RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/50
16 November 1999
(99-4929)
General Council
3 and 4 November 1999
MINUTES OF MEETING
Held in the Centre William Rappard
on 3 and 4 November 1999
Chairman:  Mr. Ali Mchumo (Tanzania)
Subjects discussed: Page :
1. Organization of work for the Third Ministerial Conference................................................2
(a) Statement by  the Chairman................................................................................................... ......2
2. Committee on Budget, Finance and Administration .............................................................3
(a) Report of the Comm ittee..................................................................................................... ........3
3. Committee on Balance-of -Payments Restrictions..................................................................4
(a) Consultations with the Slovak Republic.....................................................................................4
4. Five-year review of the exemption provided under Paragraph 3 of the GATT
1994 ........................................................................................................................... .................4
5. Review of the Dispute Settlement Understanding..................................................................7
(a) Report to the General Council ............................................................................................... .....7
6. Attendance of Observers at th e 1999 Ministerial Conference ............................................13
(a) Gover nments................................................................................................................. ............13
(b) International intergover nmental orga nizations .........................................................................13
7. Waivers under Article IX of the WTO Agreement..............................................................16
(a) Harmonized System – Requests for extensions of waivers ......................................................16
(i) Bangladesh.................................................................................................................. ..............16
(ii) Nica ragua .................................................................................................................. ...............16
(iii) Sri Lanka................................................................................................................. ..................16
(b) Zambia – Renegotiation of Schedule LXXVIII........................................................................16
(i) Request for extension of waiver ............................................................................................. ...16
(c) Decision on the introduction of Harmonized System changes into WTO Schedules of
tariff concessions on 1 January 1996........................................................................................17
(i) Extension of time- limit ..................................................................................................... .........17
(d) Review of waivers pursuant to Ar ticle IX:4 of the WTO Agreement ......................................17
(i) Canada – CARIBCAN, granted on 14 October 1996 until 31 December 2006........................17(ii) Cuba – Article XV:6, granted on 14 October 1996 until 31 December 2001...........................17
(iii) EC – The Fourth ACP-EC Convention of Lomé, granted on 14 October 1996 until
29 February 2000 ............................................................................................................... ......17
(iv) EC/France – Trading arrangements with Morocco, granted on 9-11 and 18
December 1998 until 31  December 1999 .................................................................................17WT/GC/M/50
Page 2
(v) Hungary – Agricultural export subsidies, granted on 22 October 1997 until
31 December 2001............................................................................................................... .....17
(vi) United States – Andean Trade Preference Act, granted on 14 October 1996 until
4 December 2001................................................................................................................ ......17
(vii) United States – Caribbean Basin Economic Recovery Act, granted on
15 November 1995 until 31  December 2005 ............................................................................17
(viii) United States – Former Trust Territory of the Pacific Islands, granted on 14 October
1996 until 31 December 2006...................................................................................................1 7
8. Trade facilitation – Status report on work carried out by the Council for Trade
in Goods under paragraph 21 of the Singapore Ministerial Declaration ..........................19
9. Review of WT O activi ties..................................................................................................... ..19
Reports of:
(a) General Council, Dispute Settlement Body, Trade Policy Review Body, sectoral
Councils, Committees on Trade and Development, Balance-of-Payments Restrictions,
Budget, Finance and Administration, and Regional Trade Agreements...................................19
(b) Committee on Trade and Environment.....................................................................................19
(c) Working Groups on the Relationship between Trade and Investment, the Interaction
between Trade and Competition Policy, and Transparency in GovernmentProcurement.................................................................................................................... ..........19
(d) Committees under the Pluril ateral Trade Agreements..............................................................19
10. Appointment of office rs of WTO bodies...............................................................................25
The Chairman invited the Director-General to make a statement
1 on developments in
international trade and the trading system, after which the General Council met2 as the Trade Policy
Review Body and held a full discussion on this matter.
1. Organization of work for the Third Ministerial Conference
(a) Statement by the Chairman
The Chairman said that after consultations with the Secretariat and the host Government of
the Third Ministerial Conference, the business of the Conference was being planned on the following
basis:  an opening ceremony on 30 November at 10 a.m.;  plenary sessions in the afternoon of
30 November, and in the mornings and afternoons of 1 and 2 December;  a night plenary session on1 December to accommodate the overflow of speakers, and if necessary, a night plenary session on
2 December.  Informal working sessions would be organized as appropriate by the Chairperson, in the
light of developments during the Conference.  The closing ceremony would be on 3 December
preceded by a plenary session during which Ministers were expected to adopt the Ministerial
Declaration and take any other action they deemed relevant under the Proposed Agenda of the
Conference.  At this plenary session Ministers would also take note of the General Council's report
and endorse all recommendations therein.  A document outlining the organization of work would becirculated to Members.
3
The representative of Bolivia said there was a feeling of unease among many smaller
delegations regarding the lack of transparency in the preparatory work for the Third Ministerial
                                                     
1 The statement was circulated in WT/GC/29.
2 The minutes of this meeting are contained in WT/TPR/OV/M/2.
3 WT/MIN(99)/4.WT/GC/M/50
Page 3
Conference.  Bolivia requested that the Chairman of the General Council and the Director-General
take the necessary steps to ensure that delegations were informed of the meetings among small groups
of delegations convened to solve certain problems not solved in plenary meetings, and that the results
of such meetings be made known 24 hours in advance of any decision to be taken by Ministers.
The representative of Panama said that his delegation fully supported Bolivia's statement.
The whole of the membership should be informed  of what occurred in meetings in which the
Chairman or the Director-General participated and which dealt with preparations for the Third
Ministerial Conference.  In light of the concerns over transparency, all Members should be informed
of when these meetings were to be held and which issues were to be dealt with, so they could decide
whether to take part in such meetings.  Panama hoped that measures would be taken in this regard
very soon.
The representative of Mauritius said that his delegation fully supported the statements by
Bolivia and Panama.  The need for transparency had often been stated in the General Council, yet in
the context of preparations for the Third Ministerial Conference one was finding a repeat of the
situation encountered during the Singapore Ministerial Conference, where many Ministers had to wait
outside meeting rooms in order to find out from t hose attending the meetings what had occurred.  The
necessary steps should be taken in order to fully brief all delegations, so that they did not later face a
fait accompli .
The representative of Cuba said that his delegation shared the views expressed by Bolivia,
Panama and Mauritius regarding the lack of transparency and the need to improve working methods
in the preparations for the Third Ministerial Conference.  The consensus-building process was
difficult but needed to be done in a room large enough to accommodate all interested delegations and
to allow them to share in that process.  Cuba hoped that this situation would be rectified.
The representative of Uganda said that his delegation appreciated that in order to build
consensus it was at times necessary to bring a few delegations together, but this should not develop
into a situation where many Ministers were kept in the dark until an outcome was announced.
Uganda appreciated the Chairman's efforts to bring issues to the General Council so that this process
could be as open as possible.  The least-developed country Members might be poor in resources but
were not poor in ideas.
The General Council took note of the statements and of the organization of work at the Third
Ministerial Conference.
2. Committee on Budget, Finance and Administration
(a) Report of the Committee (WT/BFA/44)
Mrs. Dubois-Destrizais (France), Chairperson of the Committee on Budget, Finance and
Administration, announced that the Committee had not yet reached a final decision on the WTO's
budget for the year 2000.  Consensus was emerging on a budget that would represent an increase of
4.5 per cent over the 1998 budget, which represented less than 2 per cent real growth.
The Chairman proposed that the General Council adjourn after consideration of the remaining
items on its agenda and reconvene as soon as possible to consider this item.WT/GC/M/50
Page 4
The General Council took note of the statement and so agreed.4
3. Committee on Balance-of-Payments Restrictions
(a) Consultations with the Slovak Republic (WT/BOP/R/48)
Mr. Jenkins (United Kingdom), speaking on behalf of Mr. Jodko (Poland), Chairman of the
Committee on Balance-of-Payments Restrictions, said that the Committee had met with the Slovak
Republic on 20 and 21 September to consult on the 7 per cent import surcharge applied since
1 June 1999.  Members had recognized that the Slovak Republic faced serious economic difficulties
and a fragile balance-of-payments situation.  Fiscal and current account deficits were unsustainable,
external debt had nearly doubled in the last three years and foreign exchange reserves, at less than
three months of import coverage, remained at uncomfortably low levels.  Members had considered
that the import surcharge, as a price-based measure accompanied by a phase-out schedule, wasconsistent with the provisions of GATT 1994.  Several Members had noted the number of
exemptions, designed to promote investment and meet basic needs, and some had expressed doubts
about the effectiveness of the measure to solve the present economic difficulties.  The Committee had
welcomed the fact that the trade measure was part of a larger package aimed at financial stabilization
and accompanied by a concerted effort to undertake macroeconomic and structural reform, whichMembers recognized as painful and courageous but necessary and long overdue.  Members had
encouraged the Slovak Republic to ensure that the reform process was implemented as planned, and
even accelerated if possible.  Such fundamental re form was vital to bringing about lasting stability
and would allow the surcharge to be eliminated in line with the proposed timetable, if not ahead of
schedule.
The General Council took note of the statement and adopted
 the report on the consultations
with the Slovak Republic (WT/BOP/R/48).
4. Five-year review of the exemption provided under Paragraph 3 of the GATT 1994
(WT/GC/W/228)
The Chairman recalled that the exemption under paragraph 3 of the GATT 1994 provides in
sub-paragraph 3(b) for a five-year review after the date of entry into force of the WTO Agreement in
order to examine whether the conditions which created the need for the exemption still prevail, andthereafter for a review every two years for as long as the exemption is in force.  At its meeting on
6 October the General Council had considered this matter, as well as a communication on it from
Japan in WT/GC/W/344, and had agreed to revert to it at the present meeting.
The representative of the United States said that the provision in question was not a waiver
and was not about measures taken by the United States pursuant to the security exception provided
under Article XXI.  Thus, questions about the US law's operation relative to US national defensecapacity were not in order.  Her delegation had explained earlier why this matter was before the
General Council, and how the US saw both the meas ure and the scope of this review, and she would
repeat those explanations.  At the October m eeting of the General Council the US had received
additional questions on the operation of the exemption from Japan, some of which were appropriate
and some not.  At an informal consultation organized by Panama on 2 November the US hadexplained its position on these questions to several WTO Members.  Certain additional questions had
been received from the European Communities, and where appropriate to the context of this review,
                                                     
4 The General Council's subsequent consideration of this item is carried in an addendum to these
minutes.WT/GC/M/50
Page 5
the US would answer those questions as well.  Due to the technical details involved, her delegation
did not have answers to those questions at th e present meeting, but would forward both the
Community's and Japan's questions to Washington for written responses to those questions the US
considered appropriate in the context of this review, and these would be circulated to all Members.
However, she reiterated that the exemption in paragraph 3 of GATT 1994 was neither a waiver nor an
invocation of GATT's security exception.  Thus, while her delegation was prepared to clarify how theexemption and the US legislation operated in practice and in law, it did not intend to engage in an
exercise of answering questions that implied that  the US had to justify this exception on economic or
national security grounds.  In the US view, the General Council should conclude that the conditions
which made the exemption necessary still existed and that the first review of this provision should be
concluded at the present meeting.  She asked whether delegations had any questions they felt had not
yet been answered by the US in previous meetings.
The representatives of Panama, Japan
, European Communities , Korea , Australia  and Hong
Kong, China expressed appreciation for the United States' undertaking to provide written answers to
questions raised by several delegations.
The representative of Panama recalled that the US had said that the scope of the review
provided for under paragraph 3 of GATT 1994 was limited to a review of whether the US had adopted
any amendment, legislative change, or measure wh ich affected the implementation of an exemption
provided under that paragraph, and that the simple fact that there had been no such change should lead
to the conclusion that the conditions creating the n eed for the exemption continued to exist.  Panama
did not agree with this reading of paragraph 3.  The conditions that had led to the need for theexemption were those that had provoked the adoption of the legislation under consideration, and not
the simple existence of the legislation, and it was those conditions that should be reviewed under
paragraph 3.  It could even be asked whether the US legislation qualified for an exemption under
paragraph 3, in terms of the compliance of the legislation notified by the US in its letter of
20 December 1994 with the conditions of paragraph 3(a).  These conditions were that the legislationhad to be mandatory, specific, and enacted before the Member had become a contracting party to
GATT 1947.  Furthermore, the exemption was limited to that legislation prohibiting the use, sale or
rental of vessels built or re-built abroad for trad ing applications between points located in national
waters or in waters in an exclusive economic area.  Similar questions could be asked regarding the
regulations implementing this legislation.  The legislation could not stray from the conditions imposedby paragraph 3.  For example, to the extent the legislation was not mandatory or specific, or that its
prohibition extended beyond the limits specified in paragraph 3, it was not clear that it qualified for
the exemption.  In view of the seriousness of waivers or exemptions from fundamental WTO
principles provided under paragraph 3 of GATT 1994, its applicability in the present case should be
reviewed carefully and in detail.  This question shoul d be resolved before turning to the full review of
the exemption, to which Panama attached considerable importance.  Assuming that Members could
determine that the legislation did effectively benefit from this exemption, the review should be all-encompassing and not unnecessarily limited.  Waivers or exemptions to fundamental GATT/WTO
principles had always been interpreted restrictively.  Panama reserved the right to submit to the
United States at the appropriate time any questions it considered appropriate, both to determine
whether the legislation met the criteria for the exemption, as well as to pursue the purposes of the
review provided for under paragraph 3.  His delegation would submit questions to the United Statesconcerning the operation and application of the notified legislation.
The representative of Japan said that the common understanding among most Members was
that the review under paragraph 3 of GATT 1994 should be substantive and not merely a formality.
This review was of great importance since that paragraph allowed a serious deviation from GATTfundamental principles.  The US responses to Ja pan's questions in WT/GC/W/344 were therefore of
extreme importance.  After considering these responses, Japan would decide whether it was
appropriate to conclude the review.WT/GC/M/50
Page 6
The representative of the European Communities said that the continued use of the exemption
under paragraph 3 of GATT 1994 was an anachronism.  It was hard to believe that more than 50 years
after this exemption had first been granted, the United States still found it necessary to have recourse
to it.  There was no economic justification for the exemption, and therefore the review should be
substantive and should go beyond a pure pro-forma exercise.  Regarding the US statement that therehad been no change in the legislation, not only was this not the case, but a new element had been
introduced relating to US national security requirements.  This new element would have to be
considered with great care and scrutiny, since it could have serious implications for the organization.
The representative of Hong Kong, China said that the Jones Act was outdated legislation that
was inconsistent with the fundamental principles of the GATT/WTO and did not meet modern
business needs.  It was also incompatible with the United States' generally liberal services regime and
its call for further liberalisation of trade in services in the new round of multilateral trade negotiations.
The collapse of the maritime transport services negotiations in June 1996 had been disappointing.
Hong Kong, China was among the few Members who had maintained their commitments in this
sector, notwithstanding the US decision to walk away from the negotiations at the very last moment.
Maritime transport was a major service sector, and it was important for the US to be a party to theAgreement in this area.  Reform of the Jones Act wa s instrumental to enabling the US to move in this
sector and hence to the successful conclusion of the negotiations, and the US should take immediate
action.  The exemption under paragraph 3(b) was a major impediment to any meaningful market
access – not to mention national treatment – commitment.   To facilitate Members' consideration of the
US request for continuation of the exemption under paragraph 3(b), the US should provide theinformation requested by Japan and others and should demonstrate that the conditions which created
the need for the exemption still prevailed.  This is sue was of a trade and systemic interest to his
delegation, and the review required under paragraph 3(b) had to be substantive and related to the
WTO's ongoing work.
The representative of Korea said the fact that no legislative changes had taken place did not
automatically imply that the conditions which had created the need for the exemption still prevailed.
Moreover, even if these conditions had remained the same, it was for the Ministerial Conference to
assess this in accordance with paragraph 3(b) of GATT 1994.  There should be a thorough discussion
of this issue in an appropriate forum to be decided by the General Council.  Paragraph 3 of GATT1994 allowed a serious derogation from the principle of national treatment.  Therefore, the Jones Act
should be reviewed substantively in a manner th at would enhance its compatibility with the
fundamental principles of the multilateral trading system.
The representative of Panama said that the review should be carried out in such a way as to
identify the substance of the amendments to the US legislation.
The representative of Australia said that this issue was very important both in terms of the
systemic operation of this organization and in terms of Australia's direct commercial interests in the
future of the legislation at issue.  Therefore, the review should be a substantive one.
The General Council took note of the statements and agreed  to revert to this matter at its next
meeting.WT/GC/M/50
Page 7
5. Review of the Dispute Settlement Understanding
(a) Report to the General Council
The Chairman recalled that at its meeting on 6 October the General Council had heard a
statement by the then-Chairman of the Dispute Settlement Body (DSB) concerning the mandated
review of the Dispute Settlement Understanding (DSU), and had had an extensive discussion of how
to proceed and what action to take in regard to th is review.  It had been agreed at that meeting to
revert to this matter at the present meeting.
Mr. Bryn (Norway), Chairman of the DSB, recalled that in accordance with the Ministerial
Decision on the Application and Review of the Understanding on Rules and Procedures Governing
the Settlement of Disputes, the Ministerial Conference had been invited to complete a full review of
dispute settlement rules and procedures under the WTO within four years after the entry into force of
the Agreement Establishing the WTO.  He recalled in particular that the last paragraph of the Decisionprovided that the Ministerial Conference will take "a decision on the occasion of its first meeting after
the completion of the review, whether to continue, m odify or terminate such dispute settlement rules
and procedures".  It had not been possible to reach agreement on a report by the DSB on the question
of the DSU review.  Therefore, he had been authorized by the DSB to make a statement in his
capacity as Chairman on his own responsibility.  He believed that the elements of that statementreflected the general trend of the discussions on this matter in the DSB on 27 October and
3 November 1999.  However, that statement should be read in conjunction with the individual
statements by Members at DSB meetings, setting out  specific national positions.  His statement was as
follows:
"1. I wish to note the oral report
5 to the General Council on 6 October 1999 of Mr. Akao,
then Chairman of the DSB.  That report provides a review of the discussions and actions taken
pursuant to the Ministerial Decision (Marrakesh) and the General Council Decision, taken at
its meeting of 9-11 and 18 December 1998, to continue and complete the review process by
end of July 1999.
In light of the discussions in the DSB at its meeting on 27 October and 3 November
1999, I would note the following points:
2. The 31 July 1999 deadline for the completion of the review process has lapsed.
Informal consultations among some interested delegations have continued after 31 July 1999.
3. It is my impression that there is a consensus view that the WTO dispute settlement
rules and procedures have proved an effective and important instrument in enforcing the rules
of the multilateral trading system and that it could be further improved.
4. Accordingly, I would propos e that the General Council:
(a) take note of all the discussions that have taken place during the review; and(b) note that in the context of the informal consultations among some interested
delegations mentioned above, it is still possible that proposals to amend the DSUwhich may constitute a consensus can emerge in time for a decision at the Third
Ministerial Conference."
                                                     
5 See WT/GC/M/48, page 25.WT/GC/M/50
Page 8
Many representatives expressed appreciation to the DSB Chairman for his statement and to
Mr. Suzuki (Japan) for the text he had produced.
The representative of Egypt reiterated her delegation's position as follows:  the mandate for
the review had expired on 31 July 1999 and there had been no consensus to extend it;  the ongoing
informal consultations lacked a legal basis;  a year and a half of consultations had failed to produce atext of amendments on which there was consensus;  and the three weeks remaining before the Third
Ministerial Conference would not be sufficient to produce a text that was balanced, took Members'
interests into consideration, and could be carefully studied in capitals.
The representative of Malaysia said that his delegation could go along with the DSB
Chairman's statement made on his own responsibility, but would have preferred that the latter reflect
more clearly the fact that the legal mandate for the review had ended.  No one had contested that fact,which the former DSB Chairman's statement to the General Council on 6 October 1999 had clearly
stated.  Malaysia wanted to reiterate that (i) the legal mandate for the DSU review had expired;  (ii)
there was no consensus to modify the existing DSU;  (iii) the ongoing consultations among some
interested delegations that had been chaired by Mr. Suzuki had been completely informal, lacked a
legal mandate and should not be mandated either by the DSB or the General Council;  (iv) anypossible proposals to amend the DSU at the Third Ministerial Conference would have to be agreed by
consensus as stated by the DSB Chairman;  (v) Malaysia had repeatedly stated in the DSB and in the
General Council that it would not be able to agre e to the inclusion of any proposals on transparency;
and (vi) in the absence of any agreement to ame nd the DSU, the current DSU would remain in force.
The representative of Hong Kong, China recalled that the DSB had been given a mandate by
the General Council in December 1998 to continue and complete the review process, including the
preparation of the report, by 31 July 1999.  That mandate had expired on 31 July 1999 and there had
been no further decision by the General Council to extend it.  No consensus had ever been reached on
any proposed amendments to the DSU arising from the review process, nor was there a consensus toterminate the DSU.  Informal consultations among interested delegations had continued after 31 July,
and his delegation had participated positively and constructively in those consultations.  However,
these consultations had to date not produced any consensus text on possible amendments to the
current DSU.  Among other things, most delegations remained strongly opposed to the so-called
"transparency proposals".  The WTO dispute settlement rules and procedures were a central elementin providing security and predictability to the mu ltilateral trading system.  While the current DSU had
been effective in its operation, there was a general view that ambiguities in the existing DSU
provisions on the implementation of DSB rulings and recommendations should be clarified on an
urgent basis.  Accordingly, Hong Kong, China proposed  that the General Council:  (i) take note of the
fact that the DSB mandate on the review had expired on 31 July 1999 and that no consensus had been
reached regarding any proposed amendments to the current DSU, nor had there been a consensus to
terminate the DSU;  and (ii) take note that in the context of the informal consultations amonginterested delegations, it might be possible for a consensus on the proposals relating to
implementation issues, participation of third parties, and technical amendments – and no other
substantive issues – to emerge in time for a decision at the Third Ministerial Conference.  Pending
such a consensus, the current DSU should continue.
The representative of Mexico said that his delegation had noted the fact that the DSB
Chairman had made his report on his own responsibility and that the report was to be read in
conjunction with the statements by delegations at the DSB meetings of 27 October and
3 November 1999.  The informal consultations that had been held after the deadline for the DSU
review had been held amongst some interested delegations, which made it clear that thoseconsultations had not stemmed from any mandate by the DSB or any other WTO body.  As Hong
Kong, China had said, the dispute settlement mechanism was a central element in ensuring security
and predictability in WTO agreements.  Members had the power at any time to propose amendmentsWT/GC/M/50
Page 9
to WTO agreements under Article X of the Agreement Establishing the WTO or in the context of the
preparatory process for the Third Ministerial Conference.  If there was no consensus to amend the
DSU, the current DSU remained in force.  No Memb er had called for the termination of the DSU, and
the logical consequence of a lack of consensus on th e three possibilities provided in the Decision on
the DSU review was that the existing text would continue to apply.
The representative of the United States said that the most recent meeting of the DSB had
made clear that there were still issues to be resolved that required further discussion.  The 1994
Ministerial Decision called for a decision on "whether to continue, modify or terminate" the DSU
rules and procedures.  Thus, a consensus decision was required for any of these alternatives.  It could
not be assumed that continuation of the DSU would happen automatically.  Rather, this would require
a consensus decision of Members, and Members could not and should not assume that the United
States would agree to a continuation of the rules as they were, or that it would agree to a modificationof the rules that was unacceptable to some Members.  It was clear that there were aspects of the
present DSU rules that did not work.  If Members worked together, agreement could be reached on
modifications to the DSU that would fix the problems in a way that all could accept, and that could be
adopted at the Third Ministerial Conference.  However, it was too early to rule out any of the options
provided for in the 1994 Decision.  His delegation was ready to continue discussion with a view toreaching a consensus.  Members should seek that goal and should spend time working on developing
a consensus, rather than speculating on scenario s in the event that no consensus was reached.
The representative of Guatemala reiterated her delegation's position as stated at the October
meeting of the DSB.  The DSU review process had concluded, there was no consensus on the
proposals that had been made, and it would be difficult to reach a consensus before the Third
Ministerial Conference.  Delegations could not continue to discuss this matter in informal meetings in
the time remaining before that Conference.  The Ge neral Council should reiterate the fact that the
current DSU continued in force.
The representative of Thailand said that his delegation shared the DSB Chairman's view that
it was still possible that a consensus proposal to amend the DSU could emerge in time for a decision
at the Third Ministerial Conference.  The DSU had proved to be a useful and effective instrument and
had contributed to a large extent to the credibil ity of the WTO, especially in the eyes of the
developing world.  This was evident in the increasing number of dispute cases that had been broughtby developing countries to the WTO since its establishment.  However, Thailand was convinced that
the DSU could be further improved so that it might better serve the objectives of the multilateral
trading system.  It was therefore important that Members arrive at a consensus at the earliest
opportunity on how this instrument should be improved, and submit a proposal to the Third
Ministerial Conference for decision accordingly.  In the absence of a consensus to modify the DSU,
the General Council should recommend to Ministers that the current DSU be continued.
 The representative of Turkey said that his delegation supported the statement by the DSB
Chairman on the DSU review.  There had been long and comprehensive discussions on this matter
which, unfortunately, had not led to consensus on any issue.  For the sake of the integrity and
credibility of the dispute settlement system, Members had to reach agreement on the provisions of
Articles 21 and 22, as there were inconsistencies in the provisions of these two Articles.  Turkeyattached utmost importance to the need to amend these Articles and had stated that it would join a
consensus on a package of amendments provided this important issue was resolved.  It was crucial to
settle this issue before the Third Ministerial Conference.  The legal problem of the expiration of the
period for the DSU review could be resolved by s ubmitting a proposal to the General Council in line
with Members' wishes.
The representative of Venezuela said that his delegation supported all those who had said that
efforts should be continued as stated by the DSB Chairman in his report.  The Minister's mandateWT/GC/M/50
Page 10
should be that the current DSU would continue should there be no agreement on amendments by the
time of the Third Ministerial Conference, and that the period for the DSU review should be extended
to 31 July 2000.
The representative of Switzerland said that his delegation fully endorsed the statement by the
DSB Chairman.  His delegation maintained the position that the text put forward by Mr. Suzuki, as
the Chairman of the informal group of interest ed Members on the DSU review, and the results of
those consultations, constituted a balanced package.  This settled in a satisfactory manner some of the
issues to which Switzerland attached great importance, for example, the sequence between
Articles 21.5 and 22, and the strengthening of the surveillance of implementation of findings and
recommendations.  The draft text had not yet achieved a consensus, but did represent a basis for
possible agreement at the Third Ministerial Conference and was the result of a process that had been
underway for some months.  It was important that Members not introduce any new elements into thattext, which Switzerland was convinced was an improvement on the current DSU and strengthened the
multilateral character of the WTO.  Ministers at Seattle should take a decision to amend the DSU on
the basis of that text.  Should no agreement on this be possible, the current DSU should continue to
apply.
The representative of the European Communitie s said that the Community could support the
DSB Chairman's statement and was ready to continue work on the DSU review.
The representative of Hungary said that his delegation welcomed the statement by the DSB
Chairman and shared his view that there was still a possibility that proposals to amend the DSU could
be the basis for a consensus allowing a decision at the Third Ministerial Conference.  The
contradictions and ambiguities that had been discovered in the provisions governing the
implementation of DSB recommendations and rulings constituted the single biggest shortcoming in
the present DSU.  Their elimination was critical to maintaining and strengthening the multilateral
character of the dispute settlement mechanism and wa rranted extra efforts by all.  Hungary hoped that
despite the short time left until the Third Ministerial Conference and the pressures of preparations for
that meeting, it would be possible to solve at l east this outstanding issue.  In the absence of a
consensus on amendments to the DSU, the current DSU should continue, since the dispute settlement
mechanism, which was the pillar of the multilateral trading system, could not be left in a state of
permanent review during the new round of negotiations.
The representative of Canada said that her delegation could support the DSB Chairman's
statement.  Canada was among those who believed it was still possible to agree by consensus on
proposals to amend the DSU at the Third Ministerial Conference, and was prepared to work to that
end.
The representative of Hong Kong, China said that in the event there was no consensus at the
Third Ministerial Conference on whether to continue , modify or terminate the DSU, the current DSU
should continue in force for the following reasons:  Article II.2 of the Marrakesh Agreement
Establishing the World Trade Organization (WTO Agreement) stipulated that "the WTO agreements
and associated legal instruments included in Annexes 1, 2 and 3 are integral parts of the WTO
Agreement, binding on all Members."  The DSU was included in Annex 2 of the WTO Agreement.By virtue of Article II.2 of the WTO Agreement, the DSU was an integral part of that Agreement.  By
virtue of Article XIV.1 of the WTO Agreement and paragraph 3 of the Final Act Embodying the
Results of the Uruguay Round of Multilateral Trade Negotiations, the WTO Agreement and the
Multilateral Trade Agreements annexed thereto had entered into force on 1 January 1995.  The DSU,
being an integral part of the WTO Agreement, had entered into force on the same date.  At the ThirdSession of the Ministerial Conference, Ministers would take a collective decision on whether to
continue, modify or terminate the DSU.  Such a decision would have to be made in accordance with
Rule 28 of the Rules of Procedures for Meetings of the Ministerial Conference and in turn, ArticleWT/GC/M/50
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IX.1 of the WTO Agreement.  After following the decision-making process as required, if the
decision was to modify the DSU, the procedural requ irements as stipulated in Article X.8 of the WTO
Agreement would have to be followed.  If the decision was to terminate the DSU, the relevant
provisions of the WTO Agreement, including Ar ticle II.2, Article III.3, Article IV.3, Footnote 3 to
Article IX.1, Article X.8 and Annex 2 to the WTO Ag reement, would have to be amended as well.
Such WTO amendments or deletions would again be subject to the procedural requirements stipulatedin Article X of the WTO Agreement.  If the decision was to continue the DSU, there would be no
need for further procedural steps, by virtue of Article II.2 and Article XIV.1 of the WTO Agreement.
However, if there was no consensus on any of the options, the following would apply:  Article 54 of
the Vienna Convention on the Law of Treaties provided that the termination of a treaty may take place
in conformity with the provisions of the treaty or at any time by consent of all parties after
consultation with the other contracting States.  If either condition was not fulfilled, the result was that
the DSU would not be terminated, and the only logical conclusion was that the DSU remained as itwas.  In the absence of any decision taken under Article IX.1 of the WTO Agreement and before any
amendment procedures were fully taken, the current DSU would remain in force by virtue of
Articles II.2 and XIV.1 of the WTO Agreement.
The representative of the Czech Republic said that the DSB Chairman's statement was
balanced and did not prejudice any delegation's position.  Like others, his delegation believed it was
still possible to come to an agreement on a number of points contained in Mr. Suzuki's text.  He
invited those delegations who had doubts or objections to that text to join the consultations on this
matter.  These consultations represented an open-ended informal setting where every Member could
participate and present its views.  It would be in the interests of all if, by the time of the ThirdMinisterial Conference, Members could agree not only on the continued application of the DSU but
also on measures to improve its functioning.
The representative of Colombia said that his delegation attached particular importance to the
DSU review and had participated actively in the informal meetings convened by Mr. Suzuki.  The text
proposed constituted an important step towards what might be agreed in the way of amendments to
the DSU.  However, these amendments had to fill the current gaps in the DSU and respond to the
interests of all Members.  While the text was a starting-point, Colombia could not accept it until
improvements had been achieved on Article 21.5, paragraph 8, on the reduction of the consultation
period from 60 to 30 days, and paragraph 18 on transparency.  If there were no consensus onamendments, the DSU should remain in its present form.
The representative of Japan said that the dispute settlement mechanism was a pillar of the
WTO multilateral trading system and played a significant role in ensuring the security and
predictability of that system.  Japan realized the necessity of assuring the fair and effective
functioning of the dispute settlement mechanism.  Thus, it was important for the WTO that Ministers
agree on modifying the DSU at the Third Ministerial Conference.  Japan believed it was still possibleto reach agreement on amendments.  Therefore, it supported Mr. Suzuki's efforts and would continue
its utmost efforts to improve the current dispute settlement system.
The representative of the Philippines noted that the DSB Chairman himself had said that it
had not been possible to reach agreement in the DSB on a report and that he had made the present
report on his own responsibility.  In light of this, no one could disagree with the contents of that
report.  He reiterated his delegation's position as stated in the DSB meetings that the deadline for the
DSU review had expired on 31 July 1999 and could not be extended without a consensus to do so,
that there was nothing to prevent Members from at any time agreeing by consensus on amendment of
the DSU, and that there remained an obligation to formulate a recommendation to Ministers onwhether to continue, modify or terminate the DSU.  However, the failure of the DSB, the General
Council, or the Ministers to take such a decision would have no adverse consequences on the DSU
itself, as the DSU would continue as it was.  The reasons for this were the following:  (i) a MinisterialWT/GC/M/50
Page 12
Declaration imposing an obligation on Ministers did not constitute an amendment to the WTO
Agreement itself;  and (ii) the failure of Ministers to comply with a self-imposed obligation did not
result in the termination of the DSU, which co uld only be terminated in accordance with the
provisions of the WTO Agreement.  Underlying this was the fact that in the event of a conflict
between the Ministerial Declaration and the WTO Agreement, the latter would prevail.
The representative Brazil said that the text that had resulted from the informal consultations
was a good text, and Brazil was ready to try to fine-tune it before the Third Ministerial Conference.
However, his delegation could not consider favorably any text it had not examined carefully.  Also, if
the Chairman of the DSB deemed there was a possibility of consensus on a given text, he did not need
consensus in the DSB to present it.
The representative of Argentina said that his delegation shared the views expressed by the
DSB Chairman regarding the possibility of reaching consensus on amendments to the DSU before the
Third Ministerial Conference, and was willing to continue working to improve the text that had been
discussed in the informal consultations, on the basis that no new elements or proposals would be
introduced.  Any new proposals or re -introduction of proposals that had not achieved a certain degree
of consensus among participants would not promote a favourable outcome in the short timeremaining.  Should there be no consensus to amend the current DSU, the latter would continue in
force in its present form.
The representative of India said that the Suzuki text was a good basis for further work.  India
could support it provided that there was no linkage, direct or indirect, to matters outside this text, that
the universe remained the same, and that there were no substantive negotiations around the text.  India
wanted to reflect on the assessments of the legal situation put forth by various delegations.  However,
the factual situation was that there was no consensus either on the continuation of the DSU or on its
modification, and this was a serious situation.  It was not in any Member's interest to have a DSU that
was in a state of constant review, and India hoped this issue could be resolved as quickly as possible.
The representative of Peru said that the Suzuki text was balanced and constituted a good basis
for consensus.  His delegation hoped that the short time remaining would be sufficient to reach
agreement on it.  Peru could support this text provided there were no substantial changes to it.
The representative of Singapore agreed that the DSU was the backbone of the WTO.  As
such, her delegation had continued to participate in the informal consultations that had taken place
since 31 July 1999.  Singapore would continue to work in the hope of being able to forge a consensus
at the Third Ministerial Conference.  However, s hould that not be possible, the current DSU should
continue.
The Chairman proposed that the General Council take note of the statement by the Chairman
of the DSB and the proposals contained therein and submit them to Ministers for consideration at the
Third Ministerial Conference, and take note of the statements by delegations which would also be
conveyed to Ministers.
The General Council so agreed.
The representative of the Philippines asked whether the General Council was recommending
the DSB Chairman's report to Ministers for decision, or merely forwarding it to Ministers.
The Chairman said that the report was merely being forwarded to Ministers.
The General Council took note of the statements.WT/GC/M/50
Page 13
6. Attendance of Observers at the 1999 Ministerial Conference
(a) Governments (WT/L/321, 324, 331 and 332)
The Chairman recalled that according to paragraph 1 of Annex 2 to the Rules of Procedure for
meetings of WTO bodies, governments seeking observer status in the Ministerial Conference shall
address a communication to that body indicating their reasons for seeking such status, and suchrequests shall be examined on a case-by-case basis.  He drew attention to the communications from
the Bahamas (WT/L/321), the Libyan Arab Ja mahiriya (WT/L/324), Eritrea (WT/L/331) and
Comoros (WT/L/332) requesting observer status at the Third Ministerial Conference, and proposed
that if no objection was received by the Secretariat from any Member by 8 November,
6 these
Governments be granted observer status to that Conference.
The representative of Egypt said that her delegation fully supported the requests of these four
Governments.
The General Council took note of the statements and agreed  to the Chairman's proposal.
(b) International intergovernmental organizations
The Chairman recalled that at its meeting on 15 June 1999 the General Council had agreed
that consultations would be held on requests for observer status to the 1999 Ministerial Conference
from international intergovernmental organizations  (IGOs) that were not observers to the WTO.
Since the meeting of the General Council on 6 October, the Secretariat had received requests for
observer status to the 1999 Ministerial Conference from the Conference of Ministers of Agriculture ofWest and Central Africa (CMA/WCA), the International Civil Aviation Organization (ICAO), the
West African Economic and Monetary Union (WAEMU), the Organisation Internationale de la
Francophonie, the Joint United Nations Programme on HIV/AIDS (UNAIDS), and the United Nations
University ( UNU).  The WAEMU had ad hoc observer st atus in the Committee on Trade and
Development and pending requests for observer status in the General Council, the Committee onRegional Trade Agreements and the Committee on Market Access.  The ICAO had ad hoc observer
status in the Council for Trade in Services.  The CMA/WCA had a pending request for observer status
in the Council for TRIPS.  Members wishing to consult the communications sent to the Secretariat by
these organizations were invited to contact the External Relations Division.  He proposed that unless
any objection was received by the Secretariat from any Member by 8 November, these organizationsbe granted observer status to the Third Ministerial Conference.
The representative of Egypt said that her delegation was concerned about the assessment in
the minutes of the General Council's October 1999 meeting regarding requests from IGOs for
observer status at the 1999 Ministerial Conference.  In her recollection, the General Council had
agreed with the Chairman's statement on the requests for observership to the 1999 Ministerial
Conference by four IGOs on a no-objection basis,  and had decided that unless any objection was
received by the Secretariat from any Member by 21 October 1999, the requests by the four
organizations concerned would be granted.  Egypt want ed to be informed of what had transpired since
then, since at that meeting no objection had been raised to the request by the League of the Arab
States.  In this regard, footnote 4 on page 32 of the minutes of that meeting (WT/GC/M/48) was
misleading and incorrect, as no objection had been raised at that meeting, and those minutes should becorrected.  Had any objection been raised, Egypt would like information from the Chairman on what
the reservation was, where it had come from, and what the present status of the League of Arab States'
                                                     
6 Subsequent to the meeting, the deadline for any objection to the request by the Libyan Arab
Jamahiriya was extended to 19 November 1999.WT/GC/M/50
Page 14
request was.  Her delegation requested that a corrigendum be issued to reflect what had actually
happened at the meeting and what had subsequently transpired, and proposed that the objections
raised to the request be attached to the corrigendum and circulated to all Members.
The Chairman recalled that on 6 October the General Council had decided that unless any
objection was received by the Secretariat from any Member by 21 October 1999, the four IGOs
concerned would be granted observer status to the 1999 Ministerial Conference.  However,
subsequent to that meeting, objections to the League of Arab States' request had been raised.  This
was why he had announced that no consensus had been reached on that specific request.
The Secretary of the General Council said that the established procedure since the Singapore
Ministerial Conference had been that when a request for observership was submitted by an IGO that
was not already an observer to the WTO, such a request would be communicated to the GeneralCouncil.  The General Council had then decided that unless any objection was raised by any Member,
such a request would be considered as accepted.  Concerning the League of Arab States' request, two
objections had been received in writing by the Secretariat.  This indicated that a consensus had not
been reached on the request, and the Chairman of the General Council was now in the process of
informing Members of this.
The representative of Egypt said that her delegation was aware of the established procedures.
However, two issues still remained.  First, the minutes of the October General Council meeting were
not accurate since no objection had been raised at that meeting to the League of Arab States' request.
Second, the principles of transparency and fairness had not been respected in the case of the Leagueof Arab States' request, as the process had been se lective.  On 6 October the Chairman had concluded
that unless any objection was received by the Secretariat from any Member by 21 October, the
requests by the four IGOs would be accepted.  However, the General Council was being informed
only at the present meeting of the objections raised, almost ten days after the deadline had expired.
The General Council should have been informed before the expiration of the 21 October deadline, andher delegation wanted to know why it had not been, in the interests of transparency and fairness.
The Secretary of the General Council said that the Secretariat would issue a corrigendum to
the minutes.  Footnote 4 had been inserted in th e minutes in the spirit of transparency to inform
Members of what had occurred since the General Council's October meeting.  He clarified that thetwo objections in question had been received by the Secretariat before the 21 October deadline.  In
such a situation, the practice had been that the organization concerned would be immediately
informed, and this had been done in a formal communication by the Secretariat.  Members were to be
informed at the first opportunity, which happened to be the present meeting.  However, if Members so
wished, the Secretariat could inform Members before the subsequent General Council meeting as to
whether an objection to a request for observership had been received.
The representative of the Philippines asked whether it was also part of the Secretariat's
practice to disclose the identities of delegations who had objected to a request.  If this was the case, he
wondered why this information had not been communicated to Members.
The representative of Bulgaria said that the relevant item of the airgram convening the present
meeting did not contain any reference to WTO documents.  Therefore, he asked that the list of
governments and IGOs that were to be observers at the 1999 Ministerial Conference be provided as a
WTO document.  The 8 November deadline that had been established was too close.  Given the fact
that the airgram convening the General Council was issued ten days prior to the date set for the
meeting, he suggested the 8 November deadline be extended in order to give his Government time tobe informed which entities would be observers to the 1999 Ministerial Conference.WT/GC/M/50
Page 15
The Director of the External Relations Division said that the 8 November deadline had been
set to allow the IGOs concerned to make arrang ements, in the limited time left, to enable their
representatives to attend the 1999 Ministerial Conferen ce.  Extending that deadline by ten days would
considerably complicate that task.
The representative of the United States said that in the interest of transparency, he wished to
indicate that his delegation had opposed the League of Arab States' request for observership, as the
United States believed that the League of Arab States had sponsored certain political and economic
activities that were incompatible with the WTO's objectives.
The representative of Israel said that his delegation also had objected to the League of Arab
States' request and concurred with the United States' explanations for this.  Israel could not see the
direct link between a political organization such as the League and the WTO's trade-related work.
The Secretary of the General Council, in respon se to the Philippines' question, said that in
situations such as this the Secretariat did not, as a rule, disclose names of delegations that had
objected to a specific request.  This was the responsibility of each Government.
The Chairman, in response to Bulgaria's questions, said that the countries that had applied for
observership to the 1999 Ministerial Conference were the Bahamas, Libyan Arab Jamahiriya, Eritrea
and Comoros.
The representative of Bulgaria said that for the sake of transparency, information concerning
the IGOs that had applied for observership to the 1999 Ministerial Conference should have been
circulated to Members ten days before the present meeting.
The Secretary of the General Council said that some of these requests had been received by
the Secretariat only 48 hours before the present meeting, and this was the reason they did not appear
on the airgram.  However, written requests by specific Governments had been circulated as
documents to all Members.
The representative of Egypt said that her de legation wished to be informed before the
expiration of the deadline whether any objections had been received regarding requests for observer
status at the 1999 Ministerial Conference.  She thanked the United States and Israel for their
transparency.  However, her delegation did not agree that the League of Arab States was only a
political regional organization.  A simple reading of  the application of the League of the Arab States
showed that it had every right to ask for observership to the WTO.  The Leagues of Arab States had
two organs:  the Council of the Arab Economic Unit y, and the ECOSOC.  The League of Arab States
also oversaw the Arab Common Market.
The representative of Bulgaria asked whether the General Council was now taking a decision
on requests received prior to the current meeting or on those that would be tabled before the
8 November deadline.
The Director of the External Relations Division said that only requests by those organizations
listed by the Chairman in his introduction were before the General Council for consideration, and the
8 November deadline applied only to them.  No other requests were being considered at the present
meeting.
The representative of Tunisia said that his delegation concurred with Egypt's statement.  The
League of Arab States had both a political vocation and also carried out important economic
activities.  It was surrealistic that the General Council was agreeing to grant observership to UNAIDS
–  which had no trade-related activities – while excluding an organization such as the League of ArabWT/GC/M/50
Page 16
States, whose membership included WTO Members.  Issues raised by the United States related to
security, and therefore would fall under Articles XX and XXI of the GATT 1994, on general
exceptions and security exceptions, respectively.
The Chairman said that the IGO requests for observership that were before the General
Council were not being automatically approved, but were subject to approval by 8 November.
Therefore, there might be objections to the requests by UNAIDS or the UN University.  This was
without prejudice to the statement by Tunisia.
The representative of Israel said that an organization calling for primary, secondary and
tertiary boycotts was not complying with the basic WTO rule of non-discrimination.  This was one of
the reasons Israel had opposed the League of Arab States' request.
The General Council took note of the statements and agreed  to the Chairman's proposal.
7. Waivers under Article IX of the WTO Agreement
(a) Harmonized System – Requests for extensions of waivers
(i) Bangladesh (G/L/324, G/C/W/162)
(ii) Nicaragua (G/L/320, G/C/W/160)
(iii) Sri Lanka (G/L/321, G/C/W/161)
The Chairman drew attention to the reques ts from Bangladesh (G/L/324), Nicaragua
(G/L/320) and Sri Lanka (G/L/321) for extensions until 30 April 2000 of waivers previously granted
in connection with their implementation of the Harmonized System, and to the related draft decisions
(Bangladesh - G/C/W/162, Nicaragua - G/C/W/160, and Sri La nka - G/C/W/161).
Mr. Farrell (New Zealand), Chairman of the Council for Trade in Goods, reported on the
consideration of these requests by that Council.
The Chairman proposed that, in accordance with the Decision-making Procedures under
Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93), the General
Council adopt the draft decisions in G/C/W/160 through 162.
The General Council so agreed.7
(b) Zambia – Renegotiation of Schedule LXXVIII
(i) Request for extension of waiver (G/L/329, G/C/W/163)
The Chairman drew attention to the request fr om Zambia (G/L/329) for an extension until
30 April 2000 of the waiver previously granted in connection with the renegotiation of its schedule,
and to the related draft decision in G/C/W/163.
Mr. Farrell (New Zealand), Chairman of the Council for Trade in Goods, reported on the
consideration of this request by that Council.
                                                     
7 The Decisions were subsequently circulated in WT/L/334 thro ugh 336.WT/GC/M/50
Page 17
The Chairman proposed that in accordance with the Decision-making Procedures under
Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93), the General
Council adopt the draft decision (G/C/W/163).
The General Council so agreed.8
(c) Decision on the introduction of Harmonized System changes into WTO Schedules of tariff
concessions on 1 January 1996
(i) Extension of time-limit (G/C/W/165)
The Chairman drew attention to the draft decision in G/C/W/165 to suspend the application of
the provisions of Article II  of GATT 1994 until 30 April 2000.
Mr. Farrell (New Zealand), Chairman of the Council for Trade in Goods, reported on the
consideration of the draft decision by that Council.
The Chairman proposed that in accordance with the Decision-making Procedures under
Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93), the General
Council adopt the draft decision in G/C/W/165.
The General Council so agreed.9
(d) Review of waivers pursuant to Article IX:4 of the WTO Agreement
(i) Canada – CARIBCAN, granted on 14 Octobe r 1996 until 31 December 2006 (WT/L/185 and
323)
(ii) Cuba – Article XV:6, granted on 14 Octobe r 1996 until 31 December 2001 (WT/L/182 and
320)
(iii) EC – The Fourth ACP-EC Convention of Lomé, granted on 14 October 1996 until
29 February 2000 (WT/L/186, WT/L /325 and Add.1 and Add.1/Corr.1)
(iv) EC/France – Trading arrangements with Morocco, granted on 9-11 and 18 December 1998
until 31 December 1999 (WT/L/294)
(v) Hungary – Agricultural export subsidies, granted on 22 October 1997 until
31 December 2001 (WT/L/238 and 322)
(vi) United States – Andean Trade Preference Act, granted on 14 October 1996 until
4 December 2001 (WT/L/184 and 328)
(vii) United States – Caribbean Basin Economic Recovery Act, granted on 15 November 1995
until 31 December 2005 (WT/L/104 and 329)
(viii) United States – Former Trust Territory of the Pacific Islands, granted on 14 October 1996
until 31 December 2006 (WT/L/183 and 327)
                                                     
8 The Decision was subsequently circulated in WT/L/337.
9 The Decision was subsequently circulated in WT/L/338.WT/GC/M/50
Page 18
The Chairman recalled that under paragraph 4 of Article IX of the WTO Agreement, 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.  That
paragraph further provides that 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 abov e eight waivers were before the General Council for
review.
The representative of the European Communities said that regarding sub-item (iv), this waiver
had originally had an unlimited period of validity.  At the General Council meeting in December
1998, the Community had requested an extension of the waiver for a period of one year, until
31 December 1999, in the expectation that during that period the need for the waiver would lapse
through the entry into force of the Community's  Euro-Mediterranean Agreement with Morocco.  As
that Agreement covered matters of Community fu ll competence and shared competence between the
European Communities and the member States, the latter needed to ratify the Agreement.  That
ratification process had been completed, but in order for the Agreement to enter into force, there was
one further element of Community legal procedure that needed to be completed, which was a decision
by the Council on the conclusion of the Agreement,  after which the Agreement would then enter into
force on the first day of the second month following this conclusion.  As the Community had hoped
that the various stages of these formalities woul d have been completed by the present time and that
there would be no need for a report on the waiver, his statement should be regarded as an oral report
on the waiver.  His delegation expected to make a request for a short extension of the waiver until the
ratification process was completed.  Regarding sub-items (vi) and (vii), his delegation understoodthere were legislative developments concerning these waivers currently under discussion in the
US Congress.  The outcome of those discussions would help Members to complete a meaningful
review of those waivers, and he asked the United States to inform Members of the outcome of those
deliberations.
The representative of the United States said there were no legislative developments underway
in the US relative to the waivers before the General Council in sub-items (vi) and (vii).  The previous
day the US Senate had approved legislation that would enhance features of the preference programme
for CBERA beneficiaries, but there were additional steps in the legislative process that had to be
accomplished before those enhancements could ente r into force.  The existing waiver governed
existing preferences, and would clearly not be sufficient to cover significant changes to the CBERA
programme.  Should new legislation providing for enhancement of that programme enter into force,
the US would have to come back to the WTO for a different or revised waiver.  It was not clear why
the Community had given no indication of a concern relative to the existing waiver when the matter
had been considered recently by the Council on Trade in Goods, and why the Community – which
had so strongly defended the economic interests of this region in the long debate over bananas trade –
would now question the US intent to enhance pref erences to the region.  Regarding the Community's
request for more information on CBI-related matters, it was curious that it was asking for information
on pending legislation that did not even pertain directly to the waiver under consideration, when at the
same time it had not even produced a report on the waiver for French trading relations with Morocco.
He asked the Community to advise Members as to when the required written report on the operation
of that waiver would be provided.
The General Council took note of the statements and of the reports in documents WT/L/320,
322, 323, 325 and Add.1 and Add.1/Corr.1, 327, 328 and 329.WT/GC/M/50
Page 19
8. Trade facilitation – Status report on work carried out by the Council for Trade in
Goods under paragraph 21 of the Singapore Ministerial Declaration (G/L/333)
The Chairman recalled that paragraph 21 of the Singapore Ministerial Declaration directs the
Council for Trade in Goods "to undertake explorat ory and analytical work, drawing on the work of
other relevant organizations, on the simplification of trade procedures in order to assess the scope for
WTO rules in this area."  He drew attention to a status report by the Council for Trade in Goods onthis work (G/L/333).
Mr. Farrell (New Zealand), Chairman of the Council for Trade in Goods, introducing the
report, said that in accordance with the mandate given in Singapore, the Council for Trade in Goods
(CTG) had undertaken an extensive work programm e on trade facilitation.  Following an introductory
phase devoted largely to an assessment of the scope of work in other intergovernmental organizations,
a Trade Facilitation Symposium had been organized in March 1998, where speakers from variousbusiness sectors had addressed the trade facilitation problems their industries faced.
Intergovernmental organizations had described their ongoing work on trade facilitation.  After the
Symposium the CTG had held four informal meetings on trade facilitation in September and
December 1998 and in April and June 1999, which had addressed a wide array of trade facilitation
issues.  Based on input from a number of its subsidiary bodies, from the TRIPS and ServicesCouncils, as well as from the Committee on Trade and Development, the CTG had also discussed
WTO Agreements relating to, or including provisions on, trade facilitation.  The CTG had subsequently
agreed to present a status report on the work carried out since the Singapore Ministerial Conference
which would inform Ministers on the state of play regarding the work programme on trade
facilitation.
The General Council took note of the statement and of the status report in G/L/333.
9. Review of WTO activities
Reports of:
(a) General Council (WT/GC/W/345 and Add.1), Dispute Settlement Body (WT/DSB/16 and
Add.1 and Corr.1), Trade Policy Review Body  (WT/TPR/69), sectoral Councils (G/L/337,
S/C/10, IP/C/19), Committees on Trade and Development (WT/COMTD/22), Balance-of-Payments Restrictions (WT/BOP/R/47), Budg et, Finance and Administration (WT/BFA/43),
and Regional Trade Agreements (WT/REG/8)
(b) Committee on Trade and Environment (WT/CTE/4)
(c) Working Groups on the Relationship between Trade and Investment (WT/GTI/3), the
Interaction between Trade and Competition Policy (WT/WGTCP/3), and Transparency in
Government Procurement (WT/WGTGP/3)
(d) Committees under the Plurilateral Trade Agreements (GPA/30 and Job No. 6358)
The Chairman recalled that under this item the General Council would be conducting a
review of WTO activities in pursuance of the Decision concerning procedures for an annual overview
of WTO activities and for reporting under the WTO (WT/L/105).  He drew attention to the annual
reports of the various Committees and Councils in the documents referred to under this item, and
noted that the Chairman of the Committee on Trade in Civil Aircraft had sent him a communicationconcerning the work of that Committee which had been circulated in document Job No. 6358.  HeWT/GC/M/50
Page 20
invited the Chairpersons of the respective WTO bodies to introduce the reports from these bodies
before turning to the report of the General Council.
Mr. Kåre Bryn (Norway), Chairman of the Dispute Settlement Body, said that the DSB's
annual report provided factual information on its activities thus far in 1999 in implementing the
provisions of the DSU.  In 1999 the DSB had continued to discharge its various tasks of administeringthe system of dispute settlement in accordance with Article 2.1 of the DSU.  These tasks had included
the authority to establish panels, adopt panel and Appellate Body reports, maintain surveillance of
implementation of rulings and recommendations, and authorize suspension of concessions and other
obligations under the covered agreements.  In 1999 the dispute settlement mechanism had continued
to be used frequently by both developed and developing countries to resolve their differences in the
area of trade.  In many respects, 1999 had also been a year during which the DSB had had to deal with
new procedural elements in the dispute settlement process.  During the period covered by the report,the DSB had held 18 meetings, 33 new requests for consultations had been filed, and dispute
settlement panels had been established in respect of 19 requests.  Appellate Body and panel reports
had been adopted with regard to six different matters.  In three of those matters the Appellate Body
had modified the panels' findings, and in the other three, the panels' findings had been upheld.  In
addition, panel reports had been adopted with regard to two matters where the parties had not soughtrecourse to Appellate Body proceedings.  In the area of implementation, the DSB had heard status
reports on progress in implementation with regard to six different matters.  In three of those matters,
the process of implementation had been completed as foreseen.  For the first time, recourse to Article
21.5 of the DSU had been sought by Members with regard to three matters, in order to examine
compliance with the rulings and recommendations adopted by the DSB.  Regarding one matter, theDSB had already adopted an Article 21.5 panel report, and in the other, two such proceedings were
ongoing.  Also for the first time, the DSB had authorized suspension of concessions in respect of three
requests under Article 22.7 of the DSU.  These authorizations had been granted on the basis of the
Arbitrators' decisions on the level of suspension of concessions.  Pursuant to the Ministerial Decision
on the Application and Review of the Understanding on Rules and Procedures Governing theSettlement of Disputes, the DSB had undertaken a revi ew of the DSU.  Following the extension of the
deadline for the completion of the review, intensive discussions had been held up to 31 July 1999.
Subsequently, at the October 1999 meeting of the General Council, the then-Chairman of the DSB
had made an oral report on the DSU review, and he himself had made a statement in connection with
the DSU review at the present meeting.
Mr. Jean-Marie Noirfalisse, Chairman of the Trade Policy Review Body, said that the Trade
Policy Review Body's (TPRB) report was purely factua l.  He stressed that the reviews had been held
on time and that the preliminary reports prepared by the Secretariat had been generally well
appreciated.  He drew attention to paragraph 7 of the report concerning the appraisal of the operation
of the TPRB to be forwarded to the Third Ministerial Conference.  There had been a number of
discussions of this text and he welcomed the spir it of cooperation shown by all who had participated
in this exercise.  The TPRB made possible a dialogue among all Members which contributed to the
goal of transparency.
Mr. Roger Farrell (New Zealand), Chairman of the Council for Trade in Goods, said that
during the period under review the Council had met four times and had considered a range of matters.
It had taken note of the final report of the Working Party on Preshipment Inspection which had
concluded its work at the end of March 1999.  On trade facilitation, it had adopted the status report in
G/L/333.  Regarding the TRIMS Agreement, the Council had considered a request by the Philippines
for extension of a transition period pursuant to Article 5.3 and had agreed to hold further informal
consultations on this matter.  It had also begun the review of the operation of the TRIMS Agreementprovided for in Article 9 of that Agreement.  Regarding the Understanding on the Interpretation of
Article XVII of GATT 1994, the Council had adopted an  illustrative list of relationships between
governments and state trading enterprises and the kinds of activities engaged in by such enterprises.WT/GC/M/50
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The Council had also heard periodic reports on the work of the Market Access Committee, as well as
on the continuation of the Harmonization Work Programme provided for in the Agreement on Rules
of Origin.  Lastly, it had adopted the terms of reference for the examination of 20 regional agreements
by the Committee on Regional Trade Agreements.
Mr. Hugo Cayrús (Uruguay), in the absence of Mr. Carlos Pérez del Castillo (Uruguay),
Chairman of the Council for TRIPS, said that some of the main features of the Council's work in 1999
had been continuing the review of national implementing legislation;  agreeing on the practical
arrangements for the reviews of the TRIPS implementing legislation of developing country Members
in 2000 and 2001;  monitoring the technical cooperation provided to developing and least-developed
country Members;  and continuing work on the built-in agenda of the TRIPS Agreement, in respect of
"non-violation" disputes in the TRIPS area, geographical indications in the context of Articles 24.2
and 23.4, as well as on the review of the provisions of Article 27.3(b) concerning the protection ofplant and animal inventions.  In regard to non-violation disputes, the TRIPS Agreement required the
Council to "submit its recommendations to the Ministerial Conference for approval" before the end of
1999.  As indicated in paragraph 26 of the report, the Council had agreed to reflect in the report that
"Most Members have expressed themselves in favour of recommending to the Ministerial Conference
an extension of the period referred to in Article 64.2 of the Agreement, in order to allow the Councilto further examine the scope and modalities of 'non-violation' complaints under the TRIPS
Agreement.  One Member has made it clear that it is not in a position to join a consensus to that
effect.  Some Members were of the view that, in the absence of a decision of the Ministerial
Conference pursuant to Article 64.3, there would be no scope for 'non-violation' complaints under the
TRIPS Agreement.  Some other Members were not in a position to share this view."
Miss Amy Yuen (Hong Kong, China), in the absence of Mr. Stuart Robinson (Hong Kong,
China) Chairman of the Council for Trade in Services, said that annexed to the report, which was of a
factual nature, were the reports of the subsidiary bodies, namely the Committee on SpecificCommitments, the Committee on Trade in Financial Services, the Working Party on DomesticRegulation and the Working Party on GATS Rules.  The Council had conducted a number of
significant activities during the period covered by the report, most important of which were those
associated with the preparation for the new round of negotiations, namely, the exchange of
information exercise, the assessment of trade in serv ices and the discussion of the guidelines for the
negotiations.  At its September and October meetings the Council had also started discussing themandated reviews of MFN exemptions and the Annex on Air Transport.  Another significant area of
work related to the Work Programme on Electronic Commerce.  The results of the Council's
deliberations had been forwarded to the General Council.  Other notable matters were the coming into
force of the Fifth Protocol on Financial Services, agreement on Article 21 procedures, and adoption of
disciplines on accountancy.
Mrs. Absa Claude Diallo (Senegal), Chairperson of the Committee on Trade and
Development, said that the Committee on Trade and Development (CTD) had held five sessions in
1999.  Seven main topics had been at the centre of the Committee's work:  review of special and
differential treatment provisions in the WTO Agreements;  concerns and problems of small
economies;  the development dimensions of trade facilitation and of electronic commerce;  technical
assistance and training;  the development of a waiver covering preferential tariff treatment for least-developed countries in other developing country markets;  and possible inputs into the Third
Ministerial Conference, together with the Committee' s future work programme.  Many of the topics
raised in the Committee had found a strong echo in the ongoing preparatory work for the Third
Ministerial Conference.  This was certainly true for the issues of special and differential treatment, the
concerns of small economies, and the ongoing discussions on the future shape, nature and financing oftechnical assistance.  This showed the continuing im portance of development issues in the work of the
WTO and the need to maintain the CTD as a st rong and effective forum for monitoring these
questions.  The Committee's work programme for the year 2000 would be, in part, defined in the lightWT/GC/M/50
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of the outcome of the Third Ministerial Conference, and the CTD would hold an informal meeting in
January 2000 to discuss this.  However, it was already clear that the Committee would be required to
continue its examination of the technical cooperation programmes of the WTO, in the light of a
mandated evaluation.  In addition, a seminar on special and differential treatment was planned for
February 2000.  During 1999, the Committee had received a number of guests from other
organizations to discuss their operations in the field of trade and development.  These includedrepresentatives from the Commonwealth Secretariat and World Bank, who had presented the draft
report of the joint Commonwealth Secretariat/World Bank Task Force on Small States, and the
Development Assistance Committee of the OECD.  In 1999, the Sub-Committee on Least Developed
Countries had continued its monitoring of the follow-up to the 1997 High-Level Meeting on
Integrated Initiatives for Least-developed Countries' Trade Development.  On the basis of a
Secretariat paper, the Sub-Committee had discussed issues of market access and supply-side
constraints facing least-developed countries.  The Secretariat had also circulated new information onthe market access conditions facing products exporte d by individual least-developed countries.  The
Sub-Committee had also reviewed difficulties faced by least-developed countries in implementing
WTO Agreements and the response to such difficulties, on the basis of a background note by the
Secretariat.  However, the main focus of the work of the Sub-Committee had continued to be the
monitoring of implementation of the Integrated Framework for Trade-Related Technical Assistance toLDCs (IF).  The Sub-Committee had heard presentations by the representatives of UNCTAD, the IMF
and UNDP on their work in connection with the IF and updates by the WTO Secretariat on its
activities.  A number of "round-table" meetings under the IF were imminent and the Sub-Committee
would meet on 19 November to review progress in this regard.
Mr. Thomas Jodko (Poland), Chairman of the Committee on Balance-of-Payments
Restrictions, said that during the period covered by the report the Committee had held consultations
with Romania, Bangladesh and the Slovak Republic.  In all three cases the Committee had found the
actions taken by those countries to be compatible with the respective provisions of the GATT /WTO.
Members had made recommendations and offered encouragement regarding the reasons for themeasures taken by these three Members.  The consultations foreseen with Pakistan had not yet taken
place as this country had requested their postponement.  The last paragraph of the report contained
information on the actions taken by Bulgaria, Tunisia and Nigeria in connection with past
consultations.
Mrs. Laurence Dubois-Destrizais (France), Ch airperson of the Committee on Budget, Finance
and Administration, noted that the Committee had reached agreement on the establishment of the
minimum contribution applied to the least-developed country Members, and that this agreement
would be formally adopted along with the budget  for the year 2000.  As a result, the minimum
contribution for these Members for the year 2000 would be Sw F 19,000 instead of Sw F 30,000.
Second, the joint meeting held with the Committee on Trade and Development to discuss technical
assistance matters had been most useful.  While this meeting had not been conclusive, it had beenhelpful in clarifying the issues and in seeking so lutions.  This matter was now in the hands of the
Chairman and the Director-General and was ripe fo r a decision at the Third Ministerial Conference on
the financing of technical assistance.
Mr. István Major (Hungary), Chairman of the Committee on Trade and Environment, said
that t he Committee on Trade and Environment (CTE) had held three meetings in 1999 and had
continued to discuss all items on the  work programme set out in the Marrakesh Ministerial Decision on
Trade and Environment, based on a cluster approach under the themes of market access and the linkages
between the multilateral environment and trade agendas.   With respect to market access, the discussions
had focused primarily on the sectors of agriculture  and fisheries, and had also dealt with energy,
forestry, non-ferrous metals, textiles and clothing, leather and environmental services.  The sectoral
discussions had highlighted areas where the removal of  trade restrictions and distortions could be bothWT/GC/M/50
Page 23
environmentally and economically beneficial and woul d thus result in "win-win " opportunities for trade
and environment.  Concerning the linkages between the multilateral environment and trade agendas, the
CTE had held an information session with five secr etariats of Multilateral Environmental Agreements
(MEAs) in order to inform Members on the trade- related developments in these agreements.  This
meeting had illustrated how trade-related measures function in MEAs and had helped to deepen the
understanding of the MEA relationship to the multilateral trading system.  Throughout the course of
1999, there had been a constructive atmosphere of  cooperation and willingness to move ahead and to
understand the complex issues on the CTE's agenda.  The CTE's work was important not only fortrade and the environment, but fo r the multilateral trading system as a whole, and the public scrutiny
of the WTO and the CTE's work would continue.  He was confident that the spirit of cooperation thathad helped to fac ilitate the C TE's work in 1999 would prevail in 2000, as Members continued to
advance the CTE's challenging work programme.
Mr. Joong Keun Kim (Korea), in the absence of Mr. Man Soon Chang (Korea), Chairman of
the Working Group on the Relationship between Trade and Investment, said that pursuant to the
General Council decision of 18 December 1998, the Working Group had continued the educational
work it had been undertaking on the basis of the mandate contained in paragraph 20 of the Singapore
Ministerial Declaration.  The report provided an overview of that work.
Mr. Ronald Saborío Soto (Costa Rica), Chairman of the Working Group on Transparency in
Government Procurement, said that the Working Group had held three meetings in 1999.  An informal
note by the Chairman attached to this report listed  the substantive issues raised in the Working Group
together with the points made on these issues.  Also, in the period covered by the report various
papers had been submitted to the Working Group, including four proposals by six delegations for
draft texts of an agreement on transparency in government procurement.
The Chairman, introducing the report of the General Council for 1999, said that 1999 had
been one of the busiest years on record for the General Council, which had held extensive meetings at
which a number of important and difficult issues were considered.  This included the exercise of
appointing a Director-General, and on a separate track, the lengthy and complex preparations for the
Third Ministerial Conference – a process which had involved extensive formal and informal meetings
of the General Council and which was still ongoing.  The culmination of this work would be theGeneral Council's submission of recommendations to Ministers regarding the WTO's work
programme in the new millennium.  Issues brought to the General Council by Members during the
year included the need for greater coherence among the policies of the WTO, the International
Monetary Fund and the World Bank, on which two special informal meetings had been held.  The
General Council had also continued its oversight role in the implementation of the Work Programmeon Electronic Commerce and had contributed to the input to Ministers on this matter.  He recalled that
on 6 October 1999 the General Council had agreed to forward the reports on electronic commerce of
the Council for Trade in Services, the Council fo r Trade in Goods, the Council for Trade-Related
Aspects of Intellectual Property Rights and the Committee for Trade and Development to the Third
Ministerial Conference with the recommendations tha t:  (a) the General Council revert to the matter of
electronic commerce as early as possible in the year 2000 in the context of its regular work
programme;  and (b) in doing so, the General Council continue its work on electronic commerce on
the basis of the above-mentioned reports submitted by the four relevant WTO bodies;  any further
work that might be carried out by those bodies in the interim period;  and any agreements that might
be reached at the Third Ministerial Conference on the issue of electronic commerce.  In recognition ofthe importance of enhancing public understanding of the benefits of the multilateral trading system,
the General Council had considered the issue of promotion of the institutional image of the WTO and
had authorized informal consultations on this matter so that Members could benefit from their
respective experiences in such activities.  The General Council had also considered the question of the
WTO senior management structure.  A review of the WTO Secretariat and senior managementWT/GC/M/50
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structure would be concluded by the end of September 2000 in conjunction with the review of the
current rules and procedures for appointment of the Director-General.  During the period covered by
the report, the General Council had established three working parties on accession and had adopted
decisions authorizing the accession of three new Members.  Several other accession working parties
were deemed to be close to completing their work.  The General Council had granted two waivers to
Members, had agreed to extend the time-limit on a number of waivers on various WTO obligations,and had considered reports on waivers granted for a period exceeding one year.  He expressed his
gratitude to the Chairpersons of all WTO working bodies for their effort, their determination and their
competence, and also to the Members for the spirit of cooperation they have shown in the difficult
work undertaken.  This, together with a firm commitment to the tradition of consensus in the WTO,
had enabled the organization to move forward to meet the challenges of the new millennium and to
strengthen the WTO's capacity to respond positively to those challenges.
The General Council adopted the report of the Committee on Trade and Development, took
note of the reports of the other WTO bodies, including the reports from the bodies under the
Plurilateral Trade Agreements, and took note of the introductory statements by the Chairpersons.
The representative of Australia said that regarding the draft annual report of the General
Council there were two crucial elements missing in  relation to electronic commerce, both of which
were required by the Declaration on Global Electronic Commerce:  that the General Council was
required "to produce a report on the progress of the work programme and any recommendations for
action" to Ministers at the Third Ministerial Conference, and that the General Council was to review
the Declaration – which included the moratorium on the application of customs duties to electronictransmissions – and to decide by consensus if it should be extended.  The issue of the moratorium
should be among the immediate decisions for the Th ird Ministerial Conference, and Australia urged
Members to reach the necessary consensus to extend it.  Regarding the work programme, work on
electronic commerce could not continue before the General Council had examined the reports of the
subsidiary bodies and had produced a composite report clearly identifying areas of consensus andareas where further action was needed to address gaps and uncertainties in the applicability of trade
rules to electronic commerce.  The next step would be to recommend that the relevant working and
negotiating groups take specific action on specific issues as part of their work programme.  Therefore,
the General Council's annual report should make tw o recommendations to Ministers:  that Members
extend their current practice of not imposing customs duties on electronic transmissions for theduration of the multilateral negotiations, and that the General Council complete the existing work
programme on electronic commerce by producing a report synthesising the findings of the subsidiary
bodies with recommendations for further practical action being referred to relevant working and
negotiating bodies for inclusion in their respective work programmes.  His delegation would be happy
to provide language on those two recommendations.
The representative of Malaysia, speaking on a point of order, said that the recommendations
suggested by Australia for inclusion in the General Council's report should not be part of that report.
Rather, this should be part of the draft Ministerial Declaration, and Australia should make these
suggestions in the context of the preparatory process for the Third Ministerial Conference.  On
another point, he said that the review of the Trade Policy Review Mechanism which had been
successfully concluded had not yet been reflected in the draft Ministerial Declaration.
The Chairman recalled that the matter of how to take the work on electronic commerce
forward had been extensively discussed at the October General Council meeting and that the
conclusion reflected in the minutes of that meeting clearly indicated that the General Council would
not revert to the matter of electronic commerce until after the Third Ministerial Conference, pendingany decision Ministers might make on this matter.  Thus, any proposal at this stage regarding
electronic commerce in the General Council was out of order.WT/GC/M/50
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The representative of India said that his delegation appreciated the Chairman's clarification
regarding the issue of electronic commerce and shared Malaysia's views on this matter.
The Chairman proposed that the General Council adopt the report of the General Council, on
the understanding that the Secretariat would make the necessary adjustments to the draft report in
document WT/GC/W/345 and Add.1 so as to includ e matters considered at the present meeting10, and
take note of the statements.
The General Council so agreed.
10. Appointment of officers of WTO bodies
The Chairman, speaking under "Other Business",  recalled that the General Council normally
took up the appointment of officers of WTO bodies at its final meeting of the year.  However, due to
the intensity of preparations for the Third Minister ial Conference, it had not been possible to carry out
consultations on this matter.  These would be held as soon as possible after that Conference.
The General Council took note of the statement and adjourned .11
__________
                                                     
10 The General Council's annual report was subsequently circulated in document WT/GC/28 and Add.1.
11 The meeting will be reconvened to consider the report of the Committee on Budget, Finance and
Administration under item 2.