RESTRICTED
WORLD TRADE G/MA/W/7/Rev.3
24October 1996
ORGANIZATION(96-4440)
Committee onMarket Access Original: English
DRAFT
REPORT OFTHE MARKET ACCESS COMMITTEE
TOTHE COUNCIL FOR TRADE INGOODS
Revision
Section A-Background
1. TheCommittee onMarket Access wasestablished under paragraph 7ofArticle IVoftheWTO
Agreement bytheGeneral Council atitsmeeting of30January 1995. Itsmandate (WT/L/47) covers
market access issues related totariffs, non-tariff measures notcovered byanyother WTO body, as
wellasmatters related totheIntegrated DataBase.
2. Mr.JeanSaint-Jacques (Canada) hasbeenelected Chairman, andMrs. Marie Gosset (Côte
d'Ivoire), Vice-Chairperson oftheCommittee. Their mandates wererenewed for1996. Participation
inthemeetings oftheCommittee isopen toallWTO Members, toGovernments granted observer
status bytheGeneral Council andtothefollowing international organizations: FAO, IMF, ITCB,
UNCTAD, WCO andtheWorld Bank.
3. Rules ofProcedure fortheCommittee, based ontheRules ofProcedure adopted bytheCouncil
forTrade inGoods (CTG) andapproved bytheGeneral Council on31July1995, wereadopted by
theCTG on1December 1995 (WT/L/79).G/MA/W/7/Rev.3
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4. TheCommittee heldfourformal meetings eachin1995 andin1996 aswellasanumber of
informal meetings.
Section B-Status report oftheCommittee 'swork
Tariff Matters
Implementation oftheUruguay Round results
5. Theimplementation oftariff concessions contained intheWTO Schedules onGoods began
on1January 1995 according totheprovisions oftheMarrakesh Protocol andtheSchedules annexed
thereto. Beginning on1January 1996, thesecond stage ofreductions started. There isnospecial
notificationprocedurefortheimplementationoftariffreductions.TheCommitteeagreedthatifproblems
arose inthisrespect, itwould relyonreverse notifications. Todate, nosuchreverse notifications
havebeensubmitted.
Implementation ofHarmonized System 1996 changes
6. TheHarmonized Commodity Description andCoding System (Harmonized System orHS),
which isadministered bytheWorld Customs Organization (WCO), isthecustoms nomenclature used
bynearly allWTO Members fortheir schedules oftariff concessions. Special procedures were
establishedfortheintroductionofchangestotheHarmonizedSystemintoWTOschedulesofconcessions.
In1993, theWCO agreed toapproximately 400setsofamendments totheHarmonized System, to
enterintoeffect on1January 1996. These affect bound schedules oftariffconcessions ofalargenumber
ofWTO Members. Members have hadtoimplement thechanges, inkeeping withtheir WCO
obligations, intheircustoms nomenclature on1January 1996. They wereunable, however, tocarry
outtheprocedures related totheintroduction ofHSchanges inWTO schedules prior totheir
implementation. These Members therefore hadtorequest waivers, inaccordance withArticle IXof
theWTO Agreement, from theirobligations under Article IIofGATT 1994. Atitsmeeting of13G/MA/W/7/Rev.3
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December 1995, theGeneral Council approved aDecision granting waivers to33Members, allowing
them toimplement theHS96 changes on1January 1996 andtocarry outthenecessary procedures
subsequently. These waivers were toexpire on30June1996.
7. ByJune1996, 19Members hadsubmitted thenecessary documentation inconnection with
theintroduction oftheHS96 changes andreservations, bothgeneral andspecific, hadbeenmade with
regard tomostofthesubmissions. Onlytwosubmissions ofHS96 changes werefinalized andcertified
during thisperiod. Thus, anextension ofthewaivers appeared necessary. Atthemeeting ofthe
Committee on13June1996, theChairman proposed that-forpractical reasons andbecause there
wasnotalways ameeting oftheGeneral Council inDecember -theperiod forextension ofwaivers
ingeneral, which wasusually sixmonths -fromJanuary toJuneandfromJulytoDecember-, bechanged
fromMaytoOctober andfromNovember toApril ofeachyear.TheCommittee approved thisproposal
andagreed that,inorder tobridge thegapbetween thecurrent situation andthenewproposal, any
extension ofwaivers should beuntil30April 1997. Itwasthendecided torecommend thattheHS96
waivers beexceptionally extended until30April 1997fortheMembers thatindividually hadrequested
anddocumented aneedforanextension orhadnewly requested awaiver inconnection withtheHS96
changes. Thecomplete required documentation wastobesubmitted bytheMembers concerned by
30September 1996 atthelatest. Thedraft decision ontheextension ofthewaivers wasapproved
bytheCTG atitsmeeting of5July1996 andadopted bytheGeneral Council atitsmeeting of18
July1996. Thesituation with respect tothesubmission ofdocumentation isreproduced in
G/MA/TAR/2/Rev.3.
8. Developingandleast-developedMembercountriesstressedtheneedtoobtaintechnicalassistance
from theSecretariat inconnection withtheintroduction ofHS96 changes andforthepreparation of
consolidated loose-leaf schedules.G/MA/W/7/Rev.3
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Procedures under Article XXVIII
9. Withreference tothesubmission ofdocumentation containing HS96 changes, several Members
expressed concern about reservations ofapurely general character presented byother Members under
Article XXVIII. Twoproblems wereidentified inthisrespect: ontheonehandthere istheneedfor
Members submitting changes toprovide asmuch information aspossible tofacilitate areview ofthese
changes byother Members; ontheother handthere istheneedforMembers making reservations to
specify theexact nature oftheirreservations inorder toenable theMembers concerned toeither supply
missinginformationortoenterintonegotiations.TheChairmanwasrequestedtocarryoutconsultations
regarding theprocedures governing Article XXVIII.
Further trade liberalization initiatives
10. TheMarketAccessCommitteediscussedseveralfurthertradeliberalizationpapersbydelegations.
Twoproposals focused onthefuture agenda fortariffliberalization: anAustralian proposal onFurther
Industrial Tariff Negotiations (G/L/96) which recommends thatindustrial tariff negotiations begin in
2000 andthatpreparatory work beundertaken bytheGoods Council orMarket Access Committee;
andaCanadian proposal onFurther Tariff Liberalization (G/MA/W/9) which proposes aWTO work
program fortheacceleration ofUruguay Round tariffreductions, expansion ofmembership forexisting
zero-for-zero andharmonization initiatives, andidentification ofadditional sectors forzero-for-zero
andharmonization initiatives. Members expressed divergent views withrespect tobothofthese
proposals.
11. Additionally, thereweretwoothercommunications submitted which concern plurilateral market
access initiatives: apaper ontheInformation Technology Agreement (G/MA/W/8) submitted bythe
United States which summarizes thebenefits offurther liberalization oninformation technology products
andoutlinestheproductcoverage;andoneonTradeinPharmaceuticalProducts(G/MA/W/10)submitted
bytheEuropean Communities onbehalf oftheWTO Members concerned which outlines thereviewG/MA/W/7/Rev.3
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ofpharmaceutical product coverage thathastaken place andresulted intheaddition of465products
forduty-free treatment. Members welcomed theinformation provided andtook note ofthe
communications.
Waivers granted inconnection withtheintroduction oftheHarmonized System
12. TheCommittee examined thesituation related tothetransposition andrenegotiation ofschedules
ofcertain Members which hadadopted theHarmonized System intheyears following itsintroduction
on1January 1988. These Members wererequested toprovide factual information inrelation torequests
foranextension ofthewaivers; theinformation isreproduced asanAnnex tothesemi-annual reports
oftheCommittee totheCTG (thelatest being G/MA/4). While anumber ofMembers havebeen
abletocomplete thistransposition inrecent years, 11Members requested anextension oftheirwaiver
until30April 1997. These extensions were approved bytheGeneral Council on18July1996.
TechnicalassistanceisbeingprovidedtosomeMemberstoassistinthetranspositionoftheirpre-Uruguay
Round schedules intotheHarmonized System.
Establishment ofconsolidated loose-leaf schedules ongoods
13. During thepasttwoyears, theCommittee examined various issues related totheestablishment
ofconsolidated loose-leaf schedules ongoods. These concern inparticular thelegalimplications of
theestablishment ofsuchschedules andtheircontent (e.g.thecoverage ofunbound items; thetreatment
ofadvalorem ,specific andmixed duties; stages ofimplementation; other duties andcharges (ODCs);
thereflectionofagriculturecommitments;andtheindicationofInitialNegotiatingRights).Atitsmeeting
of22November 1995, theCommittee agreed totheestablishment ofconsolidated loose-leaf schedules
ongoods onthebasisofaproposal bytheChairman. Thequestion ofverification, however, remains
outstanding. Several Members raised thepossibility ofcreating acomputer-assisted verification of
theschedules. TheChairman hasheldinformal consultations withaviewtosolving theproblem.G/MA/W/7/Rev.3
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14. Asaresult ofthese consultations, heproposed thattheCommittee adopt theDraft Decision
ontheEstablishment ofConsolidated Loose-Leaf Schedules onGoods contained indocument G/L/121.
TheCommittee adopted theDecision andagreed toforward ittotheCTGforapproval. TheCommittee,
noting thatasof18October 1996, 15Members hadsubmitted consolidated loose-leaf schedules on
goods inconnection withthesubmission oftheirHS96 documentation using theformat appended to
theDecision, recognized theimportance ofgiving priority consideration totheverification ofthese
schedules.
Non-tariff Matters
Notifications ofquantitative restrictions
15. ADecision onNotification Procedures forQuantitative Restrictions (G/L/59) wasadopted by
theCTG on1December 1995. Inaccordance withthisDecision, Members were tosubmit tothe
Secretariat by31January 1996complete notifications ontheQRstheymaintained. Thesituation with
regard tothose notifications isfarfrom satisfactory asonly 22Members have submitted their
notifications.
Reverse notification ofnon-tariff measures
16. Atitsmeeting inDecember 1995, theCouncil forTrade inGoods alsoadopted adecision related
tothereverse notification ofnon-tariff measures (G/L/60). Onesubmission hasbeenreceived todate.
Integrated Data Base
17. InOctober 1995, theCommittee examined several issues concerning thefuture oftheIntegrated
DataBaseandagreed thatMembers should make every effort toprovide thenecessary tradeandtariff
information inorder toestablish areliable database. However, todateveryfewMembers have
submitted therequired information. Since October 1995, theSecretariat hasreceived complete IDB
submissions from10Members andrecent import statistics from14Members. Inaddition, inresponseG/MA/W/7/Rev.3
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tospecific requests, theSecretariat hasbeenabletoupdate thefilesofanumber ofcountries onthe
basisofdatacollected, interalia,fromtheTrade Policy Review Division andfrompublished customs
tariffs.
18. TheCommittee alsoagreed that(1)theSecretariat prepare asimplified format fortheIDB
datasubmissions anddevelop PCapplications forthepreparation ofdataincapitals; (2)theSecretariat
undertake astudy onthe"restructuring" oftheIDBfromamainframe toaPCenvironment; (3)the
IDBbemade operational withbasic information ontariffs andimports before broadening itsscope
toinclude non-tariff measures andother types ofrestrictions; and(4)access totheIDBcould begiven
tointernational organizations. Since then,theSecretariat hasprepared andcirculated simplified formats
forthesubmission andaPCsoftware forthepreparation ofdataincapitals inaformat compatible
forusewiththeIDBmainframe applications. Astudy onthe"restructuring" oftheIDBfrom a
mainframe toaPCenvironment wasinitiated inAugust 1996.
WTO-WCO Coordination
19. Members expressed thedesire forincreased cooperation withtheWCO withrespect tofuture
changestotheHarmonizedSystem.UnderthecurrentWCOagenda,changestotheHarmonizedSystem
aremade every 4years andthenextupdate isbeing prepared fortheyear2000. Thus, theCommittee
suggested thatbetter communication between thetwoorganizations would beadvantageous forthe
implementation ofHarmonized System 2000changes andtheirintroduction, asnecessary, intoWTO
schedules ofconcessions. TheChairman undertook toinitiate consultations onthisissue.
Future work oftheCommittee
20. TheCommittee willfocus onthefollowing issues:
- continue thesupervision oftheimplementation ofUruguay Round concessions relating totariffs
andnon-tariff measures, andofconcessions byacceding countries;G/MA/W/7/Rev.3
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- improving theefficacy ofitswork through ensuring a)thesubmission oftimely notifications
ofQuantitative Restrictions andtimely provision oftradeandtariffinformation byMembers;
b)thecompletion andimplementation oftheloose-leaf schedules ongoods andthedevelopment
ofanelectronic verification process; bothofwhich willprovide Members withthenecessary
information forsuchsupervision;
- complete theestablishment andverification ofthechanges intheHarmonized System approved
bytheWorld Customs Organization;
- review theprocedural issues identified withrespect tomodifications ofschedules;
- establishmentofacloserworkingrelationshipwiththeWorldCustomsOrganization,particularly
withrespect totheintroduction offuture changes intheHarmonized System;
- implement modifications totheIntegrated DataBaseinorder todevelop adatabase thatwill
facilitate theinformation-gathering and-dissemination processes, thusimproving theanalytical
tools atthedisposal oftheWTO anditsMembers.
Section C-Recommendations
21. TheCommittee recommends totheCouncil forTrade inGoods that:
- Given theimportance ofcompleting assoonaspossible thechanges intheHarmonized System
agreed tobytheWorld Customs Organization, Members dotheirutmost tocomplete the
verification ofHS96 changes already submitted soastoprevent requests foradditional waivers.
Also, tourgethose Members whohavenotsubmitted complete documentation todosoassoon
aspossible.
- MembersagreeontheimportanceoftheworkbeingconsideredintheMarketAccessCommittee
todevelop thebasic information andtheanalytical toolsthatwillenable Members toimprove
theefficiency oftariffnegotiations. [andtounderstand theissues involved insuchnegotiations
andtoidentify theirinterests inrespect ofthem.] These analytical toolsinclude [interalia]G/MA/W/7/Rev.3
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thedevelopment andimplementation ofloose-leaf schedules ongoods andofaPC-based
Integrated DataBase.
- Inorder tofulfil thiswork, Members:
(a) complete theirnotification obligations onquantitative restrictions;
(b) participate fullyinthedevelopment oftheIntegrated DataBaseandsubmit therequired
trade andtariff datatotheWTO Secretariat;
(c) undertake tosubmit assoonaspossible theirloose-leaf schedules ongoods inelectronic
format; and
(d) complete assoonaspossible theverification ofsubmitted loose-leaf schedules ongoods.
- TheCTG takeintoaccount theneed, when necessary, fortechnical assistance fordeveloping
countriesandleastdevelopedcountriestofacilitatetheimplementationoftheserecommendations.
[- Members noteAustralia 'srequest forpositive consideration ofitsproposal forfurther
comprehensive industrial tariff negotiations from thebeginning of2000.]
[- Members beencouraged toconsider andwork toward effecting further tariff liberalization,
including interaliathrough plurilateral efforts]
[- Members takenoteoftheliberalization proposal contained intheUSpaper andrecognize that
iftheInformation Technology Agreement isachieved itwillconstitute apositive development
forfurther trade liberalization]
[- Members takenoteoftherecent review ofproduct coverage fortrade inpharmaceutical
products, ascontained inthepaper submitted bytheEUonbehalf ofthose Members concerned,
which willresult inextraproducts (465) receiving duty-free treatment andrecognize thepositive
effects ontrade liberalization.]