FINAL ACT EMBODYING THE RESULTS OF THE
URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS
1.
Having met in order to conclude the Uruguay Round of Multilateral Trade Negotiations,
representatives of the governments and of the European Communities, members of the Trade Negotiations
Committee,
agree
that the Agreement Establishing the World Trade Organization (referred to in this
Final Act as the "WTO Agreement"), the Ministerial Declarations and Decisions, and the Understanding
on Commitments in Financial Services, as annexed hereto, embody the results of their negotiations
and form an integral part of this Final Act.
2.
By signing the present Final Act, the representatives
agree
(a)
to submit, as appropriate, the WTO Agreement for the consideration of their respective
competent authorities with a view to seeking approval of the Agreement in accordance
with their procedures; and
(b)
to adopt the Ministerial Declarations and Decisions.
3.
The representatives
agree
on the desirability of acceptance of the WTO Agreement by all
participants in the Uruguay Round of Multilateral Trade Negotiations (hereinafter referred to as
"participants") with a view to its entry into force by 1 January 1995, or as early as possible thereafter.
Not later than late 1994, Ministers will meet, in accordance with the final paragraph of the Punta del
Este Ministerial Declaration, to decide on the international implementation of the results, including
the timing of their entry into force.
4.
The representatives
agree
that the WTO Agreement shall be open for acceptance as a whole,
by signature or otherwise, by all participants pursuant to Article XIV thereof. The acceptance and entry
into force of a Plurilateral Trade Agreement included in Annex 4 of the WTO Agreement shall be
governed by the provisions of that Plurilateral Trade Agreement.
5.
Before accepting the WTO Agreement, participants which are not contracting parties to the
General Agreement on Tariffs and Trade must first have concluded negotiations for their accession
to the General Agreement and become contracting parties thereto. For participants which are not
contracting parties to the General Agreement as of the date of the Final Act, the Schedules are not
definitive and shall be subsequently completed for the purpose of their accession to the General
Agreement and acceptance of the WTO Agreement.
6.
This Final Act and the texts annexed hereto shall be deposited with the Director-General to
the CONTRACTING PARTIES to the General Agreement on Tariffs and Trade who shall promptly
furnish to each participant a certified copy thereof.
DONE at Marrakesh this fifteenth day of April one thousand nine hundred and ninety-four,
in a single copy, in the English, French and Spanish languages, each text being authentic.
AGREEMENT ESTABLISHING THE
WORLD TRADE ORGANIZATION
The
Parties
to this Agreement,
Recognizing
that their relations in the field of trade and economic endeavour should be conducted
with a view to raising standards of living, ensuring full employment and a large and steadily growing
volume of real income and effective demand, and expanding the production of and trade in goods and
services, while allowing for the optimal use of the world's resources in accordance with the objective
of sustainable development, seeking both to protect and preserve the environment and to enhance the
means for doing so in a manner consistent with their respective needs and concerns at different levels
of economic development,
Recognizing
further that there is need for positive efforts designed to ensure that developing
countries, and especially the least developed among them, secure a share in the growth in international
trade commensurate with the needs of their economic development,
Being desirous
of contributing to these objectives by entering into reciprocal and mutually
advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade
and to the elimination of discriminatory treatment in international trade relations,
Resolved
, therefore, to develop an integrated, more viable and durable multilateral trading system
encompassing the General Agreement on Tariffs and Trade, the results of past trade liberalization efforts,
and all of the results of the Uruguay Round of Multilateral Trade Negotiations,
Determined
to preserve the basic principles and to further the objectives underlying this
multilateral trading system,
A gree
as follows:
A rticle I
Establishment of the Organization
The World Trade Organization (hereinafter referred to as "the WTO") is hereby established.
A rticle II
Scope of the WTO
1.
The WTO shall provide the common institutional framework for the conduct of trade relations
among its Members in matters related to the agreements and associated legal instruments included in
the Annexes to this Agreement.
2.
The agreements and associated legal instruments included in Annexes 1, 2 and 3 (hereinafter
referred to as "Multilateral Trade Agreements") are integral parts of this Agreement, binding on all
Members.
accepted them, and are binding on those Members. The Plurilateral Trade Agreements do not create
either obligations or rights for Members that have not accepted them.
4.
The General Agreement on Tariffs and Trade 1994 as specified in Annex 1A (hereinafter referred
to as "GATT 1994") is legally distinct from 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, as subsequently
rectified, amended or modified (hereinafter referred to as "GATT 1947").
A rticle III
Functions of the WTO
1.
The WTO shall facilitate the implementation, administration and operation, and further the
objectives, of this Agreement and of the Multilateral Trade Agreements, and shall also provide the
framework for the implementation, administration and operation of the Plurilateral Trade Agreements.
2.
The WTO shall provide the forum for negotiations among its Members concerning their
multilateral trade relations in matters dealt with under the agreements in the Annexes to this Agreement.
The WTO may also provide a forum for further negotiations among its Members concerning their
multilateral trade relations, and a framework for the implementation of the results of such negotiations,
as may be decided by the Ministerial Conference.
3.
The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement
of Disputes (hereinafter referred to as the "Dispute Settlement Understanding" or "DSU") in Annex 2
to this Agreement.
4.
The WTO shall administer the Trade Policy Review Mechanism (hereinafter referred to as the
"TPRM") provided for in Annex 3 to this Agreement.
5.
With a view to achieving greater coherence in global economic policy-making, the WTO shall
cooperate, as appropriate, with the International Monetary Fund and with the International Bank for
Reconstruction and Development and its affiliated agencies.
A rticle IV
Structure of the WTO
1.
There shall be a Ministerial Conference composed of representatives of all the Members, which
shall meet at least once every two years. The Ministerial Conference shall carry out the functions of
the WTO and take actions necessary to this effect. The Ministerial Conference shall have the authority
to take decisions on all matters under any of the Multilateral Trade Agreements, if so requested by
a Member, in accordance with the specific requirements for decision-making in this Agreement and
in the relevant Multilateral Trade Agreement.
3.
The General Council shall convene as appropriate to discharge the responsibilities of the Dispute
Settlement Body provided for in the Dispute Settlement Understanding. The Dispute Settlement Body
may have its own chairman and shall establish such rules of procedure as it deems necessary for the
fulfilment of those responsibilities.
4.
The General Council shall convene as appropriate to discharge the responsibilities of the Trade
Policy Review Body provided for in the TPRM. The Trade Policy Review Body may have its own
chairman and shall establish such rules of procedure as it deems necessary for the fulfilment of those
responsibilities.
5.
There shall be a Council for Trade in Goods, a Council for Trade in Services and a Council
for Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as the "Council for
TRIPS"), which shall operate under the general guidance of the General Council. The Council for Trade
in Goods shall oversee the functioning of the Multilateral Trade Agreements in Annex 1A. The Council
for Trade in Services shall oversee the functioning of the General Agreement on Trade in Services
(hereinafter referred to as "GATS"). The Council for TRIPS shall oversee the functioning of the
Agreement on Trade-Related Aspects of Intellectual Property Rights (hereinafter referred to as the
"Agreement on TRIPS"). These Councils shall carry out the functions assigned to them by their respective
agreements and by the General Council. They shall establish their respective rules of procedure subject
to the approval of the General Council. Membership in these Councils shall be open to representatives
of all Members. These Councils shall meet as necessary to carry out their functions.
6.
The Council for Trade in Goods, the Council for Trade in Services and the Council for TRIPS
shall establish subsidiary bodies as required. These subsidiary bodies shall establish their respective
rules of procedure subject to the approval of their respective Councils.
7.
The Ministerial Conference shall establish a Committee on Trade and Development, a Committee
on Balance-of-Payments Restrictions and a Committee on Budget, Finance and Administration, which
shall carry out the functions assigned to them by this Agreement and by the Multilateral Trade
Agreements, and any additional functions assigned to them by the General Council, and may establish
such additional Committees with such functions as it may deem appropriate. As part of its functions,
the Committee on Trade and Development shall periodically review the special provisions in the
Multilateral Trade Agreements in favour of the least-developed country Members and report to the
General Council for appropriate action. Membership in these Committees shall be open to representatives
of all Members.
8.
The bodies provided for under the Plurilateral Trade Agreements shall carry out the functions
assigned to them under those Agreements and shall operate within the institutional framework of the
WTO. These bodies shall keep the General Council informed of their activities on a regular basis.
A rticle V
Relations with Other Organizations
1.
The General Council shall make appropriate arrangements for effective cooperation with other
intergovernmental organizations that have responsibilities related to those of the WTO.
A rticle V I
The Secretariat
1.
There shall be a Secretariat of the WTO (hereinafter referred to as “the Secretariat”) headed
by a Director-General.
2.
The Ministerial Conference shall appoint the Director-General and adopt regulations setting
out the powers, duties, conditions of service and term of office of the Director-General.
3.
The Director-General shall appoint the members of the staff of the Secretariat and determine
their duties and conditions of service in accordance with regulations adopted by the Ministerial
Conference.
4.
The responsibilities of the Director-General and of the staff of the Secretariat shall be exclusively
international in character. In the discharge of their duties, the Director-General and the staff of the
Secretariat shall not seek or accept instructions from any government or any other authority external
to the WTO. They shall refrain from any action which might adversely reflect on their position as
international officials. The Members of the WTO shall respect the international character of the
responsibilities of the Director-General and of the staff of the Secretariat and shall not seek to influence
them in the discharge of their duties.
A rticle V II
Budget and Contributions
1.
The Director-General shall present to the Committee on Budget, Finance and Administration
the annual budget estimate and financial statement of the WTO. The Committee on Budget, Finance
and Administration shall review the annual budget estimate and the financial statement presented by
the Director-General and make recommendations thereon to the General Council. The annual budget
estimate shall be subject to approval by the General Council.
2.
The Committee on Budget, Finance and Administration shall propose to the General Council
financial regulations which shall include provisions setting out:
(a)
the scale of contributions apportioning the expenses of the WTO among its Members;
and
(b)
the measures to be taken in respect of Members in arrears.
The financial regulations shall be based, as far as practicable, on the regulations and practices of
GATT 1947.
3.
The General Council shall adopt the financial regulations and the annual budget estimate by
a two-thirds majority comprising more than half of the Members of the WTO.
A rticle V III
Status of the WTO
1.
The WTO shall have legal personality, and shall be accorded by each of its Members such
legal capacity as may be necessary for the exercise of its functions.
2.
The WTO shall be accorded by each of its Members such privileges and immunities as are
necessary for the exercise of its functions.
3.
The officials of the WTO and the representatives of the Members shall similarly be accorded
by each of its Members such privileges and immunities as are necessary for the independent exercise
of their functions in connection with the WTO.
4.
The privileges and immunities to be accorded by a Member to the WTO, its officials, and the
representatives of its Members shall be similar to the privileges and immunities stipulated in the
Convention on the Privileges and Immunities of the Specialized Agencies, approved by the General
Assembly of the United Nations on 21 November 1947.
5.
The WTO may conclude a headquarters agreement.
A rticle IX
Decision-Making
1.
The WTO shall continue the practice of decision-making by consensus followed under
GATT 1947.
1Except as otherwise provided, where a decision cannot be arrived at by consensus, the
matter at issue shall be decided by voting. At meetings of the Ministerial Conference and the General
Council, each Member of the WTO shall have one vote. Where the European Communities exercise
their right to vote, they shall have a number of votes equal to the number of their member States
2which
are Members of the WTO. Decisions of the Ministerial Conference and the General Council shall be
taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the relevant
Multilateral Trade Agreement.
32.
The Ministerial Conference and the General Council shall have the exclusive authority to adopt
interpretations of this Agreement and of the Multilateral Trade Agreements. In the case of an
interpretation of a Multilateral Trade Agreement in Annex 1, they shall exercise their authority on the
basis of a recommendation by the Council overseeing the functioning of that Agreement. The decision
to adopt an interpretation shall be taken by a three-fourths majority of the Members. This paragraph
shall not be used in a manner that would undermine the amendment provisions in Article X.
3.
In exceptional circumstances, the Ministerial Conference may decide to waive an obligation
imposed on a Member by this Agreement or any of the Multilateral Trade Agreements, provided that
1The body concerned shall be deemed to have decided by consensus on a matter submitted for its consideration, if no Member, present at the meeting when the decision is taken, formally objects to the proposed decision.
2
The number of votes of the European Communities and their member States shall in no case exceed the number of the member States of the European Communities.
3
any such decision shall be taken by three fourths
4of the Members unless otherwise provided for in
this paragraph.
(a)
A request for a waiver concerning this Agreement shall be submitted to the Ministerial
Conference for consideration pursuant to the practice of decision-making by consensus.
The Ministerial Conference shall establish a time-period, which shall not exceed 90 days,
to consider the request. If consensus is not reached during the time-period, any decision
to grant a waiver shall be taken by three fourths
4of the Members.
(b)
A request for a waiver concerning the Multilateral Trade Agreements in Annexes 1A
or 1B or 1C and their annexes shall be submitted initially to the Council for Trade in
Goods, the Council for Trade in Services or the Council for TRIPS, respectively, for
consideration during a time-period which shall not exceed 90 days. At the end of the
time-period, the relevant Council shall submit a report to the Ministerial Conference.
4.
A decision by the Ministerial Conference granting a waiver shall state the exceptional
circumstances justifying the decision, the terms and conditions governing the application of the waiver,
and the date on which the waiver shall terminate. Any waiver granted for a period of more than one
year shall be reviewed by the Ministerial Conference not later than one year after it is granted, and
thereafter annually until the waiver terminates. In each review, the Ministerial Conference shall examine
whether the exceptional circumstances justifying the waiver still exist and whether the terms and
conditions attached to the waiver have been met. The Ministerial Conference, on the basis of the annual
review, may extend, modify or terminate the waiver.
5.
Decisions under a Plurilateral Trade Agreement, including any decisions on interpretations and
waivers, shall be governed by the provisions of that Agreement.
A rticle X
A m endment
s
1.
Any Member of the WTO may initiate a proposal to amend the provisions of this Agreement
or the Multilateral Trade Agreements in Annex 1 by submitting such proposal to the Ministerial
Conference. The Councils listed in paragraph 5 of Article IV may also submit to the Ministerial
Conference proposals to amend the provisions of the corresponding Multilateral Trade Agreements
in Annex 1 the functioning of which they oversee. Unless the Ministerial Conference decides on a
longer period, for a period of 90 days after the proposal has been tabled formally at the Ministerial
Conference any decision by the Ministerial Conference to submit the proposed amendment to the Members
for acceptance shall be taken by consensus. Unless the provisions of paragraphs 2, 5 or 6 apply, that
decision shall specify whether the provisions of paragraphs 3 or 4 shall apply. If consensus is reached,
the Ministerial Conference shall forthwith submit the proposed amendment to the Members for acceptance.
If consensus is not reached at a meeting of the Ministerial Conference within the established period,
the Ministerial Conference shall decide by a two-thirds majority of the Members whether to submit
the proposed amendment to the Members for acceptance. Except as provided in paragraphs 2, 5 and
6, the provisions of paragraph 3 shall apply to the proposed amendment, unless the Ministerial Conference
decides by a three-fourths majority of the Members that the provisions of paragraph 4 shall apply.
2.
Amendments to the provisions of this Article and to the provisions of the following Articles
shall take effect only upon acceptance by all Members:
4
Article IX of this Agreement;
Articles I and II of GATT 1994;
Article II:1 of GATS;
Article 4 of the Agreement on TRIPS.
3.
Amendments to provisions of this Agreement, or of the Multilateral Trade Agreements in
Annexes 1A and 1C, other than those listed in paragraphs 2 and 6, of a nature that would alter the rights
and obligations of the Members, shall take effect for the Members that have accepted them upon
acceptance by two thirds of the Members and thereafter for each other Member upon acceptance by
it. The Ministerial Conference may decide by a three-fourths majority of the Members that any
amendment made effective under this paragraph is of such a nature that any Member which has not
accepted it within a period specified by the Ministerial Conference in each case shall be free to withdraw
from the WTO or to remain a Member with the consent of the Ministerial Conference.
4.
Amendments to provisions of this Agreement or of the Multilateral Trade Agreements in
Annexes 1A and 1C, other than those listed in paragraphs 2 and 6, of a nature that would not alter
the rights and obligations of the Members, shall take effect for all Members upon acceptance by two
thirds of the Members.
5.
Except as provided in paragraph 2 above, amendments to Parts I, II and III of GATS and the
respective annexes shall take effect for the Members that have accepted them upon acceptance by two
thirds of the Members and thereafter for each Member upon acceptance by it. The Ministerial Conference
may decide by a three-fourths majority of the Members that any amendment made effective under the
preceding provision is of such a nature that any Member which has not accepted it within a period
specified by the Ministerial Conference in each case shall be free to withdraw from the WTO or to
remain a Member with the consent of the Ministerial Conference. Amendments to Parts IV, V and
VI of GATS and the respective annexes shall take effect for all Members upon acceptance by two thirds
of the Members.
6.
Notwithstanding the other provisions of this Article, amendments to the Agreement on TRIPS
meeting the requirements of paragraph 2 of Article 71 thereof may be adopted by the Ministerial
Conference without further formal acceptance process.
7.
Any Member accepting an amendment to this Agreement or to a Multilateral Trade Agreement
in Annex 1 shall deposit an instrument of acceptance with the Director-General of the WTO within
the period of acceptance specified by the Ministerial Conference.
8.
Any Member of the WTO may initiate a proposal to amend the provisions of the Multilateral
Trade Agreements in Annexes 2 and 3 by submitting such proposal to the Ministerial Conference.
The decision to approve amendments to the Multilateral Trade Agreement in Annex 2 shall be made
by consensus and these amendments shall take effect for all Members upon approval by the Ministerial
Conference. Decisions to approve amendments to the Multilateral Trade Agreement in Annex 3 shall
take effect for all Members upon approval by the Ministerial Conference.
9.
The Ministerial Conference, upon the request of the Members parties to a trade agreement,
may decide exclusively by consensus to add that agreement to Annex 4. The Ministerial Conference,
upon the request of the Members parties to a Plurilateral Trade Agreement, may decide to delete that
Agreement from Annex 4.
A rticle X I
Original Membership
1.
The contracting parties to GATT 1947 as of the date of entry into force of this Agreement,
and the European Communities, which accept this Agreement and the Multilateral Trade Agreements
and for which Schedules of Concessions and Commitments are annexed to GATT 1994 and for which
Schedules of Specific Commitments are annexed to GATS shall become original Members of the WTO.
2.
The least-developed countries recognized as such by the United Nations will only be required
to undertake commitments and concessions to the extent consistent with their individual development,
financial and trade needs or their administrative and institutional capabilities.
A rticle X II
A ccession
1.
Any State or separate customs territory possessing full autonomy in the conduct of its external
commercial relations and of the other matters provided for in this Agreement and the Multilateral Trade
Agreements may accede to this Agreement, on terms to be agreed between it and the WTO. Such
acces-sion shall apply to this Agreement and the Multilateral Trade Agreements annexed thereto.
2.
Decisions on accession shall be taken by the Ministerial Conference. The Ministerial Conference
shall approve the agreement on the terms of accession by a two-thirds majority of the Members of the
WTO.
3.
Accession to a Plurilateral Trade Agreement shall be governed by the provisions of that
Agreement.
A rticle X III
Non-A pplication of Multilateral Trade A greements
between Particular Members
1.
This Agreement and the Multilateral Trade Agreements in Annexes 1 and 2 shall not apply
as between any Member and any other Member if either of the Members, at the time either becomes
a Member, does not consent to such application.
2.
Paragraph 1 may be invoked between original Members of the WTO which were contracting
parties to GATT 1947 only where Article XXXV of that Agreement had been invoked earlier and was
effective as between those contracting parties at the time of entry into force for them of this Agreement.
3.
Paragraph 1 shall apply between a Member and another Member which has acceded under
Article XII only if the Member not consenting to the application has so notified the Ministerial Conference
before the approval of the agreement on the terms of accession by the Ministerial Conference.
4.
The Ministerial Conference may review the operation of this Article in particular cases at the
request of any Member and make appropriate recommendations.
A rticle X IV
A cceptance, Entry into Force and Deposit
1.
This Agreement shall be open for acceptance, by signature or otherwise, by contracting parties
to GATT 1947, and the European Communities, which are eligible to become original Members of
the WTO in accordance with Article XI of this Agreement. Such acceptance shall apply to this
Agreement and the Multilateral Trade Agreements annexed hereto. This Agreement and the Multilateral
Trade Agreements annexed hereto shall enter into force on the date determined by Ministers in accordance
with paragraph 3 of the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade
Negotiations and shall remain open for acceptance for a period of two years following that date unless
the Ministers decide otherwise. An acceptance following the entry into force of this Agreement shall
enter into force on the 30th day following the date of such acceptance.
2.
A Member which accepts this Agreement after its entry into force shall implement those
con-cessions and obligations in the Multilateral Trade Agreements that are to be implemented over a period
of time starting with the entry into force of this Agreement as if it had accepted this Agreement on
the date of its entry into force.
3.
Until the entry into force of this Agreement, the text of this Agreement and the Multilateral
Trade Agreements shall be deposited with the Director-General to the CONTRACTING PARTIES to
GATT 1947. The Director-General shall promptly furnish a certified true copy of this Agreement and
the Multilateral Trade Agreements, and a notification of each acceptance thereof, to each government
and the European Communities having accepted this Agreement. This Agreement and the Multilateral
Trade Agreements, and any amendments thereto, shall, upon the entry into force of this Agreement,
be deposited with the Director-General of the WTO.
4.
The acceptance and entry into force of a Plurilateral Trade Agreement shall be governed by
the provisions of that Agreement. Such Agreements shall be deposited with the Director-General to
the CONTRACTING PARTIES to GATT 1947. Upon the entry into force of this Agreement, such
Agreements shall be deposited with the Director-General of the WTO.
A rticle X V
W ithdrawal
1.
Any Member may withdraw from this Agreement. Such withdrawal shall apply both to this
Agreement and the Multilateral Trade Agreements and shall take effect upon the expiration of six months
from the date on which written notice of withdrawal is received by the Director-General of the WTO.
2.
Withdrawal from a Plurilateral Trade Agreement shall be governed by the provisions of that
Agreement.
A rticle X V I
Miscellaneous Provisions
2.
To the extent practicable, the Secretariat of GATT 1947 shall become the Secretariat of the
WTO, and the Director-General to the CONTRACTING PARTIES to GATT 1947, until such time
as the Ministerial Conference has appointed a Director-General in accordance with paragraph 2 of
Article VI of this Agreement, shall serve as Director-General of the WTO.
3.
In the event of a conflict between a provision of this Agreement and a provision of any of the
Multilateral Trade Agreements, the provision of this Agreement shall prevail to the extent of the conflict.
4.
Each Member shall ensure the conformity of its laws, regulations and administrative procedures
with its obligations as provided in the annexed Agreements.
5.
No reservations may be made in respect of any provision of this Agreement. Reservations
in respect of any of the provisions of the Multilateral Trade Agreements may only be made to the extent
provided for in those Agreements. Reservations in respect of a provision of a Plurilateral Trade
Agreement shall be governed by the provisions of that Agreement.
6.
This Agreement shall be registered in accordance with the provisions of Article 102 of the Charter
of the United Nations.
DONE at Marrakesh this fifteenth day of April one thousand nine hundred and ninety-four,
in a single copy, in the English, French and Spanish languages, each text being authentic.
Explanatory Notes:
The terms "country" or "countries" as used in this Agreement and the Multilateral Trade Agreements are to be understood to include any separate customs territory Member of the WTO.
LIST OF ANNEXES
ANNEX 1
ANNEX 1A: Multilateral Agreements on Trade in Goods
General Agreement on Tariffs and Trade
1994Agreement on Agriculture
Agreement on the Application of Sanitary and Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994
Agreement on Preshipment Inspection
Agreement on Rules of Origin
Agreement on Import Licensing Procedures
Agreement on Subsidies and Countervailing Measures
Agreement on Safeguards
ANNEX 1B: General Agreement on Trade in Services and Annexes
ANNEX 1C: Agreement on Trade-Related Aspects of Intellectual Property Rights
ANNEX 2
Understanding on Rules and Procedures Governing the Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
ANNEX 4
Plurilateral Trade Agreements
Agreement on Trade in Civil Aircraft
Agreement on Government Procurement
International Dairy Agreement
ANNEX 1
ANNEX 1A
MULTILATERAL AGREEMENTS ON TRADE IN GOODS
General interpretative note to A nnex 1A :
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
1;
(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.
1
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
A d
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.
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.
UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XVII
OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 19 9 4
M em bers,
N oting
th at Article XVII provides for obligation s on Mem bers in respect of th e activities
of the state tradin g en terprises referred to in paragraph 1 of Article XVII, which are required
to be con sisten t with the gen eral prin ciples of n on -discrim in atory treatm en t prescribed in
GATT 1994 for govern m en tal m easures affectin g im ports or exports by private traders;
N oting
furth er th at Mem bers are subject to th eir GATT 1994 obligation s in respect of
those govern m en tal m easures affectin g state tradin g en terprises;
Recognizing
that this Un derstan din g is without prejudice to the substan tive disciplin es
prescribed in Article XVII;
H ereby
agree
as follows:
1.
In order to ensure the transparency of the activities of state trading enterprises, Mem bers
shall n otify such en terprises to the Coun cil for Trade in Goods, for review by the workin g party
to be set up un der paragraph 5, in accordan ce with the followin g workin g defin ition :
"Govern m en tal an d n on -govern m en tal en terprises, in cludin g m arketin g boards, which
have been gran ted exclusive or special rights or privileges, in cludin g statutory or
con stitution al powers, in th e exercise of wh ich th ey in fluen ce th rough th eir purch ases
or sales th e level or direction of im ports or exports."
This n otification requirem en t does n ot apply to im ports of products for im m ediate or ultim ate
consum ption in governm ental use or in use by an enterprise as specified above and not otherwise
for resale or use in th e production of goods for sale.
2.
Each Mem ber sh all con duct a review of its policy with regard to th e subm ission of
n otification s on state tradin g en terprises to the Coun cil for Trade in Goods, takin g accoun t
of th e provision s of th is Un derstan din g. In carryin g out such a review, each Mem ber sh ould
have regard to the n eed to en sure the m axim um tran sparen cy possible in its n otification s so
as to perm it a clear appreciation of the m an n er of operation of the en terprises n otified an d
the effect of their operation s on in tern ation al trade.
3.
Notifications shall be m ade in accordance with the questionnaire on state trading adopted
on 24 May 1960 (BISD 9S/ 18 4-18 5), it bein g un derstood that Mem bers shall n otify the
en terprises referred to in paragraph 1 wh eth er or n ot im ports or exports h ave in fact taken
place.
4.
An y Mem ber wh ich h as reason to believe th at an oth er Mem ber h as n ot adequately m et
its n otification obligation m ay raise the m atter with the Mem ber con cern ed. If th e m atter
is n ot satisfactorily resolved it m ay m ake a coun ter-n otification to the Coun cil for Trade in
Goods, for con sideration by the workin g party set up un der paragraph 5, sim ultan eously
in form in g the Mem ber con cern ed.
with regard to the adequacy of n otification s an d the n eed for further in form ation . Th e workin g
party shall also review, in the light of the n otification s received, the adequacy of the
above-m en tion ed question n aire on state tradin g an d the coverage of state tradin g en terprises n otified
un der paragraph 1. It shall also develop an illustrative list showin g the kin ds of relation ships
between govern m en ts an d en terprises, an d the kin ds of activities, en gaged in by these
en terprises, wh ich m ay be relevan t for th e purposes of Article XVII. It is un derstood th at th e
Secretariat will provide a gen eral backgroun d paper for the workin g party on the operation s
of state tradin g en terprises as they relate to in tern ation al trade. Mem bersh ip of th e workin g
party shall be open to all Mem bers in dicatin g their wish to serve on it. It shall m eet within
a year of th e date of en try in to force of th e WTO Agreem en t an d th ereafter at least on ce a
year. It shall report an n ually to the Coun cil for Trade in Goods.
11
UNDERSTANDING ON THE BALANCE-OF-PAYMENTS PROVISIONS
OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 19 9 4
M em bers,
Recognizing
th e provision s of Articles XII an d XVIII:B of GATT 1994 an d of th e
Declaration on Trade Measures Taken for Balan ce-of-Paym en ts Purposes adopted on 28
Novem ber 1979 (BISD 26S/ 20 5-20 9, referred to in this Understanding as the "1979 Declaration")
an d in order to clarify such provision s
1;
H ereby
agree
as follows:
Application of M easures
1.
Mem bers con firm their com m itm en t to an n oun ce publicly, as soon as possible, tim
e-schedules for the rem oval of restrictive im port m easures taken for balance-of-paym ents purposes.
It is un derstood that such tim e-schedules m ay be m odified as appropriate to take in to accoun t
chan ges in the balan ce-of-paym en ts situation . Wh en ever a tim e-schedule is n ot publicly
an n oun ced by a Mem ber, th at Mem ber sh all provide justification as to th e reason s th erefor.
2.
Mem bers con firm th eir com m itm en t to give preferen ce to th ose m easures wh ich h ave
the least disruptive effect on trade. Such m easures (referred to in this Un derstan din g as
"price-based m easures") shall be understood to include im port surcharges, im port deposit requirem ents
or other equivalen t trade m easures with an im pact on the price of im ported goods. It is
un derstood th at, n otwith stan din g th e provision s of Article II, price-based m easures taken for
balan ce-of-paym en ts purposes m ay be applied by a Mem ber in excess of the duties in scribed
in th e Sch edule of th at Mem ber. Furtherm ore, th at Mem ber sh all in dicate th e am oun t by wh ich
the price-based m easure exceeds the boun d duty clearly an d separately un der the n otification
procedures of this Un derstan din g.
3.
Mem bers shall seek to avoid the im position of n ew quan titative restriction s for balan
ce-of-paym en ts purposes un less, because of a critical balan ce-ce-of-paym en ts situation , price-based
m easures can n ot arrest a sharp deterioration in the extern al paym en ts position . In th ose cases
in which a Mem ber applies quantitative restrictions, it shall provide justification as to the reasons
why price-based m easures are not an adequate instrum ent to deal with the balance-of-paym ents
situation . A Mem ber m ain tain in g quan titative restriction s shall in dicate in successive
con sultation s the progress m ade in sign ifican tly reducin g the in ciden ce an d restrictive effect
of such m easures. It is un derstood th at n ot m ore th an on e type of restrictive im port m easure
taken for balan ce-of-paym en ts purposes m ay be applied on the sam e product.
4.
Mem bers con firm that restrictive im port m easures taken for balan ce-of-paym en ts
purposes m ay on ly be applied to con trol the gen eral level of im ports an d m ay n ot exceed what
is n ecessary to address the balan ce-of-paym en ts situation . In order to m in im ize an y in ciden tal
protective effects, a Mem ber shall adm in ister restriction s in a tran sparen t m an n er. Th e
authorities of the im portin g Mem ber shall provide adequate justification as to the criteria used
to determ ine which products are subject to restriction. As provided in paragraph 3 of Article XII
1
an d paragraph 10 of Article XVIII, Mem bers m ay, in the case of certain essen tial products,
exclude or lim it the application of surcharges applied across the board or other m easures applied
for balan ce-of-paym en ts purposes. Th e term "essen tial products" sh all be un derstood to m ean
products wh ich m eet basic con sum ption n eeds or wh ich con tribute to th e Mem ber's effort to
im prove its balance-of-paym ents situation, such as capital goods or inputs needed for production.
In the adm in istration of quan titative restriction s, a Mem ber shall use discretion ary licen sin g
on ly when un avoidable an d shall phase it out progressively. Appropriate justification shall
be provided as to the criteria used to determ in e allowable im port quan tities or values.
Procedures for Balance-of-Pay m ents Consultations
5.
The Com m ittee on Balan ce-of-Paym en ts Restriction s (referred to in this Un derstan din g
as the "Com m ittee") shall carry out con sultation s in order to review all restrictive im port
m easures taken for balan ce-of-paym en ts purposes. Th e m em bersh ip of th e Com m ittee is open
to all Mem bers in dicatin g their wish to serve on it. Th e Com m ittee sh all follow th e procedures
for consultations on balance-of-paym ents 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 Mem ber applying new restrictions or raising the general level of its existing restrictions
by a substantial intensification of the m easures shall enter into consultations with the Com m ittee
with in four m on th s of th e adoption of such m easures. Th e Mem ber adoptin g such m easures
m ay request that a con sultation be held un der paragraph 4(a) of Article XII or paragraph 12(a)
of Article XVIII as appropriate. If n o such request h as been m ade, th e Ch airm an of th e
Com m ittee shall in vite the Mem ber to hold such a con sultation . Factors that m ay be exam in ed
in the consultation would include,
inter alia
, the introduction of new types of restrictive m easures
for balance-of-paym ents purposes, or an increase in the level or product coverage of restrictions.
7.
All restriction s applied for balan ce-of-paym en ts purposes shall be subject to periodic
review in the Com m ittee un der paragraph 4(b) of Article XII or un der paragraph 12(b) of
Article XVIII, subject to the possibility of alterin g the periodicity of con sultation s in agreem en t
with th e con sultin g Mem ber or pursuan t to an y specific review procedure th at m ay be
recom m en ded by the Gen eral Coun cil.
8 .
Con sultation s m ay be held un der the sim plified procedures approved on 19 Decem ber
1972 (BISD 20 S/ 47-49, referred to in this Understanding as "sim plified consultation procedures")
in th e case of least-developed coun try Mem bers or in th e case of developin g coun try Mem bers
which are pursuin g liberalization efforts in con form ity with the schedule presen ted to the
Com m ittee in previous con sultation s. Sim plified con sultation procedures m ay also be used
when the Trade Policy Review of a developin g coun try Mem ber is scheduled for the sam e
calen dar year as the date fixed for the con sultation s. In such cases th e decision as to wh eth er
full con sultation procedures sh ould be used will be m ade on th e basis of th e factors en um erated
in paragraph 8 of the 1979 Declaration. Except in the case of least-developed country Mem bers,
no m ore than two successive consultations m ay be held under sim plified consultation procedures.
N otification an d Docum en tation
statem en ts or public n otices, for exam in ation by Mem bers. Notification s shall in clude full
in form ation , as far as possible, at the tariff-lin e level, on the type of m easures applied, the
criteria used for their adm in istration , product coverage an d trade flows affected.
10 .
At the request of an y Mem ber, n otification s m ay be reviewed by the Com m ittee. Such
reviews would be lim ited to the clarification of specific issues raised by a n otification or
exam in ation of wh eth er a con sultation un der paragraph 4(a) of Article XII or paragraph 12(a)
of Article XVIII is required. Mem bers wh ich h ave reason s to believe th at a restrictive im port
m easure applied by an other Mem ber was taken for balan ce-of-paym en ts purposes m ay brin g
th e m atter to th e atten tion of th e Com m ittee. Th e Chairm an of the Com m ittee shall request
in form ation on the m easure an d m ake it available to all Mem bers. With out prejudice to the
right of an y m em ber of the Com m ittee to seek appropriate clarification s in the course of
con sultation s, question s m ay be subm itted in advan ce for con sideration by the con sultin g
Mem ber.
11.
Th e con sultin g Mem ber sh all prepare a Basic Docum en t for th e con sultation s wh ich ,
in addition to an y other in form ation con sidered to be relevan t, should in clude:
(a)
an overview
of the balan ce-of-paym en ts situation an d prospects, in cludin g a con sideration of the in tern al
an d extern al factors havin g a bearin g on the balan ce-of-paym en ts situation an d the dom estic
policy m easures taken in order to restore equilibrium on a soun d an d lastin g basis;
(b)
a full
description of the restriction s applied for balan ce-of-paym en ts purposes, their legal basis an d
steps taken to reduce incidental protective effects;
(c)
m easures taken since the last consultation
to liberalize im port restriction s, in the light of the con clusion s of the Com m ittee;
(d)
a plan
for the elim in ation an d progressive relaxation of rem ain in g restriction s. Referen ces m ay be
m ade, wh en relevan t, to th e in form ation provided in oth er n otification s or reports m ade to
th e WTO. Un der sim plified con sultation procedures, the con sultin g Mem ber shall subm it a
written statem en t con tain in g essen tial in form ation on the elem en ts covered by the Basic
Docum en t.
12.
The Secretariat shall, with a view to facilitatin g the con sultation s in the Com m ittee,
prepare a factual backgroun d paper dealin g with the differen t aspects of the plan for
con sultation s. In th e case of developin g coun try Mem bers, th e Secretariat docum en t sh all
in clude relevan t backgroun d an d an alytical m aterial on the in ciden ce of the extern al tradin g
en viron m en t on the balan ce-of-paym en ts situation an d prospects of the con sultin g Mem ber.
The techn ical assistan ce services of the Secretariat shall, at the request of a developin g coun try
Mem ber, assist in preparin g the docum en tation for the con sultation s.
Con clusion s of Balan ce-of-Pay m en ts Con sultation s
UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XXIV
OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 19 9 4
M em bers,
Having regard
to th e provision s of Article XXIV of GATT 1994;
Recognizing
that custom s un ion s an d free trade areas have greatly in creased in n um ber
an d im portan ce sin ce th e establish m en t of GATT 1947 an d today cover a sign ifican t proportion
of world trade;
Recognizing
the contribution to the expansion of world trade that m ay be m ade by closer
in tegration between th e econ om ies of th e parties to such agreem en ts;
Recognizing
also that such con tribution is in creased if the elim in ation between the
con stituen t territories of duties an d other restrictive regulation s of com m erce exten ds to all
trade, an d dim in ished if an y m ajor sector of trade is excluded;
Reaffirm ing
th at th e purpose of such agreem en ts sh ould be to facilitate trade between
th e con stituen t territories an d n ot to raise barriers to th e trade of oth er Mem bers with such
territories; an d th at in th eir form ation or en largem en t th e parties to th em sh ould to th e greatest
possible exten t avoid creatin g adverse effects on th e trade of oth er Mem bers;
Con v in ced
also of th e n eed to rein force th e effectiven ess of th e role of th e Coun cil for
Trade in Goods in reviewin g agreem en ts n otified un der Article XXIV, by clarifyin g the criteria
an d procedures for th e assessm en t of n ew or en larged agreem en ts, an d im provin g th e
tran sparen cy of all Article XXIV agreem en ts;
Recognizing
th e n eed for a com m on un derstan din g of th e obligation s of Mem bers un der
paragraph 12 of Article XXIV;
H ereby
agree
as follows:
1.
Custom s un ion s, free-trade areas, an d in terim agreem en ts leadin g to the form ation
of a custom s un ion or free-trade area, to be con sisten t with Article XXIV, m ust satisfy,
inter
alia
, the provision s of paragraphs 5, 6, 7 an d 8 of that Article.
Article X X IV:5
3.
The "reason able len gth of tim e" referred to in paragraph 5(c) of Article XXIV should
exceed 10 years on ly in exception al cases. In cases wh ere Mem bers parties to an in terim
agreem en t believe that 10 years would be in sufficien t they shall provide a full explan ation to
the Coun cil for Trade in Goods of the n eed for a lon ger period.
Article X X IV:6
4.
Paragraph 6 of Article XXIV establish es th e procedure to be followed wh en a Mem ber
form in g a custom s un ion proposes to in crease a boun d rate of duty. In th is regard Mem bers
reaffirm th at th e procedure set forth in Article XXVIII, as elaborated in the guidelin es adopted
on 10 Novem ber 198 0 (BISD 27S/ 26-28 ) an d in th e Un derstan din g on th e In terpretation of
Article XXVIII of GATT 1994, m ust be com m en ced before tariff con cession s are m odified or
with drawn upon th e form ation of a custom s un ion or an in terim agreem en t leadin g to th e
form ation of a custom s un ion .
5.
These n egotiation s will be en tered in to in good faith with a view to achievin g m utually
satisfactory com pen satory adjustm en t. In such n egotiation s, as required by paragraph 6 of
Article XXIV, due accoun t shall be taken of reduction s of duties on the sam e tariff lin e m ade
by oth er con stituen ts of th e custom s un ion upon its form ation . Sh ould such reduction s n ot
be sufficien t to provide the n ecessary com pen satory adjustm en t, the custom s un ion would offer
com pen sation , which m ay take the form of reduction s of duties on other tariff lin es. Such
an offer shall be taken in to con sideration by the Mem bers havin g n egotiatin g rights in the
bin din g bein g m odified or withdrawn . Sh ould the com pen satory adjustm en t rem ain
un acceptable, n egotiation s should be con tin ued. Wh ere, despite such efforts, agreem en t in
n egotiation s on com pen satory adjustm en t un der Article XXVIII as elaborated by th e
Un derstan din g on th e In terpretation of Article XXVIII of GATT 1994 can n ot be reach ed with in
a reason able period from the in itiation of n egotiation s, the custom s un ion shall, n evertheless,
be free to m odify or with draw th e con cession s; affected Mem bers sh all th en be free to with draw
substan tially equivalen t con cession s in accordan ce with Article XXVIII.
6.
GATT 1994 im poses n o obligation on Mem bers ben efitin g from a reduction of duties
con sequen t upon the form ation of a custom s un ion , or an in terim agreem en t leadin g to the
form ation of a custom s un ion , to provide com pen satory adjustm en t to its con stituen ts.
Rev iew of Custom s Unions and Free-Trade Areas
7.
All n otification s m ade un der paragraph 7(a) of Article XXIV shall be exam in ed by a
workin g party in th e ligh t of th e relevan t provision s of GATT 1994 an d of paragraph 1 of th is
Un derstan din g. The workin g party shall subm it a report to the Coun cil for Trade in Goods
on its fin din gs in this regard. The Coun cil for Trade in Goods m ay m ake such recom m en dation s
to Mem bers as it deem s appropriate.
8 .
In regard to in terim agreem en ts, the workin g party m ay in its report m ake appropriate
recom m en dation s on the proposed tim e-fram e an d on m easures required to com plete the
form ation of th e custom s un ion or free-trade area. It m ay if n ecessary provide for further
review of the agreem en t.
9.
Mem bers parties to an in terim agreem en t shall n otify substan tial chan ges in the plan
an d schedule in cluded in that agreem en t to the Coun cil for Trade in Goods an d, if so requested,
the Coun cil shall exam in e the chan ges.
its report recom m en d such a plan an d schedule. Th e parties shall n ot m ain tain or put in to
force, as the case m ay be, such agreem en t if they are n ot prepared to m odify it in accordan ce
with th ese recom m en dation s. Provision sh all be m ade for subsequen t review of th e
im plem en tation of the recom m en dation s.
11.
Custom s un ion s an d con stituen ts of free-trade areas shall report periodically to the
Coun cil for Trade in Goods, as en visaged by the CONTRACTING PARTIES to GATT 1947 in
th eir in struction to th e GATT 1947 Coun cil con cern in g reports on region al agreem en ts (BISD
18 S/ 38 ), on the operation of the relevan t agreem en t. An y sign ifican t chan ges an d/ or
developm en ts in th e agreem en ts sh ould be reported as th ey occur.
Dispute Settlem en t
12.
The provision s of Articles XXII an d XXIII of GATT 1994 as elaborated an d applied
by the Dispute Settlem en t Un derstan din g m ay be in voked with respect to an y m atters arisin g
from th e application of th ose provision s of Article XXIV relatin g to custom s un ion s, free-trade
areas or in terim agreem en ts leadin g to the form ation of a custom s un ion or free-trade area.
Article X X IV:12
13.
Each Mem ber is fully respon sible un der GATT 1994 for th e observan ce of all provision s
of GATT 1994, an d shall take such reason able m easures as m ay be available to it to en sure
such observan ce by region al an d local govern m en ts an d authorities within its territory.
14.
The provision s of Articles XXII an d XXIII of GATT 1994 as elaborated an d applied
by the Dispute Settlem en t Un derstan din g m ay be in voked in respect of m easures affectin g
its observan ce taken by region al or local govern m en ts or auth orities with in th e territory of
a Mem ber. Wh en th e Dispute Settlem en t Body h as ruled th at a provision of GATT 1994 h as
n ot been observed, th e respon sible Mem ber sh all take such reason able m easures as m ay be
available to it to en sure its observan ce. Th e provision s relatin g to com pen sation an d suspen sion
of con cession s or oth er obligation s apply in cases wh ere it h as n ot been possible to secure such
observan ce.
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
UNDERSTANDING ON THE INTERPRETATION OF ARTICLE XXVIII
OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 19 9 4
M em bers
h ereby
agree
as follows:
1.
For th e purposes of m odification or with drawal of a con cession , th e Mem ber wh ich
h as th e h igh est ratio of exports affected by th e con cession (i.e. exports of th e product to th e
m arket of th e Mem ber m odifyin g or with drawin g th e con cession ) to its total exports sh all be
deem ed to have a prin cipal supplyin g in terest if it does n ot already have an in itial n egotiatin g
right or a prin cipal supplyin g in terest as provided for in paragraph 1 of Article XXVIII. It is
however agreed that this paragraph will be reviewed by the Coun cil for Trade in Goods five
years from th e date of en try in to force of th e WTO Agreem en t with a view to decidin g wh eth er
this criterion has worked satisfactorily in securing a redistribution of negotiating rights in favour
of sm all an d m edium -sized exportin g Mem bers. If this is n ot the case, con sideration will be
given to possible im provem en ts, in cludin g, in the light of the availability of adequate data,
th e adoption of a criterion based on th e ratio of exports affected by th e con cession to exports
to all m arkets of the product in question .
2.
Where a Mem ber con siders that it has a prin cipal supplyin g in terest in term s of
paragraph 1, it should com m un icate its claim in writin g, with supportin g eviden ce, to the
Mem ber proposin g to m odify or with draw a con cession , an d at th e sam e tim e in form th e
Secretariat. Paragraph 4 of the "Procedures for Negotiation s un der Article XXVIII" adopted
on 10 Novem ber 198 0 (BISD 27S/ 26-28 ) shall apply in these cases.
3.
In the determ in ation of which Mem bers have a prin cipal supplyin g in terest (whether
as provided for in paragraph 1 above or in paragraph 1 of Article XXVIII) or substan tial in terest,
on ly trade in the affected product which has taken place on an MFN basis shall be taken in to
con sideration . H owever, trade in the affected product which has taken place un der n on
-con tractual preferen ces shall also be taken in to accoun t if the trade in question has ceased
to ben efit from such preferen tial treatm en t, thus becom in g MFN trade, at the tim e of the
n egotiation for th e m odification or with drawal of th e con cession , or will do so by th e con clusion
of that n egotiation .
4.
When a tariff con cession is m odified or withdrawn on a n ew product (i.e. a product
for which three years' trade statistics are not available) the Mem ber possessing initial negotiating
righ ts on th e tariff lin e wh ere th e product is or was form erly classified sh all be deem ed to h ave
an in itial n egotiatin g right in the con cession in question . Th e determ in ation of prin cipal
supplyin g an d substan tial in terests an d the calculation of com pen sation shall take in to accoun t,
inter alia,
production capacity an d in vestm en t in the affected product in the exportin g Mem ber
an d estim ates of export growth , as well as forecasts of dem an d for th e product in th e im portin g
Mem ber. For th e purposes of th is paragraph , "n ew product" is un derstood to in clude a tariff
item created by m ean s of a breakout from an existin g tariff lin e.
5.
Where a Mem ber con siders that it has a prin cipal supplyin g or a substan tial in terest
in term s of paragraph 4, it should com m un icate its claim in writin g, with supportin g eviden ce,
to th e Mem ber proposin g to m odify or with draw a con cession , an d at th e sam e tim e in form
the Secretariat. Paragraph 4 of the above-m entioned "Procedures for Negotiations under Article
XXVIII" shall apply in these cases.
am oun t by wh ich future trade prospects exceed th e level of th e quota. It is un derstood th at
th e calculation of future trade prospects sh ould be based on th e greater of:
(a)
the average an n ual trade in the m ost recen t represen tative three-year period,
in creased by the average an n ual growth rate of im ports in that sam e period,
or by 10 per cen t, wh ich ever is th e greater; or
(b)
trade in the m ost recen t year in creased by 10 per cen t.
In n o case shall a Mem ber's liability for com pen sation exceed that which would be en tailed
by com plete with drawal of th e con cession .
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