The WTO provides that members of a customs union must provide compensation to other WTO members affected by the new tariff structure. If agreement is not found, the affected WTO member may withdraw substantially equivalent tariff concessions six months after the customs union’s new tariffs come into effect.

The period for the withdrawal of substantially equivalent concessions related to the EC enlargement of 19 January 2004 to 25 members was further extended until 1 August 2008.

The relevant period related to the EC enlargement on 1 January 2007 (Bulgaria and Romania) was extended until 1 July 2008.

Ecuador said it could agree to the EC requests, adding the EC had recognized its supplier’s rights with respect to bananas and certain other products. It estimated that the EC needed to compensate it by a total 700 million euros with respect to its banana exports for the EC-25 since 2004.

Trade preferences

The US said it has been consulting with members on issues regarding its requests for waivers on three trade preference agreements (the African Growth and Opportunity Act, the Caribbean Basin Economic Recovery Act, and the Andean Trade Preference Act). It said it hoped to present a positive report to the Council at its next meeting.

Paraguay said that it would continue efforts to find a way by which it could join a possible consensus on these waiver request. It said it had been working with the United States on this issue, and that this would be on the agenda of a bilateral meeting scheduled for early next month. Paraguay said that the fact that it has a trade deficit of $850 million with the United States while the members of the Andean Trade Preference Act continue to enjoy big trade surpluses showed that it had been disadvantaged by its exclusion from this preference agreement.

Textiles

Turkey reiterated its proposal for a work programme on textiles. It said it continued to consult with other members on this issue. Jordan, Honduras and Egypt supported Turkey’s proposal.

China said its position against the proposal had not changed, and suggested that it was time to stop taking up this item in the Council. India supported China, and suggested this item be taken off the agenda. Thailand and Hong Kong, China also reiterated their objection to the proposal.

The Council agreed to revert to this item at its next meeting. The Chairman, Amb. Karsten Vagn Nielsen (Denmark), said he was open to holding consultations should there be an evolution in the positions of delegations.

Transitional review of China

The United States, the European Communities and Japan reiterated concerns about China’s measures on trade in goods, in particular about export restrictions on certain raw materials like coke. They also complained that China had not responded adequately to many of their questions they had submitted in transitional reviews conducted in the subsidiary bodies of the Goods Council.

China noted that it had submitted updated information regarding its trade in goods, and stressed that it had ensured transparency of its trade measures, including through regular notifications to WTO bodies such as the Market Access Committee. It said that export controls on certain natural resource materials are allowed under the GATT 1994, and that parallel controls had been imposed on domestic companies.

At the end of the meeting, the Council considered the annual reports of its subsidiary bodies, and adopted its own annual report for submission to the General Council.