArticle 7?Would thispermit under anycircumstances
thegrant ofcompulsory licences? Ifso,would thatnotconflict with Article 13ofthe
TRIPS Agreement?
91. Does Article 8permit theparallel importation ofworks from oneMERCOSUR country
toanother? What treatment willlegitimate works created outside MERCOSUR begranted?
What istherelationship ofthisprovision withArticle 18?What iscovered bytheconcept of
"commercializing"? Forexample, canpeople show videos topaying customers iftheylegitimately
purchase thevideos?
92. What isthemeaning ofthelastprovision inArticle 13?How willcollaborators beable
to"dispose freely" ofthepartoftheaudiovisual work thatconstitutes theirpersonal collaboration?
Does thissupersede contractual obligations withtheproducer oremployers?
93. How willMERCOSUR countries beabletoassure employers thatworks produced by
their employees canbeusedinthenormal course ofcommerce, which intheareaofsoftware
involves theregular modification ofworks created byemployees, usually without their consent?
Would establishing inalienable andunwaivable model rights perArticle 14notruncounter to
thisgoal?
94. Does Article 16notinherently conflict withthelanguage ofArticle 14?What variations
could beplaced ontotalinalienability andwaivability?
95. Will placing acopy ofawork onthemarket exhaust therental right established in
Article 17(e)?
96. Under what circumstances would aperson bepermitted tomake personal-use copies of
works perArticle 19.TheUnited States believes thatpersonal useexceptions inherently conflict
withthenormal exploitation ofcopyright andcause unjustified harm tothelegitimate interests
oftheright holder, intheabsence ofsignificant clarification ofwhat actsareatissue.
97. How willtheequitable remuneration established byArticle 21becollected? Willitbe
granted tonationals ofnon-MERCOSUR countries onanational treatment basis? Ifnot,what
criteria willbeapplied?
98. InArticle 22,what does"maintaining essential features" mean?
99. What istheterm ofprotection forcomputer programs? Forworks created inthecourse
ofanemployment relationship?
100. Willneighbouring andrelated rights begranted tonationals ofnon-MERCOSUR countries
onthebasis ofnational treatment, including rights toequitable remuneration?
101. Willcollecting societies beoptional? Willright holders beabletochoose thesociety they
want tojoin?
102. What measures arecontemplated byArticle 43andwhen must theybeimplemented?
103. What other measures arecontemplated byArticle 44?WT/COMTD/1/Add.4/Rev.1
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GENERAL COMMENT TOQUESTIONS 88TO103:
TheAgreement onCopyright andRelated Rights wasnotapproved bytheCouncil ofthe
Common Market, andasaconsequence wasreturned toWorking Group No.7forfurther study; all
theArticles oftheAgreement arethussubject toreview.
XII. TRANSPARENCY INIMPLEMENTING THE AGREEMENT11
104. AreMERCOSUR rules andlegal documents available from asingle source suchasthe
MERCOSUR Secretariat inMontevideo, Uruguay? DoMERCOSUR decisions generally require
authorization bytherespective legislatures ofthefourcountries? What types ofdecision can
beimplemented without legislative approval? What mechanisms exist toenforce thefull
implementation ofMERCOSUR decisions?
Alltherules andlegal documents ofMERCOSUR areavailable from theAdministrative
Secretariat ofMERCOSUR. They willbeavailable ontheInternet veryshortly. Seereply 75.
105. What central institutions existtohandle theday-to-day operations ofMERCOSUR, for
example, theissuance ofcertificates oforigin?
Therelevant ministries andother bodies ofthedifferent countries playtheirpartinaccordance
withtheirresponsibilities.
106. Aswasagreed inparagraph 11oftheUnderstanding ontheInterpretation ofArticle XXIV
oftheGATT 1994, customs unions andconstituents offree-trade areas shall report periodically
ontheoperation oftherelevant agreement. How does theMERCOSUR comply with this
agreement?
AlltheDecisions andResolutions related totheoperation ofMERCOSUR areregularly notified
through thePro-Tempore Chairman.
11Section 15indocument WT/COMTD/1.WT/COMTD/1/Add.4/Rev.1
Page33
ADDITIONAL QUESTIONS RAISED BYMEMBERS
ThefollowingquestionsaresubmittedtoMERCOSURasagreedinthemeetingoftheCommittee
onRegional Trade Agreements on20September 1996. Theheadings refer todocument
WT/COMTD/1/Add.4.
TheEuropean Communities reserve therighttoputforward additional questions.
I. ELIMINATION OFDUTIES, CHARGES AND OTHER RESTRICTIONS APPLIED IN
INTRA-MERCOSUR TRADE
107. CantheStates Parties totheMERCOSUR identify theproducts thataresubject tothe
procedures fortheadaptation tothetrade liberalization programme (i.e.products forwhich
intra-MERCOSUR trade hasnotyetbeenliberalized) andindicate theschedule forliberalization?
Which istheintra-MERCOSUR trade volume forthese products?
Seereply 3.
108. According toArticle 12ofAnnex IontheAgreement onMERCOSUR concerning the
trade liberalization programme, theprovisions ofthisAnnex donotapply totheagreements on
agriculture concluded intheframework ofthe1980Treaty ofMontevideo. CantheStates Parties '
totheMERCOSUR indicate what thismeans inconcrete terms?
Theprecise meaning ofthisprovision wastosafeguard pre-existing agreements between the
MERCOSUR States Parties during thetransition period (21March 1991 to31December 1994).
109. TheMERCOSUR decision inorder toharmonize theTechnical Standards among their
members must becompatible with theWTO Agreements, inparticular theTBT Agreement.
HasMERCOSUR envisaged toadopt thisharmonized technical standards based oninternational
standards andrecommendations asfaraspossible?
Yes,MERCOSUR intends asfaraspossible toadopt harmonized measures onthebasis of
international standards andrecommendations.
110. Theharmonization process ofTechnical Standards foreseen byMERCOSUR doesnot
talkabout theacceptance ofconformity assessment ofproducts among itsmembers. Have the
member states ofMERCOSUR foreseen anymechanism forthemutual recognition ofconformity
assessment ofproducts inorder toavoid duplication?
Inthenegotiating guidelines forWorking Group No.3"Technical Regulations", aperiod of
18months asfrom 1December 1995 isenvisaged forfinishing work relating tothissubject.
III. THEESTABLISHMENT OFACOMMON EXTERNAL TARIFF AND THEADOPTION
OFACOMMON TRADE POLICY INRELATION TOTHIRD STATES ORGROUPS OF
STATES
111. CantheStates Parties totheMERCOSUR identify theproducts notyetcovered bythe
(CET) andindicate theregime(s) inforce forthese products?
Seeanswer 22(a).WT/COMTD/1/Add.4/Rev.1
Page34
112. What isthetime-schedule fortheelimination oftheexceptions totheCET?
Seereplies 2and24.
113. While itisenvisaged inArticle XXIV thatcountries maybreak tariff bindings intheprocess
offorming acustoms union, there arespecific procedures thatmust befollowed tonotify the
breach ofabinding, tonegotiate compensation withaffected countries andtoreplace thetariffs
schedules ofindividual countries withaschedule forthenewcustoms union. Intheevent that
anyMERCOSUR Party hasbroken itstariff bindings intheprocess ofadopting theMERCOSUR
CET, when isitsintention tonotify these modifications tobound tariffs properly, provide the
required trade andtariff dataandbegin compensation negotiations?
Seedocument WT/COMTD/1/Add.5/Rev.1 andreply 29(b).
IV. RULES OFORIGIN
114. WhatisthetarifftreatmentprogrammeforthirdcountrygoodstransitingoneMERCOSUR
member andentering another during thepresent transition period until fullconvergence onthe
CET isachieved in2006?
Products fromthirdcountries intransit through oneMERCOSUR member country anddestined
foranother willpaythedutyinthedestination country offinalconsumption.
V. MEASURES AFFECTING IMPORTS FROM THIRD COUNTRIES
115. Pleaseindicatethestateofprogressintheestablishmentofacommonsafeguardinstrument,
and, when possible, supply acopy ofthelegal instrument aswellasinformation onhowthe
safeguard instrument willfunction, forinstance which authority willapply theinstrument, how
willtheinjury bedetermined etc.?
Seereply 51andDecision 17/96.
116. DotheMERCOSUR States Parties presently exclude other MERCOSUR members inthe
application ofsafeguard measures under Article XIXofGATT 1994, orisittheintention ofthe
MERCOSUR State Parties toexclude theapplication ofsafeguard measures within the
MERCOSUR?
Seereply 51andDecision 17/96.
117. Please indicate thestate ofprogress intheestablishment oflegislation onanti-dumping
andcountervailing duties andexplain howananti-dumping proceeding would work: which
authority iscarrying outtheAD/CVD investigation andtheinjury investigation? Willaproduct
imported inonMERCOSUR country besubject toanAD/CVD investigation covering thetotal
territory oftheMERCOSUR countries? Willfuture measures equally beapplicable toimports
inevery MERCOSUR country? Inwhat respects isthesituation different during thetransition
period andafter thetransition period? Does thisalsoimply thattheexisting national AD/CVD
legislation willdisappear? Ifso,bywhatdate? What willhappen withnational AD/CVD measures
inforce?
Seereplies 49,50and53(b).WT/COMTD/1/Add.4/Rev.1
Page35
X. SERVICES
118. TheAdHocServices Group istoprepare aServices Framework Agreement under
Decision 20/95. What arethestateofplay, expectations andlikely timetable oftheMERCOSUR
Services Framework Agreement?
Seereply64.TheAdHocServicesGroupintendstosubmitthetrademarkagreementonservices
totheCMC before 30September 1997.
XI. OTHER AREAS
119. Could theStates Parties totheMERCOSUR inform ofthesituation andanypossible
developments withrespect toexport dutyonleather (byArgentina, Brazil andUruguay)?
Seereply 67.
Agriculture
120. TheMERCOSURStatesPartieshavestated(indocumentWT/COMTD/1/Add.2question3)
thateachcountry isresponsible forimplementing itscommitments under theWTO Agreement
onAgriculture. Given thattheMERCOSUR isacustoms union, could theStates Parties tothe
MERCOSUR indicate ifthemarket access concessions contained ineachindividual Schedule of
theParties andagreed upon under theUruguay Round negotiations onAgriculture willbemerged
intooneSchedule common totheStates Parties totheMERCOSUR?
Yes,asacustoms union MERCOSUR intends, attheappropriate time, tosubstitute thefour
national listswithacommon MERCOSUR list.
121. Under theAgreement onAgriculture, Brazil andUruguay havethepossibilities togrant
direct export subsidies. Willthetrade withother parties ofMERCOSUR beconsidered anexport
forthatpurpose?
Decision 10/94 oftheCMC establishes theform ofapplication anduseofincentives in
international trade.
While Uruguay hastheoption togrant direct export subsidies under theWTO Agreement on
Agriculture, itisnotmaking useofthisoption.
122. Export taxes areapplied bysome parties ofMERCOSUR, e.g.forsoybeans. Aresuch
taxes tobeeliminated ortobeharmonized?
MERCOSUR hasstillnotdetermined apolicy onthismatter.
Trade Mark andCopyright Agreement
Other thanquestions 74to103ofWT/COMTD/1/Add.4, theMERCOSUR States Parties are
requested toreply tothefollowing questions:WT/COMTD/1/Add.4/Rev.1
Page36
123. What kindofprotection ofgeographical indications iscontemplated byMERCOSUR under
theDecision onTrademarks andGeographical Indications (CMC 8/95)? Please supply acopy
ofCMC 8/95. Istheprotection ofgeographical indications subject tonational treatment and
MFN clause, asprovided forinArticles 3and4ofTRIPS? Howdoesitrelate withtheprotection
granted under national legislation ofeachMERCOSUR Member State?
Seereplies 77to80.
124. IsCMC 8/95directly applicable ineachoftheMERCOSUR States, orisimplementing
oramending legislation necessary? Ifsuchimplementing oramending legislation isnecessary,
please supply information onthestateofadvancement ofsuchlegislation oratimeschedule for
suchlegislation.
Seereplies 77to80.
125. DotheMERCOSUR States Parties envisage theadoption ofasimilar agreement concerning
copyright? Ifyes,please supply acopy ofthedraft agreement andindicate thetimeframe for
theadoption ofthisdecision. Isthisdrafting ofthisdecision undertaken inlightoftherelevant
provisions oftheTRIPS Agreement, andinparticular those ofSection 1ofPartIIonCopyright
andRelated Rights?
Seereply 88.
126. DotheMERCOSUR States Parties envisage theextension ofthistypeofdecision toother
areas ofintellectual property rights?
Seereply 76.
127. DotheMERCOSUR States Parties have, ordotheyintend toadopt, measures toeffectively
combat counterfeit andimitation copyrights?
Inaccordance withArticle 22oftheProtocol, theStates Parties shall implement effective
measures tocurbcommercial production ofpirated orfalsified products.
128. Could theMERCOSUR representative please provide abriefhistory oftheharmonization
ofSPSmeasures inMERCOSUR andanoverview ofthecurrent harmonization process. For
example, havecommittees beenestablished andifyes,what arethese committees andhowoften
dotheymeet? Once astandard isharmonized, isimplementation mandatory orarederogations
permitted andunder what circumstances? How many standards have been harmonized?
Seereplies 11(c) and13.Therules harmonized andapproved byMERCOSUR must be
implemented bytheStates Parties.
129. Does theharmonization process apply toallcommodities (plant, animal andfood) and
foralltypes ofSPSmeasures (human, animal andplant health andsafety)? Ifnot,whatstandards
arebeing harmonized andwhy?
Inthereview carried outbyWorking Group 8"Agriculture", sanitary andphytosanitary rules
which could beharmonized havebeenidentified bothforplant products asforanimal products. In
theharmonization process carried outbyWorking Group 8,thefollowing rules have sofarbeen
harmonized:WT/COMTD/1/Add.4/Rev.1
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130. Does theharmonization process include onlythose standards which apply toimports or
aredomestic standards being harmonized aswell? Howdoestheharmonization ofmeasures impact
ontradebetweenMemberStates?Areproductsbeingtradedintra-MERCOSURsubjecttocontrols
oristhere freemovement ofproduct between Member States? How areproducts from third
countries being treated?
Harmonized rulesareapplied toimports fromwithin andoutside MERCOSUR. Thecriteria
established inthese rules facilitate themovement ofproducts.
131. Theconcept ofappropriate levelofsanitary andphytosanitary protection isfound inthe
SPSAgreement oftheWTO. TheAgreement recognizes thatacountry hastheright toestablish
itsappropriate levelofprotection. How isthisconcept being applied inMERCOSUR?
Seereply 11(c).
132. When countries establish SPSmeasures toprovide their appropriate levelofprotection
theAgreement encourages theadoption ofinternational standards. What consideration does
MERCOSUR givetothestandards developed bytheinternational organizations identified by
theWTO SPSAgreement?
Seereplies 11(c) and11(f).
133. WhenaSPSmeasureisnotbasedonainternationalstandard,guidelineorrecommendation,
ariskassessment must becompleted? Who completes theriskassessments forharmonized
standards? Does eachcountry complete ariskassessment?
Sanitary andphytosanitary measures areadapted torulesandguidelines setoutbyinternational
organizations (Rome Plant Protection Convention andtheInternational Office ofEpizootics).
134. Arethestandards harmonized byMERCOSUR detailed innature oraretheyguidelines?
AreMERCOSUR Member States permitted todevelop equivalent measures? DoeseachMember
State have thelatitude toformulate their ownimport requirements which would reflect the
characteristics ofitsownagriculture situation (inspection system, pestanddisease status etc.)?
Rules harmonized inMERCOSUR areofaspecific nature andofmandatory application in
eachoneofthemember countries. Withregard tothecompetencies ofthese States Parties, theyhave
thelatitude toformulate theirownimport requirements, through consultation.
135. WeunderstandthatforexistingharmonizedcommoditiesMERCOSURapprovalofchanges
toimport requirements isnecessary. Does thisapproval leadtodelays intheestablishment of
import requirements?
Anychange intheharmonized rulesmustbeapproved bytheexecutive organ ofMERCOSUR
(CMC). Imports willhavetocomply withtherequirements inforce atthetimeoftheoperation.WT/COMTD/1/Add.4/Rev.1
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136. How doestheharmonization process impact ontheexisting SPSmeasures forimports
from third countries? Arethese bilateral agreements amended, where required, when standards
areharmonized? Ifyes,could MERCOSUR explain theamendment process? Could thesituation
arise where MERCOSUR isunable toestablish aharmonized import requirement? Ifyes,would
theimport requirement beestablished bytheMember States? Ifno,howMember States would
beabletofulfil their WTO commitments asspecified intheSPSAgreement, Article 2(3), and
justify thattheirSPSmeasure isnotusedasabarrier totrade insuchwaythatconstitute abarrier
totrade?
Seereply 11(c).
137. During theharmonization process doesMERCOSUR orindividual countries notify the
WTO, were required, ofchanges toSPSmeasures asrequired bytheSPSAgreement?
Seereply 11(h). Inthecaseofnon-harmonized rules, itwillbetheresponsibility ofeachState
Party tonotify them totheWTO.