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GENERAL AGREEMENT on $^St 1981 TARIFFS and TRADE Limited Distribution

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GENERAL AGREEMENT on $^St 1981 TARIFFS and TRADE Limited Distribution RESTRICTED GENERAL AGREEMENT ON $^st 1981 TARIFFS AND TRADE Limited Distribution COUNCIL 15 July 1981 MINUTES OF MEETING Held in the Centre William Rappard on 15 July 1981 Chairman: Mr. D.S. McPHAIL (Canada) Page Subjects discussed: 1. Africa, Caribbean and Pacific Group 2 of States (ACP Group) - Request for observer status 2 2. Tax legislation 2 (a) Income tax practices maintained by 2 France (b) Income tax practices maintained by 2 Belgium (c) Income tax practices maintained by 2 the Netherlands (d) United States tax legislation (DISC) 2 3. Spain - Measures concerning domestic sale of 3 soyabean oiI - Report of the Panel 3 4. European Communities - Refunds on exports of 3 sugar 5. International Trade Centre 10 - Report of the Joint Advisory Group 10 6. European Economic Community - Production 11 subsidies on canned fruit 7. Italy - Deposit requirement for purchases 12 of foreign currency 8. Dates for the thirty-seventh session of 14 the CONTRACTING PARTIES 9. Agreement between the EEC and Yugoslavia 14 10. United States - Imposition of countervailing 14 duty without injury criterion/industrial fasteners imported from India 11. United States - Agricultural Adjustment Act 14 12. Japan - Measures on edible fats containing 15 mi Ik fat 13. United States - Import duty on vitamin B12 15 C/M/149 Page 2 The Chairman stated that Item 6 of the proposed agenda (C/W/365), Australia - Article XIX action on certain works trucks and stackers, should be deleted from the agenda at the request of the interested delegations. 1. Africa, Caribbean and Pacific Group of States (ACP Group) - Request for observer status The Chairman informed the Council that the Director-General had received a letter from the Secretary-General to the African, Caribbean and Pacific Group of States, requesting that the General Secretariat of the ACP Group be granted observer status at sessions of the CONTRACTING PARTIES and at the meetings of the Council of Representatives. The letter stated that the ACP Group Secretariat considered it very important to be kept well informed on the activities of GATT, since the major emphasis of the ACP Group was on trade co-operation and trade promotion. The representative of Nigeria supported the request for observer status. The Council approved of the request. 2. Tax Legislation (a) Income tax practices maintained by France (C/114, L/4423) (b) Income tax practices maintained by Belgium (C/115 and Corr.1, L/4424) (c) Income tax practices maintained by the Netherlands (C/116, L/4425) (d) United States tax legislation (DISC) (L/4422) The Chairman said that it was his understanding that consultations were still in progress and that, according to his information, it would not be possible for the Council to arrive at conclusions at the present meeting. The representative of the Netherlands said that, according to his instructions, he had to ask the Council to adopt the report on the Netherlands tax-practices with a qualification which would clarify the interpretation of the terms "export activities" in terms of Article XVI:4. In view of the Chairman's introductory statement, however, he understood that it would not be possible to deal with this matter at the present meeting. He expressed the regret of his authorities that it would again be necessary to postpone this matter to the next Council meeting. The Council took note of the statements and agreed to revert to these matters at its next meeting. C/M/149 Page 3 3. Spain - Measures concerning domestic sale of soyabean oil - Report of the Panel (L/5142, L/5161) The Chairman recalled that in January 1980 the Council had agreed to establish a Panel to examine the complaint by the United States. The Report of the Panel had been circulated in document L/5142 and Corr.1. In addition, a communication from the United States had been circulated in document L/5161. Mr. A. Moerzinger (Uruguay), speaking on behalf of Mr. J.J. Real (Uruguay), Chairman of the Panel, noted that the Report contained four chapters, viz. an introductory chapter, a second chapter summarizing the purely factual aspects of the Spanish measures in question, a third chapter setting out the main arguments presented to the Panel by the parties to the dispute, and a fourth chapter with the findings and conclusions reached by the Panel. He said that in November 1980, and in accordance with the "Understanding Regarding Notification, Consultation, Dispute Settlement and Surveillance" (BISD 26S/210), the Panel had presented its findings and conclusions to the parties and had invited them to inform the Panel by the end of January 1981 whether they thought it possible to arrive at an agreement on the basis of bilateral consultations. Following such consultations, this did not prove to be possible. Accordingly, the Panel had submitted its Report for consideration by the Council. In conclusion, he stated that the Panel had reached its findings and conclusions unanimously. The Chairman said that he understood that the two parties to this dispute had requested that consideration of the Panel's Report be deferred until a future meeting of the Council in the autumn. The representative of Spain said that his authorities' decision not to discuss this matter at the present meeting naturally did not imply their agreement with the written comments of the United States (L/5161). He said that Spain reserved all its GATT rights in this matter. The Council took note of the statements, and agreed to defer this item to a future meeting in the autumn. 4. European Communities - Refunds on exports of sugar (C/M/148, L/5175) The Chairman recalled that in March 1981 the Council had considered the report by the Director-General on the discussions in a working party with the European Communities under Article XVI:1 on the possibility of limiting the subsidization of exports of sugar. The Council had adopted the report, had noted that the complaints were maintained, had taken note of the intention of the European Economic Community to notify to GATT as soon as they were adopted the new sugar regulations as well as the 1981/82 sugar intervention prices, had decided that as soon as these notifications were received the Council C/M/149 Page 4 would promptly review the situation, and had decided to maintain this item on its agenda. Further discussions had taken place at the meeting of 11 June 1981, and the Council had agreed to revert to this matter at the present meeting. The new Community regulations and intervention prices on sugar had been adopted on 30 June 1981. The Chairman said that the European Economic Community had meanwhile sent this information, which was available in document L/5175. The representative of the European Communities affirmed that the EEC had honoured its commitment to notify the new regulations governing the Community sugar policy. As those regulations were very complex and the Council needed time to study them, he suggested that discussion on this item be deferred to the next meeting of the Council. The representative of Brazil said that significant developments had taken place since this item had most recently been considered by the Council. He stated that between 10 June and 8 July, five more tenders had been granted by the Community, involving 414,000 tons of white sugar and 11,000 tons of raw sugar for which export licences had been granted. This meant that since 1 April 1981 over one million tons of white sugar and nearly 33,000 tons of raw sugar had been the object of export licences, for which the total amount of subsidies granted surpassed US$160 million. He said that his delegation could not agree to a postponement of the review, particularly since the Council had decided in March 1981 that as soon as the notifications were received it would promptly review the situation. He then proposed that, for technical reasons, the review should not be carried out by the Council itself, but rather by a body set up by the Council. In his view, the same situation existed now as in March 1981, except that an essential element, namely the notification by the EEC of the measures adopted, had now been made available. Therefore, it was most appropriate to reconvene the Working Party. The representative of Australia supported the views expressed by the representative of Brazil. He said that the review should, in keeping with the decision of the Council, be undertaken promptly. He then outlined the development of events which had led to the present situation, pointing out that the Working Party had been a mechanism to conduct discussions between the EEC and the CONTRACTING PARTIES on the possi­ bility of limiting the subsidization of Community sugar exports. He.sf]^ that during the discussions in the earlier Working Party on the possibility of limiting Community subsidies on sugar exports the representative of the European Communities had himself explained the proposed EEC sugar régime. The representative of Australia then cited a number of extracts from the report of the Working Party (L/5113) to illustrate the detailed attention which had been given by the Working Party to what had, at that time, been a C/M/149 Page 5 proposal for a new EEC sugar régime. He stressed the following points: (1) Discussion of the proposed new Community régime for the next five years had been a fundamental part of the Working Party proceedings. (2) Discussion of that régime had been introduced by the representative of the European Communities as a significant factor in terms of the EEC's limiting the sub­ sidization of its sugar exports. (3) It had been pointed out by the representative of the European Communities in the discussions that the régime was subject to the acceptance by the Council of Ministers, and that the discussion in the Working Party could not be final since the proposed régime had not at that time taken effect.
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