World Organization Annual Report 2002 WTO Members (As of 15 April 2002)

Albania Gambia Angola Georgia New Zealand Antigua and Barbuda Ghana Niger Australia Greece Nigeria Austria Grenada Bahrain, Kingdom of Guatemala Oman Bangladesh Guinea Bissau Pakistan Barbados Guinea, Rep.of Panama Belgium Guyana Belize Haiti Paraguay Benin Honduras Peru Bolivia , Botswana Brazil Brunei Darussalam India Qatar Bulgaria Indonesia Romania Burkina Faso Ireland Rwanda Burundi Israel St. Kitts and Nevis Cameroon St. Lucia Canada Jamaica St. Vincent & the Grenadines Central African Rep. Japan Senegal Chad Jordan Sierra Leone Chile Kenya Singapore China Korea, Rep. of Slovak Republic Chinese Taipei Kuwait Colombia Kyrgyz Republic Solomon Islands Congo Congo, Dem. Rep. of the Lesotho Costa Rica Liechtenstein Sri Lanka Côte d’Ivoire Suriname Swaziland Cuba Macao, China Cyprus Madagascar Czech Republic Malawi Tanzania Malaysia Thailand Djibouti Togo Dominica Mali Trinidad and Tobago Dominican Republic Tunisia Ecuador Mauritania Egypt Mauritius Uganda El Salvador Mexico United Arab Emirates Moldova United Kingdom European Communities Mongolia United States of America Fiji Morocco Uruguay Finland Mozambique Venezuela France Myanmar Zambia Gabon Namibia Zimbabwe

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Table of Contents

Chapter One – Overview

Introduction ...... 2 The Doha Development Agenda ...... 2 Assisting developing and least-developed countries...... 3 Fuller participation by civil society ...... 4

Chapter Two - World trade developments

Main features ...... 8 Merchandise trade and output developments ...... 10 Trade developments in value terms...... 13 Trade outlook...... 17 Commodity Prices and Export Earnings of Developing Countries ...... 17

Chapter Three – Overview of developments in the international trading environment

Trade policy trends in WTO Members...... 30

Chapter Four – WTO activities

PART I...... 50 The ...... 50 WTO accession negotiations...... 52 Work of the General Council ...... 53 Trade in goods ...... 58 Trade in services...... 74 Trade-related aspects of intellectual property rights (TRIPS)...... 77 Resolution of trade conflicts under the WTO’s Dispute Settlement Understanding...... 79 Trade Policy Review Mechanism...... 111 Committee on Balance-of-Payments Restrictions...... 112 Committee on Regional Trade Agreements...... 112 Committee on Trade and Development ...... 114 Committee on Trade and Environment ...... 118 Plurilateral Agreements ...... 119 PART II...... 121 Technical cooperation...... 121 Training activities ...... 122 Cooperation with other international organizations and relations with civil society...... 122 Annex I – Recent publications...... 129 Annex II – Trade Policy Review Body – Concluding remarks by the Chair of the Trade Policy Review Body ...... 133

Chapter Five – Organization, Secretariat and budget

The organization ...... 152 WTO Secretariat: Divisions...... 157 WTO budget 2002 ...... 162

III List of tables, charts and boxes

Chapter Two - World Trade Developments

Chart II.1 Trade and output decline synchronously in major markets, 1996-2001 ...... 9 Chart II.2 Growth in the volume of world merchandise exports and GDP, 1990-2001...... 10 Chart II.3 Real GDP growth by region in 2000 and 2001...... 11 Chart II.4 Growth in the volume of merchandise trade by region in 2001...... 12 Table II.1 World exports of merchandise and commercial services, 1990-2001...... 13 Table II.2 Growth in the value of merchandise trade by region, 1990-2001 ...... 13 Table II.3 Merchandise trade of Africa, 1990-2001...... 14 Table II.4 Merchandise trade of developing countries, 1990-2001 ...... 15 Table II.5 Growth in the value of commercial services trade by region, 1990-2001 ...... 16 Chart II.5 Price developments in , 1990-2001...... 18 Chart II.6 Primary products’ long term decline in developing countries merchandise exports, 1955-2001 ...... 19 Chart II.7 Share of primary products in merchandise exports of developing regions, 1970-2001...... 19 Chart II.8 Share of primary products in developing countries merchandise exports in the late 1960s and the late 1990s 20 Appendix Table II.1 Leading exporters and importers of merchandise trade in 2001...... 22 Appendix Table II.2 Leading exporters and importers of merchandise trade (excluding EU intra-trade) in 2001...... 23 Appendix Table II.3 Leading exporters and importers of commercial services in 2001...... 24 Appendix Table II.4 Long-term changes in the product structure of developing countries merchandise exports, 1968-70 and 1998-2000...... 25

Chapter Three - Overview of developments in the international trading environment

Table III.1 Scope of bindings, average and bound tariff rates on industrial products for selected WTO Members ..... 32 Chart III.1 Initiations of anti-dumping and countervailing investigations, 1995-2001...... 34 Chart III.2 Producer Subsidy Equivalents (PSE) for Canada, the United States, the European Union and Japan, 1986-2000...... 36 Table III.2 TBT notifications of technical regulations and standards, 1995-2000...... 37 Table III.3 Sectoral coverage of Schedules ...... 38 Chart III.3 Geographical distribution of RTAs, both in force and under negotiation, 2001 ...... 40 Table AIII.1 Bound tariffs on industrial products: scope of bindings and simple averages...... 42 Table AIII.2 Bound tariffs on industrial products: simple averages by stage of processing and by category...... 43 Table AIII.3 Initiations of anti-dumping investigations by reporting WTO Member and affected exporter, 2000 ...... 46 Table AIII.4 Initiations of countervailing investigations by reporting WTO Member and affected exporter, 2000 ...... 48

Chapter Four - WTO activities

Table IV.1 List of the issue areas and the Friends of the Chair responsible for each...... 51 Table IV.2 Waiver under Article XIX of the WTO Agreement ...... 55 Table IV.3 Exporters subject to initiations of countervailing investigations, 1 July 2000-30 June 2001 ...... 68 Table IV.4 Summary of countervailing duty actions, 1 July 2000-30 June 2001 ...... 68 Table IV.5 Rules Notifications Submitted by WTO Members...... 69 Table IV.6 Summary of Anti-Dumping Actions, 1 July 2000 - 30 June 2001...... 72 Table IV.7 New requests for consultations in 2001 ...... 110 Table IV.8 International Intergovernmental Organizations - Observer Status in the WTO...... 124

Chapter Five - Organization, Secretariat and budget

Table V.1 Distribution of staff positions within the WTO’s various divisions 2002 ...... 154 Table V.2 Table of regular staff by nationality ...... 156 Table V.3 WTO Secretariat budget for 2002...... 163 Table V.4 Budget for the and its Secretariat, 2002...... 164 Table V.5 Members’ contributions to the WTO budget and the budget of the Appellate Body, 2002...... 165 Table V.6 List of main active extra-budgetary funds donated for technical cooperation and training activities...... 168

IV Abbreviations and symbols

APEC Asia-Pacific Economic Cooperation ASEAN Association of South-East Asian Nations CEFTA Central European Free Trade Agreement CIS Commonwealth of Independent States ECU European currency unit EFTA European Free Trade Association EU European Union FDI Foreign direct investment GDP Gross Domestic Product GNP Gross National Product IMF International Monetary Fund LAIA Latin American Integration Association MERCOSUR Southern Common Market NAFTA North American Free Trade Agreement OECD Organisation for Economic Cooperation and Development TOT terms of trade UNCTAD United Nations Conference on Trade and Development c.i.f. cost, insurance and freight f.o.b. free on board n.a. not available

The following symbols are used in this publication:

... not applicable 0 figure is zero or became zero due to rounding $ United States dollars

Billion means one thousand million.

Minor discrepancies between constituent figures and totals are due to rounding.

Unless otherwise indicated, (i) all value figures are expressed in US dollars; (ii) trade figures include the intra-trade of free trade areas, customs unions, regional and other country groupings; (iii) merchandise trade figures are on a customs basis, and (iv) merchandise exports are f.o.b. and merchandise imports are c.i.f. Data for the latest year are provisional.

V Chapter One

OVERVIEW Overview

2 Introduction The DohaDevelopment Agenda Introduction Overview eur nya diinlU$0blinanal,farlessthanmerelythe require onlyanadditionalUS$50 billion annually, that reachingallsevenoftheMilleniumDevelopmentGoalssetby the UnitedNationswould andbecomesamoral imperative inlightof theIMF/World Bankestimate within ourgrasp, Achievingsuchliberalization is benefitthesecountriesby almosteighttimesODA. estimates, bysome servicesandmanufactures–would, liberalization inallsectors–agriculture, And complete all theoverseasdevelopmentassistance(ODA)theycurrentlyreceive. developing andleast-developedcountries–thepoorestofpoor –threetimesmorethan indicate thatremovingallsubsidiestoagricultureinOECDcountries alonecouldreturnto Estimatesalso income byUS$2.8trillionandlift320millionpeopleoutofpoverty by2015. the World Bankestimatesthatabolishingalltrade barriers couldincreaseglobal round: Letusnotforgetwhatisatstake inthenew building andfurthermarket liberalization. downturn intechnologyinvestmentislikely toreducethepaceofglobalization. The combinationofhighertransaction costsandthe from theeventsof11September. largelyasaresultofthefallout Internationaltransaction costshavealsorisen, has output. globaltrade hassufferedmoreasaresultoftheburstingITboomthan Consequently, investment prospectsremainfragile. althoughoverall the roleoflocomotiveinglobaleconomy–isincreasinglypositive, inventories arebeingre-builtandtheoutlookforUSeconomy–whichcontinuestoplay WhileITinvestmentsarenotexpectedtorecoverpreviouslevelsanytimesoon, weakened. consumption inaddition, this werethefallinITinvestmentandrun-downofinventories; Majorcausesfor GDP andtrade recordedtheirweakest performanceinmorethanadecade. global Lastyear, the backgroundofasharpslowdowninglobaleconomicgrowthandtrade. we arenowoncoursetonegotiatethenecessarychangesandnewrules. WiththeDohaDevelopment Agenda, multilateral rulesisrelianceonthelawofjungle. Eventhesternestcriticsofglobalizationtodayacceptthatalternativeto round. thelaunchofanewtrade skeptics hadsuggestedwas beyondtheorganization’s grasp: ButatDoha the WTO achievedsomethingthatmany necessary newrulesshouldtake. still remainselusiveonpreciselyhowexistingrulesshouldbechangedandwhatform Agreement economicandpoliticalconditionsofarapidly changingworld. reflect thesocial, agreed thatcertainadjustmentstotheruleswereneedediftrading systemistobetter far toocommonafeatureofour TV screens. whicharestill andinthe haunted facesofthehungryandhomeless, around theworld; inthecontinuinglethalconflictsthatrage We haveseentheuglyalternatives, are manifest. than onequarteroftheworld’s populationintoourmembership. welcomingmore LithuaniaandMoldova tothe WTO, Chinese Taipei, the accessionofChina, Lastyearwas alsooneinwhichweconcluded frustrating failureatSeattletwoyearsearlier. Italsobroughttoanendtheuncertaintycreatedby stimulating trade anddevelopment. isarecognitionoftheimportancetoglobaleconomy round oftrade negotiations, couldagreethelaunchof anew inaddition, That Ministers, must beseenasasuccess. inNovember2001, Qatar, mere factthattheMinisterialConferencecouldbeheldatDoha, the Inlightofthetragic eventsof11Septemberanditsaftermath, and developingcountries. aturningpointinthehistoryof WTO andinrelationsbetweendeveloped Conference, eeoigcutis Soabasicpriorityoftheinternational trade communitymust be –as developing countries. distorting subsidiesanddismantle theirexistingbarriersoncompetitiveexportsfrom Richcountriesneedtodomorereduce trade entering themarkets ofrichcountries. Butcurrentlyproductsofdevelopingcountries facemanyobstaclesin of thatgrowth. income intherichcountrieswhich trade liberalization wouldgenerate. This calls foraglobaltrade policythatoffsetstheseadversetrendsbyconfidence- The ITsectorhasalargershareininternationaltrade (15%)thaninglobaloutput(5%). against The DohaDevelopment Agenda offerstheprospectofastabletrade framework, theDirector-General notedthatmanyMembergovernmentsand WTOLast year, critics The rewards ofbringingtheworld’s disaffectedanddeprivedinto theglobalcommunity theyear2001was abovealltheyearofDohaMinisterial From the WTO perspective, Poor countriesneedtogrowtheirway outofpovertyandtrade canserveasakey engine increment to Assisting developingandleast-developed countries participate a three-yeartime-fr success oftheDohaDevelopment outcome ofa boost toresourcesfordevelopment. must imper year substantively improvingexportprospectsofdevelopingcountriesbeingleftuntilthefinal 1 J also agricultur which reachonebilliondollarsaday). subsidies –buttheseareonlyaverysmallfr therefore betoreducesubstantiallysuchsupport(andeliminatethespecificexport would otherwisebeearningforeignexchange developing countriesandforceseventhemostefficientproducersoutofmark continue toattr tariffs developing countriesmanaged, of thepopulation–livinginrur the DohaDevelopment and thenegotiationsmustensurethatsectoriscleanly represents overhalf agriculture accountsforoveronethirdofexportearnings a sustainableandproductiveagricultur four k countries canmaximizethegainstheyareabletoreapfromtr escalation, access tomark dynamic partofworldmerchandisetr products formostoftheirforeignexchangeearningswhichcutsthemofffromthe countries areevertodiversifytheireconomiesaw processing/tr in governmentprocurement, services “new issues on mark and non-tariffbarriers days” three years WT consensus thatwillbetterallofourlives need isthewill–onpartofbothdevelopinganddeveloped world–toforgea poorer members and improvingtheruleoftr in thebusinessofbringingdownbarrierstotr replaced withthehopeandexpectationofDohaDevelopment legitimacy andaccountability enforcement ofitsrules which functionsontheprincipleofconsensus our Memberswillbetofindcommonground. , undertaking” anuary 2005. O’ - - - - Development hasbeenplaced–rightly –atthecoreofnewtr Happily Our Membershavesetthemselvesatoughtarget: T , . he prospectsforfurthertr there iseveryreasontobeextremelyvigilant. s nextMinisterialmeeting, Agriculture: T T T , ey areas: ariff escalation: ariff peaks: for someoftheseissues extiles andclothing: the productsinwhichdevelopingcountriesaregloballycompetitivenevertheless , et accessforindustrialproducts which beganin2000, al productsisfourtimesthatofindustrialproducts; , , . atively bebeatendowninthenegotiationsiftr which tiltsthetablesagainstdevelopmentofindigenous negotiate the DohaDeclar , T ” ansformation (andthusmovementupthev he three-yeardeadlineisambitious WT so thatallMemberswillsignontoagreementsreached. which includecompetitionpolicyandforeigndirectinvestment, ets act relativelyhightariffs(inbothdevelopedanddevelopingcountries); . Given theback-loadingofthisagreement, O MinisterialConference the conclusionofnegotiationswillbeonbasisa W , this isthebackboneofalmostalldevelopingeconomies study afterhasshownhow which isthe ame –willbetheimprovedcapacity ofdevelopingcountriesto e havethemachineryinplacetoconcludethistr . Y , et massiveagricultur , even moreinsidiousanissuethantariffpeaksisthatof conclude andimplement that and tariffpeaksescalation. Agenda recognized–thecreationofconditionsinwhichdeveloping . And itgivesthenegotiatingagendasasolidbasisindemocr this isthegreatestexportearnerformanydevelopingcountries ade law ation invigor tr . ade liber , ade facilitationandtheenvironment, WT are nowmovingintoahighergear on whichimportantdecisionswillhavetobetak to agreaterextentthaneverbefore to beheldinMexicothesecondhalfof2003. Agenda –negotiationswhichare to becompletedwithin O’ al areas–dependsforitsincomesonthedevelopmentof , s corebusiness and backintogivingopportunityhopetoour ade alization aregood. In addition, al sector , . ates andextendsthenegotiationsforliber , including textilesandclothing, . such escalationmustberootedout. al supportintheOECDcountriesundercuts One signoftheirinfluenceisthat aconditionfor action oftotalagricultur . ade anddevelopment, . A k T . T he F his isessentialfortheacceptanceand , or nearly50developingeconomies ay fromthedependenceonafewprimary ey elementofadevelopmentagendawill but certainlyachiev the aver , WT . Agenda. despite lowaver T he negotiationsonagricultureand O isaMember to concludethenewroundwithin T alue-added chain). he agendaalsocoversar , T ade istoprovidetheneeded and fornearly40ofthemit age OECDboundtariffr he Seattlesyndromehasbeen “integr with thebulkofchanges action isneededonthisfront ade . . ated” Agenda. T Negotiations havebegun , ade round. his requiresactionin although itisstill age non-agricultur al supportpayments back intoexpanding to influencethe -driven organization, ade round. able covering bothtariffs as plannedfor . “single . T T If developing As inthe T he poorestpart he challengefor he ets wherethey tr What we WT ansparency en atthe At Doha, ange of alizing O isback ate for , “early these atic al , 3 Overview Assisting developing and least-developed countries The Doha Development Agenda recognizes that technical assistance and capacity- building are essential to assist developing countries to implement WTO rules and obligations, prepare for effective participation in the work of the WTO, and thus to benefit from the open, rules-based multilateral trading system. Enhanced developing-country capacity to understand the multilateral trading system and particularly the implications of specific agreements is a key starting-point. We need also to help developing countries in their struggle to develop their capabilities to comply with existing agreements. But that is by no means enough. Crucial to their effective participation in the multilateral trading system is a reinforcement of their capacities to formulate trade policy and to build and refine negotiating skills. Technical assistance is needed to train negotiators, build efficient their customs regimes and plug porous tax systems. We in the WTO are working hard on this, and are very pleased and grateful that the new trade agenda has been strongly supported by donors, who have increased our core budget Overview Fuller participation by civil society and pledged CHF 30 million to the Doha Development Agenda Trust Fund, almost double our target. But the requirements of developing countries for trade-related technical assistance extend well beyond what the WTO can and should provide. We need to be absolutely clear about the limits of what the WTO can do and cannot do with regard to the Doha Development Agenda. It is not for the WTO to tell countries to make T-shirts or shoes, to build airports or seaports. 10% of WTO’s budget goes to the excellent International Trade Centre whose core business is to help businesses navigate through agreements and rules to get products to markets. The core business of other organizations is to help with physical infrastructure. The WTO cooperates closely with these other agencies. But the WTO must stick to its core business, which is trade liberalization: bringing down barriers to trade so that people everywhere can benefit. At present, we are on target to meet the mandate handed down by ministers at Doha. We are making every effort to ensure that, by the time of the 2005 Ministerial, all our Member governments will be able to effectively put their views forward. Capacity is being built for negotiations and for trade policy formulation. And developing-country Members can themselves help to speed the process: there is no need to await the conclusion of the . For example, south-south trade grew faster in the 1990s than world trade, and now accounts for more than one third of developing-country exports. And the World Bank reports that tariffs of other developing countries on developing countries’ manufactured exports are considerably higher than those of developed countries. The quicker those walls come down, the quicker the returns will flow to the developing countries. Other important development and good governance issues, such as transparency in , investment, competition policy and , need direction from the highest political levels. Trade facilitation, for example, is expected to generate huge returns, according to studies by APEC and UNCTAD. An Inter-American Development Bank study showed how, in South America, a truck delivering products to markets across two borders took 200 hours, of which 100 were bound up in bureaucratic delays at the border. The need for improvement to this public sector infrastructure is desperately urgent. Domestic red-tape and poor governance, wherever it occurs – whether in developed or developing countries – is costly and corrosive.

Fuller participation by civil society

WTO’s efforts, mentioned above, to create a more involved and informed membership are part of a broader move towards increased external transparency. We note that there are an increased number of stakeholders in the international trade arena in this era of enhanced globalization. Although there is no consensus among WTO Members in favour of involving NGOs directly in the organization’s work, the existing guidelines on external relations were designed by Members to give the Secretariat an appropriate degree of flexibility to allow responsible NGOs a voice in the dialogue. Within these guidelines, an increasing number of symposia have been held, involving a wide range of civil society actors, including parliamentarians, chambers of commerce, trade unions and many groups with particular focus on such issues as development and the environment. We have also greatly improved the dissemination of information to the general public through our website, which in the first quarter of 2002 recorded more than half a million visitors per month. Visitors downloaded monthly the equivalent of over 100 million pages of text. Overview of Chapters

Chapter Two reviews the broad developments in trade flows and considers in some detail the market for primary commodities, upon the export of which many developing countries

4 are highly dependent. The widely expected slowdown in the expansion of world output and trade turned out to be much stronger than most observers had projected at the beginning of the year 2001. Global output increased only marginally and world trade decreased somewhat, both developments in sharp contrast to the preceding year when both trade and output expanded at record rates. A salient feature of the recent weakening in global economic activity was the almost simultaneous slowdown in the three major economies from the third quarter of 2000 onwards. Three factors played a role in the steeper-than-expected slowdown: the bursting of the global IT bubble; the sluggishness of Western Europe’s activity; and, to a much lesser extent, the events of 11 September. The result was that the contrast in the developments of world output and trade between the years 2001 and 2000 could hardly have been more striking. As regards commodities, the report notes that although the elements shaping commodity price trends have not changed much over the last decades, the importance of commodity prices to the export earnings of developing countries Overview Fuller participation by civil society as a group has declined dramatically, the dynamism of world trade in manufactures – in particular that of office and telecom equipment – playing an important role in this outcome. Developing Asia and Latin American regions made extraordinary progress in reducing their dependence on primary product exports from the early 1970s to the late 1990s. Africa, on the other hand, still depends on commodities for 80% of its export earnings. It should also be noted that the regional trade data provided above are affected by the predominance of the major exporters of the region in the regional trade values; in the late 1990s, the exporters of manufactured goods among the developing countries were still outnumbered by the primary product exporters in all developing regions with the notable exception of Asia. Indeed, comparison of the export structure of individual developing economies in 1968-70 and 1998-2000, reveals that out of 103 developing exporters only 27 managed to make the successful transition from predominantly commodity to predominantly manufactures exports. Chapter Three reviews trade policy trends in WTO Members and notes that, possibly contrary to common belief, trade in industrial products continues to be subject to significant tariff protection in both developed and developing countries, with ample scope for further liberalization. One important feature of the tariff landscape is that low-average tariff levels mask much higher rates applied to imports in “sensitive” sectors, such as textiles and clothing, footwear, travel goods, transport equipment or electric machinery. Another is that tariff escalation – to protect upstream industries in relation to primary production of metals, minerals, fibres, fish and agricultural produce – continues to be an enduring feature of most tariff regimes, affecting the market access interests of developing countries. The slow pace of elimination of restrictions on textiles and clothing, the rising trend in the use of trade defence instruments and the continued use of subsidies, particularly in agriculture, also characterized the trading system in 2001. Product regulations and standards have also become a growing issue for market access in goods, whereas a number of Members pursued the privatization and deregulation of services activities, accelerating the pace of autonomous liberalization in the services sector, and leading to policies in place that are generally more liberal – in some instances, much more so – than those specified in Schedules. Also noteworthy is that with virtually all WTO Members being partners in at least one regional trade agreement (RTA) and with several being part of two or more, RTAs have become by far the most important exception to the MFN principle which lies at the core of the WTO. The many ongoing activities involved in the regular operation of the WTO – including the various councils, committees and trade policy reviews – are detailed in Chapter Four. The report concludes with Chapter Five containing administrative information on the Organization, its Secretariat and budget.

5 Chapter Two

WORLD TRADE DEVELOPMENTS World trade developments

8 Main features .Mainfeatures 1. World TradeDevelopments above-average expansionofChinainbothboom andbustyearsofinternational trade has The itstillrecordedanoutstandinglyhighgrowthforbothimportsandexports. markets, trade lastyear. theirimportsmoderated somewhattheslowdownofworld the burstingofITbubble, Asthe threeregions’exportsandoutputhadbeenlessaffectedby expanded byatleast3%. output Inboththelatterregions, output andimportsin Africa andtheMiddleEast. increase inexportearningsoffuel-exportingcountries2000and 2001alsosustained The substantial elements makingthetransition economiesthemostdynamictraders in2001. FDI inflowsandsubstantiallyhigherearningsfromfuelexportsinrecent yearsaremajor Increasesin transition economiescontributed toadouble-digitincreaseinregionalimports. Economicgrowth closeto5%inthe reported astrongtrade andoutput expansion. terrorist attacks. earnings ontourismarelikely tobeamongtheeconomiesmostseverelyaffectedby countries whichoftendependformorethanonethirdoftheirtotal foreignexchange The Caribbean impact onairtransportation and tourismdependingonairtransportation. The major trade repercussionofthe11Septembereventsin2001hasbeennegative disruption ofUSmerchandiseimportsandafallinairtransportation inthefourthquarter. ashortterm atemporary reductioninstockmarket prices, and businessconfidence, GDP growthin2001wellabovetheEUaverage. recordeda IrelandandtheUnitedKingdom, closest economiclinkswiththeUnitedStates, surplus ingoodsandservicesincreasedlastyearthetwoeconomiesEUwith IndeedtheEUoverall Europe decreasedmorestronglythanitsimportsfrom Western Europe. growth was evenweaker thanthatoftheUnitedStatesin2001andUSexportsto Western The euroarea’s domesticdemand attributed totheweaker UnitedStatesorglobaldemand. than onethirdofworldtrade –was duelargely to domesticfactorsandshouldnotbe them recordedtheirweakest outputperformanceforthelast30years. Someof wereseverely affected. and themostdynamictrade performanceinthe1990s, These countrieswhichoftenhadthefastest-growingeconomies these productcategories. impact onthoseeconomiesin Asia which hadspecializedintheproductionandtrade of a contraction ofinternationaltrade inofficeandtelecomequipment whichhadadramatic fall inITinvestmenttogetherwiththelessdynamicprivate consumptionofITproductsledto The contrasting starklywiththehighinvestmentgrowthrates intheprecedingyears. year, contributed tothestagnationoftotalinvestmentexpenditureindevelopedworldlast September. the eventsof11 toamuchlesserextent, and, thesluggishnessof Western Europe’s activity; global ITbubble; steeply asintheUnitedStatessecondhalfof2001. Japan startedtoslowsomewhatlaterthanintheothertwomarkets butdecreasedas Importsof import growthhavedecelerated almostinparallel sincetheautumnof2000. theirexportand fosteringtherebythe Asian recovery, a marked slowdownintheirexports, 2000 whenUnitedStatesandEuropeanUnionimportscontinuedtoexpandrapidly despite Contrary tothetrade developmentsbetweenthefirstquartersof1998and 2000 onwards. simultaneous slowdowninthethreemajoreconomiesfromthirdquarterof goods andservicesacontraction of7%couldbeobservedinthefinalquarter. OECD countriesstagnatedatitsprecedingyear’s levelinthefourthquarterandfortrade in Outputofthe year farbetterthantheaverage annualchangesinglobaltrade andoutput. at recordrates. developments insharpcontrast totheprecedingyearwhenbothtrade andoutputexpanded both Global outputincreasedonlymarginallyandworldtrade decreasedsomewhat, be muchstrongerthanmostobservershadprojectedatthebeginningofyear2001. Although China’s trade expansionwas curtailedbythe weaknessofitsprincipalexport someregionsandcountries Despite theweakening oftheglobaleconomyin2001, The tragic eventsof11Septemberled tofurthererosionofanalreadyweakconsumer The sluggishnessofgrowthin Western Europe–theonlyregionwhichaccountsformore The burstingoftheITbubbleledtoacontraction ofIT-related investmentand theburstingof Three factorsplayedaroleinthesteeperthanexpectedslowdown: A salientfeatureoftherecentweakening inglobaleconomicactivitywas thealmost Quarterly year-to-year changesillustrate theseverityofdownturnincourse The widelyexpectedslowdownintheexpansionofworldoutputandtrade turnedoutto Chart II.1 Trade and output decline synchronously in major markets, 1996-2001 (Percentage change on a year-to-year basis) United States 20

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led to a steady rise in China’s share in world trade. In 2001, the dollar value of China’s merchandise imports (and exports) exceeded those of the Middle East, Africa or Latin America, if Mexico is excluded. International capital flows, and in particular FDI flows which had been supporting the strong trade expansion in the second half of the 1990s, decreased in 2001. A large part of this decrease can be attributed to falling stock prices and thus to the end of the boom in mergers and acquisitions which inflated the transaction value of FDI flows in recent years, in particular among industrial countries. Long-term net capital flows to the developing countries have decreased for the fourth consecutive year in 2001 according to World Bank estimates. The decline in 2001 occurred despite a moderate increase of public lending and FDI flows and was due to the repayment of bank credits and a reduction in new obligations and portfolio investment. The net capital flows to the developing countries as a group, mask the highly divergent situation among the developing regions. The East Asian developing countries (mainly the newly industrialized economies and China) have recorded since 1998 a large current account

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In 2001, m 9 recorded largeyear although atpresentitisstilltooearlytomak 4 e Act (A r ate oftheUScurrencyhasappreciatedbymore c African countries h ational, action ofover a aged morethan40%abovetheir1995level. 9 n 5 the lowestgrowthinoutputmorethantwo e theireconomiesmoreopenandinternational GOA) wouldhavesupportedexportsof d ade policyinitiatives i . s Arms” While Dohahelpedtore-establishbattered e

that theremov e 9 x 6 as againstrongenoughtofinancethe F p or non-fuelcommoditypricesthe o initiative oftheEUorUnited -to-year v r together withmoder all UnitedStatesimports t , s 9 America,

beneficiaries ofthe ade betweentheyears2001and 7 a n tr d ade-weighted basisin2001. , ade

sent outaclearsignalthat G al oftr ariations overthelastsix M 9 . D 8 . . However e P Africa andthatofSouth Asia aretheprincipal Since 1996, On theotherhand, r , c

Another featurew 1 h a 9 ade barrierswill n 9 . , d 9 0 i In 2000, quota-free access s 9 e - , 2

e ate domestic it is 0 x p . A 0 o 2 In particular GOA, 1 r 0 the prices . t 0 s e an 0 output , ade despite 2 as the 0 0 1 , growth was strong not only globally but also in all major geographic regions, while in 2001 large regional differences in trade and output growth prevailed. Global merchandise export volume is estimated to have contracted by one per cent in 2001 following an 11% increase in 2000. Global GDP expanded by slightly more than 1% in 2001 following a near 4% rise in the preceding year. Quarterly estimates reveal that there was an uninterrupted decline of trade (on a seasonally-adjusted basis) from the third quarter of 2000 until the last quarter of 2001 when trade levels of the fourth quarter of 1999 were again reached. Fourth quarter data in 2001 for OECD countries did not show any arrest of the trade contraction. This is hardly a surprise given the continued weakness in overall GDP growth and in particular the steep fall in inventory level in OECD countries which further depressed import levels. The stagnation of investment expenditure in the OECD countries had been one of the salient features of the slowdown in world economic activity in 2001. In contrast to the second half of the 1990s, when the strength of the investment expansion exceeded consumption growth, the fall in capital expenditure in the IT sector in 2001 made investment the principal factor in the global economic slowdown. Though private consumption and public expenditure growth weakened too, these components of demand nevertheless rose by 2 to 2.5% in the developed world. Although investment represents a much smaller part than consumption of GDP, it accounted for more than one half in the reduction of the GDP growth in the developed countries. It is the decline in fixed investment and the steep fall in inventories1 which had dramatic repercussions on global trade flows in 2001. The bursting of the information technology (IT) bubble was a major factor in the fall of ade investment. Owing to the lack of detailed investment expenditure data at present, one has to recur to industry statistics to illustrate the depth of the cut in IT-related production and investment. Global sales of semiconductors, which are the most widespread component in IT ade developments chandise tr

products, in 2001 recorded a decrease of 29% to US $146 billion and capital spending of orld tr the world semiconductor industry decreased at a similar rate. World wide shipments of W Mer and output developments personal computers totaled 128 million units, a 4.6% decline from the previous year, the first year since 1985 in which PC sales decreased. Mobile phone sales dropped by 3% in 2001 to nearly 400 million units after more than doubling in the two preceding years.2 As the importance of IT investment and trade differs significantly among major regions, the impact of the downturn in the information and telecom sector was felt more strongly in the output and trade growth of North America, Asia and Western Europe than in other regions. These developments are a factor which contributed prominently to the sluggish overall trade and output growth of North America and Asia, the regions which benefited most in the recent past from the boom in IT industries. North America’s merchandise export volume recorded the strongest regional decline in 2001 at 5%. Somewhat surprisingly, the export decrease was larger than that of imports. Several factors have contributed to this outcome: first, economic growth among North America’s major trading partners in Latin America, Asia and Western Europe was also weak

Chart II.3 Real GDP growth by region, 2000-2001 (Annual percentage change)

Transition economies

Africa

Middle East

Western Europe

Asia

North America

1 The decline of inventories knocked 1.2% off 2001 GDP growth in the United States and Canada Latin America according to IMF estimates. 2000 2 World Semiconductor Trade Statistics, Direct Communication; Gartner, Press Releases dated 7 and 29 January and 7 March 2002. 0 1 2 3 4 5 6 7

11 World trade developments Merchandise trade 12 and output developments by aboutonequarterwhileexportsrosemorethan10%. non-EU membercountries the EuropeanUnion, former estimates indicatethattheregion’ developments intheregion’ imports thanexportsfor financial crisisyear1998andalsolessthanitsexportdecrease T combined. Mexican exportperformancethatw real effectiveappreciationoftheP Asian developingcountriesexportingprincipallyITproducts reported astrongexportgrowthalthoughatmuchlowerr years in morethan25 America and of USimports exports rosebyabout9%whilethoseofMexicostagnated, contr export category–officeandtelecomequipmentcausedthefirstdeclineof merchandise import v but deceler the Secretariat, adequately theactualexportpricedevelopments major exportcommoditiesorinternationalmark countries intheseregionsprovidethenecessaryinformation, imports nearlyunchangedwhiletheexportvolumew petroleum by4%whilethecorrespondingexportsdecreased. category decreasedby7.5%. Automotive productsrecordedadeclineinimportvolumesof3%butexportsthis and thestrengthofUSdollarhascostgoodsmark the precedingyear have expandedbyabout8%and import growthofabout15%w sluggishness ofworldtr exceeding thatofexports F N L W T e A eder he decreasein a r c o a s e t o ( G C r i i n A s t W T V Latin T a n n h t s h r he sluggishnessofeconomicgrowthwithin he tr

n o e olume dataforthetr i A

ast inthetr o t ation, estern Europe’ A a m r n i m n o w r m u i Y

t n e e E a

e ugoslavia recovered, t s r I America’ u l ansition economies’r r I i

h c . i p r c 4 o a

e a ated farlessthanworldtr i p Kazakhstan and r n e c W

e . - t n 6 T h estern Europe t he verylargeconcentr it appearsthattheirtr Asia’ a e ade performanceofthetwolargesteconomieswithinregion. g s moder

v . e

o Import growthw s exportandimportvolumeslowedmark c - s importvolume h l one canobservethatintr 4 alue amongthetr u . a a m n T W v ade in2001. he declineinmerchandiseexportsw g e Asia reducedtheregion’ o e r . e ate over ade of a r .

) l g d o T e - s twolargesttr he economiccrisisin Azerbaijan. f 2 ,

with theriseinimportsexceedingthatofexports Imports ofconsumergoodsstillroseby1.5%andthat m together withtheshrinkageofglobaldemandfor apid tr e Africa andtheMiddleEastarer r all economicgrowthk c s exportvolumestagnatedwhileimportsdecreased. eso ledforthefirsttimeinmorethantenyearstoa 0 h as inferiortothatofallotherLatin as closeto20%forthefuelexporting Russian a ade expansionw , ade andremainedpositive Merchandise exportvolumegrowth isestimatedto ation ofMexicanexportsontheUSmark ade expansionin2001w n nearly 2%, d ansition economies in2000, Imports intoP i s 2 e aders

t r a a-tr d Asia andinitsmajorexportmark , . e s netexports 4 T J According toroughestimatespreparedby w ade growthw

apan andChina. urk b as lesspronouncedthanduringthe y as upbynearly3%.

ey causedacontr as strikinglydifferentfromthe r oland, ets mightnotalw e ept thevolumeofmerchandise 6 g i et sharesathomeandabroad. o . n ate thanintheprecedingyear as verysteepinJ largely owingtothecontr edly in2001. In contr T which reportedthelargest

and reportedpricesfortheir i r , n ade oftheeconomies . and w 8 as lessdynamicthanin2000 ,

as weak T ather fr 2 with importgrowth he smallerdeclinein as almostunchangedfrom 0 0 ast, registered onlya 1 as largelydueto 1 0 action ofitsimports American countries agile asonlyafew er thanexportsto ays reflect China andIndia T Preliminary here w E I 1 m x Asia’ apan andthe 2 p p . ets andthe o o r r Asia’ t t s ets s as alarge s exports Br 1 , 4 azil’ s major North action F Asian or s . 1 6 moderate increase. Foreign direct investment inflows have most likely also contributed to the strength of imports of the transition economies.

3. Trade developments in value terms

The value of world merchandise exports shrank by 4% to US $ 6.0 trillion in 2001. This was the largest annual decrease recorded since 1982. All three major merchandise product groups – agricultural products, mining products and manufactures – experienced a fall in their export value. Commercial services trade slipped slightly by 1% to US $ 1.4 trillion last year. This was the first year-to-year decline for world trade in commercial services since 1983. The decrease in the value of transportation and travel services was not fully compensated by the rise in the value of other commercial services, comprising, inter alia, communication, insurance and financial services as well as royalties and licence fees. The stronger resilience of commercial services trade in last year’s sluggish world economy may also be due to a smaller price decrease for services than for goods, and to the fact that services trade is not subject to the large cyclical inventory variations which contributed to the depressed merchandise trade in 2001.3

Table II.1

World exports of merchandise and commercial services, 1990-2001

(Billion dollars and percentage) ade developments Value Annual percentage change orld tr ade developments in value terms r 2001 1990-2000 1999 2000 2001 W T

Merchandise 5990 6.5 5.0 12.5 - 4.0 Commercial services 1440 6.5 2.5 6.0 - 1.5

The overview of world merchandise trade by region provided in Table II.2 below shows that all seven geographic regions recorded a weaker export and import performance in 2001 than in the preceding year. With the exception of the transition economies all regions 3 Deflators calculated for US services trade reported even a fall in their merchandise export earnings. The steepest decrease in both indicate a small price increase for services exports and a moderate price decline for export and import values can be observed for Asia – a region which in the 1990s expanded services imports. its trade substantially faster than the world as a whole. The double-digit fall in the

Table II.2

Growth in the value of merchandise trade by region, 1990-2001

(Billion dollars and percentage)

Exports Imports

Value Annual percentage change Value Annual percentage change

2001 1990-2000 2000 2001 2001 1990-2000 2000 2001

World 6162 6 13 -4 6439 7 13 -4 North America 994 7 13 -6 1410 9 18 -6 Latin America 349 9 20 -3 381 12 16 -2 Mexico 159 15 22 -5 176 15 23 -4 Other Latin America 190 6 18 -1 205 9 10 0 Western Europe 2484 4 4 -1 2527 4 6 -3 European Union (15) 2290 4 3 -1 2335 4 6 -2 Excl. intra-EU trade 873 5 7 0 914 5 15 -4 Transition economies 285 7 26 5 268 5 14 11 Central/Eastern Europe 129 8 14 11 159 10 12 9 Russian Federation 103 - 39 -2 54 - 13 19 Africa 141 4 28 -5 134 3 5 1 Middle East 239 7 42 -9 174 5 10 4 Asia 1671 8 18 -9 1544 8 23 -7 Japan 405 5 14 -16 350 5 22 -8 China 266 15 28 7 244 16 36 8 IT traders (6) a 582 10 19 -13 530 9 25 -13

aThe Rep. of Korea, Malaysia, Philippines, Chinese Taipei, Thailand and Singapore.

13 World trade developments 14 Trade developments in value terms 4 vis-à-vis thedollarunchanged in2001. seven economieswhichk Malaysia istheonlycountryamongthese a Africa (Billion dollarsandper Mer T able II.3 Angola, Algeria,RepublicofCongo,EquatorialGuinea,Gabon,LibyanArabY Other Major fuelsexporters South chandise tr Africa Africa ade of ept itsexchanger centage) a Africa, 1990-2001 ate V 2001 alue 141 merchandise importsdecreasedalmost asmuchworldtr 2001 assomeobservershadbeen expectingearlyintheyear exporting 20%)whileexportscouldbemaintainedatthepreceding yearlevel. imports (– while itsimportsstagnated. contr gener while importsfromnon-EUmembers decreasedby4%, than theregion’ dynamic thanthatoftheothercountriesinregion. as awhole T the largesttr v stagnated andthose ofNorw respectively orsomewhatlessthanworldtr commodity exporters T v a largetr substantial merchandisetr discrepancy inthemerchandisetr stagnated, slightly morethan6%. other faster thanitsimports weak strong tr that ofJ surplus merchandise exportsofJ export shipmentsof other regions neverthelesscontinuedtoreportamerchandisetr and allowedthemtofurtherincreaseimportsdespitefallingexportsin2001. and 2000whichboostedtheseregions’exportearningsforeignexchangereserves imports merchandise exportearningsandatthesametimeanincreaseoftheir States recordagrowthofexportsanddeclineimports sluggish domesticgrowth, to NAFT 10%, decreased bynearly8%, h ercaino hi urnisvsàvsteU dollar the depreciationoftheircurrenciesvis-à-visUS the fallinglobaldemandforITproductsandaccentuatedbyv 46 29 66 urk unisia, ariations differedsignificantlyamongthemajortr ariations intr W Latin North T Africa andtheMiddleEastareonlytworegionswhichrecordedafallintheir ey) reportstrikinglydifferenttr he regionaltr action ofexportsintheorder10%. ened sharplyinthecourseof2001. estern Europe’ al. African countriescombined(excludingSouth African countries much fasterthanitstr . . A partnersdecreasedby9%, Mauritius andMadagascar)havingastrongertr T apan, T ade performancein2001w T America’ ade deficit. he East America recordedacontr he threemajorEuropeantr hese developmentsarelargelyexplainedbytherecoveryinoilprices1999 V 1990-2000 , according totheinformationatpresentav enezuela andEcuador while overthepasttenyearsMexico’ ader inLatin Exports ade performancein2001withexportersofmanufacturedgoods(suchas Annual percentagechange as theirimportsdecreasedsomewhatfasterthanexports s exports Asian ITtr s merchandiseexportsandimportsdecreasedby3%2% ade datafor amahiriya, NigeriaandSudan. 4 3 2 4 s tr African fuelsexportersandastrongriseintheirimports Among thenon-fuelexportingcountries . . . ade didnotprovideacounterweighttotheweak United Statesexportstoandimportsfrom United Statesmerchandiseexportsdecreased, Preliminary estimatesfor2001indicateasharpdropinthe apan andthesixEast . 2000 half thedeclineinitsexports America, In thecaseofEU ade surpluswhiletheother 28 only initstr 12 62 aders 2 Argentina’ ade with ay decreased, Africa comprisesdivergenttrendsforfuelsexportersand , , ade balancesasthefuelsexportersrecordeda however however 2001 ade performances action ofitsmerchandiseexportsandimportsby decreased somewhatfasterthanthoseoftheregion -5 as againoutstandingintheregionalthoughitalso -2 -9 aders outsidetheEU(Switzerland, 1 W faster thanimportsfromNAFT s economiccrisisledtoasteepcontr ade withoil-exportingcountriesdidtheUnited estern Europe(4%and1%respectively). , , maintained theirtr ade in2001. imports of reported asharpriseinimportsand Asian ITexportersw , V 2001 134 exports tothirdcountriesstagnated alue 29 70 36 s tr aders Africa) bothexportsandimports . ade expansionw While Swissexportsandimports ailable , African countriesaresaddledwith T urk Br leading toareductionofitstr . ade expansionthannon-fuel or asmuchworldimportsin Within theregiontr . Exports andimportsofMexico azil’ 4 ade surplus ey –affectedby its economic . 1990-2000 J ade andshr apan’ . , T . s exportsrosebynearly6% one noticesalsoverylarge ade surpluswhichequals here isalsoalarge W Imports Annual percentagechange estern Europe’ s merchandiseimports Asia bothdecreasedby 3 5 3 3 as provok A (5%). . as farmore at 7%, aluation effectof ank evenmoreso Norw er UStr 2000 action ofits -2 11 14 . . Despite its 5 ed mainlyby ay and F slightly China’ Both or the s ade in Oil ade Exports 2001 s ade -1 -3 10 1 , Table II.4

Merchandise trade of developing countries, 1990-2001

(Billion dollars and percentage)

Exports Imports (c.i.f.)

Value Annual percentage change Value Annual percentage change

2001 1990-2000 2000 2001 2001 1990-2000 2000 2001

Developing countries 1991 9 23 -6 1850 9 20 -5 Oil exporters 350 7 46 -9 198 4 15 7 Non-oil exporters 1590 10 19 -5 1653 10 21 -6 IT traders (6) a 568 9 19 -13 530 9 25 -14 Other dev. economies 1022 11 19 0 1123 10 18 -2 China 266 15 28 7 244 16 36 8 Hong Kong, China 191 9 16 -6 202 10 18 -6 Mexico 159 15 22 -5 176 15 23 -4 Brazil 58 6 15 6 58 10 13 0 India 44 9 19 4 51 8 10 -2 aThe Rep. of Korea, Malaysia, Philippines, Chinese Taipei, Thailand and Singapore.

crisis – decreased in 2001 by one quarter after a surge of one third in the preceding years. Its exports, however, increased at double-digit rates helping to reduce Turkey’s large current account deficit. ade developments orld tr The transition economies form the only region which showed a positive export and ade developments in value terms r import growth in dollar terms last year. Falling oil prices and the weakness of Western W T Europe’s imports on which exports of Central/Eastern Europe depend increasingly had been adverse factors for the regions’ export growth. However, these factors were more than offset by the strength of intra-regional trade which was supported not only by the higher level of imports from the oil exporters in the region but also by a sustained high level of FDI inflows. Exports were particularly buoyant in Central and Eastern Europe with exports up at double- digit rates. Import growth in the fuel exporting countries, Russian Federation, Kazakhstan, Azerbaijan and Turkmenistan, was in a range of 15-25%. Merchandise trade developments of developing countries are summarized below in Table II.4. Merchandise exports of developing countries decreased by 6%, somewhat faster than the world average in 2001, largely due to the marked contraction of shipments from the East Asian traders of IT products and that of oil exporting developing countries. Among the other developing countries China, Brazil and India recorded an increase in their exports while those of Hong Kong, China and Mexico decreased. The share of the developing countries in world merchandise exports decreased slightly from their peak level of nearly 30% in 2001. Merchandise imports of the developing countries as a group declined by about the same rate as world trade. A further rise of the imports of the oil-exporting developing countries and of China contrasted with the steep decline in imports of the East Asian traders of information technology products. Among the other major developing economies, import decreases are reported for Hong Kong, China; Mexico and India while those of Brazil stagnated. For the least-developed countries tentative estimates based on incomplete information point to a stagnation of their exports and imports in 2001. Given the importance of fuels in exports of the LDCs, this outcome, if confirmed by the actual numbers, implies an increase in real terms and for the third year in a row a faster export growth than for the world. Although developing-countries’ exports decreased faster than imports, they still recorded an overall merchandise trade surplus in 2001. The aggregate surplus of developing countries is the combination of the surpluses of the IT traders, the oil-exporters and China and a deficit for the remaining developing countries. Commercial services trade

World trade in commercial services is estimated to have decreased by 1% to US $ 1.44 trillion in 2001. This first decline of world commercial services exports since 1983 affected all services categories and all the major regions. According to the preliminary data available, it is estimated that the receipts from travel and transportation services decreased by three and 2% respectively. Exports of other commercial services, the largest services category (including communication, insurance, financial services and royalties and licence fees) stagnated in 2001.

15 World trade developments 16 Trade developments in value terms 5 insurers as areductioninpremiumpaidtoforeign events of11Septemberwhichareregistered payments madeintheaftermathoftr services islargelyduetotheinsur T he importcontr W (Billion dollarsandper Gr T W North Latin T Asia Middle East Africa r able II.5 ansition economies estern Europe orld India EU (15) Other Latin Mexico United States J China Hong K owth inthevalueofcommer apan . America America ong, America China action ofothercommercial centage) ance agic cial servicestr V 1440 2001 alue 298 670 604 263 298 accounted formorethan45%of tr tr decrease intheirexportsandimports2001. contr higher commercialservicesexportsreceiptsthanintheprecedingyear contributed totheregion’ the severecontr in theCaribbean. commercial services very sharpgrowthforservices(exportsandimports)isreportedinthecategoryofother pronounced forJ still upby2%, increase inexportsbutadecreaseimports attributed tothethirdmajorservicescategory: categories although tr earnings impacted manyeconomieswhicharehighlydependentontouristsfortheirforeignexchange respectively and Mexico services exportsofLatin deceler fall ofitstr the caseof Argentina. 2001 thanintheprecedingyear 9% lowerthanintheprecedingyear accentuated bytheimpactof11Septemberevents the precedingyear contr major regions 20 13 58 45 31 30 55 63 31 43 ade growthin ade aver T Asia’ US commercialservicesexportsdecreasedby3%, Latin T US importsofcommercialservicesdecreasedby7%in2001followingasurge16% he scantinformationav he impactoftheslowdownincommercialservicestr action ofbothexportsandimportsin2001. action hadmajorrepercussionsontheservicesexportsofitsNAFT ation ingrowthr s exportsandimportsofcommercialservicesdecreasedagainonlythreeyearsafter . ade byr America’ T aged belowits1997levelin2001. . 1990-2000 he mostdependenteconomiesareusuallysmallisland avel andtr Mexico’ avel andtr T . , Argentina itseconomiccrisisandthehighlypricedpesocontributedtosteep he differenceinthedevelopmentofUSservicesexportsandimportscanbe US tr which recordedafallintheircommercialservicesexportsof5%and7% . Exports Annual percentagechange Most ofthemreportedadeclineinexportsandimports despite asharpslowdowninthesecondhalfofyear action duringthe Asia andinparticularJ apan and 14 18 s commercialservicesexportsareestimatedtohavebeen4%lowerin ... avel expendituredroppeddr egion, 6 7 5 7 7 7 5 7 8 5 9 5 9 . s exportsdwindled, All categoriesofUSservicesimportsrecordedasteepfallwhichw . ansportation receipts ansport receiptscontr ates between2000and2001couldbeobservedincommercial America, 2000 1990-2001 s commercialservicestr Austr 26 17 11 15 10 12 13 15 13 6 9 1 9 1 9 0 ailable forservicestr alia. , mainly duetothecontr African commercialservicesexportsin2000, Asian financialcrisis the MiddleEastand 2001 -1 -4 -3 -7 -4 -3 -2 -7 14 10 . China, ...... 0 1 3 2 T owing tothedownturnofUSeconomywhilein he widespreadfearofairtr apan, . acted assteeplyUSexpenditureinthese Latin Hong K . 5 amatically after11Septemberandaver Sluggish over 1430 Isr Other commercialservicesrecordedan V 2001 together withexchanger 227 631 188 589 351 107 alue ade of ade decline America’ 55 17 72 24 56 38 57 36 23 ael, Egypt andSouth ong, by farthelargestexporterin less thandiditsservicesimports . Asia andforNorth . Indeed, Africa T China andIndia, action ofexportsfromMexicoand ade differedlargelyamongthe he UnitedStates’import s commercialservicesimportswere 1990-2000 all economicandmerchandise . T and theMiddleEastpointtoa he downturnw Asia’ Imports Annual percentagechange 13 24 ansportation severely ... Africa, 6 7 8 5 7 5 7 5 7 3 4 4 8 s commercialservices . . In thecaseofIndia, . T A partners he sharpest ate changes however which combined 2000 America’ 14 10 19 12 15 16 10 18 16 , 6 1 1 8 1 7 2 many ofthem as particularly both reporta , , s imports Canada recorded 2001 , aged -1 -6 -7 -3 -8 21 11 as ...... 2 1 2 0 0 2 0 . a Middle East, recorded a steep fall in its services exports – due to sharply lower earnings from tourism. Western Europe’s services trade stagnated in 2001 following a small increase in the preceding year. Measured in euro terms the deceleration in 2001 is considerably more pronounced as the dollar appreciation vis-à-vis the euro was far less in 2001 than in 2000. Within Western Europe marked differences in trade performance could be observed between the three largest traders (United Kingdom, Germany and France) which reported a fall in their exports and imports, and Italy and Spain which experienced a marked increase in both exports and imports. Ireland continued to report by far the most dynamic services trade in Western Europe, concentrated on its other commercial services trade. The transition economies’ commercial services trade continued to expand strongly benefiting from the region’s high economic growth. Both exports and imports expanded by almost 10% in 2001. The expansion of services trade was strong across all sectors. On a country level, above average export growth has been observed for Poland, Hungary and the Slovak Republic while imports were buoyant in the Russian Federation, Ukraine and Hungary.6

4. Trade outlook

Information available at the time of writing (end March 2002) indicates that the deceleration of US demand was arrested and might have started to pick up in recent months. In Western Europe data on business confidence and order income point to an improvement in the business climate which should lead to a gradual recovery of investment ade developments

and a more vigorous consumption growth in the course of the year. In Asia, the growth orld tr prospects for Japan are still considered to be bleak for 2002 while a number of other Asian W Commodity Prices and Export Earnings of Developing Countries countries, including the Republic of Korea, report a strengthening of consumer and investment expenditure. Global economic activity is expected to pick up in the first half also due to the rebuilding of depleted inventories and is expected to gain more momentum in the second half of the year. Despite an acceleration of output growth in the course of the year, the projected annual GDP growth is unlikely to be larger than in 2001. According to the IMF, World Economic Outlook Projections (March 2002) world GDP growth is expected to be 2.5% in 2002, unchanged from 2001.7 World merchandise trade is expected to expand only marginally on a year-to-year basis despite a projected increase of 6% between the fourth quarter of 2001 and that of 2002. Given the low trade level in the fourth quarter of 2001 it would take a steady increase of 5% at annual rates from the first quarter onwards for trade to recover to the average level of 2001.8 A strong rebound in trade is not the most likely outcome given the moderate output gains in major markets and today’s more sober prospects for the IT industries.9 It is the projected lower growth of the IT industries which might lead in the coming years to a smaller excess of trade over output growth than was observed in the second half of the 1990s.

5. Commodity Prices and Export Earnings of Developing Countries

Commodity price fluctuations have been again quite considerable in 2001, with the number of primary products recording a price decrease exceeding by far those which recorded a price increase. However, a number of primary products recorded double-digit increases for highly diverging reasons with the result that the yearly average of non-fuel commodity prices decrease of 5% masks wide variations. The sluggishness of global manufacturing output10 contributed to the weakness of prices for industrial inputs, in particular non-ferrous metals. Prices for copper, the most important non-ferrous metal 6 Commercial services trade data by country are reported in Appendix Table II.3. exported by developing countries, recorded a double-digit decrease in 2001 to a seven year 7 Estimate based by using PPP weights. Using low. Prices for some tropical beverages suffered from a market situation in which a strong GDP measured at 1995 market exchange rates extension of the area planted and good harvests increased the supply well above global would result in a world GDP growth of 1.4% respectively in both years. demand growth. Coffee prices slumped by nearly 30% reaching their lowest level in 8 The volume of world trade in the fourth 30 years. Cotton prices dropped by nearly 20% affecting strongly the overall export earnings quarter of 2001 is estimated to have been 6% of Benin, Chad, Mali and Burkina Faso. By contrast, banana prices recorded an increase of lower than in the preceding year. 9 Projections made by industry sources for nearly 40% (largely due to unfavourable weather conditions and plant diseases in Ecuador the year 2002 include a stagnation of global and Central America which led to a fall in output) and those of cocoa beans of 20%. The sales of mobile phones and a moderate widespread animal diseases in Western Europe which led to a fall in West European output increase of PC sales. 10 The industrial production in OECD countries and consumption, was a major factor in the year to year increase in prices of lamb and beef decreased by 2.5% in 2001. on international markets, reflecting a (health) security premium. Spot crude oil prices

17 World trade developments Commodity Prices and Export 18 Earnings of Developing Countries F 12 11 1990s compared tothoseofmanufacturesinthe strength ofnon-fuelcommodityprices from IMF decades in the1990scomparedtoprevioustwo ebruary 2002. It isquestionablewhethertherelative Prices forprimarycommoditiesaretak , and thesomewhatlesserpricev , , can bemaintained. International Financial Statistics Financial International ariation en , between 1955andtheearly1980sbutsincemid-1980sdecline acceler A partofthischangecanbeattributedtothechangingfortunes thefuelsmark decades lowest eversince1955. developing countries’totalexport earningsdroppedinthesecondhalfof1990sto countries’ exports 50s and60saccountedbetween19741982formorethan onehalfofdeveloping share offuelsindevelopingcountries’totalmerchandiseexportsrose quitesteadilyinthe share whichfellbelow30%attheendof1990s primary productsaccountedformorethan90%ofexportearningsindevelopingcountries merchandise exportsofthegroupdevelopingcountriesoverlast45years goods isremarkable export structurebyexpandingthelistoftheiritemsandaddingmanufactured between 1974and1994thatofnon-fuel primaryproducts the evolutionof shareofprimaryproductsinthe merchandiseexportsoffourdeveloping earnings ofdevelopingcountries dr commodity pricestotheexportearningsofdevelopingcountriesasagrouphaschanged commodity pricetrendshavenotchangedmuchoverthelastdecades countries’ participationininternationaltr of manyprimaryproductshaveprovok v dependence ontheindustrialcountriesbusinesscycles(forbothvolumeandprices), Over dropped by14%. observ exports isnotalw outcome in particularthatofofficeandtelecomequipment–isanevenmore importantfactorinthis countries’ exportserodedsharply above thoseinthesecondhalfof the1980s and inthefactthatrealoilpricessecondhalfof1990shad beenonaver which w products (agricultur prices remainedonaver about thesamedecreaseobservedformanufacturedgoodsoverperiod. 1 1 1 1 S a

agaries oftheweatherandlong-termtrendfallingrelativepricesovermanydecades 0 1 2 3 o 4 5 6 7 8 9 U ( P C amatically 0 0 0 0 u 0 0 0 0 0 0 I n n 1 r i r Chart II.6showsthedr T And whiletheshareoffuelsinprimary-product exportsofdevelopingcountriesexceeded Commodity pricedevelopmentshaveinthepastdeterminedbulkofforeignexchange h t c d 9 i

his gener v all, a c e 9 i a c s r e

0 l e

I ation ofshort-termdevelopments u t M :

e s d I ,

, in 2001, F as reducedbynearlyonehalfto12%betweenthemid-1980sand thelate1990s I . i

, . n

e the progressmadebydevelopingcountriesasagroupindiversifyingtheir 1 5 I Evidence forthiscanbefoundinthesteadilyshrinkingshareofnon-fuel primary d n 9 v e t e x 9 e 9 . r . 12 0 n 1 l al picture a o

= T t i p o his profoundchangeintheroleofcommoditiesdevelopingcountries’

1 n m a 0 non-fuel commoditypriceswereonaver . ays fullyperceivedinthepublicdebate l Prices formanufacturedgoodsareestimatedtohavedecreasedby2%.

0 e With sharplyloweroilpricessince1986, F al productsandnon-ferrousmetals)indevelopingcountries’exports ) i 9 n n . a 2 t n s c ,

i a i age 6%abovetheirlevelin1990. however l n

S

t amatic long-termdeclineoftheshareprimaryproductsin i a n t 9 i s t 3 t e i c s r

a n , . n . a d masks substantialregionaldifferences Consequently

However t W i 9 o T O 4 n

S ed questionsaboutthebenefitsfordeveloping a e N . c l r

o ade If onetak e t n M t r a , - a r a f 9 i the dynamismofworldtr u a . d n . 5 t e u

Although thefourelementsshaping e l e

f s p a , , t

r c i 1 m the highpricevolatilityofcommodities i t m u 9 a C r t a es alongertermperspectiveofsever 9 e e r r u 9 s s y 0 . . d a 6

c e - T o 2

here w p m 0 e , m t 0 age 14%belowtheirlevelin1990, r which isoftenlimitedtothe o o 11 1 , d l e 9 the weightoffuelsindeveloping i the contributionoffuelsto u t 7 i m e as ar s ather steadytrenddecline 9 8 ade inmanufactures– , the importanceof . Chart II.7illustr 9 9 ated sharply . In 1955, ets 2 Crude oil 0 age 0 the . 0 T , he al ates their 2 , 0 . a 0 1 Chart II.6 Primary products' long-term decline in developing countries merchandise exports, 1955-2001 (Percentage share)

100

90 All primary products 80

70 Non-fuels primary products 60

50

40

30

20 Fuels 10

0 1955 63 68 70 80 90 2001 regions since 1970. These regions differ not only in respect to their reliance on primary products for their overall export earnings but also by their progress made in diversification ade developments

over the last 30 years. While the developing Asia region made extraordinary progress, orld tr reducing its dependence on primary product exports from more than one half in the early W Commodity Prices and Export Earnings of Developing Countries 1970s to less than 15% in the late 1990s, the corresponding decrease for Africa is far more limited, from around 90% in the 1970s to about 80% in the late 1990s. The Middle East region reduced its reliance on primary products more than Africa but still depends on primary products for more than two thirds of its export earnings. Latin America, which was in a rather similar situation to Africa and the Middle East in the early 1970s, substantially reduced its dependence on primary products over the last 30 years from nearly 90% in 1970 to about 40% in the late 1990s. The reduction of the share of primary products was particularly pronounced in the second half of that period. The increased outward orientation of trade policies in the region since the mid 1980s – in particular that of Mexico – contributed significantly to these developments. In sum, developing Asia now has a very low dependence on primary products – even less than the developed regions – while Africa and the Middle East still depend for more than two thirds of their exports on primary products – in particular on fuels. Latin America as a region has sharply reduced its reliance on primary commodities which remains, however, still substantial at 40% in 2000. It should be noted, however, that the regional trade data provided above are affected by the predominance of the major exporters of the region in the regional trade values. In Latin

Chart II.7

Share of primary products in merchandise exports of developing regions, 1970-2001

100

90 Africa 80

70 Developing Middle East 60 Economies Latin America 50

40

30

20

10 Developing Asia 0 1970 1980 1990 2000

19 World trade developments Commodity Prices and Export 20 Earnings of Developing Countries and below50%in1998-2000, grouped whichhadonaver exporter ofprimarycommoditiestothatanmanufactures the late1990sisgivenonhorizontalaxis axiswhilethecorrespondingshareof products inthelate1960sisprovidedonvertical number to111economieswithobserv 120 developingeconomies and theendofobserv comprises allthosecountrieswhichhadbeenprimaryproductexportersatthebeginning both thelate1960sand1990s for 111developingcountrieswhichinformationisav exports over half(nearlytwothirds)oftheregion’ regions although3countriesaccountedfornearlyone concentr regional merchandiseexportsin2000. region accountedformorethanonehalfandthetopfivebetween78%88%of America, exports atthecountrylevel. among thedevelopingcountriesarestillout-numberedbyprimaryproductexporters one halfoftheirmerchandiseexports exporters ofprimaryproducts(103out111)i.e became anexporterofprimaryproductsinthelate1990s observ is noobserv described as exporters ofmanufacturesinthelate1960sand1990swhichcanbe S o ( l S C u a P Chart II.8presentsinformationontheshareofprimaryproductsinmerchandiseexports In thelate1960s h r h t e c Share of primary products in 1968-70 all exportsin2000. a a e e r

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9 m 8 . 6 - e 2 0 n IVcontainsnodataasthere ant , p 0 r in quadr r 0 c i m E 0 h ation ofregionalmerchandise x a a p r Africa), o n y

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9 t 0 h e . ant II

T his 1 0 s 0 The result of the comparison of the export structure of individual developing economies in 1968-70 and 1998-2000 reveals that out of 111 developing exporters only 27 made the successful transition to an exporter of manufactured goods. A total of 76 developing economies remained primary product exporters and eight were “traditional” exporters of manufactured goods. No country shifted from the position of an exporter of manufactures to that of a primary product exporter. As could be expected from the regional results reported above, the number of manufacturing exporters was and remained the largest in Asia. Among the 27 countries which made the shift from primary commodity exporter to exporter of manufactured goods, there are ten Asian economies, nine countries from Latin America, but only seven from Africa and one from the Middle East. Only in Asia do the exporters of manufactures outnumber those of primary products. Reviewing the countries which have made the transition to an exporter of manufactures, it is interesting to find not only countries which industrialized and reached higher income levels over the last decades but also some LDCs. For some of the new manufacturing exporters, processing zones have played and still play a crucial role in this development (e.g. Bangladesh, China, Costa Rica, Dominican Republic, Madagascar, Mauritius and Morocco). The experience shows that being landlocked, small or least developed does not necessarily imply that it is impossible to become an exporter of manufactures (e.g. Nepal, Mauritius and Bangladesh). Admittedly the 50% primary-product share used as a yardstick is a rather crude measure for the change in developing countries’ export structure. However, the data assembled also indicate that out of the 76 developing economies which were still primary product exporters in the late 1990s, 58 managed to reduce their dependence on primary products and 24 did so sharply (i.e. with a share of primary products lowered by at least 20 percentage points ade developments

over the 30-year period). orld tr The data assembled above leads to the following conclusion: while the developing W Commodity Prices and Export Earnings of Developing Countries countries as a group have sharply reduced their dependence on primary products, this shift is uneven between the developing regions and even more so among individual economies. Considerable progress has been made not only on the aggregate value of developing- 13 13 The 35 developing-economy exporters of country exports but also on a population weighted basis. For about two thirds of the manufactured goods (eight traditional and developing economies, however, commodity prices remain a major determinant of their 27 new) account for more than three quarters of the total population of all developing annual merchandise export earnings as they still export more primary products than countries in the late 1990s. Excluding the two manufactures. The poor prospects for recovery in real commodity prices14 and the projected most populous countries, China and India, the remaining 33 developing exporters of moderate demand growth for primary products relative to that of manufactures continue to manufactured goods represent still more than call for a long-term development strategy in most developing countries to reduce their high one half of the population living in the 15 developing world. dependence on primary commodity export earnings. This long-term strategy is not in 14 World Bank, Global Economic Prospects and conflict with current efforts undertaken to improve the market access for agricultural the Developing Countries, 2002, p. 229-231. products. Indeed, the need for the liberalization of market access for agricultural products is 15 S. Page and A. Hewitt, World Commodity highlighted by the fact that at present the majority of the developing country exporter of Prices: Still a problem for developing countries?, Overseas Development Institute, primary products depend for more than one half of their merchandise export earnings on 2001. agricultural products.

21 World trade developments Commodity Prices and Export 22 Earnings of Developing Countries Singapore T K Mexico Malaysia Spain Belgium Saudi Austria Sweden Switzerland Austr b a China United Kingdom F Germany United States (Billion dollarsandper Leading exporter Appendix T J W Ireland Russian F Br T Norw Italy Canada Hong K Netherlands Indonesia T India Denmark apan aipei, r hailand otal ofabove orea, Retained impor ance Includes significantr azil orld domestic exports re-exports re-exports domestic exports alia ay Ar Exporters Rep Chinese ong, b abia ed. . of China able II.1 b ts ar e definedasimpor e-expor 6162.4 5299.8 s andimporter centage) 121.7 150.7 122.9 158.5 170.7 110.8 179.9 266.2 273.5 319.5 569.6 730.9 404.7 103.2 241.3 262.2 229.8 190.7 V 66.1 55.6 88.5 70.3 75.2 82.1 68.2 63.4 83.4 58.2 64.2 57.9 56.7 20.0 43.9 51.8 alue ts orimpor 100.0 ts lessr Share ts forr 11.9 86.0 1.1 2.0 2.4 2.0 2.6 0.9 2.8 1.4 1.8 2.9 1.1 1.2 1.3 1.1 1.0 4.3 4.4 5.2 6.6 9.2 1.7 1.4 0.9 1.0 0.9 3.9 4.3 3.7 0.9 0.3 3.1 0.7 0.8 s ofmer e-expor e-expor 1990-2000 ts. t. Annual percentagechange -2 chandise tr 10 10 15 13 13 13 15 13 12 - - 6 9 8 8 5 4 3 6 5 4 4 5 3 7 6 6 3 8 6 9 9 9 3 - 2000 13 15 20 20 22 22 39 28 18 16 10 53 14 14 11 28 15 32 18 16 28 16 19 3 3 3 2 5 0 2 8 1 5 7 2 - ade in2001 2001 -16 -12 -13 -17 -10 -12 -14 -16 -15 -4 -3 -5 -2 -6 -5 -4 -1 -4 -2 -7 -3 -7 -5 -1 -9 -6 4 1 3 7 8 6 2 4 1 - Singapore Spain K Mexico Belgium Malaysia T Austria Switzerland Br T Sweden Ireland F United Kingdom J United States Germany China T W Austr P India Russian F Italy Canada Netherlands Denmark Hong K P T apan aipei, urk r hailand otal ofabove oland ortugal orea, ance azil orld retained imports retained imports Importers ey alia Rep Chinese ong, b ed. . of China b a a 6438.8 5454.5 1180.5 141.1 116.0 144.5 176.2 169.0 107.2 322.9 350.1 332.5 493.0 243.6 233.7 228.3 207.9 202.3 V 74.4 60.4 31.5 73.9 84.1 58.3 60.2 62.5 63.9 50.9 53.5 50.0 50.5 45.6 37.7 40.5 alue 100.0 Share 84.7 18.3 2.2 1.8 2.2 2.7 2.6 1.2 1.7 0.9 0.5 1.1 1.3 0.9 0.9 1.0 1.0 0.8 0.8 5.0 5.4 5.2 7.7 3.8 0.8 0.8 3.6 3.5 3.2 0.7 3.1 0.6 0.6 1990-2000 Annual percentagechange 15 11 10 10 16 16 10 - - 7 9 8 6 6 1 4 2 6 3 6 9 4 5 4 9 3 8 3 7 6 3 5 9 - 2000 13 34 21 15 23 13 27 26 16 22 13 23 22 19 36 10 11 18 34 5 2 5 6 3 9 6 6 5 7 7 6 0 0 - 2001 -12 -14 -10 -23 -20 -10 -14 -11 -26 -4 -7 -2 -4 -3 -3 -8 -3 -6 -1 -2 -1 -7 -5 -6 -6 19 2 1 0 0 8 2 0 - T K Singapore Saudi Russian F Mexico Br T Norw b a European Union(15) (Billion dollarsandper Leading exporter Appendix T China United States J W Switzerland Malaysia P United India Indonesia Austr Philippines Canada Hong K T Czech Rep Argentina V T Isr South Hungary apan aipei, urk hailand otal ofabove oland orea, enezuela Retained impor Includes significantr azil orld (excl. ael re-exports domestic exports re-exports domestic exports EU tr ey alia ay Ar Africa Exporters Rep Chinese Ar ong, abia ade) ed. ab Emir . . of China able II.2 intr b b ts ar ates a- e definedasimpor e-expor 4745.0 4288.2 s andimporter centage) 150.7 122.9 121.7 103.2 170.7 158.5 872.5 266.2 730.9 404.7 262.2 190.7 V 55.6 66.1 68.2 58.2 64.2 57.9 82.1 88.5 43.9 56.7 63.4 35.5 42.9 33.6 33.4 26.7 28.6 20.0 29.0 29.3 30.8 31.2 alue ts orimpor 100.0 ts lessr Share ts forr 18.4 15.4 90.4 3.2 2.6 2.2 1.2 1.4 2.6 3.6 1.4 3.3 1.2 1.4 1.2 5.6 8.5 1.7 1.9 0.9 1.2 1.3 0.7 0.9 0.7 5.5 0.7 0.6 0.6 0.4 4.0 0.6 0.6 0.6 0.7 s ofmer e-expor e-expor 1990-2000 ts. t. Annual percentagechange -2 chandise tr 10 13 10 13 15 12 15 13 17 10 7 8 9 6 6 6 5 5 7 3 9 9 5 8 8 8 8 6 9 3 9 8 - - - 2000 17 20 22 39 15 28 20 18 53 22 15 32 18 14 11 28 16 19 28 14 15 28 16 10 13 58 16 12 12 22 7 2 9 5 4 - ade (excludingEUintr 2001 -13 -17 -16 -12 -12 -16 -10 -16 -15 -10 -5 -2 -6 -5 -5 -3 -7 -7 -9 -1 -2 -5 -6 -2 -8 12 15 10 12 6 0 7 1 4 1 - Singapore Switzerland T Mexico T K P India Br United States J European Union(15) China T EU tr W Austr Malaysia T Russian F Isr Czech Rep United Hungary Canada Norw Argentina V Hong K Indonesia Philippines Saudi South apan aipei, urk hailand otal ofabove oland orea, enezuela azil orld (excl. ael retained imports retained imports Importers ey alia ay ade) Ar Africa Rep Chinese Ar ong, abia ed. ab Emir . . b of China intr b a-tr ates a- a a ade) in2001 5017.3 4531.4 1180.5 116.0 141.1 107.2 176.2 350.1 914.0 243.6 228.3 202.3 V 84.1 60.4 31.5 63.9 60.2 53.5 36.6 50.0 50.5 58.3 74.4 40.5 35.1 36.5 33.9 32.1 32.4 20.3 28.7 18.8 31.2 31.4 alue 100.0 Share 90.3 23.5 18.2 2.3 2.8 1.7 1.2 0.6 1.3 2.1 3.5 1.2 1.1 0.7 1.0 1.0 1.2 7.0 4.9 1.5 0.8 0.7 0.7 0.7 4.5 0.6 0.6 0.4 0.6 0.4 4.0 0.6 0.6 1990-2000 Annual percentagechange 10 15 11 16 10 16 11 12 20 10 10 - - 7 8 9 2 6 1 6 6 8 9 5 5 9 9 7 2 2 5 8 4 - 2000 17 -1 21 34 13 16 22 26 23 23 10 13 14 19 22 15 36 27 34 14 15 11 11 15 18 40 5 3 3 7 8 1 4 - 2001 -14 -12 -20 -10 -11 -23 -10 -26 -19 -5 -4 -3 -2 -6 -8 -4 -7 -7 -6 -3 -6 -7 -7 19 12 14 16 1 2 0 8 6 6 - 23 World trade developments Commodity Prices and Export Earnings of Developing Countries World trade developments Commodity Prices and Export 24 Earnings of Developing Countries series foralar Note: Spain Italy J F Germany United Kingdom United States (Billion dollarsandper Leading exporter Appendix T Hong K Netherlands egu-Luxembourg Belgium- Austria Canada Denmark China Singapore K Greece India T Sweden Switzerland Austr Ireland T Norw Malaysia T P Mexico Isr T W apan aipei, urk r hailand otal ofabove oland orea, ance orld ael ey alia ay Figur Exporters Rep Chinese ong, es foranumberofcountriesandter . of China ge numberofeconomies. able II.3 1440.0 1254.0 s andimporter centage) 108.3 262.9 V 56.7 59.5 63.3 79.8 79.0 50.9 43.0 42.6 30.0 34.7 22.8 31.0 28.4 26.4 19.7 20.1 20.8 20.8 25.9 15.9 19.2 15.6 13.6 14.8 12.8 12.6 12.0 11.3 alue 100.0 Share 18.3 87.2 3.9 4.1 4.4 5.5 5.5 7.5 3.5 3.0 3.0 2.1 2.4 1.6 2.2 2.0 1.8 1.4 1.4 1.4 1.4 1.8 1.1 1.3 1.1 0.9 1.0 0.9 0.9 0.8 0.8 s ofcommer ritories havebeenestimatedbytheSecr 1990-2000 Annual percentagechange 18 12 11 14 11 18 14 12 12 6 7 1 5 5 2 8 7 6 9 6 3 7 5 8 4 4 6 2 9 8 7 - cial servicesin2001 2000 -4 -3 -1 -2 -3 -5 13 13 21 15 13 12 17 26 18 19 15 17 25 32 6 0 3 9 5 7 2 0 5 8 8 - 2001 -11 -23 -21 -1 -7 -1 -3 -6 -3 -1 -5 -2 -2 -1 -7 -7 12 14 15 16 7 7 2 0 0 3 4 3 3 4 0 - etariat. Annualper F J Netherlands Italy United Kingdom Germany United States Canada egu-Luxembourg Belgium- China Ireland Spain Hong K India Austria K Singapore Sweden Denmark Russian F T Mexico United Austr Malaysia T Br Switzerland Norw Indonesia T W apan aipei, r hailand otal ofabove orea, ance azil orld Importers alia ay Rep Chinese Ar ong, ed. ab Emir . of China centage changesandrankingsar ates 1430.0 1221.6 106.7 128.5 187.6 V 60.0 52.3 58.5 88.5 39.6 38.9 36.4 33.6 32.2 32.6 20.5 22.9 23.6 23.7 29.0 20.0 22.7 18.3 19.0 17.0 16.4 16.3 15.9 15.8 15.5 15.1 14.4 alue 100.0 Share 13.1 85.3 4.2 7.5 3.7 4.1 6.2 9.0 2.8 2.7 2.5 2.4 2.3 2.3 1.4 1.6 1.7 1.7 2.0 1.4 1.6 1.3 1.3 1.2 1.1 1.1 1.1 1.1 1.1 1.1 1.0 e af 1990-2000 fected bycontinuitybr Annual percentagechange 24 19 13 13 10 10 12 10 10 6 2 3 6 2 8 5 7 4 5 7 4 8 6 8 3 6 5 3 9 3 2 - 2000 -3 -2 -3 -1 -2 -1 -1 16 16 23 30 10 15 13 18 19 13 14 19 30 6 1 3 2 7 5 8 2 2 4 à - eaks inthe 2001 -1 -2 -8 -5 -3 -7 -4 -1 -8 -3 -6 -7 -2 17 18 21 6 1 2 2 0 5 0 6 1 4 1 0 4 à à - K Guinea Bissau Guinea Ghana Gambia Gabon Egypt Côte d’Ivoire Congo Congo Comoros Chad Centr Cape Cameroon Burundi Burkina F Benin Angola Algeria Africa V Uruguay T Suriname St.V St.Lucia St.Kitts andNevis P P P Nicar Netherlands Montserr Mexico Martinique J Hondur Haiti Guy Guatemala Grenada El Salv Ecuador Dominican Rep Dominica Cuba Costa Rica Colombia Chile Br Bolivia Belize Barbados Argentina Antigua andBarbuda Latin (Per exports Long-term changesinthepr Appendix T amaica rinidad & eru ar anama eny enezuela azil aguay ana incent &Grenadines centage shar a agua al V America , ador erde as Dem. African Rep at aso , T obago 1968-70 and1998-2000 Antilles Rep able II.4 . . e) . oduct structur 1968-70 Primary Products 88 97 98 98 92 73 94 93 65 65 97 51 92 96 96 91 77 93 99 80 87 85 94 95 85 99 91 97 88 95 98 74 96 92 92 71 95 74 99 69 98 96 91 99 81 91 96 89 99 92 76 87 75 ...... e ofdevelopingcountriesmer 1998-00 100 77 98 57 68 81 96 56 81 96 96 83 95 88 14 90 83 79 95 98 87 60 63 91 80 74 30 64 84 83 87 93 77 15 80 72 12 67 64 51 91 44 76 38 69 81 43 62 82 47 66 26 ...... 8 1968-70 Manufactures 12 27 35 35 49 23 20 13 15 15 12 26 28 25 31 19 10 23 13 23 ...... 3 1 1 8 6 7 2 8 3 4 9 7 1 1 4 1 9 3 5 2 4 8 8 5 1 2 3 7 1 9 4 1 7 chandise 1998-00 22 25 14 19 41 18 82 17 13 39 37 20 26 70 18 16 17 22 85 20 27 87 33 34 48 83 56 62 31 16 55 31 17 52 33 74 ...... 0 0 0 0 7 5 0 6 0 4 0 2 3 7 6 9 3 25 World trade developments Commodity Prices and Export Earnings of Developing Countries World trade developments Commodity Prices and Export 26 Earnings of Developing Countries Nepal My Mongolia Maldives Malaysia Macao Lao P K Indonesia India Hong K Fiji China Cambodia Brunei Bangladesh Afghanistan Asia United Syria Saudi Qatar Oman Lebanon K Jordan Isr Ir Ir Cyprus Bahr Middle East Zimbabwe Zambia Uganda T T T Sudan South Somalia Sierr Seychelles Senegal Rw Nigeria Niger Mozambique Morocco Mauritius Mauritania Mali Malawi Liby Madagascar Liberia (Per exports Long-term changesinthepr Appendix T unisia anzania ogo orea, uw aq an ael anmar anda a centage shar ait a Leone ain eople’ Ar African CustomsUnion , Rep Ar ong, China abia ab Emir , . s Dem. of 1968-70 and1998-2000 China able II.4 ates e) Rep . (continued) oduct structur 1968-70 Primary Products 100 100 100 100 100 100 82 97 93 14 89 24 98 47 89 52 99 97 50 91 98 88 44 95 81 99 29 96 84 83 63 99 80 92 87 64 96 55 96 85 99 97 96 93 91 98 98 95 92 92 97 ...... 8 e ofdevelopingcountriesmer 1998-00 100 100 100 100 56 58 57 19 51 42 20 53 12 28 89 77 89 88 89 79 23 91 36 96 91 57 62 72 92 20 50 79 84 37 16 45 59 99 74 90 35 24 94 87 28 87 ...... 9 3 9 5 9 7 1968-70 Manufactures 18 86 11 76 52 92 42 46 12 56 19 70 14 17 30 19 13 32 45 15 ...... 3 6 1 8 1 3 9 2 0 0 0 5 1 4 0 1 8 0 4 4 0 2 3 7 9 1 2 4 7 8 2 0 chandise 1998-00 69 44 42 43 80 97 47 89 52 78 94 47 88 71 11 91 20 12 11 20 75 64 93 42 38 27 80 50 18 54 84 55 41 26 10 65 76 72 ...... 5 9 0 9 0 4 9 0 1 0 0 0 0 0 V T T Sri Lanka Solomon Islands Singapore Samoa Philippines P P (Per exports Long-term changesinthepr Appendix T and nationalstatistics. Sour aipei, onga apua NewGuinea akistan iet Nam centage shar ces: Chinese UN Comtradedatabase,IMFW , 1968-70 and1998-2000 able II.4 e) (continued) orld DevelopmentIndicators2001,IMFcountr oduct structur 1968-70 Primary Products 98 35 98 98 72 93 92 95 46 ... e ofdevelopingcountriesmer 1998-00 48 96 24 13 97 97 15 ... 5 8 y r epor 1968-70 ts, EIUcountr Manufactures 64 25 54 ... 1 1 0 2 7 5 chandise 1998-00 y r epor 52 95 75 85 74 84 ... ts, 4 3 3 27 World trade developments Commodity Prices and Export Earnings of Developing Countries Chapter Three

OVERVIEW OF DEVELOPMENTS IN THE INTERNATIONAL TRADING ENVIRONMENT Overview of developments in the international trading environment

Trade policy trends in WTO Members 1. Overview

Although the path of world trade growth has been uneven in the past few years (contraction in 1998, rebound in 1999 and 2000, followed by a slowdown in 2001), the fact that trade continued to expand faster than output is indicative of the increasing openness of national economies. Part of this development is due to the gradual but continued trend towards more liberal trade policies around the world. Fears that the failure of the Third Ministerial Meeting in Seattle to agree on an agenda for a new trade round would lead to a resurgence of protectionism have not, by and large, materialized. This is a tribute to the good sense of governments in conducting their trade policies. But credit also goes to the strength of the multilateral rules under the WTO, as well as commitments made under regional trade arrangements, which have made it more difficult to take protectionist measures. Members also agreed at their Ministerial Meeting in Doha, in November 2001, to build on these achievements and to put in place a comprehensive work programme to strengthen further the multilateral trading system. The recent accessions of the People’s Republic of China and Chinese Taipei as the 143rd and 144th Members, respectively, of the WTO, will further strengthen the role of the multilateral trading system and the import of the upcoming negotiations. National trade policies have continued, by and large, to be outward-oriented, through the implementation of multilateral and regional commitments, and new liberalizing initiatives, both multilateral, regional and autonomous. Since the establishment of the WTO in 1995, Members have been implementing staged reductions in bound tariffs, in domestic levels of support and export subsidy levels for agricultural products, and lifting non-tariff barriers. Specific measures, targeted on improving market access for least-developed countries in particular, have also been implemented. At the same time, with a view to improving the transparency, stability and openness of their trading environments, a number of WTO Members have been changing the procedural aspects of their trade policy regimes, particularly with respect to licensing and customs valuation. These efforts have resulted, without doubt, in more open markets, on the whole. Nevertheless, significant barriers to trade remain. The unfinished business of market Overview of developments in the international environment trading Members WTO in policy trends Trade access is the subject of the recently-published WTO Secretariat’s study Market Access: Unfinished Business.1 Possibly contrary to common belief, the results of the study demonstrates that trade in industrial products continues to be subject to significant tariff protection in developed and developing countries, with ample scope for further liberalization.2 For tariffs on industrial products, the study indicates that bindings cover 100% of tariff lines for most developed countries. As a result of Uruguay Round-related tariff reductions, on top of seven rounds of tariff negotiations held under GATT 1947, developed countries’ average bound and applied tariff rates on industrial products have fallen to low levels (7% and 5%, respectively), on a most-favoured-nation (MFN) basis. However, these low average levels mask the much higher rates applied to imports in “sensitive” sectors, such as textiles and clothing, footwear, travel goods, transport equipment or electric machinery. Tariff escalation – to protect upstream industries in relation to primary production of metals, minerals, fibres, fish and agricultural produce – is also an enduring feature of most tariff regimes, and may affect primarily the market access interests of developing countries. Developing countries have also raised their share of bound tariffs (to three quarters of the total), but a significant proportion of their industrial product tariff lines remain unbound or are bound well above the level of applied tariffs through ceiling bindings. The average bound rate for developing countries as a whole remains well above that of developed countries, although this gap is much lower for applied tariffs. Peaks and tariff escalation are also features of developing countries’ tariff regimes, generally in the same category of products as developed countries. 1 WTO (2001), Market Access: Unfinished In agriculture, an important achievement of the Uruguay Round was the tariffication of all Business, Special Study 6, WTO Secretariat, non-tariff measures and the binding of 100% of all tariffs on agricultural products by all Geneva. 2 The tariffs reported in the study are drawn WTO Members, improving predictability and security of access. However, resulting tariffs, from a sample of 42 WTO Members including even after implementation of staged reduction commitments, are high and continue to offer all developed countries and a group of significant protection to the products concerned. The quantification and binding of disparate developing-country Members that account for 90% of all developing countries’ trade. measures of domestic support was also a significant achievement, although overall levels of

30 total support to farming also remain high. Export subsidies, although also bound and reduced in a staged manner, remain in place. The notification of products to be integrated under the third stage of the WTO’s Agreement on Textiles and Clothing (ATC) suggests that a significant number of quantitative restrictions maintained under the ATC may not be removed until the end of 2004. Use of anti-dumping and countervailing procedures by established developed-country users is increasing, joined by a larger number of developing countries each year. While regional trade agreements are increasingly attractive to WTO Members, they also raise questions regarding trade diversion, the effect of tariff preferences, and complex rules of origin. The services agenda is also full. This sector, critical for businesses and consumers, was first brought into the multilateral rules in the Uruguay Round. Part of its unfinished business was addressed by the agreements on basic telecommunications and financial services reached in 1997. As in the industrial products area, levels of commitments may not reflect actual practice in the services area. Certain WTO Members may be interested in extending the scope of their commitments in order to provide a strong signal of interest in domestic services liberalization. The “unfinished business” in both agriculture and services explains the emphasis currently being placed on the mandated negotiations in these areas. This chapter looks in greater detail at recent trends in trade policies to take stock of progress, and unfinished business, in the multilateral trading system. 2. Market access for goods

Unfinished business on tariffs The increase in the level of bindings was a major result of the Uruguay Round. In addition to higher levels of bindings on industrial products, all Members bound 100% of their tariff lines on agricultural items as a result of the WTO . Bindings reduce uncertainty and improve transparency in trading regimes. Bindings may also have laid the ground for improvements in access to developed countries’ markets, as these Members chose to liberalize tariffs through reductions in bound rates.

Most developed countries have bound close to 100% of their industrial tariff lines s (Table III.1). A very substantial increase in the share of bound industrial product tariff lines – from 21% to 73% – was effected by developing countries as a whole, although there are considerable differences between such Members. In Latin America, Members bound 100% of O Member lines at ceiling levels, and in Central and Eastern Europe, bindings are close to 100%. The WT variation in the level of bindings among Members in Asia is significant. Apart from a few, notably Gabon and South Africa, the scope of bindings of WTO Members from Africa is ends in generally low. Uruguay Round commitments will result in relatively low simple average MFN bound

rates for industrial products, although wide differences exist across Members and products. ade policy tr ading environment r The average for the Quad – Canada, the European Union, Japan and the United States – is Overview of developments in the international tr T under 5%, for developed countries as a group it is about 7%, and for developing countries and transition economies the average is around 26%.3 Japan has the highest share duty-free bound lines – just under one half – closely followed by Norway (Table AIII.1). Few developing countries have bound any lines at zero. Levels of bound rates for categories of industrial products vary significantly (Table AIII.2). For both developed and developing countries, bound rates are highest in the category of textiles and clothing: Quad countries show a post-Uruguay Round average of 9% and developed countries as a whole are at 12%; developing and transition economies average 29%. Similar levels of rates are to be found for leather, rubber, footwear and leather products (9% for the Quad, 10% for developed countries, 27% for developing countries).4 Above-average bound rates are generally also found in the categories of fish and fish products, and transport equipment. Among the Quad, tariffs well above the average continue to protect a number of industries from imports. In the European Union and Japan, peaks are concentrated in 3 Taking into account the effects of recent WTO agriculture and food products, although peaks are also prevalent in footwear. In the United commitments on information technology and pharmaceutical products, the average bound States and Canada, most tariff peaks are in manufactures, particularly textiles and clothing, rate of the Quad and other developed footwear, glass and related products, and electrical parts.5 Many of these products are of countries is further reduced by about one significant export interest to developing countries. percentage point, and by a few decimals in developing countries. In addition to peaks, tariff escalation is a feature of industrial-product bound tariffs in 4 This category of products is defined, in WTO many WTO Members. Tariffs structured according to the degree of processing (as well as (2001), op. cit., Table 4, page 6, as the peaks) affect resource allocation, as well as transparency, and provides scope for rent- aggregation of HS Chapters 40 and 41 (except 4101-03), 4201, 4203-05, Chapter 43 (except seeking. In developed countries, such escalation is present in the same sectors that are 4301), Chapter 64 (except 6405-06), 9605. affected by peaks, including in textiles and clothing, leather and footwear products. Despite 5 B. Hoekman, F. Ng, M. Olarreaga (2000), significant efforts made by developing countries to achieve more uniform tariff regimes, Tariff Peaks in the Quad and Developing Countries’ Exports, World Bank. peaks and escalation are in evidence, in many cases on the same categories of products as 6 B. Hoekman, F. Ng, M. Olerreaga (2000), ibid. on those in developed countries (Table AIII.1).6

31 Overview of developments in the international trading environment 32 Trade policy trends in WTO Members 7 for developingcountries”, IMF and W orld Bank(2001), p 18. . “Mark et access evidence suggeststhatformost administr domestic prices autonomous liber gap istheresultofacombination oftwofactors: developing countriesoftenapplytariffs atr categories arefrequent, equiv indicate thatthesimpleaver products isinv factor presence ofspecificdutiesoncertainproducts higher thanthatforindustrialproducts that onindustrialproducts Sour number oftarif 9.5% fortheRepublicofKor bound ratesforsomecountrieswillactuallybeslightlylower W Latin North selected Scope ofbindings T for thelatestavailableyearonConsolidatedT d c b a ple uis S1996isusedforthemajorityofMembers. applied duties,HS For boundduties,mostoftheMemberswer implement thetarif Centr Asia Africa able III.1 Applied tariffsaregener Levels ofboundr Norw Iceland P Mexico Costa Rica Colombia Chile Argentina United States European Union Canada T Switzerland Slov Hungary Czech Republic Hong K Austr Macao K J estern Europe Gabon Chad Singapore Philippines Cameroon T The dataneedtobeinterpr All Swisstarif Post Ur apan aking intoaccountcommitmentsoninfor urk eru orea, alents forcompar ce: . al andEasternEurope America T Import Mark ak Republic ey America he levelofprotectionimpliedbyspecificdutiesdependsonworldcommodity prices alia ay WTO (2001), , Republic of ative arr uguay Roundboundrate:theMembermayhavescheduledalongerimplementationperiodforcer ong, China WT f lines.Oneexampleistextilesandclothingpr China fs ar ariably higherthanforindustrialproducts; O Member , f r and thusv e specific: angements andtheirimplementation. alization initiatives toreduceappliedtariffssincethe eduction. Market Access:UnfinishedBusiness, ets ates foragricultur , ative purposes; aver ea, and22.8%forthePhilippines. eted withcaution:neithertheyearnornomenclatur as isescalationbydegreeofprocessing. ad valor , s aries continuously; ally at, age andboundtariffr and fordevelopingcountries Shar a age ofboundr em lines (%) e ofbound WT 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 equivalents notavailableforalllines 93.2 99.6 98.9 95.4 36.3 95.9 90.4 99.2 23.5 65.5 58.6 0.4 0.1 9.9 or closeto e usingHar mation technologyandphar O Members al productsaremoredifficulttoanalyseduethe the prev . arif 7 P f Schedules(CTS)database. eaks inmoresensitiveagricultur ates significantlybelowboundlevels ates foragricultur monized System1988or1992,stillCCCNnomenclatur A , Special Study6.Figur ver , for tariffquotas bound r alence oftariffquotasisalsoacomplicating . Forexample,3.3%fortheUnitedStates,2.9%Japan, , which mustbeconvertedto oducts wher the aver age bound r use ofceilingbindingsinSchedules and/or ate (%) d 30.0 34.8 44.6 35.5 25.0 31.0 42.6 14.2 11.7 15.5 17.6 26.1 17.6 ates onindustrialpr 3.9 9.7 5.2 4.1 1.8 3.4 7.4 4.3 4.3 3.5 0.0 4.6 0.0 ates fordevelopedcountries d K , maceutical pr age boundr e severalMembershaveuntil2004to eeping thesedifficultiesinmind, for developedcountries the aver b,c al productsisaroundfourtimes es onappliedrateshavebeenupdated , e isthesameforallMemberslisted. important issuesconcern Level (%) age istwotothreetimes oducts, postUr A 13.0 15.6 11.2 13.4 17.6 17.6 17.6 2.3 ver 4.7 9.0 4.1 2.5 4.4 4.5 3.3 7.4 8.0 4.8 4.7 4.4 7.5 3.9 0.0 0.0 6.7 0.0 ate foragricultur WT age appliedr oducts for O cameinto al product ad valorem ad uguay Round . , T 1998 2000 2000 2000 2000 2000 2000 1998 2000 2000 2000 1998 2001 1999 1998 2001 2000 2000 2000 2001 1999 1999 2000 2001 1999 1997 his latter estimates Y , ear ate whereas tain al e. For the , existence. Such initiatives, often remarked in Trade Policy Reviews (TPRs), frequently indicate significant progress in liberalization (e.g. Cameroon and Uganda in Africa, and India and Pakistan in Asia). Liberalization in Central Europe has also continued at a sustained pace, resulting in generally low applied MFN tariffs. There would seem to have been a pause in the process of tariff reduction in South East Asia and Latin America in connection with the 1997- 98 financial crisis. In absolute terms, however, applied tariffs in these regions are already among the lowest among developing-country Members (9% on average in the ASEAN-6, 13% in South America), and no major policy reversals were observed during the financial crisis. The gaps between applied and bound rates on industrial products differ among regions, noting however the different scope of bindings.8 Average bound rates are three times higher than applied rates in Latin America, and two-and-a-half times higher in South East Asia.9 In these cases, bindings contribute less to the stability of applied tariffs, since countries could, if they wish, raise their applied tariffs up to the level of their bindings. Trade Policy Reviews indicate that such increases generally have not occurred, although certain countries in Asia fine-tuned tariffs in the course of the 1997-98 financial crisis. It has to be underlined that the scope of application of MFN tariffs by WTO Members is reduced by preferences granted to partners in regional trade agreements, non-reciprocal preferences, or other preferences granted to countries in transition and developing countries under the Generalized System of Preferences (GSP), or supplementary preferences for the least-developed countries. One recent development in this respect is the extension of preferences granted to the least-developed countries since the Action Plan was launched in 1996. The increase in the number of regional trade agreements in recent years looks set to further erode the scope of application of MFN tariffs.

Slow pace of elimination of restrictions on textiles and clothing Under the WTO Agreement on Textiles and Clothing (ATC), Canada, the European Union and the United States continue to maintain quantitative restrictions on certain of their imports of textiles and clothing from developing and transition economies. These restrictions

were carried over from the Multifibre Arrangement, and are to be eliminated by end-2004. s The first two phases of the ATC product integration programme, to bring the sector fully into GATT rules, required the integration of no less than 16% of the total volume of 1990 imports in 1995 and no less than 17% in 1998, respectively. Market access was also O Member required to be improved in the first and second stages of integration, by increases in the WT quota growth-rates of at least 16% and 25%, respectively, and applied annually. The product integration percentages and the increases in the growth rates have been met, but ends in 8 It is difficult to include agricultural tariffs in the elimination of the restrictions has been modest, with a significant exception (Norway). this analysis because of the above-noted Canada removed restrictions on one product in the first phase and on two categories in the specific-duty and tariff-quota aspects of those

second phase, the EU on 12 categories in the second phase (none in the first phase), and ade policy tr ading environment tariffs. r Overview of developments in the international tr T 9 WTO (2001), op. cit. Table II.4, p. 17. the United States on all or part of 24 product categories in the second stage (none in the 10 10 Details are contained in notifications to the first stage). Norway has removed all its quotas under a phased plan. Textiles Monitoring Body. They are as follows: The third stage of integration under the ATC took place on 1 January 2002, and involved Canada’s integration programme contained one product subject to restrictions (work no less than 18% of the total volume 1990 imports. At least 12 months in advance of each gloves) in the first phase of integration and implementation stage, Members were required to notify the Textiles Monitoring Body (TMB) two categories of products under the second stage (tailored collar shirts and textiles of their respective integration programmes. The EU’s integration programme will result in the handbags). Canada removed quotas on certain elimination of restrictions on 11 EU categories of products, affecting nine WTO Members and clothing products in six additional product leading to the elimination of 37 specific restrictions. In public statements, the EU has raised categories, although not integrating these products. In the second stage, the EU’s the possibility of removing additional quotas of particular interest to an exporter in exchange integration programme contained products in for better access to its domestic textiles and clothing market. For its part, the United States, 12 restricted categories, affecting five Members to varying extents. Norway gradually removed is going to integrate products from 38 U.S. categories for which the United States maintains all its restrictions: 14 quotas in 1996, 32 in restrictions, affecting 20 WTO Members and resulting in the elimination of 43 specific limits 1997, 5 in 1998 and 3 in 2001. The United States’ second stage of integration programme or sub-limits. Canada will integrate three categories and two sub-categories for which it contained all or part of 24 product categories, maintains restrictions; as a result 27 specific restraints will be lifted. In addition, restrictions with specific limits affecting three of these 11 categories or combined categories and six affecting 17 other Canadian categories or sub-categories will be partially eliminated. In Members, and the other product categories in addition, in the third stage of integration all growth rates on the remaining restrictions will group or aggregate limits. be increased by 27%, to be applied annually. 11 G/TMB/N/370/Corr. 3. As a result of the implementation of the third stage of integration of textiles and clothing 12 For example, quantitative restrictions maintained by the EU on textiles and clothing under the ATC, some additional liberalization is to take place beyond that in the previous imports from EU membership candidates were two stages. However, this still leaves the bulk of trade affected by quotas, to be liberalized eliminated on 1 January 1998, while tariffs had been eliminated one year before. Rules of only on 31 December 2004, at the end of transitional period to full implementation. It is origin have been harmonized between the EU worth noting, in this respect, that Canada, the EU and the United States have already largely and the associated countries (WTO (1997), Trade Policy Review – European Union, and liberalized textiles and clothing trade with neighbouring countries under regional trade WTO (2000), Trade Policy Review – European agreements.12 Union). Restrictions on textiles and clothing products maintained by some other WTO Members 13 India – Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products, outside the ATC but with reference to GATT provisions are also gradually being eliminated. complaint by the United States (WT/DS90/1). Those maintained by India were removed on 1 April 2001, as scheduled.13 Pakistan is in the

33 Overview of developments in the international trading environment 34 Trade policy trends in WTO Members (WT/DS34/14). 16 15 14 and and Clothing Products Clothing and TBPN5/d.2of10J WT/BOP/N/53/Add. WT/BOP/R/51. Turkey – Restrictions on Imports of Textiles of Imports on Restrictions – Turkey TBPN5 f1 F WT/BOP/N/57 of15 , complaint byIndia ebruary 2001. anuary 2001 (229), and itsMemberStateshavebeenthemostaffectedbyinitiations(287), followed byChina(22), investigations continuetobetargetedagainsttheEuropeanUnionanditsmembers(23), Indonesia (64)andIndia(64). (31). were alsooftentargeted(42initiations). 2001 maybeslightlyhigherthanfor2000(T figures forthefirstsixmonthsof2001(134initiations)suggestthatfinalnumber were: the RepublicofK anti-dumping investigationswere: were: Moreover should betak preserve themark anti-dumping investigationsinitiatedcomparedwith356in1999(ChartIII.1and measures (anti-dumping, Rising tr T balance-of-payments provisionsofGA process ofphasing-outrestrictionsontextilesandclothingproductsmaintainedunderthe source ofdisputes in particularsensitiveproducts dumping andcounterv possible thattheinitiationofprocedures(sometimesinacombinedmanner concern theuseoftr nearly threequartersofinitiations investigations –ofbothdevelopingcountriesanddevelopedaccountingfor investigations wereinitiatedbydevelopingortr initiationsofanti-dumpinginvestigationsworld-wide 1,642 Restrictions thatithadliber DSB country; agreed toaphase-outplanofrestrictionsaffectingtextilesandclothingimportsfromthat responding toproceduresimposescostsontr time one thirdoftotalinitiationsinvestigationsinthepreviousfive-yearperiod. growing useofanti-dumpingprocedures; Number 300 350 400 100 150 200 250 Source: urk 50 Initiations ofanti-dumpingandcountervailinginvestigations, 1995-2001 Chart III.1 0 A slowdowninthenumberofinitiationsoccurred2000aftersurge1999–272 During theperiod1995tomid-2001, Under the , ey , WTO Secretariat. WTO which includescompensation. In 2000, exporters indevelopingandtr , the UnitedStates(39), the UnitedStates(47initiations), the RepublicofK for theimplementationofresultsadispute-settlementproceedingwithIndia, 1995 subsequently thetwoMembersnotifiedamutuallysatisfactoryagreementto 10 , end intheuseoftr even whenincompliancewith 157 Anti-dumping Countervailing en nottoabusesuchcontingencymeasuresimposenewbarrierstr WT the O orea (19); et accessgainsfromreducingtr , WT Agreements as asignificantpercentageofallcomplaintsfiledinthe ade defenceinstruments ebr hs xotr eemostoftenthesubjectofinitiated O Memberswhoseexporterswere 7 ailing procedures)mayhaveachillingeffectontr 1996 orea (127), Chinese 224 counterv Indonesia (13); alized certainfabricsandapparelproductsinearly2001. Canada (23), , ade defenceinstrumentsslowsin2000 Members havetherighttoapplycontingencytr T . aipei (9)andIndia(8). 16 . ailing orsafeguard), Finally 1997 h uoenUinadisMemberStatestogether(41); its the EuropeanUnionand 16 the UnitedStates(93), ansition countriesarethemaintargetsofanti-dumping 243 TT Argentina (45), 14 , In thefirsthalfof2001, records maintainedbythe WT the useofproceduresthemselvescanbe ; developing andtr it notifiedtheCommitteeonBalance-of-P India (16)andtheEuropeanUnion(13); and theUnitedStates(12). O disciplinesontheuseofsuchmeasures able . aders andexportersthatmaydiscour 25 9819 2000 1999 1998 ansition countries 254 aditional measuresofprotection, AIII.3B). subject tospecifiedrules India (41), Since 1995, 41 T Chinese he leadingfourusersin2000 . ansition countriesaccountedfor More thanhalfofthese 356 , the leadingfourusers demonstr and theEuropeanUnion T WT aipei (84), the EuropeanUnion 17 Chinese exporters O indicatenearly ade; followed byChina 272 WT , ating their both anti- in particular At thesame O since1995 J . ade T apan (71), However able January-June age tr 12 care most ayments 15 2001 134 AIII.3); ade , it is ade , , . to , On average, about one-half of initiated anti-dumping investigations are terminated without measures being imposed, and the rest end with a definitive anti-dumping measure in the form of a duty or, much less frequently, a price undertaking by the exporter. The number of anti-dumping measures in force rose from 880 at the end of 1997 to 1,120 at the end of 1999. In 2000 the number declined to 1,088; by mid-2001 Members had notified 85 measures in force to the WTO. In 2000, the United States had the most measures in place, followed by the European Union, South Africa, India, and Canada. Counted together, the EU and its Member States were the WTO Members most affected by anti-dumping measures in place, although exporters from China are affected by a similar number of measures. In the first half of 2001, most measures were notified by India (18), followed by the United States and Brazil (12 each) and Australia (10); countries most affected by anti-dumping measures during this period were the EU and its Member States (17), the Republic of Korea (10) and China (9). Sectors where anti-dumping measures are more frequent include chemical products and base metals, notably steel. Requests for anti-dumping investigations by the steel industry have been relatively frequent in recent years, notably in the United States (almost two thirds of the 125 anti-dumping investigations initiated between 1998 and 2000 involved steel products), in relation to chronic excess-supply in world markets.17 As steel prices are falling again, new calls for anti-dumping investigations are re-emerging from both sides of the Atlantic. The use of countervailing procedures – both in terms of the number of user WTO Members, initiations, and measures in force – remains much lower than for anti-dumping. While the number of initiations also reached a peak of 41 in 1999, a slowdown occurred in 2000, with 17 initiations (Table AIII.4); in the first half of 2001, 12 investigations were initiated (Table AIII.4B). As of mid-2001, the United States had the largest number of measures in force (21), followed by the European Union (15), while the European Union and its Member States were the most affected by measures (20).

Subsidies are still an issue, in particular in agriculture

Although there is no global accounting available on the use of subsidies, a number of s factors, ranging from fiscal consolidation in major economies to private sector-oriented structural reforms in developing countries, have contributed to limiting the use of subsidies in the manufacturing and services sectors.18 The disciplines on trade-distorting subsidies O Member contained in the WTO Agreement on Agriculture have also capped support to this sector, WT which nevertheless remains among the leading recipients of support in a number of WTO Members. ends in Total support to agriculture by OECD countries is estimated by the OECD to have decreased in 2000, from US$356 billion to US$327 billion. The decline was due to higher

world prices (and hence a reduction in the gap between domestic and world prices) and ade policy tr ading environment r exchange rate movements, “rather than major agricultural policy changes”.19 Producer Overview of developments in the international tr T support granted in the OECD area also declined from US$274 billion in 1999 to US$246 billion in 2000, i.e. from 37% to 34% of total farm receipts: the largest share of this producer support is accounted for by the European Union (36%), followed by Japan (24%) 17 During the 1997-98 financial crisis in some emerging markets, calls for anti-dumping and the United States (20%). Chart III.2 presents producer subsidy equivalents for these four actions were heard in the main importing (and countries. It should be noted that OECD figures do not segregate less from more trade- producing) countries, in particular the United States, raising fears of a new wave of anti- distorting measures of producer support, notably the measures in the 18 “green box” dumping actions; however, world demand and categories of Annex 2 of the Agreement on Agriculture.20 prices rebounded quickly, preventing a new “steel war”. In relation to the peak 1986-88 period, when the Uruguay Round was underway, the 18 All WTO Members are required to notify their OECD notes that the overall level of support to producers in 2000 was some 7 percentage subsidy programmes to trading partners. For points below the peak (Chart III.2). This is an improvement over 1999, when the OECD notifications on subsidies under Article XVI:1 of GATT 1994 and Article 25 of the Subsidies found support to have risen to the 1986-88 level for the first time. On the whole, the OECD Agreement, see document series finds that: WT/G/SCM/N/; and for notifications on agricultural support measures under the The overall reduction in market protection in the OECD area may partly reflect the Agreement on Agriculture, see document series process of achieving WTO commitments. However, the current levels of protection WT/G/AG/N. Comparisons are however difficult are still an important factor in encouraging production, distorting trade and depressing to make regarding the actual amounts of subsidy involved. world prices of agricultural commodities. Moreover, such protection continues to be 19 OECD (2001), Agricultural Policies in OECD regressive as it mainly benefits large firms and impacts most strongly on low-income Countries – Monitoring and Evaluation, Paris, consumers for whom food constitutes a larger share of their total household p.5. 21 20 G/AG/NG/2. expenditure. 21 OECD (2001), Agricultural Policies in OECD Under the WTO Agreement on Agriculture, Members are committed to limit and reduce Countries – Monitoring and Evaluation, Paris, the volume and value of export subsidies; the use of new export subsidies is prohibited.22 p. 16. These commitments primarily constrain developed countries, and notably the European 22 Commitments include the reduction of subsidized exports by 21% over 6 years (14% Union, which accounts for about 90% of export subsidies granted by OECD countries. over 10 years for developing countries) and the According to the OECD, the total value of export subsidies on agricultural products reduction of the value of export subsidies by 36% (24% over 10 years for developing decreased in 2000, mainly due to a fall in the value of subsidies granted by the European countries). Union (this in turn being the outcome of the lower gap between domestic and international

35 Overview of developments in the international trading environment 36 Trade policy trends in WTO Members revenue thatyear assets) w tax expenditure(acceler the environment; and US$1.7billionfornatur companies billionforspaceandtechnology US$2.4 billion intheinternationalbusinesssector comparison, 26 25 24 23 av 1998, been reducedbyathirdbetween1995and manufacturing sectorintheCommunityhas Genev Zealand, assessment with concluded MRAsfortheresultsofconformity U progr business amountedtoUS$28billionandcredit (2001), on State Aid, Brussels, Brussels, Aid, State on Review – United States United – Review .S European Commission(2001), 70% totheEuropeanUnion. According to F ailable or example . outlays insupportofcommerceand me lgtyecee S2billion. ammes slightlyexceededUS$2 a, the latestyearforwhichstatisticsare Market Access: Unfinished Business Unfinished Access: Market T . Switzerland, as estimatedatUS$32billioninlost beIII.10, able , US$3.2 billionintheenergysector tax expenditureswereUS$6.8 , the EuropeanUnionhas WT Austr . the largestsinglebusiness O(2001), p and theUnitedStates 61. . alia, p , ated depreciationof .9. for 1999, Canada, al resourcesand Trade Policy Trade State aidtothe See Eighth Survey Eighth estimated WT J apan, O , New . , By , proved tobeapersistentsourceofdisputesinthe countries thatare seekingtohavetheirmeasuresrecognized asequiv level ofsafety measures thatmaydifferfromthose oftheimportingcountrybutthatprovideanequiv Convention orCITES development, sized enterprises), the confined tothetwolargest government levels for theUnitedStatesconcerningtrendsinaidprovidedatfeder comply withtherelev Pr permitting significantuseofthesesubsidies billion, allowed attheendofimplementationperiodamounttocloseUS$13 prices). T policy objectives regulations andstandards measures environmental objectives of multilater sometimes themeasuresinvolveoutrightbans assessment proceduresconductedontheterritoryofdestinationmark to benarrowlytargetedonspecificsectors Union, Statistics producedbytheEuropeanCommission, Union –theirimpactonconditionsofcompetitioninworldmark importance ofmeaningfulprogressinthecurrentlyengagednegotiations regulation, level designedtoreducebarrierstr Phytosanitary Measures(SPS)recognizeandencour recommendations to exports participation instandard-settingbodies Agreements procedures between tr recognition agreements(MRAs), Director P S 1 2 3 4 5 6 7 8 he SPS e o 0 0 0 0 0 0 0 0 0 r t P C oduct r u

h Products placedonthemark T Subsidies areusedinsectorsotherthanagriculture c A newdevelopment, r r Agreement on h c e he o e e n a

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9 9 0 9 al environmentalagreementssuchastheMontrealProtocol, a the postUruguayRoundlevelsofexportsubsidiesthatwillcontinuetobe 0 S e Agreements on he trendtoconcludesuchMRAsis confined, 9 8 0 9 developing countrieshavepointedtotheirinadequatelevelsof n 0 . u a environmental protection). 9 6 0 8 1 a al. T - p ) n d 8 , he SPSCommitteehasidentifiedactions thatcouldassistdeveloping .

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as tak P , a , , r , , the Basel of healthprotection i et. s et access small andmedium- to meetpublic under health, : .

25 O E However en bythe C Subsidies tend D

Atlantic have S , J e ril 20of Article a and c safety and p r e a WT t n a , r i , must a O ailable t . alent . 26 Table III.2

TBT notifications of technical regulations and standards, 1995-2000

1995 1996 1997 1998 1999 2000

Argentina 0 1 0 1 16 37 Australia 20 18 26 12 35 10 Brazil 1 9 35 43 17 12 Canada 29 20 30 115 24 26 Czech Republic 12 14 1 6 28 52 European Uniona 123 123 437 276 185 156 Japan 50 41 35 28 30 56 Korea, Rep. of 13 9 14 8 22 27 Malaysia 1 19 12 28 98 3 Mexico 29 27 29 35 34 28 Switzerland 4 12 21 7 22 9 Thailand 7 13 22 34 22 9 United States 33 40 33 35 49 32 Total 365 460 795 648 672 611

a The European Union and its Member States. For details of Member States’ notifications, see WT/TPR/S/72, p. 62, Table III.6. Source: WTO Secretariat.

There is increasing transparency regarding the use of SPS measures. Most notifications are from developed countries, although developing countries are also notifying them with greater frequency. By end-2001, the United States had notified the highest number of SPS measures (526) to the WTO followed by the European Union and its Member States (235),

Mexico (175), New Zealand (161) and Australia (135). The significance of TBT measures also s appears to have grown, rising from 365 notified measures in 1995 to 611 measures in 2000 (after a peak of 672 measures in 1999), in part due to the expanded use of such measures by developing countries (Table III.2). O Member SPS and TBT measures are an integral part of the instruments at the disposal of WTO WT Members to meet public policy goals: an objective of the relevant WTO Agreements is to ensure that such measures do not create unnecessary obstacles to international trade. ends in Complaints of such barriers to trade being created are on the rise: as of 2001, there were 22 complaints invoking provisions of the SPS or TBT Agreements.27 ade policy tr ading environment r 3. Market access conditions for services Overview of developments in the international tr T

The services sector plays a dominant role in the economies of most WTO Members, both in providing consumer benefits directly, such as through health and education, and as a support to business activities through, for example, finance, communications, and transportation. Services is the main sector of activity in high-income countries (both in terms of GDP and employment) and its importance is growing in lower-income countries. The importance of the services sector in the world economy greatly exceeds its share in world trade, the latter being estimated at one fifth in 2000, in part because these statistics only count cross-border transactions and not services provided through affiliates.28 Efficiency in the production and trade of services has an important bearing on economic performance and development. Services like transportation and distribution, banking and finance are of critical importance in developing countries (and no less in developed countries), both for the emergence of a competitive manufacturing sector, and, more broadly, for social development and poverty reduction. In many of the poorest countries, economic and social development is hampered by the lack of adequate basic infrastructure such as 27 Allegations of inconsistency with provisions of the TBT Agreement and/or the SPS roads, power supply, telecommunications, and public transport. Open services trade regimes Agreement were made in the following may therefore entail major benefits by helping poor countries to obtain infrastructural complaints: shelf-life (DS5); salmon (DS18); hormones (DS26, DS48); shrimp (DS58, DS61); services at internationally competitive prices. For those reasons, similar basic policy butter (DS72); agricultural products (DS76); prescriptions as in the goods sector apply, such as ensuring that policies encourage rather textiles and apparel products (DS85); quantitative restrictions (DS96); poultry than impede competition, and that economic operators have some certainty regarding the (DS100); footwear (DS121); rice (DS134); stability of the policy framework. In addition to domestic benefits from a greater variety and asbestos (DS135); wood of conifers (DS137); cattle, swine and grain (DS144); textiles and competitive pricing of services, trading partners gain the opportunity for trade-related apparel products (DS151); swine (DS203), development, based on services trade. sardines (DS231); matches (DS232); A key development in the multilateral trading system was the WTO GATS Agreement, pharmaceutical products (DS233); and fresh fruit (DS237). which established a framework of commitments by Members to bind, reduce or eliminate 28 WT/S/C/W/27. impediments to the supply of services by foreign providers; this was followed up by the

37 Overview of developments in the international trading environment 38 Trade policy trends in WTO Members Sour Sector Sector T able III.3 ce: 101-120 81-100 s committed WTO documentT/S/C/W/94,9Febr 121 + 41-60 21-40 61-80 –20 al cover age ofSchedules Number ofMember 10 23 12 44 12 24 7 uar y 1999. s Nevis Guatemala, Slovenia, Ar Antigua &Barbuda, Uruguay Bangladesh, Uganda, Argentina, (Republic), Angola, Austr Br Maldives EC (15), azil, ab Emir foreign suppliers Domestic reformshavegener countries (Republic ofK of K 98) providedforextensiveopeningtoforeignparticipationinbanking (Indonesia, and changingconsumerdemands ownership thresholdsinIndonesia, resilience ink liber tak highw owned banks centers throughout thecountry the liftingofbr Schedules ofCommitments countries aftertheendofUruguayRound, numerous examplesofdomesticreformsundertak and entrepreneurialmethods F public sectors example), underlying factorswerether particularly intheareasoftelecommunications and priv those specifiedinSchedules policies inplacethataregener acceler (T for goods Protocols oftheGA agreements onbasictelecommunicationsandfinancialservicesin1997(F pursued, (essentially tobusinesstr scope ofaccessfordeliverybymode4–movementnatur for alia, , oreign participationhasoftenbeenencour St. Ecuador able III.3). , , Bahr e effectivecontrolofailingdomestic institutionsandfacilitaterestructuring. Iceland, T Although GA , Zambia although anumberofMembersmaintainrestrictionsoncommercialpresence Zimbabwe South orea, ates Lucia, alization ofservicesectorshadtheobjectivetoincreaseeconomicefficiency and Bulgaria, he Mali, Chile Costa Rica, K ays Bolivia, ain, ating thepaceofautonomousliber eny . T , atization ofk In Br r Egypt, Malta, Africa, , , ade P . or arestillpursuing, St. , T a, J Czech Republic, Barbados in particular financial crisesandtheneedtoredressailingbankingsectors In South apan, hailand), Members displayawidev Macao (China), V Gambia, Within thesector Belize Brunei Darussalam, incent &theGrenadines azil, , , ey servicesaswelltoattr orea, Hong K T Mauritania, the nationaltelephonecompanyand theleasingofport, olicy Reviewsconductedsincetheestablishmentof supply bottlenecks(publictr Cyprus anch restrictions(Indonesia)aimed atcreatingalevelplayingfield urk Columbia, TS commitmentsareofrelativelyrecentvintage . , ey , the structur Cuba, Benin, Canada, Africa, T TS other financialservices(RepublicofK ong (China), , hailand), Fiji, ey serviceshasbeenundertak , Dominican Republic, respectively). , India, K Botsw Mauritius Mongolia, as foreigninstitutionshadinitially beenconfinedtoselectedurban Gabon, orea (Rep avellers andintr “network industries” Philippines the maintelephone companyw . . Morocco F Burundi, apid r . ana, al reformagendainservicescovers thepriv ally resultedinmoreopenmark Since themid-1990’ or example al commitments and distributionservices(Indonesia). priv F Isr Guinea, ally moreliber aced withther , ael, , . Mozambique Nigeria, Burkina F Solomon Islands of), atization andderegulationofservicesactivities , , ate oftechnologicalchange(intelecommunications , service reformshavealsobeenundertak J Switzerland, Republic ofK Côte d’Ivoire Netherlands amaica, Just asisthecaseofpoliciesaffectingmark Malaysia, ariety ofapproachestoservice-sectorliber WT Guinea-Bissau, P Indonesia, O Member apua NewGuinea, , aso a-corpor the recentfinancialcrisisinSouth-East act foreignexpertise alization intheservicessector K ansport, , , uw aged toprovidecapital, My Cameroon, Mexico al –insomeinstances , T , Antilles ait, , hailand apid globalizationofmark anmar all modesofdeliveryaregener Djibouti, , and whichhavenotbeenboundinGA (telecommunications Sri Lanka, finance andtr Lesotho orea and Liechtenstein, s ate tr s Guy en inbothdevelopedanddeveloping , , en inmanydevelopingcountries Norw , a w , energy) aswellfiscalconsider Namibia, Nicar ana, Centr Dominica, , ansferees). ave ofrestructuring, New Zealand, ay Suriname P eru, agua, Haiti, , orea), al Hungary as soldtoapriv T hailand allowedforeignbanksto African Republic, Niger Qatar P al persons–isseverelylimited ets forbothdomesticand oland, P Hondur ansportation. . El Salv akistan, , T , telecommunications Sw , he loweringofforeign , , a numberofMembershave P Senegal, United States ar aziland, Romania, P Wide-r , ador as , aguay anama, tr much moreso–than power andgassupply). T , ansfer oftechnology rinidad & WT Madagascar , Ghana, airports and , , , atization ofstate- ets andtechnologies Sierr T the restructuringof and leadingto Rw O in1995provide anging anzania, Chad, Slov ate consortium ourth andFifth Singapore en bydeveloped Among the anda, r a Leone ationalization ak Republic, ally provided T Grenada, obago Congo alization In addition, , , T St. Malawi, Asia (1997- , ogo , Republic , and the T V , Kitts & , unisia, , ations United et access enezuela , Congo TS , for . and the authorities are considering the implication of privatizations in the air transport sector. Many countries in Africa have taken similar steps (Gabon, Kenya, Uganda), seeking foreign strategic partners for major banks or telecommunications companies. Reforms are undertaken on an autonomous basis, often under IMF and World Bank-supported programs. 4. Intellectual property protection

The WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) establishes a framework of rules on minimum levels of protection for intellectual property rights (IPRs) and the means to ensure their enforcement. These rules concern the protection of patents (for inventions), trademarks, geographical indications (identifying the origin of a product) industrial designs of integrated circuits, undisclosed information, as well as the protection of copyright (for literary and artistic works such as novels, poems, plays, films, musical works, paintings, photographs, sculptures, and architectural designs, and the rights of performers, producers of sound recordings and broadcasting organizations). Protecting intellectual property rights such as patents and copyright preserves the incentive for creativity and inventiveness, while in the area of distinctive signs, such as trademarks and geographical indications, its main purpose is to protect the consumer and prevent unfair competition between producers. In the area of patents, another benefit is to foster disclosure of inventions, which encourages further innovation. When the WTO Agreements took effect on 1 January 1995, developed countries had one year to ensure that their laws and practices conformed with the TRIPS Agreement, developing-country Members and (under certain conditions) transition economies had an additional four years (plus five years to provide patents for areas of technology not subject to such protection previously, although exclusive marketing rights were required as of 1995), and LDCs had an additional ten years. Thus, as of 1 January 2000, developing-country Members were required to have implemented the TRIPS Agreement by introducing new legislation or modifying existing legislation; the WTO has received notifications to this effect and the TRIPS Council has been engaged in reviewing implementation efforts by such Members.29 s Trade Policy Reviews conducted in the course of 2000 and 2001 confirm the steps taken by many developing and transition countries to adopt entirely new intellectual property legislation, or update existing legislation.30 In Latin America, Brazil enacted revised copyright, O Member patent and trademark legislation, while Costa Rica adopted regulations to give effect to WT TRIPS obligations. In the Caribbean, the degree to which the Members of the Organization of Eastern Caribbean States (OECS) have amended or introduced domestic legislation to ends in reflect the TRIPS Agreement varies considerably, but no country has completed the process. Dominica updated or introduced domestic legislation regarding trademarks, industrial

designs, geographical indications, patents, and protection of layout-designs of integrated ade policy tr ading environment r circuits, between 1998 and 2000. No new or amended legislation with respect to the Overview of developments in the international tr T protection of intellectual property rights has been passed in Antigua and Barbuda, Grenada, and St. Vincent and the Grenadines since the inception of the WTO. In Antigua and Barbuda, however, draft legislation is being prepared with respect to copyright and related rights, layout designs, trademarks and geographical indications. In Asia, new legislation was adopted by , China, and measures have been taken to better enforce rights. Brunei Darussalam introduced legislative changes in 2000 for the protection of copyright, trademarks, patents, layout designs of integrated circuits, and industrial designs. The Republic of Korea launched in April 1998 the “Intellectual Property Great Leap Forward Policy” to raise competitiveness through strengthened inventive 29 IP/C/19. activities and enhanced protection of IPRs, enacting legislation on IPRs, notably patents in 30 Based mainly on the information contained in Trade Policy Review documents 1999, trademarks and designs in 1998, and enhancing enforcement by raising the ceiling on (WT/TPR/G/,S,M) circulated between January fines by 150%. Malaysia has enacted two new laws (Layout Designs and Integrated Circuits 2000 and December 2001 for the reviews of Act, 2000 and the Geographical Indications Act, 2000) and amended other legislation with a Kenya (WT/TPR/S,G,M64), Peru (WT/TPR/S,G,M69), Poland (WT/TPR/S,G,M71), view to complying with its obligations under the Agreement on Trade-Related Measures on Republic of Korea (WT/TPR/S,G,M73), Bahrain Intellectual Property Rights.31 In Africa, Ghana, Kenya and Uganda were proceeding to (WT/TPR/S,G,M74), Brazil (WT/TPR/S,G,M75), Ghana (WT/TPR/S,G,M81), Macau, China update their intellectual property laws, and the members of the Organisation Africaine de la (WT/TPR/S,G,M82), Brunei Darussalam Propriété Intellectuelle (OAPI) revised the 1977 Bangui Agreement to attain consistency with (WT/TPR/S,G,M84), Organization of Eastern Caribbean States (OECS) (WT/TPR/S,G,M85), TRIPS provisions. In Europe, the Czech and Slovak Republics and Poland revised their Gabon ((WT/TPR/S,G,M86), Cameroon legislation to meet TRIPS requirements and to harmonize with legislation of the European (WT/TPR/S,G,M87), Czech Republic (WT/TPR/S,G,M/89), Mauritius Union. (WT/TPR/S,G,M/90), Slovak Republic Although the Reviews confirm significant progress being made on implementation, they (WT/TPR/S,G,M/91), Malaysia (WT/TPR/S,G,M/92), and Uganda also indicate that certain Members face more difficulties than others on implementation. (WT/TPR/S,G,M/93). These difficulties include delays in completing legislative procedures in some areas of IPR 31 The amended legislation includes the legislation or in ratifications of regional agreements, or with respect to measures required to Copyright Act, 1987, the Patents Act, 1983, the Trade Marks Act, 1976 and the Industrial be taken to better enforce IPRs. The latter includes the border measures to be taken by Designs Act, 1996. customs authorities, which requires training, as well as the training of police and of

39 Overview of developments in the international trading environment 40 Trade policy trends in WTO Members and New Guinea; F K K Members are: example of Canada; Cooper W Preferential Krueger(1995) A. emphasize theimportanceofmultilater Kansas City). regional 34 33 32 cooper basis preferential tarifftreatmentonareciprocal former provideforpartnerstogr T Summers (1991) R R economy thatcanaccompanythespreadof discrimination andfr liber and Currency Zones Currency and r eder T T orea; ong, ading System” Some expertsbelievethisprolifer WT/REG/W/41. Regional ashington, As shouldbewelcomed(see As (see alization, V , ation; iet Nam(http://www while thelatterpromoteopentr China; ation. Malaysia; ation (APEC), integration Chile; , for example trade “open” Singapore; T r T D Indonesia; Others arelesssanguineand ade P w he Austr .C eru; China; arning againstthe .). in Asia-P Mexico; “Regionalism andthe agreements aredistinctfrom Agreements”, “T Philippines; Policy Implications of Trade of Implications Policy alia; , regionalism. agreements insofarasthe agmentation oftheglobal he DangerousDriftto F established in1989, eder Chinese , T acific Economic J hailand; J Brunei Darussalam; . apan; New Zealand; Bhagw .apecsec.org.sg/). al ReserveBank, , T Russian Republic of aipei; for example E Press AEI United States; ant eachother APEC ati and ation of Hong ade and al tr W P apua , orld is an ade , L. N number ofR the risingnumberofR and ChileMERCOSUR, the negotiationsonfree-tr been atissuewithrespecttothedebateoveraccessessentialmedicines Agreement bydevelopingcountries–aswellthescopeoftheseprovisionshasrecently note istheprev to the of the favoured-nation (MFN)provisionsof agreements leadingtotheformationofoneorother Cuba). Agreement ofthe prev party tooneormoreR 5. magistr half ofallR tr Caribbean, in itslaststageofimplementation), effect, ties withneighboursonthepartofEuropeanCommunities(ChartIII.3). vis therestofworld. establish anelementofpreferenceinthetr structures fortheconductofagrowingshareworldtr discriminatory treatment, R to NAFT tr regional tr negotiations onbilater (EU) andcandidatestoaccessionhavebeenimplemented, Association (ChileandMexicobeingamongthemostactivecountriesinthisregard). become byfarthemostimportantexceptiontoMFNprinciple 1 1 S allows Memberstoconcludecustomsunionsandfree-tr 2 0 o 2 4 6 8 u T ade couldsoonaccountformorethanhalfofworldtr ade agreements(manyofpartialscope)concludedundertheLatin G C 0 0 u m 0 0 0 0 0 As multiplies r A majordevelopmentin2001w T Although R In the In Europe b h e c alent thancustomsunions he cornerstoneofthe Regional tr e e

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2 intr C , 0 r A (whichis al free- notably o ril 4 Article 0 s a-R ally more s r 1 ation - ade R P e T arties or g . A i o In n a l been agreed for agricultural products. In turn, the candidates to accession are linked among themselves by FTAs such as the CEFTA (Central European Free Trade Agreement) and BAFTA (Baltic Free Trade Area), which are broadly framed and modelled on the RTAs negotiated with the EU. Meanwhile, the EU is negotiating and concluding second-generation bilateral FTAs, based on a reciprocal exchange of preferences, with partners in the Mediterranean and North Africa, with the objective of a Euro-Med free-trade area by 2010. A similar process is envisaged for African, Caribbean and Pacific (ACP) countries, as part of the transitional provisions of the ACP-EU partnership agreement concluded in February 2000. The EU is also looking to forge closer ties with emerging markets in Latin America; its FTA with Mexico entered into force in mid-2000 and negotiations on FTAs with MERCOSUR and Chile have taken place over the past few months. In Africa, the regional integration process continues to intensify, with initiatives in western and eastern Africa involving in some cases the same countries with different objectives and rules.35 In western Africa, countries are working at the completion of the West African Economic and Monetary Union (WAEMU) and Central African Economic and Monetary Community (CEMAC).36 Certain Members of the Economic Community of West African States (ECOWAS) agreed to establish a common external tariff by the end of 2001, but progress has been uneven.37 Ambitious plans to achieve a free-trade area among 20 countries in eastern and southern Africa under the COMESA, supported by closer monetary cooperation, are under way.38 Members of the SADC are working towards achieving a free-trade area by 2004.39 In Asia, Japan, like the Republic of Korea, has shifted its long-standing policy of multilateral-only trade liberalization to sign an FTA with Singapore in 2001, and has formed a study group to consider the feasibility of FTAs with the Republic of Korea and Mexico. Singapore hopes to conclude FTAs with Australia, Canada, and Mexico; an FTA with New Zealand was concluded in November 2000. Singapore, already a member of ASEAN, considers such FTAs as a useful means to forge links with trading partners. Similar considerations are motivating Thailand in its search for bilateral FTAs with Croatia, the Czech Republic, and the Republic of Korea. The Members of ASEAN moved towards their objective of achieving a free-trade area by 2005, although most tariffs will already be cut to between zero and 5% by 2002. The Republic of Korea is negotiating an FTA with Chile, and is s considering the feasibility of FTAs with Japan and Thailand. In the rest of the world, regional initiatives have been burgeoning, from the Middle-East (in the context of the Gulf Cooperation Council and the Arab League) to Eastern Europe O Member (customs union between several former Soviet Union countries) and South Asia (recent free- WT trade agreement between India and Sri Lanka and the South Asian Association for Regional Cooperation (SAARC)), involving both WTO Members and non-members. ends in While it was argued that regional integration could strengthen after Seattle, in response to disappointment with the multilateral trading system, most of the initiatives described

above were designed or launched before the Third WTO Ministerial Conference. In addition, ade policy tr ading environment r not all regional processes are moving forward without difficulties. The process established Overview of developments in the international tr T under APEC to meet the goal set at Bogor in 1994 of “free and open trade and investment in the Asia-Pacific by 2010 for developed member economies and 2020 for developing ones”, through autonomous MFN tariff reductions has not advanced significantly in recent years.40 MERCOSUR has encountered obstacles following the decision by Argentina, on an 35 Concerns have been voiced by multilateral emergency basis, to suspend certain regional commitments and impose a surcharge on and regional aid agencies over the number of internally inconsistent initiatives, particularly in imports in the autumn of 2000. Finally, plans to complete customs unions or FTAs in Africa eastern and southern Africa. COMESA, SACU, have at times proved difficult to complete or been slowed by significant delays or even SADC and the EAC have overlapping memberships, conflicting obligations, different defections by parties. strategies and objectives, and conflicting rules Still, the evidence regarding the stock of completed RTAs, and the large number of RTAs and administrative procedures (one example is the existence of multiple rules of origin, leading planned or under negotiation, is testimony to the basic attraction of such agreements to to possible discretion at customs and costly virtually all WTO Members. RTAs can offer intermediate steps to the broader process of duplication of administrative efforts). integration into the world economy and, in some cases, achieve faster and deeper 36 WAEMU is composed of Benin, Burkina Faso, Guinea-Bissau, Côte d’Ivoire, Mali, Niger, liberalization than is possible at the multilateral level. Some countries argue that Senegal and Togo; and CEMAC comprises liberalization at the regional level is sometimes a prerequisite to achieving multilateral Cameroon, the Central African Republic, the consensus. Other countries view trade agreements as part of a wider integration projects, Congo, Gabon, Equatorial Guinea, and Chad. 37 The countries concerned are Benin, Burkina aimed at stimulating economic, social and political links in their regions; this is notably the Faso, Ghana, Mali, Niger, Nigeria, and Togo. case for small or landlocked African states, which typically seek integration of infrastructures 38 COMESA Members are Angola, Burundi, and monetary unions. In this context, the exchange of trade preferences is but an initial Comoros, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, aspect of a much broader and deeper integration agenda. Namibia, Rwanda, Seychelles, Sudan, RTAs have their limits. Experience has also shown that 100% product coverage of free- Swaziland, Uganda, Zambia, and Zimbabwe. trade provisions is the exception as opposed to the rule, as the domestic forces that resist 39 SADC is composed of Angola, Botswana, the Congo, Lesotho, Malawi, Mauritius, trade liberalization at the multilateral level are just as likely to resist it at the regional level, Mozambique, Namibia, Seychelles, South perhaps even more so given proximity. And FTA partners do not generally exempt each other Africa, Swaziland, Tanzania, Zambia, and from using trade defence instruments, which are a frequent source of dispute in the WTO, Zimbabwe. 40 For information on APEC developments, see but also regionally. For third parties, RTAs imply trade diversion as a result of tariff http://www.apecsec.org.sg/. preferences, reinforced by preferential rules of origin.

41 Overview of developments in the international trading environment 42 Annex Annex Africa Sour b a North Bound tariffsonindustrialpr T Asia Centr W Latin able AIII.1 Zimbabwe T South Senegal Gabon Chad Cameroon T Sri Lanka Singapore Philippines New Zealand Malaysia Macao Hong K J Indonesia India K Austr Slov Romania P Hungary Czech Republic T Switzerland Norw Iceland European Union United States Canada V P Mexico J El Salv Costa Rica Colombia Chile Br Argentina estern Eur Excluding petr All shar apan amaica unisia urk hailand oland eru orea, enezuela azil ce: ak Republic ey al andEasternEur America Import Mark America alia ay WTO (2001), Africa ador , Republic of es ar ong, China e expr ope China oleum. essed asaper Market Access:UnfinishedBusiness, ets ope centage ofthetotalnumberindustrialtarif T otal numberof tariff lines 11,677 10,832 15,479 11,255 10,860 10,530 oducts 1,929 5,087 2,818 4,721 4,721 4,721 5,244 5,933 4,963 5,387 5,894 5,337 8,882 5,520 5,110 7,339 7,735 4,354 4,354 4,602 5,896 4,354 6,217 5,689 7,635 7,872 6,261 4,354 5,326 5,974 3,097 4,922 1,546 6,145 5,055 4,545 a : scope ofbindingsandsimpleaver Special Study6. Shar tariff lines e ofbound 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 46.3 98.1 32.3 67.9 65.5 58.6 61.8 90.4 95.9 23.5 99.2 93.2 61.6 95.4 36.3 98.9 93.2 99.6 95.8 8.8 0.4 0.1 8.0 9.9 b f lines(column1). Shar duty-fr e ofbound lines 15.2 39.4 11.6 17.7 23.5 47.4 14.0 10.4 14.0 17.2 46.5 41.6 26.9 39.4 34.5 3.0 0.0 7.7 0.0 0.0 0.0 0.9 0.0 0.1 9.9 0.0 1.6 0.0 0.0 5.8 2.2 1.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.5 0.0 ee tariff ages Shar duty-fr e ofunbound 44.7 90.1 33.8 76.5 lines 1.0 0.3 0.0 0.0 0.0 0.0 1.2 1.4 0.0 0.0 2.8 0.0 0.2 0.4 1.2 0.4 0.0 0.0 0.0 0.2 0.0 0.8 0.0 0.0 2.9 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ee tariff Shar tariff lines valor e ofnon-ad 19.7 22.4 82.8 N N N N N 0.0 1.3 0.0 0.0 0.0 0.0 0.2 4.1 2.5 3.2 0.2 0.8 0.0 3.5 0.0 1.1 0.0 0.0 0.0 0.1 0.0 0.1 2.6 0.0 0.5 4.2 0.3 0.0 0.0 0.0 0.2 0.1 0.0 0.0 .A .A .A .A .A em Simple aver bound tariff 11.3 34.0 17.7 15.5 17.8 17.6 13.8 27.5 28.1 26.1 12.7 17.2 11.7 14.2 38.9 58.7 30.8 10.4 42.6 33.9 50.0 36.9 44.6 35.5 25.0 30.0 34.8 30.0 31.0 0.0 4.6 0.0 3.5 1.8 4.3 7.4 4.3 3.4 9.7 4.1 3.9 5.2 age Hungary Republic Czech Eastern Eur T Switzerland Norw Iceland Union European W V Mexico J El Salv Colombia Chile Br Latin States United Canada North Bound tariffsonindustrialpr T amaica urk mark able AIII.2 enezuela Import estern Eur azil ey ay America ador ets America Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials ope ope of pr Stage ocess W paper furni- pulp 52.8 39.2 15.7 18.1 34.6 32.8 31.8 34.6 34.1 30.1 50.0 50.0 50.0 39.7 30.0 36.4 35.0 35.0 35.0 25.0 25.0 25.0 31.1 tur 25.8 20.2 and ood, 6.6 5.4 1.6 6.0 6.2 2.3 1.7 2.9 1.2 0.6 0.2 0.0 6.1 1.9 0.5 1.0 0.0 0.7 0.7 0.0 1.9 0.9 0.2 e , oducts: clothing T extiles 89.8 74.2 27.3 18.2 34.9 35.0 34.7 35.0 35.1 34.2 50.0 50.0 50.0 40.0 37.1 40.0 38.8 35.0 35.3 25.0 25.0 25.0 34.9 34.8 35.0 14.5 11.1 and 9.6 7.1 3.1 7.8 4.8 3.3 5.5 3.9 1.6 9.5 7.8 0.1 3.4 1.1 9.7 6.6 2.6 9.1 9.1 2.8 2.5 simple aver footwear Leather rubber goods tr 87.3 87.6 18.1 19.1 34.6 33.9 34.9 34.9 34.7 34.8 50.0 50.0 50.0 42.4 38.5 40.0 35.5 35.0 34.6 25.0 25.0 25.0 35.0 34.4 34.3 11.7 10.3 and avel 7.2 6.9 4.6 5.7 2.2 0.6 3.2 0.8 0.1 4.4 0.0 8.4 0.3 7.0 2.4 0.1 2.3 0.0 5.7 0.3 , , ages bystageofpr Metals 47.9 24.5 15.3 34.4 32.8 35.0 35.0 34.4 34.1 50.0 50.0 50.0 39.9 32.8 26.3 35.0 35.0 35.0 25.0 25.0 25.0 33.4 33.3 35.0 8.0 3.9 1.4 4.6 3.7 0.1 6.0 1.3 1.1 0.0 2.5 0.3 0.0 2.1 1.6 2.8 1.2 0.0 2.9 1.1 0.8 5.2 1.7 0.1 Chemicals supplies gr photo- 35.6 27.0 34.3 34.0 35.4 35.1 50.0 50.0 36.7 38.0 35.0 35.0 25.0 25.0 26.2 21.6 and aphic 7.2 5.0 3.8 4.1 1.2 1.5 2.9 3.0 6.5 1.2 3.4 5.2 2.3 4.1 3.9 4.7 ocessing andbycategory equip- T ment 15.9 25.8 17.1 33.6 35.8 50.0 port 35.8 35.8 24.9 33.6 r ans- 6.2 2.2 3.3 4.7 2.7 6.8 electric machi- Non- 23.7 nery 33.2 35.0 50.0 32.6 35.0 25.0 32.6 8.4 3.8 0.6 2.7 7.0 1.8 1.2 3.6 Electric machi- 26.6 19.4 nery 33.9 34.1 50.0 34.6 35.0 25.0 31.9 9.5 4.2 0.7 2.7 3.3 2.1 5.2 pr pr pr Miner metals stones oducts 49.7 35.8 26.3 20.9 34.6 33.8 33.8 35.0 33.6 33.7 50.0 50.0 50.0 ecious ecious 39.2 32.6 39.1 35.1 35.0 35.1 25.0 25.0 24.8 34.8 29.4 34.3 and and 6.6 4.6 3.2 5.8 3.6 0.4 1.4 1.5 1.7 1.3 0.0 0.2 5.5 2.3 3.7 2.4 0.4 5.3 1.3 0.6 4.4 1.0 2.7 al factur articles Manu- wher speci- else- 43.3 21.9 33.4 34.6 50.0 38.2 35.0 25.0 33.5 fied not 7.8 3.6 1.3 2.2 2.7 3.0 4.2 ed e pr and fish oducts Fish 23.6 22.9 13.9 58.8 25.0 21.2 30.9 10.4 14.1 13.3 11.2 33.5 34.8 33.4 36.0 33.0 35.0 52.4 50.0 50.0 55.2 48.3 42.4 63.8 35.0 35.0 25.0 25.0 25.0 34.5 25.6 35.0 0.0 0.0 0.2 1.1 0.2 0.3 0.0 0.0 0.0 1.5 4.0 1.7 0.7 4.6 0.3 0.6 43 Overview of developments in the international trading environment Annex Overview of developments in the international trading environment 44 Annex Cameroon Africa T Singapore Sri Lanka Philippines Zealand New Malaysia China Macao Republic of K J Indonesia India China Hong K Austr Asia/P Republic Slov Romania P Bound tariffsonindustrialpr T apan hailand mark orea, able AIII.2 oland Import ak alia , acific ets ong, Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials (continued) of pr Stage ocess W paper furni- pulp 21.9 20.6 24.1 24.8 22.3 41.9 31.9 13.1 37.2 32.5 13.7 20.5 19.7 19.7 39.9 39.8 38.3 81.1 40.4 25.1 tur 31.3 30.5 34.0 and 5.6 3.6 ood, 8.3 1.8 4.2 4.2 4.6 0.0 0.0 0.0 0.0 7.1 2.1 0.6 1.9 0.1 0.0 0.0 0.0 8.9 7.0 0.3 6.0 6.2 2.3 8.8 9.0 3.1 e , oducts: clothing T extiles 27.7 18.8 12.6 30.4 27.6 29.3 56.7 40.2 22.6 31.2 25.7 14.4 34.4 23.5 19.6 24.5 14.0 39.8 40.0 40.0 93.8 86.5 39.1 35.7 22.9 33.1 32.5 33.4 16.7 10.1 and 8.3 9.6 5.1 6.8 9.2 0.0 5.2 0.0 0.0 0.0 8.1 5.9 2.6 0.0 0.0 0.0 1.5 7.8 4.8 3.3 5.7 simple aver footwear Leather rubber goods tr 25.9 17.8 10.0 35.8 34.7 28.6 47.8 43.8 29.6 40.3 27.1 20.6 23.1 14.8 24.4 21.1 10.2 19.8 11.1 20.7 10.4 39.8 40.0 39.0 96.3 33.7 37.0 22.0 11.5 29.7 30.3 35.0 13.6 11.2 and avel 3.0 1.2 6.3 5.9 0.0 0.0 0.0 9.4 0.1 0.0 0.0 0.0 4.2 5.7 2.2 0.6 7.4 , , ages bystageofpr Metals 20.9 13.2 10.0 31.9 21.4 28.8 31.4 33.6 18.8 10.6 15.2 19.5 12.0 13.2 38.7 35.1 40.0 82.1 47.1 29.0 11.8 30.0 32.5 35.0 10.5 10.2 2.1 4.1 0.0 9.1 5.0 9.4 0.0 5.8 0.0 0.0 0.0 4.5 1.2 0.9 1.0 0.0 0.0 0.0 0.0 0.8 0.6 4.6 3.7 0.1 2.5 Chemicals supplies gr photo- 15.6 10.3 28.1 29.7 28.4 11.3 28.4 20.8 11.4 16.8 14.7 37.2 37.5 61.1 39.4 28.7 31.2 and aphic 4.6 5.2 4.1 0.0 0.0 8.2 6.0 1.0 2.9 0.0 0.0 7.6 9.8 3.8 4.1 9.1 8.6 ocessing andbycategory equip- T ment 14.9 38.5 18.3 26.1 17.0 29.8 24.6 58.5 port 53.9 15.1 32.1 16.1 r ans- 4.4 0.0 0.0 0.0 6.2 electric machi- Non- 12.2 23.4 12.8 22.0 15.1 10.9 nery 11.1 36.6 36.2 29.5 4.3 0.0 0.0 0.0 9.1 3.8 8.9 Electric machi- 16.8 30.5 20.4 26.2 16.1 14.1 nery 16.1 38.7 44.8 13.3 27.3 4.9 0.0 0.0 0.2 0.0 0.0 4.2 9.7 pr pr pr Miner metals stones 23.7 17.5 12.6 33.0 27.9 17.4 oducts 39.0 11.9 18.9 35.6 30.3 17.8 13.1 21.4 13.3 14.9 40.0 37.1 39.5 ecious ecious 58.0 40.6 38.5 11.1 32.0 35.0 30.4 10.5 and and 8.6 2.4 1.4 2.2 0.3 1.6 2.1 5.4 0.0 0.0 0.0 5.6 1.8 0.5 0.2 0.0 0.0 0.0 6.0 5.8 3.6 0.4 6.3 2.8 al factur articles Manu- wher speci- else- 22.9 29.5 27.1 29.5 11.7 12.6 11.4 36.9 72.4 29.3 11.6 fied not 1.2 0.0 1.1 0.0 7.0 3.6 ed e pr and fish 106.6 oducts 22.9 17.8 Fish 27.6 20.0 24.3 27.0 10.0 10.0 45.8 50.0 50.1 41.9 50.0 24.9 20.4 22.5 20.0 10.4 40.0 40.0 40.0 60.0 60.5 31.8 28.3 27.1 27.9 10.8 14.3 6.9 8.8 8.8 6.6 0.0 1.1 9.8 0.0 0.0 0.0 7.9 5.2 0.0 0.0 0.0 3.2 0.0 0.4 0.0 0.0 0.2 T Africa South Gabon a Chad Bound tariffsonindustrialpr T unisia mark able AIII.2 Sour Import ce: ets WTO (2001), Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials Finished products Semi-manufactures Raw materials (continued) of pr Stage ocess Market Access:UnfinishedBusiness W paper furni- pulp 36.9 36.2 18.2 15.5 tur 16.5 15.0 15.0 21.9 20.6 24.1 and ood, 6.7 1.2 e , oducts: clothing T extiles 57.3 55.2 55.5 36.6 23.9 12.5 15.1 15.0 15.0 27.7 18.6 11.6 and simple aver pca td ,p 36. 6,p. , SpecialStudy footwear Leather rubber goods tr 39.1 35.4 25.2 27.0 16.3 12.7 15.0 15.0 15.0 25.9 17.8 10.0 and avel , , ages bystageofpr Metals 32.0 22.6 17.0 20.0 10.8 15.6 15.0 15.0 20.9 13.2 10.0 0.0 Chemicals supplies gr photo- 30.7 24.9 16.7 13.0 15.2 15.1 15.6 10.3 and aphic ocessing andbycategory equip- T ment port 25.5 23.3 15.0 20.2 r ans- electric machi- Non- nery 25.2 12.0 15.2 12.2 Electric machi- nery 29.1 17.4 15.0 16.8 pr pr pr Miner metals stones oducts ecious ecious 35.3 26.9 20.4 16.8 16.8 16.6 15.0 23.7 17.5 12.6 and and 6.7 4.3 al factur articles Manu- wher speci- else- 32.5 14.8 18.5 22.9 fied not ed e pr and fish oducts Fish 47.0 43.0 39.4 21.4 25.0 22.7 15.0 15.0 15.0 27.6 20.0 24.3 45 Overview of developments in the international trading environment Annex Overview of developments in the international trading environment 46 Annex Argentina Initiations ofanti-dumpinginvestigationsbyr T Br Sour Name Canada Austr affected exporter Chile Colombia Egypt European Union Indonesia India Isr Mexico K New Zealand P Philippines South T T United States Uruguay V T rinidad and urk otal able AIII.3 eru orea, enezuela azil ael ey ce: alia Africa Rep WTO Secr . of T obago Reporting etariat. , 2000 WT O Member Number 272 45 11 15 21 31 41 10 21 47 5 3 1 3 2 1 7 1 2 1 2 1 1 Name Argentina Austria Austr Belarus Br Bulgaria Canada Chile China, Chinese Czech Republic Croatia Egypt Estonia European Union F Germany Greece Hong K T V V United States United Kingdom India United Ukr T T Spain Moldov Mexico Malaysia Lithuania Liby Latvia Indonesia Norw Netherlands Saudi Russia Romania P P Philippines P South Slov Ir K Kazakstan J Italy apan urk r hailand otal ortugal oland eru orea, enezuela an iet Nam ance azil aine a ak Republic ey alia ay eporting Ar Africa Rep P Ar ong, a .R. abia T aipei ab Emir . of China Affected exporter ates WT O Memberand Number 272 42 14 12 10 10 19 13 10 6 4 2 3 2 9 1 1 3 1 1 1 9 1 4 1 1 1 2 8 2 6 7 6 6 1 7 1 1 2 2 2 4 1 5 1 1 1 3 1 3 3 9 5 Argentina Initiations ofanti-dumpinginvestigationsbyr T Name Br Austr affected exporter Canada European Community India Indonesia J Isr K Mexico New Zealand T South T United States Uruguay V T apan urk hailand otal able AIII.3B orea, enezuela azil ael ey alia Africa Rep . of Reporting , 1 J WT anuary-30 J O Member Number une 2001 134 10 10 23 13 16 39 1 3 1 3 2 2 1 1 5 1 1 2 T Name Bangladesh Argentina Belgium Br Bulgaria Canada Chile Czech Republic Chinese China, European Community F Germany India Indonesia Italy Y V United States United Kingdom Ukr T T Spain J Saudi Russia Romania P P New Zealand Netherlands Mexico Malaysia Macedonia Luxembourg South Slov Singapore Kazakstan K apan urk r otal hailand oland akistan ugoslavia orea, enezuela ance azil aine ak Republic ey eporting Ar Africa Rep P .R. abia T aipei . of Affected exporter WT O Memberand Number 134 22 10 1 1 2 3 1 3 2 9 2 2 2 5 8 4 4 3 1 1 4 4 1 6 4 1 4 3 2 1 1 1 1 2 4 2 2 1 1 2 1 47 Overview of developments in the international trading environment Annex Overview of developments in the international trading environment 48 Annex T able AIII.4B affected exporter Canada affected exporter Initiations ofcountervailinginvestigationsbyr T Canada Initiations ofcountervailinginvestigationsbyr Sour Name Name P European Community South South United States United States T T otal otal able AIII.4 eru ce: Africa Africa WTO Secr Reporting Reporting etariat. , , 1 J 2000 WT WT anuary-30 J O Member O Member Number Number une 2001 17 12 4 1 1 2 5 1 7 8 T Name Name Argentina Canada T United States T Br Chile South P India F K Isr Indonesia United Kingdom Netherlands Italy Indonesia India Germany r hailand otal otal akistan orea, ance azil ael Africa Rep eporting eporting . of Affected exporter Affected exporter WT WT O Memberand O Memberand Number Number 12 17 3 1 1 1 1 1 1 1 1 6 1 1 1 1 1 1 1 4 1 Chapter Four

WTO ACTIVITIES WTO activities 50 Part 1 .TheMinisterialConference I. 1 PART WTO activities election ofofficers forthatSession. andthe and totake decisionsonthequestionsof dateandvenueoftheFifthSession, Ministersalsorequested the WTO General Counciltopursueconsultations described below. Theoverview of actionstaken byMinistersunderitem 2oftheagendaare WTO activities. intergovernmental organizationsdelivered statementsunderthefirstagendaitemon nineobservergovernments andfourobserverinternational 118Members, days, Inthecourseofformalplenary meetingsoverthefollowing the endofFifthSession. and(iv)electofficerstoholdofficeuntil decide onthedateandvenueofFifthSession; (iii) (ii)adoptaMinisterialtextortextsandtake anyotheractionsnecessary; activities; (i)review WTO adopted afour-point agendafortheConferenceunderwhichtheyagreedto: Ministers andbytheChairmanof theGeneral Council. Kofi Annan, Mr. Secretary-General, onbehalfoftheUN RubensRicupero, Mr. bytheSecretary-General ofUNCTAD, WTO, bytheDirector-General ofthe bytheChairmanofConference, Emir oftheStateQatar, andwithaddressesbyHisHighnessSheikh HamadbinKhalifa Al-Thani, Commerce ofQatar, Economyand MinisterofFinance, Youssef HussainKamal, Mr. chairmanship ofH.E. necessary toconcludeagreement(seeunder Work oftheGeneral Councilbelow). MinistersatDohawouldhavetotake thecriticalpoliticaldecisions comprehensive package, that althoughtheyhadwithintheirgrasp alltheingredientsnecessaryforabalancedand Membersacknowledged November, At theendofpreparatory processinGeneva on1 although thediscussionshelpednarrowdownmanyofoutstandingissues. theGeneva processdidnotresultinconsensustextsforsubmissiontoMinisters, however, Despite veryintensiveandconstructiveeffortsinkey areas, General Councilin April. for actionbyMinistersonthebasisofachecklistissuesoutlinedChairman the General Councilsystematicallyreviewedissuesforinclusionontheagenda Council. these confidence-buildingmeasureshavebeenatthecentreofworkGeneral Intheperiodsincethen, internal transparency andeffectiveparticipationofallMembers. andadedicated process toseekimprovementsintheareaof the Fourth Ministerial, with amandatetocompletethisworknotlaterthan existing agreementsanddecisions, concerns raised bymanydeveloping-countryMembersregardingtheimplementationof aseparate mechanismtodealwiththeserious cooperation andcapacity-buildingactivities, acomprehensivereassessmentoftechnical identify thedifficultiesfacingLDCsin WTO, These includedspecificinitiativesto comprehensive setofconfidence-buildingmeasures. theChairmanofGeneral CouncilandtheDirector-General announceda In early2000, preparations forDohabeganimmediatelyaftertheSeattleMinisterialConference. however, Inasense, theexecutivebodyof WTO inbetween MinisterialConferences. Council, undertheresponsibilityofGeneral startinginFebruary 2001, organized inGeneva, AprocesstopreparefortheDohaMinisterialConferencewas November2001. 9-14 necessary. andsettheagendaforfurtherworkas political guidanceanddirectiontothatwork, provide MinisterialConferencesreviewongoingwork, at leastonceeverytwoyears. andisrequiredtomeet is thehighestdecision-makingbodyoforganization, Plenary Meetings The Fourth SessionoftheMinisterialConference h orhSsinfral pndi h feno f9Novemberunderthe The Fourth Sessionformallyopenedintheafternoonof9 In thesubstantiveprocessofpreparations fortheDohaMinisterialConferencein2001, from Qatar, The Fourth SessionoftheMinisterialConferencewas organizedinDoha, composedofrepresentativesalltheMembers, The MinisterialConferenceofthe WTO, This chapterprovidesanoutlineofthemainactivities WTO during2001. Informal Consultative Process

While the plenary business of the Doha Conference got under way, and in order to make maximum use of the time available and to give all delegations the opportunity to participate in the continued work of drafting Ministerial texts and related Decisions for adoption under the second agenda item, the Chairman began, on the first full day of the Conference, a process of intensive informal open-ended meetings at the level of Heads of Delegation – a process which continued over the next four days. The main purpose of these informal meetings was to facilitate consensus-building on the texts that would be put forward for formal consideration and action under agenda item 2, in a flexible, transparent, open and inclusive fashion, in a process similar to the one followed in Geneva in preparing for the Conference. With a view to inclusiveness and transparency, this open Heads of Delegation format was the core of the informal process. The basis of work in this informal consultative process were texts forwarded to Ministers by the Chairman of the General Council and the Director-General concerning a draft Ministerial Declaration, a draft Declaration on Intellectual Property and Access to Medicines/Public Health, and a draft Decision on Implementation- Related Issues and Concerns. The immediate focus of work was on six key issues, with the understanding that provision would be made as necessary for other areas of concern to be addressed. Open-ended Heads of Delegations meetings were organized on each issue in sequence, at which delegations were invited to make brief and focused interventions, after which the Chairman asked a “Friend of the Chair” to undertake further work on each issue on his behalf. The Friends of the Chair were available to all delegations wishing to raise issues of particular concern, and were requested to seek the views of interested Ministers before reporting back to the informal Heads of Delegations meetings on progress. The Chairman underscored that the task of the Friends of the Chair was to resolve differences and thus facilitate consensus, and that any decisions could ultimately only be taken by the membership as a whole.

Table IV.1

List of the issue areas and the Friends of the Chair

Issue Focus Friend of Chair

Agriculture Declaration text concerning negotiations on Agriculture Minister for Trade and Industry, H.E. Brigadier-General George Yeo (Singapore) Implementation Outstanding implementation issues and concerns Federal Counsellor for Economy, H.E. Mr. Pascal Couchepin (Switzerland) Trade and Environment Environmental concerns and the WTO agenda Under-Secretary of Foreign Relations, H.E. Mr. Heraldo Muñoz (Chile) Rules Issues WTO rules Minister for Trade and Industry, H.E. Mr. Alec Erwin, MP (South Africa) Singapore Issues Investment; competition policy; transparency Minister for International Trade, H.E. Mr. Pierre Pettigrew (Canada) in government procurement; trade facilitation TRIPS TRIPS and Health/Access to Medicines Secretary of Economy, H.E. Mr. Luis Ernesto Derbez Bautista (Mexico) Other Issues Issues not covered in the above issue areas Minister for Trade, Industry, Wildlife and Tourism, the Hon. Tebelelo Seretse (Botswana)

The work undertaken in the informal consultative process on the above issues – and by ence the Friends of the Chair, which fed directly into that process – continued intensively over the following four days, and paved the way for consensus agreement to submit for formal adoption by the Conference on 14 November a draft Ministerial Declaration, a draft Declaration on the TRIPS Agreement and Public Health, and a draft Decision on

Implementation-Related Issues and Concerns. O activities WT The Ministerial Confer Results of the Fourth Session

The results of the Ministerial Conference as described below reflect the determination of governments to provide leadership and direction at a time of considerable political and economic uncertainty, to overcome differences by recognizing and accommodating others’ needs and concerns, and to work together to make trade an instrument for global development, peace and security. First, on 10 and 11 November respectively, Ministers met to take two historic accession decisions, one regarding the People’s Republic of China and the other regarding the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, whose respective requests for accession had been under consideration for roughly 15 years (for the former) and 12 years (for the latter). The integration of these two economies into the WTO is an event of major political significance, and brings two of the world’s important trading entities into the

51 WTO activities 52 WTO accession negotiations II. WT O accessionnegotiations countries inthisareaofactivity that implemented inamannersupportiveof av Declar progr remaining implementationissueswouldbeaddressedinthecourseoffuturework address anumberoftheconcernsr the multilater countries regardingtheirexperiencewiththeimplementationandoper which representedasignificantandcredibleefforttoaddresstheconcernsofdeveloping truly globalinscopeandapplication. addition totheusualtr w negotiations levels andcommercialpresencefor foreignservicesuppliers)arethesubjectofbilater form agovernment’ and serviceslegislationtoenforce intellectualpropertyrights tr flexibility forthispurpose right ofMemberstousethefullprovisions should notpreventMembersfromtakingmeasurestoprotectpublichealthandreaffirmsthe Agreements information withrespecttopharmaceuticalproducts countries inregardtotheprotectionandenforcementofpatentsundisclosed addition, for accesstodrugs multilater centr world tr account formorethan90%ofworldtr GA process thathasbecomemorecomplexbecauseofthe accession ofChinese new members: of individualworkingparties conduct ofitstr response totheconcernsexpressedaboutpossibleimplicationsof Agenda, diverse membershipofthe to addressthechallengesfacingtr negotiations inagricultureandservices–aswellotheractivitiesdecisionsdesigned the goalofuniversalmembership for the non-discrimination obligationsunderthe A over 25years earlier LoméConventions States underthe treatment toproductsfromcountriesofthe would bereplacedby June 2000, gr separ CP States ade policiesandpr as currentof31 December2001: anted bytheEUtoits77 ailable inthe TT Fifth, An importanttaskfacingthe During theperiodcovered(1J WT F T Second, ourth, hird, WT ally-planned tomark . ate quotafor amme ofthe With manyofthecandidatescurrentlyundergoingaprocesstr ation includesanumberofimportantclarificationssometheformsflexibility O membershipisopentoanyStateorcustomsterritoryhavingfull autonomy inthe WT O technicalassistanceshouldfocus ade systemhaverequestedaccessiontothe Ministers alsoadoptedaDecisiononImplementation-RelatedIssuesandConcerns incorpor al tr it providesforanextensionuntil2016ofthetr Ministers adoptedaMinisterialDeclar O forthecomingyears , Ministers adoptedaDeclar n1 November on 14 these preferenceswereextendeduntilthebeginningof2008, , which includemanyleast-developedcountries . and tofacilitatetheiractiveparticipationinthe , al tr T ading system. he followingisalistofthe28governments forwhicha aimed atimprovingthestandardoflivingandeconomicdevelopment Lithuania, ade policies Agreement, A ates bothexpandednegotiations–goingbeyondtheongoingmandated ading system. CP-EU P WT . A s commercialpolicies T CP bananaexportsuntiltheendof2005. actices he Declar T WT O assetoutintheMinisterialDeclar aipei whobecamethe144 ade benefits–aw O-compatible tr . . et economies Moldov Ministers alsogr artnership It mak , WT . A With thesetwoaccessions , in particularcompulsorylicensingandpar such asmark . Accession negotiationsconcernallaspectsoftheapplicant’ CP partnershavebeenanessentialpillaroftheircooper Ministers approvedaw T O ation emphasizesthatthe erms andconditionsrelatedtomark . Under theDecision, . WT es clearthatthe . a andChina. . anuary to31December2001), T his workprogr aised bydeveloping-countryMembersandagreedthat O isthatofmakingthenewmultilater Agreement (Cotonou T ation onthe ading systemandtheneedsinterestsof he 144Membersofthe , ade accession tothe WT ade arr WT . et accessconcessionsandcommitments ongoods ay ofunderpinningtheirdomesticreformprocess Applications for anted aw . , O Members’righttoprotectpublichealth. African, O inordertoenableitgr Many ofthenationsthatremainoutside as amatterofpriority T angements betweenthe ation settingoutabroadworkprogr he Gener th TRIPS amme TRIPS member ofthe Caribbean andP Ministers tookimmediateactionto . WT aiver fortheEuropeanUnionfromits aiver permittingtheEUtomaintaina , the O andareatv WT Agreement shouldbeinterpretedand , TRIPS WT ansition periodforleast-developed al Councilalsoagreedtothe Agreement andPublicHealth, TRIPS called theDohaDevelopment . WT Agreement), ation. Under theCotonou O’ WT O offersthesecountries–in , s increasedcover WT O membershiparethesubject and allothermeasureswhich Unilater O tookanothersteptow Agreement whichprovide WT Agreement doesnotand O andfullerintegr Ministers furtherdirected the , O (asof15 WT et access(suchastariff on assistingdeveloping acific (A WT O on1J allel importation. al tr arious stagesofa WT ation ofexisting the successorto ant preferentialtariff ansition from A O receivedthree CP andtheEU at whichtimethey ade preferences O workingparty al tr TRIPS CP) Groupof anuary 2002. April 2002) age relativeto Agreement of ading system Agreement ation into amme ation for al T ards he in In WT . s O . Algeria, Andorra, , Azerbaijan, Bahamas, Belarus, Bhutan, Bosnia-Herzegovina, Cambodia, Cape Verde, Kazakhstan, Lao PDR, Lebanon, Former Yugoslav Republic of Macedonia, Nepal, Russian Federation, Samoa, , Seychelles, Sudan, Tajikistan, Tonga, Ukraine, Uzbekistan, Vanuatu, Viet Nam, Yemen and the Federal Republic of Yugoslavia. After the Doha Ministerial, as mandated negotiations in goods, services and TRIPS and consultations in other important sectors within the WTO continue, there is a strong interest by a significant number of acceding governments to join the WTO as soon as possible. This desire has received wide support from WTO Members who are committed to accelerating the accession process to the maximum extent possible on the basis of meaningful market-access commitments and the acceptance of the rules and disciplines of the WTO system.

III. Work of the General Council

The General Council is entrusted with carrying out the functions of the WTO, and taking action necessary to this effect, in the intervals between meetings of the Ministerial Conference, in addition to carrying out the specific tasks assigned to it by the WTO Agreement. During the period under review, the work of the General Council included the following: Preparations for the 2001 Ministerial Conference

In February 2001, the General Council accepted a generous offer by the State of Qatar to host the Fourth Ministerial Conference and, at the same time, authorized the Chairman of the General Council, in cooperation with the Director-General, to begin consultations on both organizational and substantive matters related to the preparations for that meeting. As part of its regular work, the General Council considered and took action on a number of organizational aspects relating to the Ministerial Conference. These included decisions concerning the organization of work for the Conference, the appointment of the vice- chairpersons, attendance of governments and of international intergovernmental organizations as observers at the Conference, and attendance of non-governmental organizations at the Conference. The substantive preparations for the Ministerial Conference under this mandate were conducted in a process of informal meetings, in which transparency and inclusiveness were made a top priority. Following early consultations in this process, the Chairman circulated on 20 April a checklist of possible issues to be included on the agenda of the Conference, which formed the basis for the intensive discussions in the subsequent months. At the end of June, an informal meeting of the General Council at the level of Senior Officials was convened. A further informal meeting at the end of July provided an opportunity for a collective stocktaking or “reality check”, prior to which the Chairman and the Director-General circulated a report that provided a sobering assessment of the results of the work up to that point. That report suggested that the task of bridging the substantial gaps that Members still faced in a very short time, although difficult and complex, would not be impossible, given two essential conditions: a strengthening of the political will to find consensus solutions and the conversion of that political will into negotiated outcomes. In September, consultations moved from a focus on single issues to a broader approach al Council that cut across issues and enhanced the possibility for linkages and trade-offs. On the basis of these discussions, the Chairman and the Director-General circulated a first draft of a Ministerial Declaration on 26 September, reflecting the level of development of Members’ O activities

work in each area at that time. In some areas, such as agriculture and intellectual property ork of the Gener

and access to medicines/public health, fuller texts remained to be developed. In others, WT W options for further consideration were included. The draft text represented what the Chairman and the Director-General judged to be the best possible basis at that time for reaching an eventual consensus on a text to put before Ministers in Doha. Intensive consultations subsequent to the circulation of that text indicated that although delegations had shown a willingness to engage constructively and had made considerable efforts to bridge gaps and raise comfort levels on key issues, the distance between positions in some critical areas remained. Using their best judgement, and taking account of the various positions, the Chairman and the Director-General circulated, on 27 October, a revised draft text of a Ministerial Declaration as well as a separate Declaration on Intellectual Property and Access to Medicines/Public Health in an effort to provide the basis for eventual consensus. It was made clear that nothing could be considered to be agreed definitively in the absence of agreement overall, which would be a decision for Ministers to take in Doha. At a formal meeting of the General Council on 31 October and 1 November 2001, which

53 WTO activities 54 Work of the General Council documents toMinisters ontheirownresponsibility undercoverofalettertr Chairman andDirector for reachingagreementbybuilding onthegoodworkdoneinGenev areas inrespectofwhichitw package discussion indicatedthatmostof the elementswereacceptabletoallMembersaspartofa before priority onassistingdevelopingcountriesinthisareaofactivity future workprogr action byMinistersatDoha, November resumed SpecialSessionon1 revised dr whether immediateactioncouldbeproposedonanyadditionalimplementation issues consider consultations werepursuedinOctoberonthebasisofthisdr priority onassistingdevelopingcountriesinthisareaofthe to bedecidedonbyMinistersatDoha, remaining implementationissuesbeaddressedinthecontextoffutureworkprogr OctoberandattheMinisterialConferenceitself 3 a numberofissuesforspecificimmediateactionbothatSpecialSessionscheduled September 26 discussion anddecisionbyMinisters elements Declar concerns wereexpressedbysever mark Implementation-related issuesandconcerns w bodies onissuesreferredtothem, Members intheseconsultations September Substantial progressw the implementationofsever Seattle MinisterialConference that furtherconsultationswouldnottak and theDirector possibilities forearlyagreement, elements beingputforw consultations onthebasisoffr the F them, Special Sessions implementation reviewmechanism. outstanding implementation-relatedissuesandconcernswithinthefr many developingcountries of basictelecommunicationsandfinancialservices in theUruguayRoundand, done inGenev and expectationthatMinisterswouldbeabletobuildonthegoodworkhadbeen Ministers ontheirownresponsibilityundercoverofalettertr therefore theirintentionnottorevisethetwotextsfurther successful result. contribution totheover committees important andv this areawithinthestipulateddeadline and heldalargenumberofinformalmeetingsinanintensiveefforttoconcludeitswork the processandprovidedanewfr of theMay2000Decision, continued toattachsatisfactoryresultsinthisareatermsofthemandate as submittedbytheChairmanandDirector Although fewMembersexpressed fullsatisfactionwiththedr All Over thecourseof2001, In June ourth SessionoftheMinisterialConferenceinNovember2001. ed thewr , ation containednooptionsanddidnotreflectthediversityofviewsonv and tak WT it alsoproposedrelatedactiontoensurethat , ation suggestionsforspecificimprovementsandclarifications , although someconcernsremained withregardtosomeproposals aft Decisionw O Membersareboundtoimplementthemultilater while othersconsideredthatitrepresentedasoundbasisforcontinued , . . seven Memberssubmittedadiscussionpaperwhichinjectedfreshthinkinginto Dr Discussions earlyintheyearclearlydemonstr , awing onimportantandv e decisionsforappropriateaction, ap-up ofthesubstantiveprepar a andcreatebasisforreachingagreementatDoha. reflecting thelevelofdevelopmentworkuntilthatstage , aluable technicalexpertiseav -Gener w amme assetoutinpar as calledontoassessexistingdifficulties -Gener as alsomadeinfurtherintensiveconsultationsconductedthroughout al hadtak all processfortheDohaMinisterialConferenceandk ssbitdt ebr n2 Octoberforconsider as submittedtoMemberson27 ard bytheChairmanandDirector , and broadrecognitionthatthiswouldbeavitallyimportant if applicable the Gener al and thatoutstandingissuesbeaddressedinthecourseof the Gener al indicatedtheywouldtr as hopedthatMinistersatDohawould beablecreateabasis , WT many Membersr , and takingintoaccounttheworkundertak pending furtherdiscussiononremainingelements en theprocessinGenev O agreementsanddecisions al Membersthatthedr amework forapproachingtheissues a firstdr amework offeredbythispaperresultedinspecific Under thisfr . T al CouncildecidedinMay2000toaddress he Chairmanindicatedthat, al CouncilmetinthreeSpecialSessions . and alsothat , aluable contributionsprovidedbyawider . In itswork, e themanyclosertoimprovingthetexts agr the post-UruguayRoundcommitmentsinareas It proposedasinglesetofissuesforimmediate aft Decisiontoaddressalltheoutstandingissues aph 12ofthedr ailable inother ations fortheMinisterialConference aised seriousconcernsinconnectionwith amework, and tocompletethisprocessnotlaterthan -Gener . . In addition, In thecourseofprepar the Gener WT WT ansmit thedr al forMembers’consider O technicalassistancefocusedasa O technicalassistancefocusasa aft textoftheMinisterial a asfartheypossiblycould, ated thesignificancethatMembers , the Gener , WT but r al tr aft MinisterialDeclar identify w WT aft inanefforttotak . -Gener al Councilalsodrewuponthe it proposedthatany F . O’ ollowing aninitiativeby O councilsand ade agreementsconcluded aft textinitsentirety ansmittal, ather totr s work. in theirjudgement, aft Decisionandrelated al inmid-Julyas al Council, a. amework ofan , . ays neededtoresolve and toexamine F Intensive or thispurpose Further intensive . ations forthe . T ansmit themto with thehope en insubsidiary he textproposed T ey toa ation ata hese were ansmittal, meeting in ation on ation. . ange of e into It w . , arious , amme . as the As , A he the and and recommend that in the organization of their work on this subject, Ministers seek to focus on the limited number of outstanding issues and not reopen the text in other areas. Mandated negotiations on agriculture and services

The General Council continued to oversee progress in the mandated negotiations on agriculture and services through periodic reports submitted by the Committee on Agriculture and the Council for Trade in Services on work undertaken in their Special Sessions. Accessions

The General Council established working parties to examine the applications of the Bahamas, the Federal Republic of Yugoslavia and Tajikistan. Waivers under Article IX of the WTO Agreement

The General Council granted a number of waivers from obligations under the WTO Agreement (see Table IV.2). In October and December 2001 the General Council conducted its annual review of waivers required under Article IX:4 of the WTO Agreement. The following waivers were reviewed: Canada – CARIBCAN, granted on 14 October 1996 until 31 December 2006 (WT/L/185); Cuba – Article XV:6 granted on 14 October 1996 until 31 December 2001 (WT/L/182); Hungary – Agricultural export subsidies, granted on 22 October 1997 until 31 December 2001 (WT/L/238); United States – Andean Trade Preference Act, granted on 14 October 1996 until 4 December 2001 (WT/L/184); United States – Caribbean Basin Economic Recovery Act, granted on 15 November 1995 until 31 December 2005 (WT/L/104); United States – Former Trust Territory of the Pacific Islands, granted on 14 October 1996 until 31 December 2006 (WT/L/183); EC. – Autonomous preferential treatment to the countries of the Western Balkans, granted on 8 December 2000 until 31 December 2006 (WT/L/380 and

Table IV.2

Waivers under Article IX of the WTO Agreement

Member Type Decision of Expiry Document

Nicaragua Implementation of the Harmonized Commodity 8 May 2001 31 October 2001 WT/L/397 Description and Coding System – Extensions 31 October 2001 30 April 2002 WT/L/426 of Time-Limit

Sri Lanka Implementation of the Harmonized Commodity 8 May 2001 31 October 2001 WT/L/398 Description and Coding System – Extensions 31 October 2001 30 April 2002 WT/L/427 of Time-Limit

Zambia Renegotiation of Schedule – Extensions of Time-Limit 8 May 2001 31 October 2001 WT/L/399 31 October 2001 30 April 2002 WT/L/428

Cameroon Agreement on the Implementation of Article VII 8 May 2001 1 July 2001 WT/L/396 al Council of the GATT 1994

Argentina, Brazil, Egypt, El Salvador, Introduction of Harmonized System changes 8 May 2001 30 April 2002 WT/L/400 Guatemala, Iceland, Israel, Malaysia, Morocco, into WTO Schedules of Tariff Concessions

New Zealand, Norway, Pakistan, Panama, on 1 January 1996 – Extension of Time-Limit O activities ork of the Gener

Paraguay, South Africa, Switzerland, Thailand, WT W Uruguay, Venezuela

Madagascar Agreement on the Implementation of Article VII 18 July 2001 17 November 2003 WT/L/408 of the GATT 1994

Switzerland Preferences for Albania and Bosnia-Herzegovina 18 July 2001 31 March 2004 WT/L/406 Thailand Agreement on Trade-Related Investment Measures 31 July 2001 31 December 2001 WT/L/410 Colombia Article 5.2 of the Agreement on Trade-Related 20 December 2001 31 December 2003 WT/L/441 Investment Measures Cuba Article XV:6 of the GATT 1994 – Extension of Time-Limit 20 December 2001 31 December 2006 WT/L/440 Dominican Republic Minimum values under the Customs Valuation 20 December 2001 1 July 2003 WT/L/442 Agreement Haiti Customs Valuation Agreement 20 December 2001 30 January 2003 WT/L/439

55 WTO activities 56 Work of the General Council subject willtak W Group’ assessing thedesir tr (3) stocktakingandanalysisofexistinginternationalinstrumentsactivitiesregarding and, on tr pursuant totheMinisterialDeclar a newmandate(par economic growth; implications oftherelationshipbetweentr that theworkundertak established toexaminetherelationshipbetweentr regarding theworkinCommittee from theChairpersonofCommitteeonRegional identified asimportant inrelationtotr since November1997. issues meetings 5 proposals madebymembers developed atthefirstmeetingof the disciplines inthisareaswouldbeinitiatedthefuture Dispute SettlementUnderstanding. circulation of the Councilfor a firstsubstantivediscussiononreportssubmittedtoitinJuly1999andDecember2000by 2001 theGener electronic commercealsotookplaceundertheauspicesofGener Development. Related Electronic commerce Corr W Other issues W consensus Chairman listingtheissuesthathad beenr Gener Chairman oftheSub-CommitteeonLeast-DevelopedCountriesandfromDirector the Gener handling the consultations withdelegationsonthemostappropriateinstitutionalarr Gener further dedicateddiscussiononcross-cuttingissueswillbeheldundertheauspicesof 2000 until31December2006(WT/L/381). competence andwouldk and Development)withregardtotheworkone-commerceintheirrespectiveareaof involved inelectroniccommerce(thethreeSector Gener th ade andinvestment; orking GrouptotheGener orking GroupontheRelationshipbetween orking Groupon Session oftheMinisterialConferencein2003. In November2001, In 2001, T At theSingaporeMinisterialConferenceheldinDecember1996, Other issueswhichwereconsideredbytheGener As partofthe W .1); he ansparency ingovernmentprocurementpr based onthisstudy orking GrouparelistedinaChecklistofIssuessuggestedforStudywhichw al ontheIntegr al Councilearlyin2002; , al Councilwillcontinuetooverseeprogressmadeinthefoursubsidiarybodies s discussionsfrom1997to2001arecontainedintheannualreportssubmittedby under eachoftheitemsthatwere discussedbytheGroupatitsmeetingsheld W T Aspects ofIntellectualPropertyRightsandtheCommitteeon urk , orking Groupon al Councilaftertheseconddedicateddiscussiononcross-cuttingissues; , the at thatSessiononmodalitiesofnegotiations ey –PreferentialtreatmentforBosnia-Herzegovina, the Groupheldtwomeetings(on 4Mayand17September). W WT A dedicateddiscussiononissuesofacross-cuttingnaturerelev W e placeafterthe5 ork Progr T al Councilagreedtoorganizefutureworkone-commerceasfollows: r orking Grouprevertedtotheissues beforeitonthebasisofanoteby O documents ade inGoods W (2) theeconomicrelationshipbetweentr ability ofpossiblefutureinitiativesinthisarea. ork Progr agr ated F and (4)certainquestionsofamoreprospectivenaturerelev en wouldnotprejudgewhethernegotiationsonmultilater at theDohaMinisterialConference aphs 20-22oftheDohaDeclar T , amme onElectronicCommerce his notereflectsthesystemicstudy of12issuesthatwere eep futureworkunderperiodicreview to developelementsforinclusion in anappropriateagreement”. T T r r ansparency inGovernmentProcurementwhichw amework PilotSchemeadoptedinF . r al Council(WT/WGTI/1-5, amme onElectronicCommerce ansparency inGovernmentProcurement T , , his Checklistcomprisesfourcategoriesofissues: and proposalstoamendorreviewcertainprovisionsofthe (ii) theChairmanofGener the Councilfor th ation ofDecember1996ismandated Session onthebasisofadecisiontobetak T he Gener . W orking GroupinJune1997onthebasisofspecific ansparency ingovernment procurement. ade andinvestmentfordevelopment aised, al Councilhasalsoreceivedreportsfromthe T actices r ade inServices al CouncilsandtheCommitteeon It isagreedthatnegotiationsonthis ade andinvestment, together withthepointsmadeon these al Councilincludederestrictionand T , r ade ation) foritsworkthroughtothe . taking intoaccountnationalpolicies and . . T T he substantivesubjectsstudiedby he Chairmanwillreportbackto , Agreements onthesituation ade andinvestment; d.1). Add. the , the Gener al Councilwillconductinformal T , , W gr r ebruary 2001, as appropriate the Councilfor ade andInvestment orking Groupw anted on8December Summaries ofthe a al Council. T W r al Councilengagedin angements for ade and “to conductastudy on theunderstanding orking Groupw At these as established ant to en, . and areport (1) the T In December r as given T al ade- as by explicit ant to hese are: (iii) the T W r - ade (i) a orking as , definition and scope of government procurement; procurement methods; publication of information on national legislation and procedures; information on procurement opportunities, tendering and qualification procedures; time-periods; transparency of decisions on qualification; transparency of decisions on contract awards; domestic review procedures; other matters related to transparency (maintenance of record of procurement proceedings, application of information technology, language, fight against bribery and corruption); information to be provided to other governments (notification); WTO dispute settlement procedures; and technical cooperation and special and differential treatment for developing countries. At the May meeting, the Group also heard an exchange of views on the experience of a number of Parties regarding the application of information technology to government procurement in their countries and parties to some regional agreements reported on the recent developments in the work of regional fora on government procurement, and provided information on the treatment of government procurement in some regional trade agreements. At the Doha Ministerial Conference in November 2001, Ministers agreed on the following in regard to the future work of the WTO in this area:

Transparency in Government Procurement Recognizing the case for a multilateral agreement on transparency in government procurement and the need for enhanced technical assistance and capacity building in this area, we agree that negotiations will take place after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicit consensus, at that Session on modalities of negotiations. These negotiations will build on the progress made in the Working Group on Transparency in Government Procurement by that time and take into account participants’ development priorities, especially those of least-developed country participants. Negotiations shall be limited to the transparency aspects and therefore will not restrict the scope for countries to give preferences to domestic supplies and suppliers. We commit ourselves to ensuring adequate technical assistance and support for capacity building both during the negotiations and after their conclusion.

Working Group on the Interaction between Trade and Competition Policy

From January to October 2001, the Working Group, which was established at the Singapore Ministerial Conference and is chaired by Professor Frédéric Jenny of France, continued its work under the terms of a decision taken by the General Council in December 1998 (WT/GC/M/32, page 52). Three meetings were held during the year. The dates of the meetings were: 22-23 March, 5-6 July and 28 September. At the meetings in March and July, consideration was given to the full range of topics called for in the above-noted decision of the General Council. At the meeting on 28 September, the Working Group completed and adopted a substantive report on its activities in 2001. This document, entitled Report (2001) of the Working Group on the Interaction between Trade and Competition Policy to the General Council (document WT/WGTCP/5), is available on the WTO website (www.wto.org), under the symbol “wgtcp”. Throughout its work, the Working Group on the Interaction between Trade and Competition Policy has benefited from a high level of participation from Members. As of al Council 31 December 1999, there had been a total of approximately 170 formal contributions by Members to the Group, including about 70 from developing countries. Almost all of these were issued as unrestricted documents or have been derestricted and are available on the O activities

WTO website. ork of the Gener

The Singapore Ministerial Declaration (paragraph 20) encouraged the Working Group to WT W undertake its work in cooperation with UNCTAD and other appropriate intergovernmental fora, to make the best use of available resources and to ensure that the development dimension was fully taken into account in its work. In this regard, representatives of UNCTAD and other organizations have contributed actively to the work of the Group. As a further aspect of cooperation, representatives of the Secretariats of UNCTAD and the OECD participated in a Workshop that was organized by the WTO Secretariat during the year, in cooperation with the Government of South Africa and with financial support from the Government of the United Kingdom, for the benefit of African WTO Members and observers. The Workshop took place in Cape Town, South Africa on 22-24 February 2001. The subject of the Workshop was “Competition Policy, Economic Development and the Multilateral Trading System: Overview of the Issues and Options for the Future”. Although formally separate from the work programme of the Working Group, the Workshop was aimed at facilitating Members’ participation in its work.

57 WTO activities 58 Trade in goods WT/MIN(01)/DEC/1, requirement inpar Kamel, explicit consensus that Memberw from proceedingaftertheFifthSessionuntil modalities thatwouldpreventnegotiations Member therighttotak issues” on competitionpolicyandother modalities fornegotiationsbefore 1 IV par be tak Chairman oftheConference to theadoptionofDeclar Ministerial Declar agr . en, aphs 23-25. expressed hisunderstandingthatthe T could proceedwouldgive r by explicitconsensus ade ingoods as preparedtojoininan . ” agr ation (F In astatementmadeprior (WT/MIN/(01)/SR/9) November 9-14, aph 23foradecisionto e apositionon ourth Session, , ation, Mr , on the . “Singapore Y “each oussef the 2001), Doha, participants andappropriateflexibilityprovidedtoaddressthem. Full accountshallbetak reinforcement ofcompetitioninstitutionsindevelopingcountriesthroughcapacitybuilding. hardcore cartels; including tr between the workshopw workshop building inthefacilitationoftr priv and capacitybuildingintr delegations furtherrequestedtheSecretariattoorganizeaworkshop ontechnicalassistance (G/C/W/248), national experiencepaperssubmittedbytheCzechRepublic(G/C/W/247), tr assistance elements ascrucialforasuccessful executionoftr intergovernmental organizations to theseneeds bilater subsidiary bodies the situation withrespecttothecomplianceofnotificationobligations undertheprovisionsof which 18regionalagreementsweretobeexaminedintheCR development. of the P cooper and developmentsothattheymaybetterev support fortechnicalassistanceandcapacitybuildinginthisarea, pursuant to negotiations on thebasisofadecisiontobetak agree thatnegotiationswilltak technical assistanceandcapacity-buildinginthisareaasreferredtopar competition policytointernationaltr governments oftheOrganizationreachedagreementonfuturecourse for specialtariffarr w Agreement, WT Republic concerningcustomsv adoption werew HS96 changesintotheirschedules Harmonized System, made byMembersinconnectionwiththetr TRIMs Inter Council for in thisarea. related requestsfromP extension concerningGA requests akistan, ade facilitation. aivers for O In theperioduntilFifthSession, T W Recognizing thecaseforamultilater During theyear2001, At theMinisterialConferenceinDoha, ate sectortoexchangetheirviews ontheroleoftechnicalassistanceandcapacity Agreements in he Councilfor e recognizetheneedsofdevelopingandleast-developedcountriesforenhanced Agreement whichwereapprovedbytheCTGconcerned action betweentr al channels TRIMs ation fortheirdevelopmentpoliciesandobjectives Agreement, , T , the Councilexaminedandapprovedrequestsforw Philippines . r ade andCompetitionP delegations underlinedtheimportance ofsuchassistanceandidentifiedsever ansparency (A detailedreport ontheworkshopiscontainedin documentG/C/W/297). T . ril 5.3ofthe Article T preferential treatmentbySwitzerlandfor hailand andColombia(bothconcernedwith Agreement. he relev Austr T . o thisend, as toallowdonors T aiver requestsbyCameroon, modalities forvoluntarycooper . , At twoinformalmeetingsinF r to providestrengthenedandadequatelyresourcedassistancerespond ade inGoods T Annex 1Aofthe alia (G/C/W/263)andCostaRica(G/C/W/265). the Counciladopteddecisionsforextensionsoftr angements tocombatdrugproductionandtr r , ade inGoodsalsocontinueditsexplor with renegotiationoftheirschedulesandtheintroduction ant par and Romania. , akistan, non-discrimination andprocedur en oftheneedsdevelopingandleast-developedcountry TT In addition, ade facilitation, ade andcompetitionpolicy the Councilconvenedeightformalmeetings we shallworkincooper ril XV Article agr TRIMs ade aluation. e placeaftertheFifthSessionofMinisterialConference aphs oftheMinisterialDeclar Côte d’IvoireandElSalv , including UNCT olicy willfocusontheclarificationof: . , . en, Dr recipients Also approvedandforw WT T ade anddevelopment, Agreement for he Councilalsodiscussedthereviewofoper awing onconclusionsmadeinthe courseofthat the Counciladoptedtermsofreferenceunder :6. by explicitconsensus O further workinthe al fr Further w Under consider Agreement aswelloftheperiodicreportsits which w Qatar inNovember2001, amework toenhancethecontributionof aluate theimplicationsofclosermultilater ansposition oftheirschedulesintothe , intergovernmental organizationsand the Haiti, ebruary andMay ation; AD ade facilitation-relatedtechnical ation withotherrelev aiver requestsunder as heldon10-11May , Argentina, Madagascar andtheDominican and throughappropriateregional Albania andBosnia-Herzegovina, and supportforprogressive al fairness ation werecustomsv ador aswellaw , TRIMs) andforCubaaw and humaninstitutional atory andanalyticalworkon W and theneedforenhanced , arded totheGener ation readasfollows: at thatSessiononmodalitiesof orking GroupontheInter aivers andw T Colombia, A andtooknoteofthe , 1 afficking. members discussed , At theF including policyanalysis A and provisionson CP-EC P the Member . Article IX:3ofthe core principles ant Regarding w . ansition period T Malaysia, aiver extensions agr ebruary meeting, he objectiveof Guatemala Regarding the artnership aiver bytheEC aph 24, aluation- al Councilfor WT O’ Mexico aiver we , al ation s work action aiver al , In the second half of 2001, the Secretariat’s work on trade facilitation increasingly focused on the preparatory process for the Fourth Ministerial Conference. Rules of Origin

The main objective of the Agreement on Rules of Origin is to harmonize non-preferential rules of origin and to ensure that such rules do not themselves create unnecessary obstacles to trade. The Agreement sets out a Harmonization Work Programme (HWP) for the harmonization of non-preferential rules of origin to be accomplished by the Committee on Rules of Origin (CRO) in conjunction with the World Customs Organization’s Technical Committee on Rules of Origin (TCRO). Much work was done in the CRO and the TCRO and substantial progress has been achieved in the three years foreseen in the Agreement for the completion of the work. However, due to the complexity of the issues, the HWP could not be finalized within the foreseen deadline. The CRO continued its work under the mandate from the General Council. The pace of the HWP began to accelerate, and the CRO resolved more than 300 outstanding issues in 2001, as a result of which the number of unresolved issues is now reduced to 155. In December 2001, the General Council set the end of 2002 as the new deadline for completion of the remainder of the work. The negotiating texts are contained in documents G/RO/45 and its addenda. Market Access

The Committee on Market Access held three formal meetings and 12 informal meetings in 2001. Concerning routine work, and on the introduction on 1 January 1996 of the changes to the Harmonized System (HS) nomenclature and the submission of documentation related to these changes, the Committee noted that the submissions of 21 Members, whether they had requested a waiver or not, remained pending due to ongoing consultations and/or negotiations. Two Members under waiver had not yet submitted the required documentation. Informal meetings dedicated to reviewing this situation were found to be useful and three such meetings were held during the year. The Committee also agreed that the waiver which had been granted to Members on a collective basis in connection with the introduction of Harmonized System 1996 (HS96) changes would be granted for the last time on that basis and for a period of one year. Any future waivers linked to the HS96 exercise would be granted on an individual basis. The Committee took note that three Members remained under waiver for the transposition and/or renegotiation of their schedules into the HS. The Committee elaborated new procedures to introduce Harmonized System 2002 (HS2002) changes to schedules of concessions. These procedures were approved by the General Council at its meeting of 18 July 2001 (WT/L/407). Following agreement in the Committee on a programme for a “Multilateral Appraisal of the Operation of the Integrated Data Base (IDB) and Related Technical Assistance Activities” on 18 December 2000, the Committee commenced work in this area. In this respect, there were four meetings held, based on regional groupings, with the Secretariat preparing background notes for each meeting. The outcome of these meetings were further discussed and additional ways to improve IDB submissions and technical assistance activities were also examined. The Secretariat updated the Committee on the status of processing of IDB submissions, the status of software development, use of IDB information, information obtained from the Trade Policy Review Division, IDB reporting tools, IDB internet analysis facility, and the technical assistance activities that had been carried out. The Committee was also informed of the status of the consolidated tariff schedules database by the Secretariat, including the status of the Members’ files, software developments, and analytical facilities. O activities ade in goods r Regarding other activities of the Committee, on the invitation of the Committee, the WT T Secretariat organized and conducted a Tariff Seminar on 20 March 2001. As to the notifications of quantitative restrictions, the Committee agreed to follow the procedures as outlined in document G/MA/NTM/QR/W/1 in order to accommodate items when difficulties were encountered in entering the information in the database. The Committee also conducted its review of notifications under the Decision on Reverse Notification of Non-Tariff Measures on the basis of a Secretariat document. The Committee took note of the information in document G/MA/W/23/Rev.1 reflecting the situation of schedules of WTO Members, and of G/MA/TAR/3/Rev.6 containing the tariff information available in the Secretariat. Import Licensing

The Agreement on Import Licensing Procedures establishes disciplines on the users of import licensing systems with the principal objective of ensuring that the procedures applied

59 WTO activities 60 Trade in goods NTMs thatimpactITtr the Committeew and reviewedtheimplementationduring2001. Additionally reviews periodicallytheimplementationandoper information concerninglicensingproceduresandnotificationtotheCommittee Agreement establishestime-limitsforprocessingoflicenceapplications equipment, separ agreed toinSingapore1996hasbeenacceptedby57 many countries scientific instrumentswillbereducedtozero; matters relatingtotheoper procedures Article 5. institution ofimportlicensingproceduresorchangesinthosepursuantto the ECasasingleMember). replies totheQuestionnaireonImportLicensingProcedurespursuant regulations pursuantto covered bythisreport, measures administr on importsoverandabovethosewhichthelicensingsystemadministers of implementationquantitativeorotherrestrictions)donotactasadditionalrestrictions restrict tr ensure thatautomaticimportlicensingproceduresarenotusedinsuchamannerasto for gr Customs T licensed importsonthesamebasisasforofgoodsnotrequiringimportlicences obligations ofthe that couldbetak and administr a neutr and bringingtr v predictability indutiespay Article Agreement gavegreaterprecisiontotheprovisionsoncustomsv fair Round negotiations V Customs P Cuba; Members underv India; 11 the periodunderconsider in accordancewithpar during 2001. Agreement under on implementationmatters T Zimbabwe provisions ofthe extensions andtwo arestillundernegotiationamong CommitteeMembers aluation systemsinexistenceatthetimewithasetofstr okyo RoundCustoms oland; aluation r ade ininformationtechnologyproducts(IT , April, T T T T T uniform andneutr he CommitteeonImportLicensingaffordsMemberstheopportunityofconsulting he he MinisterialDeclar he obligationscontainedinthe he Committeeheldtwomeetingsduringthisperiod, ate customsterritories anting importlicencesdonotinthemselvesrestricttr J Czech Republic; VII oftheGA apan; al andnon-discriminatorymanner WT South ade V 24 July atively moreburdensomethanabsolutelynecessarytoadministertherelev . Agreement w . aluation O By becomingMembersofthe , , semiconductors notification totheCommitteeonImportLicensing, , Agreement onImplementationof the Committeeaddednewparticipants V Jordan; During theyear2001, ation, and thatnon-automaticimportlicensingprocedures(licensingforthepurposes Africa; aluation ansparency totheirimportlicensingproceduresandadministeringthemin . , T en toimprovethecomplianceofallmemberswithnotification WT he detailsarecontainedineachscheduleofcommitments as engagedinanon-tariffmeasures’(NTMs)workprogr 2 and25October arious provisionsofthe Article 20.1expiredduringtheyear 2000andforfiveMembersitexpired Agreement, Agreement, . TT andhasledtotheharmonizationofv simplification ofproceduresandprovisionforeignexchangetopayfor O T Liechtenstein; Switzerland; he al systemandprecludetheuseofarbitr Agreement (ArticleIX). ade andtoexaminetheeconomicdevelopmentalimpacts agr V Dominica; 14 MembershavenotifiedtotheCommitteetheirlawsand as oneofthe Articles 1.4(a)and8.2(b)ofthe aluation T ation on ation, okyo RoundCodesoughttoreplacethemanydifferentnational aph 1, able bytr . , . ation ofthe F semiconductor manufacturingequipment, Ultimately F or 21Members our Membershavesubmittednotificationsrelatingtothe and reviewednotificationssubmittedbythefollowing entered intoforceon1J the Committeehasheldsixformalmeetings(on9March, Agreement donotdifferinasubstantivemanner Annex IIIofthe Estonia; T T r , rinidad and Macau, ade inInformation aders Agreement includepublicationofimportlicensing and 21November). four Membersrequestedextensions ofthedelayperiod, T okyo RoundCodeswhichresultedfromthe , Agreement orthefurther the tariffsoncomputers WT . . Agreement: T EC; he China; O , , the five-yeardelayperiodinapplying the most ofthisoccurredon1J Gabon; Of theserequests WT governments committhemselvestosimplifying Article T obago; Agreement orthroughtheGener O Customs ation ofthe Mali; , examined classificationdivergences Antigua andBarbuda; VII oftheGA Georgia; T T echnology Products(IT anuary 1995. Malta; Much oftheworkthisyearfocused Agreement and22havesubmitted urk continued itsdiscussiononsteps WT aightforw ade ey; V aluation systemsandgreater O Membersandstatesor Agreement. aluation ary orfictitiousv . A) Uruguay; Hong K Mongolia; fair andequitableapplication , It containsprovisionsto , two havebeengr ance ofitsobjectives aluation alreadyfoundin telecommunications TT 1994, ard ruleswhichprovidea Originally ong, Agreement andthe softw , , publication of V Article 7.3(counting and arenot amme toidentify During theperiod anuary 2000for enezuela and Oman, . . China; known asthe Burundi; are In addition, During 2001, A) whichw alues . , , and the Customs Philippines; . al T anted Hungary; During okyo . ant W . T Chad; , he aiver and . , five as T he Members have requested derogations to continue the use of minimum values while applying the Agreement, in accordance with paragraph 2, Annex III. Five have been granted and one request is pending. In the area of notifications, Members are to ensure that their laws, regulations and administrative procedures conform with the provisions of the Agreement, and are required to inform the Committee on Customs Valuation of any changes in this regard. Such notifications are subject to examination in the Committee. The Committee examined the national legislations of 19 Members. It concluded examination of the legislations of Albania, Brazil, Colombia, Cuba, Dominica, Dominican Republic, Indonesia, Jamaica, Kyrgyz Republic, Madagascar, Malaysia, Mauritius, Oman, Pakistan, Philippines, Romania, Senegal, and Uruguay. The legislation of the Republic of Korea was be reverted to by the Committee for further examination. In addition, Article 20.3 of the Agreement provides that developed country Members furnish technical assistance to developing country Members that so request. For this reason, the Committee has continued to focus the question of technical assistance. Various Members have informed the Committee of the technical assistance activities they had conducted or were conducting, and the Secretariat has briefed the Committee on the 47 Technical Assistance missions it has carried out under the Market Access Programme on Customs Valuation Technical Assistance which concluded in December 2001. Further, at its 24 July meeting, the Committee adopted a work programme to “reinvigorate” the Committee’s technical assistance activities. At its meeting of 2 October 2001, the Committee adopted its 2001 report to the Council for Trade in Goods. Adoption of the fourth, fifth, sixth and seventh annual reviews remains blocked by an unresolved issue concerning one Member’s interpretation of paragraph 2, Annex III of the Agreement. Article 18 of the Agreement established a WTO Technical Committee under the auspices of the World Customs Organization (WCO) to promote, at the technical level, uniformity of interpretation and application of the Agreement. The Technical Committee presented reports on its Twelfth and Thirteenth Sessions. Textiles and clothing

The Agreement on Textiles and Clothing (ATC), which entered into force on 1 January 1995, is a ten-year transitional agreement with a programme to gradually integrate textile and clothing products fully into GATT 1994 rules and disciplines by the end of 2004. Under the ATC, when products are integrated, they are removed from the Agreement and normal GATT rules apply to their trade. Furthermore, if the integrated products are subject to bilateral quotas carried over from the former Multifibre Arrangement, these quotas must be removed. The agreed rate for the integration of textile and clothing products in the first stage (1995- 1997) was 16% of the total volume of each country’s imports in 1990; a further 17% was integrated at the beginning of the second stage (1998-2002). Consequently, in the period under review, one third of all textile and clothing products have been integrated. At the beginning of the third stage, on 1 January 2002, a further 18% of products were integrated and the process will be completed on 31 December 2004 with the integration of all remaining products and the full removal of the quota regime. For the second stage of the integration process, 49 Members notified the products being integrated; through this process, some quotas were removed in Canada, EC and US. Norway had decided to use another approach, removing all of the quotas in place over a four-year period under another provision of the Agreement while not integrating the products. In addition, at the beginning of the second stage, the annual growth rates in all of the remaining quotas were automatically increased by a factor of 25%. For example, a 6% growth rate under the former MFA had become 6.96% in Stage 1 and moved to 8.7% for Stage 2, to be applied annually.

During 2001, Members notified to the TMB their respective programmes of integration for O activities ade in goods r the third stage (2002-04), which brings total product integration to at least 51% of the WT T Member’s total imports in 1990. It has been estimated that about 20% of imports under specific quota restrictions were to be liberalized by the main importing Members by the beginning of Stage 3. In the last quarter of 2001, the Council for Trade in Goods conducted its major review of the implementation of the ATC during the second stage of the integration process, as required by the Agreement. In this review, developing countries raised a number of concerns with the implementation process being carried out by the WTO Members maintaining quotas, in particular, that their integration programmes had thus far not been commercially meaningful for developing countries, with few products of export interest being integrated, and only a small number of quotas being removed. Developed-country importers, for their part, consider that they were meeting the requirements of the ATC. In the period under review, one matter involving the application of the safeguard provisions of the ATC was examined by a panel established under the DSU and was

61 WTO activities 62 Trade in goods examined. integr safeguard providedforin Republic ofChinastatedthattheywishedtoretaintherightuse thetr of twonotificationsmadepursuantto on thebasisofrotation. are selectedfromwithintheconstituencyofmember acting onanadpersonambasis necessary tocarryoutitsfunctions and 10memberswhoactintheirpersonalcapacity by Membersundertherelev exports ofcombedcottony reviewed bythe T (Egypt); European Communities; member (oralternate)inthe Members (i.e decision includedtheallocationoftenseatsto under the measures tak not requiretheassentorconcurrenceofthosemembersappointedby which areinvolvedinanunresolvedissueunderreviewbythe about theanticipatedmark the currentimplementationprogr provisions ofthe Cyprus Members (Argentina, (2002-2004) submittedby36 the UnitedStates ogK Hong TMB fortheprepar considered, Goods inthecontextofmajorreviewenvisaged July2001the 20 detailed reportsofthesemeetingsarecontainedindocumentsG/TMB/R/73to85. own detailedworkingprocedures Council inthecontextofitsspecialsessionsonimplementation-relatedissues implementation processwithintheexistingstructureof country Membersbroughtforw Hondur on behalfofthemembersInternational during itsSecondStage(1998-2001), out intheMinisterialDecisiononImplementation-RelatedIssues(SeeSection referred totheCTGforexaminationandrecommendationby31July2002. Conference withagreementbeingreachedonsomeofthesematterswhileotherswere countries underother actions tak issues inrespectofotherobligationsunderthe time (G/L/475). 14 September2001andprovidinganoverviewoftheissueshandled bythe adopted, exercised surveillanceoftheimplementationitsrecommendations progr Members inrespectofactionstak he T At thebeginningof2001following T T Discussions amongMemberscontinuedin2001onthebestw ntepro F In theperiod1 T Matters arisingfromthesediscussionsweretak More specifically T he compositionof he he he he ammes ation process(1995-1997and1998-2001) ofEstoniaandLithuaniawerealso T , extiles MonitoringBody(TMB) ong, TMB hasthetaskofsupervisingimplementation TMB tak TMB examinedanumberofnotificationsandcommunicationsreceived from as TMB completeditsdetailedreview oftheintegr Czech Republic, J apan; , in addition, A Indonesia, en bydeveloped-countryMembersontextileproductsexporteddeveloping TC (1998-2001)w in thiscontext, , China; . en underthis actions tak constituencies) which, P es allofitsdecisionsbyconsensus akistan (Macau, Appellate Body A . TMB adopteditsComprehensiveReportontheImplementationof TC inviewoftheconcernexpressedbymanydevelopingcountriesthat ation forthereportfromCanada; J , bur 01t 1J 2001to31 ebruary apan; during theperiodcoveredbythisreport nana eott h T oeigtepro 0October2000 to an annualreporttotheCTGcoveringperiod10 the Republicof WT TMB’ en underthetr Hong K Dominican Republic, O instruments ril 6.1. Article Macau, Agreement andtheirconformitywithit. et liber arn fromP communications receivedinresponsetoquestionsputbythe s membershipforthesecondstageofintegr ant provisionsofthe TMB: as decidedbytheGener ard anumberofsuggestionsonmeanstoimprovethe . ong, . T T China); ammes ofthemajorimportingcountrieshadnotbrought . his involvedarestr en undertheprovisionsof alization. he , China; Br relying mainlyonnotificationsandinformationsupplied in turn, azil (P China (theRepublicofK TMB membersmayappointtheiralternates T K akistan. he progr which w ril 6.1ofthe Article orea, . ansitional safeguardmechanismandanumberof Switzerland (T nay2002, anuary T urk ar WT T hese discussionswereheldinthe Latvia, appointed anindividualtobethe aguay ey; lSalv El Details ofthismatteraresetoutinSection O Membersappointedindividualstoserveas T as tr ammes forthefirstandsecondstage ofthe extiles andClothingBureau). A the UnitedStatesandUruguay(thelatter TC A . TC , en upattheF ansmitted totheCouncilfor WT . However . P Liechtenstein, itpae yteUie Stateson aint placedbytheUnited ador It isastandingbodyandmeetsas As mandatedinthe Br anama); . the EuropeanCommunities; O Membersortogroupingsof al CouncilinDecember1997. urk the azil, Article 8.11ofthe ation progr A . , TC: Most oftheconstituenciesoper ey); Estonia, TMB held13formalsessions A Canada, , TC consensus withinthe orea, Lithuania andtheP T Canada (Norw TMB hailand (thePhilippines)and . A Reference w ourth Ministerial TMB ay toimplementthe TC Lithuania, European Communities A ammes forthethirdstage Bangladesh); It consistsofaChairman . TC andexaminingall T . , Colombia, he , including integr inter alia inter TMB alsohasits A ansitional A TC WT TC (G/L/459). Details areset ation process ay); TMB duringthat , T as alsomadeto Malta, O Members . VII). he it also WT TMB member Developing- ot Rica, Costa T , . India the r eople’ took note TMB ade in Alternates O Gener TMB does On WT T ation he s . O A T ate It TC he VII. al , , Mauritius, Morocco, Norway, Pakistan, Panama, Peru, Philippines, Poland, Romania, Slovak Republic, Slovenia, Sri Lanka, Switzerland, Thailand, Tunisia, Turkey, United States, Uruguay), while with respect to five others it was still waiting for the responses to the additional information or clarification sought from the Members concerned. With respect to the notifications addressed to the TMB after the relevant deadlines specified by the ATC, the TMB reiterated that its taking note of late notifications was without prejudice to the legal status of such notifications. As regards the notification made by the United States, the TMB requested, inter alia, information regarding the application by the United States of visa requirements to the products integrated into GATT 1994 as from 1 January 2002. The United States informed the TMB that “the visa requirement for products integrated in the third stage has been eliminated”. Following the accession of the People’s Republic of China, as well as that of the separate customs territory of Taiwan, Penghu, Kinmen and Matsu (Chinese Taipei) to the WTO, the TMB started to consider the notifications made by Canada and the European Communities of the quantitative restrictions maintained on imports of the products covered by the ATC from those Members. The TMB decided to seek clarification from Canada and the European Communities regarding certain aspects of their notifications. The TMB reviewed a notification made by Canada under Article 2.15 according to which Canada would remove the restraints on baby garments of category 17, effective 1January 2002. The Member affected was the Republic of Korea. Canada further stated that it would not be reducing the category 17 restraint level of this Member to account for the removal of baby garments from restraint, thereby providing a further de facto increase in access for it to the Canadian market, and that as a result of the action under Article 2.15, all remaining restraints on baby apparel would be eliminated by 1 January 2002. With reference to the transitional safeguard mechanism, the TMB examined a notification of a transitional safeguard measure applied by Poland on 20 July 2001 under Article 6.10 of the ATC on imports of acrylic/modacrylic staple yarn, pure or mixed with wool or fine animal hair from Romania, for a period of three years. The TMB concluded that Poland had not demonstrated that the yarns subject to its safeguard measure were being imported into its territory in the reference period in such increased quantities as to cause serious damage to the domestic industry producing like and/or directly competitive products, and recommended, therefore, that Poland rescind the transitional safeguard measure. Subsequently, Poland informed the TMB, pursuant to Article 8.10 of the ATC, that it considered itself unable to conform with this TMB recommendation, providing reasons for this inability. The TMB gave thorough consideration to the reasons presented by Poland and concluded that these reasons did not lead it to change the conclusion and recommendation it had arrived at. The TMB recommended, therefore, that Poland reconsider its position and that the safeguard measure introduced on the imports from Romania of acrylic/modacrylic staple yarn, pure or mixed with wool or fine animal hair, be rescinded forthwith. In terms of exercising surveillance of the implementation of its recommendation the TMB, in view of the fact that it had received no information from Poland as to the implementation of the above-mentioned recommendation, decided to request such information from Poland. The TMB was informed subsequently by Poland that it intended to implement the TMB recommendation and rescind the measure on 1 March 2002. The TMB reviewed the notification made by the United States under Article 2.17 of the ATC of the administrative arrangements concluded between the United States and Oman. The TMB observed, inter alia, that certain provisions of the administrative arrangements seemed to be inconsistent with the ATC. It sought confirmation from the United States of its understanding that the statements, made by the United States when the TMB had examined some other administrative arrangements, that when provisions of the administrative arrangements were inconsistent with the ATC, the provisions of the ATC would apply, also

applied to the administrative arrangements concluded between the United States and Oman. O activities ade in goods r The United States confirmed the Body’s understanding. WT T The TMB, noting that under the provisions of Article 2.18, which applied to small suppliers and new entrants, as well as, to the extent possible, to least-developed country Members, “... meaningful improvement in access for their exports shall be provided [...] for the duration of this Agreement [i.e. the ATC] ...”, considered that in order to comply with the requirements of the first sentence of Article 2.21, it should receive the necessary information from the Members concerned (Canada, the European Communities and the United States) on how they intended to implement the provisions of Article 2.18 as from 1 January 2002. The Body decided, therefore, to seek information from the European Communities and the United States in this regard (an earlier communication by Canada had provided this information). Replies were received from the European Communities and the United States, and the TMB noted that the three Members concerned would increase the annual growth rates applied during Stage 2 for WTO Members falling under the provisions of Article 2.18 (small suppliers) in their respective regimes by 27% as from 1 January 2002.

63 WTO activities 64 Trade in goods 2 agriculture pageofthe out inthenegotiationsareav other detailedinformationontheworkcarried prepared bythe background papersforthenegotiations first phaseandothersubmissionsbyMembers 10. contained indocumentsG/A the secondphaseofnegotiationsare discussions attheinformalSpecialSessions of T he Chairperson’ T he negotiatingproposalstabledduringthe WT s summaryoverviewsofthe O Secretariataswell WT O website G/NG/R/8, ailable onthe . 9 and , one implementation ofcommitmentsunderthereformprogr provision entitlesMemberstor notifications the of mark implementation ofcommitments WT end ofMarch2003. the furthercommitments provided guidanceforthefurtherwork. Agriculture reviewed. comply withthenon-tr provide supporttoagricultureundertheprovisionsofGreenBo measures claimedbyMemberstobeinconformitywiththe number ofMembersthathavethusfartak Committee alsomonitoredtheapplicationofspecialagricultur customs duties quotas haveasignificantcommercialv further detailsonguidelinesandproceduresfortheallotmentoftariff quotas Members providedadditionalnotificationstotheCommitteeon Members’ administr decision ofthe commitments undertheUruguayRoundagricultur in 2001thecourseoffourregularmeetingstoreviewprogressimplementation negotiating agendaasawhole(1J negotiations onagriculturearetobeconcludedaspartandthedateofconclusion submitted byparticipantstheFifthSessionofMinisterialConference the progressivephase-outofmeasuresnotifiedbyJ Agreement on maintain themeasures importation ofsilky Special Sessions results agriculture whichbeganin1995withtheprogressiveimplementationofUruguayRound commitments (“ (“Blue Bo questions werer Agreement, completely phasedoutoverthedur 3.2(b), Article and otherinformalpapers elabor depth onallissuesandoptionsforpolicyreformsetoutinMembers’proposals progr or aspartofagroup negotiations (March2000toMarch2001), Special SessioninF were substantivelyaddressedinonew background informationpreparedbytheSecretariat. discussion oftheseproposalsaswellotherpaperssubmittedbyMembersand with expectation thattheimplementationofcontinuedphase-outprogr of restrictionsonimportssilky O accessionnegotiations In theareaofmark In additiontoconductingthenegotiations T In F T Members’ performanceinimplementing theirexportsubsidycommitmentsw In theareaofdomesticsupport, T At astock-takingmeetingattheendofMarch2001, , Agreement relatingtoexportrestrictions he he textonagricultureoftheDohaMinisterialDeclar he SpecialSessionscontinuedtoserveasaforumforpresentationandintenseinitial ril 3.2(b), Article bound atotalof1,371tariffquotasintheir amme forthesecondphaseofnegotiationsuptoearly2002, ation asappropriate . ebruary 2000, TMB consideredanotificationreceivedfromJ T et access he negotiations x” Clarification w . such measuresareexemptfromreduction commitments payments) aswellmattersrelated tocompliancewithscheduledreduction Specific matterswerealsoaddressedunder and totherelatedcommitmentundertak , Agriculture WT , Amber Bo albeit forlimitedimportvolumes , aised withrespecttopaymentsunder production-limitingprogr started smoothlyandcontinuetobeontr domestic supportandexportsubsidies O Gener would besuchastoprovideappropriateprogressiveincreasesthelevel ebruary 2002, arn andsilkfabricfromtheRepublicofK ation oftariffquotasandimportsunderthesecommitments Comprehensive dr , the Gener 45 negotiatingproposals . et access ade distortionandothercriteriaspecified in In takingnoteofthisnotification, , as soughtonv , which areconductedbytheCommitteeon , x”). including provisionsforspecialanddifferentialtreatment, . . al CouncilundertheImplementationMechanism, the negotiationstocontinueprocessofreformtr In thecourseofsecondphase . F or thepurposeofmultilater aise intheCommitteeanymatterrelev , al Councillaunched, , arn andsilkfabricfromtheRepublicofK the Committeecontinuedlastyeartoreviewsystematically Members mustperiodicallysubmitnotificationsintheareas Members submittedafurther105elabor ation ofthe anuary 2005). the Committee’ ay oranother aft schedulesbasedonthesemodalitiesaretobe alue sinceimportsaresubjecttorelativelylow arious aspectsof anumberofexportsubsidy T his includesabenchmarktoestablishmodalitiesfor en recoursetoit. a totalof121Memberssubmitted, . , Since 1995theCommitteereviewed1,265 A the . TC . WT T al reformprogr . WT hirty sevenMembers s reviewofnotificationsfocusedon Furthermore apan pursuantto . O Schedules in accordancewith 2 All aspectsofthenegotiatingproposals O Committeeon en byJ apan under , amme ation setthesceneandhas the Article 18.6ofthe the Committeeadopteda as wellundertheprovisionof ack. orea. “Green Bo TMB recalledthat, apan, , al reviewofthe . which w , During thefirstphaseof Agriculture whichinclude . the J amme In 2001, ril 3.1, Article apan haddecidedto al safeguardbythelimited these measureshadtobe Annex 2ofthe x andsolongasthey . TMB reiter Agriculture meetingin amme ril 3.2(b), Article Furthermore ant tothe Agriculture continued x”. as concludedata , , involving workin Article 20ofthe orea. or resultingfrom counting theECas Most Members , in responsetoa ated proposals , in conformity Agreement. and the sever affecting the . T ated its pursuant to he , individually . ammes as also with further Many tariff , al ade in specific regarding by the T his programmes, including cases where Members had apparently exceeded their export subsidy commitments. In December 2001, the Committee held, in accordance with Article 18.5 of the Agreement, its annual consultation concerning the impact of the implementation of the Uruguay Round export subsidy commitments on Members’ world market shares for major commodities as well as high value agricultural products. As requested by the General Council, the Committee also continued its discussions on the issue of implementation of Article 10.2 of the Agreement on Agriculture which concerns the development of internationally agreed disciplines to govern the provision of export credits, export credit guarantees or insurance programmes. The Committee is mandated to monitor the follow-up to the Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries. In December 2001, the Committee conducted its seventh annual monitoring exercise on the basis of contributions by Members, including notifications concerning actions taken by developed countries within the framework of the Decision, and a background paper prepared by the Secretariat.3 The FAO, the International Grains Council, the IMF, the OECD, the World Bank and UNCTAD also contributed to this process. Finally, the Committee worked out and, on the responsibility of the Vice-Chairman, submitted to the General Council recommendations on the implementation of Article 10.2 of the Agreement on Agriculture (export credits); on the examination of possible means of improving the effectiveness of the implementation of the Marrakesh Ministerial Decision on net food-importing developing countries; and concerning the addenda to notifications on tariff quota regimes noted above.4 These recommendations became subsequently part of the Decision on Implementation-Related Issues and Concerns adopted by Ministers at Doha. Sanitary and phytosanitary measures

The Agreement on the Application of Sanitary and Phytosanitary Measures (the “SPS Agreement”) sets out the rights and obligations of Members when taking measures to ensure food safety, to protect human health from plant - or animal-spread diseases, or to protect plant and animal health from pests and diseases. Governments must ensure that their food safety and animal or plant health measures are necessary for health protection, are based on scientific principles, are transparent, and are not applied in a manner which would constitute a disguised restriction on international trade. The measures must be justifiable through an assessment of the health risks involved. The use of internationally- developed standards is encouraged. Advance notice must be given of proposed new regulations or modifications to requirements whenever these differ from the relevant international standards. Since 1 January 2000, the provisions of the SPS Agreement also apply for least-developed countries. By 31 December 2001, the Committee had received close to 2,630 SPS notifications since the entry into force of the WTO in 1995. One hundred and twenty two Members had established and identified Enquiry Points to respond to requests for information regarding sanitary and phytosanitary measures, and 115 had identified their national authority responsible for notifications.5 In 2001, the SPS Committee held three regular meetings. At each of these, the Committee discussed specific trade concerns identified by Members.6 The Committee also focused specifically on difficulties faced by developing countries, in particular regarding recognition of equivalence and the need for technical assistance. The Committee adopted a decision providing guidance on the recognition of the equivalence of sanitary measures which provide a similar level of health protection (G/SPS/19). A number of intergovernmental

organizations have been granted observer status by the Committee, either on a regular or an O activities ade in goods r ad hoc basis.7 WT T The WTO Secretariat regularly provides technical assistance to developing and WTO- acceding countries to facilitate their implementation of the SPS Agreement. This assistance is usually provided either through WTO-organized programmes or through WTO presentations in programmes organized by other institutions. Most of this technical assistance is undertaken in cooperation with the relevant standard-setting organizations (Codex, OIE and IPPC), as well as with the World Bank. During 2001, the WTO Secretariat participated in SPS technical assistance to the Congo, China, Pakistan, Kenya and Chinese Taipei as well as in regional seminars in the Near and Middle East, the Gulf, the South Pacific, and southern, 3 See document G/AG/W/42/Rev. 4 eastern and central Africa. 4 See document G/AG/11. As for dispute settlement, to date Panel and Appellate Body reports have been adopted 5 For the most recent listing see G/SPS/GEN/27/Rev. 9. for three distinct cases in the SPS area: EC-Hormones, Australia-Salmon and Japan-Varietals. 6 See G/SPS/GEN/204/Rev. 2. No further panels were established on new SPS issues in 2001, although formal requests for 7 G/SPS/W/98/Rev. 1. consultations relating to alleged violations of the SPS Agreement were requested by Ecuador

65 WTO activities 66 Trade in goods 9 8 Member reduced to129iftheECiscountedasasingle are currently144 purposes ofthelegislativenotification. regular meetingofthe Committee 2001 willbereviewedatthe meetings consider notifications thatwerereceivedintimefor Counting theECasasingleMemberfor During 2001, . ation atthetwo2001regular . Other notificationsreceivedduring the Committeereviewed WT O Members April 2002 . . T his figureis T here notification), concessions andotherobligations receivedfromEgyptandtheEuropeanCommunities(joint of asafeguardmeasureineffectreceivedfromtheUnitedStates safeguard measures Jordan, Article 9.1ofthe those developingcountrieswhosesharesofimportsarebelowthe thresholds setforthin Colombia, of asafeguardinvestigationwithnomeasureimposedreceived fromChile Republic, from concerning findingsofseriousinjury(orthreatthereof)duetoincreasedimportsreceived eliminated by31December1998asrequiredthe 1995. Communities andtheRepublicofK existing safeguardmeasuresimposedunder arr 31 December1999). Salv the CzechRepublic, concerning theapplicationofprovisionalsafeguardmeasuresreceivedfrom Communities Nigeria alsonotifiedsuchpre-existingsafeguardmeasures during 1995. related tosafeguardmeasures Committee onthestatusofthesemeasuresassoonpossible Committee’ into forceon1J Safeguards on concerning theinitiationofsafeguardinvestigationsreceivedfrom 1995 tohavenotifiedthem, date madesuchanotification. made communicationsinthisregardtotheCommittee had notifiedtheCommitteeoftheirdomesticsafeguardslegislationand/orregulationsor Subsidies andcounterv Bulgaria, imports ofthatproductarecausing, industry thatproduceslik to theUScomplaintregardingJ the UnitedStatesandJ new groundinestablishingaprohibitionagainst agreements betweenexportingandimportingcountries domestic industriesbyusing infrequently used, safeguard measurescouldbeappliedonthebasisof Agreement stipulatesthatMembersshallnotseek, restr establishes thesubstantiveandprocedur of 1998(inthecaseonespecifiedmeasurebyend1999). protection. notified totheCommitteeasofmid-September2001. under the angement onmotorvehicles T During 2001, During 2001, During 2001, Members arerequiredtonotifytheCommitteeimmediatelyupontakinganyaction T WT T T During theperiodunderreview(i.e ador urk aints he he he Argentina, T O Membersmaytak ey’ WT Agreement onSubsidiesandCounterv Agreement requiresMembersthathadgrey-areameasuresinforceasof1J hese measureswerephasedoutby1J Morocco , , Chile the Slov and s measuresaffectingimportsofbananasandotherfreshfruit. orderly mark Agreement completeditsreviewofnationalsafeguardlegislationwhichhadbeen O the CzechRepublic, All suchpre-existingmeasureswererequiredtohavebeenphasedoutbytheend s 29October2001meeting, Agreement onSafeguards , and fromP T V the RepublicofK , imely notificationsoftimetableswerereceivedfromCyprus enezuela. the CzechRepublic, Chile anuary 1995, , the Committeereviewednotificationsregardingproposedsuspension of the Committeereviewedanotificationofresultsmid-term review the Committeereviewednotificationsrelatedtodecisionsapply ak Republic, Agreement, the Slov in partbecausesomegovernmentspreferredtosecureprotectionfortheir , Ecuador and relatedtotheexclusionfromapplicationofsafeguardmeasures of T , eting arr he the CzechRepublic, apan reportedthattheyhadreachedamutuallyacceptablesolution oland. Agreement alsorequiresnotificationandterminationofanypre- e ordirectlycompetitiveproducts T ak Republic, he Committeereviewednotificationsconcerningthetermination e , “safeguard” as welltimetablesfortheirphase-out, “grey-area” J received from apan andMorocco . and theUnitedStates regulates theprovision ofsubsidiesandtheimposition of angements oranyothersimilarmeasureswhichafford , Jordan, orea, During 2001, apan’ which the ailing measures orea notifiedsuchmeasuresbytherelev Egypt, or threatentocause Slovenia andSouth s testingrequirementsonfreshfruits , ., and theUnitedStates El Salv which enteredintoforceon1J al requirementsforapplyingnewsafeguardmeasures calendar year2001), the CommitteerequestedthatNigeriaupdate measures actions withrespecttoaproductifincreased Agreement permittedtoremaininforceuntil Egypt, J apan, Argentina, Article XIXofGA 9 ador ailing Measures(“ anuary 2000asrequiredbythe the Committeereviewednotifications “grey-area” . India, , Jordan, T tak , and theUnitedStates he Committeereviewednotifications . such asvoluntaryexportrestr Agreement (exceptfortheEC/J T e ormaintainanyvoluntaryexport Article XIXofGA he Committeereviewednotifications As of29October2001, . Chile . Jordan, 35 Membershadnotasofthat Africa. , Morocco serious injurytothedomestic , . after thedeadline Prior totheUruguayRound, , . measures the CzechRepublic, TT 1947. the Committeeestablished . Morocco T Agreement”), . he notifiedmeasureswere T , Argentina, he the Philippines . anuary 1995, Agreement also TT 1947, to theCommittee In particular T he European , In October2001, . the Slov , . the European ant deadlinein Argentina, . Br which entered Agreement. 92 Members At the azil, but were ak aint Egypt, , , brok the P anuary apan oland, , Chile e El 8 . , countervailing measures by Members. The Agreement applies to subsidies that are specific to an enterprise or industry or group of enterprises or industries within the territory of a Member. Specific subsidies are divided into two categories: prohibited subsidies under Part II of the Agreement and actionable subsidies under Part III of the Agreement.10 Part V of the Agreement contains detailed rules regarding the conduct of countervailing duty investigations and the application of countervailing measures by Members. Parts VIII and IX of the Agreement provide special and differential treatment, respectively, for developing- country Members and for Members in transformation to a market economy.

Implementation-related Issues referred to the Committee During 2001, the Committee on Subsidies and Countervailing Measures (“the Committee”) undertook a review of certain implementation-related issues referred to it from the General Council: all issues related to Articles 27.5 and 27.6 of the Agreement, including the possibility to establish export competitiveness on the basis of a period longer than two years; the issues of aggregate and generalized rates of remission of import duties, and of the definition of “inputs consumed in the production process”; consideration of the implementation of Article 27 of the Agreement as it relates to particular issues concerning developing country Members with a small percentage share of exports in import markets and in global trade; review of the provisions of the Agreement regarding countervailing duty investigations; and methodology to be used in calculating GNP per capita in constant 1990 dollars, as referred to in a draft decision contained in Annex I to the Draft Decision on Implementation-Related Issues and Concerns (JOB/(01)/139). The Committee Chairman reported to the General Council in respect of the Committee’s consideration of these issues on 31 July, 30 September, and 26 October 2001 in documents G/SCM/34, G/SCM/36 and G/SCM/38, respectively. At the Fourth Ministerial Conference, in their Decision on Implementation-Related Issues and Concerns, Ministers approved procedures for certain developing-country Members to obtain an extension of the transition period for export subsidies under SCM Article 27.4. (The procedures can be found in G/SCM/39). As of 31 December 2001 (the deadline under Article 27.4 for all requests for extensions) the Committee had received 26 such requests from Members, of which 22 were made pursuant to the special procedures. (The requests received are listed in G/SCM/40/Rev.1 and Corr.1). Ministers also took implementation- related decisions in respect of Annex VII to the Agreement, the Committee’s review of the provisions pertaining to countervailing duty investigations, and certain subsidies of developing country Members. (WT/MIN(01)/17, paras. 10.1-10.6.)

Negotiations At the Fourth Ministerial Conference, Ministers agreed to negotiations aimed at clarifying and improving disciplines under, inter alia, the Agreement on Subsidies and Countervailing Measures, while preserving the basic concepts, principles and effectiveness of that Agreement and its instruments and objectives, and taking into account the needs of developing and least-developed participants. In the initial phase of the negotiations, participants will indicate the provisions, including disciplines on trade distorting practices, that they seek to clarify and improve in the subsequent phase. In the context of these negotiations, participants shall also aim to clarify and improve WTO disciplines on fisheries subsidies, taking into account the importance of this sector to developing countries. (WT/MIN(01)/DEC/1, para. 28.)

Notification and review of subsidies Transparency is essential for the effective operation of the Agreement. To this end, Article 25 of the Agreement requires that Members make a new and full notification of

specific subsidies every third year (the most recent such notification was due on 30 June O activities ade in goods r 2001), and that Members submit an updating notification on 30 June of the intervening WT T years. As of 31 December 2001, 30 Members (counting the EC as a single Member) had submitted a 2001 new and full notification, of which 14 notified that they provided no specific subsidies. The Committee on Subsidies and Countervailing Measures (“the Committee”) continued its review of subsidy notifications at its regular and special meetings in May and October 2001. At its special meeting of 31 May 2001, the Committee reached an understanding that, in an effort to improve compliance with the subsidy notification obligations and thus transparency, Members would give priority to submitting new and full notifications every two years and would de-emphasize the review of updating notifications. 10 The provisions of Part IV of the Agreement, on non-actionable subsidies, lapsed on 1 January 2000, as there was no consensus in Notification and review of countervailing duty legislation the Committee on Subsidies and Countervailing Measures, pursuant to SCM Article 31, to Pursuant to Article 32.6 of the Agreement and a decision of the Committee, Members extend these provisions. were required to notify their countervailing duty legislation and/or regulations (or the lack

67 WTO activities 68 Trade in goods 11 University Department ofEconomicsatHacettepe follows: Rio deJ Professor ofLawatUniversidadeF law area; Castro Bernieri, Law attheUniversityofLeyden; attorney inthetr T he currentmembershipofthePGEisas aneiro Mr , and Mr Ankar . Okan . priv a; ade lawareaandProfessorof . Aktan, Renato Galv Mr ate attorneyinthetr . Marco Bronck Chairman, ao FloresJunior Mr eder . Jorge ers al do , ade priv ate , approved bytheCommittee submitted themtotheCommitteeforitsapprov P no suchlegislation. 62 Membersnotifiedcounterv (counting theECasasingleMember)hadsubmittedsuchnotification. thereof) totheCommitteeby15March1995. Countervailing actions of theCommitteeoraMember whether asubsidyisprohibited, undertakings) inforce period. av provided alloftheinformationrequiredbyformatadoptedCommittee not submittedoneorbothoftheirsemi-annualreportsoncounterv relations composed offiveindependentpersonshighlyqualifiedinthefieldssubsidiesandtr Committee continueditsreviewoflegislativenotifications summarized in ermanent Gr T V United States South European Community P Canada New Zealand Austr as twomeasur significant numberofmissingnotifications. Indonesia India European Community Chile Canada Reporting party Summary ofcountervailingdutyactions T 2 1 Argentina Affected Country 1 J Exporter T as twomeasur 2 1 Mexico Argentina significant numberofmissingnotifications. ailable indicatethat26newcounterv able IV able IV eru O Includes initiationsinr The tableisbasedoninfor A priceunder The tableisbasedoninfor enezuela T Counterv T he uly 2000-30J AL alia Africa Agreement providesfortheestablishmentofaP As of30June2001, . .4 .3 T he roleofthePGEinvolvesprovisionassistancetopanelswithrespect s subjecttoinitiationsofcountervailinginvestigations ailing actionstak es. taking andadefinitivedutywithr es, andapriceunder T oup ofExperts ables IV 2 une 2001 espect ofindividualECMemberStates:Ger T hirty nineMembershadnotsubmittedanotification. . mation fr mation fr .3 andIV Initiations . 26 15 Members reported86counterv 0 taking andadefinitivedutywithr 4 2 1 3 0 1 0 0 en duringtheperiod1July2000–30June2001are om Membersthathavesubmittedsemi-annual r 1 om Membersthathavesubmittedsemi-annualr ailing dutylegislation, . 11 .4. as welltheprovisionofadvisoryopinionsatrequest Although thePGEhasdr Initiations T he tablesareincompletebecausecertainMembershave 2 8 6 1 1 3 Provisional espect toPolytheleneT measures ailing dutyinvestigationswereinitiatedinthereview 22 12 0 2 4 1 3 0 0 0 0 , As of31December2001, 1 J al, T United States T South K Isr Affected Country uly 2000-30J O hailand orea, the dr ael T Definitive many AL and 27Membersnotifiedthattheyhad duties espect tosalmonfr 10 Africa 0 Rep er 1 1 5 0 2 0 1 0 0 , Italy ermanent GroupofExperts(PGE), ephthalate (PET)fr aft Ruleshavenotyetbeen . . afted RulesofProcedureand of ailing measures(including , France,Netherlands,UnitedKingdom. Undertakings une 2001 epor epor ailing actionsorhavenot 1 0 0 0 1 0 0 0 0 0 0 om Nor ts andisincompleteduetoa ts andisincompleteduetoa om Indiahavebeencounted , 89 Members Of these way havebeencounted During 2001the 1 Measures inforce on 30.06.2001 Initiations . 2 , 86 43 19 T 3 26 1 0 9 2 5 1 3 he data 1 1 1 1 1 2 ade Iceland Hungary Guinea, Guinea Bissau Hong K Haiti Guy Guatemala Hondur Fiji Ecuador Estonia El Salv Grenada Ghana Georgia Gambia Gabon Dominican Republic Dominica Djibouti Egypt Colombia Czech Republic Cyprus European Communities** Côte d’Ivoire Congo Congo Cuba Costa Rica Chile Chad Centr Croatia Canada Cameroon Burundi Burkina F Bulgaria Benin Belize Barbados Bangladesh Bahr Botsw Brunei Darussalam Bolivia Br Antigua andBarbuda Angola Albania Rules NotificationsSubmittedby T Austr Argentina able IV azil ana ain alia al ana , ador as ong, African Republic Dem. Rep aso .5 . China Member of Rep . Legislation X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X WT Anti-Dumping O Member July-Dec. 2000 X X X X X X X X X X X X X X X X X X X X X X X X X X X X Semi-Annual Reports* s J an.-June 2001 X X X X X X X X X X X X X X X X X X X X X X Legislation X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Countervailing Duties July-Dec. 2000 X X X X X X X X X X X X X X X X X X X X X X X X X X X Semi-Annual Reports* J an.-June 2001 X X X X X X X X X X X X X X X X X X X X X (Articles 25 New &Full Subsidies & XVI) 2001 X X X X X X X X X X X X X X Status asof31December2001 State New &Full XVII:4(a) & XVII Article 2001 X X X X X X X X X X T r ading Safeguar Legislation X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X ds 69 WTO activities Trade in goods WTO activities 70 Trade in goods Qatar Saint Lucia Saint Kitts&Nevis Rw Slovenia P Oman P Romania Senegal Saint Slov Madagascar Maldives P Norw Nigeria Niger Nicar P P Philippines Singapore Sierr Malaysia Malawi Mali Mauritius Mauritania Morocco Mongolia Moldov New Zealand P Macao Lithuania Malta Mexico Namibia My Mozambique Liechtenstein Lesotho Jordan K K J J K Latvia Isr K Indonesia India Rules NotificationsSubmittedby T apan amaica akistan oland anama ap ar eru able IV yrgyz Republic uw eny orea, ael anmar anda aguay . ak Republic ait a Leone a New Guinea agua ay V , incent &Grenadines Rep a China .5 . of (continued) Member Legislation X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X WT Anti-Dumping O Member July-Dec. 2000 X X X X X X X X X X X X X X X X X X X X X X X X X X X Semi-Annual Reports* s J an.-June 2001 X X X X X X X X X X X X X X X X X X X X X X X X Legislation X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Countervailing Duties July-Dec. 2000 X X X X X X X X X X X X X X X X X X X X X X X X X X Semi-Annual Reports* J an.-June 2001 X X X X X X X X X X X X X X X X X X X X X X X X (Articles 25 New &Full Subsidies & XVI) 2001 X X X X X X X X X X X Status asof31December2001 State New &Full XVII:4(a) & XVII Article 2001 X X X X X X X X X X X X X X X X T r ading Safeguar Legislation X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X ds Table IV.5 (continued)

Rules Notifications Submitted by WTO Members Status as of 31 December 2001

Anti-Dumping Countervailing Duties Subsidies State Trading Safeguards

Semi-Annual Semi-Annual (Articles 25 Article Member Reports* Reports* & XVI) XVII:4(a) Legislation Legislation & XVII Legislation July-Dec. Jan.-June July-Dec. Jan.-June New & Full New & Full 2000 2001 2000 2001 2001 2001

Solomon Islands South Africa X X X X X X X X Sri Lanka X X X X Suriname X X X Swaziland X Switzerland X X X X X XX X X X Tanzania Thailand X X X X X X X X X Togo Trinidad & Tobago X X X X X X X Tunisia X X X X X X X X Turkey X X X X X X X X Uganda X X X United Arab Emirates X X X United States X X X X X X X Uruguay X X X X X X X Venezuela X X X X X X X X Zambia X X X Zimbabwe X X X X X X

X = notification submitted. N = document submitted on its face does not satisfy the requirement to notify. * Tally reflects semi-annual reports for the period 1 July-31 December 2000, due 29 February 2001, and 1 January-30 June 2001, due 31 August 2001. ** The EC submits a single notification that covers the EC and all 15 Member States.

Anti-dumping practices

The Agreement on Implementation of Article VI of GATT 1994 (“the Agreement”) entered into force on 1 January 1995. Article VI of GATT 1994 allows Members to apply anti- dumping measures on imports of a product with an export price below its “normal value” (usually, the comparable price of the product in the domestic market of the exporting country) if such imports cause or threaten to cause material injury to a domestic industry. The Agreement sets forth detailed rules concerning the determinations of dumping, injury, and causal link, and the procedures to be followed in initiating and conducting anti-dumping investigations. It also clarifies the role of dispute settlement panels in disputes concerning anti-dumping actions taken by WTO Members. Implementation-related matters. At the Fourth Ministerial Conference, in their Decision on Implementation-Related Issues and Concerns, Ministers agreed that investigating authorities shall examine with special care any application for the initiation of an anti-dumping

investigation where an investigation of the same product from the same Member resulted in O activities ade in goods r a negative finding within the 365 days prior to the filing of the application and that, unless WT T this pre-initiation examination indicates that circumstances have changed, the investigation shall not proceed. (WT/MIN(01)/17, para. 7.1). Ministers also referred three implementation- related issues to the Committee or its Working Group on Implementation for consideration and recommendations, to be completed within 12 months. The Working Group on Implementation will examine modalities for the application of Article 15 of the Agreement and draw up recommendations on how to operationalize it, and will draw up recommendations concerning the time-frame to be used in determining a de minimis volume of imports under Article 5.8 of the Agreement. The Committee will draw up guidelines for the improvement of the annual reviews under Article 18.5 of the Agreement. (WT/MIN(01)/17, paras. 7.2, 7.3., and 7.4). Negotiations. At the Fourth Ministerial Conference, Ministers agreed to negotiations aimed at clarifying and improving disciplines under, inter alia, the Agreement, while preserving the basic concepts, principles and effectiveness of that Agreement and its

71 WTO activities 72 Trade in goods developed participants improve inthesubsequentphase provisions Anti-Dumping Pr Members’ notificationsoflegislationcontinuesattheregularmeetingsCommitteeon T legislation orregulations (counting theECasasingleMember)hadsubmittednotificationsregardinganti-dumping required tonotifythenewtextoramendment. thereof). continuing obligationtonotifytheiranti-dumpinglegislationand/orregulations(orthelack instruments andobjectives Implementation (formerlyknownasthe Group on Implementation considers conjunction withtheregularmeetingsofCommittee At itsmeetingsin to developagreementconcerningimplementationissuesforconsider and informationsubmittedbyMembersconcerningtheirownpr basis ofpaperssubmittedbyMembers series oftopicsreferredtoitbytheCommitteein he statusofnotificationspursuantto Colombia Chile Canada Br Uruguay T T T Philippines P New Zealand Mexico Malaysia submitted asemi-annualr r Indonesia India European Communities K J Isr Egypt Czech Republic Austr Argentina Summary of T 3 2 1 T V United States South Singapore P epor apan urk rinidad and hailand otal able IV eru oland Did notsubmitaseparate listofmeasur Includes definitivepriceunder The r orea, enezuela Subsidiary bodies Subsidiary legislation anti-dumping of review and Notification azil ael ey ts. alia epor Africa Rep T .6 , hus Anti-Circumvention. ting periodcovers1July2000–30June2001. Thetableisbasedoninfor . including disciplinesontr of T obago , Members whoenactnewlegislationoramendexistingare Anti-Dumping actices April andOctober2001, . Initiations epor T . he Committeehastwosubsidiarybodies 313 , In theinitialphaseofnegotiations 41 10 20 20 37 29 77 44 on thebasisofwrittenquestionsandanswers . t forthatperiodandisincompleteduetomissing r takings. , 0 4 3 2 1 1 2 0 5 4 0 5 2 1 2 1 0 2 0 0 1Membershavenotyetsubmittedanotificationinthisregard. 31 , principally and takingintoaccounttheneedsofdevelopingleast- T hese bodiesmeettwiceayearinregularsession, Actions es infor . (WT/MIN(01)/DEC/1, Provisional measures ade distortingpr , 183 technical issuesconcerningthe , Article 18.5maybefoundin ce. 38 52 16 35 , dr Ad HocGrouponImplementation), 0 0 0 6 0 0 1 0 2 1 2 4 0 0 0 9 7 1 0 0 8 1 0 0 1 J aft recommendationspreparedbytheSecretariat, the uly 2000–30J W As of31December2001, orking Groupcontinueddiscussionsona April 1999. Definitive Duties 178 actices 12 11 12 41 36 20 13 . 0 0 3 0 2 2 0 5 1 3 6 0 1 0 3 1 0 1 0 0 5 WT par . T he O Membersareundera a. , une 2001 that theyseektoclarifyand 28). W Discussion proceededonthe , epor participants willindicatethe , orking Groupon Undertakings actices the mation fr ts and/ormissinginfor Price T 16 W ation bytheCommittee able IV 2 0 1 3 4 0 0 0 0 0 1 0 0 0 2 0 0 0 1 0 0 0 0 0 1 0 0 1 Agreement, orking Groupon 1 . . om Membershaving 97 Members .6. and theInformal n3 June2001 on 30 Measures inforce Review of in 1105 and seeks n.a. n.a. n.a. n.a. n.a. n.a. 109 121 219 241 mation in 89 52 56 15 15 11 66 29 10 45 0 5 6 8 4 1 1 2 3 3 3 3 3 3 2 . In the Informal Group on Anti-Circumvention, Members discuss the matters referred to the Committee by Ministers in the 1994 Ministerial Decision on Anti-Circumvention. The Informal Group met in April and October 2001, and continued discussions on the first two topics under the agreed framework for discussions, “what constitutes circumvention”, and “what is being done by Members confronted with what they consider to be circumvention”. In addition, the Informal Group agreed, at its meeting in October 2001, to open discussions on the third topic under the agreed framework, “to what extent can circumvention be dealt with under the relevant WTO rules? to what extent can it not? and what other options may be deemed necessary?”. Anti-dumping actions. Anti-dumping actions taken during the period 1 July 2000- 30 June 2001 are summarized in Tables IV.6 and V.5. The tables are incomplete because certain Members have not submitted the required semi-annual report of anti-dumping actions for this period or have not provided all the information required by the format adopted by the Committee. The data available indicate that 313 investigations were initiated during the period. The most active Members during this period, in terms of initiations of anti-dumping investigations, were the United States (77), Argentina (44), Canada (41), India (37), the European Communities (29), Australia and South Africa (20 each), and Brazil (10). As of 30 June 2001, 21 Members reported anti-dumping measures (including undertakings) in force. Of the 1105 measures in force reported, 22% were maintained by the United States, 20% by the European Communities, 11% by India, 10% by South Africa, 8% by Canada, and 6% by Mexico. Other Members reporting measures in force each accounted for 5% or less of the total number of measures in force. Products exported from China were the subject of the most anti-dumping investigations initiated during the period, (53), followed by products exported from the European Communities or member States (52), Republic of Korea (20), Chinese Taipei (19), India (14) Indonesia (12), Brazil, Japan and Thailand (11 each), and the United States (10). Technical barriers to trade

During the year 2001, the Committee held three meetings where statements were made on the implementation and administration of the Agreement. A number of Members informed the Committee of measures taken to ensure the implementation and administration of the Agreement. Several measures were brought to the attention of the Committee by Members who raised concerns about the potential adverse trade effects or inconsistency with the Agreement of those measures. A number of observers updated the Committee on their technical assistance activities and on the ways in which they sought to ensure effective participation of Members, in particular developing-country Members in their activities (G/TBT/M/23-25). In order to give Members the opportunity to discuss the activities and problems relating to information exchange and to review periodically how well notification procedures work, a special meeting on procedures for information exchange was held. A number of proposals to improve information exchange were made for the consideration of the Committee. As a result of the Second Triennial Review of the Agreement, the Committee proceeded to develop a demand driven TBT-related Technical Cooperation Programme. At the Doha Ministerial Conference, Ministers confirmed the approach to technical assistance being developed by the Committee, reflecting the results of the triennial review work in this area, and mandated this work to continue. State trading enterprises O activities ade in goods r The Working Party on State Trading Enterprises was established in accordance with WT T paragraph 5 of the Understanding on the Interpretation of Article XVII of the GATT 1994, and held its first meeting in April 1995. Since the 2001 Annual Report, the Working Party has held one formal meeting: in October 2001. The Working Party’s main task is to review the notifications and counter-notifications submitted by Members on their state trading activities. The Working Party was also charged with two other tasks by the Ministers at Marrakesh: - to examine, with a view to revising, the questionnaire on state trading adopted in November 1960; and - to develop an illustrative list of the kinds of relationships between governments and state trading enterprises and the kinds of activities engaged in by these enterprises. As reported previously, the illustrative list of state trading relationships and activities – contained in document G/STR/4 and approved by the Working Party at its July 1999 meeting – was adopted by the Council for Trade in Goods at its October 1999 meeting. As also

73 WTO activities 74 Trade in services V . T r ade inservices has conductedanytr any statetr notifications mustbemadebyallMembers submitted ineachoftheinterveningtwoyears are requiredeverythirdyear of allMembersbythedeadline30June1995, P for statetr meeting ofOctober2001, Switzerland; Goods atits by the reported previously T (GA Scheduling ofSpecificCommitments undertheGener Revision ofGuidelinesforthe SchedulingofSpecificCommitments of theoper tr up totheendof2003. 2001, Romania and Council for made years inthecaseofleast-developedcountryMembers country Members of theentryintoforce are containedindocumentsS/C/M/52to56. permitted underGA that areinconsistentwith Members arerequiredtoeliminatetheuseoftr P Africa; Ghana; P Malta; Agreement. Member whichdemonstr tr meeting dedicatedtothereviewof conjunction withthisreport. annual reportbytheCouncil, which iscontainedindocumentS/C/M/57. following matters: P arty akistan; oland; oland; r ansition periodispending. ansition periodattherequestofanindividualdevelopingorleast-developedcountry ade-related investmentmeasures(TRIMs) Reviews ofthenotificationssubmittedareconductedinformalmeetings With regardtothemaintaskof T T Under theUruguayRound - - At itsmeetingof23March2001, At itsOctober1999meeting, Members weregivenatr - - TS) (documentS/L/92). he he Councilfor . 2000 updatingnotificationsofDominica; 2001 newandfullnotificationsofBolivia; 1998 newandfullnotificationsofDominica; 1999 updatingnotificationsofDominica; . T and inNovember2001furtherextensionsweregr W he firstseriesofnewandfullnotificationsonstatetr Mongolia; Switzerland; TRIMs Guatemala; Romania; Romania; orking P P ading notificationsbyMembers anama; ation ofthe ading enterprisesandregardlessofwhetheranexistingstatetr In July2001, April 1998meeting. and T Agreement providesthattheCouncilfor hailand receivedextensionsofthetr T arty atits T , r New Zealand; St. St. hailand; five yearsinthecaseofdeveloping-countryMembers ade InServices(RegularSession) P , T TT 1994. and Uganda; oland; Hong K a revisedquestionnaire–containedindocumentG/STR/3andapproved r ade duringtheperiodunderreview ade inServicesheldfiveformalmeetings V V incent andtheGrenadines; incent andtheGrenadines; TRIMs Consider ates particulardifficultiesinimplementingtheprovisionsof Argentina, Article IIIor the Romania; April 1998meeting–w ong, , ansition periodtoeliminate WT also bythedeadlineof30June During thereportingperiod, Agreement. Agreement on W contained indocumentS/C/14, O Oman; ation ofonefurtherrequestforanextensionthe China; orking P the Councilfor T his questionnairehasbeeninusesincethenastheformat Agreement –twoyearsinthecaseofdeveloped- Colombia, St. the CounciladoptedrevisedGuidelines forthe Article XIofGA W P J V amaica; Annex on arty conductedareviewof57notifications: anama; incent andtheGrenadines; orking P . , T regardless ofwhethertheMembermaintains T he reportsofthemeetings r T ade-Related InvestmentMeasures , El Salv El Salv he Councilhasalsoheldonespecial Malaysia, ade-related investmentmeasures(TRIMs) also bythedeadlineof30June Burundi; T J Romania; apan; r and subsequentnewfullnotifications arty –thereviewofnotificationsatits South South ade inGoodsbeganthe El Salv Air as adoptedbytheCouncilfor ansition periodthroughtotheendof al ador; ador; . TT 1994, T T T r Agreement on Liechtenstein; r wenty-six suchnotificationswere . ansport Services TRIMs notifiedwithin90days Africa; Africa; ade inGoodsmayextendthe anted totheseMembersforperiods Chad; ador; Mexico Slovenia; the Counciladdressed Guatemala; Jordan; ading enterprisesw . Updating notificationsmustbe . Jordan; should bereadin subject totheexceptions and Uganda. and Uganda; Czech Republic; Reports ofthemeetings , P akistan, P South akistan; Slov Latvia; T P r Jordan; , akistan; ade inServices , , and seven ak Republic; as wellthe the reportof ading enterprise Africa; Article 9review the Philippines P and Macau, anama; . Liechtenstein; as required Estonia; , All P T WT anama; r ade in W O orking China; South , Date of further review of Article II (MFN) Exemptions

The Council discussed the date for a further review of Article II (MFN) exemptions at the meetings of 23 March and 14 May 2001. At the May meeting, the Council decided that a further review of MFN exemptions should take place no later than June 2004.

Issues arising from the review of Article II (MFN) Exemptions In the course of the review of MFN exemptions, several Members had identified issues of concern to them, both of substantive as well as of procedural nature. Upon request by the Council at the meeting of 4 October 2001, the Secretariat prepared draft procedures for the rectification, termination, or reduction of MFN exemptions, contained in document S/C/W/202.

Proposals Concerning a Technical Review of GATS Provisions At its meeting held on 23 March 2001, a group of Members introduced a proposal to conduct a technical review of GATS provisions with the objective of ensuring their legal consistency and clarity. Notwithstanding differences among Members as to whether a technical review of GATS provisions should be based on a pre-identified list of issues and conducted within a set timeframe, a number of substantive issues were discussed at the Council meetings in 2001.

Other issues addressed by the Council for Trade in Services At all meetings held in 2001, the Council continued its discussions on the review of the Understanding on Accounting Rates, as provided for in paragraph 7 of the Report of the Group on Basic Telecommunications contained in document S/GBT/4. The Council also continued its work on electronic commerce, as mandated by the General Council. A request for a cooperation arrangement with the International Civil Aviation Organization (ICAO) was discussed.

Special Session of the Council for Trade in Services The Council held six meetings in Special Session in 2001, one of which dedicated to the issue of the treatment of autonomous liberalization. Reports of the meetings are contained in documents S/CSS/M/8 to 13.

Negotiating Guidelines and Procedures pursuant to Article XIX of the GATS Article XIX:3 of the GATS mandates that, for each round of negotiations, negotiating guidelines and procedures be established. The Council had discussed the establishment of such guidelines throughout 2000, and adopted the negotiating guidelines and procedures contained in document S/L/93 on 28 March 2001.

Stock-taking In March 2001, the Council held a stock-taking exercise, to consider progress made in the negotiations and to decide on how to move forward. The stock-taking discussion was carried out expeditiously, thanks to the positive and constructive spirit of delegations. Besides the many negotiating proposals submitted to the Council, several delegations referred to on-going work and to the need to continue the rule-making work with dispatch. There was convergence on the schedule of meetings for the year ahead. Members agreed to hold clusters of services meetings in May, July, October, December 2001 and March 2002, when they would again review progress made in the negotiations.

Proposals Relating to the Negotiations under Article XIX of the GATS

Under this agenda item, Members discussed the various negotiating proposals submitted O activities ade in services r to the Special Session on a number of services sectors, modes of supply and other horizontal WT T issues. Around 110 proposals were submitted to the Special Session, by more than 50 Members. At the meeting in May, the Council addressed all the proposals and structured the discussion according to sectors, modes of supply and the horizontal issues identified. Subsequently, the proposals were divided into two groups for a more detailed discussion at the meetings in July and October. Sectors were taken up in the order in which they appear in the MTN.GNS/W/120 sectoral classification, while also allowing for the discussion of other sectors, such as energy services. In December, the Council again addressed all the proposals, but, in order to sharpen the focus of the discussion, decided to organize the debate around a set of items. These are: classification issues; market access and national treatment commitments; regulatory issues; issues relating to the implementation of Article IV; and any other issues, including MFN exemptions. It was underscored that Members remained free to introduce new proposals at any time.

75 WTO activities 76 Trade in services meetings the assessmentoftr indicating possiblecriteriaandmodalitiesforthetreatmentofautonomousliber Members mightwishtotak submissions tabledontheassessment, progress liber International countries two jointsubmissionsontheassessmentoftr of Norw the participationofdevelopingcountriesinservicestr Agreement, services inover as astandingitemontheagendaofSpecialSession. the treatmentofautonomousliber issues andanyrelev agenda oftheSpecialSession. negotiations for thetreatmentofliber developing countries were submittedinDecember relev Secretariat wouldprepareabriefnoteoutliningthebroadviewsexpressedundereach also decidedthatameetingdedicatedtoautonomousliber informal paper disciplines their domesticorganizationsconcerningthepotentialapplicabilityof theaccountancy disciplines forprofessionalservices structure discussions substantive issuesrelatingtothedevelopmentofhorizontaldisciplines helpedfocusand rule outthepossibilityofdevelopingsector issues relatedtothedevelopmentofhorizontallyapplicabledisciplines W S/WPDR/M/410 toM/14. in theperiodunderreview professional services Assessment of W T Committee on that meetingtheCouncilagreedthat, tr unnecessary barrierstotr requirements April 1999, 4forw mode the contained indocumentsJOB(01)/63, proposals themselves VI:4 r ade infinancialservices and, eatment of orking P orking P At themeetingheldinOctober Article XIX:3oftheGA Article XIX:3oftheGA Contributions tabledontheassessmentincludeacommunicationby At themeetinginMarch, T T At themeetingheldinJuly T W , alization w he Committeeon he he Secretariatw ant issue; at themeetingof orld Bankinthespring2002. W ay titled . , . orking P As abasistoadv a SecretariatnoteontheworkofInter , arty onProfessionalServices adopted inDecember1998, is mandatedtodevelopdisciplinesensurethatmeasuresrelatinglicencing . including thosesetoutin ard, T , T r technical standardsandqualificationrequirementsdonotconstitute , he treatmentofautonomousliber ade inServices arty onDomesticRegulation the noteformedbasisofdiscussioninOctober as complex, all termsandonasector Autonomous Liber Examples of Measures to be Addressed by Disciplines under GATS Article GATS under Disciplines by Addressed be to Measures of Examples “Diffusion ofInformation T an informalsymposiumontheissuewouldbeheldincollabor arty onDomesticRegulation(WPDR), r ade inServices ant materialonexperiencegainedintheUruguayRoundaddressing ade inserviceswouldbeheldwithintheMarch2002clusterof . . as alsoask . T , T While itw Observing themandateof T r identifies theirmainelements he r ade inFinancialServices ade inFinancialServicesismandated todiscussmattersrelating alization undertak ade inservices W Discussions ofthe TS mandatestheCounciltocarryoutanassessmentoftr TS mandatesthatthenegotiatingguidelinesestablishmodalities . ance work, e intoconsider WPDR on11May there w orking P Minutes oftheformalmeetingsarefoundin , , Members task one bytheRepublicofK a Secretariatcompilationofallthestatementsmadeand , as such, Members alsodecidedthat, ed toprepareapaperwhich, as gener , alization. , as widespreadandsharedwillintheCounciltomak Members alsodecidedthataninformalsymposiumon arty heldfiveformalmeetingsandoneinformalmeeting Members continuedtoconsultonavoluntarybasiswith alization Addenda 1and2Corrigendum1. Article IV Members ask and aSecretariatnotecontaininglistofissuesthat in ordertomoveamoreoper , serves asaforum fortechnicaldiscussionsand . including thedevelopmentofgener to otherprofessions al basis ally acknowledgedthattheissueofautonomous It alsotookoverthetasksassignedtoformer ation whenconductingtheirownassessment. T echnology en autonomouslybyMemberssinceprevious -specific disciplines ed theSecretariatwithproducingachecklistof T W ade tabledbytwogroupsofdeveloping . he notew orking P :1. , alization figuresasastandingitemonthe with referencetotheobjectivesof T -Agency he assessmentoftr ed theSecretariattoprepareanote . , ade W T SADC andInternationalProduction”, he paper orea andonebyagroupof orking P arty continuedtofocusprimarilyon as discussedinMay , established bytheServicesCouncilin a paperpresentedbythedelegation alization wouldbeheldinJuly T in ordertomovethedebateon . ask F T while notasubstituteforthe . he Secretariatpresentedan arty toalsodevelopgener , A revisedchecklistof which isregularlyupdated, orce onStatisticsof . T . Argentina assessing ade inservicesfigures ational phase wo newproposals T his WT , , al disciplinesfor O documents when Members however ation with alization. ade in , , the did not e al . At is examination of regulatory developments. It is responsible, inter alia, for the continuous review and surveillance of the application of the GATS with respect to this sector, and for formulating proposals or recommendations for consideration by the Council for Trade in Services in connection with any matters relating to trade in the sector. The Committee held four formal meetings during the period under consideration. The reports of these meetings are contained in documents S/FIN/M/30-33. The annual report of the Committee to the Council for Trade in Services is contained in document S/FIN/6, dated 4 October 2001. During the year 2001, the Committee continued monitoring the acceptance of the Fifth Protocol to the GATS (which entered into force on 1 March 1999), discussed technical issues regarding the classification of financial services, and addressed recent developments in financial services trade. With respect to the former, seven Members have yet to ratify the Protocol, namely Bolivia, Brazil, Dominican Republic, Jamaica, Philippines, Poland and Uruguay. Also, the Committee invited relevant international standard-setting organizations to brief WTO delegates on the scope of their activities with respect to international standards for financial services. Committee on Specific commitments

The Committee on Specific Commitments (CSC) is mandated to oversee the implementation of services commitments and the application of the procedures for the modification of schedules and seeks to improve the technical accuracy and coherence of schedules of commitments and lists of MFN exemptions. It has concentrated its work on services classification and the scheduling of commitments, with a view to facilitating the current round of negotiations on trade in services. During the period under consideration, the Committee held three formal meetings. The reports of those meetings are contained in documents S/CSC/M/19 to 21. The Committee also held six informal meetings in this period, mainly devoted to advancing work on the Guidelines for the Scheduling of Specific Commitments under the GATS and organizational issues. Following intense consultations, the Committee agreed on a revised text of the Scheduling Guidelines which was adopted as a non-binding set of guidelines by the Council for Trade in Services on 23 March 2001. The text of the Guidelines and the related Decision by the Services Council are contained in documents S/L/92 and S/L/91, respectively. Additionally, the Committee continued its consideration of proposals submitted by Members concerning possible amendments to the existing Secretariat’s services classification list (document MTN.GNS/W/120). The classification issues raised related to environmental services, energy services, legal services, postal and courier services, and construction services. The Committee also continued its deliberations on the issue of “manufacturing on a fee or contract basis”. At its May meeting, the Committee agreed on this issue not being a matter of priority at that stage. The Annual Report of the Committee on Specific Commitments to the Council for Trade in Services is contained in document S/CSC/6 of 4 October 2001. Working Party on GATS Rules

The Working Party on GATS Rules is mandated to carry out negotiations on emergency safeguard measures (GATS Article X), government procurement (GATS Article XIII) and subsidies (GATS Article XV). In 2001, it held five formal meetings during which these three topics were discussed. Differing views continued to be expressed regarding the desirability and feasibility of an emergency safeguard mechanism in services. Various approaches have been suggested and discussed (see doc. S/WPGR/M/31 to 35). In November 2000, Members decided to extend the negotiating deadline for emergency safeguard measures until

15 March 2002. On government procurement, discussions focused on definitional issues as elated aspects of intellectual O activities

well as on possible multilateral disciplines. The Working Party also considered the need for, operty rights (TRIPS) ade-r r and possible scope of disciplines on, subsidies which may have trade-distortive effects. The WT T pr annual report of the Working Party on GATS Rules to the Council for Trade in Services is contained in document S/C/14 (9 October 2001).

VI. Trade-related aspects of intellectual property rights (TRIPS)

A major feature of the work of the Council for TRIPS in 2001 was a continuation of the reviews of the national implementing legislation of developing and transition economy Members, following the expiry of their transition period at the beginning of 2000. The Council reviewed in April 2001 the legislation of Bolivia, Cameroon, Congo, Grenada, Guyana, Jordan, Namibia, Papua New Guinea, Saint Lucia, Suriname and Venezuela; in June 2001 the legislation of Albania, Argentina, Bahrain, Botswana, Costa Rica, Côte d’Ivoire,

77 WTO activities Trade-related aspects of intellectual 78 property rights (TRIPS) their activities observers tothe cooper 67, readily accessibleandtofacilitatethemonitoringofcompliancewithobligation cooper developed Membercountries in theiradministr with cooper agreed terms Agreement obligeseachdeveloped-countryMembertoprovide on patentsandundisclosedinformationintheareaofpharmaceuticalsuntil1J provision fortheextensionofdeadlineleast-developedcountriestoapplyprovisions viable technologicalbase tr institutions intheirterritoriesforthepurposeofpromotingandencour which requiresdevelopedcountryMemberstoprovideincentives enterprisesand development. mak under the (LDCs). WIPO launchedajointinitiativetoprovidetechnicalassistanceleast-developedcountries force on1J compulsory licensingandpar technology inpursuanceoftheircommitmentsunder functioning inpr developed-country Membersshallsubmitpriortotheendof2002detailed reportsonthe mandatory tak and reporttotheGener compulsory licensingiftheyhavetoolittleornopharmaceuticalmanufacturingcapacity TRIPS Councilhastofindasolutiontheproblemscountriesmayfaceinmakinguseof health. Agreement shouldbeinterpretedinaw governments’ righttousethe should notpreventMembergovernmentsfromactingtoprotectpublichealth. Members areentitledunderthat multilater of the annually subject toareviewinthe the monitoringandfullimplementationofobligationsinquestion. 2003 forcompletion ofnegotiationsonthismatter spirits Agreement foraccesstomedicines which isdesignedtorespondconcernsaboutthepossibleimplicationsof issues wereaddressedintheDohaDeclar Concerns meeting oftheCouncilinJulyandatCouncil’ Agreement andaffordableaccesstomedicines relev relev to devoteafullday’ some ofthesereviewsin2002. Br Lanka, Ar Mauritius Croatia, ansfer toleast-developedcountryMembersinorderenablethem tocreateasoundand azil, ab Emir en upinpar T T T As farastheDohaagendaisconcerned, During theperiodcoveredby report, F developed-country Membersupdateannuallydescriptionsoftheirtechnicalandfinancial e bestuseoftheintellectualpropertysystemfortheireconomic, echnical cooper ollowing arequestfromZimbabweonbehalfofthe he Secretariatcooper he Councilcontinueditsworkontheimplementationof ant provisionsofthe ant toaccessmedicines WIPO pursuanttothe . TRIPS ation progr ation inthe ation on Brunei Darussalam, T Sw T T he DohaMinisterialDeclar . he Declar Dominica, his jointinitiativeisaimedathelpingLDCMemberstocomplywiththeirobligations . , al systemofnotificationandregistr ates; aziland, TRIPS Reaffirming thattheprovisionsof , Morocco anuary 1996. this Decisioncallsforthe Agreement’ , . technical andfinancialcooper ln addition, and inNovember2001thelegislationof agr TRIPS Agreement. actice oftheincentivesprovidedtotheirenterprisesfortr TRIPS Councilalsopresent, ations whichcanbeaddressedbydevelopingcountriesseekingtechnical ammes ation clarifiessomeoftheformsflexibilityav T aph 11.2oftheDohaDecisiononImplementation-RelatedIssuesand TRIPS area. , Dominican Republic, hailand, ation hasbeenaprominentissueinthe s specialdiscussionatitsmeetinginJunetointellectualpropertyissues Nicar . al Councilonthisbytheendof2002. s built-inagenda. . . ates withanumberofintergovernmentalorganizations agua, On 14June2001, TRIPS TRIPS Councilandinformationshall beupdatedbyMembers F T Cuba, the or thesak he issueofimplementation Agreement Between T It isalsoopentootherLDCsandaimedathelping . unisia, allel importing. ln ordertoensurethatinformationonav Agreement’ Developed-country Membershavealsonotifiedcontactpoints WT , Oman, Agreement withaviewtoclarifyingtheflexibilitywhich focusing ontheinterpretationandapplicationof Agreement; Gabon, O Secretariatprovidesinformationonitstechnical ation setadeadlineoftheFifthMinisterial Conferencein . Uruguay andZimbabwe It emphasizesthatthe e oftr TRIPS Counciltoputinplaceamechanismforensuring the Philippines ay thatsupportsgovernments’righttoprotectpublic Egypt, Ghana, ation onthe s flexibilitiestothefull. It continueditsworkontheestablishment ofa ansparency ation infavourofdevelopingandleast- the Councilhelddiscussionsonv Article 66.2ofthe on theinvitationofCouncil, the respectiveDirectors-Gener this Declar ation ofgeogr and therelationshipbetween . Fiji, T WIPO andthe his discussionw India, s meetinginSeptember . Georgia, Article 66.2. , , TRIPS Saint KittsandNevistheUnited ation setstwospecifictasks Lithuania, intergovernmental organizations Antigua andBarbuda, African Group Article 66.2ofthe TRIPS aphical indicationsforwinesand . TRIPS Council. Hondur Agreement andPublicHealth, T Article 66.2ofthe he Councilwillstillfollowup T WT , TRIPS he Declar on requestandmutually- as continuedataninformal Agreement doesnotand ailable It statesthatthe Malaysia, O T hese submissionsshallbe as , which enteredinto social andcultur Agreement are , , T aging technology J ailable assistanceis amaica, , o thisend, the Councilagreed ation alsomak . in particular Eventually al of Article 67ofthe P Agreement w akistan, information on arious aspects ansfer of It affirms TRIPS Barbados anuary 2016. WT Agreement, K TRIPS , eny notably O and . T , a, he Sri these al Article es , , as The implementation of Article 24.1 relating to increasing the protection of individual geographical indications under Article 23 has been under discussion in the Council since September 2000, following a request by Switzerland and the submission of a paper outlining the views of a number of delegations. As regards its review of the application of the Agreement’s provisions on geographical indications under Article 24.2, the Council received a Secretariat paper summarizing, on the basis of an agreed outline, the responses to a Checklist of Questions on how Members are implementing the TRIPS provisions on geographical indications. Paragraph 18 of the Doha Ministerial Declaration states that issues related to the extension of the protection of geographical indications provided for in Article 23 to products other than wines and spirits will be addressed in the Council for TRIPS pursuant to paragraph 12 of the Declaration concerning outstanding implementation-related issues and concerns. In regard to the review of the provisions of Article 27.3(b), Members continued to discuss both a number of substantive issues and a number of procedural questions relating to how the Council should handle its further work on this matter. The Council also had a discussion about the extent to which all the issues that had been raised under Article 27.3(b) should be pursued in that context or whether some might more suitably form part of the items to be taken up in the context of the implementation of the TRIPS Agreement under Article 71.1. Article 71.1 requires the Council for TRIPS to review the implementation of the Agreement after the end of the five-year transition period provided for in Article 65.2, which ended on 1 January 2000. Throughout the period under review, the Council continued to discuss how it should approach this general review of the implementation of the Agreement. The Doha Ministerial Declaration gives the Council further guidance on how to pursue its work on reviews under Articles 27.3(b) and 71.1 of the Agreement. In paragraph 19 of the Declaration, the Ministers instruct the Council for TRIPS, in pursuing its work programme including under the review of Article 27.3(b), the review of the implementation of the TRIPS Agreement under Article 71.1 and the work foreseen pursuant to paragraph 12 of this Declaration relating to outstanding implementation issues and concerns, to examine, inter alia, the relationship between the TRIPS Agreement and the Convention on Biological Diversity, the protection of traditional knowledge and folklore, and other relevant new developments raised by Members pursuant to Article 71.1. In undertaking this work, the TRIPS Council shall be guided by the objectives and principles set out in Articles 7 and 8 of the TRIPS Agreement and shall take fully into account the development dimension. The Council continued to examine the scope and modalities for non-violation and situation complaints. Paragraph 11.1 of the Doha Decision on Implementation-Related Issues and Concerns directs the TRIPS Council to continue its examination of the scope and modalities for complaints of the types provided for under subparagraphs 1(b) and 1(c) of Article XXIII of GATT 1994 and make recommendations to the Fifth Session of the Ministerial Conference. It is agreed that, in the meantime, Members will not initiate such complaints under the TRIPS Agreement. s O’ WT VII. Resolution of trade conflicts under the WTO’s Dispute Settlement Understanding

Overview standing

The General Council convenes as the (DSB) to deal with disputes arising from any agreement contained in the Final Act of the Uruguay Round that is ade conflicts under the covered by the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). The DSB has the sole authority to establish dispute settlement panels, adopt

panel and Appellate Body reports, maintain surveillance of implementation of O activities Dispute Settlement Under recommendations and rulings, and authorize suspension of concessions in the event of non- WT Resolution of tr implementation of recommendations. Dispute settlement activity in 2001

In the year 2001, the DSB received 24 notifications from Members of formal requests for consultations under the DSU. During this period, the DSB also established panels to deal with 16 new cases and adopted panel and/or Appellate Body reports in 16 cases, concerning 14 distinct matters. In addition, mutually agreed solutions were notified in seven cases. Two panels suspended their work at the request of the parties and in two cases the request for a panel was withdrawn by the complaining party following abrogation of the contested measure. The following sections briefly describe the procedural history and, where available, the substantive outcome of these cases. They also describe the implementation status of adopted reports where new developments occurred in the covered period. In order to

79 WTO activities Resolution of trade conflicts under the WTO’s 80 Dispute Settlement Understanding 12 “WT/DSxxx/R”, reports normallyareissuedunderthesymbol dispute areissuedunderthatsymbol. dispute). (WT/DSxxx, br the documentseriesreferenceindicatedin online” can easilybefoundthroughthe also av “WT/DSxxx/AB/R”. normally issuedunderthesymbol Documents relatingtoaparticulardispute ack ets afterthetitleofeachdispute ailable onthe facility ofthe All documentsconcerningaspecific where xxxisthenumberof and T Appellate Bodyreportsare he fulltextoftheDSUis WT WT O website O websitebyusing “Documents . P anel Articles 2, application ofthestandardreviewunder concluded thattheP 3.4 ofthe AD the P determination ofdumping. DSU submitted byP and legalinterpretationsdevelopedbytheP Settlement BodyofitsdecisiontoappealcertainissueslawcoveredintheP Thailand – Appellate Bodyand/orP reflected. which wereactivein2001, provide themostup-to-dateinformationav the manufacture pr Eur T adopted the a mandatoryev findings ofviolation. Body reversedthereasoningofP panel reviewingtheimpositionofananti-dumpingdutytoconsideronlyfacts obligations ofMemberswithrespecttothedeterminationinjury and reasoningthatweredisclosedto of thesecasescanbefoundonthe Canada claimedthatthisDecreeviolated report, c.i.f imposed by P imposed on26May1997. alloy steelandH-beamsfr Articles 2, imposed ononetypeofasbestos 19 November1999, Br containing chrysotile accruing toitunderthev 1994. Application ofSanitaryandPhytosanitaryMeasures(SPS Agreement on steel productsfromP United Statesreservedtheirthird-partyrights Agreement applied totheexceptions and 5.5ofthe imports ofH-beamsfromP P inconsistent withtherequirementsof Article 2ofthe P imposition ofthedefinitiveanti-dumpingmeasureonimportsH-beamsfromP amount forprofitinconstructingnormalv description of the Panel report, see also WTO Annual Report 2001, “Panel reports pending reports “Panel 2001, Report Annual WTO also see report, Panel the of description he measurealsoincludedcertaintempor oland fordisclosureoffindings oland failedtoestablishthat oland failedtoestablishthat eoeteAplaeBd” .97). p. Body”, Appellate the before azil, oducts T T T T In itsreportcirculatedon18September 2000, In itsreportcirculatedtoMembersonthe28September2000, . Agreement, opean Communities–Measur . he he his disputeconcernsaF his disputeconcernstheimpositionoffinalanti-dumpingdutiesonimportscertain v anel’ T alue fortheseproducts he Canada alsoargued, the UnitedStatesandZimbabwe reserved theirthird-partyrights on 5 Appellate BodyupheldtheP Appellate Bodyreportw Appellate BodyreversedthefindingofP s reasoning, New casesinitiatedin2002arenotreflectedhere , AD 3 and5ofthe 3, complaint byCanada(WT/DS135) T April 2001. Anti-dumping dutiesonangles Appellate BodyreportandtheP hailand on27December1996, 5 and6ofthe Agreement. oland inthiscasew T AD aluation ofallthefactorslistedinthatprovision. AD echnical Barriersto which setsoutthestandardofreviewforpanels , processing, Agreement or Agreement or . anel didnoterrinitsapplicationoftheburdenproof the DSBestablishedapanel. T oland. T he either in he DSBestablishedapanelatits meeting of25November1998. Appellate BodyalsoupheldtheP arious agreementscited. AD T oland w T P he eeomnsfo J developments from1 under P rench Decreeof24December1996imposingprohibitionson Anti-Dumping he oland furtherallegedthat , oland allegedthatprovisionalanti-dumpingdutieswere Agreement, sale produced orexportedbyanyP Appellate BodyagreedwiththeP om P T T Appellate Bodyw Article 3.1ofthe hailand’ hailand hadactedinconsistentlywithitsobligationsunder as circulatedto . Article , P , Article namely chrysotile(orwhite)asbestos Article XXIII:1(b), oland contendedthattheseactionsby anel reportsadopted import, as sufficienttomeettherequirementsof as inconsistentwiththerequirementsof T WT anel’ oland, On 23October2000, r , anel onthisissue , ade (TBT Article 3ofthe es affectingasbestosandasbestos-containing but nottotheprohibitions or discernibleby O’ s initiationoftheanti-dumpinginvestigationon VI oftheGA VI oftheGA s conclusionthatwithrespecttotheclaimsunder s websiteatwww the requestforestablishmentofapanel ary andlimitedexceptionstotheseprohibitions Articles 2and5ofthe alue etc. Agreement (AD ailable atthetimeofwritingconcerningcases complaint byP Article 17.6(i)ofthe anel. anel report, and afinalanti-dumpingdutyof27.78% . . of asbestosandproductscontaining Agreement) and However WT , AD as oftheviewthattherew shapes andsectionsofir T the P Canada’ anuary 2001until1F O Memberson12March2001. he EuropeanCommunities nullification andimpairmentofbenefits TT 1994. Agreement, TT 1994inthecalculationof AD anel thatthe , , T it leftundisturbedtheP anel concludedthatthe P hailand refusedtworequestsby , olish firmsatthetimeoffinal Agreement as modifiedbythe Agreement), the P T anel’ s claimsrelatedtotherestrictions Agreement). .wto hailand notifiedtheDispute . olish producerorexporter oland (WT/DS122) Additional informationoneach T anel foundthat he P s conclusionsunder Articles IIIandXIofGA .org. anel that . , which laysdownthe Agreement onthe AD Finally Although the in themeasure , the P AD anel alsoconcludedthat or in 12 Agreement. (for a more detailed more a (for Article 2ofthe Agreement requiresa , , . At itsmeetingon anel concludedthat ebruary 2002are and products the Article 17.6ofthe T Article 3.4requires hailand violated Articles 5.2, Article 6.2ofthe as nobasisfor Appellate Body , Appellate Body , or inthe on ornon- T J anel report Appellate anel’ apan andthe hailand’ TBT . oland w , T he P evidence T Article s main he DSB , TT anel s w 5.3 as . as . examined, and upheld, Canada’s claim that the measure was inconsistent with Article III:4 of the GATT 1994. This provision prevents WTO Members from treating imported products “less favourably” than “like” domestic products. The Panel concluded that chrysotile asbestos fibres are “like” polyvinyl alcohol, cellulose and glass fibres (“PCG fibres”) and, also, that cement-based products containing chrysotile asbestos fibres are “like” cement-based products containing PCG fibres. The Panel also found that there was less favourable treatment of imported products and, consequently, concluded that the measure was inconsistent with Article III:4 of the GATT 1994. However, since chrysotile asbestos is carcinogenic, the Panel found that the measure was justified by the exception provided in Article XX(b) of the GATT 1994 as it is “necessary to protect human ... life or health” (for a more detailed description of the Panel report, see also WTO Annual Report 2001, “Panel reports pending before the Appellate Body”, p. 97). On 23 October 2000, Canada notified the Dispute Settlement Body of its decision to appeal certain issues of law covered in the Panel report and legal interpretations developed by the Panel. The Appellate Body ruled that the French Decree, prohibiting asbestos and asbestos- containing products had not been shown to be inconsistent with the European Communities’ obligations under the WTO agreements. The Appellate Body reversed the Panel’s finding that the TBT Agreement does not apply to the prohibitions in the measure concerning asbestos and asbestos-containing products and found that the TBT Agreement applies to the measure viewed as an integrated whole. The Appellate Body concluded that it was unable to examine Canada’s claims that the measure was inconsistent with the TBT Agreement. The Appellate Body reversed the Panel’s findings with respect to “like products”, under Article III:4 of the GATT 1994. The Appellate Body ruled, in particular, that the Panel erred in excluding the health risks associated with asbestos from its examination of “likeness”. The Appellate Body also reversed the Panel’s conclusion that the measure was inconsistent with Article III:4 of the GATT 1994. The Appellate Body itself examined Canada’s claims under Article III:4 of the GATT 1994 and ruled that Canada had not satisfied its burden of proving the existence of “like products” under that provision. Finally, the Appellate Body upheld the Panel’s conclusion, under Article XX(b) of the GATT 1994, that the French Decree was “necessary to protect human ... life or health”. In this appeal, the Appellate Body adopted an additional procedure “for the purposes of this appeal only” to deal with amicus curiae submissions. The Appellate Body received, and refused, 17 applications to file such a submission. The Appellate Body also refused to accept 14 unsolicited submissions from non-governmental organizations that were not submitted under the additional procedure. At its meeting of 5 April 2001, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report.

European Communities – Anti-dumping duties on imports of cotton-type bed linen, complaint by India (WT/DS141) s O’

This dispute concerns the imposition of anti-dumping duties by the European WT Communities on imports of cotton-type bed linen from India. India argued that the European Communities acted inconsistently with various obligations under Articles 2, 3, 5, 6, 12 and 15 of the Anti-Dumping Agreement (AD Agreement). At its meeting on 27 October 1999, the DSB established a panel. Egypt, Japan and the United States reserved their third-party rights. standing The Panel concluded that the European Communities did not act inconsistently with its obligations under Articles 2.2, 2.2.2, 3.1, 3.4, 3.5, 5.3, 5.4, and 12.2.2 of the AD Agreement. However, the Panel did conclude that the European Communities had acted ade conflicts under the inconsistently with its obligations under Articles 2.4.2, 3.4, and 15 of the AD Agreement (for further details on the Panel’s findings see also WTO Annual Report 2001, “Panel reports

pending before the Appellate Body”, p. 97). The Panel report was circulated to WTO O activities Dispute Settlement Under Members on 30 October 2000. WT Resolution of tr On 1 December 2000, the European Communities notified the DSB of its intention to appeal the finding that the European Communities’ practice of “zeroing” when establishing the margin of dumping was inconsistent with Article 2.4.2 of the AD Agreement. In addition, India appealed the Panel’s findings regarding Article 2.2.2(ii). The Appellate Body upheld the Panel’s finding that the European Communities’ practice of “zeroing” was inconsistent with Article 2.4.2 of the AD Agreement. Article 2.4.2 states that: “... the existence of margins of dumping shall ... be established on the basis of a comparison of weighted average normal value with the weighted average of prices of all comparable export transactions ...”. (emphasis added) By “zeroing” the “negative dumping margins”, the European Communities did not take fully into account the entirety of the prices of some export transactions, namely, those export transactions involving models of cotton-type bed linen where “negative dumping margins” were found. Thus, the European Communities did not establish the existence of dumping for cotton-type bed linen on the

81 WTO activities Resolution of trade conflicts under the WTO’s 82 Dispute Settlement Understanding imported beef supermark beef anddomestictobesoldinsepar reports” Agreement (forsubsequentdevelopmentsseethesectionon the of tr adopted bytheDSBon16F by theUnitedStatesand one basis ofacomparison that themeasureswereinviolationof benefited frompricesupportprovidedbytheK to displayasignreading K leather Ar be examinedbythesamepanelestablished attherequestofUnitedStates part throughtheauthorizationgr facto exportprohibitiononr bovine hidesandtheimportationofgoods GA industry toparticipateincustomscontrolproceduresofhidesbeforeexport)violation restriction contr the exportmeasure; Argentina prev respect totheexportmeasureandimportmeasuresatissueindispute Argentina w products whicharelik violation of imported goodsimposedonoper products into Communities alsoclaimedthatthe Appellate Bodyreport, that theEuropeanCommunitieshadactedinconsistentlywith tr administr applied wherethereisdataonadministr in thecustomsprocess the factthattheycouldallegedlybecomeaw were oper for profits 1 J virtue ofaNoteinK 6, conformity withthe the requestofK export levels Communities hadfailedtoshowthatthemeasureinquestionw assist extent thatpersonnelofthe X:3(a) (whichrequiresuniformandimpartialadministr Agreement. Austr Panel’s findings see also WTO Annual Report 2001, “Appellate Body and/or panel reports panel and/or Body “Appellate 2001, Report Annual WTO also see findings Panel’s dpe” .75). p. adopted”, or ansactions” and 7ofthe gentina –Measur anuary 2001, TT T At itsmeetingon26July1999, T T T T T At itsmeetingon26July1999, AD ea –Measur ade his disputeconcernsK he DSBadoptedthe he reportoftheP he P his disputeconcernscertainmeasurestak he other exporterorproducer alia. Articles XI:1(whichprohibitsexportrestrictionsandmeasuresofequiv Argentine customsauthoritiesintheclear Appellate Body Agreement. , may not may anel foundfirstthatanumberof the contestedK below). ative complaint bytheEur , ating acartelandthuswereabletoexertpressureonexportersofhidesdue Canada, ets sales byotherexportersorproducersthatwerenotmadeintheordinarycourse Article III:2oftheGA as actinginconsistentlywithitsobligationsundertheGA . , T Argentina, . , as requiredby in separ he EuropeanCommunitiesasserted, ailed withrespecttooneofthetwoEuropeanCommunitiesclaimsregarding K selling andgener Agreement on ary to orea, orea establishedin1990a by whichdatetheyhadtobeeliminated orotherwisebroughtinto be excluded. es affectingimportsoffr New ZealandandtheUnitedStates reservedtheirthird-partyrights T WT orea’ he namely thattheexportmeasuredidnotconstituteadefacto the DSBagreedthat, Article XI:1oftheGA e domesticproducts). anel w ate displayareas , “with theweightedaver . es ontheexportofbovinehidesandimportfinished on 12March2001. O Appellate Bodyfoundthatthemethodforcalculatingamounts however T and the he P Appellate BodyreportandtheP “Specialized ImportedBeefStore”. s ScheduleofConcessions Agreement. orean Governmentmeasuresaffectingthedistributionandsaleof aw andsemi-tannedbovinehidesw ebruary 2001. Argentine Chamberforthetanningindustrywereauthorizedto Article 2.4.2. as circulatedto anel rejectedthisclaimasunproven Austr Agriculture; . In thelightofthesefindings T , al costsandprofitssetforthin he TT 1994(whichprohibitstaxdiscriminationofforeign “adv anted bythe reversed theP ators whenimportinggoodsinto opean Communities(WT/DS155) alia (WT/DS/161and169) “additional v the DSBestablishedapanel. the DSBalsoestablishedapanelatrequestof Appellate Bodyalsofoundthat, T ance turnovertax” he P Articles II, . Also ative and . ate stores; anel foundthatK pursuant toDSU TT 1994. “dual retail” T , WT he EuropeanCommunitiesallegedthatade are oftheidentityexportersbyparticipating , stores whichsoldimportedbeefwererequired en by Argentine authoritiestothe selling andgener orean Government. age ofprices Articles 1and3oftheImportLicensing esh, anel’ O Memberson19December2000. alue addedtax” III, inter alia inter , Argentina affectingtheexportationof s findingsregarding chilled andfr XI, from atr T or inthecaseoflargestores he P ation oflawsandregulations), and XVIIofGA ance process system whichrequiredimported anel report, of 3%basedontheprice orean measuresbenefited, anel consideredthattheEuropean , , the Article 9.1, orea violated In addition, that the “Implementation ofadopted ansitional perioduntil Article 2.2.2(ii)ofthe all Article 2.2.2(ii) al costsandprofitsforonly Appellate Bodyconcluded as beingimplemented, as thecauseoflow T of 9%onimports he P (for further details on the on details further (for compar T Argentina, ozen beef he UnitedStatesargued in calculatingamounts TT 1994bothwith . as modifiedbythe Argentine tanners anel foundthat T TT 1994; he European this complaintwould Article 2.2.2(ii)of domestic beef able export Article 3.2ofthe Argentine tanning alent effect)and were in . , . cannot However complaints Articles 3, It w AD by to the . be At as in , 4, Agreement on Agriculture, since Korea’s total domestic support for agriculture (Total AMS) for 1997 and 1998, when price support for domestic beef was included, exceeded its Total AMS commitments for these years set out in the Schedule. The Panel also found that Korea violated Article III:4 of the GATT 1994, principally by requiring a dual retail system for the sale of imported and domestic beef. The report of the Panel was circulated to WTO Members on 31 July 2000. On 11 September 2000, Korea notified its intention to appeal certain issues of law and legal interpretations developed by the Panel. On 11 December 2000, the report of the Appellate Body was circulated. The Appellate Body upheld the Panel’s conclusion that Korea’s domestic support (AMS) for beef provided in 1997 and 1998 was not calculated in accordance with Article 1(a)(ii) and Annex 3 of the Agreement on Agriculture, but reversed the Panel’s findings that Korea’s total domestic support for agriculture (Total AMS) provided in 1997 and 1998 exceeded its commitments in its Schedule contrary to Article 3.2 of the Agreement on Agriculture. The Appellate Body upheld the Panel’s conclusions that Korea’s dual retail system was inconsistent with the national treatment obligation in Article III:4 of the GATT 1994. The Appellate Body upheld the Panel’s conclusion that the measure could not be justified under Article XX(d) of the GATT 1994 (for a more detailed description of the Panel and Appellate Body reports see also WTO Annual Report 2001, Appellate Body and/or Panel reports adopted p. 77). At its meeting of 10 January 2001, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report (for subsequent developments, see the section on “Implementation of adopted reports” below).

United States – Import measures on certain products, complaint by the European Communities (WT/DS165) This dispute concerns certain measures taken by the United States with respect to certain imports from the European Communities in the context of the dispute on European Communities – Regime for the Importation, Distribution and Sale of Bananas (WT/DS27) (see section below on “Implementation of adopted reports”). On 2 March 1999, the arbitrators charged with determining the level of suspension of concessions, requested by the United States in response to the failure by the European Communities to implement the recommendations of the DSB in respect of the European Communities banana regime, had asked for additional data from the parties and informed them that they were unable to issue their report within the 60-day period envisaged by the DSU. On 3 March 1999, the United States imposed increased bonding requirements on certain designated products from the European Communities in order, in their own words, “to preserve [the United States] right to impose 100% duties as of 3 March, pending the release of the arbitrators’ final decision”. This was the “3 March measure” which is the subject of this dispute. The arbitrators circulated their decision on 9 April 1999. On 19 April 1999, the DSB granted authorization to the United States to suspend concessions or other obligations with respect to the European Communities in the amount determined by the arbitrators. s O’

Subsequent to this authorization, the United States imposed 100% duties on some, but not WT all of the designated products that were previously subject to the increased bonding requirements. This decision is referred to as the “19 April action”, and the United States applied it retroactively to 3 March 1999. The European Communities contended that the 3 March 1999 measure was inconsistent standing with Articles 3, 21, 22 and 23 of the DSU, and Articles I, II, VIII and XI of the GATT 1994. The European Communities also alleged nullification and impairment of benefits under GATT 1994, as well as the impediment of the objectives of the DSU and GATT 1994. The European ade conflicts under the Communities requested urgent consultations pursuant to Article 4.8 of the DSU. At its meeting on 16 June 1999, the DSB established a panel. Dominica, Ecuador, India,

Jamaica, Japan and St. Lucia reserved their third-party rights. The Panel found that when on O activities Dispute Settlement Under 3 March the United States increased bonding requirements to guarantee 100% tariff duties WT Resolution of tr on certain products from the European Communities, it effectively imposed unilateral retaliatory sanctions, contrary to Article 23.1 of the DSU, which requires WTO Members not to take unilateral action, but to have recourse to, and abide by, the rule and procedures of the DSU when seeking redress for alleged violations of WTO obligations. The Panel found that by putting into place the 3 March measure prior to the time authorized by the DSB, the United States made a unilateral determination that the revised European Communities bananas regime in respect of its bananas import, sales and distribution regime violated WTO rules, contrary to Articles 23.2(a) and 21.5, first sentence, of the DSU. The Panel further found that the United States had violated its obligations under Articles I and II of the GATT 1994 (one panelist dissented, considering that the bonding requirements rather violated Article XI:1 of the GATT 1994). In light of these conclusions, the 3 March measure constituted a suspension of concessions or other obligations within the meaning of Articles 3.7, 22.6 and 23.2(c) of the DSU imposed without DSB authorization and during the

83 WTO activities Resolution of trade conflicts under the WTO’s 84 Dispute Settlement Understanding the UnitedStates inJuly1999onimportsoffresh, modified bythe is the3Marchmeasure United Statesactedinconsistentlywith terms ofreferencetheP action, the UnitedStateshadactedinconsistentlywith meat, and heldthattheP DSU DSB are determination ofwhethermeasurestak and II:1(b), the P and legalinterpretationsdevelopedbytheP Members on17July2000. Articles 3.7, the UnitedStatesdidnotabidebyDSUandthusviolated ongoing complaint bytheEur United States–Definitivesafeguar United States–Safeguar report oftheP At itsmeetingof10J circulated to imports ofwheatglutenfromtheEuropeanCommunities Safeguards becausetheUnitedStates claimed thatthemeasurew 2December2000. 22 and 4oftheSafeguards 4.2 ofthe States’ safeguardmeasureonimportsofwheatglutenw Austr Agreement onSafeguards measure weresatisfied. Commission (theUSITC), interpretations developedbytheP Body certainissuesoflawandlegalinterpretationcoveredintheP 2.1and4oftheSafeguards Articles gluten basedontheUnitedStatesinvestigationanddeterminationw definitive safeguardmeasureimposedbytheUnitedStatesoncertainimportsofwheat reversed certainoftheP States didnotcomplywiththeprocedur obligation under prior consultationsonthemeasure; the UnitedStatesviolatedobligationof measures GA substantially equiv 12.1(a) andthefindingofseriousinjuryunder United Statesfailedtonotifyimmediatelytheinitiationofinvestigationunder standard forcausationin the UnitedStatesdidnotmak (iv) innotifyingitsdecisiontotak Panel and Appellate Body reports see also Annual Report 2001, p. 78). p. 2001, Report Annual also see reports Body Appellate and Panel con ftePnladAplaeBd eot,seas T nulRpr 01 .76). p. 2001, Report Annual WTO also see reports, Body Appellate and Panel the of account TT 1994betweenitandtheexportingMemberswhichwouldbeaffected bysuch T T T T Both theUnitedStatesandEuropeanCommunitiesappealedcertainissuesoflaw T T On 26September2000, , his disputeconcernsasafeguardmeasure intheformofatariffr he he DSBadoptedthereportof he reportofthe his disputeconcernsdefinitivesafeguardmeasuresimposedbytheUnitedStateson he P anel’ alia andNewZealandreservedtheirthird-partyrights the complaints byNewZealandand Appellate BodyupheldtheP i.e WT anel foundthat: Article 22.6arbitr Appellate BodyfoundthattheP , ., s findingsofinconsistencywith Agreement onSafeguards in accordancewith the impositionof100%dutiesoncertaindesignatedproducts first sentenceoftheDSU O-consistent canbemadebyarbitr 22.6 and23.2(c)oftheDSU WT anel, O Memberson31July2000. Appellate Body Article 8.1oftheSafeguards alent levelofconcessionsandotherobligationstothatexistingunderthe anel’ T as modifiedbythe Appellate Bodyw he anuary 2001, , anel’ Appellate BodyupheldtheP opean Communities(WT/DS166) s statementonthisissue In addition, Agreement orwith i.e Article 4.2ofthe (i) theUnitedStateshadnotactedinconsistentlywith did notdemonstr . ation process anel. At itsmeetingon26July1999, ., the UnitedStatesnotifieditsdecisiontoappeal as inconsistentwith s legalfindings d measur the increasedbondingrequirements Article 12.3oftheSafeguards e timelynotificationunder , T on 19J he e themeasureonlyafterw anel. . the DSBadopted anel’ Appellate BodyalsoupheldtheP and (v)theUnitedStatesthereforealsoviolatedits the EuropeanCommunitiesclaimedthatUnited . However Agreement; With regardtotheP as circulatedto Appellate Body “competent authorities”, T Appellate Body’ Article 21.5oftheDSU es onimportoffr en toimplementrecommendationsandrulingsofthe . he anuary 2001. al requirementsin d measur s findingsthatthemeasureatissueinthisdispute In suspendingconcessionsinthosecircumstances . anel haderredinaddressingthisissuecase Article 23.2(a)oftheDSUaswell Agreement onSafeguards T Appellate Bodycirculateditsreporton ate thattheconditionsforimposingasafeguard , he reportoftheP Article 12.3toprovideadequateopportunityfor in particular Article XIX:1(a)oftheGA anel. Austr , in reachingthisconclusion, Agreement toendeavourmaintaina ators appointedunder Article 12.1(b)oftheSafeguards Article 23.1oftheDSUw Articles 2.1and4.2ofthe , (iii) theP However therefore alia (WT/DS177and es onimportsofwheatgluten, chilled, anel’ , WT and thereportofP s report , as inconsistentwith s over the P Article 12.1(c). Appellate BodyReportandthe . O Memberson11December2000. anel furtherconcludedthatthe anel’ , T Articles 8.1, . or frozenlambmeat, , the DSBestablishedapanel. he EuropeanCommunities the P esh, T w Agreement. anel w he reportoftheP anel’ Article 23.1togetherwith as ofnolegaleffect. all conclusionthattheUnited . s statementsthatthe (for further description of the of description further (for T the International anel’ he , chilled orfr anel reportandcertainlegal s interpretationofthelegal and thatthe19 as circulatedto Appellate Bodyreversed (for a more detailed more a (for as inconsistentwith anel’ s k Article 22.6ofthe ate quotaimposedby TT 1994; 12.1 and12.3ofthe ey conclusionthat F or thesamereason, the as implemented, as notappealed. , s findingthatthe WT/DS178) is notwiththe Agreement on Articles 2.1and Appellate Body anel, ozen lamb Article II:1(a) anel w (ii) the Articles 2.1 Agreement; primarily Appellate T Article r April as ade WT as O , , from New Zealand and Australia, for a duration of three years. New Zealand and Australia raised a number of claims against this measure under Articles 2, 3, 4, 5, 8, 11 and 12 of the Agreement on Safeguards and Articles I, II and XIX of GATT 1994. The DSB established a panel on 19 November 1999. The Panel found that Article XIX:1(a) of the GATT 1994, read in the context of Article 3.1 of the Agreement on Safeguards, requires that a Member’s competent authorities set out, in their findings, “reasoned conclusions” with respect to the existence of unforeseen developments. In examining the report of the United States International Trade Commission (USITC), the Panel did not find such “reasoned conclusions”. The Panel also found that the United States acted inconsistently with the Agreement on Safeguards because the USITC included, in the domestic lamb meat industry, producers of live lambs, even though these producers do not produce lamb meat. With respect to the “threat” of serious injury, the Panel agreed with the USITC’s “analytical approach” and that the USITC was correct to focus on the most recent data available from the end of the investigation period. However, the Panel found that the data used was not sufficiently representative of the domestic industry, since the USITC failed to obtain data on producers representing a major proportion of the total domestic production by the domestic industry. The Panel also found that, under the Agreement on Safeguards, increased imports must be shown to be a necessary and sufficient cause of serious injury or threat thereof. The Panel found that the USITC had not met this standard (for a more detailed description concerning the Panel report, see also the Annual Report 2001, p.98). The report of the Panel was circulated to WTO Members on 21 December 2000. On 31 January 2001, the United States notified its intention to appeal certain issues of law covered in the Panel report and legal interpretations developed by the Panel. The report upheld the Panel’s overall conclusion that the safeguard measure taken by the United States with respect to imported lamb meat was inconsistent with the GATT 1994 and the Agreement on Safeguards. In particular, the Appellate Body upheld the Panel’s findings that, in taking safeguard action with respect to imported lamb, the United States had: (i) failed to demonstrate the existence of “unforeseen developments”; (ii) incorrectly defined the relevant “domestic industry”; (iii) failed to make a determination of the state of the “domestic industry” on the basis of data that was sufficiently representative of that industry; (iv) inadequately explained its determination of a threat of serious injury to the domestic industry; and (v) failed to ensure that injury caused to the domestic industry by factors other than increased imports was not attributed to those imports. The Appellate Body also found, however, that the Panel had erred: (i) in its application of the standard of review under Article 11 of the DSU; and (ii) in interpreting the causation requirements in the Agreement on Safeguards. The DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body, report on 16 May 2001.

United States – Anti-dumping measures on stainless steel plate in coils and s O’

stainless sheet and strip from Korea, complaint by Korea (WT/DS179) WT This dispute concerns preliminary and final determinations of the United States Department of Commerce (DOC) on stainless steel plate in coils from Korea dated 4 November 1998 and 31March 1999 respectively, and stainless steel sheet and strip from Korea dated 20 January 1999 and 8 June 1999 respectively. Korea considered that several standing errors were made by the United States in those determinations which resulted in erroneous findings and deficient conclusions as well as the imposition, calculation and collection of anti-dumping duties which are incompatible with the obligation of the United States under ade conflicts under the the provisions of the Anti-Dumping Agreement (AD Agreement) and Article VI of GATT 1994 and in particular, but not necessarily exclusively, Article 2, Article 6 and Article 12 of the AD

Agreement. O activities Dispute Settlement Under At its meeting on 19 November 1999, the DSB established a panel. The European WT Resolution of tr Communities and Japan reserved their third-party rights. The Panel concluded that certain aspects of the calculation of the dumping margin by the United States in the two investigations concerned were not in accordance with the requirements of the AD Agreement. In particular, the Panel found that (1) in the case of the investigation on sheet and strip, the United States made unnecessary currency conversions when determining normal value; (2) in both investigations, it made adjustments to export prices for unpaid sales in a manner not foreseen by the AD Agreement and (3) in both investigations, the United States calculated the dumping margin through multiple weighted averages in circumstances not provided for in the AD Agreement. The Panel, however, also concluded that the United States acted consistently with its obligations under the AD Agreement when engaging in currency conversions for the purpose of determining normal value in the plate investigation. The Panel recommended that the United States be required to bring the two anti-dumping measures at issue into conformity

85 WTO activities Resolution of trade conflicts under the WTO’s 86 Dispute Settlement Understanding of certain provisionsofthe States these determinationswereerroneousandbasedondeficientproceduresundertheUnited 30 November1998, dumping investigationofCertainHot-RolledSteelProductsfromJ fr Department ofCommerceandtheUnitedStatesInternational concluded thatcertainofJ in theproceedings the United States– with theirobligationsunderthe establishment ofapanel. floor tilesfromItaly imposedon12November1999. fr Ar insufficient factualrecordtoallowcompletionoftheanalysisJ respect tocertainaspectsoftheconductanti-dumpinginvestigations underlying investigation, Br inconsistent withthat the P Appellate Bodyreport, Members on22December2000. the UnitedStatesrevok between dumpedimportsandmaterialinjurytothatindustry demonstr United Stateshot-rolledsteelindustry application ofthecaptiveproductionprovisioninitsdetermination injurysustainedbythe hot-rolled steelproductsinJune1999: the followingrespectswhenitimposeddefinitiveanti-dumpingdutiesonimportsofcertain that theUnitedStatesactedinconsistentlywithitsobligationsunder downstream salesmadebyaninvestigatedexporter’ States methodologyforcalculatingthenormalv on importsofhot-rolledsteelfromJ the P the P certain issuesoflawcoveredintheP determinations intheunderlyinginvestigations P found thattherew obligations underthe its face applied toimportsfromuninvestigatedproducers(the (iii) theUnitedStatesstatutegoverningcalculationofamaximumdumpingmargintobe normal v sales andtheirreplacementwithdownstreamhomemark in accordancewiththerequirementsof determination ofthedumpingmarginforallthreeinvestigatedJ comparison initsuseofdownstreamsaleswhencalculatingnormalv claim under P examination ofinjury performance andmark causation; “critical circumstances” inconsistently with anel’ anel’ om J om Italy azil, Articles gentina –Definitiveanti-dumping measur T In itsreport, T T However theP On 25 Anti-Dumping his disputeconcernspreliminaryandfinaldeterminationsoftheUnitedStates he DSBadoptedthe his disputeconcerns anel’ anel’ anel. s findingthattheUnitedStateshadnotactedinconsistentlywith s findingregardingtheinconsistencywith T Canada, , apan, ariff inconsistent withthe alue w ated theexistenceofacausalrelationship s conclusionthataprovisionoftheUnitedStates s over April 2001, T VI andXoftheGA (iii) therequirementinUnitedStatesstatuteofa , he Article 2.4ofthe Act of1930andrelatedregulations complaint bytheEur Appellate Bodycirculateditsreporton24July2001. complaint byJ all conclusionthattheimposition, as notinaccordancewiththerequirementsof Chile circulated on28F anel concludedthattheUnitedStatesdidnotactinconsistentlywithits Agreement (AD Anti-dumping measur . as insufficientfactualrecordtoallowcompletionoftheanalysisJ Article X:3ofGA , 12 F . the UnitedStatesnotifieditsdecisiontoappeal Agreement andwiththe the EuropeanCommunitiesandK AD Finally et shareinthemerchant, n2 August2001. on 23 e suchmeasures determination; T Appellate BodyreportandtheP and didnotencompassUnitedStates Argentina’ ebruary 1999, Agreement inthefollowingrespects: ariff At itsmeetingon20March2000, apan’ , AD TT 1994and the P AD Act of1930andrelatedregulations apan (WT/DS184) s claimswerelimitedtospecificdeterminationsinthe AD Agreement thattheUnitedStatesdidnotmak Agreement. It w ebruary 2001, Agreement). anel foundthattheUnitedStateshadnotacted apan w s definitiveanti-dumpingmeasures onimportsofcer Agreement, TT inconductingitsinvestigationandmaking anel reportandcertainlegalinterpretationsdevelopedby opean Communities(WT/DS189) . as adoptedbytheDSBon1F It alsoreversedtheP (i) thedecisiontorelyon (ii) theexaminationanddeterminationofinjury . 28 T he reportoftheP as inconsistentwiththe Articles 2, April 1999and23June1999. es oncertainhot-r AD WT . alue asregardstheusingofcertain Article 2.1ofthe On 24F Agreement; . but declinedK as opposedtothecaptivemark the P by theUnitedStates T O , he J es onimportsofcer under s affiliatestodependentpurchasers Agreement. T 3, anel, apanese complaintalsoconcerned he EuropeanCommunities claimed “all others” ebruary 2000, orea reservedtheirthird-partyrights 6 (including anel report, Article 3.5ofthesaid et salesinthecalculationof T anel’ ariff as apreliminarymatter , (ii) theexclusionofcertainhome anel w but foundthattherew the DSBestablishedapanel. T orea’ s findingthattheUSITChad (i) issuingapreliminary “gener r However Act of1930w apan’ AD ade Commissionintheanti- “primary focus” apanese exportersw olled steelpr “facts av apan issuedon25and . T AD AD as circulatedto he dumping margin)w J s requestsuggestingthat Agreement oftheUnited ebruary 2001. alue apan claimedviolations Annex II), , s claimoncausation. as modifiedbythe Agreement, Agreement; of anti-dumpingduties Appellate Bodyupheld J al pr apan requestedthe , . . it reversedthe T AD It reversedthe AD ailable” he P amic floortiles J actice” Appellate Body apan allegedthat Agreement in Agreement inits as also e afair anel found 9 and10of Agreement, oducts et, on financial as well and WT with , in the as in the apan’ as not O . as It amic , s on that the Argentine investigative authority without justification disregarded all the information on normal value and on export prices provided by the exporters included in the sample; failed to calculate an individual dumping margin for each of the exporters included in the sample; failed to make due allowance for the differences in physical characteristics between the models exported to Argentina and those sold in Italy; and failed to inform the Italian exporters of the essential facts concerning the existence of dumping which formed the basis for the decision whether to apply definitive measures. The European Communities considered that the anti-dumping measures in question were inconsistent with Articles 2.4, 6.8 in conjunction with Annex II, 6.9 and 6.10 of the Anti-Dumping Agreement. On 7 November 2000, the European Communities requested the establishment of a panel. At its meeting on 17 November 2000, the DSB established a panel on the basis of the European Communities reduced complaint relating only to definitive anti-dumping measures on imports of ceramic floor tiles from Italy (WT/DS189/3). Japan, Turkey and the United States reserved their third-party rights. The Panel circulated its report to Members on 28 September 2001. The Panel found that (i) Argentina acted inconsistently with Article 6.8 and Annex II of the AD Agreement by disregarding in large part the information provided by the exporter for the determination of the normal value and export price, and this without informing the exporters of the reasons for such a rejection; (ii) Argentina acted inconsistently with Article 6.10 of the AD Agreement by not determining an individual dumping margin for each sampled exporter; (iii) Argentina acted inconsistently with Article 2.4 of the AD Agreement by failing to make due allowance for difference in physical characteristics affecting price comparability; and (iv) Argentina acted inconsistently with Article 6.9 of the AD Agreement by not disclosing to the exporters the essential facts under consideration which form the basis of the decision as to whether to apply definitive measures. At its meeting on 5 November 2001, the DSB adopted the Panel report (for subsequent developments see the section on “Implementation of adopted reports” below).

United States – Transitional safeguard measure on combed cotton yarn from Pakistan, complaint by Pakistan (WT/DS192) This dispute concerns a transitional safeguard measure applied by the United States, as of 17 March 1999, on combed cotton yarn (United States category 301) from Pakistan. In accordance with Article 6.10 of the Agreement on Textiles and Clothing (ATC), the United States had notified the Textiles Monitory Body (TMB) on 5 March 1999 that it had decided to unilaterally impose a restraint, after consultations as to whether the situation called for a restraint had failed to produce a mutually satisfactory solution. In April 1999, the TMB examined the United States restraint pursuant to Article 6.10 of the ATC and recommended that the United States restraint should be rescinded. On 28 May 1999, in accordance with Article 8.10 of the ATC, the United States notified the TMB that it considered itself unable to conform to the recommendations issued by the TMB. Despite a further recommendation of the TMB pursuant to Article 8.10 of the ATC that the United s O’

States reconsider its position, the United States continued to maintain its unilateral restraint WT and thus the matter remained unresolved. Pakistan is of the view that the transitional safeguards applied by the United States are inconsistent with the United States’ obligations under Articles 2.4 of the ATC and not justified by Article 6 of the ATC. Pakistan considers that the United States restraint does not meet the requirements for transitional safeguards standing set out in paragraphs 2, 3, 4 and 7 of Article 6 of the ATC. At its meeting on 19 June 2000, the DSB established a panel. India and the European Communities reserved their third-party rights. ade conflicts under the The Panel circulated its report on 31 May 2001. The Panel concluded that the transitional safeguard measure (quantitative restriction) imposed by the United States on imports of combed cotton yarn from Pakistan as of 17 March 1999, and extended as of 17 March 2000 O activities Dispute Settlement Under for a further year was inconsistent with the provisions of Article 6 of the ATC. Specifically, the WT Resolution of tr Panel found that: (i) inconsistently with its obligations under 6.2, the United States excluded the production of combed cotton yarn by vertically integrated producers for their own use from the scope of the “domestic industry producing like and/or directly competitive products” with imported combed cotton yarn; (ii) inconsistently with its obligations under Article 6.4, the United States did not examine the effect of imports from Mexico (and possibly other appropriate Members) individually; and (iii) inconsistently with its obligations under Articles 6.2 and 6.4, the United States did not demonstrate that the subject imports caused an “actual threat” of serious damage to the domestic industry. With respect to the other claims, the Panel found that Pakistan did not establish that the measure at issue was inconsistent with the United States obligations under Article 6 of the ATC. Specifically, the Panel found that: (a) Pakistan did not establish that the United States determination of serious damage was not justified based on the data used by the United States investigating authority; (b) Pakistan did not establish that the United States determination of serious

87 WTO activities Resolution of trade conflicts under the WTO’s 88 Dispute Settlement Understanding P tak by theP certain issuesoflawcoveredintheP findings that, Appellate BodyupheldtheP United States: Appellate Bodyreport, w to thatdamageandconcludedthereforetheP importing MembermustattributeseriousdamagetoallMemberswhoseexportscontributed caused tothedomesticindustry existence atthetimewhenUnitedStatesdeterminedthatseriousdamagehadbeen Appellate BodyconcludedthattheP of incidenceseriousdamageandcausationthereof were notjustifiedbaseduponaninappropriatelychosenperiodofinvestigationand establish thattheUnitedStatesdeterminationsofseriousdamageandcausationthereof authority ofestablishmentsthatceasedproducingcombedcottony damage w United States–Measur similar to tr which w Eur United States–Section211Omnibus individually whenattributingseriousdamagetoimportsfromP and (ii)failedtoexaminetheeffectofimportsy Canada (WT/DS194) under the URAA. interpreting section771(5)ofthe the domesticpriceofrestrictedproductisaffectedbyrestr product asasubsidytootherproductsmadeusingorincorpor Article 1.1oftheSCM counterv Agreement) becausethesemeasuresprovidethattheUnitedStateswouldimpose of States DepartmentofCommerce Uruguay Round include provisionsoftheStatement WT to ensurethatitslaws India reservedtheirthird-partyrights 11 September2000, WT Article 1.1(a)oftheSCM Article 1.1(a)(1)andhencedoesnotconstituteafinancialcontribution inthesenseof entrusted orgovernment-directedprovisionofgoodsinthesense subpar concluded thatanexportrestr with light oftheSAAandPreambletoUnitedStatesCVDRegulations isnotinconsistent those ofCanada’ against pr of judicialeconomy under theSCMand P akistan w anel thereforemadenorecommendationswithrespecttotheUnited Statesobligations ademarks as ofnolegaleffect. Article 10), en bytheUnitedStateswithrespecttoimportsofcombedcottony O obligationsasrequiredby O On 9July2001, T T T Canada consideredthatthesemeasureswereinconsistentwithUnitedStatesobligations T On 24July2000, T opean Communities(WT/DS176) he DSBadoptedthe i ipt ocrsScin211 oftheUnitedStatesOmnibus his disputeconcernsSection his disputeconcernsUnitedStatesmeasuresthattreatarestr he reportoftheP he DSBadoptedtheP Article 1.1oftheSCM Agreement. Articles 1.1, anel. as signedintolawon21October 1998(Section211). ailing dutiesagainstpr , actices thatarenotsubsidieswithinthemeaningof tr as notjustifiedregardingtheev as inconsistentwiththe , ademarks tr T ade names in takingsafeguardactionwithrespecttoimportsofy and 32.1ofthe he (i) failedtodefineproperlytherelev Agreements s claimsnotaddressed, Appellate BodycirculateditsreporttoMemberson8October2001. 10 (aswellas , the UnitedStatesnotifieditsdecisiontoappeal WT it w Canada requestedtheestablishmentofapanel. the DSBestablishedapanel. , anel w , tr Agreement. on 5November2001. O regulations andadministr ade names as neithernecessarynorappropriatetomak , Appellate BodyreportandtheP Agreements Agreement; and commercialnamesthatarethe sameas anel reporton23 es tr Agreement by anel’ Act (URAA)andtheExplanationofFinalRules as circulatedtoMemberson29June2001. aint asdefinedinthisdisputecannotconstitutegovernment- Agreement onSubsidiesandCounterv actices thatarenotsubsidieswithinthemeaningof . Article 32.5oftheSCM eating exportr , It declinedtoruleonthebroaderissueofwhetheran s over Articles 11, Counterv T ariff , A Canada alsoconsideredthattheUnitedStateshadfailed or commercialnames thatwereusedinconnection with TC anel shouldnothaveconsidereddatawhichwerein . anel reportandcertainlegalinterpretationsdeveloped . the P Administr . all conclusionthatthetr Act of1930(19U In particular the P aluation bytheUnitedStatesinvestigating “requir[ing] theimpositionofcounterv ailing Duties anel alsostatedthatSection771(5)(B)(iii)readin Appr August 2001. 17 and19, anel concludedthatinlightofconsider ative ative procedureswereinconformitywithits opriations estr Austr arn fromothermajorsupplier(s) ant anel’ , the Action (SAA)accompanyingthe . aints assubsidies “domestic industry” , alia, s interpretationofthisbroaderissue Agreement and Final Rule(Nov Appellate BodyupheldtheP as theyrelatetotherequirements anel report, .S .C the EuropeanCommunitiesand Act, . ating therestrictedproductif ril 1.1”. Article § 1677(5)), eto 211regulates Section akistan. ansitional safeguardmeasure aint onexportsofa aint. complaint bythe arn; Appropriations e findingsthereon. arn fromP ailing Measures(SCM as modifiedbythe At itsmeetingon , arn (y T or substantially . Furthermore (c) P he measuresatissue Article XVI:4ofthe 25, T , he P Appellate Body as amendedby producing y complaint by With respectto agr arn) from akistan didnot 1998) anel akistan, p (iv)of aph , United ailing duties Act, , the ations anel’ T arn; the he T he s businesses or assets that were confiscated by the Cuban Government on or after 1 January 1959. Section 211(a)(1) prevents the registration and renewal of such trademarks, trade names or commercial names; Section 211(a)(2) prevents United States courts from recognizing, enforcing or validating any rights asserted by Cuba or a Cuban national or its successor-in-interest in respect of such trademarks, trade names or commercial names; and Section 211(b) prevents the United States courts from recognizing, enforcing or validating any treaty rights asserted by Cuba or a Cuban national or its successor-in-interest in respect of such trademarks, trade names or commercial names. Before the Panel, the European Communities argued that Section 211 was inconsistent with Articles 2.1, 3.1, 4, 15.1, 16.1, and 42 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), as read with the relevant provisions of the Paris Convention (1967), which is incorporated into the TRIPS Agreement. On 30 June 2000, the European Communities and its member States requested the establishment of a panel. At its meeting on 26 September 2000, the DSB established a panel. Canada, Japan and Nicaragua reserved their third-party rights. The Panel circulated its report on 6 August 2001. The Panel rejected most of the claims by the European Communities and their member States except that relating to the inconsistency of Section 211(a)(2) of the Omnibus Appropriations Act with Article 42 of the TRIPS Agreement. In this regard, the Panel concluded that this Section is inconsistent with the relevant TRIPS Article on the grounds that it limits, under certain circumstances, right holders’ effective access to, and availability of, civil judicial procedures. On 4 October 2001, the European Communities and its member States notified their decision to appeal certain issues of law and legal interpretations developed by the Panel report. The Appellate Body report was circulated to Members on 12 January 2002. The Appellate Body: (i) found, in respect of the protection of trademarks, that Sections 211(a)(2) and (b) of the Omnibus Appropriations Act violated the national treatment and most- favoured-nation obligations under the TRIPS Agreement and the Paris Convention for the Protection of Industrial Property, thereby reversing the Panel’s findings to the contrary; (ii) reversed the Panel’s finding that Section 211(a)(2) was inconsistent with Article 42 of the TRIPS Agreement and concluded that Article 42 contains procedural obligations, while Section 211 affects substantive trademark rights; (iii) upheld the Panel’s findings that Section 211 does not violate the United States’ obligations under Article 2.1 of the TRIPS Agreement in conjunction with Article 6quinquies A(1) of the Paris Convention, and Articles 15 and 16 of the TRIPS Agreement. It also upheld the Panel’s finding under Article 42 of the TRIPS Agreement in respect of Section 211(b); and (iv) reversed the Panel’s conclusion that trade names were not a category of intellectual property protected under the TRIPS Agreement and then completed the analysis reaching the same conclusions for trade names as with respect to trademarks. It also found that Sections 211(a)(2) and (b) were not inconsistent with Article 2.1 of the TRIPS Agreement in conjunction with Article 8 of the Paris Convention (1967). The DSB adopted the Appellate Body report and the Panel report, as modified by the s O’

Appellate Body report, on 1 February 2002. WT Implementation of adopted reports

The DSU requires the DSB to keep under surveillance the implementation of adopted standing recommendations or rulings (DSU, Article 21.6). This section reflects developments concerning this surveillance, and includes information relating to: (i) the determination, where relevant, of a reasonable period of time for the Member concerned to bring its ade conflicts under the measures into conformity with its obligations under the WTO Agreements (DSU, Article 21.3); (ii) recourse to dispute settlement procedures in cases of disagreement regarding the

existence or consistency of measures taken to comply with the recommendations and rulings O activities Dispute Settlement Under (DSU, Article 21.5); and (iii) suspension of concessions in case of non-implementation of the WT Resolution of tr DSB’s recommendations (DSU, Article 22).

European Communities – Regime for the importation, sale and distribution of bananas, complaints by Ecuador, Guatemala, Honduras, Mexico and the United States (WT/DS27) At its meeting of 25 September 1997, the DSB adopted the Appellate Body report and the Panel reports, as modified by the Appellate Body report, recommending that the European Communities bring its regime for the importation, sale and distribution of bananas into conformity with its obligations under the GATT 1994 and the GATS (for a detailed description of the Panel and Appellate Body reports, see also Annual Report 1998, p. 106. For more detailed information relating to the implementation of the reports up until December 2000, please see Annual Report 2000, p. 69 and Annual Report 2001, p. 95).

89 WTO activities Resolution of trade conflicts under the WTO’s 90 Dispute Settlement Understanding bv ni 1December2005. above until31 1994 neededforthemanagementofquotaCunderimportregimedescribed(2) acceptance ofanEuropeanCommunitiesrequestforaw signatory totheCotonou US$201.6 millionperyear Ecuador’ accordingly by31December2004; that theEuropeanCommissionwouldexaminetr preferential accesstotheEuropeanCommunitiesofgoodsoriginatingin w (ii) doesnotenterintoforceby1J increased duties; import regimeassoonpossible of theUnderstandings implement animportregimeonthebasisofhistoricallicensingassetoutinannextoeach new importregimedescribedunder(2)above provisionally suspenditsimpositionoftheincreasedduties; (i) uponimplementationofthenewimportregimedescribedunder(1)above approv under theimportregimedescribedinpar Regulation (EEC)No 2001, and (2)effectiveassoonpossiblethereafter regime onthebasisofhistoricallicensingassetoutinannextoeachUnderstandings; tariff-r achieved withrespecttotheimplementingmeasuresnecessarymanagethree request foraw would activelyworktow Communities ofgoodsoriginatingin the EuropeanCommunitieshasrequestedforpreferentialaccessto theEuropean (iii) Ecuadorwouldliftitsreserveconcerningthew solutions withinthemeaningof the EuropeanCommunities commonorganization forbananasinordertohonour the made anor tak solutions withinthemeaningof States communicatedthattheUnderstandings didnotconstitutemutuallysatisfactory regime basedonthreetariff-r period, Article XXVIIInegotiationswouldbeinitiatedingoodtimetothateffect. introduce atariff-onlyregimeforimportsofbananasnolaterthan1J (as amendedbyCouncilRegulationNo(EC)216/2001), countries follows: Communities wouldimplementanimportregimeonthebasisofhistoricallicensingas regime wouldberesolved. means bywhichthelong-standingdisputeoverEuropeanCommunitiesbananasimport discussions withtheUnitedStatesandEcuador tariff-only regime all importsirrespectiveoftheirorigin: modifications madeinCouncilRegulation216/2001providedforthreetariffquotasopento 2001. “Understanding onBananasbetweentheEuropeanCommunitiesandEcuador” between theEuropeanCommunitiesandUnitedStates” 300 of competition, obligations tow a r 75 300 aiver of ate of75 e theitemoffDSBagenda. Pursuant toitsUnderstandingwiththeEuropeanCommunities Pursuant toitsUnderstandingwiththeEuropeanCommunities T On 1March2001, On 3May2001, On 22June2001, f he EuropeanCommunitiesnotified theUnderstandingsasmutuallysatisfactory f f /tonnes ate quotasonthebasisoffirst-come h oni fteErpa no dpe euain(C o216/2001amending the CouncilofEuropeanUnionadoptedRegulation(EC)No Pursuant totheseUnderstandingswiththeUnitedStatesandEcuador /tonnes /tonnes al andtoadoptionofan starting on1July2001, (1) effective1July2001, s righttosuspendconcessionsorotherobligationsofalevelnotexceeding , Article IoftheGA including theotherco-complainants al statementwherebyitcriticized theCommissionproposalaimedatreforming f , bound underthe . . /tonnes; T aiver of Imports from ards thesecountriesandtheneedtoguar they wouldbenefitfromatariffpreferencelimitedtomaximumof he tariffquotaswereatr . (iii) mayreimposetheincreaseddutiesifimportregimedescribedunder According totheEuropeanCommunities . the EuropeanCommunitiesreportedtoDSBthatintensive 404/93 onthecommonorganizationofmark the EuropeanCommunitiesnotifiedan . the EuropeanCommunitiesreportedtoDSBthaton29J T Article XIIIoftheGA (3) athirdautonomousquotaof850,000tonnesatr he Commissionwouldseektoobtaintheimplementationofsuchan ards promotingtheacceptanceofanEuropeanCommunities Agreement; vis-à-vis In accordancewith TT 1994thattheEuropeanCommunitiesrequestedfor A ate quotas CP countrieswillenterduty-free WT Article XIIIw the EuropeanCommunitieswouldimplementanimport Article 3.6oftheDSU Article 3.6oftheDSUandthatit wouldbeprematureto the EuropeanCommunitieswouldimplementanimport . O; anuary 2002; tteDBmeigo 5September 2001, At theDSBmeetingon25 (ii) uponimplementationofthenewimportregime the EuropeanCommunitieswouldbeterminated; A (2) asecondautonomousquotaof353,000tonnesat and wouldactivelyworktow (1) afirsttariffquotaof2,200,000tonnesatr CP StatessignatorytotheCotonou , agr to beallocatedonthebasisofhistoricallicensing. ansitional measureleadingultimatelytoa TT 1994neededforthemanagementofquotaC aph C(2)until31December2005. aiver , , , Article 16(1)ofRegulationNo , would terminateitsimpositionofthe , had ledtothecommonidentificationof subject toCouncilandEuropeanP first-served method. as welltheotherbanana-supplying and (iv)wouldliftitsreserveconcerningthe , the EuropeanCommunitieswould aiver of ade inorganicbananasandreport . the EuropeanCommunitieswould aiver of Both EcuadorandtheUnited antee properconditions , Article IoftheGA substantial progresshasbeen (ii) uponimplementationofthe of 11 “Understanding onBananas . In viewofcontr Article XIIIoftheGA , , April 2001, ards promotingthe Ecuador: the UnitedStates: anuary 2006. et inbananas A In theinterim Agreement; CP states , (i) tooknote . TT 1994that , the European (EC) 404/93 would ate of and an actual of 30 Ecuador arliament anuary GA . T and TT , he April ate of and TT above Understandings. On 4 October 2001, the European Communities circulated a status report on the implementation where it indicated that it was continuing to work actively on the legal instruments required for the management of the three tariff quotas after 1 January 2002. In addition, the European Communities’ report indicated that no progress had been made since the previous DSB meeting regarding the waiver request submitted by the European Communities and the ACP States. The European Communities further indicated that in the event that no progress was made at the meeting of the Council of Trade in Goods scheduled for 5 October 2001, the European Communities and the ACP States would be forced to reassess the situation in all respects. At the DSB meeting on 15 October 2001, the European Communities recalled that the procedure for the examination of the waiver request had been unblocked at the meeting of the Council for Trade in Goods on 5 October 2001, and expressed its readiness to work and discuss with all interested parties in the course of this examination. Ecuador, Guatemala, Honduras, Panama and Saint Lucia made statements on this item (for a further description of these discussions, see WT/DS/OV/4 p. 102). At the DSB meeting on 5 November 2001, the European Communities informed that the Working Party to examine the waiver requests submitted by the European Communities and ACP had made some progress. Ecuador said that tariff preferences to be applied by the European Communities would reproduce the same inconsistencies in the banana import regime. Honduras indicated that it was necessary to ensure that the scope of the waiver did not go beyond what was required for the implementation of the new regime. Panama said that even if the waiver was granted, the dispute would not be settled. At the DSB meeting on 18 December 2001, the European Communities welcomed the granting of the two waivers by the Ministerial Conference, which were the prerequisite for the implementation of phase II of the Understandings reached with the United States and Ecuador. The European Communities noted that the Regulation implementing phase II would be adopted on 19 December 2001, with effect on 1 January 2002. Ecuador, Honduras, Panama and Colombia noted the progress made and sought information from the European Communities concerning the granting of import licences by one European Communities member State in a manner that was inconsistent with the Understandings. On 21 January 2002, the European Communities announced that Regulation (EC) No. 2587/2001 had been adopted by the Council on 19 December 2001 and indicated that through this Regulation, the European Communities had implemented phase 2 of the Understandings with the United States and Ecuador.

Turkey – Restrictions on imports of textile and clothing products, complaint by India (WT/DS34) At its meeting of 19 November 1999, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report, recommending that Turkey bring its quantitative restrictions on imports of textile and clothing products into conformity with its obligations under the GATT 1994 and the Agreement on Textiles and s O’

Clothing (for a description of the Panel and Appellate Body reports, see also Annual WT Report 2000, p. 62). At the DSB meeting of 19 November 1999, Turkey stated its intention to comply with the recommendations and rulings of the DSB. On 7 January 2000, the parties informed the DSB that they had agreed that the reasonable period of time for Turkey to implement the DSB’s standing recommendations and rulings would expire on 19 February 2001. Pursuant to the agreement reached, Turkey also is to refrain from making more restrictive the arrangements concerning imports of specified textile and clothing products from India, to increase the size of the ade conflicts under the quotas of India on certain specified textile and clothing products and to treat India no less favourably than any other Member with respect to the elimination of, or modification to, quantitative restrictions affecting any product covered by the agreement. O activities Dispute Settlement Under On 6 July 2001, the parties to the dispute notified the DSB that they had reached WT Resolution of tr mutually acceptable solution regarding implementation by Turkey of the conclusions and recommendations adopted by the DSB on the matter. Pursuant to the agreement, Turkey agreed to: (i) remove the quantitative restrictions it applied on textile categories 24 and 27 in respect of imports from India, by 30 June 2001 or the date of signature of the agreement; (ii) carry out tariff reductions on the applied rate basis as described in annex to the agreement, by 30 September 2001; and (iii) strive towards early compliance with the recommendations and rulings of the DSB. Pursuant to the agreement, the compensation would remain effective until Turkey removed all quantitative restrictions applied as of 1 January 1996 in respect of imports from India for the 19 categories of textile and clothing products. At the meeting of the DSB on 18 December 2001, India made a statement concerning the lack of notification by Turkey of tariff reductions carried out as part of the implementation process.

91 WTO activities Resolution of trade conflicts under the WTO’s 92 Dispute Settlement Understanding Br the exportsubsidiesforregionalaircr Can$344.2 millionperyearandw payments andthatappropriatecountermeasuresinthiscaseamounted to calculation ofthecountermeasuresshouldbebasedw Members on28 present v appropriateness ofthecountermeasuresproposedbyCanadaw Appellate Bodyreport, conclusion thatBr GA request authorizationbytheDSBtosuspendtariffconcessionsorother obligationsunder recommendations andrulingsoftheDSB 2000. Agreement. Agreement andwerenotjustifiedunderitem(k)oftheIllustr that paymentsmadeundertherevisedPROEXwereprohibitedby before 18November1999. export creditin not meetconsistentwiththeSCM WT payments werepermittedunderitem(k)of 22 May2000, Appellate Bodyanduntilafterthearbitr being understoodthatnocountermeasureswouldbesoughtpendingthereportof P Procedures Br reaching thisconclusion, rulings oftheDSBeitherdidnotexistorwereconsistentwithSCM Canada wereappropriate 4.11 oftheSCM third-party rights obligations underGA authorization fromtheDSBtosuspendapplicationBr T matter totheoriginalpanel. the 2001 soughttheestablishmentof acompliancepanelpursuantto per year on ImportLicensingProcedurescoveringtr with Br measures atissueinthiscaseand claimedthatPROEXhadbeenbroughtintocompliance rights panel). agreed toreconvenetheoriginalpanelpursuant the DSUand an agreementconcerningtheprocedurestobeapplicablepursuant comply fullywiththerecommendationsandrulingsofDSB establishment ofapanelunder Agreement) rulings oftheDSB measures atissuewithin90daysandhadthusimplementedtherecommendations obligations underthe bring theexportsubsidiesforregionalaircr (WT/DS46/RW/2) Br and theP eot20,p 57). p. 2000, Report he complianceP anel. azil ofNTN-Ibonds azil ofconcessionsorotherobligationsinanamountCan$700millionperyear azil –Exportfinancingpr TT 1994, O Memberencounteredanexportcreditthathadbeenprovidedontermsitcould Br T On 10May2000, At theDSBmeetingof12December2000, On 12December2000, At theDSBmeetingof19November1999, At itsmeetingof20 “interest offurtherlegalclarity he azil stateditsintentiontobringfuturePROEXoper . T At theDSBmeetingon22May2000, T azil’ Austr Appellate Body he DSBadoptedthe he reportofthecomplianceP . alue ofthesubsidyperaircr anel report, . s obligationsundertheSCM T alia, the (for a description of the Panel and Appellate Body reports, see also Annual also see reports, Body Appellate and Panel the of description a (for he reportofthe Article 4oftheSCM Br WT Agreement on August 2000. . azil appealedcertainlegalfindingsandconclusionsofthecompliance Agreement todeterminewhetherthecountermeasuresrequestedby anel foundthatBr the EuropeanCommunitiesandUnitedStatesreservedtheirthird-party T . azil hadfailedtoimplementtherecommendationofDSBwithdr O disputesettlement. he reportoftheP Nevertheless TT 1994, , Canada requestedtheDSBauthorizationtosuspendapplication , as modifiedbythe Agreement onSubsidiesandCounterv after 18November1999, at itsmeetingon4 although fordifferentreasons August 1999, the complianceP . T Br he DSBreferredthemattertooriginalpanelforarbitr T Appellate BodyreportandtheP Austr he Appellate Bodyw azil advisedtheDSBofchangesthat ithadmadetothe T the T ogr he arbitr Article 21.5arguingthatBr , Appellate BodyalsoupheldthecomplianceP extiles andClothingthe on 23November1999, alia, Agreement. as spreadoversixyearstogivetheannualaver Agreement on . Agreement, amme forair azil’ At itsmeetingof16F anel w aft model. aft underPROEXbecauseofthecontinuedissuanceby anel w the EuropeanCommunitiesandK the DSBadopted s measurestocomplywiththerecommendationsand ation decision. Agreement. ators foundthatthesubsidyonwhich . Appellate Bodyreport, T anel notablyrejectedBr ade inamaximumamountofCan$344.2million August 2000. he decisionbythearbitr as circulatedtoMembers on26July2001. Annex IoftheSCM as circulatedto aft underPROEXintoconformitywithits Br At itsmeetingon9December1999, the properresponsew Canada requested, as circulatedto azil alsorequestedarbitr Br T he arbitr pursuant tolettersofcommitmentissued T azil announcedthatithadwithdr cr extiles andClothingthe ril 21.5oftheDSU(compliance Article Canada disagreedandon22J aft, , as thefullamountofPROEX upheld thecomplianceP ations inlinewiththe complaint byCanada ators alsofoundthatCanadamay Canada requestedthe ebruary 2001, azil hadnottak WT azil oftariffconcessionsorother anel report, Agreement onImportLicensing Appellate Bodyreport ative Listofthesame ailing Measures(SCM . WT O Memberson9May2000. Canada andBr Agreement, as circulatedto recommending thatBr azil’ O Memberson9May Article 3oftheSCM and received, Article 21.5oftheDSUin ators onthe as tochallengethat s defencethatPROEX Articles 21and22of ation under the DSBreferred orea reservedtheir as modifiedbythe en measuresto Agreement. adding thatifa anel’ azil reached anel’ Agreement WT s findings age awn the anuary O the DSB . s Article On ation, T he In azil aw it Panel found that, contrary to Canada’s claims, Brazil’s revised export financing programme for regional aircraft, PROEX III, is not as such, inconsistent with the SCM Agreement. At its meeting on 23 August 2001, the DSB adopted the Panel report on this second recourse to Article 21.5 of the DSU.

United States – Import prohibition of certain shrimp and shrimp products, complaint by India, Malaysia, Pakistan and Thailand (WT/DS58/RW) At its meeting of 6 November 1998, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report, recommending that the United States bring its measures into conformity with its obligations under GATT 1994 (for a description of the Panel and Appellate Body reports, see also Annual Report 1999, p. 77). At the DSB meeting on 25 November 1998, the United States informed the DSB that it was committed to implementing the recommendations and rulings of the DSB. The parties to the dispute announced that they had agreed on an implementation period of 13 months from the date of adoption of the Appellate Body and Panel reports, i.e. a period expiring on 6 December 1999. The United States issued the Revised Guidelines on 8 July 1999 with a view to implementing those recommendations and rulings. On 12 October 2000, Malaysia requested that the matter be referred to the original panel pursuant to Article 21.5 of the DSU (compliance panel), considering that by not lifting the import prohibition, and by not taking the necessary measures to allow the importation of certain shrimp and shrimp products in an unrestrictive manner, the United States had failed to comply with the recommendations and rulings of the DSB. At its meeting of 23 October 2000, the DSB referred the matter to the original panel pursuant to Article 21.5 DSU (compliance panel). Australia, Canada, the European Communities, Ecuador, India, Japan, Mexico, Pakistan, Thailand and Hong Kong, China reserved their third-party rights to participate in the compliance Panel’s proceedings. On 15 June 2001 the compliance Panel circulated its report. The Panel considered inter alia that the migratory nature of sea turtles and the existence of several international agreements on the protection of migratory species create a specific factual and legal framework which influences the interpretation of Article XX, making unilateral measures less acceptable in that field. The Panel thus concluded that the United States was expected to make serious good faith efforts to reach an international agreement on the conservation of sea turtles in order to be entitled to apply unilateral measures pending the conclusion of that multilateral agreement. The Panel considered that the United States had made serious good faith efforts. The Panel also found that the measure at issue complied with the other requirements contained in the Appellate Body report. However, the Panel found that the above-mentioned efforts had to be continuous and could be subject to further review under Article 21.5 of the DSU. On 23 July 2001, Malaysia notified its decision to appeal to the Appellate Body certain issues of law covered in the Panel Report and certain legal interpretations developed by the Panel. The report of the Appellate Body was circulated to WTO Members on 22 October 2001. s O’

The Appellate Body upheld the Panel’s finding that the measure at issue – Section 609 of WT Public Law 101-162, as implemented by the Revised Guidelines of 8 July 1999 and as applied so far by the United States authorities – was justified under Article XX of the GATT 1994 as long as the conditions stated in the findings of the Panel report, in particular the ongoing serious, good faith efforts to reach a multilateral agreement, remained satisfied. In standing particular, the Appellate Body found that the measure at issue was not applied in a manner that constituted unjustifiable discrimination because the efforts made by the United States in relation to the negotiation of a multilateral agreement in the Indian Ocean and South-East ade conflicts under the Asia region constituted serious, good faith efforts comparable to those that led to the conclusion of the Inter-American Convention for the Protection and Conservation of Sea

Turtles in the Caribbean/Western Atlantic region. The Appellate Body also ruled that the O activities Dispute Settlement Under measure at issue met the requirements of the chapeau of Article XX because it provided WT Resolution of tr sufficient flexibility to allow the United States authorities to take into account the specific conditions prevailing in Malaysia. In addition, the Appellate Body found that the Panel did not confine itself to the reasoning of the Appellate Body in the original proceedings and, therefore, had correctly fulfilled its task under Article 21.5 of the DSU. The DSB adopted the Appellate Body report and the Panel report as upheld by the Appellate Body report on 21 November 2001.

Japan – Measures affecting agricultural products, complaint by the United States (WT/DS76) At its meeting of 19 March 1999, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report, recommending that Japan bring its varietal testing requirements into conformity with its obligations under the SPS Agreement (for a description of the Panel and Appellate Body reports, see also Annual Report 1999, p. 79).

93 WTO activities Resolution of trade conflicts under the WTO’s 94 Dispute Settlement Understanding be progressivelyreducedto27%. bever the agreement. elimination oformodificationquantitativerestrictionsaffectingany productcoveredby w would bemaintainedforpisco publication intheOfficialJournal. its fullentryintoforceaw prohibitions onthefruitsandnutsatissueindispute reached amutuallysatisfactorysolutionwithrespecttoconditionsforliftingimport had thusimplementedtheDSB’ removed thequantitativerestrictionsonimportsinrespectofremaining 715itemsand the DSBmeetingof5 all otheritemsIndiahadimplementedtherecommendationofDSB by1 those tariffitemsforwhichthereasonableperiodw period oftimew for sometariffitemstobenotifiedbyIndiatheUnitedStateswhichreasonable determined throughbindingarbitr reasonable periodoftimeforimplementationtheDSB’ and rulingsoftheDSB agreement onthereasonableperiodoftimeforIndiatocomplywithrecommendations w enact andputintoeffectalawappropriatelyamendingtherelev 14 monthsandNINEdaysfrom12J Chile toimplementtherecommendationsandrulingsofDSBw Members on23May2000. United Statesonthismatter meeting oftheDSB India –Quantitativer Chile – dairy pr Canada –Measur pr and 113) methodology mutually satisfactorysolutionwiththeUnitedStatesregardinganewquar moth. for thoseproductssubjecttoimportprohibitionsbecausetheywerehostsofthepestcodling conducting consultationswiththeUnitedStatesregardinganewquar 31 December1999, rulings w obligations undertheGA quantitative restrictionsforbalance-of-paymentspurposesintoconformitywithits the P (WT/DS87 and110) P Agriculture andthe GA the measuresatissueintoconformity withitsobligationsunderthe “Experimental Guide”. its obligationsunderthesecondsentenceof System anditsNewfortaxationofdistilledalcoholicbever Appellate Bodyreport, ftePnladAplaeBd eot,seas nulRpr 00 .63). p. 2000, Report Annual also see reports, Body Appellate and Panel the of ae n pelt oyrprs e loAna eot20,p 60). p. 2000, Report Annual also see reports, Body Appellate and Panel anel report, as totreattheUnitedStatesnolessfavour as adoptedbyaclearmajorityinboththeChamberofDeputiesandSenate oducts At theDSBmeetingof27July2000, On 23 On 28December1999, At theDSBmeetingof1F On 15March2000, At itsmeetingof22September1999, At itsmeetingof27October1999, T T he DSBadoptedthe he reasonableperiodoftimeforJ anel report, ages asfrom21March2003. At theDSBmeetingof24F T oducts as determinedbymutualagreementandexpiredon31December1999. axes onalcoholicbever , August 2001, complaint bytheUnitedStates(WT/DS90) . as modifiedbythe Subsequently , as toexpireon1 as upheldbythe complaints bytheUnitedStates andNewZealand(WT/DS103 , es affectingtheimportationof milkandtheexportationof J and J apan abolishedthev April 2001, . TT 1994. on 12J At theDSBmeetingof14J T Chile requested, J he reasonableperiodoftimew estrictions onimportsofagricultur Appellate BodyreportandtheP TT 1994andthe apan andtheUnitedStatesnotifiedtoDSBthattheyhad aited onlyitspromulgationbythePresidentofRepublicand apan hasreportedthatdiscussionswerestillongoingwiththe , the partiesinformedDSBthattheyhadreachedan . T the itemhasremainedunderconsider he arbitr ebruary 2001, , anuary 2000, s recommendationsinthiscase while thatsamer Appellate Bodyreport, T he P ebruary 2000, India announcedthat, ation. April 2001. Under thislegislativereform, Appellate Bodyreport, In themeantime anuary 2000, ages ator determinedthatthereasonableperiodoftimefor anel andthe apan toimplementtheDSBrecommendationsand the DSBadopted T pursuant to India statedthatithadnotifiedtotheUnitedStates he reportofthearbitr , the DSBadopted arietal testingrequirementaswellthe Agreement on complaints bytheEur Chile announcedthatimplementinglegislation recommending thatChilebringits ably thananyotherMemberwithrespecttothe Article III:2oftheGA Pursuant totheagreementreached, J ate wouldbeappliedtootheralcoholic apan notedthatitexpectedtoreacha i.e anuary 2000, Appellate Bodyfound thatCanadahad as toexpireon1 , . Article 21.3(c)oftheDSU the taxappliedtothosespiritswould Chile hasuntil21March2001to recommending thatCanadabring as toexpireon1 with effectfrom1 . anel report, Agriculture s recommendationsandrulingsbe recommending thatIndiabringits Appellate Bodyreportandthe . ator w Appellate Bodyreportand the existingr J ant taxlegislation. al, apan statedthatitw TT 1994 ation ateveryregular ages intoconformitywith as notmorethan Agreement on opean Communities textile andindustrial (for a description of the of description a (for as modifiedbythe April 2001andthatfor as circulatedto antine methodology April 2000, antine (for a description a (for April 2001, April 2000. ate of27% , T that the r ansitional , On and that India also except WT as it had At O acted inconsistently with its obligations under Articles 3.3 and 8 of the Agreement on Agriculture by providing “export subsidies” in excess of the quantity commitment levels specified by Canada in its Schedule to that Agreement. The Panel and the Appellate Body also found that one of Canada’s restrictions on access to a tariff-rate quota constituted a violation of Article II:1(b) of the GATT 1994 (for a description of the Panel and Appellate Body reports, see also Annual Report 2000, p. 60). Pursuant to Article 21.3(b) of the DSU, the parties to the dispute agreed that Canada should have until 31 January 2001 to implement the recommendations and rulings of the DSB. Canada subsequently modified its commercial export milk scheme. On 1 March 2001, New Zealand and the United States requested the DSB to refer the matter to the original panel, pursuant to Article 21.5 of the DSU, to determine the consistency of the measure with Canada’s obligations under the Agreement on Agriculture. Australia, the European Communities and Mexico reserved their third-party rights. On the same day, the United States and New Zealand also requested authorization from the DSB to suspend concessions and other obligations, as provided for in Article 22.2 of the DSU. Canada objected to the level of suspension proposed, and the matter was referred to arbitration, pursuant to Article 22.6 of the DSU. However, the parties agreed to defer this arbitration proceeding pending the outcome of the Article 21.5 proceeding. On 12 April 2001, the compliance Panel was composed. The compliance Panel circulated its report on 11 July 2001. The Panel found that Canada had acted inconsistently with its obligations under Articles 3.3 and 8 of the Agreement on Agriculture by providing “export subsidies” within the meaning of Article 9.1(c) in excess of the quantity commitment levels specified in its Schedule to that Agreement. On 4 September 2001, Canada appealed the compliance Panel report. The report of the Appellate Body was circulated to Members on 3 December 2001. The Appellate Body reversed the Panel’s finding that the measure at issue – the supply of commercial export milk (CEM) by Canadian milk producers to Canadian dairy processors – involved “payments” on the export of milk that were “financed by virtue of governmental action” under Article 9.1(c) of the Agreement on Agriculture. The Appellate Body took the view that there were “payments” under Article 9.1(c), on the facts of this case, when the price charged by the producer was less than the milk’s proper value to the producer. This value was reflected in the producer’s average total cost of production of the milk. The Appellate Body did not have sufficient facts to enable it to determine whether the supply of CEM involved “payments” under Article 9.1(c). At its meeting on 18 December 2001, the DSB adopted the Appellate Body Report and the Panel report, as reversed by the Appellate Body Report. On 17 January 2002, a second compliance panel was established under the terms of the Article 21.5 of the DSU.

United States – Tax treatment for “Foreign Sales Corporations”, complaint by the European Communities (WT/DS108) At its meeting of 20 March 2000, the DSB adopted the Appellate Body report and the s O’

Panel report, as modified by the Appellate Body, finding that the tax exemption measure at WT issue, the FSC measure, constituted a prohibited subsidy under Article 3.1(a) of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) and Article 10.1 and 8 of the Agreement on Agriculture The DSB specified that the FSC subsidies should be withdrawn by 1 October 2000. On 12 October 2000, the DSB agreed to the request of the standing United States that the time-period for withdrawal of the subsidies be modified so as to expire on 1 November 2000 (for a description of the Panel report see also Annual Report 2000, p. 73 and for a description of the Appellate Body report, see also Annual Report ade conflicts under the 2001, p. 80). On 15 November 2000, with a view to implementing the rulings and recommendations

of the DSB, the United States enacted the FSC Repeal and Extraterritorial Income Exclusion O activities Dispute Settlement Under Act of 2000 (the ETI Act). Pursuant to the ETI Act, the provisions of the United States WT Resolution of tr Internal Revenue Code relating to taxation of FSCs were repealed, except with respect to certain transactions carried out by existing FSCs. In addition, the ETI Act amended the Internal Revenue Code to permit the exclusion from taxation of a certain proportion of the “extraterritorial income” of United States “taxpayers” that is “qualifying foreign trade income”. “Extraterritorial income” may be earned only in transactions involving qualifying foreign trade property, or involving certain services provided in connection with such foreign trade property. On 17 November 2000, the European Communities requested authorization from the DSB to suspend concessions and other obligations, as provided for in Article 22.2 of the DSU. The United States objected to the level of suspension proposed, and the matter was referred to arbitration, pursuant to Article 22.6 of the DSU. However, the parties agreed to defer this arbitration proceeding pending the outcome of the Article 21.5 proceeding. Following a request made by the European Communities, the DSB, at its meeting on

95 WTO activities Resolution of trade conflicts under the WTO’s 96 Dispute Settlement Understanding agrees toinitiate completeproceedingsunder the eventthatP possible proceedingsunder imposition ofthemeasures 0October2001. 20 reasonable periodoftimewouldbesixmonthsand15daysit therefore expiredon 25 May2001, implemented theDSB’ rescinded ormodified. recommendations becauseithad expected thatthemeasuresinquestionwouldbeeither P on enter intoconsultationswith in place the DSB’ to complywiththeDSB’ period oftimeforimplementation. with itsobligationsundertheSCM appeal certainissuesoflawandlegalinterpretationsdevelopedbytheP single meetingoftheP Article 10.3oftheDSUindecliningtorulethat party rights subsidies foundinthoseproceedingstobeprohibitedexport States originandw accorded lessfavour December2000, 20 Thailand – dispute obligations undertheSCM DSU (compliancepanel), prior tothefirstmeetingofP recommendations andrulingsmadebytheDSBinoriginalproceedings 1994 throughtheETI 10.1 ofthe subsidies defined in Agreement intheoriginalproceedings recommendations andrulingsoftheDSBmadepursuantto Article III:4oftheGA in maintainingsuchsubsidies performance withinthemeaningof Agriculture; Act involvedexportsubsidiesinconsistentwith foreign sourceincomewithinthemeaningoffootnote59toSCM States hadnotdemonstr prohibited exportsubsidiesunder States hadactedinconsistentlywithitsobligationsunder Appellate Bodyreport, T report, measures intoconformitywithitsobligationsunderthe alloy steelandH-beamsfr also concludedthattheUnitedStateshasnotfullywithdr DSB madepursuantto Agreement and, the originalproceedings third partiesbeprovidedwith ecito ftePnladAplaeBd eot,seas nulRpr 01 .97). p. 2001, Report Annual also see reports, Body Appellate and Panel the of description he DSBadoptedthe oland saidthatitcouldnotacceptthew Angles On 18December2001, At theDSBmeetingon18December2001, T T T T At itsmeetingof5 hailand informedtheDSBthatitw he he reportofthe he complianceP . as modifiedbythe Appellate BodyupheldtheP . Specifically s recommendationsinthiscase , If not, , the UnitedStateshadactedinconsistentlywithitsobligationsunder Article 1(e)ofthe Shapes andSectionsofIronorNon-AlloySteelH-BeamsfromP , Agreement on (iii) theETI the Anti-dumping dutiesonangles the partiestodisputeinformedDSBthattheyhadagreed the P oland initiatesproceedingsunder Appellate BodyfoundthattheP therefore oland wouldseekrecourseto , as able treatmenttoimportedproductsthanlik the referred themattertooriginalpanel, anel foundthattheETI Appellate Bodyw T1994; TT , Appellate BodyreportandtheP Act, s recommendationsinthecaseon April 2001theDSBadopted therefore In P anel. at itsmeetingon29J Article 4.7ofthat Act w , s recommendationsinthiscaseandthatitwouldneedareasonable Appellate Bodyupheldfindingsthat: ated thattheETI to determinetheconsistencyofETI to beprohibitedexportsubsidiesunder , Appellate Bodyreport, Agriculture oland’ a measuretak has failedtoimplementtherecommendationsandrulingsof . T Agreement, Article 21and22oftheDSU P hailand andP On 15October2001, Agreement on . T as inconsistentwiththeUnitedStates’obligationsunder oland reserveditsrightsunder hailand onareasonableperiodoftimeforimplementation. om P T all and (iv)theUnitedStateshadfailedfullytoimplement he P , s view inconsistent with anel mustbeprovidedtothethirdparties written submissionsofthepartiessubmittedpriorto Article 3.1(a)oftheSCM P Agreement, anel alsofoundthatthe anel’ Article 3.1(a)oftheSCM oland, oland reiter . as circulatedto In addition, , as intheprocessofidentifyingmostsuitablew the T T s findingsthattheUnitedStatesactedinconsistently en bytheUnitedStatestoimplement hailand onlychangedthejustification forthe hailand wouldhavetorevok Agreement. US-FSC ay inwhich Act w oland concludedanUnderstanding withregardto Agreement on Agriculture andthat, complaint byP Act involvedsubsidiescontingentuponexport anuary 2002. Article 21.5prior toanyproceedingsunder Article 21.5oftheDSU Articles 3.3, T the as ameasuretoavoidthedoubletaxationof ated itspositionthatinordertoimplement , all anel haderredinitsinterpretationof hailand announcedthatithadfully shapes andsectionsofir recommending that because ithadnotfullywithdr Articles 21.5and22oftheDSU Article III:4oftheGA the UnitedStatesnotifieditsdecisionto according totheP written submissionsofthepartiesfiled Agreement on T anel report, T WT he P hailand hadimplementedtheDSB’ Appellate BodyreportandtheP Anti-Dumping . “T O Memberson14J Articles 3.2oftheSCM awn theFSCsubsidiesfound, Pursuant totheUnderstanding, Agriculture anel alsodeclinedtorequirethat hailand – Agreement andthattheUnited 8 and10.1ofthe Article 4.7oftheSCM Article 21.5oftheDSU Act involvedexportsubsidiesas oland (WT/DS122) (i) theETI Agreement andthattheUnited pursuant to Act withUnitedStates’ in maintainingsuch Article 3.1(a)oftheSCM as modifiedbythe Agriculture e productsofUnited , anel, Anti-Dumping Duties T e thedutiescurrently . Agreement; and theGA . Agreement hailand bringsits P With respecttothird- Act involved TT 1994. oland w anel report. Article 21.5ofthe the ETI . anuary 2002. , on ornon- Agreement on and theGA Articles 8and oland”. awn the as readyto T Agreement TT 1994. , Act US-FSC (for a (for he P (ii) theETI P . oland anel anel in s TT in ay On Article 22. On 21 January 2002, the parties informed the DSB that they have reached an agreement to the effect that the implementation of the recommendations of the DSB in this dispute should no longer remain on the agenda of the DSB.

Mexico – Anti-dumping investigation of high-fructose corn syrup (HFCS) from the United States, complaint by the United States (WT/DS132/RW) At its meeting of 24 February 2000 the DSB adopted the Panel report recommending that Mexico bring its measure into conformity with its obligations under the Anti-Dumping Agreement (AD Agreement) (for a description of the Panel and Appellate Body reports, see also Annual Report 2000, p. 75). Pursuant to Article 21.3 of the DSU, Mexico informed the DSB on 20 March 2000 that it was studying ways in which to implement the recommendations of the DSB. Mexico also indicated that it would need a reasonable period of time in order to implement the DSB recommendations. On 19 April 2000, the parties informed the DSB that they had agreed, pursuant to Article 21.3(b) of the DSU, on a reasonable period of time to be granted to Mexico to implement the recommendations of the DSB. That period expired on 22 September 2000. At the DSB meeting of 26 September 2000, Mexico stated that it had published on 20 September 2000 the final determination on the anti-dumping investigation of high- fructose corn syrup from the United States and had thereby complied with the DSB’s recommendation. The United States stated that it would examine Mexico’s final determination. On 12 October 2000, the United States requested that the DSB refer the matter to the original panel, pursuant to Article 21.5 of the DSU, in order to establish whether Mexico had correctly implemented the DSB’s recommendations. At its meeting of 23 October 2000, the DSB referred the matter to the original panel pursuant to Article 21.5 of the DSU. The European Communities, Jamaica and Mauritius reserved their third-party rights to participate in the Panel’s proceedings. The United States and Mexico informed the DSB that they were discussing mutually agreeable procedures under Articles 21 and 22 of the DSU in relation to this matter. The compliance Panel circulated its report on 22 June 2001. The Panel considered that Mexico had failed to implement the recommendation of the original Panel and the DSU to bring its measure into conformity with its obligations under the AD Agreement. On 24 July 2001, Mexico appealed the compliance Panel report. The Appellate Body found that the Panel had not erred in remaining silent, in its report, on certain issues relating to the proceedings and, in particular, in not addressing the lack of consultations between the parties prior to referral of the matter to the Article 21.5 Panel. The Appellate Body upheld the Panel’s findings that Mexico’s imposition of anti-dumping duties on high-fructose corn syrup was inconsistent with Articles 3.1, 3.4, 3.7(i) and 3.7 of the AD Agreement. The Appellate Body further held that the Panel had satisfied its duty, under Article 12.7 of the DSU, to provide a “basic rationale” for its findings, and that the Panel did not act inconsistently with the standard of review in Article 17.6(ii) of the AD Agreement. s O’

The report of the Appellate Body was circulated to WTO Members on 22 October 2001. WT The DSB adopted the Appellate Body report and the Panel report, as upheld by the Appellate Body report, on 21 November 2001.

United States – Anti-dumping Act of 1916, complaints by the European standing Communities and Japan (WT/DS136 and WT/DS162) At its meeting of 26 September 2000, the DSB adopted the Appellate Body report and the Panel report, as upheld by the Appellate Body report, recommending that the United ade conflicts under the States bring the Anti-dumping Act of 1916 into conformity with its obligations under the Anti-Dumping (AD Agreement) (for a description of the Panel and Appellate Body reports,

see also Annual Report 2001, p. 82). O activities Dispute Settlement Under At the DSB meeting of 23 October 2000, the United States stated that it was its intention WT Resolution of tr to implement the DSB’s recommendations and rulings. The United States also stated that it would require a reasonable period of time for implementation and that it would consult with the European Communities and Japan on this matter. On 17 November 2000, the European Communities and Japan requested that the reasonable period of time be determined by arbitration pursuant to Article 21.3(c) of the DSU. The arbitrator circulated his report on 28 February 2001. He determined that the reasonable period of time in this case was ten months and would thus expire on 26 July 2001. At its meeting on 24 July 2001, the DSB agreed to the United States proposal to extend the reasonable period of time until 31 December 2001 or the end of the current session of the United States Congress, whichever earlier. This extension had been agreed with the parties. At the DSB meeting on 18 December 2001, the United States informed Members that on 23 July 2001 it had submitted proposed legislation to the United States Congress repealing the 1916 Act and terminating all pending actions under the Act. On 7 January 2002, on the

97 WTO activities Resolution of trade conflicts under the WTO’s 98 Dispute Settlement Understanding Article 22, 21.5thatmightbeinitiatedbyIndia, Article to implementtheDSB’ so becauseitsrequesthadbeenmadeoutsidethe30daytime-period. the DSU they hadreachedanunderstandingregardingtheproceduresunder the EuropeanCommunitieslegislationintofullcompliancewith DSB’ whereby itexpressedtheviewthatnewEuropeanCommunities Regulationdidnotbring 14 suspending itsapplicationwithregardtoimportsoriginatinginIndia bythedeadlineof duty onimportsofcotton-typebedlinenoriginatinginEgypt, until 14 reasonable periodoftimewouldbefivemonthsandtwodays 2001, could completeitsimplementationprocesswithinaveryshortperiodoftime reasonable periodoftimeinwhichtodoso the possibilityoffindingamutuallysatisfactorysolution. the proposed thatthesuspensionofconcessionstookformanequiv authorization tosuspendconcessionspursuant the reasonableperiodoftime grounds thattheUnitedStateshadfailedtobringitsmeasuresintoconformitywithin Eur Canada –Certainmeasur finished leather Ar linen, recommendations andrulingsoftheDSBrelatingto determined thatthereasonableperiodoftimeforCanadatoimplement reasonable periodoftimebedeterminedthroughbindingarbitr and theEuropeanCommunitiesrequested, would complywiththerecommendationsandrulingsofDSB DSB’ European CommunitiesandJ the UnitedStatesobjectedtolevelsofsuspensionobligationsproposedby report, J requesting thearbitr meeting, At theDSBmeetingon18J procedures of in accordancewith the GA measure atissueinthisdisputeintoconformitywithitsobligationsundertheGA P Argentina bringitsmeasuresinto conformity withitsobligationsunderGA the 1994 and recommendations 12 March2001, T see also Annual Report 2001, p. 97; for a description of the Appellate Body report, see the see report, Body Appellate the of description a for 97; p. 2001, Report Annual also see ecito ftePnlrpr,seas nulRpr 01 .75). p. 2001, Report Annual also see report, Panel the of description eot,seas nulRpr 01 .84). p. 2001, Report Annual also see reports, apan andtheEur he reasonableperiodoftimewouldexpireon19F anel report, section “Appellate Body and/or Panel reports adopted” above). adopted” reports Panel and/or Body “Appellate section gentina –Measur August 2001. T At theDSBmeetingof12March 2001, At theDSBmeetingof5 Pursuant to On 13September2001, At itsmeetingof12March2001theDSBadopted At itsmeetingof16F At itsmeetingof19June2000, opean Communities– Anti-dumping Appellate BodyreportandtheP he EuropeanCommunitiesamendeditsRegulationimposingadefinitiveanti-dumping s recommendations andindicatedthatitwouldneed areasonableperiodoftimeto do the partiestodisputenotifiedDSBthattheyhadmutuallyagreed TS andtheSCM complaint byIndia(WT/DS141) as modifiedbythe . August 2001. T the partiesindicatedthattheywerestillengagedinconsultationsandwouldbe his understandingforesawthatifonthebasisofresultsproceedings under Article XVIIoftheGA the EuropeanCommunitieswouldnotassertthatIndiaw as modifiedbythe Article 22.3hadnotbeenfollowedbytheEuropeanCommunitiesandJ Article 21.3oftheDSU Canada statedthat, However . , Act of1916againstimportsfromtheUnitedStates complaint bytheEur Article 22.6oftheDSU ators opean Communities(WT/DS139/RWand s recommendationsinthiscaseandsaidthatitwouldneeda es affectingtheexportofbovine hidesandtheimportof Agreement ebruary 2001theDSBadopted P , , Appellate Bodyreport, once appointed, India, anuary 2002, India andtheEuropeanCommunitiesinformedDSBthat April 2001, es affectingtheautomotiveindustry apan andrequestedtheDSBtorefermatterarbitr Anti-dumping dutiesonimportsofcotton-typebed , the EuropeanCommunitiesandJ TS inthiscaseiseightmonthsfromthedateofadoption Appellate Bodyreport at the23 (for a description of the Panel and Appellate Body Appellate and Panel the of description a (for anel report, the DSBadopted as of18F , Canada informedtheDSBon19July2000thatit the EuropeanCommunitiesannounceditsintention the matterw . opean Communities(WT/DS155) Argentina stateditsintentiontoimplement the to suspendtheirworkwithaviewexploring August meetingoftheDSB pursuant to . T India decidedtoinitiateproceedingsunder he UnitedStatesclaimedthattheprinciplesand India saidthattheEuropeanCommunities ebruary 2001, as modifiedbythe recommending thatCanadabringthe Article 22.2oftheDSU ebruary 2001. Article I:1and as referredtoarbitr (for a description of the Panel report, Panel the of description a (for Article 21.3(c)oftheDSU Appellate BodyandtheP Appellate Bodyreportandthe anel reportrecommendingthat India andP it hadcompliedwiththeDSB’ , that isfrom12March2001 ation. apan requested . On 4 At theDSBmeetingof WT/DS142/RW) Appellate Bodyreport. Article III:4oftheGA Articles 21and22of as precludedfromdoing . T , On 17J he arbitr , alent legislationto August 2000, made astatement complaints by s recommendations . akistan and ation. TT 1994 Both Members . On 26 anuary 2002, ator During the , TT 1994, that the anel (for a (for April J ation, apan. apan TT s . so. On 14 May 2001, the European Communities requested that the reasonable period of time be determined through binding arbitration pursuant to Article 21.3(c). On 31 August 2001, the arbitrator circulated its award whereby the reasonable period of time was fixed at 12 months and 12 days from 16 February 2001. This period will therefore expire on 28 February 2002.

United States – Section 110(5) of the US Copyright Act, complaint by the European Communities (WT/DS160) At its meeting of 27 July 2000, the DSB adopted the Panel report recommending that the United States bring subparagraph (B) of Section 110(5) of the United States Copyright Act into conformity with its obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) (for a description of the Panel report, see also Annual Report 2001, p. 84). The United States informed the DSB on 24 August 2000 that it would implement the recommendations of the DSB. The United States proposed 15 months as a reasonable period of time within which to implement those recommendations. On 23 October 2000, the European Communities requested that the reasonable period of time for implementation be determined through binding arbitration as provided for in Article 21.3(c) DSU. In an award circulated on 15 January 2001, the arbitrator determined that the reasonable period for the United States to implement the DSB’s recommendations would expire on 27 July 2001. At its meeting of 24 July 2001, the DSB agreed to the United States proposal to extend the reasonable period of time until 31 December 2001 or the end of the current session of the United States Congress, whichever earlier. This extension had been agreed with the European Communities. On 23 July 2001, the United States and the European Communities notified the DSB of their agreement to pursue arbitration pursuant to Article 25.2 of the DSU in order to determine the level of nullification or impairment of benefits to the European Communities as result of Section 110(5)(B) of the United States Copyright Act. On 9 November 2001, the arbitrator determined that the level of European Communities benefits which were being nullified or impaired as a result of the operation of Section 110(5)(B) amounted to f 1,219,900 per year. On 7 January 2002, on the grounds that the United States had failed to bring its measures into conformity within the reasonable period of time, the European Communities requested authorization to suspend concessions pursuant to Article 22.2 of the DSU. The European Communities proposed to suspend concessions under the TRIPS Agreement in order to permit the levying of a special fee from United States nationals in connection with border measures concerning copyright goods. On 17 January 2002, the United States objected to the level of suspension of obligations proposed by the European Communities and requested the DSB to refer the matter to arbitration, in accordance with Article 22.6 of the DSU. The United States claimed that the principles and procedures of Article 22.3 had not been followed. During the DSB meeting on 18 January 2002, the parties indicated, s O’

however, that they were engaged in constructive negotiations and were hopeful of finding a WT mutually satisfactory solution.

Korea – Measures affecting imports of fresh, chilled and frozen beef, complaints by the United States and Australia (WT/DS/161 and 169) standing At its meeting of 10 January 2001, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report recommending that Korea bring its measures into conformity with its obligations under the Agreement on Agriculture and GATT ade conflicts under the 1994 (for a description of the Panel and Appellate Body reports, see also Annual Report 2001, p. 77).

At the DSB meeting of 2 February 2001, Korea announced that it had already O activities Dispute Settlement Under implemented some elements of the DSB’s recommendations and that in order to complete WT Resolution of tr the process it would need a reasonable period of time. On 19 April 2001, the parties to the dispute notified the DSB that they had mutually agreed that the reasonable period of time would be eight months, and would thus expire on 10 September 2001. At the DSB meeting on 25 September 2001, Korea announced that it had implemented the DSB’s recommendation by the deadline.

United States – Definitive safeguard measures on imports of wheat gluten, complaint by the European Communities (WT/DS166) At its meeting of 19 January 2001, the DSB adopted the report of the Appellate Body, and the report of the Panel, as modified by the Appellate Body recommending that the United States brings its measures into conformity with its obligations under the Agreement on Safeguards (for a description of the Panel and Appellate Body reports, see also Annual Report 2001, p. 76).

99 WTO activities

100 Resolution of trade conflicts under the WTO’s Dispute Settlement Understanding P Intellectual PropertyRights P months andwouldthusexpireon12 28 F arbitr reasonable periodoftimeforimplementationbyCanadabedeterminedbinding the GA its measuresintoconformitywithobligationsunderthe into conformitywithitsobligationsunderthe P meat, fr Agreement States bringitsmeasuresintoconformity withitsobligationsunderthe implementation oftheDSB’ States onthismatter reasonable periodoftimeforimplementationandthatitwouldconsultwiththeUnited implement theDSB’ reports to implementtherecommendationsandrulingscontainedinP that isfrom19J had mutuallyagreedthatthereasonableperiodoftimewouldbefourmonthsand14days Article 21.3(c)DSU period oftimeforimplementationbedeterminedbybindingarbitr Canada – United States– United States–Safeguar United States– stainless sheetandstripfr Article 21.3(c)of theDSU implement theDSB’ period oftimetodoso expire on15November2001. and NewZealandagreedthatthereasonableperiodoftimeforimplementationwould would respectits case andsaidthatitintendedtoimplementtheDSB’ had submittedinwritingtotheDSBitsintentionswithrespectimplementationthis requirements ofthe recommending thattheUnitedStatesbringitsmeasuresintoconformitywith 1 September2001. United StatesannouncedthatithadimplementedtheDSB’ would thusexpireon1September2001. they hadmutuallyagreedthatthereasonableperiodoftimewould besevenmonthsand the safeguardmeasureeffectiveon15November2001. informed theDSBofitsdecisiontoimplementrecommendationsbyending discussions withthecomplainingparties reasonable periodoftimeforimplementationand, eot e loAna eot20,p 76). p. 2001, Report Annual also see report, loAna eot20,p 81). p. 2001, Report Annual also section on “Appellate Body and/or panel reports adopted” above). adopted” reports panel and/or Body “Appellate on section Annual Report 2001, p. 98; for a more detailed description of the Appellate Body report see report Body Appellate the of description detailed more a for 98; p. 2001, Report Annual anel report, anel Report, anel report, section on “Appellate Body and/or Panel reports adopted” above). adopted” reports Panel and/or Body “Appellate on section om J At itsmeetingon16May2001, tismeigo 3August2001theDSBadopted the At itsmeetingof23 At itsmeetingon12October2000theDSBadopted On 20November2001, At theDSBmeetingof1March2001, At theDSBmeetingof20June2001, At theDSBmeetingof23October2000, At theDSBmeetingof16F At itsmeetingof1F ebruary 2001. ation pursuantto . TT 1994 apan, complaints byNewZealandand On 20March2001, T (for a more detailed description of the Panel and Appellate Body reports see the see reports Body Appellate and Panel the of description detailed more a (for erm ofpatentpr as modifiedbythe as upheldbythe as modifiedbythe complaint byJ (for a more detailed description concerning the Panel report, see also the also see report, Panel the concerning description detailed more a (for anuary 2001to2June2001. WT Anti-dumping measur Anti-dumping measur . He decidedthatthereasonableperiodoftimeinthiscasewouldbeten s recommendationsandrulings s recommendationsandindicatedthatitwouldneedareasonable Anti-Dumping On 10 . O obligations On 15December2000, Article 21.3(c)oftheDSU . ebruary 2001thereportofP On 26 . P April 2001, s recommendationsbedetermined bybindingarbitr (for a description of the Panel and Appellate Body reports, see reports, Body Appellate and Panel the of description a (for J ending theappointment ofthearbitr apan requestedthatthereasonable periodoftimefor the EuropeanCommunitiesrequestedthatreasonable d measur Appellate BodyreportrequiringCanadatobringitsmeasures om K apan (WT/DS184) ebruary 2001, April 2001, otection, Appellate BodyrecommendingthattheUnitedStatesbring Appellate BodyReportrecommending thattheUnited . Agreement T he UnitedStatesfurtherstatedthatitwouldneeda the DSBadopted or August 2001. ea, the partiestodisputenotifiedDSBthatthey es onimportoffr . On 27September2001, the UnitedStatesrecalledthaton14June2001it At theDSB’ complaint bytheUnitedStates(WT/DS170) the UnitedStatesstateditsintentionto complaint byK es onstainlesssteelplateincoilsand es oncertainhot-r the partiestodisputenotifiedDSBthat Austr Canada statedthatitw the UnitedStatesannouncedthatitintended Agreement for the UnitedStatesrequestedthat (for a more detailed description of the Panel the of description detailed more a (for . T . alia (WT/DS177and he arbitr for thatreason, Canada saidthatitwouldrequirea s recommendationsinamannerthat s meetingof10September2001, anel w On 28September2001, Appellate Bodyreportandthe Agreement onSafeguardsand Appellate BodyReportandthe ator circulatedhisreporton esh, s recommendationon or Appellate Bodyreportandthe T r ade-Related ea (WT/DS179) as adoptedbytheDSB olled steelpr ator chilled orfr ation pursuantto anel and the UnitedStates it wouldenterinto , as itsintentionto J apan andtheUnited Anti-Dumping WT/DS178) Aspects of Appellate Body ozen lamb ation under oducts Austr alia the , States agreed to extend the time-period under that provision. They agreed that the award of the arbitrator be made no later than 19 February 2002.

Argentina – Definitive anti-dumping measures on imports of ceramic floor tiles from Italy, complaint by the European Communities (WT/DS189) At its meeting on 5 November 2001, the DSB adopted the Panel Report recommending that Argentina bring its measures into conformity with its obligations under the Anti- Dumping Agreement (for a more detailed description of the Panel report, see the section on “Appellate Body and/or panel reports adopted” above). On 20 December 2001, the European Communities and Argentina informed the DSB that they had mutually agreed a reasonable period of time of five months to implement the recommendations and rulings of the DSB, i.e. from 5 November 2001 until 5 April 2002.

United States – Transitional safeguard measure on combed cotton yarn from Pakistan, complaint by Pakistan (WT/DS192) At its meeting of 5 November 2001, the DSB adopted the Appellate Body report and the Panel report, as modified by the Appellate Body report recommending that the United States bring its measures into conformity with its obligations under the Agreement on Textiles and Clothing (for a more detailed description of the Panel and Appellate Body reports, see the section on “Appellate Body and/or panel reports adopted” above). At the DSB meeting of 21 November 2001, the United States declared that on 8 November 2001 the Committee for the Implementation of the Textile Agreement had directed the United States Customs Services to eliminate the limit on imports of combed cotton yarn from Pakistan. The United States indicated that, through this action, effective as from 9 November 2001, it had implemented the DSB’s recommendations.

Panel reports pending before the Appellate Body as of 1 February 2002

United States – Definitive safeguard measures on imports of circular welded carbon quality line pipe from Korea, complaint by Korea (WT/DS202) This dispute concerns the United States’ imposition of a definitive safeguard measure on imports of circular welded carbon quality line pipe. On 13 June 2000, Korea requested consultations with the United States in respect of concerns regarding the definitive safeguard measure imposed by the United States on imports of circular welded carbon quality line pipe (line pipe). Korea noted that on 18 February 2000 the United States proclaimed a definitive safeguard measure on imports of line pipe (subheadings 7306.10.10 and 7306.10.50 of the Harmonized Tariff Schedule of the United States). In that proclamation, the United States announced that the proposed date of introduction of the measure was 1 March 2000 and that the measure was expected to remain in effect for three s O’

years and one day. Korea considered that the United States procedures and determinations WT that led to the imposition of the safeguard measure as well as the measure itself contravened various provisions contained in the Safeguards Agreement and the GATT 1994. In particular, Korea considered that the measure was inconsistent with United States obligations under Articles 2, 3, 4, 5, 11 and 12 of the Safeguards Agreement; and Articles I, standing XIII and XIX of the GATT 1994. Further to Korea’s request, the DSB established a panel at its meeting of 23 October 2000. Australia, Canada, European Communities, Japan and Mexico reserved their third-party rights. ade conflicts under the On 29 October 2001, the Panel circulated its report to the Members. The Panel found that the United States imposed its safeguard measure inconsistently with the GATT 1994 and the

Agreement on Safeguards (i) by applying the measure without respecting traditional trade O activities Dispute Settlement Under patterns; (ii) by applying the measure without fixing the total amount of imports permitted WT Resolution of tr at the lower tariff rate; (iii) by failing to include in its published report a finding or reasoned conclusion demonstrating either (a) that increased imports have caused serious injury, or (b) that increased imports are threatening to cause serious injury; (iv) by failing to establish a causal link between the increased imports and the serious injury, or threat thereof; (v) by applying the measure to developing countries whose imports do not exceed the individual and collective thresholds; (vi) by failing to demonstrate the existence of unforeseen developments; (vii) by failing to provide an adequate opportunity for prior consultations with Members having a substantial interest as exporters of line pipe; and (viii) by not fulfilling its obligation to endeavour to maintain a substantially equivalent level of concessions and other obligations. All other claims by Korea were rejected by the Panel. The Panel also declined Korea’s request for the Panel to find that the United States safeguard measure should be lifted immediately and the United States International Trade Commission safeguard investigation on line pipe terminated.

101 WTO activities

102 Resolution of trade conflicts under the WTO’s Dispute Settlement Understanding Members nolaterthan15F report. Appellate BodyinformedtheDSBthattherewouldbeadelayincirculationof notified itsdecisiontore-fileappealthe 2001, law andlegalinterpretationscontainedintheP Export DevelopmentCorpor including financing, Annex Itothe India –Measur Br Canada –Exportcr P (“Classification”), the ProvinceofQuébec. contributions thatconferabenefit. subsidies – arebeingprovidedtofacilitatetheexportofcivilaircr aircr Communities andtheUnitedStates(WT/DS146 and ImportP T (see above)wouldalsoexaminetheclaimsofEuropeanCommunities the DSBestablishedapanelanddecidedthatalreadyunder Communities requestedtheestablishmentofapanel. the (MoUs) signedbytheIndianGovernmentwithcertainmanufacturersofautomobiles implemented orconsolidatedbythesepolicies Import P fact, Communities Br ( including loanguar deficiency guar credits andguar Article 9.1oftheDSU European Communitiesallegedviolationsof automotive vehicles(“indigenization” use acertainproportionoflocalpartsandcomponentsinthemanufacturecars Article III:4oftheGA moreover Indiahadactedinconsistentlywithitsobligationsunder acted inconsistentlywithitsobligationsunder Indian mark the amountofanypurchasespreviouslyimportedrestrictedkitsandcomponentson 1994 byimposing, components withexportsofequiv automotive manufacturersanobligationtobalanceanyimportationofcertainkitsand Articles III:4andXI:1oftheGA incurred until1 and (ii)thattheenforcementofexportobligationsautomobilemanufacturers with theGA be inconsistentwith and 19.1oftheDSUrequiredittoaddressquestionwhethermeasuresfound upon erroneousfindingsonissuesoflawandrelatedlegalinterpretations: review ofthefollowingP IQ he EuropeanCommunitiesstatedthatthemeasuresincludedocumentsentitled anel reportscirculated azil’ azil (WT/DS222) ) progr On 6November2001, T At itsmeetingof12March2001, On 28J T T On 31J T aft industry his disputeconcernscertainmeasuresaffectingtheautomotivesectorappliedbyIndia. his disputeconcernssubsidieswhichareallegedlybeinggr he P r upon export, ade-Related InvestmentMeasures s claimsthattheEDCCorpor it withdrewitsnoticeofappeal. Accordingly olicy anel concludedthatIndiahadactedinconsistentlywithitsobligationsunder , ammes within themeaningof anuary 2002, anuary 2002, et, TT asaresultofmeasurestak olicy , April 1997-March2002”, India andtheUnitedStatesreserved theirthird-partyrights Agreement onSubsidiesandCounterv antees”, by exportsofequiv . April 2001underIndia’ antees (withinthemeaningofItem(j) Br , safcigteatmtv sector es affectingtheautomotive “as such” and 1997-2002”, and constitute , azil’ antees in thecontextoftr the loan guar Articles III:4andXI:1oftheGA TT 1994byimposingonautomotivemanufacturersanobligationto . edits andloanguar “Public NoticeNo s claimsarethatexportcredits(withinthemeaningofItem(k) J Appellate Bodyindicatedthatthereportwouldbecirculatedto apan reserveditsthird-partyrights provided by Br anel’ the P India appealedtheaboveP , the UnitedStatesnotifieditsdecisiontoappealcertainfindingsof azil tak equity guar ation (EDC)–bothCanadaandCorpor ebruary 2002. constitute prohibited exportsubsidiescontr antees s conclusiononthegroundsthattheyareinerrorandbased anel circulateditsreporttotheMembers TT “ITC (HSClassification)ExportandImportP , Article 1oftheSCM . es theviewthatallofabove-mentionedmeasuresare therefore alent v alent v ate According toBr , Investissement Québec Investissement or interestr the DSBestablishedapanel. antees condition). Account, Later s formerimportlicensingschemeisinconsistentwith and anyotherlegislativeoradministr Agreement. . alue (“tr alue 60 (PN/97-02)of12December1997, ade balancingcondition, en byIndiaduringthecourseofproceedings , , a violationof Articles IIIandXIofGA antees forr , . on 19November2001, , residual v Appellate Body Article XIoftheGA as wellMemor anel Report. Canada ate supportprovidedbyorthroughthe ade balancing” In addition, azil, On 12October2000, TT hadbeenbroughtintoconformity anel report. ailing Measures(SCM At itsmeetingof17November2000, Agreement, alue guar they arealsocontingent, aft. Account andInvestissementQuébec , Annex ItotheSCM . egional air Article 3oftheSCM complaints bytheEur Also beingprovidedareexport WT/DS175) ( However IQ . the P On 18J ), anted toCanada’ andums ofUnderstanding In particular antees a progr condition); TT 1994byimposingon since theyarefinancial Article III:4oftheGA anel foundthatIndiahad ate Austr an obligationtooffset TT 1994, , the UnitedStates cr on 13November anuary 2002, Accounts thereunder . ary to , T alia, amme oper aft, , and he P . the European in accordancewith olicy 1997-2002” (i) that Agreement)), ative provision and that , and complaint by the European “first loss anel rejected Article 3.1(a) India seeks Agreement), Agreement. Export and s regional in lawor Article 2of WT/DS175 Articles 11 opean . ated by “Export the T he TT , of the SCM Agreement. They considered that it was not appropriate to make separate findings regarding the EDC Corporate Account, Canada Account and IQ programmes “as applied”. Where claims relating to specific transactions were concerned, the Panel rejected Brazil’s claim that the EDC Corporate Account financing to Kendell, Air Nostrum and Comair in December 1996, March 1997 and March 1998 constituted a prohibited export subsidy contrary to Article 3.1(a) of the SCM Agreement In addition, the Panel rejected Brazil’s claim that IQ equity guarantees to ACA, Air Littoral, Midway, Mesa Air Group, Air Nostrum and Air Wisconsin constituted prohibited export subsidies contrary to Article 3.1(a) of the SCM Agreement; and finally, they also rejected Brazil’s claim that IQ loan guarantees to Mesa Air Group and Air Wisconsin constitute prohibited export subsidies contrary to Article 3.1(a) of the SCM Agreement. The Panel upheld Brazil’s claim that the EDC Canada Account financing to Air Wisconsin, to Air Nostrum and to Comair in July 1996, August 1997, and February 1999 constituted a prohibited export subsidy contrary to Article 3.1(a) of the SCM Agreement. The report of the Panel was circulated to WTO Members on 28 January 2002. Panels established by the DSB

United States – Anti-dumping and countervailing measures on steel plate from India, complaint by India (WT/DS206) This request for the establishment of a panel, dated 7 June 2001, concerns (i) the consistency of the United States legislation providing for use of facts available with the AD Agreement, (ii) the final determination of the United States Department of Commerce (USDOC) relying on facts available in the anti-dumping investigation of certain cut-to-length carbon quality steel plate products from India; and (iii) the alleged violation of Article 15 of the AD Agreement. India alleged violations of Article VI of the GATT 1994; Articles 2.2, 2.4, 6.13, 6.6, 6.8, 9.3, and 15, and paragraphs 3, 5, and 7 of Annex II of the AD Agreement. At its meeting on 24 July 2001 the DSB established a panel. Chile, the European Communities and Japan reserved their third-party rights.

Chile – Price band system and safeguard measures relating to certain agricultural products, complaint by Argentina (WT/DS207) This request, dated 19 January 2001, concerns: (i) the price band system established by Law 18.525 (as subsequently amended by Law 18.591 and Law 19.546), as well as implementing regulations and complementary and/or amending provisions; and (ii) the provisional safeguard measures adopted on 19 November 1999 by Decree No. 339 of the Ministry of Economy and the definitive safeguard measures imposed on 20 January 2000 by Decree No. 9 of the Ministry of Economy on the importation of various products, including wheat, wheat flour and edible vegetal oils. Argentina considers that these measures raise questions concerning the obligations of s O’

Chile under various agreements. According to Argentina, the provisions with which the WT measures relating to the said price band system are inconsistent, include, but are not limited to, the following: Article II of the GATT 1994, and Article 4 of the Agreement on Agriculture. According to Argentina, the provisions with which the safeguard measures are inconsistent, include, but are not limited to, the following: Articles 2, 3, 4, 5, 6 and 12 of the Safeguards standing Agreement, and Article XIX:1(a) of the GATT 1994. At its meeting of 12 March 2001 the DSB established a panel. Australia, Brazil, Colombia, Costa Rica, the European Communities, Ecuador, El Salvador, Guatemala, Honduras, Japan, ade conflicts under the Nicaragua, Paraguay, the United States and Venezuela reserved their third-party rights.

Egypt – Definitive anti-dumping measures on steel rebar from Turkey, complaint O activities Dispute Settlement Under by Turkey (WT/DS211) WT Resolution of tr This request dated 3 May 2001, concerns an anti-dumping investigation by the Egyptian Ministry of Trade and Supply with respect to imports of rebar from Turkey. The investigation was completed and the final report released on 21 October 1999. As a result of the investigation, anti-dumping duties were imposed, ranging from 22.63-61.00% ad valorem. Turkey considered that Egypt made determinations of injury and dumping in that investigation without a proper establishment of the facts and based on an evaluation of the facts that was neither unbiased nor objective. In addition Turkey considers that during the investigation of material injury or threat thereof and the causal link, Egypt acted inconsistently with Articles 3.1, 3.2, 3.4, 3.5, 6.1 and 6.2 of the Anti-Dumping Agreement (AD Agreement). In addition Turkey states that during the investigation of sales at less than normal value, Egypt violated Article X:3 of the GATT 1994, as well as Articles 2.2, 2.4, 6.1, 6.2, 6.6, 6.7 and 6.8, and Annex II, Paragraphs 1, 3, 5, 6 and 7 and Annex I, Paragraph 7 of the AD Agreement.

103 WTO activities

104 Resolution of trade conflicts under the WTO’s Dispute Settlement Understanding its Communities producer ofthegoodsfollowingchangeownership Communities approach w Eur United States–Countervailingmeasur cir United States–Definitivesafeguar flat pr United States–Countervailingdutiesoncertaincorr former producerofgoods duties isbasedonanirrefutablepresumptionthatnon-recurringsubsidiesgr Communities claimedthatthecontinuedapplicationbyUnitedStatesofcounterv and Counterv European Communitiesconsideredthatthecontinuedapplicationof breach of States obligationsundertheprovisions ofGA both theabove-mentionedcases on importsoflinepipeeffectiveas of1March2000. imports ofwirerodeffectiveas 1March2000; carbon qualitylinepipe(linepipe). United Statesonimportsofcertainsteelwirerod(wirerod)andcircularwelded application intwocasesconcerningthedefinitivesafeguardmeasuresimposedby Communities (WT/DS214) States ofcounterv resistant steel). United Statesonimportsofcertaincorrosion-resistantcarbonsteelflatproducts(corrosion (WT/DS213) the abovemeasure European Communities Articles 10, decision, by determination ofabenefittotheproducergoodsunderinvestigation, particular States imposeddefinitivesafeguardmeasures application oftheaforesaidUnitedStatesprovisionsintwospecific caseswheretheUnited GA these provisionsareinbreachofthemost-favoured-nationprinciple under Articles 2, to theinvestigationandimportedproductssubjectsafeguard measure which donotrespecttherequirementofpar Implementation In addition, prevented theUnitedStatesfromrespecting determination ofacausallinkbetweenincreasedimportsandinjury orthreatthereofwhich Sections 201and202ofthe Articles 3.1and3.2oftheSafeguards lead tocontinuationorrecurrenceofacounterv Agreement onSubsidiesandCounterv considers thatthisfindingisinconsistentwiththeobligationsofUnitedStatesunder Mexico reservedtheirthird-partyrights Agreement; ownership Countervailing duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Steel Carbon Bismuth and Lead Hot-Rolled Certain on duties Countervailing Originating in the United Kingdom” United the in Originating cular weldedcarbonqualitylinepipe Article 1.1(b)oftheSCM “ TT 1994. T T T T A panelw T opean Communities he DSBestablishedapanelatitsmeetingof20June2001. his request, his request, he DSBestablishedapanelatitsmeetingof10September2001. change in ownership in change his request, oducts fr , the DOCfoundthatrevocationofcounterv Articles 10, but notnecessarilyexclusively ” 4 and5oftheSafeguards 11.9 and21(notably21.3)thereof as foundbythe the EuropeanCommunitiesconsidersthatSection311ofNAFT Article 5.1ofthe Safeguards According totheEuropeanCommunities methodology , , as establishedbytheDSBon10September2001furthertorequestof ailing Measures(SCM J this iswhattheUnitedStatesDepartmentofCommerce(DOC)referstoas apan andtheUnitedStatesreservedtheirthird-partyrights T Act containsprovisionsconcerningimportsoriginatinginNAFT dated 8 dated 8 his disputerelates dated 8 om Germany ailing dutiesonanumberofproducts , carried outbytheUnitedStatesDepartmentofCommerce(DOC). 19 and21oftheSCM . J August 2001, August 2001, apan andNorw August 2001, ”methodology , , , and thecontinuedimpositionofdutiesbasedonit, prior toachangeofownership complaint bytheEur Appellate Bodyin T Agreement. r ade , , complaint bytheEur the UnitedStatesmeasuresarein breachoftheUnited , Act of1974containprovisionsrelatingtothe In particular in particular Agreement). Agreement. to beinconsistentwiththe ailing Measuresand, Agreement; . concerns UnitedStatessafeguardlegislationandits is inrespectofcounterv concerns thecontinuedapplicationbyUnited , . d measur ay reservedtheirthird-partyrights According totheEuropeanCommunities Agreement; of: allelism betweentheimportedproductssubject es concerningcertainpr Article 2oftheSafeguards Articles 4and5oftheSafeguards TT 1994andoftheSafeguards , , Agreement, (1) intheformofatariff-r . complaint bytheEur , “ , ailable subsidy the EuropeanCommunitiesconsideredthat United States – Imposition of Imposition – States United to thefinalresultsofafullsunsetreview T In thelightofthesefindings and (2)intheformofanincrease induty he EuropeanCommunitiesclaimsthat Articles 4.1and4.2oftheSafeguards es onimportsofsteelwir opean Communities(WT/DS212) , Article 8.1ofthe Safeguards In theEuropeanCommunities’view these violationsareconfirmedbythe ailing dutyorderwouldbelik . opean Communities In particular because thereisnoproper , . in particular According totheEuropean “pass through” osion-r . ailing dutiesimposedbythe T he EuropeanCommunities Chile Agreement onSubsides esistant carbonsteel , , Br the European opean , the European Agreement; oducts fr is inbreachof azil, ate quotaon . . “ Article Iofthe change in change to thecurrent Agreement, India and anted toa as required , A countries A Agreement. the are in , e r contr om the , od and this ely to In this ary to ailing in , in Agreement; Articles 12.2, 12.3 and 12.11 of the Safeguards Agreement; Article I:1 of GATT 1994 and Article XIX:1 of GATT 1994. Further to the request of the European Communities, the DSB established a panel at its meeting of 10 September 2001. Argentina, Canada, Japan, Korea and Mexico reserved their third-party rights.

United States – Continued Dumping and Subsidy Offset Act of 2000, joint complaint by Australia, Brazil, Chile, European Communities, India, Indonesia, Japan, Korea and Thailand (WT/DS217) On 21 December 2000, all mentioned Members (complainants) requested consultations with the United States concerning the amendment to the Tariff Act of 1930 signed on 28 October 2000 with the title of “Continued Dumping and Subsidy Offset Act of 2000” (the Act) usually referred to as “the Byrd Amendment”. According to the complainants the Act mandates the United States customs authorities to distribute on an annual basis the duties assessed pursuant to a countervailing duty order, an anti-dumping order or a finding under the Anti-dumping Act of 1921 to the petitioners or interested parties who supported the petition, for their expenditure incurred with respect to “manufacturing facilities, equipment, acquisition of technology, acquisition of raw material or other inputs”. In the view of the complainants, the Act leaves no discretion to the competent authorities, and, therefore, constitutes mandatory legislation. According to the complainants, these “offsets” constitute a specific action against dumping and subsidization which is not contemplated in the GATT, the Anti-Dumping Agreement (AD Agreement) or the Agreement on Subsidies and Countervailing Measures (SCM Agreement). Allegedly, the “offsets” would provide a strong incentive to the domestic producers to file or support petitions for anti-dumping or anti- subsidy measures, thereby distorting the application of the standing requirements provided for in the AD Agreement and the SCM Agreement. The Act would make it more difficult for exporters subject to an anti-dumping or countervailing duty order to secure an undertaking with the competent authorities, since the affected domestic producers will have a vested interest in opposing such undertakings in favour of the collection of anti-dumping or countervailing duties. In the view of the complainants, this is not a reasonable and impartial administration of the United States laws and regulations implementing the provisions of the AD Agreement and the Agreement on Subsidies and Countervailing Measures regarding standing determinations and undertakings. For the above reasons, the complainants consider that the Act is inconsistent with the obligations of the United States under several provisions of the GATT, the AD Agreement, the SCM Agreement, and the WTO Agreement. The DSB established a panel at its meeting on 23 August 2001. Argentina, Canada, Costa Rica, Israel, Norway, Mexico and Hong Kong, China reserved their third-party rights. Further to Canada and Mexico’s request to establish a panel on a similar matter, the DSB, at its meeting of 10 September 2001, established a single panel pursuant to paragraphs 1 and 2 of Article 9 of the DSU. This panel would therefore examine not only Canada and s O’

Mexico’s claims (see WT/DS234 below) but also those previously brought by Australia, Brazil, WT Chile, European Communities, India, Indonesia, Japan, Korea and Thailand.

United States – Section 129(c)(1) of the Uruguay Round Agreements Act, complaint by Canada (WT/DS221) standing This request, dated 12 July 2001, concerns Section 129(c)(1) of the Uruguay Round Agreements Act (the URAA) and the Statement of Administrative Action accompanying the URAA. In Canada’s view, in a situation in which the DSB has ruled that the United States ade conflicts under the has, in an anti-dumping or countervailing duty proceeding, acted inconsistently with United States obligations under the Anti-Dumping Agreement (AD Agreement) or Agreement on

Subsidies and Countervailing Measures (SCM Agreement), the United States law prohibits O activities Dispute Settlement Under the United States from complying fully with the DSB ruling. Under United States law, WT Resolution of tr determinations whether to levy anti-dumping or countervailing duties are made after the imports occur. With regard to imports that occurred prior to a date on which the United States directs compliance with the DSB ruling, the measures require United States authorities to disregard the DSB ruling in making such determinations, even where the determination whether to levy anti-dumping or countervailing duties is made after the date fixed by the DSB for compliance. In such circumstances, in Canada’s view, determinations by the United States to levy anti-dumping or countervailing duties would be inconsistent with its obligations under the AD or SCM Agreements. Canada considers that these measures are inconsistent with United States obligations under Article 21.3 of the DSU, in the context of Articles 3.1, 3.2, 3.7 and 21.1 of the DSU; Article VI of the GATT 1994; Articles 10 and note 36, 19.2, 19.4 and note 51, 21.1, 32.1, 32.2, 32.3, and 32.5 of the SCM Agreement; Articles 1, 9.3, 11.1, 18.1-4 and note 12 of the AD Agreement; and Article XVI:4 of the WTO Agreement.

105 WTO activities

106 Resolution of trade conflicts under the WTO’s Dispute Settlement Understanding Article Communities determination, expedited reviewsandadministr from Canada. company-specific expeditedreviewsandadministr 17.3, 32.1 ofthe inconsistent withUnitedStatesobligations under counterv customs authoritiestodistribute findings orcounterv dumping orsubsidizationofimportproductsaftertheissuanceanti-dumpingorders listed amongthosespecieswhichcanbetr rights by CanadaandMexico(WT/DS234) Eur States DepartmentofCommerceon9 determination andthepreliminarycriticalcircumstances madebytheUnited signed intolawbythePresidentonOctober28, United States–ContinuedDumpingandSubsidyOffset lumber fr United States–Pr 10 Septembermeeting. 2001 wereconsideredtobethird-partiesinthesingleP who hadreservedthird-partyrightstoparticipateintheP the obligationsofUnitedStatesunderMarr Agreement) orthe facilities “Qualifying expenses” domestic producers” 1921 tothe counterv that theaboveRegulationconstitutesanunjustifiablebarriertotr hence argues thattheRegulationisinconsistentwithprincipleofnon-discrimination, of Canada, according toP (WT/DS231) K Indonesia, but alsothosepreviouslybroughtby par as welltheGA Mexico andseriousprejudiceinthesenseof form ofnullificationandimpairmentbenefitsaccruingdirectlyorindirectlytoCanada “adverse effects” specific subsidieswithinthemeaningof and subsidizationwhichisnotcontemplatedintheGA According toCanadaandMexico Furthermore “sardines” Alimentarius standards(ST Subsidy Offset Act of 2000 of Act Offset Subsidy orea and Articles 2and12ofthe agr Canada andMexicoclaimthattheexpresspurposeof T Further toP T T F T At itsmeetingof10September2001, opean Communities– or thesereasons he DSBestablishedapanelatitsmeetingof23 his request, his request, his request, . , 17.4, aphs 1and2of VI(3) ofGA in breachof , ailing dutyorder ailing dutydeterminationisconcerned, Chile equipment, om Canada, T J for theirproducts apan, 19.4 and20.6oftheSCM Agreement onSubsidiesandCounterv hailand alsoreservedtheirthird-partyrightstothisP , “affected domesticproducers” , Canada andMexicoconsiderthatthe , T India andJ eru, eru’ Colombia, Canada considersthisdetermination tobeinconsistentwith his requestalsoconcernsUnitedStatesmeasuresoncompany-specific dated 10 dated 25October2001, dated 7June2001, TT to theirinterests K TT 1994. Agreement onSubsidiesandCounterv s request, prevents P orea and , Articles IandIIIofGA ailing dutyorders”. , acquisition oftechnology eliminary determinationswithr the are thepetitionersorinterestedpartieswhosupportedpetition. Canada andMexicoallegethatthe include theexpenditureincurredwithrespectto Article 9oftheDSUtoexaminenotonlyCanadaandMexico’ Austr , AD complaint byCanada(WT/DS236) apan reservedtheirthird-partyrights an anti-dumpingorderorafindingunderthe Ecuador August 2001, N94-1981rev AN ” TBT With respecttothepreliminarycritical circumstances Agreement andtheSCM . T (the the DSBestablishedapanelatitsmeetingon24July2001. eruvian exportersfromcontinuingtousethetr alia, T hailand (see P r eru submittedthat, Agreement and ade descriptionofsar , ative reviews , on anannualbasis Act), , , Br the V in thesenseof azil, enezuela andtheUnitedStatesreservedtheirthird-party is inrespectofRegulation(EEC)2136/89which, Austr “offsets” August 2001, usually referredtoastheByrd Agreement. With thatobjective Article 1oftheSCM concerns theamendmentto the EuropeanCommunities concerns preliminarycounterv TT 1994. the DSBestablishedasinglepanelpursuantto alia, WT/DS217 above). . aded as for their 1995), Article 6oftheSCM . , In particularasfarthepreliminary acquisition ofr Br Article XI:1ofGA constitute aspecificactionagainstdumping Canada considersthisdetermination tobe 2000, azil, Articles 1, ative reviews ailing Measures(SCM Article 5oftheSCM As regardsUnitedStatesmeasures on according totherelev “offsets” the species ak “sardines”. , “qualifying expenses”. August 2001. with respecttocertainsoftwoodlumber the dutiesassessedpursuanttoa Agreement. esh Chile TT entitled the anel establishedatthe , ailing Measures(SCM dines espect tocertainsoftwood the Agreement establishingthe nletbihdo 3August anel establishedon23 Act appearstobeinconsistentwith , , the European Communities 2, Agreement, paid underthe Act istoremedythe Anti-Dumping aw materialorotherinputs In thisregard, . , Act requirestheUnitedStates , “ 10, P complaint byP Canada considers thatthese sardinops sagax sagax sagax sardinops Act of2000, anel. TT 1994. eru, Agreement. ade 14, Chile “ , Continued Dumping and Dumping Continued India, Amendment. therefore , and, “manufacturing 17.1, Anti-Dumping Agreement inthe ailing duty , Agreement) and ant Codex which maycause Tariff Act of 1930 of Act Tariff European In addition, T Indonesia, Agreement (AD hence Act constitute he Articles 17.1, ade description the countries 17.5, , Agreement). “affected complaint considered eru , “continued 19.4 and in breach and, , India, s claims Act of WT J P ” apan, eru . is ” O , measures, inter alia, fail to provide for company-specific expedited reviews or administrative reviews in countervailing duty cases in which the investigation was conducted on an aggregate or country-wide basis, and that mandate that a single country-wide duty rate calculated in an administrative review supersedes all individual rates previously determined in the countervailing duty proceeding. Canada alleges these measures are inconsistent with United States obligations under Article VI:3 of the GATT 1994 and Articles 10, 19.3, 19.4, 21.1, 21.2 and 32.1 of the SCM Agreement. Canada also considers that the United States has failed to ensure that its laws and regulations are in conformity with its WTO obligations as required by Article 32.5 of the SCM Agreement and Article XVI:4 of the WTO Agreement. At its meeting on 5 December 2001, the DSB established a panel. The European Communities and India reserved their third-party rights to participate in the panel proceedings.

Argentina – Definitive safeguard measure on imports of preserved peaches, complaint by Chile (WT/DS238) This request, dated 6 December 2001, relates to a definitive safeguard measure which Argentina applies on imports of peaches preserved in water containing added sweetening matter, including syrup, preserved in any other form or in water. According to Chile, Argentina’s definitive safeguard measure are inconsistent with Articles 2, 4, 5 and 12 of the Agreement on Safeguards, and Article XIX:1 of GATT 1994. In its view, the definitive safeguard measure does not comply with the relevant WTO rules and seriously affects the competitiveness of Chilean peaches in the Argentine market. In particular, Chile considers that Argentina failed to respect the requirements of Article XIX:1 of GATT 1994 as regards the existence of “unforeseen developments” and of an increase of imports. Chile was of the opinion that the conclusions derived from the investigation carried out by the Government of Argentina do not support a finding of injury to the domestic industry or threat of injury. Chile also claims that the investigating authority did not take into account the existence of other factors when attributing the injury allegedly suffered by the domestic industry exclusively to an alleged increase of imports. In addition, Chile considers that the level of the definitive safeguard measure is so high that it is equivalent to an import prohibition. At the DSB meeting on 18 January 2002, a panel was established. Immediately after the establishment, Chile stated that it would not, for the moment, proceed with the appointment of panelists, as it was still hoping to reach a mutually satisfactory solution with Argentina. The European Communities, Paraguay and the United States reserved their third-party rights to participate in the Panel’s proceedings. Mutually agreed solutions

Denmark – Measures affecting the enforcement of intellectual property rights, complaint by the United States (WT/DS83) This request concerns Denmark’s alleged failure to make provisional measures available in the context of civil proceedings involving intellectual property rights. The United States s O’

contended that this failure violates Denmark’s obligations under Articles 50, 63 and 65 of WT the Agreement for Trade-Related Aspects of Intellectual Property Rights. On 7 June 2001, the parties to the dispute notified to the DSB a mutually satisfactory solution to the matter.

European Communities – Enforcement of intellectual property rights for motion standing pictures and television programmes, complaint by the United States (WT/DS124) This request concerns an alleged lack of enforcement of intellectual property rights in Greece. The United States claims that a significant number of TV stations in Greece regularly ade conflicts under the broadcast copyrighted motion pictures and television programmes without the authorization of copyright owners. The United States contends that effective remedies against copyright

infringement do not appear to be provided or enforced in Greece in respect of these O activities Dispute Settlement Under broadcasts. The United States alleges a violation of Articles 41 and 61 of the TRIPS WT Resolution of tr Agreement. On 20 March 2001, the parties to the dispute notified a mutually satisfactory solution to the matter to the DSB.

Greece – Enforcement of intellectual property rights for motion pictures and television programmes, complaint by the United States (WT/DS125) This request is in respect of the same measures raised against the European Communities above (DS124). On 20 March 2001, the parties to the dispute notified a mutually satisfactory solution on the matter to the DSB.

Romania – Measures on minimum import prices, complaint by the United States (WT/DS198) This dispute is in respect of Romania’s use of minimum import prices for customs valuation purposes. The measures at issue were the Customs Code of 1997 (L141/1997), the

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108 Resolution of trade conflicts under the WTO’s Dispute Settlement Understanding licensing ifthesubject-matterofpatentisnot requirement fortheenjoy effective May1997)andotherrelatedmeasures related statutesandregulations Ministry ofFinanceGener complaint bytheUnitedStates(WT/DS210) Belgium – (WT/DS199) Br (WT/DS235) Slovakia –Safeguar parties tothedisputenotifiedDSBamutuallysatisfactorysolutiononmatter provisions oftheidentifiedagreements: considered thatBelgium’ United StatesfurthernotedthatBr Br importation –ofthepatentedsubject-matter the products asmeat, measures ril 3.1, Article Committee onSafeguardsandcirculated indocumentG/SG/N/10/SVK/1. the customsdutiesapplicabletoriceimportedfromUnitedStates those provisionsofBr investigating importpriceswhenthec.i.f T authorities actedinconsistentlywith v obligations undertheSafeguards that thissafeguardmeasurehadbeen imposedinamannerinconsistentwithSlov sugar (tariffheading1701). under United StatesconsideredthatRomania’ 1994; and 4of Republic, Articles 1-6, the GA with Br patented process”. manufacture orincompleteoftheproduct” Article 12.3. reached amutuallysatisfactorysolutionpursuantto T Agriculture 6, agreed solutionpursuantto States andtheEuropeanCommunitiesinformedDSBthatthey had reachedamutually 9 October the UnitedStatesrequestedafurthersuspensionofP their third-partyrights agreements impair thebenefitsaccruingtoUnitedStatesdirectlyorindirectlyundercited the P 1 November2001. consultations betweentheUnitedStatesandEuropeanCommunities Article 12.12oftheDSU of theP extiles andClothing. he UnitedStatesfurtherassertedthatRomaniahadinstitutedburdensomeproceduresfor azil’ azil –Measur 7 and9ofthe T On 30May2000, T At itsmeetingof1F T On 26September2001, “local working” his disputeconcernstheadministr his disputeisinrespectofquantitativerestrictionsimposedbySlov he DSBestablishedapanelatitsmeetingof12March2001. anel tosuspenditsworkuntil30November2001. s Articles 1through7, Article 4.2ofthe TT 1994. azil’ “local working” anel until16November2001. Annex 1oftheCustoms , , Hondur Romania hadestablishedarbitr . the UnitedStatesrequestedtofurthersuspendworkofP s obligationsunder Article 4.2(b), . Belgium’ Administr 7, P oland considered thattheinvestigationandsafeguard measureimposed 10, as Agreement on es affectingpatentpr eggs , 14, T On 1November India andJ requirement canonlybesatisfiedbythelocalproduction–andnot he UnitedStatesconsideredthatsucharequirementw s measuresalsoappeared, azil’ the UnitedStatesrequestedconsultationswithBr . d measur , 16 and On 26July2001, ation ofmeasur ebruary 2001, Agreement on requirement stipulatesthatapatentshallbesubjecttocompulsory fruits andvegetables , s measuresappearedtobeinconsistentwiththefollowingspecific ability ofexclusivepatentrights s 1996industrialpropertylaw(LawNo al CustomsDirective(OrdinanceNo Article 5.2(a), to suspenditsworkuntil30September2001inlightofon-going and 12oftheCustoms the UnitedStatesandRomaniainformedDSBthattheyhad T Article 3.6oftheDSU he impositionofthemeasureinquestion w Articles 27and28ofthe Annex IoftheCustoms apan reservedtheirthird-partyrights . T T echnical Barriersto e onimportsofsugar Agreement. he UnitedStatesassertedthat, V azil explicitlydefines , aluation the UnitedStatesrequestedtofurthersuspendwork arious provisionsoftheSafeguards ation byBelgiumoflawsandregulationsestablishing the DSBestablishedapanel. On 19November2001, Agriculture; s measureswereinconsistentwithitsobligations Article 7.4, Articles I, . the UnitedStatesrequestedP es establishingcustomsdutiesforrice ary minimumandmaximumimportpricesforsuch v otection, alue fallsbelowtheminimumimportprice Agreement; . , According toP More specifically clothing, in theviewofUnitedStates , which establisha II, . “work and V Article 12.1(b), VII, Article 3.6oftheDSU aluation T complaint bytheUnitedStates r ade; V Articles 2and7ofthe footwear “failure tobework Articles II, VIII, aluation On 18December2001, TRIPS ed” . or nlfo o9Otbr2001. October 9 anel from1to T , he UnitedStatesassertedthat complaint byP Article 4ofthe “failure tomak oland, X andXIoftheGA in theterritoryofBr . Agreement; 5, , Agreement, the UnitedStatesrequested the UnitedStatesnotedthat , . Agreement; 4 pursuant tothese and certaindistilledspirits 9,279 of14May1996; India andJ X, Article 12.1(c)and August 1998), it appearedthatSlov “local working” Cuba, . and XIoftheGA On 5July2001, . T azil inrespectof akia onimportsof he UnitedStates . as notifiedtothe Agreement, P gener On 27September . the Dominican oland considered anel, and ed” e fulluseofthe Agreement on as inconsistent anel until oland Articles 2, apan reserved Agreement on al notes1, Article IIIof as , TT 1994; pursuant to the United azil. to nullifyor and other “failure to akia’ T . namely , the TT he T s . he 3, ak On 2 5, , . , had nullified or impaired the benefits accruing to Poland directly or indirectly under the Safeguards Agreement. On 11 January 2002, the parties notified the DSB that they have reached a mutually agreed solution within the meaning of Article 3.6 of the DSU. Accordingly, Slovakia agreed to a progressive increase of the level of its quota for imports of sugar from Poland between 2002 and 2004, and Poland agreed to remove its quantitative restriction on imports of butter and margarine. Both parties agreed to implement the above by 1 January 2002. Panel proceedings suspended

Chile – Measures affecting the transit and importation of swordfish, complaint by the European Communities (WT/DS193) This dispute concerns the prohibition on unloading of swordfish in Chilean ports established on the basis of Article 165 of the Chilean Fishery Law (Ley General de Pesca y Acuicultura), as consolidated by the Supreme Decree 430 of 28 September 1991, and extended by Decree 598 of 15 October 1999. The European Communities considered that, as a result, Chile makes transit through its ports impossible for swordfish. The European Communities claimed that the above-mentioned measures are inconsistent with the GATT 1994, and in particular Articles V and XI thereof. At its meeting of 12 December 2000, the DSB established a panel further to the request of the European Communities, Australia, Canada, Ecuador, India, New Zealand, Norway, Iceland and the United States reserved their third-party rights. On 23 March 2001, the parties to the dispute informed the Director- General of the WTO that they agreed to suspend the process for the constitution of the panel.

European Communities – Anti-dumping duties on malleable cast iron tube or pipe fittings from Brazil, complaint by Brazil (WT/DS219) This dispute concerns definitive anti-dumping duties imposed by Council Regulation (EC) No. 1784/2000 concerning imports of malleable cast iron tube or pipe fittings originating, inter alia, in Brazil. Brazil considered that the establishment by the European Communities of the facts was not proper and that its evaluation of these facts was not unbiased and objective, both at the provisional and definitive stage, particularly in relation to the initiation and conduct of the investigation (including the evaluation, findings and determination of dumping, injury and causal link between them). Brazil also challenged the evaluation and findings made in relation to the “community interest”. In sum, Brazil considered that the EC had infringed Article VI of GATT 1994 and Articles 1, 2, 3, 4,5, 6, 7, 9, 11, 12 and 15 of the Anti-dumping Agreement. Further to Brazil’s request, the DSB established a panel at its meeting of 24 July 2001. Chile, Japan, Mexico and the United States reserved their third- party rights. On 15 January 2002, both parties requested the Panel to suspend its work until 1 March s O’

2002 with a view to reaching a mutually agreed solution. The Panel agreed to the request. WT Panel requests withdrawn

Peru – Taxes on cigarettes, complaint by Chile (WT/DS227) standing This dispute concerns the Peruvian Supreme Decree No. 158-99-EF of 25 September 1999 modifying appendices III and IV of the General Sales Tax and Selective Consumption Tax Law, which identify the goods subject to the selective consumption tax. Article 1B of the ade conflicts under the said Supreme Decree amends the tax applied to cigarettes made of dark tobacco, standard cigarettes made of bright tobacco and premium cigarettes made of bright tobacco, setting a

different specific tax for each one of these categories of cigarettes ranging from S/0.025 to O activities Dispute Settlement Under S/0.100 per unit. In Chile’s view, this situation, which is damaging to Chilean cigarette WT Resolution of tr exports to Peru, could constitute a violation of the GATT 1994 – in particular, but not necessarily exclusively, of Article III.2 of the GATT 1994 – and of repeated Appellate Body jurisprudence in this area. At its meeting of 24 June 2001, the DSB established a Panel further to Chile’s request. On 12 July 2001, Chile announced its intention to withdraw the complaint on the grounds that the contested measure, i.e. the specific selective consumption tax system applied to cigarettes by Peru, had been amended on 30 June 2001 with the publication of Supreme Decree No. 128-2001 of the Ministry of the Economy and Finance of Peru, which entered into force on 1 July 2001. As from that date, cigarettes are subject to the Peruvian common selective consumption tax system at a rate of 100%, regardless of their origin, price, type or quality of tobacco and/or the number of sales markets. This amendment in the tax regime applicable to cigarettes was the result of a ruling of the Constitutional Court of Peru on 19 June 2001.

109 WTO activities

110 Resolution of trade conflicts under the WTO’s Dispute Settlement Understanding (WT/DS240) Romania –Importpr and F import ofwheatandflourwhichdoesnotmeetcertainqualitystandards and theNationalConsumerProtection (WT/DS222) softwood lumberfromCanada(WT/DS236) United States–Preliminarydeterminationswithrespecttocertain Slov (WT/DS234) United States–ContinuedDumpingandSubsidyOffset products (WT/DS233) Argentina –Measuresaffectingtheimportofpharmaceutical Mexico –Measuresaffectingtheimportofmatches(WT/DS232) European Communities– sugar (WT/DS230) Chile –Safeguardmeasuresandmodificationofschedulesregarding Br P (WT/DS226) Chile –Provisionalsafeguardmeasureonmixturesofedibleoils (WT/DS225) United States– United States–USP from theUnitedStates(WT/DS223) European Communities– Canada –Exportcreditsandloanguar Act (WT/DS221) United States–Section129(c)(1)oftheUruguayRound agricultur Chile –Pricebandsystemandsafeguardmeasuresrelatingtocertain carbon steelflatproductsfromGermany(WT/DS213) United States–Counterv from theEuropeanCommunities(WT/DS212) United States–Counterv Dispute New r T In someofthesecases panels wer 1 (WT/DS242) European Communities–Gener (WT/DS241) Argentina –Definitiveanti-dumpingduties onpoultryfromBr Romania –Importprohibitiononwheatandflour(WT/DS240) (WT/DS239) United States– peaches (WT/DS238) Argentina –Definitivesafeguardmeasureonimportsofpreserved T urk able IV eru – T These casesappearinor azil – his disputerelatestoRomania’ akia –Safeguardmeasureonimportsofsugar(WT/DS235) ey –Certainimportproceduresforfreshfruits(WT/DS237) orestry No T axes oncigarettes(WT/DS227) Anti-dumping dutiesonjutebagsfromIndia(WT/DS229) equests forconsultationsin2001 .7 al products(WT/DS220) Anti-dumping dutiesonseamlesspipefromItaly Anti-dumping dutiesonsiliconmetalfromBr . 119069 (16.07.2001), atents Code(WT/DS224) der ofdater ailing dutiesoncertaincorrosion-resistant ailing measuresconcerningcertainproducts T T r ariff-r ade descriptionofsardines(WT/DS231) ohibition onwheatandflour alized systemofpreferences e established,seer ate quotaoncornglutenfeed equested. Mor antees forregionalaircr s JointDecreeoftheMinistry Authority No Ministry ofF e infor elevant section. 1 mation ontheser Act of2000 Agreements azil azil aft . amily andHealthNo 1/3687 (19.07.2001)prohibitingthe equests canbefoundontheWTOwebsite. India P Br Br Guatemala Canada P and Mexico Canada India Chile Colombia Chile Argentina Communities European United States Canada Communities European Communities European Complainant T Br Hungary Br Chile Ecuador hailand eru oland azil azil azil azil , complaint byHungary Agriculture . 495 (18.07.2001) 9 9 22 J 31 J 5 J 21 11 July2001 21 May2001 25 May2001 17 May2001 17 1 March2001 19 F 5 F 25 J 17 J 5 F 1 F Date ofRequest 7 December2001 7 November2001 18 October2001 18 September2001 14 September2001 31 April 2001 April 2001 anuary 2001 ebruary 2001 ebruary 2001 ebruary 2001 August 2001 April 2001 August 2001 , anuary 2001 anuary 2001 anuary 2001 anuary 2001 ebruary 2001 . F ood Industry In particular, Hungary claimed that the import prohibition has been imposed in a manner inconsistent with Romania’s obligations under Article XI:1 of the GATT 1994, and that the introduction of the above-mentioned quality requirements is in breach of Article III:4 of the GATT 1994 because domestically produced products are not subject to the same quality requirements. On 30 October 2001, Hungary requested consultations with Romania according to the urgency procedure provided in Article 4.8 of the DSU. On 27 November 2001, Hungary requested the establishment of a panel. At its meeting on 10 December 2001, the DSB deferred the establishment of the panel. On 10 December 2001, Hungary requested the holding of a special meeting of the DSB in order to establish a panel. On 20 December 2001, further to the abrogation by Romania of its legislation regarding the quality requirements for imported wheat and wheat flour, Hungary withdrew its request. Composition of the Appellate Body

On 25 September 2001, the DSB decided to appoint Mr. Baptista (Brazil), Mr. J. Lockhart (Australia) and Mr. G. Sacerdoti (European Communities) to serve on the Appellate Body to replace Mr. Ehlermann (European Communities), Mr. F.Feliciano (the Philippines) and Mr. Lacarte-Muró (Uruguay) following the expiration of their terms of office.

VIII. Trade Policy Review Mechanism

The objectives of the Trade Policy Review Mechanism (TPRM), as established in Annex 3 of the , are to contribute to improved adherence by all Members of the WTO to its rules, disciplines and commitments, and thus to the smoother functioning of the multilateral trading system. The Trade Policy Reviews aim to achieve greater transparency in, and understanding of, the trade policies and practices of Members. The Mechanism enables the regular collective appreciation and evaluation of the full range of individual Members’ trade policies and practices in all areas covered by the WTO Agreements, and their impact on the functioning of the multilateral trading system. Reviews take place against the background of the wider economic and developmental needs, policies and objectives of the Member concerned, as well as the external trading environment. They are not intended to serve as a basis for the enforcement of obligations, for dispute settlement procedures, or to impose new policy commitments. Reviews are conducted in the Trade Policy Review Body (TPRB), a full-membership body of equal ranking to the General Council and the Dispute Settlement Body. During 2000, the TPRB was chaired by Ambassador Pekka Huhtaniemi (Finland). Under the TPRM, the four largest trading entities (the European Union (EU), the United States, Japan and Canada – the “Quad”) are reviewed every two years; the next 16 largest trading partners every four years; and the remaining WTO Members every six years, with a longer interval envisaged for least-developed countries. It has been agreed that these intervals may, if necessary, be applied with a flexibility of six months’ extension; and that every second review of the “Quad” countries should be an interim review, while remaining comprehensive in scope. By the end of 2001, a total of 150 reviews had been conducted, covering 84 WTO Members (counting EU-15 as one), with Canada and the United States having been reviewed six times; the EU and Japan, five times; ten Members (Australia; Brazil; Indonesia; Hong Kong, China; the Republic of Korea; Malaysia; Norway; Singapore; Switzerland; and Thailand), three times and 30 Members, twice. During 2001, the TPRB carried out reviews of olicy Review Mechanism

20 Members: Antigua and Barbuda; Brunei Darussalam; Cameroon; Costa Rica; Czech O activities ade P r Republic; Dominica; Gabon; Ghana; Grenada; Macau, China; Madagascar; Malaysia; WT T Mauritius; Mozambique; St. Kitts and Nevis; St. Lucia; St. Vincent and the Grenadines; Slovak Republic; Uganda; United States. The Chairperson’s concluding remarks for these reviews are included in Annex II. The programme for the year 2002 includes 16 reviews, including the EU and Japan, each for the sixth time. Over the past few years, greater focus has been placed on reviews of least-developed countries (LDCs), as encouraged by the November 1997 High-Level Meeting on Integrated Initiatives for Least-Developed Countries’ Trade Development. By the end of 2001, TPR reviews had covered 14 of the 30 LDCs that are WTO Members. As required in Annex 3 of the Marrakesh Agreement establishing the Mechanism, the TPRB undertook in 1999 an appraisal of the operation of the Trade Policy Review Mechanism. Overall, Members found that the TPRM was functioning effectively and that its mission and objectives remained important. The results of the Appraisal were presented to the Third Ministerial Conference in Seattle.

111 112 WTO activities Committee on Regional Trade Agreements 13 X. IX. GA complete listofR existing R the EnablingClause made underGA Included inthisnumberarenotifications TT/WT Committee onRegional Committee onBalance-of-P O T As; . see TT T WT/REG/W/44 fora As notifiedtothe Article XXIV , as wellaccessionto , GA TS Article V , Article XVIII:B planned phase-outoftherestrictionsitmaintainsforbalance-of-paymentspurposesunder WT the Governmentonwhethertoseekjustificationforcertainoftheserestrictionsunderother maintained forbalance-of-paymentspurposesunder by Bernan av Report, some casesbytheMemberunderreview on thebasisofan international tr comprehensive phase-outplanfortheremov are heldregularlybytheChairorDirectorof electronic formatthroughtheSecretariat’ Documents distributedforreviewsareav distribution ofthereports the totalnumberofagreementsnotifiedbyMembersandinforceto159. Salv tr negotiations onsever shifting theirlong-standingpolicyofmultilater of theyear K Members werepartiestoatleastoneR Bernan T launched freetr concluded anagreementwithCostaRicain negotiations withtheCARICOM. the HeadsofStatein EFT the regionalandextr development, conclusion ofthenegotiationsandforitsentryintoforcebeingsetat encompassing 34countriesofthecontinent, Hondur concluded anagreementwiththeCA the feasibilityofsuchnegotiationswithMERCOSURandRepublic ofK agreements withChileandSingapore accession negotiations the wideningofUnionto candidate countrieswithwhomithasbeenpursuing CARICOM, contacts aimingatthenegotiationofaMERCOSUR-SADCagreement. Andean CommunityandtheEUcontinuedin2001, United States except Guy 2001, institutional changes tariff ong, T ade negotiations he upw ailable immediatelyonthe r O provisions In 2001, During 2001, Substantial progresshascontinuedtobemadeinenhancingaw T In thewesternhemisphere In Europe A andIsr ador ade he , launched discussionswithCanada inJ China; their R as TPRB isalsoresponsibleforcarryingoutthe Associates ayments Restrictions the , , Guatemala, . Associates and Nicar ana andSuriname(whichareyet to completether Agr while pursuingtheireffortstocompleteasinglemark WT T ard trendcontinues ael, 19 newregionaltr hough lessinvolvedinregionaltr , T , J . the EU A withtheDominicanRepublicprovisionally enteredintoforceinallStates by ChileandMexico apan; the EUandRepublicofK O pressrelease ading environmentwhichhaveanimpactonthemultilater . ade negotiationswiththeCentr launched negotiationswithSingaporeandJ P eements the CommitteecontinuedconsultationswithBangladeshona akistan notifiedtheCommitteethatithadcompletedaheadofscheduleits . , Annual ReportbytheDirector and tow agua) andwithSingapore Macau, , , a-regional level. . al R April. Hondur including theestablishmentofafinancial fr as partofitsenlargementstr T . his commercialarr T he intr T . As A CD-ROMofall T ards negotiationsofR China; he NAFT . as) andwithChile WT , In 2001, , ade agreements(R the goalofaF a-European network ofR the ConcludingRemarksbyChairand O website T , he UnitedStatesfocusedin2001onnegotiatingbilater and Mongoliahadnotnotifiedanyagreementbytheend of theiralreadydensenetworkbilater A entereditslaststageofimplementation. CM andhasbeenholdingR . Mexico concludedR In Centr the trendw T A, . ailable toalldelegationsof s DocumentManagementSystem. angement aimstoensureawideandefficient T . he SummaryObserv and manytotwoormore; TPR reportsarepublishedonbehalfofthe orea. T anuary tow April, al oftheremainingtr r remained inplacewithfirmdeadlinesforthe ree-T ade P ade preference , al-only tr al andLatin , and hasbeenexploringthepossibilityofsuch al signed cross-regionaltr -Gener As forMERCOSUR, T T America F continued negotiationswiththeEFT r As involvingonlytwoparties as clearlytow As) werenotifiedtothe ategy totheeast, ade olicy Reviewsisalsomadeav Annual Overviewofdevelopmentsinthe and therehavebeenpreliminary T Article XVIII:B r ade P al. ade liber ards R Area ofthe T As increasedfurther in2001. T As withtheNorthern America, our (ElSalv olicies ReviewDivisionandin apan, , T Asian countrieshavebeen atification procedures). A negotiations; ations oftheSecretariat alization toinitiate ards increasedcross-regional et andacommonexternal amework, T ade restrictionsit A negotiationswiththe , and hasbeenconsidering Americas (FT areness ofthe pending consider most notablew WT negotiations withthe has beenconsidering only China; T ador ade agreementswith he 15-Member O Membersin TPR Reportsare al tr 13 T orea. WT hird Summitof , to accommodate al R Press briefings Most Guatemala, ading system, O in December . T , Chile AA), T Canada ailable by As increasing riangle (El WT Hong TPRM. , as the both at O ation by A, WT , O al Additional agreements now link some CEFTA countries and Baltic States (such as the Hungary-Estonia RTA, which entered into force in March 2001). The process has also extended to South-Eastern Europe, in particular the countries of the former Yugoslavia, within the framework of the Stability Pact initiative launched in 1999. As part of this process, the former Yugoslav Republic of Macedonia signed agreements with the EU, the EFTA States and Turkey, and Croatia initialled an agreement with EU in May 2001. In the Euro-Mediterranean region, both the EU and EFTA States have continued the negotiation of second-generation bilateral RTAs based on reciprocal exchange of preferences with partners in the Mediterranean and North Africa, with the objective of establishing an “Euro-Med” free-trade area by 2010. The EU signed an agreement with Egypt in June 2001, and concluded RTA negotiations with Algeria in December.14 The EU is also engaged in discussions with GCC countries on the negotiation of a possible RTA.15 In the Middle East, GCC countries have been working towards the establishment of a common external tariff by 2005. They also participate (together with Egypt, Iraq, Jordan, Lebanon, Libya, Morocco, Syria, and Tunisia) in the effort launched by the Arab League to establish an Arab Free Trade Area by 2007. In Central Asia, the regional structures pertaining to the Soviet era have been replaced by RTAs among the countries of the former USSR, as well as with their neighbours. In addition to the CIS free trade agreement and a customs union agreement (between the Kyrgyz Republic, the Russian Federation, Belarus, and Kazakhstan), a large number of bilateral agreements have also been concluded. In 2001, Georgia alone notified to the WTO RTAs with Armenia, Azerbaijan, Kazakhstan, Turkmenistan, Ukraine, and the Russian Federation. In Asia-Pacific, 2001 was a threshold year with respect to RTA activity, both among countries in the region and between them and other parts of the world; some countries clearly shifted their long-standing policy of MFN-only trade liberalization to actively consider the regional option. Japan finalized RTA negotiations with Singapore, launched negotiations with Mexico, and formed a study group to consider the feasibility of an RTA with the Republic of Korea. Likewise, the Republic of Korea started negotiations with Chile and has been exploring the possibility of negotiations with Mexico, while conducting feasibility studies on RTAs with Japan, Thailand and New Zealand. The members of ASEAN moved towards their objective of achieving a free-trade area by 2005; most tariffs will already be cut to 0-5% by 2002. Singapore is forging links with a number of its trading partners: in 2001, it concluded an RTA with New Zealand (in force since January 2001), and it held negotiations on RTAs with Australia, Canada, EFTA States, Japan, Mexico and the United States. Similarly, Thailand, another member of ASEAN, has been exploring prospects for negotiating bilateral RTAs with Australia, Croatia, the Czech Republic and the Republic of Korea. New Zealand has agreed to launch negotiations with Hong Kong, China; New Zealand’s CER partner, Australia, is considering RTA negotiations with the United States. The most notable development in the region, however, has been the agreement between ASEAN members and China, to initiate RTA negotiations. Japan and the Republic of Korea are also exploring the possibility of similar negotiations with ASEAN. In Africa, the regional integration process gained depth. In western Africa, countries are working at the completion of the WAEMU and the CEMAC; also, certain members of the eements ECOWAS agreed to establish a common external tariff by the end of 2001, but progress has Agr been uneven.16 COMESA members advanced further in the creation of a free-trade area ade r

grouping 20 countries in eastern and southern Africa; some of the countries were able to T enforce it in 2001. Also, despite difficulties mainly due to overlapping membership with other RTAs, the parties to SADC have been working towards their objective of establishing a free-trade area by 2004. Continent-wide integration initiatives remain in place with the African Economic Community (AEC)17, aiming towards the setting up of an African Economic and Monetary Union by 2028. South Africa, has been active at the cross-regional level, in

addition to its efforts towards Southern Africa economic integration, with the conclusion of O activities 14

A similar process, based on the negotiation WT Committee on Regional of reciprocal economic partnership agreements, an RTA with the EU, and by exploring the possibility of establishing an RTA with the United is envisaged for ACP countries, to replace the States. At the same time, the African Heads of State, meeting at the Extraordinary OAU existing ACP-EU Cotonou Agreement. Summit in March, declared the establishment of the African Union, with the ultimate goal of 15 The EU and the EFTA States were also actively engaged in 2001 in the negotiation of completing the economic integration of Africa. agreements with various countries in the western hemisphere. The WTO-RTAs relationship: to be reviewed 16 The countries concerned are Benin, Burkina Faso, Ghana, Mali, Niger, Nigeria, and Togo. 17 SADC, COMESA, ECOWAS, CEEAC and the Developments in 2001 showed that the trend towards the negotiation of RTAs by WTO Arab Maghreb Union, have been designated as Members, which took off in the 1990s, is enduring. Prospects for the near future signal a pillars of the AEC. further broadening of the scope of RTAs, with the inclusion of trade policy mechanisms in 18 RTAs are increasingly concluded among 18 geographically non-contiguous countries. The addition to tariff preferences. Their geographical reach is also expanding. Against this trend, term “regional” may soon become an the global trading system looks more and more multi-tiered, with a variety of less than incongruity to describe the plethora of cross- regional preferential agreements linking global trade initiatives engaged in preferential trade liberalization and policy negotiations, in countries around the globe. parallel to the efforts pursued within the MFN framework.

113 114 WTO activities Committee on Trade and Development when overlappinggridsofR more frequent. severe implementationproblems gridlock”, policies procedures governingcountries’tr consistent setofmultilater complicate futureeffortstodevelopa as abarriertotr procedures adoptedbyR Furthermore just aslik tr to therule cover finalization. in v 82 R “F examination”), 17 R 23 XI. 22 21 20 19 countries (tr preferential arr (Enabling Clause)governstheconclusionof Differential andMoreF multilater agreements andregionalinitiativesforthe (b) toconsidertheimplicationsofsuch fr particular (a)tooversee between them. amework, ade liber As ofDecember2001, WT/COMTD/32 and In addition, T T actual examination” he CR he 1979DecisionoftheGA arious stagesofconsultationand T T age inR As As underactiveconsider . , Committee on T T whose dr ely toresistitattheregionallevel. al tr he resultcouldbe A w alization atthemultilater , distortion ofregionalmark as thedomesticforcesthatresist ade ingoodsonly). all regionaltr , inconsistencies intherulesand T ading systemandtherelationship as establishedin1996, a broadduty-freeproduct As istheexceptionasopposed angements amongdeveloping and 23inthew ade aft examinationreportswere , but couldalsogreatly WT/COMTD/M/35. avour had beencompletedfor , T under asingle the Committeehad ade agreements As maynotonlyact al rulesand “regulatory T able As arebecoming ation (“factual TT Councilon aiting list. , T especially ade-related reatment al levelare ets and in T r , ade andDevelopment and minutes ofthesemeetingsarecontainedindocuments Doha, harmonious relationshipbetweenthemultilater liber standing controversiesabouttheinterpretationof CR inherited fromtheGA initiatives cancontributetothedevelopmentofmultilater managing theirtr annexed totheminutesofthosemeetings reported ontheseseminarstothe subsequentmeetingsoftheCTDandthesereportsare CTD onthesubjectsof informal meetingswereorganizedaswell. November2000), 8 of thedevelopmentalaspectstheseagreements and proceduresundertheexisting Ministers agreedtolaunchnegotiationsaimedatclarifyingandimprovingthedisciplines coming years Ransford Smith(J (b) commitmenttodeepintr parties’ tr these provisionsisentrustedtotheCommitteeonRegional (e are assessed, Body 100 R second-best optiontoMFNtr regulate onsuchissuesthroughR managed amongstalimitedcircleof on competitionpolicy economic relations(notablyservices T Development; Enabling Clause; are deemedtoacceler some ofthoseargumentsadv Annual ReportoftheJoint developed countries; technology technical cooper 2001 includedspecialanddifferentialtreatmentinfavourofdevelopingcountries; GA the start, “Government F (UNCT Committee in2001. elected ChairpersonoftheCTD WT GA the areaoftr And, tr inadequate tosteerR risk ofincoherenttr provisions isconsistentlyputintoquestion. here isalsoagener ade initiativeswiththebasicmessageofdeeperliber .g., T TT/WT TT O rulesandthosecontainedinsomeR Against thisbackground, T T T T T A consistencyjudgementandthedisputesettlementprocess alization andinfosteringeconomicdevelopment, he CTDheldfiveformalsessionsduringtheperiod, he GA he regionaloptionhasbecomeanattr his situationhashighlightedsever opics dealtwithintheCommitteeon , lastly on preferentialrulesoforigin), T Article XXIV however AD/WT while recognizingthatR As notifiedtothe O byconcludingR ade Members havebeenallowedtofurtherthemark , TT founders , detailed tr . . ade inservices O). and institutionalproblemsarisingfromeithertheabsenceof ade anddevelopment; T , and the acilitation ofE-commerceforDevelopment” he taskofverifyingthecomplianceR has enjoyednosuccesssofarinassessingtheconsistencyofmorethan ation andtr ade policiesalongsidemultilater amaica), , prepar for agreementsintr ade policyregulationsbeingimplementedthroughthesespecialregimes WT 16 F al feelingthatcomplexpolicyissuesofcommercialsignificancein , T TT years the Gener ate anddeepentr , As concludedbyMembersand, technical standardsandgovernmentprocurement)canbetterbe W O rulesandproceduresapplicabletoR “T and nowthe ations fortheInternationalConferenceonFinancing ebruary 2001, WT ork Progr echnology and atthatSession, T . Advisory GroupontheInternational O a-region tr 20 As WT aining; ade liber anced infavourofR , . T 22 T , One problemderivesfromthepossiblelinksbetweenany . he criteriaarefundamentallythree: As canplayanimportantroleinpromotingtr alized SystemofPreferences(GSP); O Members albeit subjecttoacertainnumberofcriteriacontainedin Ambassador Irumbachairedthesubsequent sessionsofthe due tov T WT amme oftheCommittee As , , the developmentdimensionofelectroniccommerce; WT T or fromtroublesomediscrepanciesbetweenexisting investment, “friends”. , notifications regardingmark r O provisionsapplyingtoR alization. al areasrequiringaction. ade andDevelopment” even ifitisgener ade ingoods ade liber 9 O ade liber arious politicalandlegaldifficulties April 2001, , T 23 acknowledged thatwell-structuredregional active toolforvirtuallyall T As T , T . wo seminarswereheldundertheauspicesof r he risingnumberofR meeting attheF T ade andDevelopment(CTD)inthecourseof . he 32 Ambassador NathanIrumba(Uganda) w 19 alization, al andregionalprocesses T alization onabilater hese motiv intellectual propertyprotection, al tr T . As , nd and inGA 22 May2001and8October2001. . ade negotiations Session w also stressedtheneedfora WT T a fortiori a alization underlyingtherelev hus WT/COMTD/M/31-35. ally recognizedthatR on 27October2000(continued and (c)neutr O provisionsagainstwhichR et accesstheyhaveboundinthe T , ations actasanincentiveto . As notifiedbyMemberswith (14 June2001). T for instance T r ourth MinisterialConferencein al tr ade he CTDalsotooknoteofthe T (14 F TS As areoftenconsidered , as chairedby T T . those announcedforthe he conformityofregional As T Also ading system. Article Agreement (CR T r et accessforleast- ade Centre(ITC) (a) tr As isalsoincreasingthe ebruary 2001)and , notifications underthe WT by takingdueaccount al orplurilater , ality , there arelong- seemingly confirming , O Membersfor ansparency V . such agreements , On thisbasis vis-à-vis WT for agreementin , T most ofwhich Ambassador ade he Chairman T A numberof O rules As area T hus T cooper A). , al basis non- ant , 21 from T , T As WT as his ation T he O . . The CTD continued its review of the application of the special provisions for differential and more favourable treatment of developing countries in the WTO Agreements. For the 34th Session, the Secretariat had prepared document WT/COMTD/W/85, which aimed to reflect the state of discussions on special and differential treatment according to written proposals made and discussions held in various other WTO bodies. The Chairman of the General Council, in a letter dated 2 August 2001, requested the CTD “to review all special and differential treatment provisions in the WTO Agreements and report to the General Council by 30 September 2001 on how they could be operationalized and further enhanced”. The Chairman of the CTD held informal consultations in response to that request, and to assist delegations, the Secretariat updated an earlier document. This document (WT/COMTD/W/77/Rev. 1) was given a first formal discussion at the 35th Session. However, the Committee could not reach full agreement by the 30 September 2001 deadline and the Chairman reported on the work carried out in document WT/GC/52. After the Doha Ministerial Conference, the CTD agreed to a process for the work it had been mandated to carry out, which is contained in WT/COMTD/36. A draft Secretariat paper entitled “A Strategy for Technical Assistance in the WTO” was transformed into a working document for the 32nd Session (WT/COMTD/W/78). The Committee noted document WT/COMTD/W/78/Rev.1,which had been revised following oral and written comments. At its 34th Session the Committee took note of a follow-up report24 to the Three-Year Plan (2001-2003) for Technical Cooperation. At that Session, the Committee also took note of a report on training which contained the results of a review of the objectives for the trade policy courses in order to ensure that such objectives could be effectively measured25 and a Secretariat note on Trade Policy Courses in 200026. Following a reorganization of the Technical Cooperation Division and the creation of the Training Institute, a new Strategy for WTO Technical Cooperation27, a Coordinated WTO Plan for Technical Assistance Activities28 and a note on Future Activities of the WTO Training Institute29 were discussed at the 35th Session. As requested by Members, a seminar on “Government Facilitation of E-commerce for Development” was held under the auspices of the CTD on 14 June 2001. The seminar comprised four sessions on regulation and deregulation, promotion of modern information and communication technologies, education and information, and government coordination. The presentations and the questions focused on ways in which governments (and international organizations) could facilitate e-commerce, how these in turn impact on development and the preconditions for success. The Chairman presented a report on the seminar, on his own responsibility, to the 35th Session of the CTD. The proceedings of the seminar fed into the Committee’s consideration of the issue of electronic commerce, as part of the overall WTO Work Programme. At the 34th Session, Members were asked what type of work they wished the CTD to carry out on electronic commerce as compared to the topics they preferred to treat in the context of the General Council. A programme of work on e- commerce in the CTD was agreed to at the 35th Session of the Committee (WT/COMTD/35). At the 36th Session there were two presentations, one country experience presented by a representative of Panama and a presentation by a representative of the UNCTAD “E-commerce and Development Report 2001”. The delegation of Cuba presented a communication entitled “Need for Unrestricted Global Electronic Commerce”30 to the 34th Session of the CTD. The Committee took note of that communication. Following a suggestion by the delegation of Zambia31 for the CTD to carry out work on technology-related issues, a seminar on “Technology, Trade and Development” was held

under the auspices of the CTD on 14 February 2001. It was addressed by speakers from ade and Development r Geneva-based delegations, capitals, universities, other intergovernmental organizations T and the WTO Secretariat. The participants recognized the high quality of the interventions and of the debate. It was widely recognized that technology is a key driver in the trade

and development process, and that in the last two decades, the highest growth rates have O activities

been recorded in industries, goods and services exhibiting high technology content. WT Committee on However, there were great disparities in the degree to which developing countries have been able to benefit from technologies. Foreign investment could help transfer technology to developing countries, but developing countries have also benefitted to varying extents from foreign investment. The upgrading of domestic technological capabilities also required governments to create a suitable environment and adopt appropriate policies. 24 WT/COMTD/W/84. Issues with regard to the opportunities and challenges of the WTO Agreements in that 25 WT/COMTD/W/86. respect were also raised. The Chairman of the CTD reported, on his own responsibility, to 26 WT/COMTD/W/82. nd 27 WT/COMTD/W/90. the 32 Session of the CTD. 28 WT/COMTD/W/90/Add. 1. Notifications of market access for least-developed countries are currently made following 29 WT/COMTD/W/89 and Corr.1. two different procedures. Measures taken under the Generalized System of Preferences (GSP) 30 WT/COMTD/W/87. are sent to the CTD under the provisions of the Enabling Clause, while measures taken 32 31 WT/COMTD/W/67. under the 1999 waiver are notified to the Council for Trade in Goods (CTG). The Chairmen 32 WT/L/304 of 15 June 1999. of the CTD and the CTG held consultations on how to unify the consideration of market

115 116 WTO activities Committee on Trade and Development 39 38 37 36 35 34 33 for afullreportofthe meetings See documents WT/COMTD/N/15. WT/COMTD/M/32. TCMDN4Ad 2. WT/COMTD/N/4/Add. 3. WT/COMTD/N/1/Add. 2. WT/COMTD/N/6/Add. G/C/M/47. WT/COMTD/LDC/M/23 to26 . the courseof2002. Conference andthatadditionalseminarsondevelopmenttopicscouldbeconsideredduring may resultfromtheworkprogr Countries werestillpending. Organisation InternationaledelaF work onthesubject; the 35 Progr Commodities number ofintergovernmentalorganizations regarding themembershipofCameroon, Equatorial GuineaandChadintheEconomicMonetaryCommunityofCentr 35 (CEMA Sub-Committee onLDCsforsubstantialexaminationandreportingback. But the CTDhadbeforeitanotificationbyEuropeanCommunitiesregardingits which hadenteredintoforceon1September2000, CTD agreed, access announcementsinfavourofLDCsoneforum. Sub-Committee onLeast-DevelopedCountries WT/COMTD/29and (Documents “Proposed ReformofitsGSPSchemeinF to acorrespondingprocedure prepar F preferences formorethan1,800productlines related toalldesignated with respecttotheGSPsection. United Statesinformedthe32 34 Committee bytheDirectorofDevelopmentDivision. WT/COMTD/30 w considered werenotsatisfactorilyreflectedintheagreeddocument. the Committee Committee fortheInternationalConferenceonFinancingDevelopmentandMembersof 2). African EconomicUnion(WT/COMTD/N/11/Add. P International ConferenceonFinancingforDevelopment. CTD w countries andthebenefitsdr to thefunctioningofGSP meeting oftheyearand Committee wereheldin2001, particular importancetotheleast-developedcountries(LDCs). on T Development; Level MeetingonIntegr T delegation ofCanadahadnotifiedamodificationitsGSPschemeinfavourLDCs Gener (WT/COMTD/W/93) tothe35 made anotificationonitsentireGSPschemeascurrentlyapplied W/OTN2Ad 10)w (WT/COMT/N/2/Add. Bureau tothePrepar Countries (LDC-III); T r or its32 echnical Cooper he principalthemesaddressedby the Sub-Committeeincluded: ermanent MissionofSwedentotheUNinNew ade P th th T On theissueofobservership T At its32 At therequestofsomeMembersSecretariatpresentedastudyentitled At the32 An informalmeetingw Arms” r he Sub-CommitteeonLeast-DevelopedCountriesisasubsidiarybody totheCommittee Session atwhichtimedelegationswerealsogiventheopportunitytoexpressviewsthey Session theCTDhadbeforeitanotificationregardingaspectsof ade andDevelopmentwiththemandateofgivingspecialattention toissuesof amme alized SystemofPreferences: ations fortheConference th as informedbytheSecretariat, C) (WT/COMTD/N/13)andthecorrespondingtreaty(WT/COMTD/24). olicy ReviewsofLDCs; and 36 nd Session, initiative infavourofLDCs , nd on theunderstandingthatitw nd , ad referendum ad Session, the GulfOrganizationforIndustrialConsulting, mark . Session theCommitteeheardaformalpresentationofnotification th T he ation forLDCs Sessions as presentedtothe3and4May2001meetingofPrepar et accessforproductsoriginating in LDCs; LDCs’ Prepar the CTDhadalsoreceivedacommunicationfromJ WT atory Committee and inthemeantimecontinuedtogr the CTDhadbeforeittwonotificationsregardingGSP O Membershipcontributionwhichiscontainedindocument ated InitiativesforLeast-Developed Countries’(LDCs) Ambassador SimonFuller(United Kingdom) chairingtheremainder African countriesunderthe . as heldon9 as beforethe34 , awn bydevelopingcountries to refernotificationsofmark , . th 34 the including thepreferencesprovidedbymajordeveloped nd . Session. amme tobeestablishedfollowingtheF with , . 39 Session thatherdelegationhadnotifiedadditionalGSP ations fortheF T WT/LDC/SWG/IF/12). the CTDaw At the36 he USnotification T r hird UnitedNationsConferenceon Least-Developed A Preliminary ancophonie andtheOrganizationofP Ambassador BenediktJónsson(Iceland)chairingthefirst , 38 of developmentsintheprepar attended the36 . April 2001betweentheBureauofPrepar T he aimofthestudyw the Centr avour ofLeast-DevelopedCountries” th . as withoutprejudicetoanyadditionalworkthat th Session, Requests fromtheCommonFundfor aited thecompletionofGener Session oftheCommittee ourth Analysis oftheGSPschemesinQuad” Y Africa, ork, al 37 African GrowthandOpportunity and thedelegationofNorw the Committeeadoptedits2002 African Republic, w WT T th and oneoftheCo-Chairs he actualnotification as tak F Session oftheCTDanddiscussed He reportedtotheCommitteeatits O MinisterialConference; ollowing thoseconsultationsthe Ruth J . including anumberofLDCs et accessmeasuresforLDCstothe ant ad-hocobserverstatustoa T his documentw en noteofatthe34 the Leagueof LDCs’ F as toprovideanintroduction acoby our meetingsoftheSub- the follow-uptoHigh- 36 . T atory processfortheUN Accession tothe At its35 , he representativeofthe Ambassador atthe the Congo apan concerninga ourth Ministerial . At the35 33 etroleum Exporting T reaty ofthe T as discussedat he CTGagreed Ar At its th T al Council’ ab States r “T Session, atory ade . “Everything ay had al , he T th th Gabon, he and Africa Session. Session atory . WT Act 35 W It W WT the , ork O; est s the O . Follow-up to the High-Level Meeting on Integrated Initiatives for Least-Developed Countries’ Trade Development The Sub-Committee continued its work on this standing Agenda Item, with focus on the Integrated Framework for trade-related technical assistance to LDCs (IF), and in particular, the review of the IF. With the adoption of the proposal for an IF Pilot Scheme40, new arrangements for strengthening the IF were agreed to. As part of the new arrangements, the Sub-Committee noted the reports by the Chairman of the IF Steering Committee (IFSC) on its meetings held on 15 March 2001, 3 May 2001 and 12 October 2001. The Sub-Committee was briefed by the Secretariat on the implementation of the IF Pilot Scheme and the meetings of the Inter-Agency Working Group (IAWG). The Secretariat also reported on the Joint IF Seminar held at the WTO, on 29-30 January 2001, on the “Policy Relevance of Mainstreaming Trade into Country Development Strategies: Perspectives of LDCs”. The Sub- Committee noted the Report by the Director-General for the Fourth WTO Ministerial Conference on the Follow-up to the High-Level Meeting.41

Market Access The Sub-Committee considered and presented as part of its contribution to the Third United Nations Conference for LDCs, a survey of the current market access opportunities for LDCs.42 Significant improvements in market access for LDCs were notified to the WTO and discussed in the Sub-Committee. For periodic monitoring, the Sub-Committee noted the importance of notifications of existing measures or improvements in market access for LDCs.

LDCs’ Accession to the WTO The Sub-Committee considered a Status Report on LDCs’ Accession to the WTO. In light of the comments received from Members, the paper was revised and submitted to the Third United Nations Conference for LDCs, as part of the WTO Sub-Committee’s contribution to the Conference.43

Trade Policy Reviews of LDCs The Sub-Committee was briefed by the Secretariat on the focussed attention and new approach in operation for preparing the Trade Policy Reviews (TPRs) of LDCs. Members welcomed the new approach to prepare TPRs for LDCs.44

The Third United Nations Conference on Least–Developed Countries (LDC-III) The Sub-Committee agreed to contributions submitted to the LDC-III Conference in six areas: (i) a Report by the Director-General on the implementation of the IF (WT/LDC/SWG/IF/17/Rev. 1); (ii) a Report on mainstreaming (WT/LDC/SWG/IF/15/Rev. 1); (iii) a survey of market access opportunities for LDCs (WT/LDC/SWG/IF/14/Rev. 1 and Add. 1); (iv) a status report on LDCs’ accession to the WTO (WT/LDC/SWG/IF/11/Rev. 2); (v) a Report by the Director-General on the institutional integration of LDCs into the multilateral trading system (WT/LDC/SWG/IF/16/Rev. 1); and, (vi) Food Safety and Quality, Standards and Technical Regulations (WT/LDC/SWG/IF/10). The Sub-Committee invited UNCTAD, the Executive Secretary of the Conference, to provide a briefing on the results45 of the LDC-III Conference. The Sub-Committee also considered follow-up to WTO contributions at the Conference. The Sub-Committee agreed to continue discussions on follow-up work incorporating the results of the Trade commitments

at LDC-III, in a manner consistent with the mandate of the WTO. ade and Development r T LDCs Preparations for the Fourth WTO Ministerial Conference The Sub-Committee was briefed by LDC Members on the results and outcome of the

meeting of LDC Ministers held in Zanzibar, Tanzania, on 24 July 2001. The Secretariat also O activities

briefed Members on the arrangements and support provided to LDCs to facilitate their WT Committee on 40 WT/LDC/SWG/IF/13 adopted. at the 23rd participation at the Fourth WTO Ministerial Conference, in Doha.46 Session of the Sub-Committee. 41 WT/COMTD/LDC/W/22. WTO Technical Cooperation for LDCs 42 WT/LDC/SWG/IF/14/Rev. 1 and Add. 1. The Sub-Committee was briefed by the Secretariat on the Reorganization of WTO 43 WT/LDC/SWG/IF/11/Rev.2. 44 Technical Assistance. Members were also informed of the Joint WIPO-WTO Technical WT/COMTD/LDC/M/23 and 47 WT/COMTD/LDC/M/24. Cooperation Agreement for LDCs. Participants of the Fourth Short Trade Policy 45 WT/COMTD/LDC/9 and WT/LDC/COMTD/10. Course for LDCs, participated at the 25th Session of the Sub-Committee. Members 46 WT/COMTD/LDC/M/26. welcomed their participation and made specific proposals for the future programming of 47 WT/COMTD/LDC/M/25. these courses.

117 118 WTO activities Committee on Trade and Environment XII. Committee on T r ade andEnvir labelling andrecycling; tr Environment; Intellectual PropertyRights; of the relations withintergovernmentalandnon-governmentalorganizationsreferredtoin environment andtr approach” purposes relatingtoproducts (a) chargesandtaxesforenvironmentalpurposes; tr environmental measureswithsignificanttr environmental agreements; benefits ofremovingtr developing countries measures andrequirementswhichhavesignificanttr tr Y tr supportive multilater appropriate recommendationsonwhetheranymodificationsoftheprovisions environmental measuresinordertopromotesustainabledevelopment”; has atwo-foldmandate: out intheMarr discussed thoseitemsoftheworkprogr intellectual propertyrights discriminatory natureofthesystem”. (items 2, related tothemultilater enhance themutualsupportiveness oftr Qatar inNovember2001, the MEA InformationSessionstoincreasingmutualunderstandingofthe relationshipbetween 8. settlement provisionsinMEAsandthe Environmental (i) therelationshipbetweenexisting progr 12-13 Juneand9-10October)tocontinuedeepenitsanalysisof allitemsonitswork future workprogr (WT/CTE/6) and, 9 and10, links betweenthe MEAs stating thatthesenegotiationsshall belimitedtotheapplicabilityof an MEA; olande BikéofGabon, ading systemandthosefoundinmultilater ading system; ansparency oftr ade measuresforenvironmentalpurposes On 27June - - T - - - In 2001theCTEcontinueditsanalysisofallaboveitemsbasedona - - - - - With theaimofmakinginternationaltr T T At theOctobermeetingCTEadopteditsannualreporttoGener WT he he CTEheldthreemeetingsin2001. he DohaMinisterialDeclar amme basedonthethematicclusters Item 6: Item 4: Item 5: Item 10: Item 9: Item 3: Item 2: Item 7: Item 8: Item 1: . WT T O andMEAs WT hese Sessionsalsoprovideanexcellentopportunitytoforgepr (ii) proceduresfor regularinformationexchangebetween MEASecretariatsandthe 3, al tr O , as wellboththematicclusters O Committeeon . under thethemesofmark the CTE’ 4 and6). the effectofenvironmentalmeasuresonmark the provisionsofmultilater the relationshipbetweendisputesettlementmechanismsinmultilater the workprogr the relationshipbetweenprovisionsofmultilater the relationshipbetweenenvironmentalpoliciesrelev the issueofexportsdomesticallyprohibitedgoods; the relev the relationshipbetweenprovisionsofmultilater ading systemarerequired, onment , input totherelev Agreements (MEAs)toenhanceunderstandingofthecomplianceand dispute ak the CTEheldanInformationSessionwithSecretariatsofMultilater pending theoutcomeofF esh MinisterialDecisionon ade measuresusedforenvironmentalpurposesand amme ofthe WT ade agendas , s workprogr , particularly throughidentifyingsynergiesbetweenthe O T ant provisionsofthe in particulartotheleastdevelopedamongthem, he focusofthemeetingheldon27-28Junew ade restrictionsanddistortions; , al environmentalandtr followed bytheChairof UNEP andMEASecretariats “to identifytherelationshipbetweentr . launches newnegotiationsontr T amme envisagedintheDecisionon r , ade andEnvironment’ including standardsandtechnicalregulations ation, WT ant bodiesinrespectofappropriatearr . amme w Discussions tookplaceunderthechairof O , WT agreed toholdthreemeetingsin2002(21-22March, et accessandthelinkagesbetweenmultilater adopted attheF T his broad-basedmandatecoversgoods O rulesandspecifictr WT amme relev ade andenvironment, compatible withtheopen, as initiallysetoutinthefollowingtenitems: At ameetingheldon13-14F O ade effectsandtheprovisionsofmultilater ade andenvironmentalpoliciesmutually . Agreement on . , al tr . al environmentalagreements; including thosepursuanttomultilater T Members notedtheimportantcontributionof r ade andEnvironmentof ourth ade agendas ading systemwithrespecttothe Ambassador and (b)requirementsforenvironmental s mandateandtermsofreferenceareset ant tothethemeofmark . WT ade effects; T ourth he 4Octobermeetingaddresseditems O MinisterialConferenceandthe T ade andenvironment. r et access ade-Related WT , ade obligationssetoutinMEAs including items1&5, Alejandro J O MinisterialConferencein it callsfornegotiationson T ade measuresand r ade inServicesandthe ant totr equitable andnon- , WT as onthoseitems al tr al tr especially inrelationto actical institutional angements for April 1994. ebruary and environmental Aspects of O rulestoparties and ar ofChile ading systemand: ading systemand ade and Ambassador al Council WT , et access packaging, “to mak , O , services “cluster , Members UNEP and In orderto al T . 7 and he CTE Article e al , al and al al V , relevant WTO committees, and the criteria for granting observer status; and (iii) the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services. The focus of the negotiations, therefore, is on achieving greater policy coherence between WTO rules and MEAs, and on liberalizing trade in environmental goods and services. Addressed in a separate part of the Doha Ministerial Declaration is also the issue of fisheries subsidies. The Declaration calls on members “to clarify and improve WTO disciplines on fisheries subsidies.” With respect to the regular work of the CTE, the Ministers instruct the Committee, in pursuing work on all items on its agenda within its current terms of reference, to give particular attention to the following issues: (i) the effects of environmental measures on market access, especially in relation to developing countries, in particular the LDCs, and those situations where the elimination or reduction of trade restrictions and distortions would benefit trade, the environment and development; (ii) the relevant provisions of the agreement on TRIPS; and (iii) labelling requirements for environmental purposes. Work on these issues should include the identification of any need to clarify relevant WTO rules. The Committee shall report to the Fifth Session of the Ministerial Conference, and make recommendations, where appropriate, with respect to future action, including the desirability of negotiations. The outcome of this work as well as the negotiations carried out under paragraph 31(i) and (ii) of the shall be compatible with the open and non-discriminatory nature of the multilateral trading system, shall not add to or diminish the rights and obligations of Members under existing WTO agreements, in particular the Agreement on the Application of Sanitary and Phytosanitary Measures, nor alter the balance of these rights and obligations, and will take into account the needs of developing and least- developed countries. In the Doha Declaration, Ministers recognize the importance of technical assistance and capacity-building in the field of trade and the environment to developing countries, in particular the LDCs, and encourage the sharing of expertise and experience with Members wishing to perform national environmental reviews. A report is to be prepared on these activities for the Fifth Session. Ministers also set out that the Committee on Trade and Development and the Committee on Trade and Environment shall, within their respective mandates, each act as a forum to identify and debate developmental and environmental aspects of the negotiations, in order to help achieve the objective of having sustainable development appropriately reflected. Also in 2001, as part of continued technical assistance in the trade and environment area, the Secretariat organized a regional seminar on trade and environment for government officials from developing and least-developed countries in Thailand in March 2001. The objective of regional seminars is to raise awareness on the linkages between trade, environment and sustainable development and to enhance the dialogue between policy- makers from Ministries of both trade and environment in developing and least-developed WTO Member governments. More detailed information on CTE meetings is contained in the WTO Trade and Environment Bulletin. The list of documents circulated in the CTE since 1995 is contained in WT/CTE/INF/4. Reports of the CTE and the Trade and Environment Bulletins are available from the WTO Secretariat and can be accessed through the trade and environment pages of the WTO website at: http:\\www.wto.org. eements Agr

XIII. Plurilateral Agreements al

Agreement on Government Procurement O activities WT Plurilater The following WTO Members are Parties to the plurilateral Agreement on Government Procurement of 1994: Canada; the European Community and its 15 member States; Hong Kong, China; Iceland; Israel; Japan; the Republic of Korea; Liechtenstein; the Kingdom of the Netherlands with respect to Aruba; Norway; Singapore; Switzerland; and the United States. Twenty-one WTO Members have observer status: Albania, Argentina, Australia, Bulgaria, Chile, China, Cameroon, Colombia, Croatia, the Czech Republic, Estonia, Georgia, Jordan, the Kyrgyz Republic, Latvia, Lithuania, Moldova, Mongolia, Oman, Panama, Poland, the Slovak Republic, Slovenia, Chinese Taipei and Turkey. Three intergovernmental organizations, the IMF, the ITC and the OECD, also have observer status. Albania, Bulgaria, Estonia, Jordan, the Kyrgyz Republic, Latvia, Moldova, Panama, Chinese Taipei and Slovenia are currently negotiating their accession to the Agreement. The Committee completed, in 2001, the reviews of national implementing legislation of Israel and Liechtenstein.

119 120 WTO activities Plurilateral Agreements Romania; the Committeeare: the and K elements: status ofimplementationICA decision toextendthedateofacceptance authority totheCommitteedecideondateforacceptance revert tothismatter Kingdom; inconsistent withitsprovisions requiring orencour participation in, basis ofcommercialandtechnicalfactorsonly provides thatpurchasersofcivilaircr end-use customsadministr Czech Republic; membership ofthe to the note reflectingthenumerousdr procurement. adaptation toadv provided forunder aircr support forlargecivilaircr aircr and 10); language inproposedlegislationestablishingaEuropean regulations ontheoper of UnitedStatescivilaircr including theproposalbyoneSignatoryconcerningdefinitionof had notyetbeenacceptedbyallSignatories Agreement on Civil again revertedtothestatusof remained unabletoadopttheDr treatment toaircr Greece; remains outsidethe exerting pressureon, products andrepairs not P as welltheIMFandUNCT Chinese Committee adopted, invited toparticipateinthework. Appendices tothe reporting, to the Agreement on Trade in Civil Aircraft Civil in Trade on Agreement the to orea; In 2001, T T Since F During theregularmeetingsofCommitteeon As of1F Other mattersconsideredbytheCommitteeduringperiodhavebeen: Agreement; aft basedoninitialcertification; aft industrysupportsthroughexchanger T he his Aircr arties tothe obago; Articles ofthe Mauritius; Agreement eliminatesallcustomsdutiesandotherchargesonimportsofcivilaircr Agreement enteredintoforceon1J Ireland; T European governmentsupportforthedevelopmentoflargecivilaircr aft thatw aipei; wteln n h ntdStates Switzerland andtheUnited Egypt; ebruary 1997, simplification andimprovementofthe the notificationofthresholdfiguresinnationalcurrenciesandmodificationsto ebruary 2002, the Committeealsodiscussed, T unisia and P arties pursuedactivelytheirconsultationsin2001onthebasisofaninformal the EuropeanCommunities; and eliminationofdiscriminatorymeasurespr Italy; or supportfor Finland; Estonia; aft groundmaintenancesimulators Nigeria; ances intheareaofinformationtechnology; Agreement, Agreement. aging sub-nationalentitiesornon-governmentalbodiestotak Article XXIV as proposedbytheChairpersonin Agreement bymakingitmoreaccessibletonon-P . Argentina; WT , Agreement. T ihefc rm6June2001, with effectfrom6 purchasers toprocurecivilaircr binds thematzerolevel, Luxembourg; r ation ofstage3-compliantaircr ade inCivil O fr T the Committeehasbeencarryingoutworkrelatingtonegotiations Gabon; Georgia; aft; urk Oman; aft industry ation. there were30Signatoriestothe amework. ey AD matters relatingto , and otherobservergovernmentsto . Austr . :7 ofthe civil aircr aft textsproposedbyv Although the T O stage4aircr . Ghana; T aft Protocol(1999)Rectifyingthe he RussianF An objectiveofthenegotiationsisexpansion P he oland; J Agreement inthe the Netherlands; apan; alia; aft productsshouldbefreetoselectsuppliersonthe statistical reportingoftr Agreement prohibitsSignatoriesfromrequiring, . aft progr Aircr Agreement covering, Hungary; Bangladesh; Singapore; Latvia; inter alia inter and adecisiononinterimapplicationofduty-free Austria; . anuary 1980. , ate mechanisms; T Agreement ispartofthe eder and thatthetermsofProtocolgive . hose aft aft noisestandardsasitaffectscurrent and requirestheadoptionoradaptationof T he ammes Article 3ofthe Agreement, Lithuania; Protocol (2001) Protocol ation andSaudi India; Agreement regulatesSignatories’ WT the Belgium; , . P the Slov aft fromaparticularsource WT “end-use” T Considering thatthe Br ortugal; April 1999. r arious P O Memberswithobserverstatusin aft, ade inCivil Protocol (2001) Amending the Annex the Amending (2001) Protocol , azil; O fr Indonesia; and prohibitsSignatoriesfrom Aviation Safety and themeaningofcertain Macau, amework, Agreement: Cameroon; ak Republic; ade data; including, Denmark; in particular Spain; and UnitedStatesgovernment arties relatingtomodifications expansion ofthecover Agreement, customs administr , indefinitely Agreement havebeen T Signatories adopteda Ar actices whichdistortopen Agreement on Aircr he Committeewillagain China; Isr abia arealsoobservers “civil” Sweden; arties ael; but Signatories WT certification inEurope where appropriate aft in2001, F China; Bulgaria; r , ance; Sri Lanka; Agency (Articles9 O the Republicof Malta; the following . Protocol (2001) Protocol WT vs Agreement, . in particular T statistical . the United aft; he Committee “military” O Members Colombia; Germany; , and e actions Norw T Canada; Belgian r ation, ade in T the rinidad or age of ay; it , the , the aft , , PART II

I. Technical cooperation

The year 2001 was a transition year in WTO technical assistance (TA). First in February 2001, the Director-General established a Technical Cooperation Audit Unit. This Unit is responsible for on-going monitoring and evaluation of all technical assistance provided by the WTO. Through this function, the Secretariat will ensure that the financial and human resources invested in WTO-administered technical assistance programmes are optimally utilized. Second, in June 2001, certain changes were made in the organization of the Secretariat in order to improve efficiency, including the merger under new management of the Technical Cooperation Division and the Secretariat Working Group for Least-Developed Countries and the Integrated Framework. In addition, a Technical Assistance Management Committee (TAMC) was established under the chairmanship of the Deputy Director-General in charge of technical assistance to review issues of general interest relating to trade-related technical assistance. These changes underpinned the fact that the delivery of technical assistance activities is a Secretariat-wide function, not solely limited to the Technical Cooperation Division (TCD). Third, in October 2001, a New Strategy for WTO Technical Cooperation: Technical Cooperation for Capacity Building, Growth and Integration (WT/COMTD/W/90) was submitted to the Committee on Trade and Development and subsequently endorsed by Ministers in para. 38 of the Doha Declaration. This New Strategy will be articulated in Annual Plans organized in six sections. Since the experience with the previous three-year plans was one of uneven implementation, due to increasing numbers of requests off-plan coming in during the year, it was decided to operate on a 12-month calendar basis and with ad hoc requests kept to a minimum. Fourth, the Doha Ministerial Declaration, adopted on 14 November 2001, confirmed that technical cooperation and capacity-building are core elements of the development dimension of the multilateral trading system. Ministers established an extensive mandate and undertook a firm set of commitments on technical cooperation and capacity building to enable beneficiary countries to implement WTO rules and obligations, prepare them for effective participation in the work of the WTO, including for future negotiations and an extensive Work Programme, as well as enable them to draw on the benefits of the open, rules-based multilateral trading system. Broadly, the guiding policy frameworks for technical cooperation and capacity building stemming from the Doha mandates, fall under eight areas. These are: - Mainstreaming and Integrated Framework. Paragraph 38 of the Doha Ministerial Declaration instructs the Secretariat to conduct technical assistance activities, in coordination with other relevant agencies, in support of domestic efforts in developing countries and least-developed countries to formulate trade policies coherent with associated macroeconomic and regulatory policies. In paragraph 43, Ministers endorsed the Integrated Framework for Trade-Related Technical Assistance to Least-Developed Countries (IF) as a viable model for LDCs’ trade development. Activities were designed to respond to these mandates, such as Regional and Subregional Meetings bringing together Ministers of Finance and Ministers of Trade/Commerce to promote the mainstreaming concept and enhance awareness of its importance; - Implementation. Paragraph 38 of the Doha Ministerial Declaration instructs the

Secretariat to execute WTO technical assistance and capacity building activities designed to ation assist developing and least-developed countries and low-income countries in transition to adjust to WTO rules and disciplines, implement obligations and exercise the rights of Membership. Attention shall also be accorded to small and vulnerable countries, as well as

to Members and Observers without representation in Geneva; O activities echnical cooper - Enhancing Negotiating Capacity. Paragraph 41 of the Doha Ministerial Declaration WT T reaffirms the specific commitments on technical cooperation reflected in various other paragraphs of the Declaration (paras. 16, 21, 24, 26, 27, 33, 42 and 43), in particular the Singapore issues and trade and environment. This relates to enhancing the negotiating capacity of developing and least-developed countries, as well as of low-income countries in transition; - Trade Policy Capacity-Building. Paragraphs 38-41 of the Doha Ministerial Declaration relate, in general, to capacity building in the formulation and implementation of trade policy. This is one of the most pressing needs of developing and least-developed countries, and of low-income countries in transition; - Accession. Paragraph 42 accords particular emphasis to the necessity to reflect in the WTO TA Plan, the priority that Ministers accord to countries in accession; - Technical Assistance for Non-Residents. Twenty-three Members of the WTO do not have a mission in Geneva. They also have obligations and commitments under the rules, and also need to draw on the benefits and opportunities of the open, rules-based system.

121 WTO activities Cooperation with other international

122 organizations and relations with civil society III. II. T Cooper r aining activities ation withotherinternational or implement theDohamandatesontechnicalcooper budget ofCHF15million, have establishedtheDohaDevelopment and tocreatenewones Board on covering expensesforthedur been acknowledged. Ministerial Conference one-off basis related IssuesandConcerns emerging fromtheDohaMinisterialDeclar activities three additionalthree-monthcourses place atthe developing countries; technology on thesharingofinformationandcapacitybuildingthroughuse legitimacy oftheMultilater T W inforced overtheyearswithrelev intergovernmental organizationsinterested initsactivities consist henceforthof: either implementation oftr developing andleast-developedcountryofficialswhoareinvolvedintheformulation Cooper officials languages oftheorganization, three regularCourses Courses initiated andcoursesheldsince additional humanresourcesbecomeav and fullimplementationisexpectedtobeinplaceassoonalltheinfr curriculum developmentandprovisionofrelev the participants’understandingoftr work ofthe own administr courses isexpectedtoallowparticipantsimprovetheeffectiveness oftheirworkin international tr herefore theparticipationofthesescountriesisindispensabletocredibilityand oods organizations andotherinternationalregional bodies Last, June 2001sawthecreationof - T In theperiodunderreview - - - - - T - - T - - he institutebeganimplementingitsmandateasofJune2001. he he gener Modernization andexpansionof Information offering periodicone-day offering twoshortthree-weekcoursesforLDCs; continuing toofferthree-monthresidentialtr offering threedisputesettlementcoursesforall developing ar initiating aprogr organizing atr further developingthenetworkofrelationswithacademicworld, WT ation, WT , , but notleast, . and one one-weekDisputeSettlementCourseandtwoone-dayInductionCourses O MembersorObservers T WT O continuedtodevelopanactive work relationshipwithotherinternational he mandateoftheformer , in particular WT WT , O WT al objectiveofalltheseactivitiesistobuildinstitutionalcapacityby widening endorsed byMinistersinpar to modernizeexistinginformationtechnologymaterialsandother ations andtopromoteamoreactiveparticipationoftheircountries inthe ade lawandthefunctioningof T O O inGenev r O staffandinterns; aining w . T echnology ange ofnewspecializedcoursesfortargetedparticipants; aining progr ade policy With theincreasedworkprogr , and, pursuant topar amme ofdistance-learningInternet-basedcoursesonthe , two inEnglishandoneF . a needtomodernizetechnicalcooper WT as established. ganizations andr in ordertoprovidesecureandpredictableresourcesneeded a. al O ReferenceCentresforleast-developedcountriesand , the Secretariaturgentlyrequiresasubstantialinvestment, Course participantsarefinancedby T ation oftheCourse , . r T , the ading System; WT T but atther ools as wellforofficialsfromeconomiesintr he paceofintroductionacceler amme fortr ant organizationsintheUnitedNations system, . O Inductioncoursesfordelegations WT Each regularCourselastsfortwelveweeksandtak . ade policymatters Annex , agr T ailable laterin2002. O Secretariatorganizedthreeregular r as welltoprovidebudgetfundsforsomenew WT aining Divisionw T aph 40oftheDohaMinisterialDeclar In December echnical Agenda Global O agr ate ofsixinsteadthreesuchcoursesperyear; ation, VIII oftheNewStr T ainers fordeveloping-countryofficials; r p 38oftheMinisterialDeclar aph aining Institute ant documentation. . as welltheDecisiononImplementation- Assistance rench respectively ade policycoursesinthethreeworking WT ation andcapacitybuilding. amme andnegotiatingmandate elations withcivilsociety , WT O the , . the multilater as thusconsider T T O Members; he knowledgeacquiredinv rust Fundwithaproposedcore . WT T he relationsestablishedandre- . ation toolsandmaterialshad O Membersdecidedtofinance T In October ated fromearlyJ ategy for ools Sever WT , have ensuredagreater . , Even beforetheF O fellowshipaw were heldfor al tr astructure facilitiesand , al pilotprojectswere IGO Secretariat WT , ably expandedto ading system, a JointConsultative ansition whichare O in particular T r ation, ation, T ade P anuary 2002 echnical WT T A tools the Bretton olicy and O; Members focuses ards arious ourth es . on a T , he coherence through involvement, cooperation and coordination of an increasing number of trade-related activities. There is also a growing interest in WTO work. Representatives from 57 IGOs attended the Fourth WTO Ministerial Conference as observers. A list of organizations having observer status in one or more of the WTO bodies is laid out in Table IV.8a. The WTO continued to strengthen its working relationship with the UN agencies, especially UNCTAD with the objective of furthering the development dimension of trade. The two organizations collaborate closely to advance the development dimension of trade liberalization within the framework of the multilateral system with a major focus on capacity building and technical assistance to developing countries and in particular least-developed and African countries. UNCTAD is a major partner in the Integrated Framework for Technical Assistance Programme (IF) and the Joint Integrated Technical Assistance Programme (JITAP). The WTO also actively participated in the major trade-related conferences organized by UNCTAD such as the Third United Nations Conference on Least-Developed Countries which took place in Brussels from 14 to 20 May 2001. WTO Staff have been involved in regional and inter-regional meetings sponsored by UNCTAD to prepare developing countries and LDCs for the 4th Ministerial Conference. The WTO remains a key player in various activities organized by the UN agencies and other international intergovernmental organizations. It was actively involved in the preparatory process of the International Conference on Financing for Development held in Monterrey, Mexico, March 2002. It participated in a number of other meetings where trade- related matters were discussed. ITC UNCTAD/WTO

The WTO as a parent body continued to work closely with the International Trade Centre (ITC) which plays a crucial role in trade-related technical cooperation and trade –related capacity building. The ITC is a major partner of the JITAP programme and the Integrated Framework for Technical Assistance, designed to improve the integration of least-developed countries. The ITC has a full range of activities, ranging from the design of trade development strategies for certain countries to programmes that aim at increasing the e-awareness, e-competency and e-trade capability of business entities in developing and least-developed countries. Cooperation with the IMF and the World Bank

The WTO’s cooperation with the IMF and the World Bank is based on the Marrakesh “Declaration on the Contribution of the WTO to Achieving Greater Coherence in Global Economic Policy-Making”, and on the WTO’s formal cooperation agreements with the IMF and the World Bank. It provides an opportunity to leverage the collective resources of the three institutions in areas where their activities converge, in particular in assisting developing and least-developed countries to take greater advantage of their involvement in international trade and their participation in the multilateral trading system During 2001, the Director-General met several times with the Managing Director of the IMF and the President of the World Bank. Their discussions covered a range of trade-related and coherence issues, including preparations for the Doha Ministerial Conference, the importance of maintaining an open trading system, and ways in which the three institutions can cooperate more effectively in the provision of trade-related technical assistance, capacity building and training. Each of the three continued to emphasize the important contribution elations with civil that trade makes to economic development and poverty reduction, and to stress the need for improved market access for developing-country exports, for on-going support for trade policy reform, and for enhanced assistance in trade-related capacity building.

Cooperation at the staff level extends to many areas of the WTO’s work. Most prominent, ation with other international O activities in 2001, was the expansion of cooperation in the provision of training and trade-related ganizations and r WT Cooper or technical assistance and capacity-building to developing and least-developed countries, inter society alia through the Integrated Framework. Preparations have been made for cooperation in this area to intensify further still in the context of the mandate on enhanced technical assistance and capacity-building contained in the Doha Development Agenda. Also during 2001, there was close interaction between the staff of the three organizations in the areas of trade- related analysis and research and of trade policy surveillance, through the WTO’s Trade Policy Review Mechanism in particular.

International intergovernmental organizations – Observer Status in the WTO

The guidelines on observer status for international organizations (WT/L/161, Annex 3) provide that requests for observer status from organizations shall not be considered for

123 WTO activities Cooperation with other international

124 organizations and relations with civil society UN UN bodiesandspecializedagencies: Note) Explanatory See - WTO the in Status Observer a. International inter T F Codex IPPC CITES CBD A able IV O .8 United Nations of theUnitedNations F Codex F Protection Convention F T Convention onInternational Convention onBiologicalDiversity r A A ood & ade inEndangeredSpecies O/WHO O InternationalPlant Alimentarius Commission Agriculture Organization governmental or ganizations X X columns and Committeeon GA Additional informationconcerningtheobserverstatusoflistedorganizationsin to meetings oftheBudgetCommitteeorDisputeSettlementBody T T T T for in the between Mark bodies arenotlistedin T Commitments Information T has nointernationalintergovernmentalorganizationobservers and PhytosanitaryMeasures(SPS); Subsidies andCounterv (CTS); P observer statusispending. and isinvitedasappropriatetoattendmeetingsofthose UNCT P GC respective (WT/GC/M/25, able 1(C), r r olicy ReviewBody(TPRB); arties able IV able IV able IV ade inCivil ade T X TT CONTRA Information fortheCommitteesunderPlurilater T T T An T T r able 1(B)providesinformationonobserverstatusinthefourbodiesunderCouncil

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X TPRB X P P P P P CTG X X P P P P 5 CTS X X P P P 2 6 TRIPS X 8 ADP X 8 SCM X 8 SG X X P P AG X X P 9 SPS X X BOPS X P CRTA X X X X X X X X X X X 9 7 3 CTD X X X X X X X P CTE X X MA X P LIC X X RO X X X 10 P 4 TBT X P TRIMs X X VAL XXX X X X X X X X X X X GATT CPS X X X X X X X X X GATT CNCL X X X X X X GATT CTD 125 WTO activities Cooperation with other international organizations and relations with civil society WTO activities Cooperation with other international

126 organizations and relations with civil society ICA ITCB IPGRI ISO OILM OIE IGC IEC ICCA IAIGC EBRD ECO CEMA WTO the in status Observer a. International inter T SELA ECOW GCC GOIC ITT EFT CMA/WCA COMESA CFC IDB OIV IVI UPO IICA IADB able IV O A O V T C AS .8 States oftheGulf International Genetic ResourcesInstitute International Plant for Standardization International Organization of LegalMetrology International Organization International OfficeofEpizootics International Gr Commission International Electrotechnical Cooper Inter & Development European BankforReconstruction Economic Cooper Clothing Bureau Latin Cooper of Conderence ofMinisters Organization International Civil for IndustrialConsulting Gulf Organization and Southern Common Mark Conserv International Commissionforthe Commonwealth Secretariat Centr Common FundforCommodities & MonetaryCommunity African States Economic Communityof Islamic DevelopmentBank International International Protection ofNew International Unionforthe and of Plants Organization International European F for cooper Inter Inter (continued) W Wine Office -Ar -American Institute -American DevelopmentBank est andCentr al American EconomicSystem ation ation Councilforthe ab InvestmentGuar African Economic ation of ation on ree governmental or T V V T Africa ropical extiles and accine Institute ine et forEastern T ains Council r Atlantic ade ation Organization al Aviation V Agriculture arieties Africa Association T imber T W una Agriculture estern antee Ar ab ganizations P P P P P P P P P GC X X P P TPRB X P P P P P P P P P CTG 14 P P P P P P CTS X P P P P P P P P TRIPS P P ADP P P SCM

P SG X P P P P P AG X X 11 16 13 P SPS X X BOPS X P P P P P P CRTA X X X X X X X 11 11 16 13 P P CTD X X X X X 17 P P P CTE X X P P P MA LIC X X X P P RO X X X 12 15 P P TBT P P P P P P TRIMs X P VAL X X X X X X X GATT CPS X X X X X GATT CNCL X X X X X X X X GATT CTD OA under theWHO,includingthoseatregionallevel,exceptwhenmeetingsarelimitedtoMembergovernmentsonly. WCO OIC 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 organizations intheWTO. 4 3 2 matters ofcommoninteresttobothorganizationswillbeunderdiscussion. (excluding theCommitteeonBudget,FinanceandAdministration,DisputeSettlementBody,AppellateBody 1 W UPU SADC SPF SIECA OAS ALADI WTO the in status Observer a. International inter T OIF LAS OIRSA OPEC SEAFDEC OECD WT able IV The ITUSecretariatshall[also]beinvitedasanobservertomeetingsofrelevantWTObodiesotherthantheCouncilforTrade Requested andgrantedobserverstatusfortheTRIPS18-22June200119-20SeptembermeetingswhendiscussingIPac The Committeeagreedtograntadhocobserverstatuspendingtheoutcomeofhorizontal process. The Committeeagreedtograntadhocobserverstatusonameeting-by-meetingbasis. The Committeeagreedtograntadhocobserverstatusonameeting-by-meetingbasis. The CouncilagreedtograntadhocobserverstatusontheunderstandingthatWTOwouldbegivenreciprocalopportunities The Councilagreedtograntadhocobserverstatus. The Committeeagreedtograntadhocobserverstatusonameeting-by-meetingbasis. The Committeeagreedtograntadhocobserver statusonameeting-by-meetingbasis. The Committeeagreedtograntadhocobserverstatuspendingfinalagreementontheapplicationofguidelinesfor The CouncilhadagreedtograntobserverstatustheOECDforitsSpecialSessionsonTelecommunications Serviceson25June The Councilagreedtograntadhocobserver status. The Committeeagreedtograntadhocobserver status. The Committeeagreedtograntadhocobserverstatus. The Councilagreedtograntadhocobserverstatus. The Committeeagreedtograntadhocobserverstatusonameeting-by-meetingbasis. The Committeeagreedtograntadhocobserverstatuswithaccessrestricteddocuments subjecttoobjectionsuchaccessby The Committeeagreedtograntadhocobserverstatuspendingfurtherdecisions. The Committeeagreedtograntadhocobserverstatusonameeting-by-meetingbasis. The Committeeagreedtograntadhocobserverstatuspendingfurtherdecisions. The Committeeagreedtograntadhocobserverstatusonameeting-by-meetingbasis. The Committeeagreedtograntadhocobserverstatuspendingfurtherdecisions. The Committeeagreedtograntadhocobserverstatusonameeting-by-meetingbasis. The Committeeagreedtograntadhocobserverstatuspendingfurtherdecisions. AEMU U O .8 Association Organization of W Conference Organization oftheIslamic Universal P Community Southern South P Centr Secretariat oftheGener Organization of Latin & MonetaryUnion W Integr South Centre de laF Organisation Internationale League of for PlantProtectionand Regional InternationalOrganization Exporting Countries Organization oftheP Development Centre Southeast Cooper Organization forEconomic W (continued) orld CustomsOrganization estern orld al American Integr ation T r ation &Development ancophonie ourism Organization acific F American Economic African Economic African Development Asian Fisheries Ar ostal Union ab States governmental or orum African Unity American States etroleum ation al Animal Health T reaty on ganizations X P P P P P P P P P GC X P TPRB X X P P P P P P P CTG P 24 P P P P P P P 19 CTS X X P P P P TRIPS

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X VAL X X X X X X X GATT CPS X X X X GATT CNCL X X X X GATT CTD 127 WTO activities Cooperation with other international organizations and relations with civil society WTO activities Cooperation with other international

128 organizations and relations with civil society ECLA UNIDO 1 Note) Explanatory (See Agreements Trade Plurilateral the under Committees in Status Observer c. International inter T 5 4 3 2 1 OECD OAS OA SELA GOIC IAIS A Other Or UNCT UNCITRAL UN UN bodiesandspecializedagencies: Note) Explanatory (See Bodies other Certain in Status Observer b. International inter T ICAP A Other Or UPU OIC COMESA EFT UNCT UN bodiesandspecializedagencies: WCO OECD able IV able IV The WorkingGrouphadagreedtograntadhocobserverstatusforitsmeetingsof27-28November1997and11-13March1998only. TheWorking Grouphadagreedtograntadhocobserverstatusforitsmeetingsof3-4November1997and19-20February1998only. The WorkingGroupagreedtograntadhocobserverstatusonameeting-by-meetingbasis. The WorkingGroupagreedtograntadhocobserverstatusonameeting-by-meetingbasis. The CommitteeagreedtoinvitetheWCOas an observerwhenevertheissuesofHSclassificationandamendmentswereonag T CP CP he UNCITRAL, U A C AD AD .8 .8 ganizations: ganizations: Development Organization United NationsIndustrial for Latin United NationsEconomicCommission and Development Organization of Energy CharterConference Group ofStates African, on United NationsConference Organization forEconomicCooper Organization of Latin Consulting Gulf OrganizationforIndustrial of Insur International on International United NationsCommission United Nations Universal P South Centre Organization oftheIslamicConference T listed below r ade andDevelopment American EconomicSystem ance Supervisors Caribbean &P America &theCaribbean African, Centr United NationsConferenceon Common Mark European F Inter W Organization forEconomicCooper ostal Union governmental or governmental or orld CustomsOrganization Association -American DevelopmentBank , African Unity American States al T represents theUN r ade Law American InstituteofPublic Caribbean andP ree acific et forEasternandSouthern T r ade Association ation ganizations ganizations . acific GroupofStates Financial T services r ade andDevelopment X X X X P ation andDevelopment Administr Africa ation GA rules X X X TS Regulation Domestic X X X X P commitments Specific X X X P on W GP in Government Procurement X P P P P orking Group T A r ansparency P P X X P 1 3 3 enda. and Investment W between Relationship orking Group TCA X P on X P P P P P P P 5 2 T he T r ade on and Competition W between T orking Group he Inter IT P X X olicy P A X X 1 P P P 4 T r action ade Relations with non-governmental organizations/civil society

Although NGOs have been interested in the GATT since its inception in 1947, the period since the creation of the WTO has vividly demonstrated that the multilateral trading system is being scrutinized by public opinion like never before. Relations with Non-Governmental Organizations (NGOs) are specified in Article V:2 of the Marrakesh Agreement and further clarified in a set of guidelines (WT/L/162) which were adopted by the General Council in July 1996 and which “recognizes the role NGOs can play to increase the awareness of the public in respect of WTO activities”. Relations with NGOs essentially focus on attendance at Ministerial Conferences, participation in issue-specific symposia, and the day-to-day contact between the WTO Secretariat and NGOs. The WTO Secretariat receives a large and increasing number of requests from NGOs from all over the world and Secretariat staff meet NGOs on a regular basis – both individually and as a part of NGO organized events. Since the adoption of the 1996 guidelines, several steps have been taken to enhance the dialogue with civil society. The WTO Secretariat provides regular briefings for NGOs and has established a special NGO Section on the WTO website with specific information for civil society, e.g. announcements of registration deadlines for ministerial meetings and symposia. In addition, a monthly list of NGO position papers received by the Secretariat is compiled and circulated for the information of Members. Since April 2000 a monthly electronic news bulletin is available to NGOs, facilitating access to publicly available WTO information. It is open to all organizations and/or individuals, subscription requests should be sent by e-mail to the following address: [email protected].

Ministerial Conferences NGO attendance at WTO Ministerial Conferences is based on a basic set of registration procedures: (i) NGOs are allowed to attend the Plenary Sessions of the Conference and (ii) NGO applications to register are accepted by the WTO Secretariat on the basis of Article V:2, i.e. NGOs have to demonstrate that their activities are “concerned with matters related to those of the WTO”. Information on these procedures is posted on the WTO website, as was the case for Seattle and for the Fourth Ministerial Conference in Qatar.

Symposia In March 1999, the WTO held two High-Level Symposia in Geneva, which represented an important step forward in WTO’s dialogue with civil society. They demonstrated that governments and civil society alike, can engage in open and constructive dialogue, and on issues where differences may exist, move towards identifying solutions. Along the same lines, a symposium was held on 29 November 1999 in Seattle. The Seattle Symposium on International Trade Issues in the First Decades of the Next Century provided a further opportunity to enhance this dialogue. A wide range of important issues were discussed, such as the role of international trade in poverty elimination, the effects of globalization on developing countries, the integration of Least-Developed Countries into the multilateral trading system, increasing public concerns with the trading system, trade and sustainable development, and trade and technological development.

Annex I – Recent publications

The World Trade Organization’s publications are available in print or electronic versions, in

English, French and Spanish. They cover legal texts and agreements, country and product O activities

studies, analytical economic data, special trade-related studies and histories of various trade WT Annex I – Recent publications negotiations and agreements. An increasing number of these publications are produced under co-publishing agreements with commercial publishers. Bernan Press can be contacted at 4611-F Assembly Drive, Lanham, MD 20706-4391, Toll Free: 1-800-274-4888. Kluwer Law International can be contacted at 675 Massachusetts Avenue, Cambridge, MA 02139, USA, tel. (617) 354-0140, fax (617) 354-8595, e-mail [email protected]. Cambridge University Press can be contacted at Customer Services Dept., The Edinburgh Building, Cambridge CB2 2RU, UK, Tel: 44 1223 326083, Fax: 44 1223 325150, Email: [email protected],http://uk.cambridge.org. Listed below is a selection of some of our newest and most popular publications. For details on pricing, availability and on all other titles, contact WTO Publications or consult the complete listing on our website: https://secure.vtx.ch/shop/boutiques/wto_index_boutique.html. Internet customers are now able to shop for WTO publications using our secure on-line bookshop. All major credit cards

129 130 WTO activities Annex I – Recent publications recovery andgrowth build confidenceandensurethatthe agenda isessentialforcontinuingpolicyreformandtr booklets onselectedagreements and Spanish, Fr within seconds are acceptedandcustomersprovidedwithconfirmationasummaryoftheorder coming monthsinEnglish, material. explanation designedtohelptheuserunderstandtext, WT deprives businessesoftheirtr government believesthatanotherhasviolated WT The Annual r Agreement): designed asystemtohelpthemsolvetheirdifferencesthroughtheruleoflaw is usedbythebulkofworld’ concrete cases: “T video explainsinsimpletermshowthesedisputesareresolved, English, website toaccess 11,000 pagesofinformationthatisupdatedonadailybasis of the recording copyright, broadcasting servicewhichenablesuserstoviewandhearhighlightsofk in English, brochure explainingtheGA – alengthierintroductiontothe WT some well-known, goes throughthefulllitigationprocess: 2 gigabytesisequiv (25 volume ofinformationthatisretrievedbyusersv the sitehadcontinuedincrease of whicharebroadcastliveontheInternet. website withthe w interested inwideningtheirknowledgeofthe United Statesovergasolineandenvironmentalprotection. tr possible futureevolutionofthedisputesettlementsystem. aining, ay the ee publications he O” T How cantr T hrewl emd o eusseceig2 copiesofthesepublications A chargewillbemadeforrequestsexceeding25 T T V T Length: O O video–Solvingtr he he volumesinthisseries(thesequencefollowstheirorderofappear he reportnotesthattr hree basicinformationbrochuresaboutthe he 7. 6. 5. 4. 3. 2. 1. olumes 1-4arealreadyav WT WT Agr WT – criticismsofthe WT WT T T T Sanitary andPhytosanitaryMeasures Agriculture GA Agreement Establishingthe F O website WT O inbrief r echnical Barriersto extiles andClothing for governments rench andSpanish. ade-Related Investment Measures O tr eport oftheDir eements Series O website(www O’ TT 1994and1947 F 30 minutes O works rench andSpanish. s agreementsarethelegalfoundationforinternationaltr providing shortintroductionstothe ading system” ade disputesbetweengovernmentsendinharmony? . When thetwosidesfindanamicablesolution: W “Documents online” ” orld Bank(www others notsoobvious; . – astartingpointforessentialinformationaboutthe involving theUnitedStates T alent toabout15millionpagesoftext). hese threebrochuresarecomplementedby . In English, WT , universities ade disputes ade hasslowedandconfidenceisweak. .wto F TS entitled ector rench andSpanish. O areoftenbasedonfundamentalmisunderstandingsofthe New documentsareaddeddaily – the T r ading benefits ade , ailable .org) inEnglish, reaching anaver s tr . WT -Gener Each volumecontainsthetextofoneagreement, WT .itd.org) focusingontr F ading nations rench andSpanish. WT O anditsagreements , , WT O andthetr which containsover60,000 the remainingvolumeswillbeav “GA lawyers O e O’ .g. al, and s tr Over thepastyearnumberofusersaccessing TS F , a disputebetween 2001 it canlodgeacomplaintbeforethe ading systemplaysitsfullpartinpromoting , “10 commonmisunderstandingsaboutthe WT F act andFiction”. WT businessmen andforawiderpublic , rench andSpanishoffersaccesstoover age of200,000usersinasinglemonth. aries from15to25gigabytespermonth WT European UnionandJ . WT O ading systemofferar T O rules . his seriesoffersasetofhandyreference O arenowav O ade liber , its agreementsandhowitworks: ade anddevelopment. , . or hasactedinaw In 2001the T It isatoolforinformationand . and insomecasessupplementary . he videoalsoexaminesthe In addition, T T he he sitealsohoststhe alization; e V .g. All theaboveareav illustr enezuela, WT ailable inEnglish, “T WT a disputeoversound A broadnegotiating O alsomaintainsajoint WT r ading intotheFuture” O workingdocumentsin ated throughtwo apan. WT O membershave ailable overthe ange ofbenefits ey users canusethe it woulddomuchto ance inthe WT ading systemthat O broughtouta WT Br O; azil andthe When thecase O events ay which . 1 benefits “10 When a . WT WT F an O rench ailable WT . , O T some T , O he he 8. Anti-dumping 9. Customs Valuation 10. Preshipment Inspection 11. Rules of Origin 12. Import Licensing Procedures 13. Subsidies and Countervailing Measures 14. Safeguards 15. Services 16. Trade-Related Intellectual Property Rights 17. Dispute Settlement 18. Trade Policy Reviews 19. Trade in Civil Aircraft 20. Government Procurement

Special Study No. 6 – Market Access: Unfinished Business. Post-Uruguay Round Inventory and Issues This study has two closely related objectives: to evaluate post-Uruguay Round market access conditions and to contribute to a clarification of the stakes in the ongoing process of multilateral trade negotiations in the market access area. Section II discusses obstacles to trade in industrial products, focusing on tariffs. Section III addresses distortionary measures affecting trade in agricultural products and Section IV discusses the degree of market access guaranteed by commitments under the GATS, the relative importance of the different trading modes and the main obstacles to trade for specific services. May 2001.

Special Study No. 5 – Trade, Income Disparity and Poverty This study, which is based on two expert reports commissioned by the WTO Secretariat, aims to clarify the interface between trade, global income disparity, and poverty. Professor Dan Ben-David of Tel Aviv University, takes an in-depth look at the linkages between trade, economic growth, and income disparity among nations. Professor L Alan Winters of University of Sussex, discusses the various channels by which trade may affect the income opportunities of poor people. The publication also includes a non-technical overview of the two expert reports.

International Trade Statistics 2001 The WTO annual report International Trade Statistics 2001 provides comprehensive, comparable and up-to-date statistics on trade in merchandise and commercial services for an assessment of world trade flows by country, region and main product groups or service categories. Some 240 tables and charts are depicting trade developments from various perspectives and providing a number of long-term time series as additional information. Major trade developments are summarized and discussed in the first part of the report under Overview. This volume has been produced by a team of statisticians from the Statistics Division in collaboration with the Economic Research and Analysis Division. For 2001, the report gives detailed figures for merchandise and commercial services trade by region, by country and by product category.

WTO Computer Based Training This is the first in a series of, trilingual, easy-to-use interactive guides to WTO Agreements on CD-ROM. Each CD-ROM module is designed to guide the user through the complex WTO agreements in a simple step-by-step manner. This module, which covers the WTO Agreement

on Textiles and Clothing, includes text, video and audio material and is complemented by a O activities multiple-choice test to enable users to monitor their individual progress. The complete text of WT Annex I – Recent publications the Agreement is also included. A module on sanitary and phytosanitary measures will be available during 2002. Co-published with Kluwer Law International

Guide to the GATS An Overview of Issues for Further Liberalization of Trade in Services. This Guide provides an assessment of recent developments in major sectors of services trade. It also examines some of the issues governments will confront as they pursue the liberalization of services trade. The papers in the Guide consider the economic importance of particular services sectors, the ways in which they are regulated and traded, problems of definition and classification, the pattern of commitments under the GATS and they provide sources of further information. In many cases they suggest areas of further work, and some

131 132 WTO activities Annex I – Recent publications on how environment andlabourissuestechnicalassistance mark and theEnvironment of the development, treatment todevelopingcountries GA Guide tothe identify prev CD-ROM: T Co-published withBernan The InternationalizationofFinancialServices demands ofeconomicgrowth, T specialists inthe International the usertoconductsophisticated research quicklyandefficiently large libr English, CD-ROM: become centr the paperspresentedattwoHighLevelSymposiahostedby the roleof equitable participationofthesecountriesinthebenefitsglobaltr and liber enabling GA search facilities in F the EUandCanadainEnglish, contains membercountriesreviewedfrom1995-1998, pr systems thataremorestableandefficientbyintroducinginternationalstandards support fortheviewthatinternationalizationcanassistcountriesinbuildingfinancial T of individualmembers between countriesandregions spreadsheet ordatabase throughthetechnologyof CD-ROM. include thenewreviewsthathavebecomeav regulatory structures internationalization maycarryforsomecountries reviewed everytwoyears largest tr of thecountryconcerned, their relativeimportanceinworldtr F systems diversity andsignificanceoftheeffectsinternationalizationondomesticfinancial relative benefitsandcostsofinternationalization, rench andSpanishwillbeav he ev r r actices ade P ade TT UruguayRound Developing countriescomprisetwothirdsoffthe T T T In recentyearstherelationshipsbetweentr T T T rench andSpanish. he he he entireGA he he 2000editioncontainingmembercountries1995-1999inEnglish and1995-1998in he internationalizationoffinancialservicesisanimportantissueforthestrengthening et access , aluation isconductedonthebasisoftworeports: WT WT T WT Development andtheEnvir . WT r olicy Reviewsseries F . ary ofdocumentsintoahighlyaccessible andusefultoolforresearch. alizing offinancialsystemsindevelopingcountries aders –Canada, ade P rench andSpanishononeCD-ROM. O At thesametime O O’ T GA O membersaremakingprogressinworkingwiththeobligationsandbenefits Agreements r alent formsoftr TT memberscollectivelytoexaminethefullr s 2001tr T ade P al tothemultilater r have becomeincreasinglycomplex. , TT BasicInstrumentsandSelectedDocuments ade P WT olicy ReviewMechanismw , dispute settlement, WT T using F r TT BasicInstrumentsandSelectedDocuments(BISD)–42volumes in WT ade Statistics2001onCD-ROM O andotherinstitutionsinaddressingthesechallenges O andDevelopingCountries olicy ReviewSeries olicy Reviewsarenowalsoav O Secretariat . T ade statisticsenablesyoutoanalyze internationaltr . Agreements thatcreatedthe he chaptersinthisbookexaminedifferentaspectsofdebate T Each CD-ROMcontainsthesereports olio 4softw . his processhascontinuedunderthe . T J and theotherpreparedbyGA r Other countriesarereviewedeveryfourorsixyears apan, ade andDevelopment. , ade restrictionordiscrimination. there havebeenconcernsabouttherisksthat ailable shortly economic development, , al tr as wellmembercountriesreviewedbetween1995-1997 extr the UnitedStatesandEC(asasingleentity)–are . tr T ade agenda. are ade act andexportextensivetr he provisionsarecoveredintheguideandinclude: ade policyreviews Associates . onment . A new as launchedin1989toimprovetr . ade andtheenvironment, ailable , T updated diskwillbereleasedeveryyearto his diskusesF In thisvolume T , he needtoreconcilethecompeting ailable onCD-ROM. particularly intheabsenceofadequate and togetherprovideaninsightintothe WT . WT and environmentalprotectionhas , O including theUnitedStates . O membership foreign directinvestment, , T one presentedbythegovernment ange oftr accorded specialanddifferential he guidealsoincludescasestudies . TT/WT , WT T T , with links olio 4softw he paperswerewrittenby here hasbeenconsider ade statisticsandgr v WT arious commentatorsdebate O inmuchthesameformat. . O inMarch1999, O Secretariat. ade policiesandpr . T , . and tr he 1999version In ordertoensure ading system, T bookmarks he bookarisesfrom are turningthe ade patterns ansparency by ade and , depending on It alsoallows T he four , aphics to , J on apan, and actices able the T r , ade the Areas covered include, trade by region, country or commodity data are compiled and presented by WTO’s leading economic statisticians with great detail and reliability, charts, graphs and tables present the information in an easy-to-access, easy-to-read style. Co-published with Cambridge University Press

Tariff Negotiations and Renegotiations under the GATT and the WTO – Procedures and Practices, Anwarul Hoda The procedures and practices to implement the provisions relating to tariff negotiations and renegotiations have evolved considerably since the GATT was established in 1947. The provisions themselves have undergone some changes in the last 54 years. Professor Hoda reviews the evolution of these provisions and of the procedures adopted and practices followed by the contracting parties to GATT 1947 and the Members of the WTO. He offers some conclusions and recommendations. This new book will be of particular interest to negotiators including Geneva based delegations, members of government trade ministries, economists, and all academics who specialize in trade policy.

WTO Dispute Settlement Procedures – 2nd Edition This volume contains a collection of the legal texts related to the settlement of disputes under the Agreement Establishing the World Trade Organization (WTO). To facilitate their use, the texts have been grouped by subject matter, and cross-references and a subject index have been added by the WTO Secretariat. These additions do not form part of the legal texts and therefore should not be used as sources of interpretation.

The Legal Texts – The Results of the Uruguay Round of Multilateral Trade negotiations First published in 1994 by the GATT Secretariat and reprinted by the WTO in 1995, this title has now been reprinted by Cambridge University Press. This book contains the legal texts of the agreements negotiated in the Uruguay Round, now the legal framework of the World Trade Organization. The agreements will govern world trade into the 21st century. They cover: Goods: the updated General Agreement on Tariffs and Trade (GATT) that includes new rules on agriculture, textiles, anti-dumping, subsidies and countervailing measures, import licensing, rules of origin, standards, and pre-shipment inspection. (The original GATT text is also included in this volume); Services: the General Agreement on Trade in Services (GATS); Intellectual property: the Agreement on Trade-Related Intellectual Property Rights (TRIPS); Disputes: the new dispute settlement mechanism; The legal framework for the World Trade Organization. ISBN 0521 78094 2 – Hardback Price: SFr 150 ISBN 0521 78580 4 – Paperback Price: SFr 62.50 French and Spanish versions are available from the WTO.

Dispute Settlement Reports The Dispute Settlement Reports of the World Trade Organization (the “WTO”) include

panel and Appellate Body reports, as well as arbitration awards, in disputes concerning the olicy Review Body –

rights and obligations of WTO Members under the provisions of the Marrakesh Agreement olicy Review Body emarks by the Chair ade P r Establishing the World Trade Organization. The Dispute Settlement Reports are available in T ade P r English, French and Spanish. 1996, 1 volume, 1997, 3 volumes, 1998, 9 volumes, 1999, T

6 volumes. O activities Concluding r of the WT Annex II –

Annex II – Trade Policy Review Body – Concluding remarks by the Chair of the Trade Policy Review Body Mozambique

We have had a good and informative discussion of the trade policies of Mozambique. Members were very impressed by the excellent economic performance of Mozambique in recent years, attributing this to its economic reforms, including privatization of enterprises, the elimination of most export restrictions and of foreign exchange controls, and simplification of its customs tariff. Members observed with praise the fact that Mozambique’s good performance often had come in the face of serious climatic difficulties. They also noted

133 WTO activities Annex II – Trade Policy Review Body –

134 Concluding remarks by the Chair of the Trade Policy Review Body enormous potential. continue thereformprocesssoas toallowitfullybenefitfromitsrichresourcebaseand questions r foreign investmentandurgedthattheseeffortsbestrengthenedsupported. greater relief that Mozambiquehadbenefitedfromdebtreliefprogr Madagascar system. investment, about restrictionsonlandownership situation. Madagascar’ and soughtclarificationonthemainstreamingoftr Members commendedMadagascaronitsinterimP attributed tothestrengtheningofitsmark Members wereimpressedbyMadagascar’ agricultur industrial zones; expanding Mozambique’ telecommunications Members alsoshowedaninterestintheroleofregionalandbilater assistance pay particularattentiontoMozambique’ capacity urged thatitsbilater encour success into theevolvingtr that theregularbudgetof individually orthroughv assistance needs information onMozambique’ mak system. Agreement onGovernmentProcurement; such ascashewsandsugar expressed aboutitsGovernment’ mining andpowersectors large extentoninfr T progr encour other dutiesandcharges(includingimportsurchargesonproductssuchassugar). 2003. WT bindings Mozambique furtherreduceitsborderbarrierstotr coordination andtocontinueitsreformprocess here w O provisionsoncustomsv Members appreciatedMadagascar’ W In conclusion, Members appreciatedtheresponsesprovidedbydelegationofMozambiquetomost Members appreciatedMozambique’ - - - Members alsosoughtfurtherclarificationonanumberofissues - - - - - Some MembersnotedthependingsignificantexpansionofMozambicanexportsin Members encour e everyefforttomeetits amme e havehadathoroughandconstructivediscussionofthetr government procurementandeventualparticipationbyMozambiqueinthePlurilater standards andothertechnicalrequirements; pre- andpost-shipmentinspection; investment regime industrial str mining, structur implementation ofthe Questions werer aged Mozambiquetomaintainboththepaceanddirectionofitsreforms aged Mozambiquetofurtherprogressintheimplementationofitspriv . T as alsorecognitionthatfurtherexpansionofMozambicanexportsdependedtoa , Some Membersurged Madagascartojointhemin theirsupportforthelaunchofa . Members wereencour hey calledonMozambiquetoexpanditscommitmentsundertheGA I urgeallMemberstosupportMozambiqueinitsefforts al products Members notedwithsomeconcernthatMozambiquehadnotimplementedthe Some concernw . aised duringthemeeting. . particularly inthetourismsubsector . s debtreliefundertheHIPCinitiativewouldfurtherassistitsmacroeconomic al reformsintheservicessector including theMOZALproject; Members alsocommentedfavour , it ismyfeelingthatthisReviewhasgiventhe ategy anddevelopmentcorridors; and pledgedawillingnesstoprovidecontinuedassistance ade policiesandpr astructure developmentsandforeigninvestment. . aged Mozambiquetostrengthenitsdomesticprocessoftr , al andregionalarr could beexpandedifmark aised abouttariffs(includingbindingsandappliedr , arious progr s tr including incentivesprovidedinexportprocessingzonesand , as expressedaboutthepaceof priv , and pointedoutthatMozambicanexports ade TRIPS and forfoodsecuritypurposes s experiencewiththeIntegr aluation butwelcomeditsintentiontoapplythe WT WT aged byMozambique’ , but calledforgreatertr O notificationrequirements s interventionintheagriculturesector O beincreasedtoaddresssomeoftheseneedsbetter Agreement inJ ammes , which werenegativelyaffectingforeign direct actices ofonetheLDCsthatishavinggreatest s activeparticipationinthemultilater angements be s activeparticipationinthemultilater s requesttotheMembershipfortechnical s recentstrongeconomicperformance et-oriented reforms . , Some MembersjoinedMozambiqueinurging including financialservicesand ably onMozambique’ . . ets weremoreopenindevelopedcountries Some Memberssuggestedthat Members encour anuary 2006; overty ReductionStr ade inthePRSP ade andincreasethenumberofitstariff and s economicperformance WT ammes ansparency inthoseagreements O-consistent. ated F . . Some Memberssoughtfurther , , although someurgedeven including tr r amework andonitstechnical TPRB anexcellentinsight ade policiesofMadagascar . aged Madagascarto atization processand In thisrespect, . , al tr T including: s effortstoattr Some concernw hey notedthat , almost limitedto In mypersonal , ategy P ade agreementsin mainly onproducts ade liber ates) andabout al tr , al tr . either atization TS andto Agreement by aper (PRSP) ade policy Members ading , ading which they we should alization. Members act as . . al . . new round of multilateral trade negotiations. Members called upon Madagascar to improve commitments under the GATS, particularly in areas such as telecommunications, transportation and tourism, and to meet its WTO notification requirements. Members expressed hope that a revitalized Integrated Framework, in which Madagascar would be an early participant, would yield beneficial results in meeting Madagascar’s technical assistance needs and its multilateral commitments. Members were supportive of Madagascar’s initiatives towards regional and bilateral agreements to expand its trade, but urged Madagascar to ensure that such agreements remained consistent with the multilateral trading system. Members urged Madagascar to strengthen its domestic process of trade policy coordination and were encouraged by Madagascar’s intention to establish a national committee on WTO matters. Members commended Madagascar’s reduction of import duties, although it was acknowledged that Madagascar might encounter problems of policy coherence given other recommendations to maximize revenue from import levies. Some concern was expressed about the high level and variety of additional import taxes. Suggestions were made that Madagascar increase the number of its tariff bindings on non- agricultural products. Members noted that Madagascar had just adopted the WTO provisions on customs valuation and enquired about implementation difficulties it might face. Questions were raised about preshipment inspection, quantitative restrictions on imports of products such as vanillin and precious stones, and about export promotion, including the export processing zone and export credit. Members noted that Madagascar’s economic performance had suffered somewhat because of its significant reliance on the agriculture sector which had faced serious climatic difficulties. In addition, some Members pointed out that Madagascar’s agricultural exports could be expanded if markets were more open in developed countries. Noting that aquaculture was expanding rapidly in Madagascar, Members enquired about measures taken by Madagascar following the prohibition by foreign countries of some of its exports, mainly shrimp, on sanitary grounds. There was also recognition that Madagascar might further exploit non-reciprocal preferential treatment provided by developed countries to expand its exports if it improved its infrastructure and the competitiveness of its manufactured products, mainly textiles. Members also sought further clarification on a number of issues, including: (i) government procurement and eventual participation by Madagascar in the Plurilateral Agreement on Government Procurement; (ii) adoption of new competition legislation; (iii) implementation of the TRIPS agreement in January 2006; (iv) legislative and structural reforms in the mining and energy sector; and (v) structural reforms in the services sector, especially in banking and insurance services. Members appreciated the responses provided by the delegation of Madagascar to most questions raised during the meeting. In conclusion, it is my view that this Review has given Members an opportunity to better understand the economic challenges facing Madagascar. Members were encouraged by Madagascar’s economic performance and were optimistic about its economic prospects. Members encouraged Madagascar to maintain both the pace and the direction of its reforms, and urged that its bilateral and regional arrangements be WTO-consistent. In my personal capacity, I advocate that all Members support Madagascar in its efforts. In this respect, we should pay particular attention to Madagascar’s request to the Membership for technical assistance. olicy Review Body – olicy Review Body emarks by the Chair ade P r Ghana T ade P r T

Our discussions have provided an open and informative second Trade Policy Review of O activities Concluding r of the Ghana at a critical time for the economy. Members were heartened by Ghana’s commitment WT Annex II – to trade and economic reform, reaffirmed by the incoming Government elected to office in December 2000. They acknowledged Ghana’s active participation in the multilateral trading system and welcomed continued efforts to open its market by refraining from using non- tariff measures and relying on tariffs as the main instrument of protection. The central role to be played by trade, investment and the private sector in Ghana’s economic restructuring and improving its international competitiveness was widely recognized, and Ghana was urged to pursue further liberalization. While appreciating Ghana’s efforts, the review highlighted the urgent need to restore macroeconomic stability through sound fiscal and monetary policies. The Ghanaian delegation referred to the incoming Government’s commitments to immediately tackle the large deficits and balance the budget by end-1994. Members noted that adverse terms of trade were part of Ghana’s international trading environment and that the most effective means of coping with such movements was to promote economic resilience through sound

135 WTO activities Annex II – Trade Policy Review Body –

136 Concluding remarks by the Chair of the Trade Policy Review Body system hadmaintained currencystability exchange r by Macao WT “one country tr continue intotheforeseeablefutureunder T and openmark among themostopeninworld. to liber sought detailsonGhana’ ECOW policies w useful roleplayedbyhavinganindependentstatutorybodytorevieweconomicandtr on industrialproductsandthewidespreaduseoftariffconcessionsexemptions Procurement price preferenceaffordeddomesticsuppliers preshipment inspection. the tr to improvecustomsadministr increased foreigninvestment, progr generous incometaxconcessionstosubsidizeexports economic managementanddiversification. Macao Republic ofChinain1999hasmateriallyaffectedthe related policies neither the and measuresofMacao manufacturing sector through broadeningoftheeconomy’ and coherencebetweentr measure cover save foreignexchangeon for itselimination. role inprotectingindustriesagainstunfairtr “special importtax” tariff tobelow10%overthenextthreeyears agri-based industrialcountryin V foreshadowed. the Ghanaiandelegationandlook improved tr policies challenges multilater system andMembershaveexpressedassur tr compar liber erritory andthusitseconomicdevelopment. ision 2020objectiveofachievingmiddle-incomestatusandmakingGhanaaleading ade andeconomicreforms adition. O Members welcomedthecontinuing commitmentofMacao T - Additional detailsweresoughtonanumberofotherissues While memberswelcomedtheGovernment’ - - Members expressedtheirappreciationofthewrittenandor - Members ask Members supportedGhana’ I feelthatwehavehadasuccessful alization byextendingopenaccesstoitsexports his reviewhasprovideduswithmuchgreaterinsightintothetr , age ofthetaxfromabout7%to5%tarifflinesandintendedfurtherreview amme ansaction v WT no anti-dumping, protection ofintellectualpropertyandimpendinglegislativechanges; development policies in whichithadactivelyparticipated. AS andwithinthe alize productionandmark , ative adv . in thecontextofitsdifficulteconomicsituationandimmensedevelopmental O implementationandtechnicalassistanceneeds , al technicalassistance , as alsomentionedbysomeparticipants . ate systemmighthavelimitedthe scopeforcontrollingthemoneysupply China toundertak China , ansparency andunderstandingbyMembersofGhana’ Many constructivesuggestionswerer Asian financialcrisis link Agreement. , two systems” . ets bethemaindeterminantofallocationresourceswithin the ed togreaterliber antage appearsstrongest. ed aboutGhana’ T alue inlinewithGhana’ he tr T he Ghanaiandelegationreaffirmedthatitw . of 20%onmanyconsumergoods However ade andinvestmentregimeofMacao counterv , African EconomicCommunity s sector Questions werealsor China. ade anddevelopmentalpolicies “non-essential” , including greaterpriv . e economicandadministr and ensuresthecontinuityofits long-standing free-tr Ghana hasreiter ation tofacilitatetr w , s principaltr . Africa by2010weretosucceed. as alsoencour ailing andsafeguardslegislation, some Membersquestionedtheuseofdirectincentivesvia , al policies I hopethatMemberswillalsobeabletohelpGhana’ Members commendedMacao eting aimedatrevitalizingthesector s governmentprocurementpolicies which eruptedin1997, alization ofk ed forw s exportbaseandpromotingamorecompetitive T he Government’ T . r s ade P WT , T imports ard toreceivingtheadditionalmaterial ances ofhelpthroughprovidingbilater T ade policyobjectivesofexport-ledgrowth especially forcocoawheretheysupportedefforts hey alsoexpressedtheirappreciation ofefforts , ading pr his w , and eventualparticipationintheGovernment O commitmentsandterminationof ated itsstrongcommitmenttothemultilater aged. T they questionedtherecentimpositionof olicy Reviewthathascontributedgreatlyto ey infr s policyobjectiveofreducingtheaver aised regardingitslowleveloftariffbindings his approachtoeconomicpolicyis T ate sectorparticipation, ade erritory’ aised onhowGhanamayproceedits . as essentialiftheGovernment’ . Ghana’ T he Governmenthadrecentlyreducedthe In addition, , actices abroadandonproposedtiming , astructur such astherecentimplementationof . including inagriculturewhereits , s approachhaslongbeentoletfree ative reform. Revitalization ofthepriv . T were alsoquestioned. Members soughtclarificationonits erritory’ s BasicLaw . s regionalinitiatives , nor itsreversiontotheP , , al servicesfinancedfrom China continuestobe , China totheprimacyof , including: as atempor s liber Members welcomedefforts al responsesprovidedby China forthefactthat s tr While thelink , , ade andothereconomic including the12.5% . ade policies which providesfor al tr poverty reduction ade andtr and ary measureto , Members including atization s ambitious , ed al and pr . eople’ ade , T age actices ade- the he ade s s al Members welcomed the free-port status of Macao, China, but observed that only some 24% of all tariff lines are bound. They encouraged Macao, China to increase tariff bindings so as to enhance the confidence of traders and investors. Questions were raised about non-tariff measures, with attention being focused on the simplification of customs procedures and the import licensing regime. The use of sanitary and phytosanitary measures was also queried. Although Macao, China has no laws or regulations governing anti-dumping or countervailing actions, and no such action has been taken during the period under review, Members asked about the legal basis of any such measures that might be imposed in the future. While there is no legislation regarding safeguard measures, the Chief Executive is empowered nevertheless to prohibit, restrict, attach conditions to, or impose levies on goods whose admission into the Territory is “not advisable”. Members sought clarification on the use of tax incentives to encourage exports and to promote investment. The rationale for using a system for leasing government-owned land as a potential instrument of economic policy was also queried. Some Members expressed the view that industrial policy should not undermine the Territory’s open trade policy, which has served the economy so well. Members acknowledged that Macao, China has made important efforts to implement the TRIPS Agreement through the amendment of its laws; nonetheless, they urged it to take further steps to improve the enforcement of these laws. Members welcomed efforts by Macao, China to simplify its government procurement procedures and transparency, as well as its plans to become more involved in the Working Group on Transparency in Government Procurement. Macao, China is a service-based economy and the authorities’ objective is to develop the Territory into a regional services centre. However, Members expressed concern that the granting by the Government of exclusive rights to private companies could impair competition and thus hamper the economic development of Macao, China. At the same time, Members noted and welcomed the Territory’s recent efforts to liberalize specific services (notably telecommunications). The paucity of commitments made by Macao, China in the services negotiations was also noted; Members requested Macao, China to expand its commitments under GATS in the ongoing services negotiations. With textiles and clothing continuing to be the key industrial activity and major contributor to merchandise exports, Macao, China also has incentives to promote the establishment of high-value-added industries; Members sought information on the nature and effect of these incentives. Members also sought additional details on a number of other policies and measures, including: - efforts to increase labour productivity; - the status of the creation of a new customs service and the implementation of a computerized system for customs clearance; - steps taken to encourage export diversification; - efforts to reduce the trans-shipment of textiles and clothing and the possibility of denying export licences to companies convicted of illegal trans-shipment; - clarification of the extent to which foreigners are allowed to participate in the provision of services; and - criteria for the granting of licences for the establishment of financial institutions in Macao, China. Members expressed their appreciation for the written and oral responses provided by the delegation of Macao, China to advance questions as well as those posed during the meeting. olicy Review Body – olicy Review Body

To conclude, I feel that we should commend Macao, China for maintaining an open emarks by the Chair ade P r market throughout the Asian financial crisis. Despite the economic difficulties, Macao, China T ade P r has consistently adhered to WTO principles and continued to support the multilateral trading T system. Macao, China also expressed its willingness to offer more commitments in ongoing O activities Concluding r of the and future trade negotiations, noting that the needs and concerns of developing country WT Annex II – Members should be taken into account. Finally, I am sure that the maintenance by Macao, China of one of the world’s most liberal trade and investment regimes will undoubtedly contribute to the Territory’s economic recovery and its future prosperity. Costa Rica

Our discussions over the past two days have allowed us to come to a fuller understanding and appreciation of Costa Rica’s trade policies and practices. This has been greatly helped by the openness and frankness of the delegation, led by Vice-Minister Llobet, and I am sure that we are all very grateful for their active participation. Members were all favourably impressed by Costa Rica’s good economic performance in recent years. They noted that underlying this performance was Costa Rica’s generally liberal trade regime, open investment environment and successful strategy to shift production towards

137 WTO activities Annex II – Trade Policy Review Body –

138 Concluding remarks by the Chair of the Trade Policy Review Body benefit ofbothCostaRica’ areas attributable tothe factthatremuner diversification arecomplicatedby a smallandnon-competitivepriv such astelecommunications areas thattodatelagtheprocessofreform. sever regime asopenandtr multilater example ofhowsmall commitment toastrongrules-basedmultilater answers tothemanyquestionsposedbyMembers particular theCostaRicandelegationforitsdedicationandhardworkinprovidingwritten noted thatlegislativeinitiativeswereincoursetoaddresssomeoftheseissues to encour these resourceshaspromptedthe Governmenttopursueanactiveindustrialpolicyinorder petroleum andnatur its economy Brunei’ P decade this performancewiththeshareoftr manufacturing, Brunei Darussalam questions addressedinwritingandtother domestic economy; agricultur telecommunications over Costa Rica’ air tr wide gapbetweenappliedandboundtariffr steps inthisdirection. export-oriented activities welcomed CostaRica’ tr and regionalliber consistent withmultilater arr a broadagenda. important sectors institutional environment. sectors Nevertheless olicy Review ading systemandforitsactiveparticipationintheworkof angements andhighlightedtheimportanceofensuringthatsuchparticipationisfully In conclusion, - - - Specific questionswerealsoask Members w Brunei isasmallrelativelyopeneconomy whoseprosperityisduemainlytoitsabundant Members clearlyappreciatedthecomprehensiveresponsesprovidedbyCostaRicato ------P - Members complimentedCostaRicaforitscontinuedstrongsupportthemultilater Members commendedCostaRicaforitssuccessinprovidingastableeconomicand all growth, articipants recognizedthataccesstotheCostaRicanmark ansport andfinancialservices; al Membersbelievedthatliber . schemes toencour export incentivesmechanisms strong dependenceofexportsonasingleproducerelectroniccomponents; protection ofIPRs possible participationintheGP GA administr mark use oflabellingandSPSmeasures; plans tofurtherupgr differential treatmentofnationalandimportedalcoholicbever plans toliber T , s tr . his wouldcomplementCostaRica’ particularly insomeservicesareas However TS commitments; al sector al tr age economicdiversification. ade andtr eting ofagricultur s abilitytok . , . ading system. Members notedthepersistenceofaccessbarriersinafewbutimportant T ation oftariffquotasandspecialsafeguardsonafewagricultur armly welcomedthedelegationfromBruneiDarussalamtoitsfirst his ReviewhasallowedMemberstocomeabetterunderstanding of suggesting theneedtostrengthenlinkagesbetweendomesticand notably intoexportindustries , Members tooknoteofCostaRica’ , alization effortsandtoavoidthemarginalizationofthirdcountries , it ismyclearimpressionthatthisBodyappreciatesCostaRica’ growth ofpercapitadisposableincomehadnotbeenasimpressive alize andreformtheservicessector such astelecommunications price andmark , ade-related policiesandofthechallengesitfacesasseekstodiversify al gasresources insur s clearsupportforthelaunchingofanewroundnegotiationswith ansparent, WT . eep upwithtechnologicalandmark age backw . al principles O economiesmaybenefitfromtr ance andenergydistributionservices ade andimprovecustomsproceduresadministr However Costa Ricahasrecognizedtheproblemandisalreadytaking s economyandthemultilater Gener , al products are vitalfortheinfr but arealsoaw ally eting regulations , ard linkagesbetweenexport-orientedactivitiesandthe , ed regardingCostaRica’ alization shouldalsoextendtothosesensitiveservice some recentdifficultiestoreformandmodernize including aftertheyexpirein2003; ation inthepublic sectorishigherthanthatinthe . A; , , ade toGDPrisingfrom71%97%overthelast However Members seetheCostaRicantr so astoensurethecomplementarityofmultilater But forthetimebeing, , and including sugarandcoffee; s otherwisegrowth-supportivepolicies . Members alsor T ates . his wouldbringthesesectors–someofwhich, , , al tr T the prospectofaneventualdepletion of r insur ade hasalsobeenanimportantelementin astructure –inlinewithpoliciesother are ofremainingbarriers , relatively highprotectioninthe ading system. , . s increasedparticipationinpreferential and remainingmonopoliesin ance andenergy aised duringtheReview , and accessconditionstoprofessional, al tr aised someconcernsaboutthe ade liber et developments s: ading system. efforts tofostereconomic . et isgener T WT Costa Ricaisaprime he CostaRicandelegation ate sector alization andthe O ages; , . ade andinvestment r Sever aised concernsabout . ally liber In thisrespect, . al Members , . which ispartly ation; al products; I thankin . s , to the al. T r ade . al al private sector. Members asked how the Government intends to improve the relative attractiveness of jobs in the private sector. Members welcomed the fact that Brunei’s trade and investment regime is relatively liberal – the average applied MFN tariff, for example, was only 3.1% in 2000. However, several aspects of the regime are characterized by a lack of transparency and therefore provide scope for administrative discretion, which could hamper the Government’s efforts to diversify the economy. Some Members expressed concern that this lack of transparency, and thus public accountability, also seems to extend to the operations of certain government bodies, notably the Brunei Investment Agency and Semaun Holdings. In response, the Brunei delegation outlined steps being taken to improve the transparency of government policies and regulations, especially those pertaining to the investment regime. It added that Semaun Holdings, although under the Ministry of Industry and Primary Resources, nonetheless operates in accordance with normal commercial principles. Members noted that Brunei had ratified the WTO Agreements but had yet to implement legislation to bring domestic laws into conformity with the obligations in these Agreements, except in the case of TRIPS; instead, WTO provisions have hitherto been implemented in “good faith” or on a “best efforts” basis. Members sought clarification of the Government’s position and intentions in this regard. In response, the Brunei delegation indicated that the Government is in the process of incorporating these provisions into its national legislation. At the same time, Members commended Brunei’s efforts to adhere to its WTO commitments despite the heavy burden placed on its limited institutional capacity, especially human resources. Several Members also welcomed Brunei’s support for the launching of a new round of negotiations. Members warmly congratulated Brunei on its successful chairmanship of APEC in 2000. Members noted that Brunei made GATS commitments in four out of 12 service sectors. They asked whether Brunei intends to make commitments in other sectors, such as transport and tourism, which it is trying to develop and where policies appear to be already relatively liberal, particularly as this could support the diversification effort. In response, the Brunei delegation stated that the Government intends to undertake progressive liberalization taking into account its national policy objectives and level of development. Members also sought clarification of the relative roles of ASEAN and APEC on the one hand, and the WTO on the other, in promoting trade liberalization; they welcomed Brunei’s assurance that regional arrangements would be complementary to the multilateral trading system. Questions were raised about the wide gap between bound and applied tariffs, which impart a degree of uncertainty to the tariff in that it provides Brunei with considerable freedom to raise its tariffs, although Members recognized that Brunei had seldom, if ever, taken advantage of this freedom. They noted that, while small in number, Brunei’s tariff peaks of as much as 200% could distort trade significantly. At the same time, Members welcomed Brunei’s plans to convert the remaining small number of specific duties to ad valorem tariffs, thereby increasing the transparency of the customs tariff. Members also sought details and clarification on a number of other policies and measures, including: - customs valuation and rules of origin; - temporary bans on construction products, which had not been notified to the WTO; - regulations concerning food imports; - government-to-government contracts in the case of rice;

- export measures; olicy Review Body –

- government procurement; olicy Review Body emarks by the Chair ade P r - taxation and incentives; T ade P r - progress on privatization; T

- competition and regulatory issues (including price controls); O activities Concluding r of the - measures to enforce intellectual property rights; WT Annex II – - level of support to agriculture; - efforts to liberalize telecommunications services; - financial services; and - tourism. Members expressed their appreciation for the written and oral responses provided by the delegation of Brunei Darussalam to advance questions as well as to those posed during the meeting. In conclusion, I feel that we should congratulate Brunei Darussalam on maintaining a relatively open trade and investment regime. I think that we are all aware of certain difficulties Brunei faces in transparency and in implementation in terms of notifications and domestic legislation, but I also note that the delegation made Brunei’s commitment to the WTO very clear. Generally, I think we understand that technical assistance in some areas might ease Brunei’s implementation problems. I think that we also agree that a further

139 WTO activities Annex II – Trade Policy Review Body –

140 Concluding remarks by the Chair of the Trade Policy Review Body their commitmentsinthe applied r invited OECS-WT V also suggestedalternativerevenuesources use ofsafeguardmeasures Members consideredthatagriculturewould, emphasis ondevelopingtheservicesectorofferedbestgrowthopportunities with aviewtoreducingtheirvulner significant numberofpeoplelivinginpovertyandthepressingneedtoaddressthisproblem. suggested thatamoresimplifiedtariffstructuremightbeappropriate relatively high, with theircurrent, WT meet their persistence ofquantitativerestrictions participation inCARICOM. liber economies encour tr OECS-WT performance inrecentyears that, pay greaterattentionto Although, certain thatall negative economiceffectsofbeingsingledoutastaxhavensinotherfor shocks policies andpr in helpingOECS-WT by limitedhumanresources gr special consider system. of theinternationalcommunitytoparticipatemoreeffectivelyin multilater inescapable conclusionisthatatthisjuncturethecountriesunderreviewneedsupport resources diseconomies ofscale presentations ofthespecialchallengestheyfaceduetotheirsmallsizeandpopulations tr concrete stepstoaddressthese throughout thisreviewtoidentifythetr for additionaltechnicalassistancetoOECS-WT OECS-WT multilater Brunei bothinitseffortstodiversifyeconomyandfurtherintegr liber early gr Members bytheerosionofpreferentialmargins alue-Added ade ade policiesandpr anted inthe O Members wereappreciativeoftheeffortandprogressmadebyOECS-WT Many Members ofthisBodyrecognizedtheeffortsmadebyOECS-WT T - - Specific questionswerealsoask W - - - - Sever - alize theireconomies alization ofthetr his Reviewhasmadecleartheextenttowhichcomplyingwith , even givensuchdifficulties e havehadtwodaysoffr Agreements improvements tocustomsv compliance with binding of administr use ofquantitativerestrictions; import licensingprocedures; export assistance andpromotionactivities; a welleducatedlabourforceandstable . aged thesecountriestocontinueintheirpathdiversifyeconomies anting ofthew As aresult, Acknowledging this al MemberswereunderstandingoftherequestbyOECS-WT ates , WT al system, O countriestotheirgener . as aresult, including throughongoinginitiativesforgreaterregionalcooper WT O Membersattributedmuchoftheover , T O Members O notificationrequirementsandbringtheirdomesticlegislationintolinewith and thusimprovethepredictabilityoftheirimportregimes ax, actices theyfollow ation ofpricecontrols; WT WT but tookthepointthatthisw ation forthem, “other dutiesandcharges” O countriestolowertheirtariffbindingsr . O todevelopingcountries the feasibilityofwhichOECScountriesarealreadystudying. O Memberswillhavegainedabetterappreciationof Sever relatively liber and despitethenumberofMembersattendingmeetingitself to thebenefitofusall. O countriesconducttheirowninternalreviewsofthetr actices ade regime , means mightbefoundtomak WT aiver from high infr , al Membersalsoencour the problemsanddifficultiesoftheseeconomies , O notificationrequirements; WT particularly throughtariffreductionsinthefr . . Concerns wereexpressed, . , . Members alsonotedthat, Jointly andindividually In thisregard, there werewidespreadexpressionsofsupportfromMembers O withrespecttoservices However ank andconstructivediscussionontheOECS-WT astructure andsocialcosts , anchored intheprincipleofspecialanddifferentialtreatment , al pr , including throughapermanentpresenceinGenev aluation andadministr , OECS-WT WT including additionalGA and oftheresourcesattheirdisposaltocarrythemout. al opennessandhistoricalparticipationininternational ed theOECS-WT ability O rulesfortheCotonou actices , , the Membersunderreviewpointedtostill wide-spread importlicensingrequirements ade-related needsofthesecountrieswillleadto . , O countrieshadshownstrongeconomic Some I believethisreviewhasplayedanimportantrole . . with aMemberproposingtheadoptionof in the While notingtheproblemposedtoOECS-WT Concerns werevoicedwithrespecttothe and should, as mainlyforrevenuepurposes; , O countries well-functioning institutions , aged thecountriesunderreviewtoimprove some Membersexpressedsupportforan WT WT , O Memberson: O Membersconsideredthatcontinued these Membersmadeforceful e amoreefficientuseofthose all economicaccomplishmentsofthe however O; although reduced, , ation; putting thematalevelcompar remain ak TS commitments , . and vulner I hopetheworkundertak Agreement. ates closertothecurrently , with respecttothe O Memberstofurther WT ey sectorofthe ability toexternal O rulesisconstr , amework oftheir and willnodoubt ation intothe . O Membersfor a. tariffs remained . , Members noted ation, . could assist . ade-related WT Some Members O countriesto some al tr Members also O Members O Members’ , , the , while other particularly ading a. and the , en I am able ained , O - harmonization of standards and standards bodies; - the role of commodity boards; - transparency in government procurement; - protection of IPRs; - investment incentive schemes, and their coverage; and - legislation, access conditions and incentives in specific service sectors. Apart from the questions addressed to the OECS-WTO Members as a group, specific questions were directed to individual OECS-WTO countries, including: - to Antigua and Barbuda, on incentives schemes, free trade zones, imports of reconditioned vehicles, telecommunications and the functioning of the International Ship’s Registry; - to Dominica, also on incentives schemes; - to Grenada, on tariff bindings and the application of the general consumption tax; - to St. Kitts and Nevis, on labelling standards and the functioning of the International Ships Registry; - to St. Lucia, on investment limitations in certain sectors; and - to St. Vincent and the Grenadines, on incentives for non-hotel tourism activities. Members appreciated the oral and written responses and explanations provided by the delegations of the OECS-WTO countries. We look forward to receiving answers on still outstanding questions. In conclusion, it is my sense that this Review has amply fulfilled its main objective of assessing in a collective manner the trade policies and practices of the OECS-WTO Members, particularly in the context of their development needs and objectives as well as of the external environment. The Members under review reaffirmed their full commitment to the multilateral trading system, and the presence of the six Ministers has been strong testimony to this. But we have also been made aware of the problems and difficulties hindering the fuller participation of the OECS-WTO Members in the system. Addressing these issues could be important for a greater participation of OECS-WTO Members in the multilateral trading system, which would not only help the Members reviewed take greater advantage of trading opportunities to foster growth and development, but also enrich and be of benefit to the system as a whole. In this respect, I am convinced the WTO offers the best framework in which these Members can participate as equal partners with larger economies in the global market. Gabon

I noticed a warm atmosphere and a spirit of support for Gabon among the delegations present during the country’s first Trade Policy Review, which I consider to have been particularly successful. All of us are considerably enlightened as to the situation in Gabon, the country’s potential and the challenges lying ahead. We have had a very fruitful dialogue concerning the economic reform that Gabon has launched and the role of trade policy in that reform. The process was facilitated by the presence of a large and multidisciplinary delegation, skilfully led by Gabon’s Trade Minister, Mr. Mabika. In particular, we were able to appreciate the measures taken by the Government of Gabon to improve its integration into the multilateral trading system. The creation of a National Committee to oversee WTO matters from the capital was a decisive step. Many speakers acknowledged Gabon’s action on behalf of the WTO in Africa as host for the Trade

Ministers at the Libreville Conference last November. olicy Review Body –

We all agree that the health of the Gabonese economy depends heavily on the income olicy Review Body emarks by the Chair ade P r from dwindling oil resources, and that diversification is therefore a must. Many of the T ade P r questions raised by delegations concerned the strategy adopted by the authorities in the face T of this challenge, notably in the areas of privatization and investment, in which Gabon had O activities Concluding r of the made progress. Many statements also raised the issue of the Government’s support WT Annex II – measures for its industrial development policy, including disciplined management of public finance, reform of the civil service, and continuation of the fight against corruption, supported by the Bretton Woods institutions. In this context, incentives, subsidies, and domestic tax reductions or exemptions for enterprises might lead to problems of consistency with Gabon’s WTO commitments. On the subject of the application of Gabon’s trade policy instruments, which depend for the most part on the Economic and Monetary Community of Central Africa (CAEMEC), I pointed out the importance attributed by delegations to ensuring coherence between the regional and multilateral dimensions of that policy. One delegation expressed concern that the rates applied were above the bound rates in Gabon’s schedule for 40% of the tariff lines. Mr. Mabika assured us that his Government was aware of the problem and that the Gabonese authorities intended to find a rapid solution through negotiations under Article XXVIII of the GATT 1994, in full conformity with the relevant rules. Once the authorities have

141 WTO activities Annex II – Trade Policy Review Body –

142 Concluding remarks by the Chair of the Trade Policy Review Body initially scheduledtobeeliminatedhalfw implementation ofthe r exceptional amongthe dealt withthisproblem, Cameroon which remain, process byitstr very productivedialogueregardingbothitseconomicreformsandthepartplayedinthat to familiarizeourselvesmorecloselywithitseconomicandtr distinct success as theimplementationofprovisionsCustoms also expressedregarding firm intentiontoproposetheGovernmentabolitionofthissurcharge industrial developmentpolicy about themeasuresthatGovernment istakingtosupportitsagricultur priv by theauthoritiestocarryforw improve itsintegr observer withrespecttotheplurilater encour envisage fullparticipationinthe which, Agreement onSafeguards Dumping world economy reforms designedtoimproveitscompetitivenessandpromotecloser integr the effortswhichCameroonismakingtointroduceimportantinstitutional andeconomic assisted bystructur by theCamerooniandelegationconcerningrecentnotificationsw been welcomedasapositivecontributioninthisrespect. T participation. Secretariat, financial services its commitmentsundertheGA efficient servicessector particular fisheryandforestresources)thestrengtheningofcompetitivenesswithamore food security a trueconvergenceofviewsbetweenthedelegationGabon, the system, the competenceof his cooper force withintwomonths in Gabonpendingthecollectiver Members sharedGabon’ have beenrecognized, In thisconnection, it demonstr urgent needtodealwithGabon’ necessary r to theirauthorities the Gaboneseweremastersoftheirowndevelopmentprocess of itshumanresourcesthroughtechnicalassistance progr which ates echnical Committeewithresponsibilityforfollowingupquestionsrelating tothe Other questionswerealsor I haveaverystrongfeelingthatthesecondreviewofCameroon’ Members havecongr Mr Regarding Gabon’ Most speak F atization, AIPO ortunately . amme whichmightthenbeadopted, . WT aged ittoensure greatertr Mabika gavepreciseanswerstothesequestions I wouldventuretosay and werereadytoprovideconcretesignificantsupport. , Agreement, O Membercountriescanact. w ation. atifications wereimminentandthattheBangui ated theGovernment’ as alsoasourceofconcern. and allMemberspresentheretoday , investment andpromotionofthe priv the needforsustainablemanagementofnon-renew , ers expressedsatisfactionattherecoveryofCameroonianeconomy in particularasregardsgoodgovernanceandthealleviationofpoverty . . as recognizedbyanumberofspeak ade policy W Many ofthequestionsposedbydelegations concernedthestr T , ation intothemultilater hese answers as welltr e havealllearnedagreatdealaboutCameroon, . the country’ al reformsandafavour He alsospok s sector the , WT and sever WT African countries in whichconnectionIunderstoodthatGabonw atulated theGovernmentofCameroononstepsithastak . s goalofintegr we willallbeabletocongr V . Agreement onSubsidiesandCounterv . O O A W T , he implementationofthe T andexcisetaxreductionsforlocally-producedgoods Agreements e havealsobeenabletoappreciatetheextentoftasks al policies . would undoubtedlybetr , ansport, Delegations welcomedthefactthat Cameroonhadbecomean TS underlies allothers: , s technicalassistanceandcapacity-buildingrequirements aised bycertaindelegationswithrespecttothe ard thestructur together withhisstatements e oftheurgentneedinhiscountrytobuildupcapacity al delegationsclearlyindicatedtheirwillingnesstohelp WT s enormousdebtburden, , s firmintentiontohonouritscommitmentswithinthe atification oftheBangui ansparency inthat field. particularly intheareasoftelecommunicationsand O multilater al , in thecontextofongoingnegotiations T ation intotheglobaleconomyandmultilater delegations focusedaboveallontheproblemof Agreement onGovernmentProcurement and , , hese speak I understoodfromMr al tr including thecontinuedapplicationofasurcharge to thebindingofallitstarifflinesatceiling ay through2000. able externalenvironment. which Mr ading system. al reforms al tr . I congr ate sector how canadevelopingcountrylik ers urgedGabontospecifyitsneedsina , ers ading system?Mr atulate Gabonforitscommitment, . an essentialelementinensuringthat Mabika hasdoneinfull. ansmitted bythedelegationspresent TRIPS , , technical assistanceisanareain atulate youandthankforyour V , and Iwouldlik aluation including intheareasof Similarly Agreement, a concernwhich, Agreement shouldenterinto T T Agreement, . he existenceofaNational , he Ministerinformedusofhis ade situation. . Some speak also addressthequestion . Mabika’ the discussant, ailing Measures as muchappreciated, , able natur Agreement, the informationprovided and wehavebeenable s tr It isherethattherew . Members appreciated revised bymembersof Mabika spok s commentsthatthe ade policyhasbeena e tothankhimfor as urgedtodeepen which w ers alsoinquired al, W . while notwithin al resources(in Concerns were e havehada ation intothe mining and the Indeed, ategy adopted the , as delayed and the . WT Anti- , e ofan as well e Gabon O has . , en to WT since WT . al O as O . Most speakers noted Cameroon’s participation in the Central African Economic and Monetary Community (CEMAC). Cameroon was invited to assume a leadership role in the regional integration process. Some delegations drew attention to the low-level of participation of CEMAC countries in Cameroon’s trade and asked for further information on how Cameroon had benefited from its participation in the CEMAC. As far as Cameroon’s sectoral policies are concerned, delegations focused mainly on the agricultural sector, the need for sustainable management of natural resources (in particular, forests), and the need for improved performance in the services sector. Some delegations stressed that liberalization of the services sector was an important part of the efforts to modernize the economy. Cameroon was accordingly invited to extend its commitments under GATS, particularly in the areas of telecommunications, financial services and transport, within the context of the negotiations in progress. Specific questions were also posed on subjects such as: - Customs procedures, the operation of the single-window facility; preshipment inspection; - customs valuations; the Chairperson welcomed the entry into force of the WTO Agreement on Customs Valuation as of 1 July 2001; - the level of the rate of customs duties applied; the coverage of tariff bindings and the level of bound rates; - value added tax (VAT); - the procedures for granting import licences; - the protection of intellectual property and implementation of the TRIPS Agreement; - the non-existence of an independent official body for evaluating economic and trade policies; - the Investment Code; and - limitations on market access for Cameroonian exports. The written and oral replies given by the delegation of Cameroon to most of the questions posed did much to clarify Cameroon’s trade policy and the measures currently in force. The delegation also promised to send more detailed replies to the questions left in abeyance. In conclusion, it seems to me that we can all congratulate Cameroon on its continuing efforts to liberalize and further develop its economy. Members have recognized Cameroon’s need to receive technical assistance to strengthen its human resource capacities, thereby enabling it to fulfil its obligations within the context of the WTO. This would also facilitate Cameroon’s closer integration into the multilateral trading system and allow it to benefit from the advantages this would bring. Many speakers invited the Cameroon Government to draw up a list of its substantial technical assistance needs. They also invited it to press ahead with its structural reforms and its efforts to promote greater transparency in its legal and institutional systems. Speakers encouraged Cameroon to bind, within the framework of the WTO, not only all its tariff lines but also its liberalization measures in the services sector. These efforts were regarded as essential to give the liberalization of the economy greater credibility and to attract the foreign investment so necessary in Cameroon’s current situation. United States

We have had a successful sixth Review of the trade policies and practices of the United

States. This Review has allowed Members to understand better the trade policies of the new olicy Review Body –

US Administration, and to voice their views on how these policies might affect them. It is by olicy Review Body emarks by the Chair ade P r fostering such exchanges that this Mechanism contributes to the smoother working of the T ade P r multilateral trading system, rooted in the belief that cooperation in the field of trade is a T

condition for the well-being of, and peaceful relations among nations. These I believe were O activities Concluding r of the important considerations at a time when global economic difficulties and recent terrorist WT Annex II – attacks loom large in our minds. Members have again recognized the United States’ crucial role in the global economy and as well, the vital contribution it makes to the WTO. The size of the US economy together with its generally liberal, pro-competitive trade policies have made the United States the world’s largest single importing country, and a mainstay of world growth. Members were thus concerned about the slowdown in US economic activity, and encouraged the authorities to continue with the measures they were taking to address this; they urged the United States to resist any protectionist measures that might arise. Members also expressed strong interest in the new Administration’s trade policy objectives, both in the context of the WTO and with respect to preferential trade negotiations; several welcomed the strong US support for a new round of multilateral trade negotiations. We have also noted that the Administration has placed enactment of Trade Promotion Authority at the top of its trade legislative agenda.

143 WTO activities Annex II – Trade Policy Review Body –

144 Concluding remarks by the Chair of the Trade Policy Review Body to openmark were seenasunnecessarilyincreasingcostsfortr US delegation, agreements w level. restricted, to theUSpositionthat time underlinesastrongcommitment tothisMechanismandthe Ambassador Deilyandherdelegation, and w investigations under multilater expressed concernthattheByrd investigations withoutclearjustificationsresultinhar many notedthataccesstotheUSmaritimetr have had, competitiveness that thesemeasureswerenotanalternativetotheUSindustryimprovingits increased protectionaffordedtothesteelindustrythroughcontingencymeasures Development is oneoftheworld’ respect tothe patent system, including byadoptingthefirst-to-filesystem, Buy information onUSplanstorelaxremainingpurchasingrestrictions the UnitedStatesw exemptions toitsanti-trustlaws in productsissuedfrombiotechnology issues werealsor standards consider on policychangesinthebeneficiarycountries Some Membersnotedthatunilater liber States w participants consideredUSSPSrequirementstobecomplexandlengthy sugar anddairypolicy the increaseexceedingdeclineinagricultur government outlaystothepriv a r asides regulations falling prices noted theuseofspecificandcompoundr and textilesclothing; escalation insomesectorsofparticularinteresttodevelopingcountries relatively low tr ansparent tr ange ofmeasuresassisttheagri-foodsector - - - Members appreciatedtheor - - Other mattersr In conclusion, T - Sector On competitionpolicy T Members commendedtheUnitedStatesforitsgener In textilesandclothing, Widespread interestw Members recognizedthattheUnitedStateshasamongworld’ American alization oftr he UnitedStateshasmadeitspublicprocurementsubjecttothedisciplinesofGP he largeandgrowingnumberofanti-dumpinginvestigationsw measures tr taxation issues the extentofUSsupportforamultilater foreign investmentregulationsandremainingrestrictions; certain aspectsofcustomsregistr T , as ask he extentofrecentliber ade restrictionsforforeignpolicyreasons and aboutsub-feder able concern, as implementingthe al policiesandmeasureswerethesubjectofmanyinterventions , and thatinfinancialprofessionalservicesrestrictionscouldariseatthestate I believe and thenotificationto , including mutualrecognitionagreements ed tosubmitthestatisticsrequiredunder . . ets forUSexporters; . ade andinvestmentregimes T Act, as alsor Act andsimilarlegislation. However WT , he size and streamliningtheearlypublicationsystem. and lookforw . al rules notably undertheSection301familyoflawsdesigned, O compatibilityofSpecial301investigationprovisions ade it ismystrongsensethatthereadiness oftheUnitedStates aised, including onthird-countryinputsuppliers aised intheReviewincluded: , s largestproducersandimportersoffood, as urgedtoalignitspr a fr , . including offoreignprofessionals , , and seenbymanyaspotentiallyprotectionist. aised. Some Membersnotedtheexpectedeffectsofrecent administr , , as welltotheuseofexportcreditsandfoodaid. ank andconstructive discussionofUStr a numberofMemberspointedtothepersistencetariffpeaksand including withrespecttoenergyandfisheriessubsidiestr and thatitwouldleadtotheprolifer , as expressedinUSpoliciesregardingstandardsandtechnical peaks werealsopresentformotorvehiclesandships the UnitedStatesw WT sever al purchasingmeasures ard toreceivinganswersonoutstanding questions A O isanintegr alization ofUSairtr ate sector TC asscheduledtherehadbeenar al andwrittenresponsesexplanations providedbythe ation andfillr , al MemberspointedtothefactthatalthoughUnited Amendment givesremedythatmightnotbeappropriate both ataF WT and al UStr O ofsub-feder . ation, to undertak , Concerns wereexpressedabouttheimpactofset- nearly triplingbetween1997and2000with ates . ade preferenceswereincertaincasesconditional actices morecloselywiththoseofotherMembers Consonant withthis al partoftheUSdomesticeconomic agenda. eder documentation, . eliminating tr ansport mark al investmentagreementinthe , as encour ates oftariffquotaswerealsoconcern. . which increasetariffprotectionintimesof al output. Agriculture isthelargestrecipientof , al andStatelevel. aders; in somecasesinvolvingextr e thisReviewatparticularlydifficult ansport servicesunderbilater . al measures , assment toexporters , the greateradoptionofinternational aged toreducethenumberof electronic commerceandofexports; ally liber Specific attentionw Agreement. et continuedtobeseverely ade restrictiveaspectsofthe . Members alsonotedthe ation ofpetitionsfor procedures andfees Concern w but manyMembersnotedthat , . ade policies the aver Environment-related tr al servicessector WT , ather limitedeffective On intellectualproperty particularly thoseinthe as apointof O It w s mostopenand . Members alsosought , T . . among otherthings age MFNUStariffis such asagriculture his addspoignancy as expressedwith as notedthat . . T , Sever Many he UnitedStates and ofthe as giventoUS a-territoriality WT , of . T . al open-skies T r O; al Members ade hey also . , , However noting which ade ade A W . , , , e , challenges posed by the changing external environment, notably a slowing global economy. I welcome the fact that the United States is as ready as ever to engage trading partners in finding ways to meet those challenges. The United States maintains, I think we all agree, one of the world’s most open trade regimes, but in certain areas some of its features give rise to significant concerns on the part of other WTO Members. Addressing these would be to the benefit of us all, and certainly the multilateral system. Czech Republic

This Review, the second of the Czech Republic’s trade policies and practices, has been a real success. Through an open and informative discussion with the Czech delegation, we have all been able to gain a better understanding of the trade and trade-related policies and practices in place, and a fuller appreciation of their impact on the multilateral trading system. We have had a very productive dialogue on recent economic reform in the Czech Republic, and the role that trade liberalization played. The Czech economy was viewed by most Members as now being a functioning market economy. Members were able to obtain useful information about recent and planned changes in trade measures, in particular with regard to the ongoing negotiations for accession to the European Union. Members congratulated the Czech Government for its continued support of, and active role in, the WTO. The Czech Republic has undertaken important commitments in the multilateral system, and has expanded on them since the previous Review of its trade policies in 1996. Members appreciated the Czech Republic’s overall commitment to liberal trade and investment policies. Many Members also welcomed the Czech support for launching an expanded negotiating agenda at the 4th Ministerial Conference. All delegations welcomed the Czech economic recovery, assisted by structural change encompassing domestic reform and trade and investment liberalization. Some Members noted that the fiscal situation was fragile and that a further deterioration could pose a threat to macroeconomic stability. Members appreciated the efforts made by the Czech Republic in adapting its institutional and economic environment to the requirements of a modern market-oriented economy. Members acknowledged the impressive results of the Czech transition process, including the ongoing privatization of state-owned enterprises, which has played a significant role in attracting foreign investment. Members noted the importance the authorities placed on investment promotion, and on related plans to move forward on restructuring and privatization. Many Members noted that preparations for EU accession provided a strong anchor to the reform process. In this sense, they commented favourably on the Czech priority target of accession to the EU, which would create the opportunity for further reform as the Czech Republic increasingly harmonized its policies with EU requirements. Some Members raised concerns about the real impact on trade opportunities for non-EU countries, in particular for agricultural goods, resulting from accession. The relatively large number of preferential trade agreements to which the Czech Republic is party was noted, as was the fact that this resulted in a small share of its trade being conducted on an MFN basis. Members appreciated the close Czech economic and trade relations with the Slovak Republic, while recognizing that this did not imply common external positions in all areas. Members also took note of the Czech determination to ensure consistency between its regional trade objectives and its participation in, and ambitions for, the multilateral trading system. Members appreciated that the Czech tariff regime is transparent and predictable, and that average rates were relatively low. Nevertheless, some Members noted that Czech olicy Review Body – preferential rates were well below MFN levels. Members invited the Czech Republic to olicy Review Body emarks by the Chair ade P r reduce the gap between preferential and MFN tariffs. They also commented on the wide T ade P r tariff disparities, including tariff peaks, tariff escalation, and the use of concessions and T exemptions. The advantages of simplifying the tariff structure by reducing the high number of O activities Concluding r of the different MFN and preferential rates was highlighted. Members welcomed the fact that only WT Annex II – relatively few non-tariff barriers existed. On sectoral policies, Members focused mainly on agriculture and services. Some noted that the average tariff on agriculture is relatively high compared with that on non- agricultural goods. Clarification was sought on the existing system of assistance to the agriculture sector. A number of Members asked about the envisaged evolution of agricultural policies, in particular given the prospects for accession to the EU. Members welcomed the fact that competition in the banking sector had increased in recent years, and referred to measures to improve the efficiency of the banking sector. They sought information on plans for further privatization in the telecommunication sector. Members also sought additional details in a number of specific areas, including: - customs procedures; - non-automatic import licensing; - technical regulations and standards, and conformity testing procedures;

145 WTO activities Annex II – Trade Policy Review Body –

146 Concluding remarks by the Chair of the Trade Policy Review Body and sugarindustries protected, enhance itsintegr developing countrylocatedonaremotegroupofislands T costs w due tomultilater Members commendedMauritiusonitseffortstoadjusterosionof preferentialmargins the GA plans forfuturestructur diversify itsexportsaw Mauritius toliber while someothersviewedthisconcept asanexcuseforbarrierstotr to liber understanding oftheCzechtr send moredetailedrepliestosomeofthem. challenges facedbytheeconomy Mauritius’ initiativestow second position onregionalismasabuildingblocktow mark regional andbilater duties non-tariff measuresonimportsandexports r further liber enquired aboutitsplanstoreducerelianceonbordertaxes Mauritius continue onthispath. investment, regime recession. successful economictr that isalreadywellunderw to attr foreign directinvestment(FDI)thanotherdevelopingcountries made possiblebythefullengagementofMauritiandelegation, despite itseconomicsuccess attributed tosoundmacroeconomicpoliciesandpreferentialmark strong growthofMauritius’economyoverthepasttwodecades and bytheactiveinvolvementofmanyMembers participation inthemultilater interest butalsotheover relatively smallcountrydependentonexportmark interest inthemultilater regional liber ates here w as expressedaboutMauritius’participationinv Members appreciatedMauritius’activeparticipationinthemultilater In conclusion, Noting thatcustomsdutiesaccountedforabout50%ofMauritius’ taxrevenue Some MembersjoinedMauritiusinitssupportforthemultifunctionality ofagriculture T - - - - W ------he Czechdelegationgavewrittenandor , . et accessfortheMauritianeconomy e havehadopenandfruitfuldiscussionsonMauritius’tr technical assistanceexperienceinthecontextoftr commercial courtssystem, bankruptcy legislationandpr public enterpriserestructuringandfurtherpriv the over investment regimeandincentives; protection ofintellectualpropertyrights free-tr export policyandassistance; government procurement; contingency measures; . and increasethecover act higherlevelsofFDI. , TS alize itseconomyandfurtherintegr Suggestions weremadethatMauritiusnarrowthegapbetweenbound andapplied T as alsorecognitionoftheconstr which hasproventobeanimportantfactorbehindtheincreaseintr r , ade P Current policieshaveresultedinatr particularly inareas suchastourism, and enquiredaboutMauritius’plans tofurtherliber ade zones; alize itstr and hassustainedGDPgrowth. alization measures all systemofstateaid, olicy ReviewofMauritiushasbeenthoroughandcomprehensive; al tr alize itsagriculturesector I thinkwecanallcongr ation intothemultilater al agreements , ade liber the mainsourcesofearningsfrom merchandiseexports ade regimethroughsimplificationofitstariffstructure ansformation, Members alsoencour ay fromtheseproducts al reformsinitsservicessectorand forfurthercommitmentsunder al tr ards regionalandbilater all multilater ay ading systemandtoconsolidateinthemultilater , age ofitstariffbindingsonnon-agricultur al tr alization andincreasingparticipationofdevelopedcountriesin and politicalsocialstability ade andtr . Clarification w Members wereveryappreciativeoftheCzechRepublic’ . and tr T , ading system. , his wouldbenefitnotonlytheCzechlong-termeconomic including labourmark actice; and soughtinformationontheimportanceofpreferential and forthesuccessinovercoming1997-99 including specificaidtoeconomicallydepressedregions; al tr ansparency ofthelegalfr aints facingMauritiusduetoitbeingasmall ade policymeasurescurrentlyinforce . atulate theCzechRepublicforitscontinuingefforts ading system. al tr . , Members pointedoutthatthetextile aged theCzechRepublictopreserveitsactive Members encour and eliminationofdifferingtariffsexcise T as soughtaboutfurtherstepstotak , al repliestoquestionsposed, ation intothemultilater . ading system. he replieshelpedclarifyandbringabetter and enforcement; ansparent, Clarification w ards multilater telecommunications . al agreementstoexpanditstr arious overlappingregionalagreements Members wereimpressedbythesustained ets atization plans; , has muchtogainfromfull T ansition economies et rigidities , he CzechRepublic, and oftheneedforassistanceto predictable Members weresupportiveof , aged theCzechRepublicto as soughtaboutMauritius’ alism. ade policiesandpr . Mauritius hadattr alize theseindustriesand , T amework; Members querieditsfailure . hey encour T et access his performancew , , led byMinisterCuttaree and highproduction However and financialservices , ade al system, and opentr al products al tr , and urged and . . and undertookto aged Mauritiusto , ading system. Noting that being a ade and , , dismantling of al fr . were highly some concern ade something acted less , this w e up actices amework its . ade clothing, , , Members and its as s as . T . his . , Members also sought further clarification on, inter alia: - business environment; - elimination of elements of duality in the economy through transformation from export – to outward-orientation; - incentive schemes, including export subsidies and credit, and duty and tax concessions; - state-trading enterprises and implementation of the privatization programme; - government procurement and eventual participation by Mauritius in the Plurilateral Agreement on Government Procurement; - adoption of legislation on competition and on contingency trade remedies; and - revision and adoption of legislation to comply with obligations under the WTO Agreement on TRIPS. Members appreciated the responses provided by the delegation of Mauritius during the meeting, and look forward to later replies to some questions. In conclusion, this Review has given Members an opportunity to better understand the challenges facing Mauritius. Members commended Mauritius on its transformation from a mono-crop, to a relatively diversified economy with four pillars, and appreciated its steps to adjust to changes in the international environment. Members encouraged Mauritius to further liberalize and diversify its economy. In my personal capacity, I advocate that all Members support Mauritius in its efforts by securing market access for its products and assisting it to meet adjustment costs and improve competitiveness. Slovak Republic

We have had an open and very informative discussion of the trade policies and practices of the Slovak Republic. Members appreciated the opportunity to gain a much better understanding of the Slovak Republic’s trade-related policies, especially at a time when substantial reforms were being made. Our improved understanding has been very much helped by the frankness and contribution of the Slovak delegation, and I thank them for that. Members commended the Slovak Republic’s impressive progress in transforming to a market economy, with trade and investment liberalization as major features of this process. It is now seen as a functioning market economy, becoming increasingly integrated into the world economy. The Slovak Republic has substantially increased its multilateral commitments in the WTO during the review period. Members noted the gains in macro stabilization, including fiscal consolidation, since the late 1990s. Although unemployment remains high, the economy is beginning to recover, and prospects are promising. Members noted that despite past economic difficulties, the Government has not resorted to protectionist measures nor trade remedies, and indeed it has taken further steps to liberalize its trade regime. Structural reform has been revitalised. The Slovak Republic’s overall legislative and institutional framework is being strengthened, including important commercial changes, such as to the bankruptcy procedures. Members generally agreed that many of these positive outcomes are linked to Slovakia’s EU accession plans, and referred to the substantial achievements in these negotiations thus far. Members also supported the active and more transparent privatization programme covering key sectors, such as telecommunications and banking. Members agreed that the Slovak Republic plays a full role in the WTO but some wondered how the Slovak Republic would balance its regional arrangements with its olicy Review Body – multilateral commitments, and advised that regional integration should not detract from its olicy Review Body emarks by the Chair ade P r multilateral liberalization, including in agriculture. Some members were concerned about the T ade P r possible negative impact of Slovakia’s regional integration on third countries, noting that T most of its trade was non-MFN due to a relatively large number of preferential trade O activities Concluding r of the agreements. They urged the Slovak Republic to continue pursuing multilateral liberalization WT Annex II – to narrow the gap between preferential and MFN tariffs. Members commented favourably on overall low tariffs, although noting that transparency could be improved by further rationalization, such as reducing tariff escalation and removing duty exemptions as well as higher seasonal duties on certain agricultural products. Members welcomed the fact that the import surcharge, maintained for balance-of-payments reasons, had been terminated on schedule from 2001. The Slovak Republic also has relatively few non-tariff barriers. Several Members appreciated the special non-trade concerns confronting the Slovak Republic on agriculture. However, some urged the Slovak Republic to extend its liberalisation efforts to agriculture, which receives relatively high tariff and other assistance. Several delegations noted that Slovakia’s agricultural assistance as measured by the OECD had increased substantially since 1996. They questioned the use by the Slovak Republic of food self-sufficiency policies based on agricultural assistance to achieve food security.

147 WTO activities Annex II – Trade Policy Review Body –

148 Concluding remarks by the Chair of the Trade Policy Review Body multilater Malaysia of Malaysia’ US dollar measures wondered aboutthetimingandeffectivenessofMalaysia’ especially inthecorpor impressive economicperformancetosoundmacroeconomicpolicies better understandingbyMembers Members’ activeinvolvementinthediscussion. stimulated bothbythefullandopenengagementofMalaysiandelegation, confidence sector diversion, tariff r for Doha Development Malaysia’ introduced duringthereviewperiodwouldbemade Slov Priv deregulated andexposedtogreatercompetition, quick andstrongrecoveryfromthe1997 and tr same time and abolishalllocal-contentrequirements(exceptthosefortheautomotive sector). Members commendedMalaysiaforitseffortstoreducetariffs foreign directinvestmentanditscontinuedliber certification schemeformanufacturers Members some matters policies andmeasures felt thatsuchagap providesdevelopingnationswith adegreeofflexibilityinundertaking reductions andthattheimport-weighted tariffaver simple aver permitted Malaysiatoincreasetariff protectionforcertainproducts are unboundandthewideninggap betweenboundr recognized. regional tr would continuetobenefittheSlov as itsroleinDohaforfurthermultilater such openpolicies world economy of improvingeconomicefficiencyandfurtherintegr gap betweenboundandappliedMFN tariffr a, T Members wereimpressedwiththedevelopmentstow Members commendedMalaysiaforitsstrongsupportandcommitment tothe Members welcomedandwereimpressedbyMalaysia’ Members expressedtheirappreciationforMalaysia’ - - In conclusion, ------Members alsosoughtadditionaldetailsinanumberofspecificareas - - Written andor - atization nolongerexcludessensitivestate-ownedmonopolies ak Republictocontinuewithitspriv his particularly role ofthe improving theoper standards andeffortsatregionalinternationalharmonization, government procurementprocedures; changes inintellectualpropertyprotectionandeffortstoimproveenforcement; use ofinvestmentincentives; the systemofstateaidanditscontrol; efforts tostemcorruptionandimprovegovernance; under issues relatedtoimportsofGMOfood; improving thecover . ade-related policies ates appliedtoimportsfrom K TPRB ReviewofMalaysiahadseenafr ey sectors , , s viewsontheneedtodiversifyitsexports , al tr measures thatMalaysiasawasappropriateforstabilizingmark although Malaysiadidnotbelievethatthishadactuallyhappened. , ade arr and contributedtotheirimprovedunderstandingofthecountry’ implemented inthew . -utilisation oftariffquotasonagricultur age ofMFNtariffsduringthereview period. concerns werer Members expressedthehopethat Along withMembers s tr ading system, . . ade policies T Antimonopoly Office; ASEAN he Slov angements onotherMembers this successfulReviewhashighlightedon-goingliber al repliesbytheSlov , . such asbanking, W Agenda. e allwelcometheSlov . ate andfinancialsectors T , he Slov ation ofcommercialcourts; ak Republic’ some MembersnotedthatthegapbetweenMFNandpreferential age andbenefitsoftheGSPscheme . T , aised overthefactthataboutone thirdofMalaysia’ he outcome and expressedtheirhopethatitwouldactivelyparticipateinthe pr As regardsMalaysia’ actices andmeasures ak Republicalsoundertooktosendadditionalinformationon ak , , I encour ak Republic, e ofthe and thustheircollectiveev ASEAN countriesconstitutedapotentialsourceoftr s commitmenttothemultilater insur , ak delegationhelpedclarifytheissuesr , al tr atization efforts I believe ance Asian financialcrisis age theSlov Asian crisisandthepeggingofringittto ade negotiations ak Republic’ ates istheconsequenceofunilater and , “tempor ank andveryinformativeexchangeofviews , telecommunications andtr and helpalleviateanyadverseeffectsofits . T alization effortsintheseareas and fastgrowthinexports , his exchangehascontributedtoamuch s pursuitoftr including fromforeignsources has beenahighlysuccessfulthirdReview al products; age hasdeclined; . , “permanent”. nearly halfofwhichinvolveelectronics ates andappliedMFNr ating theSlov ak Republictocontinuepursue s relativeopennesstotr ary” . s strongsupporttothe Malaysia notedthatthiswidening ards liber s r s capitalandexchangecontrol apid growthanditsremarkably . liber Liber . . , aluation, ade liber Members attributedthis simplify thetariffstructure alization measures alization onallfronts alization oftheservices . , Members encour Members alsosought ak Republicintothe , al tr thereby r structur some otherMembers alization w of Malaysia’ alization inregional ading systemiswell , and theself including: ets andbuilding ansport, s currenttr . Some Members al reforms ates aising the . aised by ade and In particular WT s tarifflines and . al tariff , as ameans which had had been O aswell s tr At the aged ade , ade ade , , , . trade liberalization and other economic reforms. Members also urged Malaysia to reduce the scope of its non-automatic licensing system. It was noted that state-owned enterprises continue to play an important role in Malaysia’s economy and that the authorities might need measures to assure a pro-competitive climate in the sectors where such enterprises are prevalent. Some Members encouraged Malaysia to accede to the Agreement on Government Procurement. On sectoral issues, Members noted the contrast between the openness and economic performance of the electronics and automotive industries; the much more open electronics industry had performed much better than the automotive industry, which is protected by high tariffs and non-tariff measures, including import licensing. Members urged Malaysia to bring forward the abolition of local-content requirements for motor vehicles. Moreover, Members encouraged Malaysia to continue its liberalization of the services sector, particularly financial services and telecommunications. In addition, Members sought further clarification on, inter alia: - the possibility of an ASEAN–China free-trade agreement; - effectiveness of investment guarantee agreements; - greater use of ad valorem import duties; - measures affecting exports; - further progress in competition policy; - transparency in government procurement; - enforcement of intellectual property rights; - standards and licensing concerning various agricultural products; and - recognition of qualifications in education and legal services. Members expressed their appreciation of the responses provided by the delegation of Malaysia during the meeting, and looked forward to later replies to some questions. In conclusion, this Review has provided Members with a much better understanding of Malaysia’s trade and trade-related policies and of their role in fostering Malaysia’s economic development and helping it to cope with shocks, such as the Asian financial crisis. Malaysia’s recovery has apparently been greatly facilitated by Members’ adherence to the principles of the multilateral trading system and thus their willingness to keep their economies open to Malaysia’s exports. Members encouraged Malaysia to further liberalize and diversify its economy. In this context, I, along with Members, look forward to Malaysia’s continued support for future efforts to liberalize the multilateral trading system. Uganda

We have had a very interesting exchange of views during this second Trade Policy Review of Uganda. This was facilitated by the presence of a large Ugandan delegation, headed by Professor Rugumayo, Minister of Tourism, Trade and Industry. Members commented positively on the impressive growth of the Ugandan economy in recent years, aided by structural reforms and a strong macroeconomic performance, which resulted in Uganda’s early inclusion in the HIPC Initiative. Various government programmes put emphasis on poverty alleviation, diversification, and promotion of the private sector. However, high production costs, declining terms of trade, climatic conditions, non-tariff barriers in export markets and appreciation of the Uganda shilling have negatively affected its economic performance, its export competitiveness in particular. Members observed the seriousness with which Uganda had pursued its privatization agenda, but noted a slowing in recent years. It was pointed out that, by speeding up the olicy Review Body – process for the remaining entities, and by addressing governance and security problems, and olicy Review Body emarks by the Chair ade P r regulatory and institutional weaknesses, Uganda might further facilitate trade and attract T ade P r investment. Members were encouraged by Uganda’s assurances and actions in this respect. T

Some Members noted, however, that issues of governance should be treated prudently in the O activities Concluding r of the TPRs. WT Annex II – Members commended Uganda on its active participation in the Multilateral Trading System. They called on Uganda to provide notification concerning its use of WTO-compatible customs valuation procedures, and to join the Information Technology Agreement, in the context of the Government’s clear emphasis on the economic importance of information technology industries. They queried about Uganda’s trade-related priorities, and urged that inter-Ministerial coordination and coherence be improved in this respect. Members noted Uganda’s expectations and experience that non-reciprocal preferential treatment and its regional arrangements were a spur to liberalization, particularly through the active participation of the private sector. Concerns were expressed about overlapping membership of regional agreements in which Uganda participated, and the likely increases that might result from the adoption of common external tariffs under the agreements. Members expressed their appreciation of Uganda’s commitment and continued efforts to liberalize its trade regime. They commended Uganda for the simplification of its tariff

149 WTO activities Annex II – Trade Policy Review Body –

150 Concluding remarks by the Chair of the Trade Policy Review Body active implementationoftheIntegr building andimprovingcompetitiveness; efforts byprovidingmark assistance Some MembersindicatedtheirwillingnesstoprovideUgandawithtr Uganda, additional resourcestotheirMissioninGenev the multilater Members encour policies andpr meeting, in Uganda’ introduction ofasocialdimensioninitseconomicreforms standardization inUganda. and toincreasethecover 15%. structure throughthereductionofnumberbandstothreeandmaximumr up theliber manufactured goodswerecompetitive low capacityutilizationandhighproductioncostshadmeantthatfewofUganda’ modernization ofagriculture particularly coffee effort hadbeenhamperedbyfinancialconstr were expressedaboutthe Uganda’ withholding tax, In conclusion, - - - - Members appreciatedtheresponsesprovidedbydelegationofUgandaduring - - - Members pointedouttheheavydependenceofUganda’ Members alsosoughtfurtherclarificationon, contingency tr incentives andexportfinancing; export bansandcontrolstheirr customs procedures; intellectual propertyprotection. competition policy; public procurementregime; Members encour s commitmenttodevelopingacapabilitycreatesetofstandards particularly sothatitcouldplayanactiveroleontheDohaDevelopment and look . s tr In mypersonalcapacity alization reformsandtoimproveitscommitmentsundertheGA al tr ade policiesandpr actices befurthermainstreamedinUganda’ aged Ugandatopursueitsreformsandfurtherintegr while Ugandahadboundotherdutiesandchargesatzero ading system. as aresultofthisReview . ed forw Although recentreformshademphasizeddiversificationand ade remedies; aged Ugandatonarrowthegapbetweenboundandappliedr and et accessforitsproducts age ofitstariffbindingsonnon-agricultur ard tolaterrepliessomequestions WT , much moreneededtobedoneinthisarea. O compatibilityoftheimportlicencecommissionand Sever actices since1995. , ated F I advocatethatallMemberssupportUgandainits al MembersurgedthattheUgandanauthoritiesprovide . In services in thatrespectitisfundamentaltoensurefulland ationale; r amework forUganda. , Members havebetterunderstooddevelopments aints a toallowitfullypursuetheinterestsof inter alia inter , , , and madesuggestionsforstreamlining and assistancefortr Members encour Members commendedUgandaforthe : . s povertyalleviationstr However s economyonagriculture . al products , aged Ugandatospeed ade-related technical they urgedthattr ate itseconomyinto ade-related capacity In manufacturing, TS . Members noted , . . although the Concerns ategy s Agenda. , ates ade . ate to , Chapter Five

ORGANIZATION, SECRETARIAT AND BUDGET 152 Organization, Secretariat and budget The organization The organization Secretariat andBudget Organization, General Council. The TNC operates undertheauthorityof TNC anditssubsidiariesonarange ofsubjects. The Declaration providesthemandatefornegotiationsin WTO MinisterialConference. being studiedbyvarious councilsandcommittees. Electroniccommerceis competition policyandtransparency ingovernmentprocurement. trade and trade andinvestment, regionaltrade agreements, membership applications, development, individual agreementsandotherimportantareassuchastheenvironment, Council reporttotheGeneral Council. ServicesCounciland Trade-Related Aspects ofIntellectualProperty (TRIPS) Goods Council, the as the Trade Atthenextlevel, Policy ReviewBodyandtheDisputeSettlementBody. The General Councilalsomeets usually representedbyambassadorsorheadsofdelegations. the highest-level WTO decision-makingbodyistheGeneral CouncilwhereMembersare Intheintervals betweensessionsofthe MinisterialConference, least onceeverytwoyears. typically byconsensus. Decisionsinthe WTObecome Membersofthe aremadebytheentiremembership,WTO. Nearly30applicantsarenegotiatingto governments butcanalsobecustomsterritories. and training programmes; The WTOpolicy. ispursuingthisobjectiveby: transparency andpredictabilityintheconductoftrade These rulesfosternon-discrimination, trade policywhichhelpinternationaltrade toexpandwithaviewraising livingstandards. the Second World The War. WTO’s mainobjectiveistheestablishment ofrulesforMembers’ Agreement on Tariffs whichhadbeenestablished(1947)inthewake and of Trade (GATT), A Trade NegotiationsCommittee(TNC)was setupbytheDohaDeclaration atthefourth workinggroupsandpartiesdealwiththe Numerous specializedcommittees, The whichmeetsat WTO’s topleveldecision-makingbodyistheMinisterial Conference, Membersaremostly accountingfor90%ofworldtrade. The WTO has144Members, Cooperating withotherinternationalorganizations. - throughtechnicalassistanceand Assistingdevelopingcountriesintrade policyissues, - Reviewingnationaltrade policies; - Settlingtrade disputes; - Actingasaforumfortrade negotiations; - Administeringtrade agreements; - The asthesuccessortoGeneral World Trade Organizationcameintobeingin1995, Textiles MonitoringBody,andplurilateralcommittees. All WTOmembersmayparticipateinallcouncils,committees,etc,exceptAppellateBody,DisputeSettlementpanels, WTO structure The GeneralCouncilalsomeetsastheTradePolicyReviewBodyandDisputeSettlement Body General Councilmeetingas Key Technology Trade andTransferof Trade, DebtandFinance Procurement Transparency inGovernment Trade andCompetitionPolicy the Interactionbetween Trade andInvestment the Relationshipbetween Working groupson Accession Working partieson and Administration Budget, Finance Restrictions Balance ofPayments Regional TradeAgreements Trade andDevelopment Trade andEnvironment Committees on Developed Countries Subcommittee onLeast- Trade PolicyReview Body Reporting toDisputeSettlementBody Reporting toGeneralCouncil(orasubsidiary) Bodies establishedbytheTradeNegotiationsCommittee not everyWTOMemberisaparticipanttothisCommittee This CommitteeinformstheCouncilforTradeinGoodsofitsactivitiesalthough agreements arenotsignedbyallWTOmembers Plurilateral committeesinformtheGeneralCounciloftheiractivitiesalthoughthese Dispute Settlementpanels General Councilmeetingas Products Information Technology the ExpansionofTradein Committee ofParticipantson Dispute Settlement Trade inGoods Council for Appellate Body Body State-Trading Enterprises Working partyon Textiles MonitoringBody Safeguards Measures Trade-Related Investment Import Licensing Rules ofOrigin Customs Valuation Anti-Dumping Practices Measures Subsidies andCountervailing Technical BarrierstoTrade Measures Sanitary andPhytosanitary Agriculture Market Access Committees on Trade-Related Aspects Property Rights of Intellectual Council for Ministerial Conference General Council Committees on GATS Rules Domestic Regulation Working partieson Specific Commitments Trade inFinancialServices Council forTrade Plurilaterals Procurement Committee onGovernment Aircraft Committee onTradeinCivil in Services Trade Negotiations Development, SpecialSession Committee onTradeand Special Session Committee onAgriculture, Special Session Dispute SettlementBody, Session Council forTRIPS,Special Environment, SpecialSession Committee onTradeand Negotiating GrouponRules Access Negotiating GrouponMarket Special Session Council forTradeinServices, Committee 153

Organization, Secretariat and budget The organization 154 Organization, Secretariat and budget Secretariat Secr etariat T consists ofindividualswithrecognizedstandinginthefieldslawandinternationaltr panels Governing theSettlementofDisputestoconsiderappealsdecisionsbyDispute total staffcomplementiscomposedalmostequallyofmenandwomen. languages ofthe a Director countries public andthemediatoorganizeministerialconferences the v decision-making powers support services in internationaltr professional staffiscomposedmostlyofeconomists governments wishingtobecomeMembersofthe provides someformsoflegalassistanceinthedisputesettlementprocessandadvises hey areappointedtoafour Office oftheDirector Administr Accessions Division Council and Agriculture &CommoditiesDivision Senior Management Distribution ofstaffpositionswithinthe T T Language Services&DocumentationDivision Intellectual PropertyDivision Information &MediaRelationsDivision Informatics Division External RelationsDivision Development &EconomicResearchDivision Legal Mark T T Statistics Division Rules Division T T T T T T T WT Appellate Body r r r r r echnical Co-oper echnical Cooper extiles Division extiles MonitoringBody otal able V T T T ade &EnvironmentDivision ade inServicesDivision ade &FinanceDivision ade P ade InformationCentre he he he Secretariatstaffof560includesindividualsrepresentingabout60nationalities O arious councilsandcommittees et T . Affairs Division r WT Appellate Bodyw T aining Institute olicies ReviewDivision Access Division he .1 , ation &Gener -Gener to monitorandanalyzedevelopmentsinworldtr O Secretariat, Appellate BodyhasitsownSecretariat. TNC Division ation , ation al. including informatics ade policy WT Division -Gener Since decisionsaretak Audit O areEnglish, al ServicesDivision al . with officesonlyinGenev as establishedbytheUnderstandingonRulesandProcedures Its maindutiesaretosupplytechnicalandprofessionalsupportfor . T -year term, here isalsoasubstantialnumberofpersonnelworkingin F , rench andSpanish. to providetechnicalassistancefordeveloping , finance and maybereappointedonce en byMembersonly Regular staff 527 137 , WT 10 86.1 15 10.5 12.5 18.5 16.5 14.5 15.5 13 26.5 15 17 10 14 33.5 10 12 human resourcesandlanguageservices 7.4 5 8 6 3.5 1 9 WT O’ a, T , he seven-member s variousdivisions2002 O lawyers andotherswithaspecialization has 560regularstaffandisheadedby . ade Directors , 27 , 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 the Secretariathasno 1 to provideinformationthe . T he Secretariatalso . Appellate Body Management T he working Senior 6 5 1 560 138 11 12 87.1 16 11.5 13.5 19.5 17.5 15.5 16.5 14 27.5 16 18 11 10 15 34.5 11 13 T otal 8.4 9 2 1 7 4.5 . ade . T T he he . WTO Secretariat Organization Chart

Director-General Mike Moore

Office of the Director-General Textiles Monitoring Body Resource and Performance Appellate Body P. Rata A. Szepesi Analysis function V. Hughes Chairman

Deputy Director-General Deputy Director-General Deputy Director-General Deputy Director-General A. Ouedraogo P.-H. Ravier M. Rodriguez Mendoza A. Stoler

Development and Administration and Accessions Agriculture and Commodities Economic Research General Services A. Hussain F. Wolter P. Low J. Chabert

Intellectual Property Council and TNC Information and Media Relations A. Otten E. Rogerson K. Rockwell External Relations A. Frank Language Services and Documentation Rules Legal Affairs F. Alcoba J. Woznowski P. Kuijper

Informatics Statistics G. Karam R. Jackson Trade and Finance Market Access R. Eglin C.L. Guarda

Technical Cooperation Textiles C. Osakwe A. Campeas Trade Policies Review Trade in Services C. Boonekamp H. Mamdouh Technical Cooperation Audit P. Rolian

Trade and Environment

J.-E. SØ rensen Trade Information Centre and Library J.-M. Léger Training Institute C. Mercier 155 Organization, Secretariat and budget Secretariat 156 Organization, Secretariat and budget Secretariat Barbados Austria Austr Argentina Country T T Belgium Sub-total 2001 Benin Bolivia Burkina F Br Chile Canada Colombia Congo Costa Rica Côte d’Ivoire Cuba Denmark Estonia Egypt Ethiopia Ghana Germany F Finland Greece Hong K Hondur Hungary Indonesia India Lebanon J Italy Ireland Malawi Mauritius Malaysia Mexico Morocco Netherlands Nigeria New Zealand Norw P P P Philippines P Republic ofK Senegal Romania South T Switzerland Sweden Sri Lanka Spain T T Uruguay United States United Kingdom V Zambia Zimbabwe apan urk unisia r hailand able V ar ortugal oland eru enezuela able ofr ance azil aguay ey alia ay Africa as ong, .2 aso China egular staffbynationality orea 272.5 18 73.5 13 17.5 18 1 5 5.5 4 1 1 1 3 6 1 1 1 3 1 1 8 3 2 2 1 7 1 2 9 2 1 2 1 3 6 1 4 3 2 3 2 4 2 1 1 1 1 2 3 1 1 5 7 3 M 283 10 71 11 16 21 16 59.5 1.5 4 1 4.5 1 2 1.5 3 1 1 1 2 1 6 1 2 1 1 5 1 5 1 1 2 1 1 1 3 4 2 4 2 1 1 2 2 2 1 1 F 555.5 144.5 10 28 14 12 14 13 29 38.5 23 77.5 T otal 2.5 9 1 5 1 3 1.5 1 6 6 1 1 1 1 2 5 1 1 4 1 4 1 1 2 1 3 1 1 2 2 3 1 8 5 1 3 1 4 5 8 2 2 3 1 1 5 4 4 2 2 7 5 1 1 WTO Secretariat: Divisions

The WTO Secretariat is organized into Divisions with functional, information and liaison and support roles. Divisions are normally headed by a Director who reports to a Deputy Director-General or directly to the Director-General. Functional divisions

Accessions Division The work of the division is to facilitate the negotiations between WTO Members and states and entities requesting accession to the WTO by encouraging their integration into the multilateral trading system through the effective liberalization of their trade regimes in goods and services; and to act as a focal point in widening the scope and geographical coverage of the WTO. There are at present 28 Accession working parties in operation.

Agriculture and Commodities Division The division handles all matters related to the ongoing negotiations on agriculture. Furthermore, the Division provides support in the implementation of the existing WTO rules and commitments on agriculture, including by ensuring that the process for multilaterally reviewing these commitments by the Committee on Agriculture is organized and conducted in an efficient manner. The work of the division is to facilitate implementation of the Agreement on the Application of Sanitary and Phytosanitary Measures, including by servicing the SPS Committee. Other activities of the division include support for the implementation of the Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries; dealing with matters related to trade in fisheries and forestry products as well as natural resource-based products; providing services for dispute settlement in the area of agriculture and SPS; providing technical assistance in all areas under its purview; and cooperation with other international organizations and the private sector.

Council and Trade Negotiations Committee Division The division was formed on 1 January 2002 by merging the existing Ministerial Sessions and General Council Divisions, with a view to achieving cost and efficiency savings by combining the related functions of servicing the Trade Negotiations Committee and the General Council. The division also has the responsibility of servicing the WTO Ministerial Conference and the Dispute Settlement Body. The division has a continuous workload involving frequent meetings at both formal and informal levels, providing support to the Chairpersons of the bodies it services as well as to the Director-General and senior management. It also has continuous contact with delegations and an important co-ordination and communication function within the Secretariat.

Development and Economic Research Division The division provides economic analysis and research in support of the WTO’s operational activities, including monitoring and reporting on current economic news and developments. It carries out economic research on broader policy-related topics in connection with the WTO’s work programme, as well as on other WTO-related topics of interest to delegations arising from the on-going integration of the world economy, the spread of market-oriented reforms, and the increased importance of economic issues in relations between countries. The division contributes to regularly scheduled annual publications, including key parts of the Annual Report. Other major activities include work related to cooperation with other international organizations and the academic community through conferences, seminars and courses; preparation of special research projects on policy-related topics in the area of international trade; preparation of briefings to senior management. The responsibilities of the division include servicing the Committee on Trade and Development and the Informal Group of Developing Countries, providing analytical support for the work programme of the Committee.

Intellectual Property

The division provides service to the TRIPS Council and to dispute settlement panels; service Divisions to any negotiations that may be launched on intellectual property matters; provides assistance to WTO Members through technical cooperation, in particular in conjunction with the World Secretariat and budget etariat: Intellectual Property Organization (WIPO), and through the provision of information/advice Secr

more generally; maintains and develops lines of communication with other intergovernmental O Organization, organizations, the NGO community, intellectual property practitioners and the academic WT

157 158 Organization, Secretariat and budget WTO Secretariat: Divisions the sameforfutureConsolidated having requestedafive-yeardelayintheimplementationof Customs OrganizationSecretariatonprovidingtechnicalassistancetodevelopingcountries oversees thecontentandoper developing countriesthathaveinvok Contr other non-tariffmeasures conducts theupdatingandanalysisofdocumentationonquantitativerestrictions modifications withdr tariffs andnon-tariffmeasures; tariffs andnon-tariffmeasures; WT respect ofaccessions; information to Settlement Understanding(DSU), particular totheDisputeSettlementBodyanditsChairman, WT technical supportandassistanceonlegal, WT community sothattheyhaveanadequateunderstandingofthe Mark information to Legal Rules Division preferential rulesoforigin; on mattersrelatingtorulesoforigin. information andadvicetodelegations tariff barriersandclassificationissuesforreviewofproductcover implementation oftheIT organizes the Customs division alsoarr of the acceding countries matters relatingtoimportlicensing. courses and more gener conjunction withUNCT the inter WT bodies servicedbytheDivision. 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Agreement, maintains abroad Finally aluation ofall T WT he division ade-related orking Group WT T al to r O technical ade and actices , , O rights ailable Committee A the report TC WT A , WT and in TC and . al s , It O s O 159 Organization, Secretariat and budget WTO Secretariat: Divisions 160 Organization, Secretariat and budget WTO Secretariat: Divisions T T Services; Services andotherbodiesestablishedundertheGA underw T T courses consistoflecturesgivenby allow themtoimprovetheeffectiveness oftheirworkinownadministr international tr widen theparticipatingofficials’understanding ofthemultilater courses inGenev resource development. 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T staff counselling, r , ammes forthestaff ade Organization. accounting, the ated packageofservicesand ative functioningofthe a-budgetary Fundsand WT WT . T avel arr O Secretariatandother he divisionactsasthe and inparticularwith . O-specific salaryand and assistingthehost As well, and payroll, T WT he . ant meetings . angements Its workincludes capacity- It isalsoin WT development O Directory “Newsroom” T . a Members’ he division O registryof , T (c) logistical he division WT , O (b) e-mail, . . . It also T , . his WT , a O . 161 Organization, Secretariat and budget WTO Secretariat: Divisions Reference Centres in the capitals of LDC and developing countries, the division provides IT expertise and participates in technical cooperation missions.

Language Services and Documentation Division The division provides a range of language and documentation services to Members and to the Secretariat, including translation, documentation, printing and related tasks. The advent of the Internet has provided the Secretariat with a powerful vehicle to disseminate its documentation. The vast majority of people consulting the WTO’s homepage visit the LSDD’s documentation facilities. Consultation is growing at a rate of 15% per month. LSDD ensures WTO documents, publications and electronic materials are available to the public and to Members in the three WTO working languages – English, French and Spanish. WTO Appellate Body and its Secretariat

The WTO Appellate Body The Appellate Body was established pursuant to the Understanding on Rules and Procedures Governing the Settlement of Disputes (the “DSU”), which is contained in Annex2 to the Marrakesh Agreement Establishing the World Trade Organization. The function of the Appellate Body is to hear appeals arising from panel reports pursuant to Article17 of the DSU. The Appellate Body comprises seven Members, recognized authorities in law, international trade and the WTO Agreements generally, who reside in different parts of the world and are required to be available at all times and on short notice to hear appeals. Individual members of the Appellate Body are sometimes called upon to act as arbitrators under Article 21 of the DSU.

WTO budget 2002

The WTO derives most of the income for its annual budget from contributions by its 144 Members. These are established according to a formula based on their share of international trade. The list of Members’ contributions for 2002 can be found in Table V.5. The balance of the budget is financed from miscellaneous income. Miscellaneous income is earned from rental fees and sales of WTO print and electronic publications. The WTO also manages a number of trust funds, which have been contributed by Members. These are used in support of special activities for technical cooperation and training meant to enable least-developed and developing countries to make better use of the WTO and draw greater benefit from the multilateral trading system. The active trust funds are listed in Table V.6. The WTO’s total budget for the year 2002 is as follows: - 2002 Budget for the WTO Secretariat: 140,313,850 CHF (Table V.3); - 2002 Budget for the Appellate Body and its Secretariat: 2,816,000 CHF (Table V.4); - Total WTO Budget for the year 2002: 143,129,850 CHF. Secretariat and budget O budget 2002 Organization, WT

162 Table V.3

WTO Secretariat budget for 2002

Section Swiss Francs

1 Staff (Work/years) (a) Salary 62,786,700 (b) Pensions 12,387,600 (c) Other Common Staff costs 10,592,500 2 Temporary Assistance 12,907,100 3 Communications (a) Telecommunications 637,000 (b) Postage charges 1,527,000 4 Building Facilities 1’000,000 (a) Rental 249,600 (b) Utilities 1,646,500 (c) Maintenance and Insurance 923,000 5 Permanent Equipment 3,700,800 6 Expendable Equipment 1,343,700 7 Contractual Services (a) Reproduction 1,421,000 (b) Office Automation/Informatics 2,239,800 (c) Other 244,000 8 Staff Overhead Costs (a) Training 430,000 (b) Insurance 1,114,500 (c) Joint Services 542,000 (d) Miscellaneous 54,500 9 Missions (a) Official 1,241,100 (b) Technical Co-operation 1,198,200 10 Trade Policy Training Courses 2,496,000 11 Contribution to ITC 15,113,850 12 Various (a) Representation and Hospitality 258,000 (b) Dispute Settlement Panels 1,337,000 (c) Permanent Group of Experts/ 30,000 (d) Appellate Body (e) Library 583,500 (f) Publications 193,000 (g) Public Information Activities 210,000 (h) External Auditors 50,000 (i) Ministerial Meeting 400,000 (j) ISO 58,900 (k) Other 73,000 13 Unforeseen Expenditure 100,000 Sub-total 139,089,850 Geneva Week/Short Trade Policy Courses for LDCs 1,224,000 Total 140,313,850 Secretariat and budget O budget 2002 Organization, WT

163 Table V.4

Budget for the Appellate Body and its Secretariat, 2002

Section Swiss Francs

1. Staff (Work/years) (a) Salary 1,500,200 (b) Pensions 296,400 (c) Other Common Staff costs 244,400 2. Temporary Assistance 36,000 3. Communications (a) Telecommunications 6,500 (b) Postage charges 4. Building Facilities (a) Rental (b) Utilities 13,000 (c) Maintenance and Insurance 0 5. Permanent Equipment 47,200 6. Expendable Equipment 17,700 7. Contractual Services (a) Reproduction 15,000 (b) Office Automation / Informatics 0 (c) Other 8. Staff Overhead Costs (a) Training (b) Insurance 5,000 (c) Joint Services (d) Miscellaneous 2,000 9. Missions (a) Official 10,000 (b) Technical Co-operation 10. Trade Policy Training Courses 11. Contribution to ITC 12. Various (a) Representation and Hospitality 1,000 (b) Dispute Settlement Panels (c) Permanent Group of Experts/ Arbitration under GATS (d) Appellate Body Members 618,200 (e) Library 3,400 (f) Publications (g) Public Information Activities (h) External Auditors (i) Ministerial Meeting (j) ISO (k) Other 13. Unforeseen Expenditure Total 2,816,000 Secretariat and budget O budget 2002 Organization, WT

164 Table V.5

Members’ contributions to the WTO budget and the budget of the Appellate Body, 2002

2002 Contribution Members % CHF

Albania 0.015 21,315 Angola 0.057 80,997 Antigua and Barbuda 0.015 21,315 Argentina 0.510 724,710 Australia 1.218 1,730,778 Austria 1.438 2,043,398 Bahrain 0.068 96,628 Bangladesh 0.105 149,205 Barbados 0.020 28,420 Belgium 2.683 3,812,543 Belize 0.015 21,315 Benin 0.015 21,315 Bolivia 0.026 36,946 Botswana 0.041 58,261 Brazil 0.988 1,403,948 Brunei Darussalam 0.044 62,524 Bulgaria 0.094 133,574 Burkina Faso 0.015 21,315 Burundi 0.015 21,315 Cameroon 0.027 38,367 Canada 3.914 5,561,794 Central African Republic 0.015 21,315 Chad 0.015 21,315 Chile 0.311 441,931 China, People’s Rep. of 2.973 4,224,633 Colombia 0.233 331,093 Congo 0.024 34,104 Costa Rica 0.104 147,784 Côte d’Ivoire 0.068 96,628 Croatia 0.147 208,887 Cuba 0.064 90,944 Cyprus 0.064 90,944 Czech Republic 0.511 726,131 Democratic Republic of the Congo 0.024 34,104 Denmark 0.948 1,347,108 Djibouti 0.015 21,315 Dominica 0.015 21,315 Dominican Republic 0.125 177,625 Ecuador 0.085 120,785 Egypt 0.266 377,986 El Salvador 0.058 82,418 Estonia 0.063 89,523 European Communities 0.000 0 Fiji 0.016 22,7366 Finland 0.672 954,912 France 5.541 7,873,761 Gabon 0.034 48,314 Gambia 0.015 21,315 Georgia 0.015 21,315 Germany 9.291 13,202,511 Ghana 0.042 59,682 Greece 0.311 441,931 Grenada 0.015 21,315 Guatemala 0.063 89,523

Guinea 0.015 21,315 Secretariat and budget Guinea-Bissau 0.015 21,315 Guyana 0.015 21,315 Haiti 0.015 21,315 O budget 2002 Organization, WT

165 Table V.5 (continued)

Members’ contributions to the WTO budget and the budget of the Appellate Body, 2002

2002 Contribution Members % CHF

Honduras 0.039 55,419 Hong Kong, China 3.345 4,753,245 Hungary 0.413 586,873 Iceland 0.045 63,945 India 0.830 1,179,430 Indonesia 0.831 1,180,851 Ireland 1.141 1,621,361 Israel 0.548 778,708 Italy 4.407 6,262,347 Jamaica 0.057 80,997 Japan 6.629 9,419,809 Jordan 0.066 93,786 Kenya 0.047 66,787 Korea, Republic of 2.381 3,383,401 Kuwait 0.194 275,674 Kyrgyz Republic 0.015 21,315 Latvia 0.051 72,471 Lesotho 0.015 21,315 Liechtenstein 0.027 38,367 Lithuania 0.083 117,943 Luxembourg 0.297 422,037 Macao, China 0.062 88,102 Madagascar 0.015 21,315 Malawi 0.015 21,315 Malaysia 1.313 1,865,773 Maldives 0.015 21,315 Mali 0.015 21,315 Malta 0.048 68,208 Mauritania 0.015 21,315 Mauritius 0.041 58,261 Mexico 2.106 2,992,626 Moldova 0.015 21,315 Mongolia 0.015 21,315 Morocco 0.160 227,360 Mozambique 0.015 21,315 Myanmar, Union of 0.032 45,472 Namibia 0.029 41,209 Netherlands, Kingdom of the 3.625 5,151,125 New Zealand 0.266 377,986 Nicaragua 0.020 28,420 Niger 0.015 21,315 Nigeria 0.204 289,884 Norway 0.859 1,220,639 Oman 0.099 140,679 Pakistan 0.185 262,885 Panama 0.124 176,204 Papua New Guinea 0.033 46,893 Paraguay 0.064 90,944 Peru 0.137 194,677 Philippines 0.628 892,388 Poland 0.703 998,963 Portugal 0.609 865,389 Qatar 0.076 107,996 Romania 0.170 241,570

Secretariat and budget Rwanda 0.015 21,315 Saint Lucia 0.015 21,315 Senegal 0.023 32,683 O budget 2002 Sierra Leone 0.015 21,315 Organization, WT

166 Table V.5 (continued)

Members’ contributions to the WTO budget and the budget of the Appellate Body, 2002

2002 Contribution Members % CHF

Singapore 2.080 2,955,680 Slovak Republic 0.205 291,305 Slovenia 0.169 240,149 Solomon Islands 0.015 21,315 South Africa 0.521 740,341 Spain 2.468 3,507,028 Sri Lanka 0.095 134,995 St. Kitts and Nevis 0.015 21,315 St. Vincent and the Grenadines 0.015 21,315 Suriname 0.015 21,315 Swaziland 0.018 25,578 Sweden 1.497 2,127,237 Switzerland 1.536 2,182,656 Tanzania 0.025 35,525 Thailand 0.999 1,419,579 Togo 0.015 21,315 Trinidad and Tobago 0.045 63,945 Tunisia 0.134 190,414 Turkey 0.792 1,125,432 Uganda 0.020 28,420 United Arab Emirates 0.519 737,499 United Kingdom of Great Britain and Northern Ireland 5.862 8,329,902 United States of America 15.723 22,342,383 Uruguay 0.064 90,944 Venezuela 0.315 447,615 Zambia 0.021 29,841 Zimbabwe 0.034 48,314 Secretariat and budget O budget 2002 Organization, WT

167 168 Organization, Secretariat and budget WTO budget 2002 United States United States United States Sweden United Kingdom United Kingdom New Zealand Netherlands United Kingdom Luxembourg K J Hong K F F Finland Denmark Germany Germany Switzerland Switzerland United States Other extr JIT 1 T T T List ofmainactiveextr T Gr Netherlands apan r r otal otherextr otal trustfunds rust Funds able V orea ance ance JIT AP and totalextr AP: JointIntegratedT 1 Donor ong, .6 a-budgetary funds China a-budgetary funds a-budgetary funds echnical AssistancePr TWP02 TWP03 TIMM1 TDDA1 TUK05 TUK03 TUK04 THK02 TDK02 TNZ03 TUS05 TUS04 TUS03 TKR01 TNL03 TDE02 TDE01 TMI04 TLU01 T0039 T0030 T0028 T0027 T0006 ES963 TFR02 TFR01 TSP10 TSE02 EPSF1 TJP05 Fund TFI01 a-budgetary fundsdonatedfortechnicalcooper W T T Seminars onSPS W T T Ev WT T NGO Symposium W Qatar Ministerial(LDCs) T T WT Interns forMembers’Missions T T Seminars onSPS T T T T Doha Development Consultant forthetr Legal adviceondisputesettlementcases T WT Progr T WT ogramme. r echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper echnical cooper ade P orkshop on orkshop on orkshop onCompetitionP aluation of O seminarsin O seminarsin O ReferenceCentres O amme SupportFund T r ainees Progr olicy Reviews WT TBT TBT ation activities ation activitiesin ation activities ation activities ation activities ation activities ation activities ation activities ation activities ation activities ation activities ation activities ation activities ation activitiesinselected O technicalcooper Asia /P Asia amme Agenda GTF ade policycourses acific Pr olicy oject Africa ation African countries ation andtr Balance 8,366,336 9,269,114 1/1/02 1,575,144 1,061,353 902,778 (53,639) (41,015) 583,823 125,381 393,507 157,277 649,854 722,525 399,112 568,595 450,064 289,781 178,662 158,964 724,116 950,985 aining activities (3,401) 43,891 63,907 33,173 15,285 32,456 84,275 18,131 30,000 33,701 11,041 5,513 6,655 - for 2002 Pledges 8,528,666 8,528,666 1,400,000 2,020,000 1,700,000 880,000 315,000 125,000 940,000 500,000 510,000 138,666 - 16,895,002 17,797,780 1,005,381 1,400,000 1,575,144 1,061,353 1,339,112 1,068,595 2,038,131 1,989,781 T 902,778 otal (53,639) (41,015) 583,823 393,507 157,277 649,854 311,599 157,456 722,525 450,064 543,701 178,662 158,964 724,116 145,321 950,985 43,891 63,907 33,173 15,285 84,275 30,000 11,041 5,513