RESTRICTED
WORLD TRADE WT/REG3/1
13March 1995
ORGANIZATION(95-0537)
WORKING PARTY ONTHE ENLARGEMENT OFTHE
EUROPEAN COMMUNITIES
Accession ofAustria, Finland andSweden
Chairman: Tobedesignated
Terms ofReference1
"Toexamine, inlightoftherelevant provisions oftheGATT 1994, theaccession ofAustria,
Finland andSweden totheEuropean Communities andtosubmit areport totheCouncil for
Trade inGoods".
Membership
TheWorking Party willbeopen toallMembers oftheWTO andother signatories ofthe
Final Actthatarecontracting parties totheGATT 1947andareeligible tobecome original Members
oftheWTO indicating theirwishtoserve onit.
1These terms ofreference were adopted inthemeeting oftheCouncil forTrade inGoods held
on20February 1995, along withtheattached understanding readoutbytheChairman atthatmeeting.WT/REG3/1
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ATTACHMENT
Understanding readoutbytheChairman oftheCouncil forTrade inGoods -20February 1995
Ishould firstrecall thattheearly consideration bytheGeneral Council ofthepossibility of
setting upanArticle XXIV Working Party ontheEnlargement oftheEuropean Communities was
proposed bythelatter inlightofthespecial circumstances prevailing atthetime. Thisinitiative arose
from thefactthattheCouncil forTrade inGoods wasnotyetoperational. AttheGeneral Council
meetingof31January1995,theChairmanproposedthatheholdconsultationswithaviewtoascertaining
theappropriate terms ofreference forthecorresponding Article XXIV working party. [Icannow
report ontheresult] [Hehasinformed me]ofthose consultations. Before Ipropose thedraftterms
ofreference foradoption Iintend togiveyoumyunderstanding ofhowtheterms ofreference will
beapplied.
According totheUnderstanding ontheInterpretation ofArticle XXIV oftheGATT 1994"all
notifications under paragraph 7(a)ofArticle XXIV shallbeexamined byaworking party inthelight
oftherelevant provisions oftheGATT 1994andofparagraph 1ofthisUnderstanding". Paragraph 1
oftheUnderstanding confirms thatagreements leading toacustoms union mustsatisfy, interalia,the
provisions ofparagraphs 5,6,7and8ofArticle XXIV. Similarly, theentire Schedules ofconcessions
andcommitments attached totheMarrakesh Protocol willbeexamined bytheWorking Party.
According toparagraph 5(a)ofArticle XXIV, theduties andother regulations ofcommerce
affecting trade withWTO Members notparticipating inthecustoms union "shall notonthewhole
behigher ormore restrictive thanthegeneral incidence oftheduties andregulations ofcommerce"
applicable priortotheformation oftheunion. Thisimplies thataworking party established toexamine
anotification under paragraph 7(a)ofArticle XXIV hasthemandate toexamine theincidence and
restrictiveness ofallduties andregulations ofcommerce, inparticular those governed bytheprovisions
oftheAgreements contained inAnnex 1AoftheWTO Agreement.
However, itshould bekeptinmindthatthepurpose ofanexamination inthelightofparagraph
5(a)ofArticle XXIV would notbetodetermine whether eachindividual dutyorregulation existing
orintroduced ontheoccasion oftheformation ofacustoms union isconsistent withallprovisions
oftheWTO Agreement; itwould betoascertain whether onthewhole thegeneral incidence ofthe
theduties andother regulations ofcommerce hasincreased orbecome more restrictive. Accordingly,
although theWorking Party would conduct itsexamination inlightoftherelevant provisions ofthe
Agreements contained inAnnex 1AoftheWTO Agreement, theconclusions oftheReport ofthe
Working Party would beconfined toreporting onconsistency withtheprovisions ofArticle XXIV.
Ontheoccasion oftheformation ofacustoms union ameasure might betaken whose legal
status under theWTO Agreement isnotdirectly related toordoesnotdepend ontheconsistency of
theformation ofthecustoms union withArticle XXIV assuch. Theexamination ofincidence and
restrictiveness ofsuchameasure byaworking party established under Article XXIV would notprevent
anyWTO Member fromraising thequestion oftheconsistency ofthatmeasure inanother WTO body
competent toexamine thatissue, nordoesthepresent arrangement prejudice therights andobligations
ofanyWTO Member under theWTO agreements.
Therefore, Ipropose thefollowing terms ofreference fortheWorking Party: "toexamine,
inlightoftherelevant provisions oftheGATT 1994, theaccession ofAustria, Finland andSweden
totheEuropean Communities andtosubmit areport totheCouncil forTrade inGoods".WT/REG3/1
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Iunderstand thatitisexpected thattheWorking Party should coordinate itsworking schedule
withthatofanyother working party thatmaybeestablished toexamine theenlargement according
totherelevant procedures oftheWTO Agreement.