RESTRICTEDWORLD TRADE
ORGANIZATIONG/C/M/28
22 January 1998
(98-0224)
Council for Trade in Goods
19 November 1997
8 December 1997
MINUTES OF THE MEETING
Held in the Centre William Rappard
on 19 November 1997 and 8 December 1997
Chairperson:  Mr. T. Johannessen (Norway)
The meeting was convened by WTO/AIR/729.  The proposed agenda contained in document
G/C/W/102  was adopted as follows, with the inclusion of items 10, 11 and 12 under "Other
business":
Page
1. France - Trading Arrang ements with Morocco ............................................................. 2
- Request for an extension of the waiver (G/L/196, G/C/W/96)
2. Trade Facilitation (Paragraph 21 of th e Singapore Ministerial Declaration ................. 3
(WT/MIN(96)DEC))- Statement by the Chairman
3. Major review of the implementati on of the Agreement on Textiles ............................. 6
and Clothing during the first stage of the integration process pursuant
to paragraph 11 of Article 8 of the Agreement on Textiles and Clothing
- Comprehensive report of the Textiles Monitoring Body (G/L/179)
4. Interim Agreement between the European Communities and the ................................. 20
Republic of Slovenia
- Communication from the Parties to the Agreement
(WT/REG32/N/1, WT/REG32/1)
5. Free Trade Agreement between the Republic of Slovenia and the ............................... 20
Republic of Bulgaria
- Communication from the Parties to the Agreement
(WT/REG33/N/1, WT/REG33/1)
6. Free Trade Agreement between the Czech Republic and the ....................................... 21
Republic of Latvia
- Communication from the Parties to the Agreement
(WT/REG45/N/1, WT/REG45/1)
7. Free Trade Agreement between the Czech Republic and the ....................................... 21
Republic of Lithuania
- Communication from the Parties to the Agreement
(WT/REG46/N/1, WT/REG46/1)G/C/M/28
Page 2
8. Consideration of Annual Reports of  Subsidiary Bodies of the ..................................... 22
Council for Trade in Goods
9. Adoption of the annual report of the Council for Tr ade in Goods ................................ 24
to the General Council (G/C/W/98 and Rev.1)
10. Free Trade Agreements between the Slovak Republic on the one ................................ 25
side and the Republics of Latvia and Lithuania on the other
11. United States - Mercosur Common External Tariff ...................................................... 25
12. Date of the next meeting ............................................................................................... 25
Items 2, 3, 8 and 9 were further considered by the Council at its resumed meeting of
8 December 1997.1  Item 12 was considered for the first time at the resumed meeting.
_________________
1. France - Trading Arrangements with Morocco
- Request for an extension of the waiver (G/L/196, G/C/W/96)
1.1 The Chairman drew attention to the communication from the European Communities
contained in document G/L/196 containing a request  for an extension of a waiver from obligations
under the provisions of paragraph 1 of Article I of the GATT.  This request was made in accordance
with paragraph 1 of the Understanding in respect of Waivers of Obligations under the GATT 1994
and Article IX of the WTO Agreement.  A draft decision granting this waiver extension had beencirculated in document G/C/W/96 to assist the Council in its consideration of this request.
1.2 The representative of the European Communities recalled that this was one of the waivers
which originally had an unlimited period of validity.  In accordance with the Understanding in respect
of Waivers of Obligations under the GATT 1994, the Goods Council and the General Council hadconfirmed this waiver in 1996 together with a number of others.  The EC had requested an extension
of one year from 31 December 1996 to 31 December 1997 in the expectation that during that period
the need for the waiver would lapse through the entry into force of the European Communities'
Euro-Mediterranean Agreement with Morocco.  As the Agreement covered matters of mixed
competence, both the EC institutions and the member States needed to ratify the Agreement. Atpresent only seven member States had completed their ratification of the Agreement, the remainder
being expected to do so in the course of 1998. The EC, for that reason, had requested an extension of
this waiver for one more year.
1.3 The Council approved the request for a waiver extension by the European Communities
contained in document G/L/196 and agreed to forward the draft decision contained in
document G/C/W/96 to the General Council for adoption.
2. Trade Facilitation (Paragraph 21 of the Singapore Ministerial Declaration
(WT/MIN(96)DEC))
- Statement by the Chairman
2.1 The Chairman recalled that the Council had agreed at the end of the meeting of
6 October 1997 that he would hold informal consultations on the further steps to be taken with regard
to the subject of trade facilitation, including the scope and format of a possible expert meeting on the
                                                     
1This meeting was originally scheduled to be resumed on 4 December 1997, but was postponed to
8 December 1997.G/C/M/28
Page 3
issue, as proposed by Switzerland in document  G/C/W/92.  During informal consultations on
21 October 1997, a wide consensus had emerged as regarded the benefits of having such a meeting,
and a number of suggestions were made concerning its scope and format.  Taking into account all
suggestions made during the informal consultations, he proposed the following format for a WTO
symposium on trade facilitation:
- The objective of the symposium on trade facilitation would be to help identify the main areas
where traders faced obstacles when moving goods across borders.  The symposium would
provide a direct interface between the practical level (traders) and the trade policy level
(officials in capitals and in Geneva) in this respect.
- Participating intergovernmental organizations would be UN/ECE, UNCTAD, and the WCO.
The International Chamber of Commerce (ICC) could be asked to take up the task of
coordinating input from the private sector and other nongovernmental organizations.
- To ensure a common understanding of the overall framework of the discussion, the typical
stages in the trade transaction process would be presented at the beginning of the symposium.
This presentation would be followed by short interventions by traders or organizationsrepresenting trade interests as well as non-governmental organizations, which would
introduce from a practical perspective their assessment of the main obstacles to cross border
trade.  These presentations would address specific problems for traders at the different stages
of the transaction process.  Special attention would be laid on the topics identified in the EC
and Swiss submissions and brought up in the discussions of the CTG, i.e. alignment,
transparency, simplification and modernization of customs procedures; customs irregularities;
transit operations; payment systems and standardized information and electronic transmission(including the link with electronic commerce); and WTO provisions related to trade
facilitation.  The trade side could also make suggestions as to how the problems should be
dealt with.  This introduction of existing problems for traders would be followed by
statements by the participating intergovernmental organizations on how their work has so far
addressed the problems raised.
- The symposium would conclude with an open exchange of views between representatives of
trade, participating intergovernmental organizations, technical experts and trade policyexperts on questions and problems raised, issues requiring further analysis, and the possible
role of future work on trade facilitation.
- As for the timing, he suggested a date in February/March 1998.  This would allow the private
sector to coordinate views and prepare presentations on the issues mentioned above.
2.2 The Chairman suggested holding further consultations on the specifics of the proposal, in
particular on the representation of the private sector and on the details of the agenda.
2.3 The representative of the European Communities welcomed the proposal by the Chairman.  A
symposium on trade facilitation would increase the information available and the understanding of the
key issues and problems.  WTO Members would then be better prepared to analyze the scope for
WTO rules in that area.  The symposium should take place as early as possible in 1998 and should be
structured in a way that would allow participants to focus on key questions and would enable them to
draw conclusions from the discussions.  His delegation strongly supported the participation of
industry and trade representatives from both developed as well as developing countries in thesymposium.
2.4 The representative of the United States reiterated that trade facilitation was an area of focus
for the WTO.  Increasingly, trade facilitation was linked to ensuring that market access commitments
were kept.  The idea of a symposium would have considerable merit, provided the agenda of the
symposium was designed to give the trading community an opportunity to make presentations directlyG/C/M/28
Page 4
to trade policy officials and to allow traders to identify the issues of the greatest concern.  Relevant
intergovernmental organizations should speak on the status of ongoing work in other fora.  She
believed that in the symposium, the trading community would bring up issues already known to
delegations, i.e. that Members should increase transparency, improve automation and further
standardization, and avoid the creation of new non-tariff barriers in customs processing.  As work on
these issues was under way in other fora, her delegation was cautious about considering new workthat would be redundant with that of other international organizations.  The trade facilitation priority
in the WTO would rather lie in the areas of rules of origin, customs valuation and PSI.  Moreover,
there were numerous other elements in various WTO agreements related to enhancing trade
facilitation.  She proposed that the Council request each of the Committees with jurisdiction over
particular agreements and GATT articles related to trade facilitation to undertake an assessment of the
status of implementation of the relevant disciplines and obligations.  In the area of origin, a survey of
this type was being undertaken to determine the status of implementation of certain proceduralrequirements in the Agreement on Rules of Origin.  Another example where a survey would be
desirable was the Import Licensing Agreement.  Reports to the Council by the chairs of each
Committee would be useful for the Council in its work related to trade facilitation.
2.5 The representative of Switzerland stated that his delegation supported the holding of a
symposium, and believed that this symposium woul d contribute to advance reflection on the matter.
In this respect, his delegation also believed that the symposium would provide a direct interfacebetween the practical level, i.e. traders, and the trade policy level, i.e. officials in capitals and in
Geneva.  Without wanting to prejudge the results of the symposium, his delegation did not believe
that at the end of this symposium the Council would have completed the mandate received by
Ministers in Singapore in 1996.  On the contrary, his delegation believed that the symposium would
constitute a first step to help the Council move in the direction of having a thorough discussion ontrade facilitation.
2.6 The representative of Argentina stated that market access commitments should be kept
regardless of the work in the Council on trade facilitation.  Work on trade facilitation should not be
mixed up with renegotiation of present rules in the various agreements.
2.7 The representative of Mexico stated that the Ministerial Declaration had mandated the
Council to undertake three stages of work on trade facilitation: exploratory work, analytical work, and
an assessment of the scope for WTO rules.  The symposium would help the Council in its currentexploratory work.  In the symposium, the whole range of trade activities should be looked at to obtain
a complete picture.  The international transaction model, as developed by the Economic Commission
of Europe (UN/ECE), should be examined, and the following areas should receive special attention:
streamlining and harmonization of documents and procedures, customs valuation, rules of origin, PSI,
technical barriers to trade, packaging, labelling, sanitary and phytosanitary measures.  The sellers' andbuyers' contracts should be analyzed, as well as credit and payment agreements, telecommunications,
electronic data interchange and databases and documents and procedures by sea, air and road
transport.  The conclusions of the symposium should be analyzed subsequently in  the Council, in
order to proceed to the analytical stage.
2.8 The representative of Nigeria stated that the symposium was an instrument in trying to
comply with the mandate of the Ministerial Declaration.  He believed that some of the work done in
other WTO fora would be crucial to work on trade facilitation.  The Council should consider if
assistance could be made available to allow capital based delegates from several countries to
participate.
2.9 The representative of Uruguay stated that the agenda of the symposium should not be overly
ambitious and take on detailed work done elsewhere.  He supported the idea that the symposium be
primarily a platform for industry and trade representatives to talk about their problems.  The
symposium should help identify those problems which were not adequately dealt with by otherorganizations.G/C/M/28
Page 5
2.10 The Chairman noted that there was an agreement on the principle of having a symposium on
trade facilitation. He stated that he would hold further consultations on the specifics of his proposal in
light of the statements made by delegations.
2.11 The Council took note of the statements, and agreed  to hold a symposium on trade
facilitation, the specifics of which would be determined through further consultations by the
Chairman.
2.12 At the resumed meeting on 8 December 1997, the Chairman  recalled that the Council had
agreed at its meeting of 19 November 1997 to a proposal he had made and circulated to delegations,
i.e. to hold a symposium on Trade Facilitation before March 1998.  From statements made by some
delegations it had appeared  that a number of points in connection with this symposium needed further
clarification.  In the meantime, he had received inputs and comments from several interested
delegations.  On the basis of these reactions, he had updated the chairman's text circulated at the last
meeting.  Copies of the updated version of the text were now available in the room.
2.13 As concerned participation, he stated that comments he had received indicated that a wide
participation of relevant intergovernmental and nongovernmental organizations, and business groups
would be desirable, and  that the symposium should not exclude any interested parties.  Active
participants would be selected on the basis of their expertise.  All delegations were invited to
contribute to the design of the detailed agenda.  The Secretariat would finalize the agenda inconsultation with all interested parties.  The possibility was also being explored of assisting a limited
number of experts from developing countries who would be expected to make active contributions.
As concerned format, on the basis of comments made under point 2 the "cost of procedures" had been
added among the topics that should be addressed. As concerned timing, the symposium would take
place over two days in the new WTO Conference Centre at the end of February or beginning of
March 1998.  The dates of  Monday, 2 March and Tuesday, 3 March 1998 had been proposed by the
Secretariat.
2.14 In response to a question by the representative of Mexico, the Chairman  stated that the
Secretariat would, in consultation with delegations and the ICC make the final selection of
participants.
2.15 The representative of Argentina stated that in paragraph 2 of the text there was a reference to
APEC.  He was aware that the United States and Canada had signed separate agreements with the
European Union on the subject of trade facilitation, and wondered why these agreements had not been
referred to.  He was also aware that this was not an exhaustive list and was subject to completion by
the Secretariat, but wished to note for the record that it might be useful to include these agreements inthe text in order for Members to get an overall picture of what was happening in the area of trade
facilitation.
2.16 The representative of the European Communities stated that the updated text appeared to
provide a very good basis for the Secretariat to proceed  with the initial steps of inviting participants to
attend the symposium.
2.17 The representative of Hong Kong, China stated that his delegation could accept and support
this symposium in light of the updated Chairman's text and the Chairman's additional comments and
clarifications.
2.18 In response to a question from the representative of Morocco, the Chairman  stated that the
Council was scheduled to meet next on 29 January 1998 and "trade facilitation" could be on the
agenda, as suggested by Morocco in order to discuss certain elements.
2.19 The Council took note of the statements, and agreed  to mandate the Secretariat to start
actively with the preparation and organization of the Symposium.G/C/M/28
Page 6
3. Major review of the implementation of the Agreement on Textiles and Clothing during the
first stage of the integration process pursuant to paragraph 11 of Article 8 of the Agreement
on Textiles and Clothing
- Comprehensive report of the Textiles Monitoring Body (G/L/179)
3.1 The Chairman recalled that the Council had begun its major review of the implementation of
the ATC, in accordance with Article 8.11 at its meeting of 6 October 1997. At that meeting, in
addition to providing overall observations, commen ts and suggestions on how the review process
should be conducted, Members agreed on a work programme which included the three main topics for
examination as identified by Article 8.11.  For this purpose, four special meetings of the Council were
scheduled for October and early November 1997.
3.2 At these special meetings, held on 16 and 20 October and 7 and 13 November, there was
extensive discussion of the three matters, namely, the integration process, the use of the transitional
safeguard mechanisms and the application of GATT rules and disciplines as defined in Article 2, 3, 6and 7 of the Agreement on Textiles and Clothing (ATC).  The review also addressed some other
topics related to the implementation of the Agreement and, in addition, consideration was given to
how the Council might bring this process to a conclusion.  From the changes which had taken place, it
appeared that there were differences in perception regarding what would be the appropriate
conclusion of the review process.  In particular, there were differences as to the form and content ofany observations, conclusions or recommendations.  Accordingly, he had undertaken the task, as
Chairman, to conduct informal consultations, seeking common ground to arrive at a generally
acceptable means for concluding the review.  At the present stage, it was clear that these consultations
would require some additional time, and if Members allowed, time was just the commodity of which
there was not an abundance.  He proposed to follow a process which would allow all interestedMembers to provide the Chair with inputs towards the final form of such conclusions.  He would
continue the process of informal consultations to arrive as soon as possible and at the latest by the end
of this month, the end of November, at a text wh ich might assemble support from all Members, and
which he would submit to the Council for adoption.
3.3 The representative of Colombia stated that the Council had been conducting an exercise
characterized by its serious nature. The important phase of the work was completed and the Council
was now entering a delicate and final stage of this review in which Members were expected to
produce a report. In his view, the exercise undertaken so far would lose all its meaning if a final report
was not drafted; a final report which took into ac count the problems that had been raised, which set
out possible observations and recommendations and which elaborated a number of appropriatedecisions as provided for in the ATC.  He wished to reiterate the feeling of a large number of
important exporting countries represented in the ITCB.  This group of countries and the Board had
reviewed substantively the implementation of the Agreement over the past three years, and in a
number of cases these countries believed that there had been deficiencies and mistakes; that some of
the aims and the letter and philosophy which underlay the Agreement had not been met.  There was
room for improvement in various areas such as integration, safeguard clauses, use of administrative
measures or anti-dumping measures and in this connection recommendations would need to be made.The group that Colombia represented was ready to cooperate in the finalization of the Council's work
and would spare no effort in helping the Coun cil produce a document which testified to the
importance that this group attached to this work.
3.4 The representative of Hong Kong, China stated that at the last meeting of the Council on
13 November 1997, his delegation had made some concluding remarks summing up the views it had
put forward earlier in the series of dedicated sessions that had taken place in the course of this first
major review of ATC implementation.  Specific proposals to facilitate the Council's completion of its
task had also been put forward.  His delegation was glad that these would be taken into account in the
Chairman's planning of the Council's further deliberations and on this understanding his delegationG/C/M/28
Page 7
supported the Chairman's proposals for carrying the work forward. As the Council entered the final
phase of the review exercise, it was useful to revisit a fundamental question, namely the purpose of
the review, so as to ensure that the Council was still on the right track. This called for a response to
certain views which had been advanced in the Council's deliberations but which did not represent an
adequate understanding of the work that the Council had been mandated to undertake.  Two points in
particular called for comment: First, the argument that the Council needed only to determine whether
specific obligations of the ATC had been complied with; and second, the argument that, where no
complaints had been raised bilaterally, it was inappropriate for the Council to interpose itself.
3.5 His delegation submitted that there was an obvious inconsistency in advancing these two
contradictory arguments.  In fact both arguments were flawed.  The first argument gave the Council
too narrow a remit, as if it was merely duplicatin g the work of the TMB.  The Council's mandate to
oversee the ATC implementation, however, required the Council also to ensure that the stipulated
objective of the Textiles Agreement would be fulfilled, namely that there was integration which wasprogressive in character and liberalization of trade. The second argument was deployed, for instance,
when compliance with Article 2.18 was addressed.  But such an argument was a denial that
multilateral rules constrained what might be agreed bilaterally.  If a measure was not challenged
bilaterally, or even if it was endorsed in a bilateral agreement, it did not by any means follow that the
measure in question was consistent with multilateral disciplines.  Conversely, a major reviewconcerned only with issues where bilateral disagreement had been registered would be redundant.  To
supervise specific obligation compliance was, in the first instance, the function of the TMB.
However, the Council clearly had a duty to address issues which the TMB, on its own admission, had
been unable to resolve or where it had been prevented from carrying out its function.  Thus, the
Council might well address specific obligation compliance, but this by itself would not constitute amajor review.
3.6 Articles 8:11 and 8:12 made clear that the purp ose of the major review were twofold:  (1) to
exercise the Council's responsibility for overseeing the functioning and implementation of the ATC;
and; (2)  to determine whether decisions were required to ensure that the balance of rights and
obligations embodied in the ATC was not being im paired.  "Rights and obligations embodied" meant
something different from specific provisions.  Th e sum was far greater than the parts.  It was
necessary to consider the objectives of the ATC, in particular liberalization that was progressive in
character, and then to assess whether the ATC was delivering those objectives, or as Hong Kong
China had expressed it earlier, whether the ATC was on track.
3.7 The representative of Pakistan stated that Pakistan attached great importance to the first major
review of the ATC implementation.  This review w ould set a precedent for the successive reviews as
contemplated in the ATC.  Article 8:12 of the AT C clearly implied the need for ensuring that these
reviews were purposeful in character. In the past several meetings held by the Council on this subject,
his delegation had presented its point of view on the implementation of the ATC.  His delegation
believed that all was not fine with the implementation of this extremely important agreement for the
following non-exhaustive list of reasons:  (1) integration programmes as notified by the major
importing countries from his delegation's  point of view had contributed very little to anycommercially significant liberalization.  In fact, there had been an obvious lack of progressive
transition as foreseen in the preamble to the ATC and as reiterated by the Ministers at Singapore;  (2)
the impact of growth on growth in terms of increm ental market access had been far from impressive;
(3) recourse to the transitional safeguard measures by at least one importing country had not been as
sparing as described in Article 6 of the ATC; and (4) actions such as the repeated use of anti-dumpinginvestigations, tightening of administrative proced ures, had resulted in limiting access to the markets
of the restraining Members.  He concluded by outlining a few recommendations which his delegation
wished the Council to take into account:  (1) th e Council should recommend that the MFA restraining
countries review their second-stage integration pr ogrammes with a view to including more products
previously under restraint;  (2) the Council should  encourage the MFA restraining countries to takeG/C/M/28
Page 8
positive measures in the shape of advanced integration as visualized in Articles 2:10 and 2:15 of the
ATC;  (3)  the Council should call upon the major textile-importing countries to avoid as far as
possible frequent recourse to safeguard measures and other similar instruments;  (4) the Council
should recommend that provisions in favour of small suppliers, least-developing countries and
cotton-producing exporting countries should be implemented in keeping with the provisions and
objectives of the ATC; and  (5) the Council should take a decision to regularly oversee theimplementation of the ATC.  His delegation also lo oked forward to the paper that the Chairman had
indicated his intention of presenting at the next meeting of the Council.
3.8 The representative of India noted that under Article 8:11, this Council was mandated to
conduct its review in order to oversee the implementation of the ATC as a whole.  His delegation had
utilised the opportunity given by the four meetings which had been held to convey in depth its
concerns and views.  He was confident that India' s views, and the specific recommendations that his
delegation had made on the basis of the facts that it had provided in the course of its interventions,would enable this Council to proceed logically to arrive at the conclusions and recommendations
which were an integral part of the review exercise.  These facts were now also available for the
Council in documents G/C/W/99, G/ C/W/100 and G/C/W/101, as well as in the minutes of the four
meetings.
3.9 His delegation had demonstrated and it had heard other Council Members convey deep
concern at the manner in which the ATC had been implemented in the first stage of the integration
process.  His delegation had shown that the first stage of the integration process had not resulted in
any liberalization of trade in the textiles and clothing sector, which he would recall was the objective
of the ATC.  Instead, his delegation had drawn attention to instances of increased restrictions on what
was already restrained trade in textiles and clothing products.  Although the concerned Members hadreiterated their commitment to fully implementing the ATC by the end of 2004, on the basis of the
facts that his delegation had provided to this Council, India could not but have genuine apprehensions
in this regard.
3.10 To conclude, his delegation thought it appropriat e to not only listen to views inside this room
regarding this issue, but also to listen to what the concerned Members often referred to as the voice of
the market-place.  This voice had in a recently published document publicly called on Members to
"get the ATC back on course".  It was therefore important for the Council to continue its deliberations
on this issue until it could arrive at the objective of such conclusions and recommendations, which it
deemed appropriate, to overcome the shortcomings in the implementation of the ATC which India and
other Members had highlighted at previous meetings.  In this context, his delegation intended tocontribute to the consultations to be held by the Chairman.
3.11 The representative of the United States stated that the ATC had by and large operated as
intended by its drafters.  The US and other importing Members had met their obligations under the
Agreement. The Council should not attempt to give a new interpretation of the Agreement in order to
deal with the problems asserted by some delegations. It was also not advisable to open up the
Agreement for renegotiation.  For this reason she had strong reservations with some of the comments
made earlier at this meeting.  The ATC safeguard mechanism was a right of all Members, includingthose countries that had specifically retained the right to use the mechanism.  The US would continue
to exercise this right when necessary, and in accordance with the provisions of the ATC.  The key for
the US in this area was to ensure that there was full implementation of ATC obligations by all
Members.  The industry in the US and indeed in  other Member countries, needed to see the ATC
being implemented in a progressive, stable and predictable manner, which was how it had beennegotiated, in order to plan and adjust to the end of the integration programme.  She added that her
delegation found acceptable the Chairman's recommendation.G/C/M/28
Page 9
3.12 The representative of Egypt stated that the review process legally based on Article 8:11, and
on Article 8:12, required the Council to take the appropriate decision to ensure the balance of rights
and obligations of Members.  Without doing that, the review process could be considered incomplete.
As far as Egypt was concerned, it was an absolute requirement to adjust the situation caused by the
misuse of anti-dumping by the EC and a decision in that respect was of high importance for two
reasons:  firstly, to prove the credibility of the multilateral trading system, and to convince thebusiness circles in the developing countries that they were committed to a fair system which took into
consideration their rights as well as their obligations;  and secondly, to support the majority of the EU
members who refused time after time to rubber-st amp the actions of the Commission and who shared
Egypt's belief that those actions were not initiated on a solid basis, and were not for the benefit of the
EU industry and customers.
3.13 The representative of the European Communities stated that as his delegation had indicated at
the outset of this debate, the EC attached importance to that review on the implementation of the
ATC.  It was a major review and it was being treated accordingly. At the same time, his delegation
had indicated that it was a review which had to take place within the parameters of the ATC itself, and
by that he had meant to review implementation of the provisions as they were and as they were
drafted.  He wished to repeat that observation now.  His delegation looked forward to making a
contribution  in order to draw positive conclusions to this review exercise.   He regretted the fact thatthe delegation of Egypt should have chosen to ra ise this subject in this way, without any prior
indication to the EC that this was intended.  The ATC had, in fact, very limited reference to
anti-dumping, and no complaints had been registered so far within the Anti-Dumping Committee
itself.  However, his delegation was clearly willing to discuss bilaterally the questions raised by
Egypt.
3.14 The representative of Thailand, speaking on behalf of ASEAN Members, stated that her
delegation had no intention of renegotiating the ATC, and it was her hope that this would not happen
in the future near the end of the transitional period.  On this point, it was worth noting that during the
ten-year transitional period of the ATC, this was one of the only two occasions when the Council
could actually monitor the ongoing process of the implementation well before the situation shouldbecome irreversible.  This was the only forum where textile-exporting countries could bring textile-
related issues to the attention of a fully represented body like the Council.  Such an occasion was
infrequent and thus the Council in its capacity as the overseeing body of the ATC had to optimize this
valuable opportunity set direction through its decisions on how the Agreement should be implemented
in order to achieve effective and progressive integration.  It should be emphasised that the processnow being undertaken by the Council should serve as  a benchmark for the successive reviews in the
future.  Therefore, ASEAN attached great importance to the first major review of the ATC.  Should
the Council fail to come up with any concrete or meaningful decisions, or perhaps together with the
recommendations, then such an outcome would undoubtedly have a negative bearing on the future
exercises and would undermine the credibility of the multilateral trading system.  ASEAN Members
had expressed their views on the conclusions and recommendations of this exercise at the Council
meeting of 13 November 1997. She added that AS EAN Members would like those recommendations
and conclusions to be taken into account in the Chairman's final paper.
3.15 The representative of Canada stated that firstly, the ATC applied to all and any review needed
to take this into account.  Secondly, as his delegation had stated on a number of occasions, the most
important point with regard to the credibility of the review was that any assessment or conclusion
must be based on the specific provisions of the ATC as they existed, not as what they might havebeen.  Thirdly, in terms of the conclusions, including a number of conclusions that had been
suggested, his delegation would have serious problems with any conclusion or assessment that would
seek to reinterpret the meaning of the provisions as  they were already written in the ATC.  His final
point concerned the question of revisiting the role of the Council.  His delegation had a number of
questions as to the purpose that was being served  in doing this.  The Agreement already specifiedG/C/M/28
Page 10
appropriate rules for the TMB and the Council.  At th e same time, he wished to observe that in terms
of raising issues, any Member in this Council could raise any issue it wished.  His delegation also
intended to participate fully and constructively in the Chairman's ongoing process.
3.16 The representative of Japan stated that his delegation attached great importance to this major
review, and appreciated very much the contribution made by Members to this process. All Members,
in the view of his delegation, were fully committed to the full implementation of the ATC. Hisdelegation was willing to contribute to the Chairman's process to reach conclusions.
3.17 The Chairman  proposed that the Council take  note of the statements, agree to follow the
process as proposed by him in his statement and that this meeting be suspended once work under the
other agenda items was finished.  He proposed that the meeting be resumed on 4 December 19972 by
which time it was his expectation that the Council would be in a position to complete the review
foreseen under Article 8.11 of the ATC.
3.18 The Council so agreed.
3.19 At the resumed meeting on 8 December 1997, the Chairman  recalled that the Council had not
been in a position to conclude the review of the ATC at its meeting of 19 November 1997.  In
reviewing the situation, he recalled that it was a statutory requirement of Article 8:11 of the ATC that
the Council carry out a major review of the implementation of the ATC in the first stage of the
integration process.  This process was begun at the Council's meeting on 6 October when Membersexchanged views on a number of general aspects of the review, including the preference for a
systematic examination of all the aspects of the implementation process, to be held over a series of
meetings.  Following the mandate of Article 8:11, to  assist in the review, the TMB had prepared a
comprehensive report on the implementation of the ATC which delegations had considered to be a
valuable asset in the review process.  At the initial meeting, the dates for a series of meetings to carry
out the review were decided upon;  namely, 16 and 20 October and 7 and 13 November with the work
being taken up under four headings:  the integration process;  the transitional safeguard mechanism;
the application of GATT rules and disciplines as defined in Articles 2, 3, 6 and 7;  and finally, other
relevant topics.
3.20 The Chairman stated that, at the meetings many delegations had provided their views, and in
many cases, their concerns, with the progress to date in the implementation process.  There had been
detailed discussions and analysis of these key topics with Members responding to the comments of the
others.  Some Members had provided useful background papers which subsequently had been
circulated as documents G/C/W/95, 99, 100, 101 and 103 .  In addition, the discussions were fully set
out in the Minutes (G/C/M/23 to 28).  Following the four Council meetings, in an effort to bring thereview to a conclusion, he had undertaken to hold consultations with delegations with a view to
developing whatever observations, conclusions or recommendations Members might consider to be
appropriate and to put them before the Council for consideration.
3.21 The Chairman advised that he had consulted with a large number of delegations over a
lengthy series of informal meetings, held almost daily since 24 November.  Many delegations had
worked very long and hard to examine the outcome of the meetings with a view to developing a
broadly acceptable summary of the main points raised in the discussions and a set of conclusionsflowing from the review.  In view  of the considerable importance of the ATC for so many Members
and the extreme sensitivity of this subject, the views of Members had often been far apart on the
progress made in the ATC implementation process in the first stage and on the conclusions to be
derived from this situation.  He said that after many hours of work and determined efforts by many
Members, he had to report to the Council that it had not been possible to arrive at sufficient common
                                                     
2See footnote 1.G/C/M/28
Page 11
ground to propose a summary of the discussions or a set of conclusions to the review that would
attract consensus.
3.22 He did not, however, characterize the situation as a failure, as the review process itself over
the past two months had been immensely helpful to  all participants to become more aware of the
concerns and understandings of the other Members.  He was confident that this better understanding
would bring benefits in the future.  He, therefore,  proposed that the report of the Goods Council to the
General Council reflect the situation as described above.
3.23 The representative of Colombia, speaking on behalf of the WTO Members that are members
of the ITCB, provided comments regarding the review  of the implementation of the Agreement in the
first phase of the integration process.  He said that since the beginning of the process, at the Council's
session on 6 October, he had highlighted the importance of the sector of textiles and clothing for the
economies of developing country Members in view of its ability to generate foreign currency and its
impact on employment.  Thus, the emphasis given to this stocktaking of the implementation of theAgreement, as it reached the end of the first stage of integration, was intended to establish to what
extent the aims of liberalization of trade in this sector had been complied with.  Now, in participating
in this analysis, they had tried to do this in the most serious, most constructive, most technical and
most objective way possible with full and open willingness to enter into dialogue with all Members
and, amongst them, with the main importers.  It coul d not have been otherwise if they were to take
into account the mandate contained in Article 8:12 which stated that "In the light of its review the
Council for Trade in Goods shall by consensus take such decisions as it deems appropriate to ensure
that the balance of rights and obligations embodied in this Agreement is not being impaired".
3.24 He pointed out that in the four documents which they had submitted to the Council for
consideration, the positive nature of the liberalization measures adopted by Norway had beenrecognized, as had Canada's contribution in the elim ination of restrictions in an important category
and the contribution of the European Community to th e elimination of differential treatment in favour
of small suppliers and the least-developed countries.  They also recognized the recent decrease in the
use of safeguard measures by the United States.  In reviewing the integration programmes of the two
largest importers, the European Community and the United States, they had noted that, from a strictlylegal point of view, there had been compliance with  the obligations regarding percentages which were
set down.  In practice, however, there had not been a significant reduction in restrictions, nor was the
concept of progressivity in integration borne in mind as very few quotas had been eliminated.
Regarding the European Community's integration programme, it was specified that, although a deficit
in the percentage to be integrated had been recorded and this was established by the TMB, this hadbeen recognized by the European Community and th ey had already been informed that a notification
was being submitted with the relevant corrections.
3.25 Regarding application of safeguard measures, the representative of Colombia said that such
measures had been applied intensively by the United States in the first year of the first phase and, in
several of the cases reviewed by the TMB, the conclusion had been reached that there had been
non-observance of important obligations contained in Article 6 of the Agreement.  Two of these cases
had been brought into the framework of the dispute settlement system and the respective panels andthe Appellate Body had found that the application of the safeguard in these cases had been
incompatible with the provisions of that Agreement.  Likewise in the ITCB's analysis, it was shown
how the United States and Canada had strayed from the principles contained in Article 1:2 of the ATC
regarding differential treatment for small suppliers and least-developed country Members.  In the
document, referring to anti-dumping actions, they had given clear proof that widespread use of suchmeasures by the European Community, even in respect of products subject to quota restrictions,
constituted a negative factor in the liberalization of trade in textiles in the integration process.G/C/M/28
Page 12
3.26 He also referred to the analysis of changes in formalities, import administrative procedures
and rules of origin which very clearly showed that the use of these procedures had constituted new
barriers to trade in this sector.  In undertaking this review with technical rigour, they had hoped to
generate an awareness of the problems and a recognition that certain corrections needed to be
introduced in order to avoid an erosion of the Agreement and to attain compliance with its spirit and
its aims.  Unfortunately, the approach taken  by some of their trading partners regarding theresponsibility of the Council had been to restrict it.  All it could do would be to take a position
regarding non-compliance with certain specific obligations as it had been stated that it was not
appropriate for the Council to reach conclusions with out there having been prior complaints that had
been dealt with bilaterally or in the TMB.  In his view, limiting the scope of this review in such a way
went against the purpose and the nature of the general review which was to be conducted by the
Council.  It was unfortunate that up to the present it had not been possible to reach conclusions and
recommendations, particularly if one bore in mind the efforts and all the hours that the participantshad devoted to seeking this consensus in order to  comply with the mandate of the Agreement.  An
important part of this review requirement had been complied with, but the exercise had been
truncated.  The current situation was a delicate one, as the Agreement did not have any concrete
stipulation which would provide orientation as to th e path to follow, nor were there any precedents in
this respect.  In these circumstances it would be up to the Members of the WTO to decide on the wayto remedy this situation.
3.27 The representative of Hong Kong, China noted that the Council had been specifically
mandated to conduct the first major review of ATC implementation and its failure to do so struck at
the heart of the WTO oversight system;  this was a serious matter.  In his view, the main reason for
this failure was the inability of some Members to recognized the purpose of the review.  Article 8:11of the ATC mandated a major review, not a renegotiation, nor a mere stock-taking of what had
transpired over the past three years.  The purpose was not just to review compliance with specific
provisions of the ATC, which was initially the function of the TMB.  Nor should the review be seized
upon as an opportunity to dilute ATC obligations, be they related to the invocation of transitional
safeguard provisions, or improvement in access for small suppliers, or the obligation to contribute tothe objective of further liberalization of trade.
3.28 It was considered that the main focus of the major review should have been an overall
assessment of progress and whether the ATC was on track to meet its ultimate objective of complete
integration of the textile and clothing sector into GATT 1994 by 2005, always bearing in mind that
there shall be no extension of the Agreement.  This overall assessment required an evaluation ofvarious separate elements, comprising:  (a) integration and enhanced growth, and the extent to which
they were contributing to progressive liberalization of trade;  (b) the degree of continuous autonomous
industrial adjustment and increased competition in markets, and whether this would lead to a smooth
transition to the GATT 1994 in 2005;  (c) the invoca tion of transitional safeguards, and their negative
impact on liberalization;  and (d) the introduction of other trade measures, and how they had affected
progress under the ATC.
3.29 In the view of Hong Kong, China, although the evaluation of these elements could have been
largely an objective process, as shown in the series of ITCB papers, some of it would necessarily have
been subjective or provisional pending further data, so there was room for legitimate differences of
opinion.  That was normal and to be expected, but it should not have prevented the Council from
reaching consensus on a reasonable compromise, particularly as all Members had claimed to be
committed to the ultimate objective of the ATC.  Given this, it would have been expected that allMembers would consider it to be in their own interests to ensure that progress under the ATC was on
track for their commitments to be fulfilled.  Unfortunately, some Members had appeared unable to
participate in any evaluation, objective or subjective, nor were they prepared to countenance an
overall assessment of progress under the ATC.G/C/M/28
Page 13
3.30 The result was that, despite much endeavour, the major review could not be completed and
the Council could not take such decisions as might be deemed appropriate to ensure that the balance
of rights and obligations embodied in the ATC were not being impaired.  Article 8:12 clearly
envisaged such decisions in order that the Council could fulfil its mandate.  One of the benefits of the
ATC was to provide for all Members an assurance of the balance of rights and obligations.  If the
Council was prevented from providing this assurance, it would follow that the benefit had beennullified.  Consequently, irrespective of what the overall assessment of progress under the ATC might
have been if the major review had been comp leted, there could be no doubt that the failure to
complete the major review directly impaired the rights and obligations embodied in the ATC.
3.31 The representative of Hong Kong, China said th at the Council had failed to fulfil its mandate
under Article IV:5 of the Marrakesh Agreement to oversee the functioning of the ATC (as endorsed
by the Singapore Ministerial Conference almost a year ago).  The Council had failed to fulfil its
mandate under Article 8:12 of the ATC to take such decisions as it deemed appropriate to ensure thatthe balance of rights and obligations embodied in the ATC was not being impaired, and had itself,
thereby, impaired that balance.
3.32 The ATC was part of the integrated structure of the WTO.  As in any integrated structure, if
one part of the structure was undermined, the rest of the structure was put at risk, with unpredictable
consequences.  The WTO was part of the global economic system.  In any economic system,confidence in the regulation of the system was a key factor.  Hong Kong, China saw the challenge to
WTO Members as:  first, to restore confidence in the WTO oversight system by redressing the
impairment arising from the failure of the Council to conduct the major review;  and second, how to
effect this redress bearing in mind also the paramount importance of smoothly conducting the 50th
Anniversary and  Ministerial Conference in 1998.
3.33 The representative of Thailand, speaking for the ASEAN WTO Members, stated that from the
very outset of the exercise, ASEAN had attached great importance to the first major review of the
ATC implementation and to the importance of trade in textiles and clothing to the ASEAN economies
in terms of its economic and social contributions throughout the past three decades of its economic
development.  He believed that the review should have been conducted in a complete andcomprehensive manner, taking into account the developments which had occurred during the past
three years of the implementation of the ATC.  Only through a proper and thorough examination,
based on the information sought and provided, would the Council be able to understand the true
picture of the progress so far achieved under th e ATC.  He considered that the Council should be
conducting the major review with a view to assessin g the quality of the implementation itself, keeping
in mind that there shall be no extension of this Agreement in the year 2005.  In this respect he had
been participating in the exercise with utmost sincere objectivity and in good faith and had made
efforts to present the fair views and judgement of ASEAN to assist the Council in ensuring that the
balance of rights and obligations embodied in this Agreement was not being impaired.  In previous
statements he had summarized a number of impor tant developments which Members had witnessed
during the past three years of the integration process.  These included the fact that there had been the
lack of progress towards an effective transition;  it was apparent that the integration programmes forthe first two stages had not contributed to any comm ercially meaningful liberalization of trade in the
sector.  The proportions of restrained products included in the integration programme had been
minimal.  Very few quotas would be eliminated, even after seven years of implementation, and an
overwhelmingly large proportion of restrained products would remain to be integrated.  This testified
to the fact that the process of integration, particul arly by two importing Members, was far from being
progressive as envisioned in the Agreement.
3.34 He also noted that the use of transitional safeguards had not been sparing.  Additional
restrictions imposed as a result of the application of transitional safeguard had severely upset and
hindered the progress towards achieving any effective implementation of the integration process.G/C/M/28
Page 14
Finally, he pointed out that the application of policies relating to the GATT rules and disciplines had
not been respected by restraining Members.  Actions such as systematic use of anti-dumping,
particularly against products under quota restrictions, unilateral changes in customs rules and
procedures and the maintenance of unnecessary administrative formalities had all resulted in
increased barriers to trade, impeding access to th e markets of the restraining Members.  Through the
objective technical analysis presented by the ITCB as well as relevant observations and technicalarguments made by several other exporting developing Members, it was initially hoped to generate a
recognition of the problems and to put the implementation of the ATC back on track.  Unfortunately
at the recent meetings they had met with a different approach to the major review.  It was argued that
the Council could only determine whether specific obligation arising out of the ATC had been
complied with and, as no complaints had been raised before the TMB, it was inappropriate for the
Council to involve itself in any further assessments of the problem.  This very limited scope of the
review which had been advanced by others in this manner was counter to the very purpose andessence of the exercise of major reviews by the Council.  ASEAN regretted that, despite extended
hours they had spent in the informal and formal process, it still had not been possible, up to this point,
for Members to develop any conclusions and recommendations.  Such an outcome could not be
considered anything other than unprecedented and detrimental to the integrity of the multilateral
trading system.  No such prospect was envisaged in the ATC.  The Council had the responsibility andthe obligation of undertaking the major review of the implementation of the ATC as well as
overseeing the functioning of the Agreement itself.  In the present circumstances, this was indeed a
very serious situation and it was greatly hoped that the Members of the Council would make
appropriate decisions as to further actions to redress this situation.
3.35 The representative of Pakistan considered that it had been demonstrated beyond doubt that the
implementation of the ATC had not been on track at least for the following reasons:  (a) integration
programmes of the first two stages as notified by the MFA restraining Members had not been
effective and progressive in character;  (b) use of the transitional safeguard measures had not
conformed to the prescription embodied in Article 6 of the ATC;  (c) the impact of the growth rate
factors or "growth-on-growth" in terms of incremental market access had been minimal;  (d) there hadbeen frequent use of other market access limiting instruments to further erode the impact of the
integration programmes on liberalization of trade in textiles and clothing;  and (e) market access
provided to small suppliers and least-developed country Members had been below expectations.
3.36 He said that in spite of the fact that Members had provided a plethora of technical input
highlighting the above issues, it was a matter of deep regret and concern that the Council had not beenable to fulfil its mandate as ordained in Articles 8:11 and 8:12 of the ATC.  Article 8.11 made it
mandatory for the Council to undertake such a major review before the end of each stage of the
integration process.  The Council, thus, could not absolve itself of this responsibility by simply
informing that no agreement could be reached on a report embodying such a review.  The inability on
the part of the Council to fulfil its mandate under Articles 8:11 and 8:12 of the ATC would be
tantamount to the impairment of rights and obligations as embodied in the ATC.
3.37 Pakistan considered that Articles 8:11 and 8:12 made it amply clear that the underlying
rationale of the major review was to examine the implementation of the ATC in such a manner as to
make an assessment of the implementation of the ATC so as to ensure that the balance of rights and
obligations embodied in the ATC were being maintained.  The latter was to be seen in the broader
context of the objectives of the ATC as enshrined in the preamble to the Agreement.  Pakistan,
therefore, called upon the Council to conclude the major review as the overseeing body of the ATC.Failure to do so would undermine the very credibility of the multilateral trading system and erode the
faith of many Members in its efficacy.
3.38 The spokesman for the European Communities re called its earlier statement that it attached
considerable importance to the major review of the first stage of integration under Article 8:11 of theG/C/M/28
Page 15
ATC.  It had a major interest in this sector as the world's largest importer with imports in 1996 of
62,470 million dollars.  It was also a major exporter of textiles and clothing products with exports in
1996 of 38.7 billion dollars.  The European Communities was an open market with low tariffs and a
limited number of quantitative restrictions which yielded an import penetration rate of around
50 per cent.  It believed that the Council had complied with its mandate;  a major review had taken
place.  What had not been achieved was to decide by consensus on the terms of the report andpossible conclusions which should be made to the General Council.  The European Communities had
played a constructive role in both the debate and in the informal consultations;  it had made numerous
drafting suggestions in an attempt to find language on which Members could achieve consensus.  He
said, however, that the debate which they had anticipated was one based on the provisions of the
ATC.  The debate that they had had in reality was rather different, in particular it had dwelt, at least in
part, on anti-dumping proceedings brought by the European Communities.  In fact, twelve Members,
Argentina, Brazil, Canada, the European Co mmunities, Japan, Korea, Mexico, New Zealand,
Philippines, South Africa, Turkey and the United States had introduced, or continued to maintain anti-
dumping actions against textile and clothing products during the first stage of integration.  As stated in
the debate, the European Communities applied their anti-dumping legislation in a transparent way,
within a closely defined legal framework, in conformity with its WTO obligations.  Dumping and
anti-dumping were not matters regulated by the ATC and so they were not matters on which the TMBdecided, unlike, for example, the use of transitional safeguards or the provisions concerning
circumvention.
3.39 He said that one might have concluded, therefore, that these matters must have been the
subject of an earlier complaint before the relevant  Committee.  But, in fact, these matters had only
been raised twice, at the European Communities' invitation, to the Members concerned suggesting that
they make a clear statement as to whether there were any breaches of the relevant Agreements.  This
had never been taken up in the appropriate Committee.  Instead, the matter had been raised in the
Council, although it was known that the Council was not in a position to take a decision on matters
under dispute.  The European Communities, while available for consultations with any Member under
the relevant Agreements, did not consider it appropriate for the Council to reach a specific conclusionon a matter falling under other Agreements where there had been no specific complaints.  In addition,
the concerns expressed by the European Communities during the debate concerning market access
had simply been swept aside.  The European Co mmunities was, in fact, informed in the drafting
exercise that a reference to its concern for improved market access would be unacceptable.  The
current position in this respect was not reassuring.  A number of fast growing developing countrymarkets were often virtually completely closed to European Communities' products.
3.40 The representative of Egypt said that the Council was facing a difficult and undesirable
situation, but it still believed that it was of great importance that the Council resume its efforts to
conclude the measure of progress according to Articles 8:11 and 8:12 of the ATC together.  A failure
to accomplish that obligation would put the credibility  of the multilateral trading system into question,
as stated clearly by other speakers.  Concerning th e question of anti-dumping, he recalled that Egypt
had demonstrated its position concerning that issue in the earlier meetings and had submitteddocuments which proved their argument.  He recalled that the Council had been discussing anti-
dumping in the framework of that review process un der Article 7:1(b) of the ATC.  Not raising the
matter earlier in the Committee on Anti-dumping Practices did not mean that Members did not have
the right to raise it through the review process.
3.41 The representative of Bangladesh noted that the footnote to Article 1:2 of the ATC stated,
with regard to the treatment of least-developed country Members, that:  "To the extent possible,
exports from a least-developed country Member may also benefit from this provision".  This referred
to the special provisions set out in Article 2.18 which was to be implemented in such a way as to
permit meaningful increases in access possibilities for all least-developed country Members.
Bangladesh appreciated the positive attitudes exhibited by one trading partner in this regard.  TwoG/C/M/28
Page 16
other importing Members, with both of whom Bangladesh possessed the closest ties across a very
broad spectrum, had provided improvement in the sense of Article 2:18 with respect to exports from
certain least-developed country Members, also advancing the application of growth factors by one
stage, i.e. increasing the respective pre-ATC growth rates by 25 per cent instead of 16 per cent.
However, he was at a loss to understand why the same treatment was being denied to Bangladesh, and
for what reason it was being subjected to this discrimination.
3.42 He noted that Bangladesh, a country of 120 million people, had an overwhelming reliance on
export of textiles and clothing.  At the same time, it was a country that had not only embraced theprinciples of liberalization and globalization, but had also taken numerous measures to open its
economy in consonance with the requirements of free market.  Bangladesh was a society thatcherished and held dear the positive values of human rights, democracy, pluralism, emancipation of
women and rights of the child.  Last year, its garment industry was declared free of child labour.
3.43 He also considered that Bangladesh was a community that had the potential for rapidly
transforming itself into a vibrant, modern, forward looking country, through a skilful mix of domestic
initiatives and external support.  Bangladesh's achievements in many areas were seen as worthy of
replication by others, providing a beacon of hope for those engaged in the struggle to lift themselves
from the morass of poverty and the least-developed status.
3.44 Bangladesh, therefore, had earned for itself the right to the widest possible empathy and
understanding.  Bangladesh only wished for the same benefits accruing from the application ofArticle 2:18 by its trading partners to be extended to it, as they had been to others in comparable
milieux.
3.45 The representative of Canada said that her delegation did not share the views of some
Members that the Council had failed to conduct the revi ew as called for in the ATC.  It might not have
been able to achieve complete consensus on the review, in particular the conclusions;  however,
Members had a full and frank exchange of views, reflecting the importance of the textile and clothing
sector for many Members, whether they were importers or exporters.   Canada had approached this
review in a constructive manner.  She noted that, as had been shown in the past, there were manysensitivities in the textiles and clothing sector, and reaching consensus on anything in this area was
always difficult.  It had taken a major effort during the Uruguay Round to build the bridge between
Members that had led to the conclusion of the ATC.  The major achievement of the ATC, on which all
Members agreed, was the full integration of the textile and clothing sector into the GATT 1994 rules
and disciplines by 1 January 2005, with resultant removal by that date of all GATT 1994-inconsistentmeasures.
3.46 However, there remained a wide gulf in the perceptions amongst Members regarding the
transitional provisions of the ATC.  As noted by several Members, the primary purpose of the
Council's review of the first stage of integration was to ensure that the implementation of the ATC
was on track.  It was clear that there were significant differences in perception of what was the right
track, and hence the wide range of views on whether they were on or off the track.  Canada's view on
what the right track was for this Council's review of the first stage of integration had been stated in
previous meetings.  She could only repeat on this occasion that it remained Canada's view that:  first,
just as the ATC applied to all Members, the review should examine the implementation by allMembers, and not just certain Members;  and seco nd, that any assessments or conclusions could only
be based on the specific provisions of the ATC.  It was these provisions that set out the path of
integration during the transition period under the ATC.  As had been indicated in the earlier meetings,
Canada had met all of its obligations regarding the implementation of the ATC transitional provisions
and remained committed to achieving full integration by 2005.  Canada had also gone beyond thesespecific transitional obligations;  for example, Canada had included restrained products in stages 1
and 2 of its integration programme, even though the ATC did not require any restrained products to be
included in any one particular intermediate stage of the transitional period.  In addition, Canada hadG/C/M/28
Page 17
removed, six months in advance of the start of stage 2, its restraints on tailored collar shirts, a
commercially important clothing item for a number of developing and least-developed countries.
Further, Canada had extended the benefits of the small suppliers provision under Article 2:18 to six
additional Members that had not, on the basis of 1991 import data, qualified under the specific
provisions of that Article.
3.47 The representative of Canada said that, as regards the proper basis for making assessments in
the review, Canada had expressed its concerns in the previous meetings that it appeared that some
Members wished to use the Council's review to reach conclusions that would stretch or reinterpret the
transitional provisions of the ATC beyond both what  the drafters of the ATC had intended and what
was actually found in the ATC.  A number of Members had expressed disappointment with the quality
or spirit of the implementation of the initial stages of integration of the ATC and that their
expectations had not been met.  No-one was fully satisfied with the actual provisions of the ATC,
including the Canadian industry;  however, this did not mean they could ignore the reality of what had
been negotiated and what was actually set out in the transitional provisions of the ATC.
3.48 The representative of the United States pointed out that, with respect to the substance of the
review of the ATC, her delegation disagreed with many of the views expressed by exporting Members
at the present meeting.  The core of their disagreement had to do with the question of strict
compliance with specific provisions of the ATC.  The ATC contained a number of legal obligations,
all of which the United States took very seriously, and all of which it believed it had met.  Despite the
views expressed at the present meeting and in the co urse of the review, the United States believed that
much of the dissatisfaction expressed had to do with the provisions of the ATC, not with its
implementation.
3.49 The question currently before the Council was how to move forward.  There could be no
question about the fact that the Council had completed its review.  It would not be acceptable to any
delegation to have an ongoing textiles review process.  The United States considered it unfortunate
that exporting Members had prevented even a summa ry of the Council's meetings to be forwarded to
the General Council.  Such a summary, in addition to the one recommendation, concerning
notifications to the TMB, would have been a valuable result of this process.
3.50 The representative of India stated that his delegation had entered into the exercise of
conducting the major review of the ATC in good faith, given the crucial importance of this particular
Agreement as part of the single undertaking entered into at the end of the Uruguay Round.  Thereview implied not only a full and frank exchange of views, but the logical distillation of the various
views by the Council, which had the responsibility to oversee the implementation of the ATC.  He
recalled the several detailed interventions Indi a had made during the meetings of the Council
organized to address specific aspects of the implementation of the ATC.  At each of these meetings,
on the basis of these interventions, India had put forward concrete suggestions in the form ofobservations and recommendations for the consideration of the Council.  This effort had been made
because of the economic and social importance for India of the implementation of the commitment by
those Members, which maintained GATT-inconsistent trade regimes for imports of textiles and
clothing, to integrate their restraints into the GATT 1994 system.  India had also made this effort
because it believed that, as Members of this Council, the provisions of Article IV of theWTO Agreement and Article 8 of the ATC obliged it, in the legal sense, to conduct the major review
of the implementation of the ATC before the end of 1997.  In light of this, he reiterated that India had
always been, and continued to be, fully committed to the task of conducting the major review of the
ATC.
3.51 He said that both during the earlier meetings of the Council, and during the informal
consultations, Members were able to establish the factual basis for undertaking the review and to
establish that, on the basis of facts, only one restrained product had been integrated into GATT 1994
during the first three years of the ATC.  Further, it had been established, on the basis of facts, thatG/C/M/28
Page 18
there had been a shortfall in the first stage integration programme of one major importing Member.
The logical conclusion, on the basis of these facts, was for the Council to conclude that the first stage
of the integration process had not resulted in any meaningful liberalization of trade in the textile and
clothing sector.  This would be logical in view of the objective of the ATC, which was to achieve
further liberalization of trade.  India further recall ed that under the Agreement, integration meant the
progressive removal of discriminatory MFA-inherited restrictions, so that on 1 January 2005, trade intextiles and clothing would be conducted entirely according to the provisions of GATT 1994.  Also,
as stipulated in the Agreement, there shall be no extension of the ATC.
3.52 He said that, when Members looked at other aspects of the ATC in the context of the
integration process, it would be possible to establish, on the basis of facts, that the non-sparing use of
the transitional safeguard provisions by one major importing Member, totalling 24 actions in the span
of about six months, and that too, at the very beginning of the implementation of the ATC, had had an
adverse effect on the integration process and had restricted trade even further.  It had been established,on the basis of facts, that the increasing number of anti-dumping actions since the entry into force of
the ATC, amounting to trade harassment, and especially those targeting specific products covered by
the ATC already subject to restraint under the ATC, had been the exercise of double protectionism.  It
was established, on the basis of facts, that despite the commitment of all Members to the
non-introduction of new discriminatory restrictions in textiles and clothing trade after the entry intoforce of the ATC, such discriminatory new restrictions had, in fact, been introduced.  It was
questioned why these restrictions were considered necessary in view of what had been said at the
current meeting about the open market and limited number of quantitative restrictions characterizing
the trade regime of one of the Members directly concerned.  It was also established that there were
genuine concerns with respect to the changes in rules of origin by one major importing Member,which had had far-reaching impact on the objective of trade liberalization that the ATC and the WTO
were meant to achieve.  On the basis of such facts,  it was logical for India to expect that the Council
would arrive at observations and recommendations regarding the adverse impact each of these actions
had had on the effective implementation of the integration process, and to ensure the implementation
of the ATC in such a manner so that the Agreement was put back on track.  He agreed with the viewsone Member had expressed at this meeting that the ATC, being a multilateral agreement, applied to all
Members.  However, all WTO Members did not restrain imports of textiles and clothing products by
the use of discriminatory quantitative restrictions.  That was why the ATC provided for a transitional
period for such Members to integrate their discriminatory restraints into the norms of GATT 1994.
3.53 The representative of India regretted that Members were now in a situation where they could
not arrive at logical conclusions in the major review.  This was despite the fact that, during the
informal process, India had demonstrated its willingness to engage in a constructive manner in the
drafting process.  It was well known that in the area of textiles and clothing the views of the importing
and exporting Members would always be apart.  However, it was also known that in the WTO,
Members had time and again demonstrated their capability to bridge such differences in order to
uphold the integrity of the multilateral trading system.  It was for the Council, collectively, to find a
common view in this exercise, and India could not, therefore, agree with the statement made by theUnited States that the Council had already conducted its major review.  It was India's view that the
unwillingness of some Members to put forward any concrete counter-proposals to the more than a
dozen drafting proposals he had provided in respect of the conclusions to be drawn from the review
exercise was an indicator of their unwillingness to engage in a constructive manner in this major
review.  In this context, he recalled to the reference made at the present meeting to the drafts providedby one such Member - these had yet to see the light of day in their collectivity, which was in stark
contrast to the comprehensive and transparent manner in which India had provided draft proposals to
the Members in the drafting group, and which had been duly circulated.  It was all the more
regrettable that, in spite of the wealth of data presented to the Council during the meetings when the
implementation of the ATC was being discussed, including data in the comprehensive report of theTMB, which was specifically mandated to assist the Council in conducting this major review,G/C/M/28
Page 19
Members found themselves in such a sorry situation.  It was difficult to be asked to participate in any
exercise when one side clearly indicated its intentions in a transparent and constructive manner, while
the other side took refuge in opaqueness and ambivalency.
3.54 In conclusion, India placed on the record its considered view that such a situation as it found
itself in today had not been envisaged in the provisions of the ATC.  Members were, therefore,
confronted with an unprecedented situation, where the Council would have to proceed with utmostcare.  As far as the outside world was concerned, quite apart from the legal issues involved, the
inability to undertake this major review would call into question the primary objective of the effective
functioning of the multilateral trading system to prov ide predictability and security to trade.  In the
context of the contractual nature of the relationship in this intergovernmental organization, the
non-fulfilment of the legal obligation of the C ouncil to undertake the major review would have
ramifications not only for the balance of rights and obligations of Members under the ATC but, given
the fact that all Members had entered into the single undertaking embodied by the WTO Agreement,on the balance of rights and obligations under that Agreement as well.  This was indeed a very serious
situation, India felt that the Council would have to discharge its responsibilities very carefully, under
the provisions of the WTO Agreement and the ATC, to find a solution to this problem.
3.55 The representative of Peru expressed concern at the situation that the Council was facing
regarding the review of the ATC which should have been completed by this time.  All who had
participated in the process understood that this was a complex task;  however, in no way could they
understand how it could culminate without having reached conclusions which would be necessary for
the Council to have completely fulfilled its mandate for the review.
3.56 The representative of Mexico clarified a point made in a statement by the
European Communities concerning the application by certain Members of anti-dumping measures on
textile products.  He considered that the situation with Mexico was different.  Mexico did, in fact,
apply anti-dumping measures to textile products;  however, Mexico had not applied measures under
the MFA, nor did it apply measures under the ATC, while the European Communities did apply such
restrictions.  Therefore, Mexico was in a somewhat different situation and the context in which it had
been mentioned, that Mexico applied anti-dumping measures, was perhaps not the most appropriate.
3.57 The representative of Hong Kong, China returned to the question raised in earlier
interventions as to whether the Council could say that it had fulfilled its mandate under the ATC with
respect to the review.  There appeared to be three elements which might be relevant to any assessment
as to whether the review had or had not taken place.  First, there was the reference in Article 8:11 of
the Agreement that the Council shall conduct a majo r review.  He considered that the Council had
certainly started such a review and had attempted to conduct the review but as yet there were no
elements before the Council which would show that a review had, indeed, taken place.  The second
element was in Article 8:12 of the ATC which said that in the light of its review the Council shall by
consensus take such decisions as it deems appropriate.  However, there was no text before the Council
and no elements with relation to the review, so clearly there was no question of a decision in the
Council's deliberations which would lead Hong Kong , China to think that indeed the review had been
completed.  Thirdly, also in Article 8:12, the Counc il was to ensure that the balance of rights and
obligations embodied in the Agreement was not being impaired and he believed that this went back to
the point he had made earlier that Article 8:12 obliged the Council to ensure the balance of rights and
obligations and failure to do so, as in the present case, through failure to complete the review was of
itself an indication of imbalance.
3.58 The representative of Argentina provided clarification with respect to a comment made earlier
regarding anti-dumping measures.  He said that Argentina did not apply any type of restriction onG/C/M/28
Page 20
textiles products, particularly quantitative restrictions, and he could indicate that between 1990
and 1996 imports of textiles products in Argentina had increased by 840 per cent.
3.59 The Chairman proposed to take note of the statements.  He reminded delegations of his
intention to include in the report of the Good s Council to the General Council, the situation as
described today.  He added that Members might be aware that the current composition of the Textiles
Monitoring Body was established for a three-year period ending on 31 December 1997. He had beenconducting consultations on this matter and they were very close to a conclusion.  With Members'
concurrence, he wished to report of the outcom e of these consultations directly to the General
Council.  In addition to the composition of the TMB, he had also had consultations on the
chairmanship of the TMB.  He  requested Dr. Kim, the Deputy Director General, for an update on this
particular issue.
3.60 Dr. Kim, Deputy Di rector General stated that he had been conducting consultations with
delegations on behalf of the Director General on the subject of the Chairmanship of the TMB.  These
consultations were being held in the context of the fact that the term of the current Chairman was due
to expire on 31 December 1997.  At this stage, he reported that his consultations were still continuing
and some more time was clearly needed to enable him, on behalf of the Director General, to make a
proposal which would enjoy the consensus in that body.  Under these circumstances, with the
Council's concurrence, it would be his intention to report on the results of these ongoing consultationsto the forthcoming meeting of the General Council.  He hoped that this proposal would be one which
the General Council would be in a position to approve by consensus.
3.61 The Council took note of the statements.
4. Interim Agreement between the European Communities and the Republic of Slovenia
- Communication from the Parties to th e Agreement (WT/REG32/N/1, WT/REG32/1)
4.1 The Chairman drew  attention to the notifications from the parties to the Agreements
circulated in document WT/REG32/N/1.  The te xt of the Agreement had been circulated in
document WT/REG32/1.
4.2 The Chairman proposed that the Committee on Regional Trade Agreements carry out the
examination of the Agreement in accordance with the following terms of reference:
"to examine, in light of the relevant provisions of the GATT 1994, the Interim Agreement
between the European Communities and the Republic of Slovenia and to submit a report to
the Council for Trade in Goods".
4.3 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 the Council for Trade in Goods on20 February 1995, as contained in document WT/REG3/1, would apply mutatis mutandis  to the
examination.  It was also understood that, during the examination, due account would be taken of the
intrinsic differences between customs unions and free-trade areas.
4.4 The Council so agreed.
5. Free Trade Agreement between the Republic of Slovenia and the Republic of Bulgaria
- Communication from the Parties to th e Agreement (WT/REG33/N/1, WT/REG33/1)
5.1 The Chairman drew  attention to the notification from the parties to the Agreement circulated
in document WT/REG33/N/1.  The text of the Agreement had been circulated in
document WT/REG33/1.G/C/M/28
Page 21
5.2 The Chairman proposed that the Committee on Regional Trade Agreements carry out the
examination of the Agreement in accordance with the following terms of reference:
"to examine, in light of the relevant provis ions of the GATT 1994, the Free Trade Agreement
between the Republic of Slovenia and the Republic of Bulgaria and to submit a report to the
Council for Trade in Goods".
5.3 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 the Council for Trade in Goods on
20 February 1995, as contained in document WT/REG3/1, would apply mutatis mutandis  to the
examination.  It was also understood that, during the examination, due account would be taken of the
intrinsic differences between customs unions and free-trade areas.
5.4 The Council so agreed.
6. Free Trade Agreement between the Czech Republic and the Republic of Latvia
- Communication from the Parties to th e Agreement (WT/REG45/N/1, WT/REG45/1)
6.1 The Chairman drew  attention to the notification from the parties to the Agreement circulated
in document WT/REG45/N/1.  The text of the Agreement had been circulated in document
WT/REG45/1.
6.2 The Chairman proposed that the Committee on Regional Trade Agreements carry out the
examination of the Agreement in accordance with the following terms of reference:
"to examine, in light of the relevant provisions of the GATT 1994, the Free Trade Agreement
between the Czech Republic and the Republic of Latvia and to submit a report to the Council
for Trade in Goods".
6.3 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 the Council for Trade in Goods on20 February 1995, as contained in document WT/REG3/1, would apply mutatis mutandis  to the
examination.  It was also understood that, during the examination, due account would be taken of the
intrinsic differences between customs unions and free-trade areas.
6.4 The Council so agreed.
7. Free Trade Agreement between the Czech Republic and the Republic of Lithuania
- Communication from the Parties to th e Agreement (WT/REG46/N/1, WT/REG46/1)
7.1 The Chairman drew  attention to the notification from the parties to the Agreement circulated
in document WT/REG46/N/1.  The text of the Agreement had been circulated in
document WT/REG46/1.
7.2 The Chairman proposed that the Committee on Regional Trade Agreements carry out the
examination of the Agreement in accordance with the following terms of reference:
"to examine, in light of the relevant provisions of the GATT 1994, the Free Trade Agreement
between the Czech Republic and the Republic of Lithuania and to submit a report to the
Council for Trade in Goods".G/C/M/28
Page 22
7.3 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 the Council for Trade in Goods on
20 February 1995, as contained in document WT/REG3/1, would apply mutatis mutandis  to the
examination.  It was also understood that, during the examination, due account would be taken of the
intrinsic differences between customs unions and free-trade areas.
7.4 The Council so agreed.
8. Consideration of Annual Reports of Subsidiary Bodies of the Council for Trade in Goods
8.1 The Chairman stated that pursuant to the "Procedures for an Annual Overview of WTO
Activities and for Reporting under the WTO" (WT/L/105) which were adopted by the General
Council on 15 November 1995, all bodies constituted under agreements in Annex 1A of the WTO
Agreement were required to submit a factual report to  the Council for Trade in Goods.  Also pursuant
to these procedures, the Council was to take note of these reports.
8.2 The Council considered the following reports of its subsidiary bodies:
8.3 The Council took note of the report of the Committee on Anti-Dumping Practices (G/L/204)
which was adopted by the Committee on 31 October 1997.8.4 The Council took note of the report of the Committee on Customs Valuation (G/L/205) which
was adopted by the Committee on 23 October 1997.8.5 The Council took note of the report of the Committee on Import Licensing (G/L/203) which
was adopted by the Committee on 15 October 1997.
8.6 The Chairman recalled that the Independent Entity was foreseen under Article 4 of the
Preshipment Inspection Agreement for the administration of the independent review procedures also
set out in that Article.   The Council took note of the report of this body (G/L/208).
8.7 The Council took note of the report of the Committee on Safeguards (G/L/200) which was
adopted by the Committee on 22 October 1997.
8.8 The Council took note of the report of the Committee on Sanitary and Phytosanitary
Measures (G/L/197) which had been discussed at the Committee's last meeting on 15-
16 October 1997, and which was then submitted by the Chairman to the Council on his own
responsibility.
8.9 The Council took note of the report of the Committee on Subsidies and Countervailing
Measures (G/L/201) which was adopted by the Committee on 24 October 1997.8.10 The Council took note of the report of the Committee on Technical Barriers to Trade
(G/L/207) which was adopted by the Committee on 18 November 1997.8.11 The Council took note of the report of the Textile Monitoring Body (G/L/206) which was
approved for presentation by that body on 12 November 1997.
8.12 The Council took note of the report of the Committee on Trade-Related Investment Measures
(G/L/193) which was adopted by the Committee on 15 September 1997.
8.13 The Council took note of the report of the Working Party on State-Trading Enterprises
(G/L/198) which was adopted by the Working Party on 14 November 1997.G/C/M/28
Page 23
8.14 The Chairman informed the Council that no t all the reports from the Council's subsidiary
bodies were before the Council. Certain of these bodies were scheduled to meet only after this
meeting of the Council at which time they would adopt their reports which were being circulated only
now. The subsidiary bodies concerned were:  the Committees on Agriculture; Market Access; Rules
of Origin; the Committee of Participants on the Expansion of Trade in Information Technology
Products, and the Working Party on Preshipment Inspection. In this regard, the Chairman proposedthat these pending reports be considered by the Council at its resumed meeting.
8.15 The Council so agreed.
8.16 In response to a question from the representative of Jamaica, a representative of the
Secretariat stated that the Council for Trade in  Goods oversaw the Multilateral Trade Agreements
found in Annex 1A of the WTO Agreement.  As a result, the Council's report covered only the
activities of those subsidiary bodies originating from those Agreements and any other subsidiary body
created under the Council, but not the activities of the Committees on Plurilateral Trade Agreements.The "Procedures for an annual overview of WTO activities and for reporting under the WTO"
(WT/L/105) also stated that the "respective sectoral Councils should report ... to the General Council
on the activities in the Council as well as in the subs idiary bodies". According to those procedures, the
Committees on Plurilateral Trade Agreements "shall be invited to report annually to the General
Council" which meant that they reported directly to the General Council.
8.17 The Council took note of the statements.
8.18 At the resumed meeting on 8 December 1997, the Chairman  recalled that not all the reports of
the subsidiary bodies had been before this Council at it's 19 November 1997 meeting, but that they
were now ready for the Council's consideration.
8.19 The Council took note of the report of the Committee on Agriculture (G/L/211) which had
been discussed at the Committee's last meeting on 21 November 1997, and which was then submitted
by the Chairman to the Council on his own responsibility.
8.20 The Council took note of the report of the Committee on Market Access (G/L/215) which was
adopted by the Committee on 2 December 1997.8.21 The Council took note of the report of the Committee on Rules of Origin (G/L/210) which
was adopted by the Committee on 21 November 1997.
8.22 The Chairman informed the Council that the Committee of Participants on Expansion of
Trade in Information Technology Products was established pursuant to the provisions of the
Ministerial Declaration on Trade in Information Technology Products and the Implementation of the
Ministerial Declaration on Trade in Information Technology Products in order to carry out theprovisions of paragraphs 3, 5, 6 and 7 of the Annex to the Declaration. The Council took note of the
information provided and of the report of the Committee (G/L/216).
8.23 The Chairman informed the Council that the Working Party on Preshipment Inspection was
established by the General Council at its meeting of 7, 8, and 13 November 1996, "to conduct the
review provided for under Article 6 of the Agreement on Preshipment Inspection and to report to the
General Council through the Council for Trade in Goods in December 1997".  The report was adopted
by the Working Party on 1 December 1997 and was contained in document G/L/214.  He noted thatthe Working Party in its report and pursuant to its mandate had made certain recommendations.  The
Council took note of the information provided and of the report, approved
 the recommendations
contained in the report and forwarded the report to the General Council for adoption.G/C/M/28
Page 24
9. Adoption of the annual report of the Counci l for Trade in Goods to the General Council
(G/C/W/98 and Rev.1)
9.1 The Chairman drew attention to the dr aft report of this Council circulated in
document G/C/W/98. 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 Novembereach 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 subordinate bodies and could follow
the model of the GATT 1947 Council report to the CONTRACTING PARTIES".  This report covered
the period starting from 29 November 1996, and would be updated in light of the work done by the
Council at its meetings of 7 and 13 November 1997, at this meeting, and at any subsequent meetings
held before the General Council meeting of 10 December 1997.  The work done in the context of themajor review pursuant to Article 8 of the ATC Agreement would also be taken into account.
9.2 At the suggestion of the representative of Nigeria, the Chairman proposed that the Council
postpone adoption of the Council report until the resumed meeting, when the Council would have
before it an updated version of the report which would take into account the work done by the Council
at its meetings of 7 and 13 November 1997 and at the present meeting.  The revised report would becirculated in document G/C/W/98/Rev.1.
9.3 In response to a question from the representative of Mexico, the Chairman stated that
incorporating details of the trade facilitation sym posium into the Council report would be difficult,
because the Council report was to be " ... factual in nature, containing an indication [only] of actions
and decisions taken..."  (WT/L/105).
9.4 The Council took note of the statements and agreed  to the Chairman's proposal.
9.5 At the resumed meeting on 8 December 1997, the Chairman  stated that in light of the
discussion at the Council meeting of 19 November 1997, the Secretariat had prepared an updated
version of the Council's report contained in document G/C/W/98/Rev.1 dated 26 November 1997.
The paragraphs which had been newly introduced to reflect work done by the Council at its meetingsof 7, 13 and 19 November 1997 were as follows;  paragraph 14.7, paragraph 16.13, paragraphs 18.4
to 18.6, paragraphs 19.11 to 19.15, paragraphs 20.7, 21.1 and 22.1.  He noted that paragraph 14.7
relating to the "trade facilitation symposium" would be modified in the light of his updated proposal
as discussed and circulated earlier at the present meeting.  He also noted that the sentences in which
references had been made to the resumed meeting of "4 December 1997" would be changed to"8 December 1997".  He proposed that the Council adopt the report contained in document
G/C/W/98/Rev.1 as such, subject  to the updating that needed to be made to the report to take account
the work done by the Council at the present meeting. The updated report would be circulated as
document G/L/213.
9.6 The Council so agreed.
9.7 The Chairman noted that in light of short tim e interval between the present meeting and the
General Council meeting at which the Council's report was to be presented,i.e. 10 December 1997, he
hoped that delegations would show some understand ing if document G/L/213 containing the updated
version of the report was not available in all the WT O official languages at the time of that meeting.
9.8 The Council took note of the statement.G/C/M/28
Page 25
10. Free Trade Agreements between the Slovak Republic on the one side and the Republics of
Latvia and Lithuania on the other
10.1 The representative of the Slovak Republic, speaking under "other business", informed the
Council that these Agreements had been notified to the Secretariat recently.
10.2 The Council took note of this information.
11. United States - Mercosur Common External Tariff
11.1 The representative of the United States, speaking under "other business", stated that her
delegation had understood that MERCOSUR intended to  increase its common external tariff by three
percentage points.  Her Government had been advised that this decision must be approved by the
Common Market Council in December 1997.  At a meeting of the economic ministers on
14 November 1997, the governments of those countries determined that the common external tariff
would be increased immediately, with Brazil and Argentina increasing their tariffs first.  Her
delegation hoped that MERCOSUR would reconsider  this action and restore its previous common
external tariff levels as soon as possible.
11.2 The representative of Uruguay stated that he had taken note of the statement by the
United States.11.3 The Council took note of the statements.
12. Date of the next meeting
12.1 At the resumed meeting on 8 December 1997, the Council took note  that its next meeting was
scheduled for 29 January 1998, and that the agenda for this meeting would close, at noontime, on
16 January 1998.
__________