GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
1. The General
Agreement on Tariffs and Trade 1994 ("GATT 1994") shall consist of:
(a) the
provisions in the General Agreement on Tariffs and Trade, dated 30 October
1947, annexed to the Final Act Adopted at the Conclusion of the Second Session
of the Preparatory Committee of the United Nations Conference on Trade and
Employment (excluding the Protocol of Provisional Application), as rectified,
amended or modified by the terms of legal instruments which have entered into
force before the date of entry into force of the WTO Agreement;
(b) the
provisions of the legal instruments set forth below that have entered into
force under the GATT 1947 before the date of entry into force of the WTO
Agreement:
(i) protocols and
certifications relating to tariff concessions;
(ii) protocols of
accession (excluding the provisions (a) concerning provisional application and
withdrawal of provisional application and (b) providing that Part II of GATT
1947 shall be applied provisionally to the fullest extent not inconsistent with
legislation existing on the date of the Protocol);
(iii) decisions
on waivers granted under Article XXV of GATT 1947 and still in force on the
date of entry into force of the WTO Agreement) The waivers covered by this
provision are listed in footnote 7 on pages 11 and 12 in Part II of document
MTN/FA of 15 December 1993 and in MTN/FA/Corr.6 of 21 March 1994. The
Ministerial Conference shall establish at its first session a revised list of
waivers covered by this provision that adds any waivers granted under GATT 1947
after 15 December 1993 and before the date of entry into force of the WTO
Agreement, and deletes the waivers which will have expired by that time.;
(iv) other
decisions of the CONTRACTING PARTIES to GATT 1947;
(c) the
Understandings set forth below:
(i) Understanding
on the Interpretation of Article II:1(b) of the General Agreement on Tariffs
and Trade 1994;
(ii)
Understanding on the Interpretation of Article XVII of the General Agreement on
Tariffs and Trade 1994;
(iii)
Understanding on Balance-of-Payments Provisions of the General Agreement on
Tariffs and Trade 1994;
(iv)
Understanding on the Interpretation of Article XXIV of the General Agreement on
Tariffs and Trade 1994;
(v) Understanding
in Respect of Waivers of Obligations under the General Agreement on Tariffs and
Trade 1994;
(vi)
Understanding on the Interpretation of Article XXVIII of the General Agreement
on Tariffs and Trade 1994; and
(d) the Marrakesh
Protocol to GATT 1994.
2. Explanatory
Notes
(a) The
references to "contracting party" in the provisions of GATT 1994
shall be deemed to read "Member". The references to
"less-developed contracting party" and "developed contracting
party" shall be deemed to read "developing country Member" and
"developed country Member". The references to "Executive
Secretary" shall be deemed to read "Director-General of the
WTO".
(b) The
references to the CONTRACTING PARTIES acting jointly in Articles XV:1, XV:2,
XV:8, XXXVIII and the Notes Ad Article XII and XVIII; and in the provisions on
special exchange agreements in Articles XV:2, XV:3, XV:6, XV:7 and XV:9 of GATT
1994 shall be deemed to be references to the WTO. The other functions that the
provisions of GATT 1994 assign to the CONTRACTING PARTIES acting jointly shall
be allocated by the Ministerial Conference.
(c) (i) The text
of GATT 1994 shall be authentic in English, French and Spanish.
(ii) The text of
GATT 1994 in the French language shall be subject to the rectifications of terms
indicated in Annex A to document MTN.TNC/41.
(iii) The
authentic text of GATT 1994 in the Spanish language shall be the text in Volume
IV of the Basic Instruments and Selected Documents series, subject to the
rectifications of terms indicated in Annex B to document MTN.TNC/41.
3. (a) The
provisions of Part II of GATT 1994 shall not apply to measures taken by a
Member under specific mandatory legislation, enacted by that Member before it
became a contracting party to GATT 1947, that prohibits the use, sale or lease
of foreign-built or foreign-reconstructed vessels in commercial applications
between points in national waters or the waters of an exclusive economic zone.
This exemption applies to: (a) the continuation or prompt renewal of a
non-conforming provision of such legislation; and (b) the amendment to a
non-conforming provision of such legislation to the extent that the amendment
does not decrease the conformity of the provision with Part II of GATT 1947.
This exemption is limited to measures taken under legislation described above
that is notified and specified prior to the date of entry into force of the WTO
Agreement. If such legislation is subsequently modified to decrease its
conformity with Part II of GATT 1994, it will no longer qualify for coverage
under this paragraph.
(b) The
Ministerial Conference shall review this exemption not later than five years
after the date of entry into force of the WTO Agreement and thereafter every
two years for as long as the exemption is in force for the purpose of examining
whether the conditions which created the need for the exemption still prevail.
(c) A Member
whose measures are covered by this exemption shall annually submit a detailed
statistical notification consisting of a five-year moving average of actual and
expected deliveries of relevant vessels as well as additional information on
the use, sale, lease or repair of relevant vessels covered by this exemption.
(d) A Member that
considers that this exemption operates in such a manner as to justify a
reciprocal and proportionate limitation on the use, sale, lease or repair of
vessels constructed in the territory of the Member invoking the exemption shall
be free to introduce such a limitation subject to prior notification to the
Ministerial Conference.
(e) This
exemption is without prejudice to solutions concerning specific aspects of the
legislation covered by this exemption negotiated in sectoral agreements or in
other fora.
Understanding on the Interpretation of Article Ⅱ:1(b) of the General Agreement on Tariffs and Trade 1994
Members hereby agree as
follows:
1. In order to
ensure transparency of the legal rights and obligations deriving from paragraph
1(b) of Article II, the nature and level of any "other duties or charges"
levied on bound tariff items, as referred to in that provision, shall be
recorded in the Schedules of concessions annexed to GATT 1994 against the
tariff item to which they apply. It is understood that such recording does not
change the legal character of "other duties or charges".
2. The date as of
which "other duties or charges" are bound, for the purposes of
Article II, shall be 15 April 1994. "Other duties or charges" shall
therefore be recorded in the Schedules at the levels applying on this date. At
each subsequent renegotiation of a concession or negotiation of a new
concession the applicable date for the tariff item in question shall become the
date of the incorporation of the new concession in the appropriate Schedule.
However, the date of the instrument by which a concession on any particular
tariff item was first incorporated into GATT 1947 or GATT 1994 shall also
continue to be recorded in column 6 of the Loose-Leaf Schedules.
3. "Other
duties or charges" shall be recorded in respect of all tariff bindings.
4. Where a tariff
item has previously been the subject of a concession, the level of "other
duties or charges" recorded in the appropriate Schedule shall not be
higher than the level obtaining at the time of the first incorporation of the
concession in that Schedule. It will be open to any Member to challenge the
existence of an "other duty or charge", on the ground that no such
"other duty or charge" existed at the time of the original binding of
the item in question, as well as the consistency of the recorded level of any
"other duty or charge" with the previously bound level, for a period
of three years after the date of entry into force of the WTO Agreement or three
years after the date of deposit with the Director-General of the WTO of the
instrument incorporating the Schedule in question into GATT 1994, if that is a
later date.
5. The recording
of "other duties or charges" in the Schedules is without prejudice to
their consistency with rights and obligations under GATT 1994 other than those
affected by paragraph 4. All Members retain the right to challenge, at any
time, the consistency of any "other duty or charge" with such
obligations.
6. For the
purposes of this Understanding, the provisions of Articles XXII and XXIII of
GATT 1994 as elaborated and applied by the Dispute Settlement Understanding
shall apply.
7. "Other
duties or charges" omitted from a Schedule at the time of deposit of the
instrument incorporating the Schedule in question into GATT 1994 with, until
the date of entry into force of the WTO Agreement, the Director-General to the
CONTRACTING PARTIES to GATT 1947 or, thereafter, with the Director-General of
the WTO, shall not subsequently be added to it and any "other duty or
charge" recorded at a level lower than that prevailing on the applicable
date shall not be restored to that level unless such additions or changes are
made within six months of the date of deposit of the instrument.
8. The decision
in paragraph 2 regarding the date applicable to each concession for the
purposes of paragraph 1(b) of Article II of GATT 1994 supersedes the decision
regarding the applicable date taken on 26 March 1980 (BISD 27S/24).
Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994
Members,
Noting that Article XVII provides
for obligations on Members in respect of the activities of the state trading
enterprises referred to in paragraph 1 of Article XVII, which are required to
be consistent with the general principles of non-discriminatory treatment
prescribed in GATT 1994 for governmental measures affecting imports or exports
by private traders;
Noting further that Members are
subject to their GATT 1994 obligations in respect of those governmental
measures affecting state trading enterprises;
Recognizing that this Understanding is
without prejudice to the substantive disciplines prescribed in Article XVII;
Hereby agree
as follows:
1. In order to
ensure the transparency of the activities of state trading enterprises, Members
shall notify such enterprises to the Council for Trade in Goods, for review by
the working party to be set up under paragraph 5, in accordance with the
following working definition:
"Governmental
and non-governmental enterprises, including marketing boards, which have been
granted exclusive or special rights or privileges, including statutory or
constitutional powers, in the exercise of which they influence through their
purchases or sales the level or direction of imports or exports."
This notification
requirement does not apply to imports of products for immediate or ultimate
consumption in governmental use or in use by an enterprise as specified above
and not otherwise for resale or use in the production of goods for sale.
2. Each Member
shall conduct a review of its policy with regard to the submission of
notifications on state trading enterprises to the Council for Trade in Goods,
taking account of the provisions of this Understanding. In carrying out such a
review, each Member should have regard to the need to ensure the maximum
transparency possible in its notifications so as to permit a clear appreciation
of the manner of operation of the enterprises notified and the effect of their
operations on international trade.
3. Notifications
shall be made in accordance with the questionnaire on state trading adopted on
24 May 1960 (BISD 9S/184-185), it being understood that Members shall notify
the enterprises referred to in paragraph 1 whether or not imports or exports
have in fact taken place.
4. Any Member which
has reason to believe that another Member has not adequately met its
notification obligation may raise the matter with the Member concerned. If the
matter is not satisfactorily resolved it may make a counter-notification to the
Council for Trade in Goods, for consideration by the working party set up under
paragraph 5, simultaneously informing the Member concerned.
5. A working
party shall be set up, on behalf of the Council for Trade in Goods, to review
notifications and counter-notifications. In the light of this review and
without prejudice to paragraph 4(c) of Article XVII, the Council for Trade in
Goods may make recommendations with regard to the adequacy of notifications and
the need for further information. The working party shall also review, in the
light of the notifications received, the adequacy of the above-mentioned
questionnaire on state trading and the coverage of state trading enterprises
notified under paragraph 1. It shall also develop an illustrative list showing
the kinds of relationships between governments and enterprises, and the kinds
of activities, engaged in by these enterprises, which may be relevant for the
purposes of Article XVII. It is understood that the Secretariat will provide a
general background paper for the working party on the operations of state
trading enterprises as they relate to international trade. Membership of the
working party shall be open to all Members indicating their wish to serve on
it. It shall meet within a year of the date of entry into force of the WTO
Agreement and thereafter at least once a year. It shall report annually to the
Council for Trade in Goods.) The activities of this working party shall be
coordinated with those of the working group provided for in Section III of the
Ministerial Decision on Notification Procedures adopted on 15 April 1994.
Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994
Members,
Recognizing the
provisions of Articles XII and XVIII:B of GATT 1994 and of the Declaration on
Trade Measures Taken for Balance-of-Payments Purposes adopted on 28 November
1979 (BISD 26S/205-209, referred to in this Understanding as the "1979
Declaration") and in order to clarify such provisions.) Nothing in this
Understanding is intended to modify the rights and obligations of Members under
Articles XII or XVIII:B of GATT 1994. The provisions of Articles XXII and XXIII
of GATT 1994 as elaborated and applied by the Dispute Settlement Understanding
may be invoked with respect to any matters arising from the application of
restrictive import measures taken for balance-of-payments purposes.
Hereby agree as
follows:
Application of Measures
1. Members
confirm their commitment to announce publicly, as soon as possible,
time-schedules for the removal of restrictive import measures taken for
balance-of-payments purposes. It is understood that such time-schedules may be
modified as appropriate to take into account changes in the balance-of-payments
situation. Whenever a time-schedule is not publicly announced by a Member, that
Member shall provide justification as to the reasons therefor.
2. Members
confirm their commitment to give preference to those measures which have the
least disruptive effect on trade. Such measures (referred to in this Understanding
as "price-based measures") shall be understood to include import
surcharges, import deposit requirements or other equivalent trade measures with
an impact on the price of imported goods. It is understood that,
notwithstanding the provisions of Article II, price-based measures taken for
balance-of-payments purposes may be applied by a Member in excess of the duties
inscribed in the Schedule of that Member. Furthermore, that Member shall
indicate the amount by which the price-based measure exceeds the bound duty
clearly and separately under the notification procedures of this Understanding.
3. Members shall
seek to avoid the imposition of new quantitative restrictions for
balance-of-payments purposes unless, because of a critical balance-of-payments
situation, price-based measures cannot arrest a sharp deterioration in the
external payments position. In those cases in which a Member applies
quantitative restrictions, it shall provide justification as to the reasons why
price-based measures are not an adequate instrument to deal with the
balance-of-payments situation. A Member maintaining quantitative restrictions
shall indicate in successive consultations the progress made in significantly
reducing the incidence and restrictive effect of such measures. It is
understood that not more than one type of restrictive import measure taken for
balance-of-payments purposes may be applied on the same product.
4. Members
confirm that restrictive import measures taken for balance-of-payments purposes
may only be applied to control the general level of imports and may not exceed
what is necessary to address the balance-of-payments situation. In order to
minimize any incidental protective effects, a Member shall administer
restrictions in a transparent manner. The authorities of the importing Member
shall provide adequate justification as to the criteria used to determine which
products are subject to restriction. As provided in paragraph 3 of Article XII
and paragraph 10 of Article XVIII, Members may, in the case of certain
essential products, exclude or limit the application of surcharges applied
across the board or other measures applied for balance-of-payments purposes.
The term "essential products" shall be understood to mean products
which meet basic consumption needs or which contribute to the Member's effort
to improve its balance-of-payments situation, such as capital goods or inputs
needed for production. In the administration of quantitative restrictions, a
Member shall use discretionary licensing only when unavoidable and shall phase
it out progressively. Appropriate justification shall be provided as to the
criteria used to determine allowable import quantities or values.
Procedures for Balance-of-Payments Consultations
5. The Committee
on Balance-of-Payments Restrictions (referred to in this Understanding as the
"Committee") shall carry out consultations in order to review all
restrictive import measures taken for balance-of-payments purposes. The
membership of the Committee is open to all Members indicating their wish to
serve on it. The Committee shall follow the procedures for consultations on
balance-of-payments restrictions approved on 28 April 1970 (BISD 18S/48-53,
referred to in this Understanding as "full consultation procedures"),
subject to the provisions set out below.
6. A Member
applying new restrictions or raising the general level of its existing
restrictions by a substantial intensification of the measures shall enter into
consultations with the Committee within four months of the adoption of such
measures. The Member adopting such measures may request that a consultation be
held under paragraph 4(a) of Article XII or paragraph 12(a) of Article XVIII as
appropriate. If no such request has been made, the Chairman of the Committee
shall invite the Member to hold such a consultation. Factors that may be
examined in the consultation would include, inter alia, the introduction
of new types of restrictive measures for balance-of-payments purposes, or an
increase in the level or product coverage of restrictions.
7. All
restrictions applied for balance-of-payments purposes shall be subject to
periodic review in the Committee under paragraph 4(b) of Article XII or under
paragraph 12(b) of Article XVIII, subject to the possibility of altering the
periodicity of consultations in agreement with the consulting Member or
pursuant to any specific review procedure that may be recommended by the
General Council.
8. Consultations
may be held under the simplified procedures approved on 19 December 1972 (BISD
20S/47-49, referred to in this Understanding as "simplified consultation
procedures") in the case of least-developed country Members or in the case
of developing country Members which are pursuing liberalization efforts in
conformity with the schedule presented to the Committee in previous
consultations. Simplified consultation procedures may also be used when the
Trade Policy Review of a developing country Member is scheduled for the same
calendar year as the date fixed for the consultations. In such cases the
decision as to whether full consultation procedures should be used will be made
on the basis of the factors enumerated in paragraph 8 of the 1979 Declaration.
Except in the case of least-developed country Members, no more than two
successive consultations may be held under simplified consultation procedures.
Notification and Documentation
9. A Member shall
notify to the General Council the introduction of or any changes in the
application of restrictive import measures taken for balance-of-payments purposes,
as well as any modifications in time-schedules for the removal of such measures
as announced under paragraph 1. Significant changes shall be notified to the
General Council prior to or not later than 30 days after their announcement. On
a yearly basis, each Member shall make available to the Secretariat a
consolidated notification, including all changes in laws, regulations, policy
statements or public notices, for examination by Members. Notifications shall
include full information, as far as possible, at the tariff-line level, on the
type of measures applied, the criteria used for their administration, product
coverage and trade flows affected.
10. At the
request of any Member, notifications may be reviewed by the Committee. Such
reviews would be limited to the clarification of specific issues raised by a
notification or examination of whether a consultation under paragraph 4(a) of
Article XII or paragraph 12(a) of Article XVIII is required. Members which have
reasons to believe that a restrictive import measure applied by another Member
was taken for balance-of-payments purposes may bring the matter to the
attention of the Committee. The Chairman of the Committee shall request
information on the measure and make it available to all Members. Without prejudice
to the right of any member of the Committee to seek appropriate clarifications
in the course of consultations, questions may be submitted in advance for
consideration by the consulting Member.
11. The
consulting Member shall prepare a Basic Document for the consultations which,
in addition to any other information considered to be relevant, should include:
(a) an overview of the balance-of-payments situation and prospects, including a
consideration of the internal and external factors having a bearing on the
balance-of-payments situation and the domestic policy measures taken in order
to restore equilibrium on a sound and lasting basis; (b) a full description of
the restrictions applied for balance-of-payments purposes, their legal basis
and steps taken to reduce incidental protective effects; (c) measures taken
since the last consultation to liberalize import restrictions, in the light of
the conclusions of the Committee; (d) a plan for the elimination and
progressive relaxation of remaining restrictions. References may be made, when
relevant, to the information provided in other notifications or reports made to
the WTO. Under simplified consultation procedures, the consulting Member shall
submit a written statement containing essential information on the elements
covered by the Basic Document.
12. The
Secretariat shall, with a view to facilitating the consultations in the
Committee, prepare a factual background paper dealing with the different
aspects of the plan for consultations. In the case of developing country
Members, the Secretariat document shall include relevant background and
analytical material on the incidence of the external trading environment on the
balance-of-payments situation and prospects of the consulting Member. The
technical assistance services of the Secretariat shall, at the request of a
developing country Member, assist in preparing the documentation for the
consultations.
Conclusions of Balance-of-Payments Consultations
13. The Committee
shall report on its consultations to the General Council. When full
consultation procedures have been used, the report should indicate the
Committee's conclusions on the different elements of the plan for
consultations, as well as the facts and reasons on which they are based. The
Committee shall endeavour to include in its conclusions proposals for
recommendations aimed at promoting the implementation of Articles XII and
XVIII:B, the 1979 Declaration and this Understanding. In those cases in which a
time-schedule has been presented for the removal of restrictive measures taken
for balance-of-payments purposes, the General Council may recommend that, in
adhering to such a time-schedule, a Member shall be deemed to be in compliance
with its GATT 1994 obligations. Whenever the General Council has made specific
recommendations, the rights and obligations of Members shall be assessed in the
light of such recommendations. In the absence of specific proposals for
recommendations by the General Council, the Committee's conclusions should
record the different views expressed in the Committee. When simplified
consultation procedures have been used, the report shall include a summary of
the main elements discussed in the Committee and a decision on whether full
consultation procedures are required.
Understanding on the Interpretation of Article XXIV of the General Agreement on Tariffs and Trade 1994
Members,
Having regard to the provisions of Article
XXIV of GATT 1994;
Recognizing that customs unions and free
trade areas have greatly increased in number and importance since the
establishment of GATT 1947 and today cover a significant proportion of world
trade;
Recognizing the contribution to the
expansion of world trade that may be made by closer integration between the
economies of the parties to such agreements;
Recognizing also that such contribution
is increased if the elimination between the constituent territories of duties
and other restrictive regulations of commerce extends to all trade, and
diminished if any major sector of trade is excluded;
Reaffirming that the purpose of such
agreements should be to facilitate trade between the constituent territories
and not to raise barriers to the trade of other Members with such territories;
and that in their formation or enlargement the parties to them should to the
greatest possible extent avoid creating adverse effects on the trade of other
Members;
Convinced also of the need to reinforce
the effectiveness of the role of the Council for Trade in Goods in reviewing
agreements notified under Article XXIV, by clarifying the criteria and
procedures for the assessment of new or enlarged agreements, and improving the
transparency of all Article XXIV agreements;
Recognizing the need for a common
understanding of the obligations of Members under paragraph 12 of Article XXIV;
Hereby agree
as follows:
1. Customs
unions, free-trade areas, and interim agreements leading to the formation of a
customs union or free-trade area, to be consistent with Article XXIV, must
satisfy, inter alia, the provisions of paragraphs 5, 6, 7 and 8 of that
Article.
Article XXIV:5
2. The evaluation
under paragraph 5(a) of Article XXIV of the general incidence of the duties and
other regulations of commerce applicable before and after the formation of a
customs union shall in respect of duties and charges be based upon an overall
assessment of weighted average tariff rates and of customs duties collected.
This assessment shall be based on import statistics for a previous
representative period to be supplied by the customs union, on a tariff-line
basis and in values and quantities, broken down by WTO country of origin. The
Secretariat shall compute the weighted average tariff rates and customs duties
collected in accordance with the methodology used in the assessment of tariff
offers in the Uruguay Round of Multilateral Trade Negotiations. For this
purpose, the duties and charges to be taken into consideration shall be the
applied rates of duty. It is recognized that for the purpose of the overall
assessment of the incidence of other regulations of commerce for which
quantification and aggregation are difficult, the examination of individual
measures, regulations, products covered and trade flows affected may be
required.
3. The
"reasonable length of time" referred to in paragraph 5(c) of Article
XXIV should exceed 10 years only in exceptional cases. In cases where Members
parties to an interim agreement believe that 10 years would be insufficient
they shall provide a full explanation to the Council for Trade in Goods of the
need for a longer period.
Article XXIV:6
4. Paragraph 6 of
Article XXIV establishes the procedure to be followed when a Member forming a
customs union proposes to increase a bound rate of duty. In this regard Members
reaffirm that the procedure set forth in Article XXVIII, as elaborated in the
guidelines adopted on 10 November 1980 (BISD 27S/26-28) and in the
Understanding on the Interpretation of Article XXVIII of GATT 1994, must be
commenced before tariff concessions are modified or withdrawn upon the formation
of a customs union or an interim agreement leading to the formation of a
customs union.
5. These
negotiations will be entered into in good faith with a view to achieving
mutually satisfactory compensatory adjustment. In such negotiations, as
required by paragraph 6 of Article XXIV, due account shall be taken of
reductions of duties on the same tariff line made by other constituents of the
customs union upon its formation. Should such reductions not be sufficient to
provide the necessary compensatory adjustment, the customs union would offer
compensation, which may take the form of reductions of duties on other tariff
lines. Such an offer shall be taken into consideration by the Members having
negotiating rights in the binding being modified or withdrawn. Should the
compensatory adjustment remain unacceptable, negotiations should be continued.
Where, despite such efforts, agreement in negotiations on compensatory
adjustment under Article XXVIII as elaborated by the Understanding on the
Interpretation of Article XXVIII of GATT 1994 cannot be reached within a
reasonable period from the initiation of negotiations, the customs union shall,
nevertheless, be free to modify or withdraw the concessions; affected Members
shall then be free to withdraw substantially equivalent concessions in
accordance with Article XXVIII.
6. GATT 1994
imposes no obligation on Members benefiting from a reduction of duties
consequent upon the formation of a customs union, or an interim agreement
leading to the formation of a customs union, to provide compensatory adjustment
to its constituents.
Review of Customs Unions and Free-Trade Areas
7. All
notifications made under paragraph 7(a) of Article XXIV shall be examined by a
working party in the light of the relevant provisions of GATT 1994 and of
paragraph 1 of this Understanding. The working party shall submit a report to
the Council for Trade in Goods on its findings in this regard. The Council for
Trade in Goods may make such recommendations to Members as it deems
appropriate.
8. In regard to
interim agreements, the working party may in its report make appropriate
recommendations on the proposed time-frame and on measures required to complete
the formation of the customs union or free-trade area. It may if necessary
provide for further review of the agreement.
9. Members
parties to an interim agreement shall notify substantial changes in the plan
and schedule included in that agreement to the Council for Trade in Goods and,
if so requested, the Council shall examine the changes.
10. Should an
interim agreement notified under paragraph 7(a) of Article XXIV not include a
plan and schedule, contrary to paragraph 5(c) of Article XXIV, the working
party shall in its report recommend such a plan and schedule. The parties shall
not maintain or put into force, as the case may be, such agreement if they are
not prepared to modify it in accordance with these recommendations. Provision
shall be made for subsequent review of the implementation of the
recommendations.
11. Customs
unions and constituents of free-trade areas shall report periodically to the
Council for Trade in Goods, as envisaged by the CONTRACTING PARTIES to GATT
1947 in their instruction to the GATT 1947 Council concerning reports on
regional agreements (BISD 18S/38), on the operation of the relevant agreement.
Any significant changes and/or developments in the agreements should be
reported as they occur.
Dispute Settlement
12. The
provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by
the Dispute Settlement Understanding may be invoked with respect to any matters
arising from the application of those provisions of Article XXIV relating to
customs unions, free-trade areas or interim agreements leading to the formation
of a customs union or free-trade area.
Article XXIV:12
13. Each Member
is fully responsible under GATT 1994 for the observance of all provisions of
GATT 1994, and shall take such reasonable measures as may be available to it to
ensure such observance by regional and local governments and authorities within
its territory.
14. The
provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by
the Dispute Settlement Understanding may be invoked in respect of measures
affecting its observance taken by regional or local governments or authorities
within the territory of a Member. When the Dispute Settlement Body has ruled
that a provision of GATT 1994 has not been observed, the responsible Member
shall take such reasonable measures as may be available to it to ensure its
observance. The provisions relating to compensation and suspension of
concessions or other obligations apply in cases where it has not been possible
to secure such observance.
15. Each Member
undertakes to accord sympathetic consideration to and afford adequate opportunity
for consultation regarding any representations made by another Member
concerning measures affecting the operation of GATT 1994 taken within the
territory of the former.
Understanding in Respect of Waivers of Obligations under the General Agreement on Tariffs and Trade 1994
Members hereby agree as
follows:
1. A request for
a waiver or for an extension of an existing waiver shall describe the measures
which the Member proposes to take, the specific policy objectives which the
Member seeks to pursue and the reasons which prevent the Member from achieving
its policy objectives by measures consistent with its obligations under GATT
1994.
2. Any waiver in
effect on the date of entry into force of the WTO Agreement shall terminate,
unless extended in accordance with the procedures above and those of Article IX
of the WTO Agreement, on the date of its expiry or two years from the date of
entry into force of the WTO Agreement, whichever is earlier.
3. Any Member
considering that a benefit accruing to it under GATT 1994 is being nullified or
impaired as a result of:
(a) the failure
of the Member to whom a waiver was granted to observe the terms or conditions
of the waiver, or
(b) the
application of a measure consistent with the terms and conditions of the waiver
may invoke the
provisions of Article XXIII of GATT 1994 as elaborated and applied by the
Dispute Settlement Understanding.
Understanding on the Interpretation of Article XXVIII of the General Agreement on Tariffs and Trade 1994
Members hereby agree as
follows:
1. For the
purposes of modification or withdrawal of a concession, the Member which has
the highest ratio of exports affected by the concession (i.e. exports of the
product to the market of the Member modifying or withdrawing the concession) to
its total exports shall be deemed to have a principal supplying interest if it
does not already have an initial negotiating right or a principal supplying
interest as provided for in paragraph 1 of Article XXVIII. It is however agreed
that this paragraph will be reviewed by the Council for Trade in Goods five
years from the date of entry into force of the WTO Agreement with a view to
deciding whether this criterion has worked satisfactorily in securing a
redistribution of negotiating rights in favour of small and medium-sized
exporting Members. If this is not the case, consideration will be given to
possible improvements, including, in the light of the availability of adequate
data, the adoption of a criterion based on the ratio of exports affected by the
concession to exports to all markets of the product in question.
2. Where a Member
considers that it has a principal supplying interest in terms of paragraph 1,
it should communicate its claim in writing, with supporting evidence, to the
Member proposing to modify or withdraw a concession, and at the same time
inform the Secretariat. Paragraph 4 of the "Procedures for Negotiations
under Article XXVIII" adopted on 10 November 1980 (BISD 27S/26-28) shall
apply in these cases.
3. In the
determination of which Members have a principal supplying interest (whether as
provided for in paragraph 1 above or in paragraph 1 of Article XXVIII) or
substantial interest, only trade in the affected product which has taken place
on an MFN basis shall be taken into consideration. However, trade in the
affected product which has taken place under non-contractual preferences shall
also be taken into account if the trade in question has ceased to benefit from
such preferential treatment, thus becoming MFN trade, at the time of the
negotiation for the modification or withdrawal of the concession, or will do so
by the conclusion of that negotiation.
4. When a tariff
concession is modified or withdrawn on a new product (i.e. a product for which
three years' trade statistics are not available) the Member possessing initial
negotiating rights on the tariff line where the product is or was formerly
classified shall be deemed to have an initial negotiating right in the
concession in question. The determination of principal supplying and
substantial interests and the calculation of compensation shall take into
account, inter alia, production capacity and investment in the affected
product in the exporting Member and estimates of export growth, as well as
forecasts of demand for the product in the importing Member. For the purposes
of this paragraph, "new product" is understood to include a tariff
item created by means of a breakout from an existing tariff line.
5. Where a Member
considers that it has a principal supplying or a substantial interest in terms
of paragraph 4, it should communicate its claim in writing, with supporting
evidence, to the Member proposing to modify or withdraw a concession, and at
the same time inform the Secretariat. Paragraph 4 of the above-mentioned "Procedures
for Negotiations under Article XXVIII" shall apply in these cases.
6. When an
unlimited tariff concession is replaced by a tariff rate quota, the amount of
compensation provided should exceed the amount of the trade actually affected
by the modification of the concession. The basis for the calculation of
compensation should be the amount by which future trade prospects exceed the
level of the quota. It is understood that the calculation of future trade
prospects should be based on the greater of:
(a) the average
annual trade in the most recent representative three-year period, increased by
the average annual growth rate of imports in that same period, or by 10 per
cent, whichever is the greater; or
(b) trade in the
most recent year increased by 10 per cent.
In no case shall
a Member's liability for compensation exceed that which would be entailed by
complete withdrawal of the concession.
7. Any Member
having a principal supplying interest, whether as provided for in paragraph 1
above or in paragraph 1 of Article XXVIII, in a concession which is modified or
withdrawn shall be accorded an initial negotiating right in the compensatory
concessions, unless another form of compensation is agreed by the Members
concerned.
Marrakesh Protocol to the General Agreement on Tariffs and Trade 1994
Members,
Having carried out negotiations within the framework of GATT 1947,
pursuant to the Ministerial Declaration on the Uruguay Round,
Hereby agree as follows:
1. The schedule annexed to this Protocol relating to a Member shall become a
Schedule to GATT 1994 relating to that Member on the day on which the WTO
Agreement enters into force for that Member. Any schedule submitted in
accordance with the Ministerial Decision on measures in favour of
least-developed countries shall be deemed to be annexed to this Protocol.
2. The tariff reductions agreed upon by each Member shall be implemented in
five equal rate reductions, except as may be otherwise specified in a Member's
Schedule. The first such reduction shall be made effective on the date of entry
into force of the WTO Agreement, each successive reduction shall be made
effective on 1 January of each of the following years, and the final rate shall
become effective no later than the date four years after the date of entry into
force of the WTO Agreement, except as may be otherwise specified in that
Member's Schedule. Unless otherwise specified in its Schedule, a Member that
accepts the WTO Agreement after its entry into force shall, on the date that
Agreement enters into force for it, make effective all rate reductions that
have already taken place together with the reductions which it would under the
preceding sentence have been obligated to make effective on 1 January of the
year following, and shall make effective all remaining rate reductions on the
schedule specified in the previous sentence. The reduced rate should in each
stage be rounded off to the first decimal. For agricultural products, as
defined in Article 2 of the Agreement on Agriculture, the staging of reductions
shall be implemented as specified in the relevant parts of the schedules.
3. The implementation of the concessions and commitments contained in the
schedules annexed to this Protocol shall, upon request, be subject to
multilateral examination by the Members. This would be without prejudice to the
rights and obligations of Members under Agreements in Annex 1A of the WTO
Agreement.
4. After the schedule annexed to this Protocol relating to a Member has become
a Schedule to GATT 1994 pursuant to the provisions of paragraph 1, such Member
shall be free at any time to withhold or to withdraw in whole or in part the
concession in such Schedule with respect to any product for which the principal
supplier is any other Uruguay Round participant the schedule of which has not
yet become a Schedule to GATT 1994. Such action can, however, only be taken
after written notice of any such withholding or withdrawal of a concession has
been given to the Council for Trade in Goods and after consultations have been
held, upon request, with any Member, the relevant schedule relating to which
has become a Schedule to GATT 1994 and which has a substantial interest in the
product involved. Any concessions so withheld or withdrawn shall be applied on
and after the day on which the schedule of the Member which has the principal
supplying interest becomes a Schedule to GATT 1994.
5. (a) Without prejudice to the provisions of paragraph 2 of Article 4 of the
Agreement on Agriculture, for the purpose of the reference in paragraphs 1:(b)
and 1(c) of Article II of GATT 1994 to the date of that Agreement, the
applicable date in respect of each product which is the subject of a concession
provided for in a schedule of concessions annexed to this Protocol shall be the
date of this Protocol.
(b) For the purpose of the reference in paragraph 6(a) of Article II of GATT
1994 to the date of that Agreement, the applicable date in respect of a
schedule of concessions annexed to this Protocol shall be the date of this
Protocol.
6. In cases of modification or withdrawal of concessions relating to non-tariff
measures as contained in Part III of the schedules, the provisions of Article
XXVIII of GATT 1994 and the "Procedures for Negotiations under Article
XXVIII" adopted on 10 November 1980 (BISD 27S/26-28) shall apply. This
would be without prejudice to the rights and obligations of Members under GATT
1994.
7. In each case in which a schedule annexed to this Protocol results for any
product in treatment less favourable than was provided for such product in the
Schedules of GATT 1947 prior to the entry into force of the WTO Agreement, the
Member to whom the schedule relates shall be deemed to have taken appropriate
action as would have been otherwise necessary under the relevant provisions of Article
XXVIII of GATT 1947 or 1994. The provisions of this paragraph shall apply only
to Egypt, Peru, South Africa and Uruguay.
8. The Schedules annexed hereto are authentic in the English, French or Spanish
language as specified in each Schedule.
9. The date of this Protocol is 15 April 1994.
[The agreed schedules of participants will be annexed to the Marrakesh Protocol
in the treaty copy of the WTO Agreement.]