Implementation Issues refer to the concerns and issues pertaining to the implementation of the existing WTO agreements arising out of the commitments undertaken during the Uruguay Round of Multilateral Trade Negotiations as embodied in the Uruguay Round Agreements signed in 1994. During the last 6 or 7 years of implementation of various agreements of the WTO, we have come across several implementation-related problems. These concerns are of three types, namely, non-realisation of anticipated benefits as in the case of the Agreement on Textiles & Clothing and Agreement on Agriculture; inequities and imbalances in some of the agreements like TRIPs, subsidies, anti-dumping etc.; and the non-operational & non-binding nature of Special & Differential provisions of the agreements.

These concerns have been highlighted by India along with 11 other like minded group of developing countries in the preparatory process to the 3rd Ministerial Conference at Seattle and the forthcoming Fourth Ministerial at Doha. These concerns can be categorised into 3 broad categories and are explained below:

(1) Inherent imbalances and asymmetries in the existing agreements.

Examples:

(i) TRIPS (Trade-Related Intellectual Property Rights) provides a higher level of protection for the Geographical Indications for the wines and spirits while items of interest to developing countries like Basmati rice or Darjeeling tea do not enjoy such a protection under TRIPS.

(ii) Through the Convention on Bio-Diversity, specifically recognises the rights of the sovereign countries on their bio- resources, TRIPS does not recognise this and does not provide any international recognition to the various sui generis systems for the protection of traditional knowledge(TK) including by way of prior informed consent and the sharing of benefits if the traditional knowledge has been used by the Patent applicants or others;

(iii) The definition of "inputs consumed in production process" as clarified in Subsidies Agreement (SCM) needs to be expanded to include all inputs such as wear and tear of machinery, tools and dies, grinding wheels etc. so that the duties paid on such inputs for exports could be reimbursed to the exporters.

(iv) Most of the developing countries who had not converted their Quantitative Restrictions (QRs) into tariffs, are not entitled to the use of Special Safeguard Mechanism for taking action against the surge in import volume above a threshold level or decline below a particular level in international prices.

(v) Under the WTO Agreement on Agriculture (AoA), while the developed countries who have been distorting trade by giving high domestic subsidies, have enough flexibility to give any amount of subsidy to any particular commodity as long as the overall Total Aggregate Measurement of Support (AMS) is below the commitments, the developing countries who were not earlier giving high subsidies, can not cross the de minimis level in any item.

(vi) While the Subsidies Agreement (SCM) permits the types of subsidies used by the developed countries, the subsidies generally used by the developing countries are made actionable;

(vii) TRIMs (Trade-Related Investment Measures) Agreement comes in the way of the pursuit of their developmental objectives by the developing countries, as it prohibits them from prescribing any specific percentages of indigenisation for the foreign investments;

(A) Non-fulfilment of their obligations under WTO in true letter and spirit by the developed countries.

Examples:

(i) The developed countries have been maintaining high peak tariffs and tariff escalations for items of export interest to the developing countries such as shoes, garments and agricultural products etc. and have also been imposing various Non- Tariff Barriers including by way of prescribing overly stringent SPS (Sanitary & Phytosanitary) standards;

(ii) Though there is an integration on paper of 33% of the tariffs lines under Agreement on Textiles and Clothing, in effect only about 4-6 % of the tariff lines under Quota have been integrated so far by the US and EU;

(iii) Back to back anti dumping action has been initiated even on textile items which are under Quota regime;

(iv) The developed countries have not made any worthwhile commitments under Mode 4 of GATS (General Agreement on Trade in Services) i.e., movement of natural persons and professionals, which is of particular significance to developing countries, besides putting several hurdles by way of Economic Needs Test, Social Security Payments, Wage Parity etc;

(v) The provisions for Article 9.1 of Anti Dumping Agreement providing for lesser duty rule have not been implemented;

(vi) The Tariff Rate Quotas* are being implemented in a most arbitrary and opaque manner denying meaningful market access to the developing countries for their agricultural exports;

(vii) The developed countries have been demanding reciprocal market access as well as adherence to core labour standards and environmental standards for giving GSP (Generalised System of Preferences) benefits, though under the enabling clause, it should be implemented in a generalised, non discriminatory and non-reciprocal manner.

(B) Non operationalisation of Special and Diffesssrential Treatment Clauses

The Special and Differential Treatment clauses in favour of developing countries as provided for in various WTO agreements have not at all been operationalised and have remained only as best endeavour clauses for which no effort has been made by the developed countries. The developed country members have also not incorporated such provisions in their domestic laws and regulations which has also led to non-operationalisation of S&D clauses

Examples:

(i) Article 15 of Anti Dumping Agreement exhorts that special regard must be given by the developed countries to the special situation of the developing country members when considering anti-dumping measures and that possibilities of constructive remedies shall be explored before applying anti-dumping measures where they would affect the essential interests of developing country members. The above has been followed only in breach. With a view to effectively operationalise this S&D provision, it has been demanded by the developing countries that there should be a gap of atleast 365 days in initiating the anti-dumping action on the same item and the various de minimis levels for the developing countries should be suitably enhanced;

(ii) Under the SPS agreement, though Article 10.2 provides that reasonable time should be provided to the developing countries from the date of notification of any new SPS Measure, it has not been so implemented;

(iii) The Special and Differential (S&D) provision of Article XVIII 'B' providing for the imposition of QRs on Balance of Payment grounds has been virtually made redundant and the development dimension has been given a go by. It is now being interpreted in such a manner that the conditions under which QRs can be imposed by the developing countries under Article XVIII'B' are same as provided under Article XII for the developed countries;

(iv) Under the Dispute Settlement Understanding, there are various S&D provisions which provide a special & differential treatment in favour of developing countries. However, this has not been taken into account in any case while dealing with disputes involving developing countries.

These implementation related concerns were highlighted by India alongwith other likeminded group of developing countries in the preparatory process to the Seattle Ministerial Conference. After the failure of the Seattle Ministerial Conference, General Council of WTO had taken up a confidence building exercise for the developing countries and had in its May, 2000 meeting decided that all implementation related concerns of the developing countries as included at para 21 and para 22 of the

draft Ministerial text for the Seattle Conference, should be addressed and decisions taken before the 4th Ministerial Conference. Though several meetings of the General Council, both formal and informal, have taken place for finding a solution to the implementation problems, the progress of resolution of Implementation issues has been rather disappointing.

India has maintained that the resolution of the "Implementation related concerns" of the developing countries should be done by the WTO membership without in any way linking it with the launch of any new or comprehensive round of negotiations as these concerns are a hangover of the past Uruguay Round of Negotiations for which the developing countries have already paid by taking several onerous obligations and are not prepared to pay again. Effective resolution of implementation issues requires a certain amount of political sensitivity and good faith efforts by the developed countries and these cannot be dealt with in a narrow and legal straight jacket manner. Therefore, referring such issues to subsidiary bodies which tend to look at them in a purely legalistic and technical manner may not meet the aspirations of developing countries. Consequently, a broader political view needs to be taken by the General Council for the effective resolution of these concerns.

India along with other developing countries has consistently pressed for the satisfactory resolution of these Implementation Related Concerns' before the Doha Ministerial Conference in terms of the May 2000 resolution of the Generasssl Council of WTO.

India reaffirmed its position that no new issues should be included in the negotiating agenda of the World Trade Organisation (WTO) unless there is an explicit consensus on the subject and that implementation concerns of the developing countries arising out of non-fulfilment of the promises made in the Uruguay Round by the developed countries are addressed upfront before the 4th Ministerial Conference of WTO at Doha in November, 2001. In his interventions at the informal meeting of WTO Trade Ministers held recently in Mexico City (31st August and 1st September) ahead of Doha, Mr. Murasoli Maran, Union Minister of Commerce & Industry, articulated India's position in a number of key areas, especially implementation, agriculture, investment, trade facilitation, environment and government procurement.

As far as agriculture is concerned, Mr. Maran said that India was approaching these negotiations with two objectives: (1) removal of distortions in major subsidising countries which distorted world trade; and (2) seeking adequate policy flexibility in order to support agricultural development in the developing countries. The Doha ministerial declaration should acknowledge the legitimate concerns of developing countries with regard to food and livelihood security, rural development and rural employment, guarantee real and effective special and differential treatment and recognise the inter-linkage among three pillars of negotiations namely, domestic support, export competition and market access, he said.

On Investment, the Minister reiterated that India was already opening up its economy to foreign investment in line with our national development needs and priorities in a transparent manner. A binding multilateral agreement in the WTO on investment would only curtail our development policy options besides bringing about inequities between the rights and obligations of the home governments (i.e., investing countries) and the host governments. While the UN Centre for MNCs has been shut down and they are allowed to enjoy unfettered rights and obligations, it is strange that without thinking about bringing an international code of conduct for MNCs, we are discussing about regulating the rights of host governments with regard to investment, Shri Maran said.

As regards trade facilitation, India believes that harmonisation of non-preferential rules of origin must be completed as per the extended time frame. Moreover, the World Customs Organisation is already seized of this issue and there is no need to duplicate the effort.

Regarding environment, while emphasising that India has participated actively in the WTO Committee on Trade & Environment and engaged constructively in drawing up a mandate for the Committee, Mr. Maran underlined the concern of developing countries including India that environment was being used as some sort of a Trojan horse to provide legitimacy to protectionist trends. In many areas, discussions have demonstrated that the existing WTO rules on environment are more than adequate and there is no need for further clarification of existing rules, much less a case of writing new rules. Further, the Minister pointed out that environmental standards would necessarily differ from country to country, and therefore, there should be no attempt by major developed countries to impose their environmental standards on poorer countries using the WTO system.

On the proposal for an agreement on government procurement, the Minister said that for valid policy reasons India was not in a position to go along with the idea of mandatory opening of government procurement to foreign suppliers. "We feel that the Working Group set up to study this issue has not yet completed its mandate given by the Ministers at Singapore. As all are aware, there is no consensus in the Working Group on even some of the basic issues like scope and definition and the problems of developing countries have yet to be analysed by the Working Group. It would be counter-productive to launch negotiations without the Working Group first reaching a common understanding on all the issues and without the developing countries being fully convinced that this would not lead to discussions on market access issues", the Minister said.

India feels that political will and sense of urgency has to be shown by the developed countries for resolving implementation issues in line with the May 2000 resolution of the WTO General Council, the Minister said adding that "unless the development deficit in the current WTO rules is made good through meaningful decisions on implementation issues, it would be difficult to convince people that WTO is a just and equitable system". Stating that the implementation concerns raised by the group of developing countries were not imaginary, Mr. Maran cited the report of an expert panel appointed by the UN last year which had stated that "by far the main beneficiaries of trade liberalisation have been the industrialised countries". "Talking about a 'round' before deciding on the agenda is akin to putting the cart before the horse. Clearly the primary issue is not really as to whether there will be a round or not, but the issue really relates to what is the agenda which is acceptable to all the members", he said. India hopes, therefore, that the Doha Conference would take appropriate decision on implementation issues; make an assessment of the progress in ongoing negotiations and reviews in the WTO which cover vital areas like agriculture, services, TRIPs etc., and give necessary policy direction in respect of negotiations and reviews and take stock of other ongoing work in the WTO.

The two-day informal meeting held in Mexico City  was attended by 17 trade representatives at the Ministerial level from across the globe. Even after the deliberations, substantial differences still remained in many areas. The developing countries complained that the pact signed in 1994 after the Uruguay Round is yet to be fully implemented. There was an  overall acknowledgement that the implementation related concerns need to be addressed urgently.   The Trade Ministers had detailed exchange of views on implementation and other issues in the context of the forthcoming Doha Ministerial Conference.

The attached Draft Ministerial Declaration is submitted for the consideration of delegations by the Chairman of the General Council in co-operation with the Director-General. It represents what they judge to be the best possible basis at the present time for reaching an eventual consensus on a balanced text to be put before Ministers in Doha. This draft does not of course purport to be agreed in any part, and it is understood that agreement must be reached on the text as a whole.

The present draft presents options in certain areas and in other areas text remains to be developed. These are indicated by notes in italics which are not to be read as part of the text proper. Further intensive consultations based on this draft are envisaged, with the aim of resolving outstanding differences before a revision is issued.

The text is issued at the same time as the Draft elements for Decision on Implementation-Related Issues and concerns. The relationship between these two text will need to be further developed as consultations on both proceed, in line with the indications in the texts.

________________________
Draft Ministerial Declaration

1. The multilateral trading system embodied in the World Trade Organisation has promoted economic growth, development and employment throughout the past fifty years. We are determined, particularly in the light of the global economic slowdown, to maintain the process of reform and liberalisation of trade policies, thus ensuring that the system plays its full part in promoting recovery and growth. We therefore strongly reaffirm the principles and objectives set out in the Marrakesh Agreement establishing the World Trade Organization, and pledge to reject the use of projectionist measures.

2. International trade plays a key role in the alleviation of poverty. We recognise the obligation to ensure that all our people may benefit from the increased opportunities and welfare gains generated by the multilateral trading system, and in the Work Programme adopted through this Declaration we seek to place the interests and needs of developing and least-developed countries at the heart of the WTO's work.

3. We stress our commitment to the WTO as the unique forum for global trade rule-making and liberalisation, while also recognising that regional trade agreements can play an important role in promoting the liberalisation and expansion of trade.

4. We are aware that the challenges Members face in a rapidly changing international environment cannot be addressed through measures taken in the trade field alone. We shall continue to work with the Bretton Woods institutions for greater coherence in global economic policy-making, and for effective cooperation with other intergovernmental organisations that have responsibilities related to those of the WTO.

5. We are convinced that the aims of upholding and safeguarding an open and non-discriminatory multilateral trading system, and acting for the protection of the environment and the promotion of sustainable development can and must be mutually supportive. We recognise the right of Members under the multilateral rules to take measures to uphold and enforce the levels of health, safety and environmental protection they deem appropriate, including the right to regulate, and to introduce new regulations on, the supply of services. We agree to ensure that measures taken to address such concerns shall not be used for protectionist purposes.

6. We reaffirm our declaration made at the Singapore Ministerial Conference regarding internationally recognised core-labour standards. We take note of work underway in the International Labour Organisation on the social dimensions of globalisation.

7. We note with particular satisfaction that this Conference has completed the WTO accession procedures for China and Chinese Taipei. We also welcome the accession as new Members, since our last Session, of Albania, Croatia, Georgia, Jordan, Lithuania, Moldova and Oman. These accessions will greatly strengthen the multilateral trading system, as will those of the 28 countries now negotiating their accession. We therefore attach great importance to concluding accession proceeding as quickly as possible, especially for least-developed countries.

8 Recognising the challenges posed by an expanding WTO membership, we confirm our collective responsibility to ensure internal transparency and the effective participation of all Members. Emphasising the intergovernmental character of the organisation, we will continue to promote a better public understanding of the WTO and to communicate the benefits of a liberal, rules-based multilateral trading system, particularly through the more effective dissemination of information and improved dialogue with the public.

9. In view of these considerations, we hereby agree to undertake the broad and balanced Work Programme set out below. This incorporates both an expanded negotiating agenda and other important decisions and activities necessary to address the challenges facing the multilateral trading system.

10 We attach the utmost importance to the implementation issues and related concerns raised by Members and are determined to resolve them. Taking note of the General Council Decisions of 15 December 2000 (and 3 October 2001), we adopt the further Decision contained in document ... to address other outstanding issues. We agree that remaining implementation issues should be fully addressed, in accordance with appropriate guidelines to be developed, under the Work Programme we are establishing.

Agriculture

11. Text to be elaborated through further consultations based on the following elements :

• Reference to the ongoing negotiations, including a reference to the active participation of developing countries.
• Reference to the long-term objective of reform in agriculture.
• Reference to the direction or aims of reform in the areas of market access, domestic support and export competition.
• Reference to special and differential treatment.
• Reference to non-trade concerns.
• Benchmarks and time-frames.
• Negotiating body.

12. The mandated negotiations on trade in services are an important means of promoting the economic growth of all trading partners and the development of developing countries. We note with satisfaction the progress which has been made in these negotiations since their inception in January 2000, and the large number of proposals submitted by Members on a wide range of sectors and several horizontal issues, as well as on movement of natural persons. We reaffirm the Guidelines and Procedures for the Negotiations adopted by the Council for Trade in Services on 28 March 2001 as the basis for continuing the negotiations with a view to achieving the objectives of the General Agreement on Trade in Services, as stipulated in the Preamble, Article IV and Article XIX of that Agreement.

13. We agree to negotiations which shall aim, by modalities to be agreed, to reduce or as appropriate eliminate tariffs, including the reduction or elimination of tariff peaks and tariff escalation, as well as non-tariff barriers. Product coverage shall be comprehensive and without a priori exclusions. The negotiations shall take into account the special neesds and interests of developing and least-developed country participants, including through less than full reciprocity in reduction commitments.

14. We agree to complete negotiations on the establishment of a multilateral system of notification and registration of geographical indications for wines and spirits.

15. We agree (that the Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council) shall examine issues related to possible negotiations on) (to negotiate) the extension of the protection of geographical indications provided for in Article 23 to additional product areas.

16. We instruct the TRIPS Council, in pursuing its work programme, to give due attention to the relationship between the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) and the Convention on Biological Diversity, the protection of traditional knowledge, non-violation complaints, and keeping the TRIPS Agreement abreast of new technological and other developments. In undertaking this work, the TRIPS Council shall be guided by the objectives and principles of the TRIPS Agreement and shall take fully into account the development dimension.

17. The TRIPS Council shall report on the progress of its work set out above to the General Council at the end of 2002 and submit a final report to the Fifth Session of the Ministerial Conference, which shall decide on further action.

Relationship between trade and investment

18. We agree to negotiations which shall aim to establish a multilateral framework of rules to secure transparent, stable and predictable conditions for long-term cross-border investment, particularly foreign direct investment. The framework shall reflect in a balanced manner the interests of home at host countries, and take due account of governments' regulatory responsibilities and economic development objectives. It shall include as core elements provisions on scope and definition, transparency, non-discrimination, pre-establishment commitments based on a GATS-type approach, and the settlement of disputes between governments. The special development, trade and financial needs of developing and least-developed country participants shall be taken into account as an integral part of the framework, which shall enable. Members to undertake obligations commensurate with their individual needs and circumstances. The negotiations shall pay due regard to other relevant WTO provisions and to existing bilateral and regional arrangements on investment. We commit ourselves to ensure that appropriate arrangements are made for the provision of technical assistance and support for capacity building both during the negotiations and as an element of the agreement to be negotiated.

19. The Working Group on the Relationship between Trade and Investment shall undertake further focused analytical work, based on proposals by Members. A report on this work shall be presented to the Fifth Session of the Ministerial Conference.

20. We agree to negotiations aimed at enhancing the contribution of competition policy to international trade and development. To this end, the negotiations should establish a framework to address the following elements: core principles, including transparency, non-discrimination and procedural fairness, and provisions on hardcore cartels; modalities for voluntary cooperation; and, support for progressive reinforcement of competition institutions in developing countries through capacity building. In the course of negotiations, full account shall be taken of the situation of developing and least-developed country participants and appropriate flexibility provided to address them. We commit ourselves to ensure that appropriate arrangements are made for the provision of technical assistance and support for capacity building both during the negotiations and as an element of the agreement to be negotiated.

21. The Working Group on the Interaction between Trade and Competition Policy shall undertake further focused analytical work, based on proposals by Members. A report on this work shall be presented to the Fifth Session of the Ministerial Conference.

22. We agree to negotiations on a multilateral agreement on transparency in government procurement, building on the progress that has been made in the Working Group on Transparency in Government Procurement and taking into account participants' development priorities. The negotiations shall be limited to the transparency aspects and will not restrict the scope for countries to give preferences to domestic supplies and suppliers. Issues relating to compliance with any new obligations to be agreed shall be addressed in the negotiations, taking into account the situation of developing and least-developed country participants. We commit ourselves to ensure that appropriate arrangements are made for the provision of technical assistance and support for capacity building both during the negotiations and as an element of the agreement to be negotiated.

23. We agree to negotiations which shall build upon Articles V, VIII and X of the GATT 1994, taking into account existing WTO provisions on matters related to customs and other procedures and formalities to expedite movement, release and clearance of goods. Issues relating to compliance with any new obligations to be agreed shall be addressed in the negotiations, taking into account the situation of developing and least-developed country participants. We commit ourselves to ensure that appropriate arrangements are made for the provision of technical assistance and support for capacity building both during the negotiations and as an element of the agreement to be negotiated.

24. We agree to negotiations aimed at clarifying and improving disciplines under the existing Agreements on Implementation of Article VI of the GATT 1994 and on Subsidies and Countervailing Measures [...], taking into account the needs of developing and least-developed country participants.

25. We also agree to negotiations aimed at clarifying and improving disciplines and procedures under the existing WTO provisions applying to regional trade agreements. Issues relating to the applications of any new obligations to existing regional trade agreements shall be addressed during the negotiations. Participants shall also take into account the development aspects of regional trade agreements.

26. We agree to negotiations on possible amendments to the Dispute Settlement Understanding on the basis of proposals by Members. The negotiations should be based on the work done thus far and aim to produce a balanced package of amendments not later than May 2003, at which time we will take steps to ensure that the amendments enter into force as soon as possible thereafter.

27. We instruct the Committee on Trade and Environment to pursue work on all items on its agenda within its current terms of reference, and in particular :

• to address, in pursuance of the WTO's objective of sustainable development, those situations in which the elimination or reduction of trade restrictions and distortions would benefit trade, environment and development;
• to deepen the understanding of the relationship between the multilateral trading system and Multilateral Environment Agreements (MEAs)

The Committee on Trade and Environment shall report to the Fifth Session of the Ministerial Conference on these issues.

28. We direct the Committee on Technical Barriers to Trade to expedite its work on labeling, bearing in mind that any measures in this field should not become disguised restrictions on trade, and to report to the Fifth Session of the Ministerial Conference.

29. We take note of the work which has been done in the General Council and other relevant bodies since our Declaration of 20 May 1998 and agree to continue the Work Programme on Electronic Commerce. We instruct the General Council to consider the most appropriate institutional arrangements for handling the Work Programme, and to report on further progress to the Fifth Session of the Ministerial Conference. We agree to maintain our current practice of not imposing customs duties on electronic transmissions until the Fifth Session.

30. We agree to a work programme, under the auspices of the General Council, to examine issues relating to the trade of small economics. The objective of this work is to frame responses to the trade related issues identified for the fuller integration of small, vulnerable economies into the multilateral trading system, and not to create a sub-category of WTO Members. The General Council shall review the work programme and make recommendations for action to the Fifth Session of the Ministerial Conference.

31. We agree to an examination, under the auspices of the General Council, of the relationship between trade, debt and finance and of any possible recommendations on steps that might be taken within the mandate and competence of the WTO to enhance the capacity of the multilateral trading system to contribute to a durable sanction to the problem of external indebtedness of developing and least developed countries, and to strengthen the coherence of international trade, financial and monitary policies with a view to safeguarding the multilateral trading system from the effects of financial and monitary instability. We instruct the General Council to consider the most appropriate institutional arrangements for handling this examination and to report on progress to the Fifth Session of the Ministerial Conference.

32. We agree to an examination, under the auspices of the General Council, of the relationship between trade and transfer of technology, and of any possible recommendations on steps that might be taken within the mandate of the WTO to increase flows of technology to developing countries. We instruct the General Council to consider the most appropriate institutional arrangements for handling this examination and to report on progress to the Fifth Session of the Ministerial Conference.

33. We instruct the Secretariat to respond to requests from Members for technical assistance in the context of their mainstreaming of trade into national plans for economic development and strategies for poverty reduction. The delivery of WTO technical assistance shall be designed to assist beneficiary countries to understand WTO rules and disciplines, implement obligations and exercise the rights of membership, including drawing on the benefits of an open, rules-based multilateral trading system. Priority shall also be accorded, in the delivery of trade-related technical assistance, to building capacity for multilateral trade negotiations in developing, least-developed, small and vulnerable, and transition economies, including those without representation in Geneva. We underscore the urgent necessity for the coordinated delivery of technical assistance with relevant international and regional intergovernmental institutions within a coherent policy framework and timetable. We agree that there is a need for this assistance to benefit from secure and predictable funding. We therefore instruct the Committee on Budget, Finance and Administration to develop a plan for adoption by the General Council in December 2001 that will ensure long-term funding for WTO technical assistance at a level no lower than that of the current year.

34. We recognise that the further integration of the least-developed countries (LDCs) into the trading system requires combined and inter-related action at three levels namely, market access, trade-related technical assistance and capacity-building, and LDCs' domestic policy reforms. We agree that the WTO should take into account, in designing its work programme for LDC's, the trade-related elements of the Brussels Declaration and Programme of Action consistent with the WTO's mandate adopted at the Third United Nations Conference on the Least Developed Countries in May 2001. We acknowledge the value of and endorse the Integrated Framework for Trade-Related Technical Assistance to Least-Development Countries (IF) as a viable model for LDCs' trade development. We appeal to development partners to increase contributions to the IF Trust Fund. We urge the core agencies, in coordination with development partners, to explore the enhancement of the IF and the extension of the model. We request the Director-General, following coordination with all the core agencies, to report to Ministers at the Fifth Session of the Ministerial Conference.

35. Text to be considered, taking into account the report to be submitted by the Committee on Trade and Development.

36. The negotiations to be pursued under the terms of this Declaration shall be concluded not later than ...... The Fifth Session of the Ministerial Conference will take stock of progress in the negotiations, provide any necessary political guidance, and take any decisions as necessary. When the results of the Negotiations in all areas have been established, a Special Session of the Ministerial Conference will be held to take decisions regarding the adoption and implementation of those results.

37. The overall conduct of the negotiations shall be supervised by a Trade Negotiations Committee under the authority of the General Council. The Trade Negotiations Committee shall hold its first meeting not later than ... It shall establish appropriate negotiating mechanisms as required and supervise the progress of the negotiations.

38. The conduct, conclusion and entry into force of the outcome of the negotiations shall, with the exception of those related to the amendment of the Dispute Settlement Understanding, be treated as parts of a single undertaking. However, agreements reached at an early stage may be implemented on a provisional or a definitive basis. Early agreements shall be taken into account in assessing the overall balance of the negotiations.

39. Negotiations shall be open to :

(i) All Members of the WTO;

(ii) States and separate customs territories that inform Members, at a regular meeting of the General Council, of their intention to negotiate the terms of their membership and for whom an accession working party is established.

Decisions on the outcomes of the negotiations shall be taken only by WTO Members.

40. The Negotiations shall be conducted in a transparent manner among participants, in order to facilitate the effective participation of all. They shall be conducted with a view to ensuring benefits to all participants and to achieving an overall balance in the outcome of the negotiations.

41. The Committee on Trade and Development and the Committee on Trade and Environment will, 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 in the negotiations.

42. The Work Programme as a whole must evolve in a balanced and forward-looking manner which responds to the diverse challenges faced by Members. Those elements which do not involve negotiations are also accorded a high priority. They will be pursued under the overall supervision of the General Council, which shall report on progress to the Fifth Session of the Ministerial Conference.

The attached draft Decision on implementation-related issues and concerns is submitted for the consideration of delegations by the Chairman of the General Council and the Director-General. It represents their best judgement of the possible basis at this time for reaching agreement to address the outstanding implementation-related issues and concerns in pursuance of the General Council's Decision of 3 May 2000. By taking action on the proposals outlined in this draft Decision, Members would be addressing elements of more than 40 tirets in addition to the dozen or so previously addressed in one way or another.

The Chairman and the Director-General believe that this draft represents a credible effort to move the implementation debate to a new level of understanding. The elements included in this draft Decision draw upon important and valuable contributions provided by developing countries, the "G-7" countries1 and, more recently, by some developed countries. They also take into account the work on-going in the subsidiary bodies on issues referred to them. The Chairman and the Director General also wish to acknowledge the value of the contributions by these bodies and their Chairpersons.

As reflected in the draft Decision, further action is proposed both now and at the Ministerial Conference in areas such as sanitary and phytosanitary measures, subsidies and countervailing measures, anti-dumping and textiles. In addition, it is proposed that remaining implementation issues be addressed in the context of the future work programme to be decided on by Ministers at the Fourth Ministerial Conference.

Draft Decision

The General Council,

Having regard to Articles IV.1, IV. 2, IV.5, IX.1 and IX.2 of the Marrakesh Agreement Establishing the World Trade Organization (WTO);

Mindful of the importance that Members attach to the increased participation of developing countries in the Multilateral trading system, and of the need to ensure that the system responds fully to the needs and interests of all participants;

Determined to take concrete action to address issues and concerns that have been raised by many developing-country Members regarding the implementation of some WTO Agreements and Decisions, including the difficulties and resource constraints that have been encountered in the implementation of obligations in various areas;

Recalling its Decision of 3 May 2000 to meet in special sessions to address outstanding implementation issues, and to assess the existing difficulties, identify ways needed to resolve them, and take decisions for appropriate action not later than the Fourth Session of the Ministerial Conference;

Noting the actions taken by the General Council in pursurance of this mandate at its Special Sessions in October and December 2000 (WT/L384), as well as the review and further discussion undertaken at the Special Sessions held in April and July 2001, including the referral of additional issues to relevant WTO bodies or their chairpersons for further work;

Noting also the reports on the issues referred to them from subsidiary bodies and their chairpersons and from the Director-General, and the discussions as well as the clarifications provided and understandings reached on implementation issues in the intensive informal and formal meetings held under this process since may 2000;

Decides as follows ;

(i) to take immediate action, as set out in Annex I, to address the implementation difficulties encountered by developing countries in a number of areas;

(ii) to develop recommendations for Ministers, based on the proposals set out in Annex II, for decision at the Fourth Session of the Ministerial Conference;

(iii) to recommend to Ministers, meeting on the occasion of the Fourth Session of the Ministerial conference to address other implementation issues in the course of the further work prsogramme of the WTO as provided for in the Draft Ministerial Declaration; and

(iv) to request the Director-General, consistent with the relevant provisions of the Draft Ministerial Declaration, to ensure that WTO technical assistance focuses, on a priority basis, on assisting developing countries to implement existing WTO obligations as well as on increasing their capacity to participate more effectively in future multilateral trade negotiations. In carrying out this mandate, we stress the need for the WTO Secretariat to cooperate more closely with international and regional intergovernmental organisations so as to increase efficiency and synergies and avoid duplication of programmes.

Annex -I

1. General Agreement on tariffs and Trade 1994

- Tiret 2

"The General Council reaffirms that Articles XVIII of the GATT 1994 is a special and differential treatment provision for developing countries and that recourse to its should be less onerous than to Article XII of the GATT 1994."

- Tiret 4

"Noting the issues raised in the report of the Committee on Market Access concerning the meaning to be given to the phrase "substantial supplier" in Article XIII of the GATT 1994, the Committee is directed to give further consideration to the issue and make recommendations to the General Council as expeditiously as possible but in any event no later than the Fifth Ministerial Conference."

2. Agreement on Agriculture

- Tariff Rate Quotas

"The General Council takes note of the Committee on Agriculture's report on the administration of tariff rate quotas and the submission by Members of addenda to their notifications and endores the decision by the Committee to keep this matter under review."

- Tiret 5

"The General Council urges Members to exercise restraint in challenging measures notified under the green box by developing countries to promote rural development and adequately address food security concerns."

3. Agreement on Sanitary and Phytosanitary Measures

- Tiret 9 and 10

"Where the appropriate level of sanitary and phytosanitary protection allows scope for the phased introduction of new sanitary and phytosanitary measures, the phrase "longer time-frame for compliance" referred to in Article 10.2 of the Agreement on the Application of Sanitary and Phytosanitary Measures, shall be understood to mean normally a period of not less than 6 months. Where the appropriate level of sanitary and phytosanitary protection does not allow scope for the phased introduction of a new measure, but specific problems are identified by a Member, the Member applying the measure shall upon request enter into consultations with the country with a view to finding a mutually satisfactory solution to the problem while continuing to achieve the importing Member's appropriate level of protection."

- Tiret 11

"Subject to the conditions specified in paragraph 2 of Annex B to the Agreement on the Application of Sanitary and Phytosanitary Measures, the phrase "reasonable interval" shall be understood to mean normally a period of not less than 6 months. It is understood that timeframes for specific measures have to be considered in the context of the particular circumstances of the measure, actions necessary to implement the measure, and the fact that SPS measures can contribute to trade liberalisation."

- Tiret 12

[Action to be taken in the light of the work of the Committee on Sanitary and Phytosanitary Measures.]

- Tiret 15

"Pursuant to the provisions of Article 12.7 of the Agreement on the Application of Sanitary and Phytosanitary Measures, the Committee on Sanitary and Phytosanitary Measures is instructed to review the operation and implementation of the Agreement on Sanitary and Phytosanitary Measures at least once every four years."

- International standard setting organisation

"The General Council notes with satisfaction the actions taken to date by the Director-General to facilitate the increased participation of Members at different levels of development in the work of the relevant international standard setting organisations, as well as to coordinate efforts with these organisations and financial institutions to identify SPS-related technical assistance needs and how best to address them. The General Council urges the Director-General to continue his cooperative efforts with these organisations and institutions in that regard."

3. Agreement on Technical Barriers to Trade

- Tiret 31 & 32

"The General Council confirms the approach to technical assistance being developed by the Committee on Technical Barriers to Trade, reflecting the result of the triennial review work in this area, and mandates this work to continue."

- Tiret 35

"Subject to the conditions specified in paragraph 12 of Article 2 of the Agreement on Technical Barriers to Trade, the phrase "reasonable interval" shall be understood to mean normally a period of not less than 6 months, except when this would be ineffective in fulfilling the legitimate objectives pursued."

- International standard setting organisations

"The General Council notes with satisfaction the actions taken to date by the Director-General to facilitate the increased participation of Members at different levels of development in the work of the relevant international standard setting organisations, as well as to coordinate efforts with these organisations and financial institutions to identify TBT-related technical assistance needs and how best to address them. The General Council urges the Director-General to continue his cooperative efforts with these organisations and institutions in that regard."

5. Agreement on Trade-Related Investment Measures

- Tiret 36

"The General Council notes with satisfaction the actions taken by the Council for Trade in Goods in regard to requests from some developing-country Members for the extension of the five-year transitional period provided for in Article 5.2 of Agreement on Trade-Related Investment Measures."

6. Agreement on the Implementation of Article VII of the General Agreement on Tariffs and Trade 1994

- Article 20.1

"The General Council notes with satisfaction the actions taken by the Committee on Customs Valuation in regard to the requests from a number of developing-country Members for the extension of the five-year transitional period provided for in Article 20.1 of Agreement on the Implementation of Article VII of the General Agreement on tariffs and Trade 1994."

- Article 20.3

"The General Council endorses the comprehensive approach to technical assistance developed by the Committee on Customs Valuation and mandates the Committee to continue this work."

7. Agreement on Subsidies and Countervailing Measures

- Tiret 67, 82 & 83

"The General Council agrees that if a Member has been excluded from Annex VII to the Agreement on Subsidies and Countervailing Measures, it nevertheless shall be reincluded in it if its GNP per capita falls back below US$ 1,000."

"The General Council agrees that Annex VII(b) to the Agreement on Subsidies and Countervailing Measures includes the Members that are listed therein until their GNP per capita reaches US$ 1,000 in constant 1990 dollars for three consecutive years."

[Action to be taken in the light of the report of the Committee on Subsidies and Countervailing Measures on the implementation of Article 27 as it relates to particular issues concerning developing-country Members with a small percentage share of exports in import markets and in global trade.]

- Tiret 80

"The General Council instructs the Committee on Subsidies and Countervailing Measures to review the provisions of the Agreement on Subsidies and Countervailing Measures regarding countervailing duty investigations, and to report it by the Fourth Ministerial Conference."

8. General Agreement on Trade in Services (GATS)

- Tiret 85

"Recalling and reaffirming the provisions of the General Agreement on Trade in Services, the General Council notes that Members agree that administrative practices should not impede full and faithful implementation of their commitments under the General Agreement on Trade in Services, particularly as regards the supply of services under Mode 4."

9. TRIPS Agreement

- Tiret 90

"With a view to facilitating the implementation of the TRIPS Agreement, the General Council requests Members to submit to the TRIPS Council information regarding measures implementing Article 66.2. These submissions shall be subject to a review in the TRIPS Council, and serve as reference in drawing up an illustrative list of incentives. This information shall be updated by Members annually thereafter."

10. Cross-cutting Issues

- Tiret 97

"The General Council reaffirms that preferences granted to developing countries pursuant to the "Enabling Clause" should be generalised, non-reciprocal and non-discriminatory."

Annex II

1. Agreement on Agriculture

- Tiret 7

[Action to be taken on implementation of the Decision on Measures Concerning the Possible Negative effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries in the light of the report of the Committee on Agriculture expected on 28 September 2001.]

- Tiret 8

[Action on the implementation of Article 10.2 of the Agreement on Agriculture to be taken in the light of the report of the Committee on Agriculture expected on 28 September 2001.]

2. Agreement on Textile and Clothing

"Recalling the Ministerial Declarations of Singapore and Geneva under which Members reaffirmed their commitment to full and faithful implementation of the Agreement on Textiles and Clothing, the Ministerial Conference agrees."

- Tirets 16 & 24

"that the provisions of the Agreement relating to the early integration of products and the elimination of quota restrictions should be effectively utilised."

- Tirets 20, 21 & 25

"to calculate the quota levels for small suppliers for the remaining years of the Agreement by applying the most favorable methodology available in respect of those Members under the growth-on-growth provision from the beginning of the implementation period; to extend the same treatment to least developed countries; and, where possible, to eliminate quota restrictions on imports of such Members."

- Tirets 17 & 22

"to calculate the quota levels for the remaining years of the Agreement with respect to other restrained Members as if implementation of the growth-on-growth provision for stage 3 had been advanced to

1 January 2000."

- Tirets 18, 23, 26 & 27

"to exercise particular consideration and restraint before initiating investigations in the context of contingent trade remedies on textile and clothing exports from developing countries."

- Tirets 19 & 29

"that Members, without prejudice to their rights and obligations, shall notify any changes in their rules of origin concerning products falling under the coverage of the Agreement to the Committee on Rules of Origin which may examine them before they are applied."

3. Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994

- Tirets 41

The Ministerial Conference agrees 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 a negative finding within the 365 days prior to the filing of the applications. Unless this pre-initiation examination indicates that circumstances have changed, the investigation shall not proceed.

- Tiret 45

The Ministerial Conference recognises that, while Article 15 of the Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 is a mandatory provision, the modalities for its application would benefit from clarification. Accordingly, the Committee on Anti-Dumping Practices is instructed, through its working group on Implementation, to examine this issue and to draw up appropriate recommendations within twelve months on how to operationalise this provision.

- Tirets 49

The Ministerial Conference notes that Article 5.8 of the Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 does not specify the time-frame to be used in determining the volume of dumped imports, and that this lack of specificity creates uncertainties in the implementation of the provision. The Committee on Anti-Dumping Practices is instructed, through its working group on Implementation, to study this issue and draw up recommendations within 12 months, with a view to ensuring the maximum possible predictability and objectivity in the application of time frames.

- Tirets 55

The Ministerial Conference notes that Article 18.6 of the Agreement on the Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 requires the Committee on Anti-Dumping Practices to review annually the implementation and operation of the Agreement taking into account the objectives thereof. The Committee on Anti-dumping Practices is requested to draw up guidelines for the improvement of annual reviews, and to report its views and recommendations to the General Council for subsequent decision within 12 months.

4. Agreement on the Implementation of Article VII of the General Agreement on Tariffs and Trade 1994

- Tirets 56

"The General Council agrees that when the Customs Administration of an importing Member has reasonable grounds to doubt the accuracy of the value declared, it may seek assistance from the Customs Administration of an exporting Member on the value of the good imported. In that case the exporting Member should offer cooperation and assistance, including information on the export value of the goods imported if available. Any information provided in this context shall be treated in accordance with the provisions of Article 10 of the Agreement on the Implementation of Article VII of the GATT 1994."

5. Agreement on Rules of Origin

- Tirets 63

"The Ministerial Conference agrees that any interim arrangements on rules of origin implemented by Members in the transitional period before the entry into force of the results of the harmonisation work programme shall be consistent with the Agreement on Rules of Origin, particularly Articles 2 and 5 thereof. Without prejudice to Members' rights and obligations, such arrangements may be examined by the Committee on Rules of Origin."

6. Agreement on Subsidies and Countervailing Measures

- Article 27.4

[Finalisation of the Annex I decision on Article 27.4 in the light of the work of the Committee on Subsidies and Countervailing Measures.]

- Tiret 68

[Decision to be taken in the light of the work of the Committee on Subsidies and Countervailing Measures.]

- Tirets 74 & 75

"The Ministerial Conference urges Members to apply, where possible, a higher de minimis level in countervailing duty investigations of products originating in developing country Members, than the levels set forth in Articles 27.10 and 27.11 of the agreement on Subsidies and Countervailing Measures."

7. TRIPS Agreement

- Tiret 89

"The Ministerial Conference 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. The Ministerial Conference agrees that Members, in the meantime, will not initiate such complaints."

8. Cross-cutting Issues

- Tiret 96

[Action to be taken in light of the report of the Committee on Trade and Development due on 28 September. This issue is also referred to in the Draft Ministerial Declaration.]

• USTR Mr. Robert Zoellick visited India from 8-10 August, 2001. Commerce and Industry Minister (CIM) Mr. Murasoli Maran and USTR held detailed discussions on 8th August, 2001 on various multilateral and bilateral trade related issues. USTR announced the decision of the U.S. Government to restore the GSP (Generalised System of Preferences) benefits to India on 42 products in the jewellery and other sectors. This will benefit Indian Exports to around US $ 540 million. CIM and USTR agreed to operationalise the Indo-US Trade Policy Dialogue at the Ministerial level.
• CIM and USTR held detailed discussions on the various WTO related issues particularly, in the context of the Fourth Ministerial Conference. CIM reiterated that India viewed Implementation Issues as a matter of great priority and emphasised that the issues arising from implementation of Uruguay Round agreements raised by the developing countries needed to be urgently addressed. USTR said that on the part of US, they would actively work with other countries to generate concrete and meaningful results in respect of the various issues raised.
• The Commerce Ministers of the SAARC countries met in New Delhi on 23rd August, 2001 with a view to consulting more closely and coordinating their national positions in the context of the Doha Ministerial Conference. The meeting was attended by the Ministers from Nepal,
• sSri Lanka, Pakistan, India and by representative from Bhutan. The meeting of the SAARC Commerce Minister was preceded by preparatory meeting of the Commerce Secretaries of the SAARC countries on 22nd August, 2001. In a joint statement, the SAARC Ministers expressed deep disappointment on the lack of any meaningful progress on the resolution of the Implementation Issues.
• SAARC Ministers voiced opposition to any move for negotiations on Investment and Competition. Any linkage of trade with social and other non-trade issues like labour standards was resolutely opposed. Their firm opposition was reiterated to the erection of trade barriers on environmental pretext and to any widening of the environmental window in WTO. Commitment was expressed for undertaking measures for LDCs (Least Developed Countries) including duty free access, facilitating faster accession, etc. The Ministers expressed the need to remain in close touch as also to hold another meeting at Doha on the margins of the Ministerial Conference.
• Foreign Trade Minister of Jamaica Mr. Anthony Hylton visited India on 1-3 August, 2001. CIM and Foreign Trade Minister of Jamaica met on 1st August, 2001 in New Delhi to coordinate the positions on various WTO issues for evolving a common strategy between India and ACP (African, Pacific & Caribbean) countries for the forthcoming Doha Ministerial Conference.
• The Ministers felt that a post-Doha Agenda comprising mandated negotiations, mandated reviews, resolution of implementation issues and on going work study and analysis in various Working Groups would provide a balanced and full programme of activities till the next Ministerial Conference. The Ministers mentioned that early resolution of implementation related concerns is utmost necessary for restoring the confidence of the developing countries in the WTO. The Jamaican Trade Minister stressed the need for establishment of a work programme for small and vulnerable economies. The Jamaican Trade Minister also sought India's support for the waiver for EC-ACP Agreement (Cotonou Protocol) in WTO.
• Ambassador, PMI, Geneva called on Dr. scNajma Heptulla, Deputy Chairperson, Rajya Sabha, who was visiting Geneva. There was a brief discussion about the possibility of IPU (Inter - Parliamentary Union) getting observership for the Doha Ministerial Conference. Subsequently, Ambassador met Mr. Alain Frank, Director, External Relations in the WTO. He clarified that as far as observership for international organisations is concerned, it is the General Council which has to consent. He also clarified that IPU could still apply for observership before the General Council meeting scheduled for October, 2001.
• The Swiss Mission prepared a formulation on behalf of Friends of Gls (Geographical Indications) for the Draft Ministerial Declaration for Doha for negotiations on establishment of register for wines and spirits and extension of higher level of protection to Gls of products other than wines and spirits. The draft proposed for completion of negotiations by the Fifth Ministerial conference for establishment of a multilateral register for wines and spirits and negotiations for extension of higher level of protection to geographical indications of product other than wines and spirits. The Ministry conveyed its views on the proposed draft declaration that concomitance between the above two items shall be maintained in the negotiations.
• CIM along with Commerce Secretary and Ambassador, PMI, Geneva attended the informal meeting of Trade Ministers at Mexico. The meeting was attended by 17 Trade Ministers and DG/WTO. The meeting discussed various WTO issues in the preparatory process leading to Doha Ministerial conference. The discussion took place under the agenda items of Agriculture, Environment, Implementation Issues, Singapore Issues and Rules (Anti-Dumping, Subsidies and Public Health Issues). The Chairman, General Council (GC) suggested that it may be a good idea to have another such meeting sometime in October once the package on Implementation Issues and the first drafts on the Ministerial text had been prepared at Geneva.

____________________________________________________________

The World Trade Organisation on 17 September 2001 successfully concluded negotiations on China's terms of membership of the WTO, paving the way for the text of the agreement to be adopted formally at the WTO Ministerial conference in Doha, Qatar, in November.

" International economic cooperation has brought about this defining moment in the history of the multilateral trading system," said Mike Moore, WTO Director-General, at the conclusion of the meeting of the Working Party on China's Accession. "With China's membership, the WTO will take a major step towards becoming a truly world organisation. The near-universal acceptance of its rules-based system will serve a pivotal role underpinning global economic cooperation."

Under the chairmanship of Ambassador Pierre-Louis Girard of Switzerland, the Working Party concluded almost 15 years of negotiations with China and agreed to forward some 900 pages of legal text for formal acceptance by the 142 Member Governments of the WTO. Thirty days after China notifies its acceptance of the agreement, China legally becomes a member of the WTO.

As a result of the negotiations, China has agreed to undertake a series of important commitments to open and liberalise its regime in order to better integrate in the world economy and offer a more predictable environment for trade and foreign investment in accordance with WTO rules.

Among some of the commitments undertaken by China are the following :

• China will provide non-discriminatory treatment to all WTO Members. All foreign individuals and enterprises, including those not invested or registered in China, will be accorded treatment no less favourable than that accorded to enterprises in China with respect to the right to trade.
• China will eliminate dual pricing practices as well as difference in treatment accorded to goods produced for sale in China in comparison to those produced for export.
• Price controls will not be used for purposes of affording protection to domestic industries or services providers.
• The WTO Agreement will be implemented by China in an effective and uniform manner by revising its existing domestic laws and enacting new legislation fully in compliance with the WTO Agreement.
• Within three years of accession all enterprises will have be right to import and export all goods and trade them throughout the customs territory with limited exceptions.
• China will not maintain or introduce any export subsidies on agricultural products.

While China will reserve the right of exclusive state trading for product such as cereals, tobacco, fuels and minerals and maintain some restrictions on transportation and distribution of goods inside the country, many of the restrictions that foreign companies have at present in China will be eliminated or considerably eased after a 3-year phase-out period. In other areas, like the protection of intellectual property rights, China will implement the TRIPS (Trade-related Aspects of Intellectual Property Rights,) Agreement in full from the date of accession.

During a 12 -year period starting from the date of accession there will be a special Transitional Safeguard mechanism in cases where imports of products of Chinese origin cause or threaten to cause market disruption to the domestic producers of other WTO members.

On the other hand, prohibitions, quantitative restrictions or other measures maintained against imports from China in a manner inconsistent with the WTO Agreement would be phased out or otherwise dealt with in accordance with mutually agreed terms and timetables specified in an annex to the Protocol of Accession.

The conclusion of the negotiations for market access on goods represents a commitment undertaken by China to gradually eliminate trade barriers and expand market access to goods from foreign countries. China has bound all tariffs for imported goods. After implementing all the commitments made, China's average bound tariff level will decrease to 15% for agricultural products. The range is from 0 to 65%, with the higher rates applied to cereals. For industrial goods the average bound tariff level will go down to 8.9% with a range from 0 to 47%, with the highest rates applied to photographic film and automobiles and related products. Some tariffs will be eliminated and others reduced mostly by 2004 but in no case later than 2010.

Upon accession China will become a party to the Agreement on Textiles and Clothing and will be subjected to its rights and obligations. As for all WTO members, quotas on textiles will end at 31 December 2004, but there will be a safeguard mechanism in place until the end of 2008 permitting WTO member Governments to take action to curb imports in case of market disruptions caused by Chinese exports of textile products.

China Agreed to limit its subsidies for agricultural production to 8.5% of the value of farm output (per Article 6.4 of the Agriculture Agreement). China also agreed to apply the same limit to subsidies covered by Article 6.2 of the Agriculture Agreement.

Upon China's accession, foreign service suppliers will be permitted to establish joint venture enterprises, without quantitative restrictions, and provide services in several cities. Foreign investment in the joint venture shall be no more than 25%. Within one year of accession, the areas will be expanded to include services in other cities and foreign investment shall be not more than 35%. Within three years of accession, foreign investment shall be no more than 49%. Within five years of accession, there will be no geographic restrictions.

Upon accession, foreign financial institutions will be permitted to provide services in China without client restrictions for foreign currency business. For local currency business, within two years of accession, foreign financial institutions will be permitted to provide services to Chinese enterprises. Within five years of accession, foreign financial institutions will be permitted to provide services to all Chinese clients.

Foreign non-life insurers will be permitted to establish as a branch or as a joint venture with 51% foreign ownership. Within two years of China's accession, foreign non-life insurers will be permitted to establish as a wholly-owned subsidiary. Upon accession, foreign life insurers will be permitted 50% foreign ownership in a joint venture with the partner of their choice. For large scale commercial risks, reinsurance and international marine, aviation and transport insurance and reinsurance upon accession, joint ventures with foreign equity of no more than 50% will be permitted; within three years of China's accession, foreign equity share shall be increased to 51%; within five years of China's accession, wholly foreign-owned subsidiaries will be permitted.

The Agreement on Trade Related Investment Measures (TRIMs) is one of Agreements covered under Annex 1-A to the Marrakesh Agreement, signed at the end of the Uruguay Round (UR) negotiations. The Agreement addresses investment measures that are trade related and that also violate Article III (National treatment) or Article XI (general elimination of quantitative restrictions) of the General Agreement on Tariffs and Trade. An illustrative list of the measures that are violative of the provisions of the Agreement is annexed to the text of the Agreement. These pertain broadly to local content requirements, trade balancing requirements and export restrictions, attached to investment decision making.

Provisions on elimination of notified TRIMs by WTO Members and transition periods

The Agreement requires all WTO Members to notify the TRIMs that are inconsistent with the provisions of the Agreement, and to eliminate them after the expiry of the transition period provided in the Agreement. Transition periods of two years in the case of developed countries, five years in the case of developing countries and seven years in the case of LDCs, from the date of entry into force of the Agreement (i.e. 1st January 1995) are provided in the Agreement.

Temporary deviation on BOP grounds

The Agreement allows developing countries to deviate temporarily from its provisions on balance of payments (BOP) grounds (as per the provisions of Article XVIII.B of GATT, 1994).

As per the provisions of Art. 5.1 of the TRIMs Agreement India had notified three trade related investment measures as inconsistent with the provisions of the Agreement:

Local content (mixing) requirements in the production of News Print,

Local content requirement in the production of Rifampicin and Penicillin - G, and

Dividend balancing requirement in the case of investment in 22 categories consumer goods.

Such notified TRIMs were due to be eliminated by 31st December, 1999. None of these measures is in force at present. Therefore, India does not have any outstanding obligations under the TRIMs agreement as far as notified TRIMs are concerned.

The transition period allowed to developing countries ended on 31st December, 1999. However, Art. 5.3 provides for extension of such transition periods in the case of individual members, based on specific requests. In such cases individual Members have to approach the Council for Trade in Goods with justification based on their specific trade, financial and development needs. Accordingly 9 developing countries (Malaysia, Pakistan, Philippines, Mexico, Chile, Colombia, Argentina, Romania and Thailand) have applied for extension of transition period in respect of certain TRIMs which had been notified by them. Examination of their requests is underway in the Council for Trade in Goods of WTO.

India had proposed during the Seattle Ministerial Conference that:

Extension of transition period for developing countries should be on a multilateral basis and not on an individual basis;

Another opportunity should be provided to developing countries to notify un-notified TRIMs and maintain them for an extended transition period;

The Seattle Ministerial Conference was inconclusive and no decision could be taken on the proposals.

However, during the General Council meeting of 8th May, 2000, the following decisions, inter-alia, were taken :

"…… ..members agree to direct the Council for Trade in Goods to give positive consideration to individual requests presented in accordance with Article 5.3 by developing countries for extension of transition periods for implementation of the TRIMs Agreement".

"Members have noted the concerns of those Members who have not notified TRIMs or have not yet requested an extension. Consultations on the means to address these cases should also be pursued as a matter of priority, under the aegis of the General Council, by the Chairman of the Council for Trade in Goods".

Mandated Review of the Agreement

Art. 9 of the Agreement envisages its review within five years of its coming into operation, i.e. by 1-1-2000.

The Council for Trade in Goods is to review the operation of the Agreement and, as appropriate, propose to the Ministerial Conference amendments to its text. The process of review has started but no specific proposals have been made by any Member as yet.

Investment Policy and Competition Policy

In the course of this review, the Council for Trade in Goods shall consider whether the Agreement should be complemented with the provisions on investment policy and competition policy. The Singapore Ministerial Conference which established the two parallel Working Groups to study the relationship between Trade and Investment on the one hand and Trade and Competition Policy on the other had stipulated that future negotiations, if any, regarding multilateral disciplines in these areas will take place only after explicit consensus decision by the Members. The Working Group process is still on.

Likely issues during the review

The review of the Agreement is likely to address the following issues:

A. Issues related to the operation of the Agreement during the last five years, and

B. Issues related to the coverage of the Agreement

A. Issues related to the operation of the Agreement

Art. 4 provides that a developing country Member shall be free to deviate temporarily from the obligations arising out of this agreement to the extent and in such a manner as Art. XVIII of GATT 1994, the Understanding on the Balance of Payments Provisions of GATT 1994, and the Declaration on Trade Measures Taken for Balance of Payments Purpose adopted on 28th November, 1979. Issues related to operationalisation of this provision would be raised by developing countries;

The question of transition period of five years for developing countries has ended before the review of the operation of the Agreement. The issue of transition periods and the need for general exemption, rather than based on individual request, is a matter of concern for developing countries;

Art. 5.3 which provides for request for extension of transition period on individual basis, stipulates that such Members should demonstrate particular difficulties in implementing the provisions of the Agreement. This leaves the decision to the discretion of WTO Members. There is likely to be demand for objective criteria;

The role of the Committee on Trade-Related Investment Measures has so far been confined to monitoring the notification requirements. A changed role could be considered.

B. Issues related to the coverage of the Agreement

The present agreement prohibits trade related investment measures that are violative of Art. III and Art. XI of the General Agreement on Tariffs and Trade. Local content requirements, trade balancing requirements, and export restrictions are prohibited. The efforts of developing countries would be to reduce the prohibitions in view of the experience of these countries based on the operation of the agreement. Developing countries (the Like Minded Group) have submitted certain proposals in this regard in the context of review of implementation of the Uruguay Round Agreements.

The TRIMs Agreement has been found by the developing countries to be standing in the way of sustained industrialisation of developing countries, without exposing them to balance of payment shocks, by reducing substantially the policy space available to these countries.

Developed countries, on the other hand, have been arguing for a further expansion in the list of prohibited TRIMs.

________________________________________________________________________

{Text of the information on the TRIMs Agreement posted on the Website of the Department of Commerce for the information of the public so as to elicit their suggestion in connection with the ongoing review of the TRIMs Agreement}

1. Negotiations shall be conducted on the basis of progressive liberalisation as stated in Article XIX of the GATS.

2. There shall be appropriate flexibility for individual developing country Members.

3. Negotiations shall be conducted within the existing architecture of the GATS, both in terms of the approach to scheduling specific commitments and the four modes of supply.

4. There shall be due respect in these negotiations for national policy objectives and the level of development of individual Members.

5. Achieving progressively higher levels of liberalisation on trade in services, according to Article XIX of the GATS, as a means of promoting the economic growth of all trading partners and the development of developing countries.

6. Securing an overall balance of rights and obligations through effective market access with a view to promoting the interests of all participants on a mutually advantageous basis.

7. Increasing the participation of developing countries in trade in services, giving special priority for least developed country Members.

8. No a priori exclusion of any service sector or mode of supply. In this regard, appropriate flexibility for developing country Members shall be provided for in accordance with Article XIX:2 of the GATS.

9. Liberalisation shall focus on sectors and modes of supply of export interest to developing countries.

10. Negotiations on safeguards under Article X shall be completed by ...... according to the Decision ..... by the Council on Trade in Services. Negotiations under Articles VI.4 and XV shall be completed prior to the conclusion of negotiations of specific commitments.

11. The Council for Trade in Services (CTS) shall continue to carry out an assessment of trade in services in overall terms and on a sectoral basis with reference to the objectives of the GATS and of Article IV in particular.

12. Assessment shall constitute an ongoing activity of the Council and the negotiations shall be adjusted in the light of the results of the assessment.

13. Based on multilaterally agreed criteria, account shall be taken and credit shall be given in market access negotiations for autonomous liberalisation undertaken by Members since previous negotiations.

14. The services negotiations will be conducted in Special Sessions of the Council for Trade in Services, and the CTS will report on a regular basis to the General Council, according to the decision taken by the General Council on 7 February 2000.

15. Negotiations shall be transparent and open to all Members and acceding States and separate customs usnions territories according to the Decision taken in this regard by the General Council on 5 May 2000.

16. The starting point for the negotiations of specific commitments is the current schedules of specific commitments.

17. Request and Offer shall be the principal method of negotiating specific commitments. Complementary methods as necessary, agreed upon by Members and consistent with the architecture of the GATS, may also be considered as a way of moving the negotiations forward to achieve the GATS objectives.

18. The Committee on Specific Commitments will endeavour to complete ongoing work on scheduling guidelines and classification prior to the beginning of market access negotiations. If necessary, further work on classification and scheduling guidelines may continue during the course of negotiations.

19. There shall be appropriate flexibility for individual developing country Members for opening fewer sectors, liberalising fewer types of transactions, progressively extending market access in line with their development situation and, when making access to their markets available to foreign service suppliers, attaching to such access conditions aimed at achieving the objectives referred to in Article IV.

20. There shall be recognition and the granting of negotiating credits for autonomous liberalisation undertaken by Members since previous negotiations.

21. These negotiations shall establish specific mechanisms for the effective implementation of Article IV.

22. The CTS shall, whenever reviewing progress in negotiations, consider the extent to which Article IV is being implemented and suggest ways and means of promoting the goals established therein.

23. Negotiations should be conducted in a flexible and efficient way, without imposing unnecessary burden on Members, in particular with respect to the number and frequency of meetings. Proliferation of subsidiary bodies should be avoided to the maximum extent possible;

24. Negotiating functions should be clearly assigned to the bodies concerned in order to avoid overlaps. If necessary, consideration should be given to the reassignment of activities among the existing bodies, only for the duration of the negotiations;

25. The needs of smaller delegations should be taken into account, e.g. by scheduling meetings in sequensce and not in parallel.

1. Pursuant to the objectives of the GATS, as stipulated in the Preamble and Article IV, and as required by Article XIX, the negotiations shall be conducted on the basis of progressive liberalisation as a means of promoting the economic growth of all trading partners and the development of developing countries, and recognising the right of Members to regulate, and to introduce new regulations, on the supply of services. The negotiations shall aim to achieve progressively higher levels of liberalisation of trade in services through the reduction or elimination of the adverse effects on trade in services of measures as a means of providing effective market access, and with a view to promoting the interests of all participants on a mutually advantageous basis and to securing an overall balance of rights and obligations.

2. The negotiations shall aim to increase the participation of developing countries in trade in services. There shall be appropriate flexibility for individual developing country Members, as provided for by Article XIX:2. Special priority shall be granted to least-developed country Members as stipulated in Article IV:3.

3. The process of liberalisation shall take place with due respect for national policy objectives, the level of development and the size of economies of individual Members, both overall and in individual sectors. Due consideration should be given to the needs of small and medium-sized service suppliers, particularly those of developing countries.

4. The negotiations shall take place within and shall respect the existing structure and principles of the GATS, including the right to specify sectors in which commitments will be undertaken and the four modes of supply.

5. There shall be no a priori exclusion of any service sector or mode of supply. Special attention shall be given to sectors and modes of supply of export interest to developing countries.

6. MFN Exemptions shall be subject to negotiation according to paragraph 6 of the Annex on Article II (MFN) Exemptions. In such negotiations, appropriate flexibility shall be accorded to individual developing country Members.

7. Negotiations on safeguards under Article X shall be completed by 15 March 2002 according to the Decision adopted by the Council for Trade in Services on 1 December 2000. Members shall aim to complete negotiations under Articles VI:4, XIII and XV prior to the conclusion of negotiations on specific commitments.

8. The negotiations shall be conducted in Special Sessions of the Council for Trade in Services, which will report on a regular basis to the General Council, in accordance with decisions taken by the General Council.

9. Negotiations shall be transparent and open to all Members and acceding States and separate customs territories according to Decisions taken in this regard by the General Council.

10. The starting point for the negotiation of specific commitments shall be the current schedules, without prejudice to the content of requests.

11. Liberalisation shall be advanced through bilateral, plurilateral or multilateral negotiations. The main method of negotiation shall be the request-offer approach.

12. There shall be appropriate flexibility for individual developing country Members for opening fewer sectors, liberalising fewer types of transactions, progressively extending market access in line with their development situation and, when making access to their markets available to foreign service suppliers, attaching to such access conditions aimed at achieving the objectives referred to in Article IV.

13. Based on multilaterally agreed criteria, account shall be taken and credit shall be given in the negotiations for autonomous liberalisation undertaken by Members since previous negotiations. Members shall endeavour to develop such criteria prior to the start of negotiation of specific commitments.

14. The Council for Trade in Services in Special Sessions shall continue to carry out an assessment of trade in services in overall terms and on a sectoral basis with reference to the objectives of the GATS and of Article IV in particular. This shall be an ongoing activity of the Council and negotiations shall be adjusted in the light of the results of the assessment. In accordance with Article XXV of the GATS, technical assistance shall be provided to developing country Members, on request, in order to carry out national/regional assessments.

15. To ensure the effective implementation of Articles IV and XIX:2, the Council for Trade in Services in Special Session, when reviewing progress in negotiations, shall consider the extent to which Article IV is being implemented and suggest ways and means of promoting the goals established therein. In implementing Article IV consideration shall also be given to the needs of small service suppliers of developing countries. It shall also conduct an evaluation, before the completion of the negotiations, of the results attained in terms of the objectives of Article IV.

16. While the Council for Trade in Services in Special Sessions may establish subsidiary bodies as it deems necessary, the proliferation of such bodies should be avoided to the maximum extent possible. Existing subsidiary bodies shall be utilised to their maximum capacity.

17. The needs of smaller delegations should be taken into account, e.g. by scheduling meetings in sequence and not in parallel.

18. The Council for Trade in Services in Special Sessions shall, when appropriate, develop time schedules for the conduct of the negotiations in accordance with any relevant decisions taken by the General Council.