US embassy cable - 05GENEVA2778

UNCLAS SECTION 01 OF 05 GENEVA 002778 
 
SIPDIS 
 
PASS USTR FOR DWOSKIN AND TROJE 
DOC/ITA FOR SJACOBS/NMORGAN/BO'BYRNE 
DOC/NIST FOR AMEININGER 
USDA/FAS FOR DBREHM/ATALLEY/KKEZAR 
DOT/NHTSA FOR JABRAHAM 
EPA FOR KFEITH/JSHOAFF 
FDA FOR RCAMPBELL/MECHOLS 
STATE FOR EB/KBARR 
 
E.O. 12958: N/A 
TAGS: EAGR, ETRD, WTRO, USTR, Trade 
SUBJECT:  WTO COMMITTEE ON TECHNICAL BARRIERS TO TRADE (TBT) 
 
1.  Begin Summary:  On November 2, 2005, the WTO TBT Committee 
met to review new trade concerns arising from the following 
notifications (or lack thereof):  China's proposed regulations to 
control pollution from electronic information products, the EU's 
Directive on eco-design requirements for energy using products 
(EUP), Colombia and South African footwear labeling requirements, 
Peru infant formula requirements and China's Health Food 
regulation.  China also raised its concerns with the short 
comment period provided on the U.S. notification (USA/128) 
concerning DTV tuners, and with Japan's failure to respond to PRC 
comments on several Japanese notifications.  Although the 
Committee was requested to refrain from raising issues previously 
brought to its attention, a number of Members reiterated concerns 
with the EU's proposed chemical regulation (known as REACH).  The 
Committee also concluded its fourth transitional review of China, 
focusing on statements submitted by the U.S., Japan and EC with a 
detailed oral response provided by China.  The Committee agreed 
on an agenda for a Workshop on Conformity Assessment, to be held 
in March 2006, with Members requested to nominate speakers no 
later than January 16, 2006.  It also reached agreement on a 
voluntary notification format on technical assistance. 
Preparations for the fourth triennial review focused on possible 
topics to include in the review, with no consensus reached on 
labeling (raised by EC) or intellectual property (raised by PRC). 
The U.S. presented a paper on its "good regulatory practice". 
The Committee adopted its annual report to the CTG.  Under "other 
business," the U.S. raised concerns with the treatment of 
international standards in the recent Secretariat publication, 
"World Trade Report 2005."  The Committee will meet again March 
14 (pm) and 15, preceded by the Workshop on Conformity Assessment 
March 13 and 14 (am).  U.S. positions are contained in TPSC 2005- 
186.  End Summary. 
 
Implementation Concerns: 
 
2.  China's "Administration on the Control of Pollution Caused by 
Electronic Information Products" (G/TBT/N/CHN/140): Japan briefly 
noted questions about the relevant standards for implementation 
and asked, joined by the EC, China to consider their forthcoming 
comments. 
 
3.  U.S. "DTV Tuner Requirements" (G/TBT/N/USA/128): China 
lamented the notification allowed only 19 days for comments and 
its request to extend that period had been denied.  It expressed 
concern that the proposal to advance the date on which all new 
television receiving equipment must include DTV capability to a 
date no later than December 31, 2006 would add unnecessary costs. 
It noted it had provided comments to the FCC in response to the 
notification.  Given the lack of advance notice of its concern, 
the U.S. noted it would look into the matter. 
 
4.  EU Directive on Eco-design Requirements for Energy Using 
Products (EUP) (2005/32/EC): China noted compliance with the 
Directive is mandated for August 11, 2007 and this will require 
CE marking for a broad range of products.  The Directive has not 
been notified to WTO members.  China expressed concern that there 
will be uneven enforcement by Member States.  It noted it was not 
seeking amendments to the Directive but an opportunity for Member 
States to receive copies of all comments submitted, as the EC had 
promised it, and requested training and seminars on how to 
comply.  In its response, the EC noted that the framework in the 
EU Directive was not subject to TBT notification requirements but 
comments were welcome.  It assured the Committee that any 
"implementing measure" would be notified for 60-days comment. 
The Commission intends to assess transposition measures to assure 
coherence among Members States implementation.  It indicated it 
could not respond at the meeting to the request for technical 
assistance. 
 
5.  Japan's Failure to Respond to Chinese Comments: China raised 
concerns with Japan's failure to respond to comments it had 
recently provided on five notifications, including those on 
pickled agricultural products (JPN/148), carbonated drinks 
(JPN/150), and carrot juice (JPN/151).  Japan was unable to 
respond at the meeting. 
 
6.  Colombia "Regulation on Labeling of Footwear" (COL/45 and 
Add.): The EC raised concerns with burdensome requirements to 
include a registration number and other comments it had made in 
response to Colombia's notification, to which Colombia indicated 
it had already responded (with no substantive information 
provided to the Committee). 
 
7.  South Africa "General Notice of the Merchandise Marks Act and 
Country of Origin Labeling" (for footwear and apparel) (SAF/49): 
The EC noted it had provided comments and expressed concern with 
the registration and other burdensome requirements of the 
proposal, which it understood had not yet been implemented.  With 
the support of the U.S., it noted its request that South Africa 
consider less trade-restrictive alternatives, such as post- 
importation stickers.  The U.S. also sought confirmation of 
reports by industry that South Africa was considering withdrawal 
of the requirement.  South Africa confirmed the regulation was 
not being enforced and that it was seeking inputs to address the 
concerns raised. 
 
8.  Peru "Infant Formula Regulations" (PER/11): The U.S. noted 
Peru's recent notification and comments that had been submitted 
by the U.S. Government and industry.  We noted a response to 
those comments had not been received but we hoped Peru would 
allow sufficient time for producers in exporting Members to adapt 
their products to the new requirements.  (Peru was not 
represented at the meeting). 
 
9.  China "Health Food Regulation" (CHN/160): The U.S. noted 
China's recent notification of its health food regulation and 
recalled prior requests to China that this proposal be notified. 
The notification indicates the "final date for comments" as "not 
applicable" and the U.S. sought confirmation, which China 
provided, that its comments (submitted just prior to the 
notification), would be taken into consideration. 
 
10.  EU Chemical Regulation (REACH): The U.S. noting the process 
in developing the REACH regulation, which had been a longstanding 
issue before the Committee, was at a critical juncture and 
reiterated its hope that changes to the original proposal would 
result in an approach that is more streamlined, science-based and 
cost-effective.  The U.S. noted the EC's promise to update its 
TBT notification if there are changes and welcomed the 
opportunity to further engage in a substantive and constructive 
dialogue on those changes.  Canada reiterated its concerns with 
the workability of the proposal, noted its June position paper, 
and sought clarification of the status of the text.  Chile, 
China, Mexico, Japan and Korea all noted they had expressed 
concerns bilaterally and welcomed a continued dialogue.  The EC 
noted it was too early to predict changes and noted the first 
reading by Parliament would be held on November 14. 
 
11.  U.S. MRAs with Norway, Iceland and Liechtenstein: The U.S. 
noted its intention to notify two MRAs reached with these EEA 
member countries on telecommunications equipment, electromagnetic 
compatibility, recreational craft and marine equipment upon their 
entry into force. 
 
12.  Kenya's "Verification of Conformity to Standards of 
Imports": On the margins of the meeting the U.S. provided Kenya's 
Geneva-based rep with a copy of comments previously provided in 
response to the above notification (KEN/14 and Add.1).  Kenya was 
previously unaware of the comments and U.S. questions and 
concerns and promised to follow-up with its Bureau of Standards 
(KEBS). 
 
Annual Transitional Review Mechanism for China: 
 
13.  Questions and concerns raised by Japan, EC and United States 
are detailed in written statements submitted in advance of the 
meeting (G/TBT/W/255, 256 and 257) and were highlighted at the 
meeting.  Among other issues, all three statements raise concerns 
with China's compulsory certification system ("CCC mark").  At 
the meeting, Korea echoed its concerns with the CCC mark 
highlighting difficulties associated with the time period, 
sometimes more than six months, required to obtain certification, 
the protection of confidential information, and requirements for 
spare parts, components and assembly. 
 
14. China responded to the various questions and comments raised 
in a single statement.  In response to a U.S. request, the 
Committee agreed to attach a record of its discussion, including 
China's statement, to the report transmitted to the Council for 
Trade in Goods.  Some highlights of its response follow. 
 
15. China informed the Committee that it had translated the TBT 
notification handbook and had been conducting workshops to 
upgrade its implementation, highlighting the increasing number of 
notifications it had submitted (84 pursuant to TBT from January 
through October 2005).  Notice of proposals was published in the 
foreign trade and economic gazettes in addition to publications 
by the responsible authority.  It noted its standardization body, 
SAC, had completed a review of its standards with a view to 
aligning them with international standards and as a result some 
1,416 were nullified, including 114 mandatory standards.  It 
noted that technical regulations (which are mostly mandatory 
standards) are published jointly by AQSIQ/SAC and AQSIQ/CNCA. 
The various ministries, including Health, Environment and 
Industry, carry out conformity assessment on both domestic and 
imported products.  It clarified that a number of notifications 
identify SAC as the "agency responsible" in the notification 
format and these include regulations of other ministries. 
 
16. [Comment: In bilateral discussions, China complained about 
the excessive work created when questions are raised with 
multiple contact points about proposals and their status of 
notification.  It suggested when such issues arise, the U.S. 
direct its inquiry to the inquiry point at AQSIQ, with a copy to 
MOFCOM (chenying@mofcom.gov.cn), who has overall responsibility 
for all WTO notifications.] 
 
17. On certification, China noted it recognizes foreign testing 
reports under the IEC CB scheme, and also through mutual 
recognition agreements with CNCA or authorized by the State 
Council.  Up to now, it reported cooperation agreements with more 
than twenty countries.  In reference to concerns raised by the 
U.S. with the recent detention of a tile shipment, it indicated 
the problem was with the HS codes that guide Customs inspections 
for CCC marking.  China indicated it was working a detailed 
product list to prevent similar problems in the future. [Comment: 
When raised bilaterally, China indicated that there has been a 19- 
month transition period for decorative building materials and a 
16-month transition period for security products, and that it 
would not postpone their implementation.  It also provided stats 
on the number of companies affected to demonstrate these were 
primarily Chinese and again asserted implementation would not 
"significantly affect trade."] China indicated when deemed 
necessary, it could make changes to the products subject to CCC 
marking and that it was exploring alternatives, such as reliance 
on supplier's declaration of conformity, based on its experience. 
It rejected the EU proposal that registration to ISO 9001 replace 
factory inspection, and the CCC mark cannot be replaced by 
another (e.g., DOT, UL, CE).  It clarified it aims to complete 
certification within 90 days of receiving an application, and 
that spare-parts for re-exported products are not subject to the 
certification requirements.  It noted fees had been lowered this 
year and in March a notice was published on exemptions. 
 
18. On information and communications products, it agreed that 
regulations should be limited to "essential requirements" and 
noted CNCA is discussing the issue with other authorities.  It 
noted international standards were sometimes deficient in 
addressing concerns, such as national security.  It asserted its 
WAPI standard is advanced technology and the fact that its 
allowed under fast track (in ISO) reflects that fact.  It 
confirmed there were no developments to report with respect to 
RFID.  On its regulation of waste from electrical products 
(WEEE), it noted a consultation draft had been submitted for 
review by the State Council and it was not in a position to 
provide more details at this time.  On chemicals it noted it was 
working hard to join the OECD good laboratory practice program. 
[Comment: China was more forthcoming in its statement at this TRM 
than it has been in the past where responses were only provided 
in bilaterals with those who had submitted written statements. 
Bilaterally and in the Committee, they continued to urge members 
to raise issues under appropriate agenda topics, rather than save 
them for the TRM]. 
 
Conformity Assessment: Follow-up from Third Triennial Review 
 
19. Members provided reactions to a revised agenda for the 
workshop circulated by the Secretariat (JOB(05)/108/Rev.1. 
Chinese Taipei called for more time and more presentations by 
developing country members on their national experience, and for 
the industry perspective to be balanced by the perspective of the 
consumer.  Canada suggested regulators, rather than certification 
bodies, would be more appropriate for providing a `users' 
perspective on accreditation; and, that a presentation be made on 
accreditation-based mutual recognition agreements which have a 
global basis (e.g., ILAC or IAF), and suggested a presentation by 
a developing country on regional cooperation in accreditation. 
With these modifications, the Committee agreed upon the agenda 
for the Workshop and chair requested members to identify speakers 
no later than January 16, 2005. 
 
Technical Assistance Notification Format: Follow-up from Third 
Triennial Review 
 
20.  Members reviewed a revised notification format (JOB(05)/265) 
following suggestions that had been made in informal discussions 
held in September.  With some modification to accommodate a 
request by China to delete the section on "policy area covered," 
and noting comments from Chinese Taipei and the EC that it may be 
necessary to supplement the notification with additional 
information, the Committee adopted the format for the voluntary 
notification of specific technical assistance needs and responses 
on a trial basis for two years. 
 
Other outstanding issues from the Third Triennial Review 
 
21.  Canada, with support from the EU and United States, noted 
that there still had not been a full discussion on how to better 
coordinate the Secretariat plans for technical assistance with 
the needs and discussions emanating from the TBT Committee as 
recommended in the last review.  Canada suggested the Committee 
discuss the Secretariat plans at a future meeting.  It also noted 
the expectation that the Committee could serve as a forum for 
feedback and that this had not yet happened in a very specific 
way.  The U.S., with support from Mexico, noted the previous 
Committee recommendation which encouraged Members to disseminate 
their comments and responses by means of national websites and, 
noting some information from Members had been provided, suggested 
the Secretariat compile a room document or provide an oral report 
at the next meeting.  The Secretariat indicated it would provide 
a factual note on the comprehensive work undertaken by the 
Committee in follow-up to the last Triennial review. 
 
Preparation for the Fourth Triennial Review 
 
22.  At the U.S. suggestion, the Committee agreed that the 
circulation of draft of factual elements for the review should 
precede the deadline for submission by delegates of proposals for 
recommendations, which is anticipated prior to the March meeting. 
Topics which have been raised include: 
 
23.  Conformity Assessment Procedures: The U.S. noted proposals 
may emanate from the March Workshop.  The EC noted its intention 
to submit a paper on its experience with mutual recognition 
agreements.  Canada noted it had comments on the Secretariat's 
background paper (JOB(05)/261) and members were invited to submit 
comments by the end of November. 
 
24.  Technical Assistance: China, Canada, El Salvador, Cuba and 
the EC all spoke in favor of addressing this topic in the 4th 
review.  (Proposals submitted by China were not discussed). 
 
25.  Special and Differential Treatment: Brazil and Cuba 
expressed general support for China's proposed notification of 
S&D, with China noting the need for coordination and regulatory 
cooperation in priority sectors. 
 
26.  Intellectual Property Rights: The ISO observer, at the 
request of China, made a presentation on the ISO and IEC joint 
patent policies and noted collaboration with the ITU in the World 
Standards Congress (WSC) on a common approach to "reasonable and 
non-discriminatory" terms.  China informed the Committee of a 
submission by Japan in the WSC and its view that this activity 
was complementary to the WTO.  It also noted the relevance of the 
TRIPs Council and suggested that there be parallel discussions to 
those in the TBT Committee.  Brazil stated that property rights 
should not become an obstacle to development and should be in 
line with the TBT Agreement.  Korea, the U.S., Mexico, El 
Salvador and Chile all raised questions about the appropriateness 
of discussing the issues raised in the TBT Committee.   China 
continued to assert the relevance of the topic to standardization 
and the TBT Agreement's obligation to use international standards 
(and thus within the mandate of the TBT Committee).  It shared 
the concerns it may not be able to resolve the new and complex 
issues, but it viewed the TBT Committee as the most able body 
related to standardization.  In response to a question raised by 
Canada, China noted it was still preparing information on 
specific cases. Given the lack of consensus, the topic is not 
part of the 4th review. 
 
27.  Labeling: The U.S. , Chile and New Zealand expressed concern 
with the EU resurrecting this topic which had been addressed in 
the last review.  There agreement had been reached that labeling 
was not a special class of issue.  The EU had not presented any 
information on what was to be addressed in the 4th review and 
given the lack of consensus, it is not on the agenda. 
 
28.  Good Regulatory Practice: The U.S. presented a paper 
providing information on the institutional underpinnings to its 
good regulatory practice (G/TBT/W/258).  Canada raised specific 
questions to which the U.S. agreed to respond in the future 
(i.e., further details on regulatory evaluation and review; more 
information on enforcement; question as to whether "equivalency" 
is contained in regulatory guidance).  Korea expressed some 
concern with the EU's proposal to develop guidelines, noting that 
good regulatory practice goes beyond the scope of the TBT 
Agreement (as was noted in the U.S. paper). 
 
29.  Transparency: The Chair recalled proposals made by Canada, 
China, and the EC (W/234, W/252, and W/253, respectively). 
Jordan noted its support both for China's proposal that final 
texts of technical regulations should be notified to the 
Secretariat and for the EC's proposal that notifications contain 
 
SIPDIS 
more descriptive information and the inclusion of the text (or 
link to) the technical regulation.  Jordan raised concerns that 
the provision of texts should be restricted to governments as it 
could be a useful source of revenue for countries selling the 
texts to industry.  The EC disagreed, saying that the text should 
be available to anyone concerned. 
 
30.  Technical Cooperation: The EU, Norway and WTO Secretariat 
provided information on their assistance activities. 
 
31.  The Committee adopted its Report to the Council for Trade in 
Goods based on a draft contained in JOB(05)/267. 
 
32.  Other Business: WTO Secretariat Report, "World Trade 2005": 
The U.S. noted the recent WTO publication included over 120 pages 
devoted to "standards" and related topics.  Noting the report was 
informative and useful in highlighting the importance of 
"standards" to trade, the U.S. expressed concern that it also 
contains certain statements and references that are subjective, 
confusing and otherwise troublesome.  Of particular note is the 
impression given by the report that standards developed by the 
ISO and IEC are somehow recognized by the WTO and their use given 
primary importance.  The U.S. noted the SPS Agreement does 
identify 3 specific bodies but noted there is no corollary 
identification in the TBT Agreement.  She recalled discussions in 
the Second triennial review where the Committee rejected the 
notion of attempting to identify and agree upon a list of 
relevant bodies for purposes of TBT.  Instead, the Committee 
agreed upon principles to guide the development of international 
standards.  She also took exception with the assertion that the 
WTO strictly regulates the work of the ISO, noting that in 
drafting the Committee Decision on International Standards it had 
recognized the limitations of the WTO imposing disciplines on 
other international bodies.  She suggested the report could have 
benefited from consultation with Members and possibly peer review 
so that such misunderstandings could be avoided.  The Secretariat 
welcomed the U.S. interest in the report and clarified the report 
was prepared by its Economic Research and Statistics Division who 
was represented at the meeting.  He added that the Report has a 
clear disclaimer that it was prepared on the basis of the 
Secretariat's own responsibility.  Allgeier 
 
SIPDIS