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JOB(99)/5868/Add.1 (5959)
11 October 1999

PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE

Ministerial Text: First Draft

Addendum

The attached addendum to the first draft of the Ministerial Text, reflecting additional text for consideration under paragraphs 21 and 22 of the original text, is being circulated by the Chairman on his own responsibility following representations that have been made to him by a large number of delegations and with a view to assisting the further evolution of the draft text in the relevant areas.

It is suggested that paragraph 21 read as follows:

"Immediate Action

21. We are determined to ensure a full and effective response to problems related to implementation. In this regard, together with the other measures we are taking to respond to such concerns, we are also taking the following decisions with immediate effect:

[(a) Anti-Dumping - No investigation shall be initiated for a period of 365 days from the date of finalization of a previous investigation for the same product. - Under Article 9.1 the lesser duty rule shall be made mandatory. - Article 2.2 shall be clarified in order to make appropriate comparison with respect to the margin of dumping.

(b) Subsidies Agreement - Article 8:1 of the Subsidies Agreement dealing with non-actionable subsidies shall be expanded to include subsidies referred to in Article 3:1 of the Agreement when such subsidies are provided by developing country Members. - Export credits given by developing countries shall not be considered as subsidies so long as the rates at which they are extended are above LIBOR. - Any countervailing duties shall be restricted only to that amount by which the subsidy exceeds the de minimis level.

- Annex VII of the Agreement shall be modified to read as follows: The developing-country Members not subject to the provisions of paragraph 1(a) of Article 3 under the terms of paragraph 2(a) of Article 27 are: (i) The developing countries, including the least-developed countries, Members of the WTO that are included in the Low and Middle Income Category of the World Bank; (ii) Countries indicated in paragraph (i) above will be excluded from this Annex if their GNP per capita has exceeded the top level of the Middle Income Category of the World Bank.

- The prohibition on using export subsidies under Article 27:6 shall be applicable to a developing country only after its export levels in a product have remained over 3.25 per cent of world trade continuously for a period of five years.

(c) Sanitary and Phytosanitary Measures - The provisions in Article 10 shall be made mandatory, including that if an SPS measure creates a problem for more than one developing country, then the country which has adopted it shall withdraw it. - Article 10:2 provision shall be made mandatory for developed countries to provide a time period of at least 12 months from the date of notification for compliance of new SPS measures for products from developing countries. - International standard-setting organizations shall ensure the presence of countries at different levels of development and from all geographical regions, throughout all phases of standard-setting. - The provisions of paragraph 2 of Annex B shall made mandatory, and a "reasonable interval" shall mean not less than 12 months. - Article 4 shall be clarified so that developing countries can enter into equivalency agreements.

(d) Technical Barriers to Trade - International standard-setting organizations shall ensure the presence of countries at different levels of development and from all geographical regions, throughout all phases of standard-setting. - A specific mandate shall be given to the TBT Committee as part of its triennial work programme to address the problems faced by developing countries in both international standards and conformity assessment.

(e) Textiles - Importing countries shall, on the first day of the 85th month that the WTO Agreement is in effect, integrate products which accounted for not less than 50 per cent of the total volume of the Member's 1990 imports. - The importing countries to apply growth-on-growth for stage 3 with effect from 1 January 2000 instead of 1 January 2002. - A moratorium shall be applied by importing countries on anti-dumping actions until two years after the entire textiles and clothing sector is integrated into the GATT. - Any change in rules of origin shall be examined in the CTG for its possible impact on market access of exporting countries, before it is applied.

(f) Trade-Related Investment Measures - The transition period mentioned in Article 5 paragraph 2 shall be extended until such time that their development needs demand. - Developing countries shall have another opportunity to notify existing TRIMs measures which they would be then allowed to maintain till the end of the new transition period.

(g) Trade-Related Aspects of Intellectual Property Rights - In the light of provisions contained in Articles 23 and 24 of the TRIPS Agreement, additional protection for geographical indications shall be extended for products other than wines and spirits. - A clear understanding in the interim that patents inconsistent with Article 15 of the CBD shall not be granted. - Article 64, paragraph 2 shall be modified so as to make it clear that subparagraphs (b) and (c) of Article XXIII of GATT 1994 shall not apply to the TRIPS Agreement. - The provisions of Article 66.2 shall be made obligatory and shall be subject to periodical notification. - The period given for implementation of the provisions of Article 27.3(b) shall be five years from the date the review is completed. - The list of exceptions to patentability in Article 27.3(b) of the TRIPS Agreement shall include the list of essential drugs of the World Health Organization.

(h) Agreement on Implementation of Article VII of GATT 1994 - A multilateral solution that enables customs administrations of importing countries to seek and obtain information on export values in a time-bound manner, in doubtful cases, shall be included in the Agreement. - The addition of cost of services such as engineering, development, and design work, which are supplied directly or indirectly by the buyer free of charge or at reduced cost for the production of goods under import, shall be included in Article 8:1(b)(iv). - The residual method of determining customs value under Article 7 shall be inclusive of all residual eventualities, thus allowing valuation based on domestic market price or export price in a third country with appropriate adjustments.

(i) Agreement on Rules of Origin - The CRO shall complete its remaining work on harmonizing non-preferential rules of origin by 31 July 2000. - No new interim arrangements shall be introduced. Further, any interim arrangements introduced by any Member with effect from I January 1995 or any subsequent date shall be suspended with effect from 4 December 1999.

(j) Balance-of-Payments Provisions of GATT 1994 - Only the Committee on Balance of Payments shall have the authority to examine the overall justification of BOP measures. - The Committee shall keep in view that Article XVIII is a special provision for developing countries and shall ensure that Article XVIII does not become more onerous than Article XII.

(k) Agriculture - Developing countries with predominately rural agrarian economies shall have sufficient flexibility in the green box to adequately address their non-trade concerns, such as food security and rural employment. - If in the calculation of the AMS, domestic support prices are lower than the external reference price (so as to ensure access of poor households to basic foodstuffs), thereby resulting in negative product specific support, then Members shall be allowed to increase their non-product specific support by an equivalent amount. - TRQ administration shall be made transparent, equitable and non-discriminatory, in order to allow new/small-scale developing-country exporters to obtain market access. - To this end, notifications submitted to the Committee on Agriculture shall include also details on guidelines and procedures of allotment of TRQ. - The Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries (NFIDCs) shall be revised, before 1 January 2001, in order to ensure its effective implementation.

(l) Services - Developed countries shall fully implement commitments undertaken by them in Mode 4. - A monitoring and notification mechanism shall be established to ensure effective implementation of Article IV.

(m) Special and Differential Treatment - All S&D provisions shall be converted into concrete commitments, specially to address the constraints on the supply side of developing countries.]"

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It is suggested that paragraph 22 read as follows:

"Implementation Review Mechanism

22. We also decide to establish an improved mechanism to examine and address implementation-related concerns. To this end we direct that:

* The General Council, meeting at heads of delegation level, shall conduct a full and comprehensive review of issues and problems identified by Members relating to the implementation of existing WTO Agreements and Decisions.

* The General Council shall complete its review and shall take or propose appropriate actions within one year of the date of this Declaration.

[The following implementation issues should be addressed in the first year of negotiations:

(a) Anti-Dumping - The provisions of Article 15 need to be operationalized and made mandatory. - The existing de minimis dumping margin of 2 per cent of export price below which no anti-dumping duty can be imposed (Article 5.8), needs to be raised to 5 per cent for developing countries. - The proposed de minimis dumping margin of 5 per cent is applied not only in new cases but also in refund and review cases. - The threshold volume of dumped imports which shall normally be regarded as negligible (Article 5.8) should be increased from the existing 3 per cent to 5 per cent for imports from developing countries. - Article 5.8 shall be also clarified with regard to the time-frame to be used in determining the volume of the dumped imports. - The substantial quantities test should be increased from the present threshold of 20 per cent to at least 40 per cent. - Article 2.4.1 shall include details of dealing with foreign exchange rate fluctuations during the process of dumping. - Article 3 shall contain a detailed provision dealing with the determination of the material retardation of the establishment of a domestic industry as stipulated in footnote 9. - There should be a provision in the Agreement, which provides a presumption of dumping of imports from developed countries into developing countries, provided certain conditions are met. - Article 17 should be suitably modified so that the general standard of review laid down in the WTO dispute settlement mechanism applies equally and totally to disputes in the anti-dumping area. - Article 18.6 must be appropriately amended to ensure that the annual reviews are meaningful and play a role in reducing the possible abuse of the Anti-Dumping Agreement.

(b) Subsidies Agreement - Aggregate and generalized rates of duty rate remission should be allowed in case of developing countries even though the individual units may not be able to establish the source of their inputs. - Developing countries should be allowed to neutralize the cost escalating effect of taxes. - Article 11:9 should be modified to provide an additional dispensation for developing countries, in as much as that any subsidy investigation shall be immediately terminated in cases. - The present de minimis level of 3 per cent below which countervailing duties may not be imposed for developing countries, needs to be increased (Article 27:11). - There should be a clarification in Article 27:3 that it is applicable notwithstanding the provisions of any other agreement. - The definition of "inputs consumed in the production process" (footnote 61) needs to be expanded to include all inputs, not just physical inputs, which may have contributed to the determination of the final cost price of the exported product. - Annex I of the Agreement shall be amended to provide developing countries the flexibility to finance their exporters, consistent with their developmental objectives.

(c) Sanitary and Phytosanitary Measures - Though the SPS Agreement encourages Members to enter into MRA's. In this context, it is suggested that MRA's are developed in a transparent way and they should be open to parties that may wish to join them at a later stage. - The definition of an international standard, guideline and recommendation (paragraph 3 of Annex A) needs to be revised so that a differentiation is introduced between mandatory international standards and voluntary international guidelines/recommendations. - Article 12:7 provides for a review of the operation and implementation of the Agreement three years after the date of entry into force of the Agreement. This review shall be carried out once every two years.

(d) Technical Barriers to Trade - Means have to be found to ensure effective participation of developing countries in setting of standards by international standard-setting organization. - Article 11 shall be made obligatory so that technical assistance and cooperation is provided to developing countries. - Acceptance by developed-country importers of self-declaration regarding adherence to standards by developing-country exporters. This provision should be introduced in Article 12. - A specific provision to be introduced in Article 12 that developing countries shall be given a longer time-frame to comply with measures regarding products of export interest to them. Furthermore, if a measure brought forward by a developed country creates difficulties for developing countries, then the measure should be reconsidered.

(e) Trade-Related Investment Measures - The provisions of Article 5.3 must be suitably amended and made mandatory. - Developing countries shall be exempted from the disciplines on the application of domestic content requirement by providing for an enabling provision in Articles 2 and 4 to this effect.

(f) Trade-Related Aspects of Intellectual Property Rights - Articles 7 and 8 of the TRIPS Agreement to be operationalized by providing for transfer of technology on fair and mutually advantageous terms. - Article 27.3(b) to be amended in light of the provisions of the Convention on Biological Diversity and the International Undertaking. Also, clarify artificial distinctions between biological and microbiological organisms and process; ensure the continuation of the traditional farming practices including the right to save, exchange and save seeds, and sell their harvest; and prevent anti-competitive practices which will threaten food sovereignty of people in developing countries, as permitted by Article 31 of the TRIPS Agreement.

(g) Agreement on Implementation Of Article VII of GATT 1994 - The Agreement should be amended to provide for the highest value when more than one transaction value of identical or similar goods is found. - Buying commissions should be taken into account in the determination of customs value of imported goods as it forms a legitimate component of the landed cost of imported goods. - Persons associated with each other as sole agents, sole distributors, and sole concessionaires, howsoever described, should automatically be deemed "related".

(h) Article XVIII of GATT 1994 - A complete review of Article XVIII shall be undertaken with a view to ensure that it subserves the original objective of facilitating the progressive development of economies in developing countries and to allow them to implement programmes and policies of economic development designed to raise the general standard of living of their people.]"

 


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