Geneva 30 July (Chakravarthi Raghavan) -- The expansion of the European Union, with the addition of Austria, Sweden and Finland, as well as the formation of the NAFTA came for scrutiny and examination at the meeting of the WTO's Committee on Regional Agreements this week.

The conformity of the EU expansion and of NAFTA with the requirements of Article XXIV, and the effects on those outside came in for special scrutiny, according to participants.

In the case of the EU, there were many critical comments that the WTO membership in effect was faced with a fait accompli, in that the accession accords were signed on 30 June 1994 (before the WTO entry into force), and became effective along with the WTO, and thus there had been no 'negotiations' on the new tariff modifications or withdrawals before the event (as required by the WTO's understanding on Art XXIV:6 of the GATT 1994). Only after the event, the EU entered into negotiations with some 20 trading partners.

According to the EU statement to the working party, these had been completed, but with some consultations still in progress. The EC Commission Representative explained that as a result of the enlargement, the EC's anti-dumping measures in force in the EC-12 had been extended to the EC-15. But this was outside the scope of scrutiny of the working party, the EC argued.

The EC claimed that on the whole the impact of the enlargement on its trading partners had been "substantially positive". Tariffs had been reduced in respect of exports to Austria and Finland, but raised for exports to Sweden. Overall there was a net duty loss for the EC-15 of ECUs 260 million.

In the discussions, a number of developing countries assailed the EC for the increased restrictions on imports of textiles and clothing as a result of the extension of the more restrictive EC regime to Sweden, which for e.g. had no restrictions at all. Complaints were also voiced on other non-tariff measures.

But the EC appeared to brush aside these complaints. One developing country delegate said the EC did not even make any attempt to answer the complaints. But he was not clear whether it was part of an EC stance or due to the personality of the representative who has a reputation for brusqueness to smaller trading nations.

In the review of the NAFTA, one of the major complaints related to the change in rules of origin. This was however justified by the NAFTA partners (US, Canada and Mexico) as merely rules relating to their preferential trade and that the rules of origin for MFN trade had not been changed.