RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/53
14 November 2001
(01-5775)
Council for Trade in Goods
MINUTES OF THE MEETING
Held in the Centre William Rappard on 5 October 2001
Chairperson:  Ambassador István Major (Hungary)
The meeting of the Council for Trade in Goods was convened by WTO/AIR/1638 and
Corrigendum 1.  The proposed agenda contained in document G/C/W/309 was adopted.  Note:  the
meeting was adjourned on item I and reconvened on 5 November 2001.
Table of contents
I. TRIMS AGREEMENT:  REQUESTS FOR EXTENSION OF THE
TRANSITION PERIOD...........................................................................................................2
II. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9 ...................................................................................................................... .........3
III. REQUEST FOR A WTO WAIVER – NEW ACP-EC PARTNERSHIP
AGREEM ENT ...................................................................................................................... ....4
IV. STATUS OF NOTIFICATIONS UNDER THE PROVISIONS OF THE
AGREEMENTS IN ANNEX 1A OF THE WTO AGREEMENT
(G/L/223/REV.7) ................................................................................................................ .......5
V. CUSTOMS VALUATION AGREEMENT: REQUESTS FOR A WAIVER
UNDER ARTICLE IX OF TH E WTO AGRE EMENT........................................................6
VI. CUBA - REQUEST FOR EXTENSION OF WAIVER UNDER ARTICLE IX.4
OF THE WTO AGREEMENT CONCE RNING GATT ARTI CLE XV:6 .........................6
VII. MARKET ACCE SS MATTE RS .............................................................................................7
A. C OMMITTEE ON MARKET ACCESS ..............................................................................................7
-P ERIODIC REPORT OF THE COMMITTEE (G/MA/113)..................................................................7
B. H ARMONIZED SYSTEM – REQUESTS FOR EXTENSIONS OF WAIVERS ..........................................8
C. Z AMBIA – REQUEST FOR AN EXTENSION OF THE WAIVER ..........................................................8
VIII. FREE TRADE AGREEMEN TS..............................................................................................8
IX. REQUEST BY COSTA RICA;  INDIA;  INDONESIA;  PAKISTAN;  PERU
AND HONG KONG, CHINA:  CTG'S OVERSIGHT FUNCTION PURSUANT
TO ARTICLE IV OF THE AGREEMENT ESTABLISHING THE WTO –
TRANSPARENCY REGARDING NEW RESTRICTIONS ON TEXTILE AND
CLOTHING PRODUCTS COMMENTED ON BY THE TEXTILES
MONITORING BODY (G /C/W/260(REV.1)) .......................................................................9G/C/M/53
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X. REQUEST BY THE SLOVAK REPUBLIC – NOTIFICATION BY POLAND
UNDER ARTICLE 12.5 OF THE AGREEMENT ON SAFEGUARDS (G/L/453-
G/SG/35) ....................................................................................................................... .............9
XI. CONSIDERATION OF ANNUAL REPORTS OF SUBSIDIARY BODIES OF
THE COUNCIL FOR T RADE IN GOODS .........................................................................10
XII. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE
IN GOODS TO THE GENERAL  COUNCIL (G/C /W/302)...............................................11
XIII. OTHER BUSINESS............................................................................................................ ....11
A. F REE TRADE AGREEMENT ........................................................................................................11
B. D ATE OF THE NEXT MEETING ....................................................................................................11
_______________
I. TRIMS AGREEMENT:  REQUESTS FOR EXTENSION OF THE TRANSITION
PERIOD
1.1 The Chairman recalled that at the end of July the Council adopted a number of decisions on
requests made by eight Members for an extension of the transition period under the TRIMs
Agreement until 31 December 2001 and for the possibility of requests, to be submitted no later than
31 August 2001,  for an additional extension of this period.  The Council now had before it eight
requests for such an additional extension, as contemplated in the decisions taken on 31 July, from:
Argentina, Colombia, Malaysia, Mexico, Pakistan, the Philippines, Romania and Thailand.  The
decisions taken on 31 July provided that requests for an additional extension of the transition should
be the subject of consultations in the Council and that on the basis of such consultations the Council
would grant such requests if they met the criteria stipulated in the decisions.  Consultations werecontinuing and he hoped that in the near future the Council for Trade in Goods would be in a position to
grant the requests made.  It was therefore his inten tion to suspend the meeting on this item in order to
allow consultations to continue and to be able to retu rn to it at very short notice.  In this connection,
he sought the indulgence of Members in asking th at the normal ten-day rule for the circulation of
documentation be waived so that the draft decisions for each requesting Member could be considered bythe Council for Trade in Goods in as timely a fashion as possible.
1.2 The meeting was adjourned on this point a nd reconvened on 5 November 2001.  The Chairman
said it was his intention to introduce a compromise package of draft CTG decisions providing
additional extension of the TRIMs transition period for Members coupled with a communication fromColombia indicating its intention to request a waiver under WTO Article IX.3 in respect of Columbia
maintenance of three measures with respect to certain bean products.  The respective documents were
contained in G/C/W/331-338. In the final version of G/C/W/333, the reference to document
G/C/W/291 at the end of the third preambular para graph was amended to read as G/C/W/291/Rev.1.
1.3 The representative of Guatemala on be half on Honduras, Panama and the Dominican
Republic, shared the concerns that had been pointed out by delegations who requested extensions of
the transition period for the elimination of trade-related investment measures. She appreciated that
several countries confronted problems to comply with WTO obligations and that there were real
problems of implementation.  Several of the Members requesting this extension were countries from
Central America and she understood the difficulties they faced in implementing different provisions
of the TRIMs agreement. At the same time she was aware of the financial problems related to tradeand development which had led her neighbours to request this extension. The extension requested was
the result of specific problems faced by certain countries in complying with their trade obligations.G/C/M/53
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Not all countries had the same implementation problems so in spite of the fact that her delegation had
not requested extensions in this regard, her country also faced implementation problems in other
areas.  All Members should be positive about this otherwise the opposite would bring about problems
in strategic sectors for various countries in relation to employment and investment. The solutions
presented by some Members in other WTO bodies should not be denied and she called for a flexibilityand understanding.  This would require sacrifices fo r some Members but, to the extent that specific
situations faced by countries could be solved through the granting of a transition period, these
countries could adjust to the requirements of WTO Agreements.   All would be compensated by the
strengthening of the multilateral trading system which required an effort on the part of all Members.
Finally, the requirement for extension presented by these countries to the CTG and other bodies was
therefore necessary and she expressed her satisfaction for the approval of such extensions.
1.4 The representative of El Salvador said El Salvador attached great importance to the solution
of implementation problems especially with regard to developing countries.  He trusted that Members
would come to an agreement which would favour the requests for extension on the part of certain
developing countries for the implementation of the trade-related investment measures agreement in
consideration of their problems and their financial and economic development.  He hoped that thiswould be brought to the attention of Ministers taking into account the problems of vulnerable
economies in relation to their development.  He supported the declaration made by Guatemala.
1.5 The representative of the United States could go along with the phase-out plan for the eight
requesting Members and in particular with respect to Malaysia and understood that Malaysia would
eliminate for certain items TRIMs on 1 January 2002 instead of 1 June 2002.
1.6 The representative of Malaysia confirmed the United States understanding with regard to the
revision of the phase-out plan.
1.7 The Chairman confirmed the compromise package of draft CTG decisions providing
additional extension of the TRIMs transition period for eight Members coupled with a communication
from Colombia indicating its intention to request a waiver under Article IX.3 in respect of Columbia's
maintenance of TRIMs measures with respect to certain bean products.  He proposed the CTG
approve the draft decisions on TRIMs extensions and give favourable consideration to making a
positive recommendation to the General Council on Colombia's request for an Article IX.3 waiver.
It was so agreed.
II. REVIEW OF THE OPERATION OF THE TRIMS AGREEMENT UNDER
ARTICLE 9
2.1 The Chairman noted that the Council had formally initiated the review under Article 9 of the
TRIMs Agreement in October 1999, but so far no specific papers from Members had been received.
He reiterated the invitation to delegations to submit such proposals.  Discussion under this item at
recent meetings had centred on the proposal for a joint WTO/UNCTAD study to assist delegations in
the conduct of the Article 9 review.  He recalled that the terms of reference for this study had been
circulated for comment in mid-May and approved by the Council as of 25 May, and were thencirculated in document G/C/W/266.  The terms of reference were approved on the understanding that
the conduct of the study would take place in the cont ext of the review called for in Article 9 of the
TRIMs Agreement and was not linked to work underway in the Council or any other WTO body on
TRIMs transition periods.  At the June meeting, he noted that the two Secretariats had started their
work on this study and aimed to have something available after the summer break.  The first fruits ofthe study were circulated in document G/C/W/307.  As noted in the its introduction, Part I of the joint
study covered "scope and definition" and "provisions in international agreements".   Part II of the
study would be issued shortly, and would cover the experience of selected developed and developingG/C/M/53
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countries in the use of TRIMs and other performance requirements, the use of these measures in
specific sectors and industries, and an analysis of the rationale, incidence and impact of the measures
on trade and investment flows, and on economic growth and development.
2.2 The representatives of India and the United States  thanked the WTO and UNCTAD
Secretariats for the document presented and noted that they needed more time to analyse it.2.3 The Council took note of the statements made and agreed
 to revert to this matter.
III. REQUEST FOR A WTO WAIVER – NEW ACP-EC PARTNERSHIP AGREEMENT
3.1 The Chairman recalled that at the last meetin g on 31 July he had reported on his consultations to
see how Members could come to an agreement rega rding the start of the examination of the waiver
request.  At that meeting he was asked to resume his consultations in September.  He reported the
following:  "In my judgement there is now agreem ent among members that the examination of the
waiver request can begin today and, accordingly, I intend to convoke the working party as soon as
possible.  In this regard, I noted that the EC and th e ACP countries have requested an Article I waiver to
include bananas until 31 December 2007.  However, there is a difference of opinion whether the EC hasyet described the measure intended for the regime between 2005 and 2007.  It may be that during the
course of the 90 day examination, this issue can be resolved to enable members to agree on whether any
Article I waiver can apply up to the end of 2007 for bananas."
3.2 The representative of Ecuador said the examination of the waiver could begin providing that
such an examination take place within the provisi ons of Article IX .3b of the WTO Agreement. Hence,
the examination of the waiver began today and the 90 days would start running. He wished that the
working party would be able to reach consensus quick ly and speedily.  However, if this possibility did
not occur, the 90 days would have to be complied with.  During the past 19 months Members had been
waiting for the EC to deliver the documen ts needed to initiate this review.
3.3 The representative of Colombia noted considerable progress in this process . Colombia had
major concerns regarding the legal structure of the decision that before the CTG. This decision would
have a major impact on the investment decisions taken by Colombian exporters, an issue he would
return to during the 90-day period that started today.
3.4 The representative of Honduras wished to place on record its view that the multilateral trading
system was at risk because some of its most important trading partners were not adhering to the rules
laid down in the Agreements and the outcomes of the Dispute Settlement Body. On this occasion,
Honduras, although with grave reservations, di d not oppose the consensus for beginning the
examination, but wishes to make it clear that it does so with a view to boosting the multilateral trading
system and not out of any conviction that the examination should begin today. This process haddeliberately become a confrontation among developing countries which some Members were seeking
to exploit in order to circumvent their obligatio ns within this Organization. Honduras was joining in
the consensus for beginning this examination and wish ed to make it quite clear that in the course of
this exercise it would demand compliance with paragraph 1 of the Understanding in Respect of
Waivers of Obligations under the GATT 1994, which provided that the measure must be described:
on that basis he reserve his right to grant the waiver requested by the European Communities.
3.5 The representative of Guatemala stated that she had no objection to the beginning of the
examination, but she reserved her right in using the 90-day period to complete the necessary task and
clarifications required by her country.
3.6 The representative of the European Communities expressed that the process of  the review of
the waiver was very much behind schedule and it was important that this examination take placeG/C/M/53
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quickly, and that the decision be adopted before the Doha Ministerial Conference.  He said that
Members of this organization were fully informed regarding the terms of the Agreement.  He hoped
therefore that the group would meet quickly and that  the programme of work would be completed within
the specified time-period.
3.7 The representative of Gabon, speaking on behalf  of the ACP Group, expressed her satisfaction
with the agreement, although she deplored the long de lays and difficulties in reaching this decision.  She
emphasized that the Cotonou Agreement covered a wide range of products of high importance for her
Group.  She stressed the importance in finding a decision before Doha.
3.8 The representative of Panama, stressing the criti cal importance of this issue for his country, said
he was entering the examination period without prejudice to its rights under the procedures for
examining waivers foreseen in the Agreement. Panama would ensure that it was able to obtain a fair and
equitable result without prejudice to other proced ures other discussions being held within this
organization.
3.9 The representative of Paraguay said that he supported the initiation of the waiver examination,
and wanted to be represented in the Working Group.3.10 The representatives of Belize, Congo
, Côte d'Ivoire , Cuba , Jamaica , Kenya , Madagascar ,
Mauritius, Saint Lucia , Suriname  and Zimbabwe  expressed their support of the statement made by
Gabon in name of the ACP Group, noting their wish fo r a constructive participation of all Members in
the examination and wished that it be finalized before the Doha Meeting.
3.11 The representative of the United States said that they supported the initiation of the waiver
examination today, and that they had a series of i ssues and questions to be considered by the working
group.
3.12 The representative of Canada expressed his satisf action with the start of the review process, and
stated he also had some questions to submit.
3.13 The Council took note of the various statements made on this item and agreed to begin the
examination of the EC-ACP request for a WTO waiver under GATT Articles I and XIII in accordance
with the relevant provisions of the WTO Agreement.   The Council agreed to establish a working party
for this purpose.
3.14 The Chairman proposed that the CTG take note of the statements made and encouraged
delegations to put forward their questions to the parties concerned.
The Council took note.
IV. STATUS OF NOTIFICATIONS UNDER THE PROVISIONS OF THE
AGREEMENTS IN ANNEX 1A OF THE WTO AGREEMENT (G/L/223/REV.7)
4.1 The Chairman said that, as indicated in document G/L/223/Rev.7, the Council had adopted in
October 1996 a recommendation by the Working Part y on Notification Obligations and Procedures to
maintain on an ongoing basis the comprehensive lis ting of notification obligations under the provisions
of the Agreements listed in Annex 1A of the WT O Agreement, and compliance therewith.  The update
in the document before Members contained all notifications made up to 30 June 2001.
The Council took note of the informati on contained in doc ument G/L/223/Rev.7.G/C/M/53
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V. CUSTOMS VALUATION AGREEMENT: REQUESTS FOR A WAIVER UNDER
ARTICLE IX OF THE WTO AGREEMENT
5.1 The Chairman drew attention to document G/ C/W/301, which contained a request for a waiver
by Côte d'Ivoire under Article IX of the WTO Agreement concerning customs valuation and to
document G/C/W/300 Revised which contained the request with respect to minimum values of
El Salvador.
5.2 The representative of Côte d'Ivoire  said Côte d'Ivoire had obtained a waiver which ended on
30 June 2001.  Theoretically, beginning on 1 July 2001 Côte d'Ivoire should apply the transaction of
value. His authorities had had technical difficulties which justified but some reservations for the use of
minimum value or reference prices for a period of 18 months.
5.3 The representative of El Salvador  said El Salvador was asking for an extension for the
application of minimum prices under Article 7 of the GATT 1994 Agreement.  His delegation was
currently in consultation with other Members on the list of products to be covered.
5.4 The requests were supported by Cuba and Jamaica .  The Council took note  of the statements
made and would revert to this matter when Côte d' Ivoire and El Salvador present draft decisions for
granting the waiver.
It was so agreed.
VI. CUBA - REQUEST FOR EXTENSION OF WAIVER UNDER ARTICLE IX.4 OF
THE WTO AGREEMENT CONCERNING GATT ARTICLE XV:6
6.1 The representative of Cuba presented documents G/C/W/303 a nd Corr.1 and G/C/W/308,
stating the reasons for his country's request for an  extension of its waiver of the provisions of
Article XV:6 of the General Agreement on Tariffs and Trade until 31 December 2006.  Given that thewaiver granted to Cuba relieving it of the provisions of paragraph 6 of Article XV of the General
Agreement on Tariffs and Trade 1994 was due to expire on 31 December 2001 and with the purpose
of fulfilling its obligations under Article IX of the Marrakesh Agreement Establishing the World
Trade Organization, he had been instructed by his authorities to request a further extension of this
waiver.
6.2 He pointed out that the circumstances which WTO Members took into consideration in 1964
and subsequently in 1996 when they granted Cuba a waiver of the provisions of Article XV.6 of the
General Agreement on Tariffs and Trade, which provided that any contracting party which ceased to
be a member of the International Monetary Fund shall enter into a special exchange agreement with
the WTO, not only still existed, but indeed had worsened.  On both occasions, the Members of this
Organization, and previously the contracting parties to the GATT, took into consideration the fact that
"the application of the provisions of paragraph 6 of Article XV to Cuba would raise a number of legal
and practical difficulties".  Cuba was not a member of the International Monetary Fund or any other
international financial institution and therefore did not adopt the policies imposed by such bodies.
Nor did it have access to major sources of credit from international financial organizations as other
countries did.  Cuba had repeatedly stated its conviction that such policies were detrimental to theeconomic interests of underdeveloped countries and that they had played a major role in the crises by
which such countries were beset.  It had proposed that either new multinational financial institutions
be created or the existing ones be reformed so that they act in the interests of the majority.  In
addition, under Title I, Section 104, of the Helms-Bu rton Act, the United States statutorily opposed
Cuba's membership of international financial organizations, through instructions from the Secretary ofthe Treasury to the United States’ Executive Directors in such institutions.  While the Cuban economy
had been able to recover from the downturn of 1989-1993 caused by the loss of its main tradingG/C/M/53
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markets, it had not yet been able to make up for the decline accumulated over that period in some
sectors of the economy, such as the sugar industry, w ith the result that trade in goods in the year 2000
represented only 48.5 per cent of the 1989 level.  By dint of hard work and determination, the country
had managed to achieve a sustained and expanding economic recovery:  had it been able to rely on
medium- and long-term external financial support, it could have achieved higher and strongereconomic growth.  One of the main factors hampering Cuban economic development potential had
been the economic war waged by the United States Government against Cuba.  The most telling
manifestation of this war were the regulations implementing the economic, commercial and financial
blockade that had been in force for over 40 years and which had adversely affected all sectors of
Cuban society and caused the country to suffer losses of over US$67 billion.  More recently, in
October 2000, the United States Congress approved new measures, set out in Title IX of the
Agriculture Appropriations Act for 2001, strengthen ing the prohibition on access of Cuban goods and
services to the United States market.  For these reasons, the Cuban authorities had maintained an
exchange rate policy enabling it to encourage the economic growth which commenced in 1994 and
ensure that the economy continues to function properly in the current circumstances, in order to
preserve the major achievements in the economic and social fields.  The second element to be
highlighted was that Cuba's use of the waiver over the thirty-seven years since it was first approvedhas not had any adverse effects on other WTO Members.  Cuba had thus shown that it has complied
with its commitment to make use of the waiver wit hout thereby affecting the objectives of the General
Agreement or harming or impairing the rights of the other parties.  For the above reasons, the
government of the Republic of Cuba expected the cooperation of WTO Members and a decision in
favour of extending the waiver granted in 1996 for a further five years and, at the same time,confirmed its willingness to use this waiver to continue to promote trade with Members.  To this
effect he recalled the belief of the national hero José Martí which served as a guiding light that:
"Countries which wish to be free must trade with the whole world, not just part of it".
6.3 The representatives of Congo, Côte d'Ivoire
, Jamaica , Malaysia  and India  expressed their
support for a waiver extension to Cuba.6.4 The representative of the United States noted th at he needed to consult with his capital on the
issue.  The representatives of the Czech Republic and India  proposed to adjourn the meeting on this
matter, to give delegations time to seek instructions.
The Council took note of the statements made and agreed  to revert to this matter.
VII. MARKET ACCESS MATTERS
A. COMMITTEE ON MARKET ACCESS
-P ERIODIC REPORT OF THE COMMITTEE (G/MA/113)
7.1 The Chairman referred to the periodic report of the Committee contained in document
G/MA/113.
7.2 The Committee Chairperson said in accordance with the agreed procedures of the Committee
on Market Access regarding the transmission of factual data related to requests for extension ofwaivers, a draft periodic report was circulated in document G/MA/SPEC/18 and was examined by the
Committee at its meeting of 26 September 2001.  Following that meeting, the report was revised
taking into account the discussions that took place at that meeting and issued as document G/MA/113.
The report reflected in Annex I the reasons why certain Members whose waivers expired on
31 October 2001 had requested a further extension of their waivers.  This was mainly to concludeongoing consultations or continue negotiations.  The Committee agreed to forward these waiverG/C/M/53
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decisions to the CTG for further action.  It took note of document G/MA/TAR/2/Rev.26 which set out
the status of submissions of Harmonized System  1996 documentation and provided an overview to
the Committee on the status of the HS96 transposition exercise, as well as the situation with respect to
HS2002 changes. The report also gave a summary of the activities carried out in the context of the
modalities and operation of the Integrated Data Base (IDB).  At the meeting of 26 September 2001,the Secretariat provided a report on the status of pr ocessing of IDB submissions , the status of software
development and ongoing technical assistance activities.  There were also reports on the informal
meetings carried out in the context of the multilateral review undertaken by the Committee on the
operation of the IDB and related technical assistance activities. The Committee also heard a report
presented by the Secretariat on the progress of work on the Consolidated Tariff Schedules Database
Project whereby much progress has been made but there are still some outstanding matters.
The Council took note of the report.
B. HARMONIZED SYSTEM – REQUESTS FOR EXTENSIONS OF WAIVERS
7.3 The Chairman noted that Nicaragua and Sri Lanka had made requests for extensions of
waivers which were going to expire on 30 April 2001.  These requests had been made in the context
of the transposition of these Members schedules in to the Harmonized System.  Pursuant to Article IX
of the WTO Agreement, these requests for waivers were before the Council for Trade in Goods and
draft decisions had been circulated to assist the Council in its consideration of these requests.  The
request from Nicaragua had been circulated in do cument G/L/481 and a corresponding draft decision
in document G/C/W/299.  The Chairman proposed that the Council approve an extension of the
waiver for Nicaragua until 30 April 2002 and recommend that the draft decision be forwarded to the
General Council for adoption.  It was so agreed.
7.4 The request for Sri Lanka had been circulated in document G/L/477 and the corresponding
draft decision in document G/C/W/298 and Corr 1. The Chairman proposed that the Council approve
an extension of the waiver for Sri Lanka until 30 April 2002 and recommend that the draft decision be
forwarded to the General Council for adoption.  It was so agreed.
C. ZAMBIA – REQUEST FOR AN EXTENSION OF THE WAIVER
7.5 The Chairman drew the attention of Members to the request by Zambia circulated in
document G/L/482 for an extension of a waiver granted to it in connection with the renegotiation of
its schedule, and to a corresponding draft decision in document G/C/W/306.  He suggested that theCouncil approve an extension of the waiver for Zambia until 30 April 2002 and recommend that the
draft decision be forwarded to the General Council for adoption.  It was so agreed.
VIII.  FREE TRADE AGREEMENTS
8.1 The Chairman drew Members' attention to the agreements listed under this item that had been
notified under Article XXIV.  The texts of the Agreements had been circulated in the documents
listed.
8.2 As there were no requests for the floor, he proposed that the Council submit the following
agreements to the Committee on Regional Trade Agreements to carry out the examination of theseagreements – Trade Development and Cooperation Agreement between the EFTA States and Mexico
(WT/REG126/N/1 and Corr. 1, WT/REG126/1);  Agreement between New Zealand and Singapore
(WT/REG127/N/1, WT/REG127/1);  Free Trade Agreement between Hungary and Estonia
(WT/REG128/N/1, WT/R EG/128/1) - in accordance with the following terms of reference:G/C/M/53
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"to examine, in light of the relevant provisions of the GATT 1994, the Free Trade
Agreements just referred to and to submit a report to the Council for Trade in Goods".
8.3 It was understood that the understanding read out by the Chairman of the Council for Trade in
Goods under item 7 of the agenda of the meeting of  Council for Trade in Goods on 20 February 1995,
as contained in the attachment to document WT/REG3/1, would apply mutatis mutandis to the
examination of the agreements.  It was also understood that, during the examination, due account
would be taken of the intrinsic differences between customs unions and free-trade areas.
The Council so agreed.
IX. REQUEST BY COSTA RICA;  INDIA;  INDONESIA;  PAKISTAN;  PERU AND
HONG KONG, CHINA:  CTG'S OVERSIGHT FUNCTION PURSUANT TO
ARTICLE IV OF THE AGREEMENT ESTABLISHING THE WTO –
TRANSPARENCY REGARDING NEW RESTRICTIONS ON TEXTILE AND
CLOTHING PRODUCTS COMMENTED ON BY THE TEXTILES MONITORING
BODY (G/C/W/260(REV.1))
9.1 The Chairman recalled that this item was first raised in the Council in February 2001, during
the Council's consideration of the report of the Textiles Monitoring Body for the year 2000.  The
specific issue was the presence of a bilateral re straint agreement between the United States and
Turkey on Turkey's exports of one category of clothing as a part of a wider understanding between
these two countries.  The  concern related to the rela tionship of this bilateral restraint agreement to the
Agreement on Textiles and Clothing, and more generally to the TMB's responsibility for supervising
the implementation of the ATC and the CTG's role in overseeing this process.  Following the initial
consideration in the Council in February and informal consultations which were not successful in
finding an acceptable solution, the matter was further discussed at the CTG meetings of 14 March and
18 April 2001.  The details and the actions being proposed to the Council were contained in documentG/C/W/260/Rev.1.  This item had been included in the agenda at the request of Hong Kong, China on
behalf of the group of Members.  He said he would continue consultations on how to deal with this
issue and proposed that, before the next meeting, he would make further consultations  on the
substantive aspects.
9.2 The representatives of Cuba; Hong Kong, China
 and India  appreciated the intention of the
Chairman in continuing consultations, and conf irmed their interest to be part of them.
It was so agreed.
X. REQUEST BY THE SLOVAK REPUBLIC – NOTIFICATION BY POLAND UNDER
ARTICLE 12.5 OF THE AGREEMENT ON SAFEGUARDS (G/L/453-G/SG/35)
10.1 The Chairman recalled that this matter was raised by the Slovak Republic under other
business at the last meeting, and that they had requested the inclusion of this item on the agenda.
10.2 The representative of Slovak reiterated that the safeguard measures imposed by his country on
imports of sugar were in conformity with the provisions of the Agreement on Safeguards, and
responded to significant increases in imports during the last few years. In spite of two rounds of
consultation on the subject, Poland had unilaterally proceeded to apply quantitative restrictions-quotas
on imports of margarine and butter from the Slovak Republic. The Slovak Republic strongly objected
to actions taken by Poland, which were setting a dangerous precedent and were a departure from
existing rules within the WTO. He called on other WTO Members to express their support forstrengthening the multilateral trading system by disapproving this unilateral action taken by Poland.
Finally his delegation requested a decision from the CTG disapproving the measure notified byG/C/M/53
Page 10
Poland in documents (G/L/453 and G/SG/35) and re questing Poland to withdraw immediately these
quantitative restrictions applied on imports of margarine and butter from the Slovak Republic.
10.3 The representative of Poland confirmed that the suspension of concessions in the form of
quantitative restrictions on imports of butter and margarine originating in Slovakia had entered into
force as from 1 August 2001. The measure was imposed following the safeguard imposed by Slovakia
on imports of sugar originating among other in Poland (G/L/453). It was the intention to keep the
measure in force as long as the safeguard measure implemented by Slovakia remained in force. The
level of the quota would be calculated for each year so that its level remained  equivalent to the level
of restriction imposed by Slovakia. He noted that the suspension of concessions was applied in
conformity with the Article 8.2 of the Agreement on Safeguards, and all the necessary preconditions
for such action were met:  no agreement between both parties on trade compensation for Poland forthe adverse effect on trade resulting from the safeguard imposed by Slovakia, the suspension took
place not later than 90 day after the safeguard measure was applied, the suspension took place upon
the expiration of 30 days from the written notice received by the CTG and the CTG did not
disapprove the measure after the notification of intention to apply it, and before the actual entry into
force. Poland had initiated a WTO dispute settlement with a view to receive a panel's decision on thematter, although they highlighted current inconsistencies between Articles 8.2 and 8.3 of the
Agreement on Safeguards.  Poland was ready to withdraw the measure in question if the Slovak side
had convinced them during the consultations under article 4 of the DSU that this safeguard had been
imposed in full conformity with the Agreement on Safeguards, and/or a WTO panel decided that the
Slovak safeguard measure had not violated the Agreement on Safeguards.  Poland did not see thepossibility to join any consensus in the CTG as to  the disapproval of the suspension of concessions in
question.
10.4 The representative of Canada expressed his systemic concern regarding Poland decision to act
unilaterally, but the WTO was a rule based system which must be respected.  The representative of the
United States noted that due to its technical nature this item should have gone to the Committee on
safeguards, as indicated in Article 12.10, before coming to the CTG.
The Council took note of the statements made and agreed to revert to this matter.
XI. CONSIDERATION OF ANNUAL REPORTS OF SUBSIDIARY BODIES OF THE
COUNCIL FOR TRADE IN GOODS
11.1 The Chairman said that pursuant to the "Procedures for an annual overview of WTO
Activities and for reporting under the WTO" (WR/L/105) which were adopted by the General Council
on 15 November 1995, all bodies constituted under agreements in Annex 1A of the WTO Agreementwere required to submit annually a factual report  to the Council for Trade in Goods, and the Council
was to take note of these reports.
11.2 The Council took note of the final or draft reports of the following bodies:  Committee on
Customs Valuation (G/L/488);  Committee on Market Access (G/L/486);  Committee on Rules of
Origin (G/L/490);   Committee on Sanitary and Phytosanitary Measures (G/L/485);   Committee on
Technical Barriers to Trade (G/L/487);  Comm ittee on Textiles Monitoring Body (G/L/475);
Committee of Participants on the Expansion of Trade in Information Technology Products (G/L/484);
Committee on Agriculture (G/L/483);  Independent Identity (G/L/489);  Committee on Import
Licensing (G/LIC/W/15);   Committee on Anti-Dumping Practices (draft report in document JobNo. 7124);  Committee on Safeguards (draft report in document Job No. 7133);  Committee on
Subsidies and Countervailing Measures (draft report in document Job No. 7161);  and Working PartyG/C/M/53
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on State-Trading Enterprises (G/STR/W/38).  The Council took note that the TRIMs Committee had
not met this year and had therefore not found it necessary to prepare an annual report.
XII. ADOPTION OF THE ANNUAL REPORT OF THE COUNCIL FOR TRADE IN
GOODS TO THE GENERAL COUNCIL (G/C/W/302)
12.1 The Chairman said that in accordance with the "Procedures for an annual overview of WTO
Activities and for Reporting under the WTO" (WT/L/105) which was adopted by the General Council
on 15 November 1995, it was agreed that "The respective sectoral Councils should report in
November each year to the General Council on the activities in the Council as well as in the
subsidiary bodies" and that the reports of the sectoral Councils should be "factual in nature,
containing an indication of actions and decisions taken, with cross references to reports of subordinatebodies and could follow the model of the GATT 1947 Council report to the CONTRACTING
PARTIES".  The draft report contained in G/C/W/302 covered the period from 2000 to
15  October 2001 and would be updated in light of  today's meeting.  Following suggestions for
amendments to the draft, the Council adopted the report with the amendments, subject to the updating
required to take account of the Council's work at this meeting.  (The report was subsequently
circulated as G/L/492.)
XIII.  OTHER BUSINESS
A. FREE TRADE AGREEMENT
13.1 The representative of Hungary noted that since the last meeting of the CTG Hungary had
concluded free trade agreements with Croatia which would be officially notified to the CTG after the
ratification procedures had been terminated.
13.2 The representative of Bulgaria informed the Council that Bulgaria had concluded a free trade
agreement with Lithuania and Israel, in conformity with the provisions of Article XXIV of
GATT 1994, which came into effect on 8 May 2001 and 8 June 2001 respectively. An appropriate
notification would be made.
B. DATE OF THE NEXT MEETING
13.3 The Chairman proposed that the date of the next meeting of the CTG would be Wednesday,
17 October 2001.
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