RESTRICTEDWORLD TRADE
ORGANIZATIONWT/COMTD/M/26
16 August 1999
(99-3454)
Committee on Trade and Development
Twenty-Sixth Session
NOTE ON THE MEETING OF 7-8 JULY 1999
Chairperson:  H.E. Mrs. Absa Claude Diallo (Senegal)
I. ADOPTION OF THE DRAFT AGENDA
1. The Chairperson welcomed Members to the 26th Session of the Committee on Trade and
Development (CTD).  The revised draft agenda for this meeting was to be found in
WTO/AIR/1115/Rev.1.  She asked if an y member wished to add any other item to the draft agenda, or
to raise any other  matter under the "Other Business" item?  She said she wished to make an
announcement regarding the date for the next formal meeting of the CTD, and proposed that the draftagenda be adopted.
2. It was so agreed
3. The Chairperson recalled that it had been agreed at the 25th Session of the CTD to invite
11 Intergovernmental Organisations on an ad-hoc, meeting-by-meeting, basis.  These organisation
were:  the Arab Maghreb Union (AMU);  th e Economic Community of West African States
(ECOWAS);  the Economic Cooperat ion Organisation (ECO);  the Inter-Arab Investment Guarantee
Corporation;  the Islamic Development Bank (IDB);  the Organisation of African Unity (OAU);
Organisation of the Islamic Conference (OIC);  the South Centre;  the South Pacific Forum;  the West
African Economic and Monetary Union (WAEMU);  and the World Intellectual Property
Organisation (WIPO).  She proposed that  these organisation be invited to the next formal meeting of
the CTD.
4. It was so agreed.
II. CONCERNS AND PROBLEMS OF SMALL ECONOMIES: INTRODUCTION OF
THE DRAFT REPORT OF THE WORLD BANK/COMMONWEALTH  ADVISORY
TASK FORCE ON SMALL ECONOMIES BY REPRESENTATIVES OF THE
WORLD BANK AND THE COMMONWEALTH
5. The Chairperson recalled that the question of small economies had been discussed in the 22nd,
23rd and 24th Sessions of the CTD.  A paper on the subject had been circulated jointly by
six delegations, namely, Barbados, Jamaica, Mauritius, Trinidad and Tobago, Lesotho, and Sri Lanka.
This paper emphasised the fragility and vulnerability, and other characteristics, of  small economies.
The delegations of Fiji and Guatemala had also circulated documents describing their own particularconditions.  A number of delegations had supported the statements made by small economies, and
some had proposed that the Secretariat begin work on the subject of small economies, leading to a
definition of small economies and the development of specific proposals.  The Secretariat had
participated in the meeting held in St. Lucia, in February 1999, during which the question of smallWT/COMTD/M/26
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states had been abundantly discussed, and where concrete proposals had been made regarding,
inter alia , the strengthening of the capacity of small economies trade, and strengthening the
participation of small economies in the multilateral trading system.
6. The Chairperson said that the CTD had been awaiting with great anticipation the results of the
work conducted jointly by the World Bank and the Commonwealth Secretariat on the subject of smallstates.  This work had resulted in a draft report bearing the title "Making Small States Less
Vulnerable: Supporting Development During Globalisation", dated 1 July 1999, which the Secretariat
had received on 5 July 1999 and had circulated to Members on the same day.  The draft document,
which existed only in English, was to be presented to a meeting of the Joint Task Force on
9 July 1999.  This meeting was to be attended by the Ambassador of Mauritius, and Mr. Peter Tulloch
on behalf of the Secretariat.  The draft report was also to be presented to the Commonwealth
Consultative Group on 12 July 1999.  It was her understanding that the draft document would berevised in the light of comments made at this Session of the CTD as well as those made in the
two other meetings, and presented to the Autumn Meeting of the World Bank as well as to the
Commonwealth Ministerial Meeting.
7. The Chairperson welcomed the two Co -Chairmen of the Joint Commonwealth
Secretariat/World Bank Task Force on Small States, namely, Sir Humphrey Maud, SpecialRepresentative of the Secretary General of the Commonwealth, and Mr. Shahid Javed Burki, Special
Representative of the President of the World Bank. Sir Humphrey and Mr. Burki were accompanied
by their colleagues, Dr. Chris Easter  from the Commonwealth Secretariat and
Messrs Constantine Tsatos and Edgardo Favero from the World Bank.  The Chairperson said that both
Co-Chairmen would make presentations, and she hoped that Members would take the opportunity toput questions to the two Co-Chairmen and to make comments that would be useful to the meeting to
be held on 9 July, and for subsequent work.
8. Mr Burki thanked the Members of the CTD for inviting the Joint Task Force, and said he
wished to make a few remarks regarding the origins of the Task Force;  where the Task Force was in
terms of presenting a paper for discussion in various fora; the conclusions reached jointly by theCommonwealth Secretariat and the World Bank;  and the expectations of the Joint Task Force with
regard to the 26
th Session of the CTD.  The origins of the Joint Task Force dated back to July 1998
when a group of Commonwealth Ministers visited the World Bank and requested that a Task Force on
Small States be organised.  The Joint Task Force had met on three occasions between October 1998
and April 1999.  At its last meeting it agreed to produce a paper which would cover four items as
follows: (i) background information on why the Joint Task Force was set up, the domestic policies of
small states and the past performance of international institutions towards them; (ii) analysis of thevulnerability and the volatility of income of small states; (iii) the major transformation of the
international economic and financial order, and the manner in which  international community could
assist small states in their  transition in the new international environment;  and (iv) the development
of specific policy recommendations by the Commonwealth Secretariat, the World Bank, and it was
hoped, by the WTO, the European Union and the International Monetary Fund.
9. Mr. Burki highlighted the main points emphasised in the paper prepared by the Joint Task
Force.  The paper pointed out that small states had roughly the same per capita income and average
income growth as large states, but suffered from  considerable income volatility.  It was important that
small states be awarded transition periods, particularly in the light of  developments in the area of
trade and in the area of Official Development Assistance (ODA).  The trade advantages  enjoyed bysmall states resulted in part from preferential market access granted through a variety of
arrangements.  The evolving trading system threatened to erode the preferences that had worked
favour of small states, which were now exposed to the detrimental effects of trade opening.  More
specifically, the establishment of other preferential trading arrangements and the development of the
rules-based multilateral trading system under the aegis of the WTO had eroded the preference marginsWT/COMTD/M/26
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which small states had enjoyed.  Preferences accorded through the Lomé Convention had lost their
value as a result of the tariff cuts of recent years, and the WTO had  introduced  trade rules which
were incompatible with the Lomé Convention.  The recent dispute surrounding the banana régime of
the European Union had showed how the establishment of the new trade system had created
additional challenges for small states.  Regarding the availability of ODA, the Joint Task Force hademphasised that ODA flows had been declining over recent years.  In 1997, 21 OECD countries
provided 0.22 per cent of their combined Gross national product, down from 0.25 per cent in 1996.
Total overseas aid dropped from US$55 billion in 1996 to US$48 billion in 1997, but increased
somewhat in 1998 as  a result of the crises in Asia and Latin America.  Aid from G7 countries had
dropped by 30 per cent in real terms since 1992.  The United States donated less than 0.1 per cent of
its GNP as ODA.  Small states therefore had to rely on a  combination of domestic and foreign
savings and private external flows,  in order to finance their development.  While the fall in ODA hadbeen compensated for by the increase in flows of pr ivate external finance, the change in composition
of foreign financing meant that the cost of external financing was higher. Furthermore, private
external finance was not  always available in  the quantity required by small states.
10.  Mr. Burki said that the World Bank focussed, in the paper, on the changing role of official
aid flows, and what the World Bank could do to help small states in this context.  He identifiedten issues that were of interest to the World Bank, which were discussed in the paper, and which
informed the World Bank's approach to the problems faced by small states.  First, experience had
indicated that good policies, when combined aid, led to a higher rate of economic growth, by as much
as two percentage points according to empirical evidence.  Second, improved aid flows  enhanced the
credit-worthiness of small states.  This was an exceptionally important point, as the increasingimportance of private capital flows increased the importance of credit worthiness.  Third, international
institutions, and particularly development banks, should take into account not only GDP but also the
volatility and vulnerability of income in determin ing graduation thresholds and other policies.  The
World Bank urged international institutions to make use of the Vulnerability Index devised by the
Commonwealth Secretariat, in order to formulate ju dgements about appropriate thresholds.  Fourth, it
was appropriate for the World Bank and other multilateral development banks to focus on the quality
of the entire public expenditure programme, and not only on specific projects in order to derive the
maximum benefit from aid  flows.  Fifth, it was the view of the World Bank that, given the low
absorptive capacity of small states, better coordination would minimise demands placed by the donor
community on the administrations of small states;  this coordination could take place within a
framework that identified the needs of small states and took account of the comparative advantages of
the various institutions working to help small stat es improve their development prospects.  Sixth, the
World Bank had had good experiences with private executing agencies in the execution of projects
financed by foreign assistance, particularly in countries where official institutions could not meet the
demands placed on them by foreign aid agencies.  Seventh, the World Bank had emphasised the need
to promote regional institutions within which small states could work in order to realise economies of
scale.  There was good empirical evidence to indicate that where regional institutions had beeneffectively set up, these had improved performances in terms of aid utilisation.  Eighth, it was the
intention of the World Bank to use a proportion of the assistance it provided in order to reduce risk
and vulnerability.  This would involve a number of new innovations which had been undertaken as a
result of the setting up of the Joint Task Force.  Ninth, in at least one operation, the World Bank had
provided contingent lines of financial assistance which could be tapped by small states in the event ofnatural disasters.  Tenth,  it was necessary for small states to restructure their economies.  In order to
do so, significant investment was needed in  the development of human resources.  It was necessary
for the donor community to refocus its aid and technical assistance programmes towards the
improvement of human resources.
11. Mr. Burki said the World Bank hoped to obtain from the WTO, as a result of the deliberations
of the 26
th Session of the CTD, some ideas as to how the trading system could accommodate the
special needs of small states.  He said that he and Sir Humphrey Maud would be holding a meeting inWT/COMTD/M/26
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Brussels where a similar contribution to the work of the Task Force was expected from the European
Union.  The International  Monetary Fund was also expected to present its own programme.
12. Sir Humphrey Maud said that his remarks were intended to complement those made by
Mr. Burki.  The initiative to establish the Task Force emerged from the discussions of Commonwealth
Heads of Government Meeting (CHOGM) in Edinburgh in 1997.  At the request of Commonwealthleaders, the Secretary-General of the Commonwealth arranged a five-member, high-level mission to
visit key international organisations to discuss the concerns of small states.  The mission, held
in July 1998, was led by the Prime Minister of Barbados, and included the Deputy Prime Ministers of
Lesotho and Mauritius and the Foreign and Trade Ministers of Fiji and New Zealand.  During these
discussions, the idea of establishing the Task Force was formalised with the World Bank.  The WTO,
IMF, UNCTAD and the European Commission all agreed to participate in this endeavour.
Sir Humphrey emphasised that the focus of the Task Force was on all small states and not merelyCommonwealth ones.
13. The aim of the Task Force was to examine the vulnerability of small states and to identify
their problems in responding to global change.  It also set out to develop proposals for international
action by institutions such as the Bretton Woods organizations, the WTO, the Commonwealth and the
EC.  Its policy recommendations were preceded by an in-depth analysis of the needs of small statessuch as: the graduation policies of international financial institutions; strategies for coping with
natural disasters; globalisation and the risk of marginalisation of small states; the problems of
transition of small economies from a preferential trading system to a more liberal international trading
environment; and vulnerability and the development of a vulnerability index to be used as an
additional criterion in determining development assistance to small states.
14. The World Bank hosted a conference  in St Lucia in February 1999 that was attended by
about 125 people, including Prime Ministers and senior ministers as well as a wide cross-section from
25 countries.  The main conclusions of the Conference were first, that there was a  broad consensus
emerged on the need for multilateral lending policies to be adjusted to meet the special needs of small
states.  Second, on trade issues, small states needed to take advantage of opportunities created byglobalisation.  But to do so, small states faced high transitional costs in integrating their economies
into the global trading system which would require adequate resources.  It was necessary for
multilateral organisations responsible for the in ternational trade regime to recognise and
accommodate the acute vulnerability of many small states which did not fall into the least-developed
category.  Third, the volatility of lending by international financial institutions to small states was
acute and more stable programmes of lending designed to overcome this were needed.  Fourth, for
small states knowledge and access to it were essential for promoting development.  Taking advantageof new technologies in the field of communications, as well as other infrastructure could best be
promoted by a regional approach. Fifth, financing mechanisms based on international capital markets
were identified for disaster insurance, for elaboration and implementation on a sub-regional basis.
Finally, the Commonwealth’s Vulnerability Index provided an operational tool for advancing the case
for the special treatment of small and vulnerable states.
15. The Vulnerability Index took into account both the impact of vulnerability as well as the
resilience of countries to adverse events.  Thus there was a strong case for the WTO to take this into
account in discussing trade issues. The  first component of the index was based on three indicators:
first, the lack of diversification;  secondly, the extent of export dependence; and,  thirdly, the impact
of natural disasters.  These were combined to form  a composite index of the impact of vulnerability
on developing countries.  The resulting index was then weighted by GDP, as a proxy for resilience,
the second component of the index.  The index covered a sample of 111 developing countries,
37 small and 74 large, for which data were available.  According to the index, small states were found
to be systematically more vulnerable than large countries, regardless of income.  The results indicated
that of the 25 most vulnerable countries, 24 were small states and of the 50 most vulnerable countriesWT/COMTD/M/26
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33 were small states.  It was interesting to note that many highly vulnerable countries were also
least-developed; for example, half of the 50 most vulnerable countries fell into the least-developed
country category.
16. Sir Humphrey said it was the intention of the Commonwealth Secretariat to follow up the
implementation of the Task Force recommendations by encouraging all the leading internationalinstitutions to develop their action programmes to support small states.  This of course included the
WTO.  The Commonwealth Secretariat and the World Bank believed the WTO could make a key
contribution to smoothing the transitional problems of small states.  To this end, he advanced four
thoughts for the consideration of the WTO for action, which would complement the actions of the
Commonwealth Secretariat and the World Bank.  First, the WTO needed to recognise that small
vulnerable states faced difficult challenges in making the necessary adjustment to multilateral trade
liberalisation and achieving a sustainable threshold of development sufficient to free them fromdependence on aid and trade preferences.  Secondly, procedures for accession to the WTO needed to
be streamlined and accelerated.  Small states would find it easier to achieve membership if they were
afforded financial and expert assistance in the process of accession, which was costly in terms of legal
fees and also involved complex negotiations.  Thirdly, the single most important development of the
Uruguay Round was the creation of the strengthened dispute settlement mechanism.  However, thelegal costs of using this mechanism were substantial, clearly making it inaccessible for many small
states.  An arrangement should be established which would assist small states to make use of the
mechanism.  Finally, using the present formula of 0.03 per cent of world trade as a lower threshold for
the membership subscriptions to WTO, meant that the per capita cost of membership was significantly
higher for many small states than larger members of the Organisation.  Given that small states, inaggregate, accounted for less than one-quarter of one per cent of world trade, there was a strong case
for lowering their subscription fees.
17. The Chairperson thanked Mr. Burki and Sir Humphrey for their respective statements, and
opened the floor to Members for questions and comments.
18. The representative of Bolivia thanked Mr. Burki and Sir Humphrey  for their presentations.
She said that small economies had  difficulties in coming to grips with the tentacular nature of the
multilateral trading system, with all its implications  for small economies.  She recalled that Bolivia
had worked, in the context of the Geneva Ministerial Conference, towards the introduction of the
concept of small economies.  While Bolivia did not identify itself with the criteria applied by the
Commonwealth Secretariat and the World Bank to define another concept,  that of small states,
Bolivia did identify itself with a number of the issu es raised in the paper, which was itself a useful
document that would enable a further examination of issues of interest to small economies.Regarding the ten points discussed by Mr. Burki, she asked whether the point about credit worthiness
was not in contradiction with the point  on the use of the vulnerability index in determining graduation
thresholds.  In connection with the  point regarding the restructuring of small economies and  the need
for human development and greater stability, she asked whether the international community had a
commitment to work towards greater stability, and whether other countries had  demonstrated a will
for restructuring, and cited as an example the difficulties encountered in restructuring the market for
agricultural products.  She said that Bolivia had undertaken extensive efforts in restructuring, and had
incurred high social costs in the process, and that Bolivia wished to see an example of restructuring in
areas of export interest to it.  She said there were, to the contrary, attempts to introduce measures
which would slow down the restructuring of such markets, and which caused countries like Bolivia todepend more on preferences.  She noted that there had been a reference to the need to facilitate the
process of transition which small economies needed to undergo.  Transition would be facilitated if
there was a systemic response  as whole to problems of transition.  The simple recourse to ad hoc
measures was liable to jeopardise, in the medium term, the establishment of such a comprehensive
approach to problems of transition.WT/COMTD/M/26
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19. The representative of Barbados joined the dele gation of Bolivia in welcoming the Task Force,
and thanked Mr. Burki and Sir Humphrey for their presentations, notably the presentation of the
Vulnerability Index  and its relevance to the work of the WTO.  She said her delegation was of the
view that the draft report presented to the CTD provided very useful material on the vulnerability and
other characteristics of small states, on the development challenges faced by small states, and on thestrategies and innovative approaches which small states and institutions, including the WTO, could
adopt when attempting to address the inherent difficulties faced by small states in regard to
participation in the multilateral trading system.  She said her delegation had spoken repeatedly on the
vulnerability  of small economies, on their development problems, and on the difficulties faced by
small economies in achieving full integration into the multilateral trading system.  It was therefore
heartening to hear from  the Task Force that  the WTO needed to take recognise that small economies
faced specific challenges in adjusting to multilateral trade liberalisation.  Her delegation wished toendorse the call made by  Sir Humphrey that Ministers discuss the issue of small economies in the
Third Ministerial Conference, with a view to including the issue of small economies in the WTO work
programme.  She said that this suggestion should be formally included in the input of the CTD into
the preparatory process for the Third Ministerial  Conference.
20. The representative of Haiti thanked Mr. Burki and Sir Humphrey for their presentation, and
said that his delegation appreciated the fact that the Commonwealth Secretariat, in its study, did not
differentiate between small states and small ec onomies belonging to the Commonwealth, and those
that did not.  He said that the concept of vulnerability furthered the recognition of the issues faced by
small economies.  His delegation were nevertheless  preoccupied by the manner in which the question
of small economies was handled.  While the Commonwealth Secretariat and the World Bank spoke ofsmall states, the Ministerial Conference of the WTO had referred to small economies.  His delegation
hoped that the Secretariat would find the means to develop a definition that would be of satisfaction to
the WTO and to the UN system, which would take into account the problems of small economies and
notably the concept of vulnerability.  This last concept was important given the number of highly
developed small states that were Members of the WTO.  The representative of Haiti also drewattention to the fact that certain small states, including Haiti, were particularly prone to suffer from
natural disasters.  Regarding the question of ODA, he recalled that the United Nations had
recommended that flows of ODA be not less than 0.7 per cent of GNP, and said that it was therefore
the low  levels of aid flows from OECD countries was cause for concern.  He appealed to the
Commonwealth Secretariat to urge those countries that had committed themselves to providing the
equivalent of 0.7 per cent  of GNP in ODA to adhere to these commitments, to ensure that developing
countries, and small economies in particular, received that to which they were entitled.  This would inturn make available the necessary funds to  address the marginalisation of small economies.  Finally,
he said that  whereas least-developed countries were given recognition, such recognition had not yet
been given to small economies.  Such recognition was important if small economies were to exercise
their rights.
21. The representative of Guatemala thanked Sir Humphrey and Mr. Burki for their presentation,
and said his delegation agreed with many of the matters raised.  He noted, however, that Guatemala
had a population of over 1.5 million and said  that the concept of  small states should be broadened.
He said that this was not a question of establishing new categories, but rather an exercise in
understanding the limitation and constraints affecting  small economies, and seeking appropriate
mechanisms to ensure that they benefitted fully fr om participation in international trade.  Aspects
which were of particular interest to small economies included market access for products of export
interest, the transfer of technologies, technical assistance and special and differential treatment.  He
said that in the process of creation of the Free-Trade Area of the Americas, a consultative group on
small economies had been established, in order that  the concerns of small economies that were
participating in trade negotiations in the region be taken into account.  He said this was a similarprocess to that which would be undertaken shortly in the WTO example, and therefore provided
useful lessons of experience on which the WTO could draw.  He concluded by saying that hisWT/COMTD/M/26
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delegation were aware the greater part of responsibility fell on small economies to develop their own
policies and strategies which would enable their full participation  in international trade.
22. The representative of Egypt expressed the strong support of his delegation for efforts to
understand the problems and limitations of small economies.  He said that issues of concern to small
states were related to a number of issues which were being addressed by the CTD, such as technicalassistance, special and differential treatment and so forth.  He said that given the WTO was a rules
based system, if small economies or any other Members were to have any rights, these had to be
inscribed in the rules.  The most important issue however was gaining an understanding of the
limitations of small economies, and in this context the draft report was of  great value.  He recalled
that Egypt's approach to the question of special and differential treatment stressed that provisions for
special and differential treatment needed to be more targeted to address the needs of different groups
of countries.  He recalled the statement made in a previous meeting by the representative of Dominicathat it was difficult for a country like Dominica to implement the TRIPS Agreement in its entirety
with all its costs in the same manner as  a developed country.  A key question therefore related to the
manner in which multilateral organisations dealing with trade issues  could accommodate the interests
of small economies.  To this end, the Vulnerability Index and it components could be put to use
within the context of the WTO.  The Vulnerability Index was also of use in addressing problems facedby developing countries in general.  He noted that one component of the index was lack of export
diversification.  An approach needed to be found within the WTO, in terms of rights and obligation,
that met the concerns of Members that suffered from a lack of export diversification.  The
representative of Egypt noted that the report pointed to the presence of important transition costs, and
also to the fact that vulnerability was independent of income.  He also noted that some small stateswould remain small regardless of any other developments, and that consequently an approach was
needed which dealt specifically with the problems of small states.  He said his delegation supported
the preparation of a paper by the Secretariat which examined the trade structure of small economies
and their vulnerability in order to facilitate the understanding of the issues faced by small economies.
Finally, he said that his delegation shared the concerns expressed in the Draft Report regardingdifficulties which affected small economies in connection with accession, and in connection with
participation in the Dispute Settlement Mechanism.  He hoped that the creation of an Advisory Centre
on WTO, Law which his delegation supported, would be of assistance in this regard.
23. The representative of Cuba thanked Mr. Burki and Sir Humphrey for their presentation, and
said that rather than referring to small states, the concepts of small economies and vulnerability
should be made use of, as they reflected the situation of many Members of the WTO.  The concept of
small states excluded a number of small economies whose present difficulties required special anddifferential treatment.  His delegation believed that vulnerability was the defining factor, and cited the
example of Caribbean countries which were  prone to natural disasters  on a yearly basis.  He said that
the issue of real access to world markets needed to be taken into account.  He noted that Cuba did not
appear in either Table 1 or Table 2 of the draft report, whereas Cuba did appear on a list of vulnerable
countries prepared by the World Bank.
24. The representative of Trinidad and Tobago thanked Mr. Burki and Sir Humphrey for their
presentations.  She said that the draft report was a clear and concise document which was particularly
useful as an exercise in awareness building.  She said that if the issue of vulnerability was new to the
WTO, it was not in itself a new issue, as discus sions regarding vulnerability had been held for over
15 years.  She said that it would be more appropriate to speak of small economies rather than smallstates in the context of the WTO. She said that sm all states were compelled to look outwards, and that
integration into international trade was not an option but an imperative.  The key issue lay in
enhancing the capacity of small economies to become full and active participants in the international
economy.  To this end, her delegation encouraged the WTO to examine ways and means of taking
into account the specificities of small economies.  She drew attention to the problems of preferenceerosion faced by the small economies, and the negative impact WTO agreements sometimes had onWT/COMTD/M/26
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the interests of small economies, as evidenced by the recent banana crisis.  Her delegation also echoed
the point made by the representative of Egypt that vulnerability existed regardless of  income.
25. The representative of Jamaica thanked Sir Humphrey and Mr. Burki for their presentations,
and said his delegation was of the view that the conclusions contained in the draft report pointed the
way forward through which the concerns of small economies could be taken into account in the WTO.He believed that the four points made by Sir Humphrey in his concluding remarks could be handled
by the WTO.  His delegation also supported the proposal by Barbados that the issue of small
economies should be taken up at the Seattle Ministerial Conference, and should be incorporated into
the work programme of the WTO.
26. The representative of Australia said that, with regard to accessions, the pace of accession was
largely determined by the acceding country, and was very closely related to the pace of domestic
policy reform.  Based on Australian experiences in assisting countries in reform, she said that simplyaccelerating the pace of accession was not necessarily beneficial, as it was necessary for there to be a
solid institutional base as well as a good understanding of policy commitments within the acceding
country.
27. The representative of Mauritius thanked Mr. Burki and Sir Humphrey for their presentations,
and added that further time for reflection regarding the contents of the draft report was necessary.  He
said the linkage between issues related to smallness and vulnerability, on one hand, and trade, on the
other, needed to be clearly spelled out.  He noted that Mauritius had been used as a case-study, and
said that the attempt to draw a parallel with Cyprus did not highlight the distinctive differences
between the two countries.  Cyprus was close to its main markets by virtue of its geographical
location, whereas Mauritius was outside the main air and sea transport routes.  He said that the periodof unprecedented growth experienced by Mauritius was a result of, amongst other things, the strategic
alliances it had forged with it main trading partners.  A key element of these partnerships was the
Lomé Convention.  He said the comparative advantage of Mauritius was propelled by such
preferential frameworks.  He said that while Mauritius  recognised that it could not depend in
perpetuity on preferences, and that preferential systems had to be compatible with WTO rules, it stillremained a vulnerable economy.
28. The representative of Sri Lanka said the draft report was useful, and that his delegation would
reflect on it further.  He noted that Sri Lanka  was not identified as a small state, and said his
delegation agreed with other speakers who had stressed that it was necessary  to examine the concepts
of small economies and of vulnerability in the future work of the WTO.  He said Sri Lanka  was a
small and vulnerable economy, but with a relatively large population, that had difficulty in coping
with all the demands of the multilateral trading system.
29. Mr Burki said, in response to a question raised by the representative of Bolivia, that there was
no contradiction between the promotion of creditworthiness on the one hand, and the point made
about graduation thresholds on the other, and added that the one point supported the other.  He said,
for instance, that if a country was  about to graduate from concessional lending through IDA and it
was determined that that country  had some of the characteristics that  justified flexibility, then that
country would continue to benefit from IDA lending, which would in turn bolster its credit
worthiness.  Regarding the question raised by the representative of Bolivia regarding successful
restructuring, Mr. Burki referred to the Bolivian experience under President Banzer which was based,
in part, on exploiting the comparative advantage of the country.  The World Bank had associated itself
with the strategy, and had also introduced its co mprehensive development framework.  Regarding
definitional issues, he emphasised that the Joint Task Force had deliberately chosen not to be precise
when making lists of countries, and had focused instead  on presenting a certain number of stylised
facts.  It had deliberately chose to use the term small states since it focused on the absorptive capacity
of these states to, amongst other things, deal with foreign assistance, access markets, or to bring aboutWT/COMTD/M/26
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change.  It was left to international organisations to decide for themselves what  criteria they would
use to tackle problems posed by smallness and vulnerability.  The World Bank had for its part decided
to use its thresholds in a flexible way, and that its approach would be informed by the Vulnerability
Index.
30. Sir Humphrey Maud said it appeared to him that there was agreement that the interests of
small and vulnerable economies needed to be accommodated within the World Trade Organisation,
and also as  to the use of the vulnerability index as an  analytical tool in guiding decisions.  He said
that the final version of the report would be presented to the meeting of Commonwealth Finance
Ministers, to the Annual Meetings of the IMF and the World Bank, and the Commonwealth Heads of
Government Meeting.  Regarding definitional issues, he said that there was no intent to be exclusive,
and stressed that the draft report focussed on certain stylised facts relating to vulnerability.  He said
that there were aspects of vulnerability that ran across an unbroken continuum. He said that there wasno call for there to be a small group  of countries which benefitted from certain exclusive rights, but
rather that there should be a recognition that small states as described in the draft report suffered from
specific problems.  He thanked all delegations that had intervened and said that  the final version of
the report would be adapted in the light of remarks made.
31. The Chairperson thanked Mr. Burki and Sir Humphrey for responding to questions, and
thanked all members who had participated in the discussions under this agenda item.  She proposed
that the CTD take note of all statements made.  She proposed that this item be kept on the agenda for
further deliberation.
III. COMPREHENSIVE NEW ACTION PLAN FOR LEAST-DEVELOPED COUNTRIES
32. The Chairperson said the UNCTAD and the UNDP had organised a Workshop for Senior
Advisors to Ministers of Trade of least-developed countries in Sun City, South Africa, from
21-25 June 1999 on which occasion a Comprehensive New Plan of Action for Least-Developed
Countries had been developed.  She called on  Amba ssador Chowdhury of Bangladesh to present the
new plan of action to the CTD, and added that even though this point had not been on the agenda, shewas convinced that Members would be willing to accept it given the concern shared by all that
least-developed countries be integrated into the multilateral trading system.
33. Ambassador Chowdhury expressed his administration for the manner in which the
Chairperson conducted the work of the CTD.  He said that the Sun City Workshop had been aimed at
preparing proposals as inputs to the third Ministerial Conference.  He had presented  these formally to
the General Council.  He said that the Sun City meeting had reviewed the implementation of Uruguay
Round Agreements by least-developed countries, and had evaluated the impact of the agreements onthe trade and development prospects of the least-developed countries.  It also addressed the need to
enhance the capacity of least-developed countries to participate in global trade and rule making, and
also the need to identify issues of interest to least-developed countries to promote and safeguard
potential benefits, and to protect such countries from possible risks and losses.  The meeting
formulated a Comprehensive New Plan of Action (CNPA) aimed at integrating least-developedcountries into the multilateral trading system.  Th e proposals contained in the CNPA covered a broad
range of issues of key interest to least-developed countries.  These proposals were sharp, succinct and
entirely de-ideologised, and were the product of very business-like discussions.  A copy of the CNPA
had already been made available to the Secretariat.WT/COMTD/M/26
Page 10
IV. INTERNATIONAL TRADE CENTRE:  REPORT OF THE JOINT ADVISORY
GROUP AT ITS THIRTY SECOND  SESSION
34. The Chairperson recalled that following the informal consultations which had taken place on
4 November 1998 under the Chairmanship of Ambassador Benjelloun (Morocco), it had been agreed
that it would be useful for the CTD to examine and take note of the report of the Joint AdvisoryGroup (JAG) before it was forwarded to the General Council.  She therefore invited
Ambassador Jean-Marie Noirfalisse (Belgium), Pres ident of the Joint Advisory Group, to present the
report to the CTD.  She also welcomed to the meeting Mr. Denis Bélisle,  Executive Director of the
ITC.
35. Ambassador Noirfalisse said that the Thirty-Second Session of the Joint Advisory Board had
demonstrated the close collaboration that existed between the UNCTAD, the WTO, and the ITC.
Furthermore, it demonstrated that the reform  of the ITC was complete.  This was welcomed by therepresentatives to the JAG.  The capacity of the ITC to meet the needs of its core clients was
emphasised.  An effort had been made to distinguish between two fundamental programmes of the
ITC, namely the Joint ITC/UNCTAD/WTO/Integrated Technical Assistance Programme in Selected
Least-Developed and Other African Countries ( JITAP), and the Integrated Framework for
Trade-Related Technical Assistance to Least-Developed Countries.  Regarding the latter, the pivotalrole of the ITC in coordinating and managing activities which involved the six agencies was
highlighted by representatives.  The interaction between the ITC and the other agencies was an
example of coherence in policy-making between institutions.  Members had stressed the importance
of striking a balance between inter-regional, regional and national programmes.  Concerns had been
expressed about the decline in extra-budgetary resources, and also regarding the marginalisation  ofleast-developed countries in the process of globalisation.  The importance project coordination at the
conceptual phase, as well as the execution stage, was stressed.  The ITC was encouraged to strengthen
its cooperation with other United Nations organisa tions such as UNIDO and the ILO, as well as with
the Bretton Woods institutions, and to develop  partnerships with civil society.
36. Ambassador Noirfalisse said that speedy operationalisation of the Integrated Framework was
a matter of great concern to representatives. It was also recognised that the operationalisation of the
Integrated Framework  was a challenge that required  the full and constant commitment of  all actors,
and particularly LDCs.  Commenting on the ITC's Annual Report, several representatives
recommended a more evaluative  and analytical approach focusing on objectives and results, and
assessments by beneficiaries of the support they had received.  Finally, the government
representatives had announced confirmed or possible voluntary contributions to ITC. These were:
Canada, China, Denmark, France, Germany, India, the Netherlands, Norway, Sweden, Switzerland,the United Kingdom, Côte d'Ivoire, Greece, Ireland,  Italy and Belgium.  Ambassador Noirfalisse said
that the fact that a number of developing countries had made pledges was noteworthy.
37. The representative of Mexico thanked Ambassador Noirfalisse for his statement and
Mr. Bélisle for the report of the Joint Advisory Group.  He recalled that his delegation had stressed
the need for coherence between activities at the regional level, and observed that that this concern wasbeing addressed satisfactorily.  He referred to the point made in the report concerning partnerships
with civil society, and enquired as to the form such partnerships would take.  Referring to point 29 on
page 5 of the report which made mention of the first Executive Forum on National Export Strategies
to be held in September 1999, he asked whether more details about this forum could be made known.
38. The representative of Mauritius thanked Ambassador Noirfalisse for his statement and
Mr. Bélisle for the report of the Joint Advisory Group, and said his delegation wished to place on
record the excellence of the ITC in addressing the technical assistance needs of its clients.  His
delegation wished to thank the donors who supported the operation of the ITC.WT/COMTD/M/26
Page 11
39. The representative of Norway said that in addition to the pledges made during the JAG
meeting, Norway had also made a contribution of US$500, 000 to the global trust fund.
40. The representative of Haiti thanked Ambassador Noirfalisse for his statement and Mr. Bélisle
for the report of the Joint Advisory Group, and sa id his delegation thanked donors who supported the
work of the ITC.  He said that the ITC needed further resources to comprehensively address the needsof developing countries, and particularly the least-developed countries.  His delegation commended
the ITC, the UNCTAD, and the WTO for their close collaboration, and expressed the hope that the
three other organisations participating in the In tegrated Framework for Trade-Related Technical
Assistance, would follow this example.  He said that a certain reluctance was detected  on the part of
certain agencies to take part fully in the Integrated Framework, and, taking Haiti as an example, cited
the World bank as one agency that was particularly hesitant.  He said that the CTD could make these
concerns known to the relevant organisations.
41. The representative of Switzerland thanked Ambassador Noirfalisse for his statement and
Mr. Bélisle for the report of the Joint Advisory Group.  He underlined the fact that financing for the
ITC was forthcoming both from developed countries  and developing countries.  His delegation
viewed such financing as investments which  would generate significant returns.  His delegation
expressed the hope that other developing countries would make contributions.
42. Mr. Bélisle, referring to the statement made by the representative of Mexico, said that
regional activities were funded through the regular budget, and were for the benefit of all regions
equally and without distinction.  Specific projects undertaken at the national level were funded
through extra-budgetary sources.  Regarding partnerships with civil society, he said that the ITC
worked principally with civil society, that is, the private sector, academia and, more recently, withNGOs.  The ITC had developed networks with the academic community with a view to improving the
implementation of programmes, including training programmes.  The ITC had a programme known as
Export Led Poverty Alleviation, and the ITC had sought to draw in NGOs in the implementation of
this programme.  Regarding the Executive Forum on National Export Strategies to be held in
September 1999, he said that the intention was to bring together about 13 countries to participate infour days of brainstorming on trade promotion.  A number of countries had asked the ITC to present
examples of countries that had been successfully in trade promotion.  The selection of countries made
was on the basis, amongst other things, of region, and in order to ensure that LDCs, developing
countries and countries in transition were represented.  Countries were invited only if the ITC was
satisfied that both the representative from the business community and that from government were
able to make a substantive contribution.  It was the intention of the ITC to publish the proceedings of
the meetings,  and he hoped that the meeting would be repeated on an annual basis.  Regardingsupport received from the donors, the fact that developing countries were counted amongst donors,
showed the importance of  the ITC to developing  countries.  He acknowledged the support the
representative of Norway had announced, and added that Norway had recently organised
consultations relating to the implementation of private sector development strategies in developing
countries and the role of the ITC.
43. The Chairperson thanked Mr. Bélisle for his remarks, and proposed that the CTD take note
 of
the report, and forward it to the General Council  with the views expressed by Members.  It was so
agreed.WT/COMTD/M/26
Page 12
V. WTO WORK PROGRAMME ON  ELECTRONIC COMMERCE
(a) Consideration of the Contribution of the CTD to the Work Programme
44. The Chairperson recalled the discussions on this subject  held at the 25th Session of the CTD.
A number of delegations had expressed their concerns regarding the format and content of the
document Electronic Commerce and Developmen t (Job No. 2987), which summarised points
regarding Electronic Commerce made in  meetings of the CTD and during the Seminar on Electronic
Commerce.  It had been agreed that the Secretariat would undertake further work on the document,
taking into account points made by Members at the 25th Session.  The Secretariat also undertook
further consultations with delegations that intervened during the CTD meeting on 16 June, and set the
25 June as a deadline for written submissions to be incorporated in the document. Members should
therefore have had ample opportunity to provide an input into the preparation of the revised
document.  The Secretariat had produced a new document (Job No. 3943), which took account of thecomments and contributions made by Members.  The document had been circulated to Members at
the beginning of this week, and the Chairperson asked if members had any comments to make
regarding the document.
45. The representative of Mexico thanked the Secretariat for the new document.  He noted that
reference had been made to the issue of domain names in paragraph 16, and said that monopoly over
domain names had an adverse impact on small and medium enterprises and developing countries in
general.  He therefore suggested that the question of domain names be included under point 35 in the
section "Illustrative list of questions for further study".
46. The representative of Korea recalled a question asked by the representative of the
United States during the 25th Session of the CTD regarding the reference made  to Article XX in
paragraph 1 of the document.  The representative of Korea said that Article XX exceptions (under
GATT 1947) provided for the fact that the content of GATT should not damage the public order.  His
delegation had raised the question in view of the fact that the contents of e-commerce could be
affected by this article, even though it was unclear as to whether Article XX could be feasible applied
given the nature of electronic commerce.
47. The representative of Brazil said the paper reflected the deliberations of the CTD on
electronic commerce.  He said that the paper should be called a progress report, in order to be
consistent with the work done in other committees and to reflect the fact that the CTD had not
finished its work on electronic commerce.  Regarding paragraph 7, he said that the words "electronic
commerce" should be replaced by the words "information technology", since it was the latter rather
than electronic commerce that was the means for conducting trade facilitation.  Alternatively, if this
substitution could not be made, a sentence could be added  to the effect that  some members did notbelieve that the discussion of electronic commerce and trade facilitation fell under the current work
programme, since they were of the view that electronic commerce had little to do with trade
facilitation.  Regarding paragraph 11, he said the wording of the last sentence seemed to indicate that
there was a link between the absence competition laws and policies and problems in the use of
development assistance funds, and added that it was unclear how one would affect the other.Regarding paragraph 15, the representative of Brazil said that the issue of taxation was one of national
economic policy – particularly with respect to the development of the domestic information
technology industry – and not limited to the concept of sovereignty.  Regarding paragraph 16, he
asked why mention was made, in the 7
th line, of the WTO.  In order to be consistent, either this
reference to the WTO had to be deleted, or mention had to be made of the WTO in all other areascited in paragraph 16.
48.  The representative of India endorsed the points made by Brazil, and added that the work
programme on electronic commerce had not yet reached completion.  In particular, the standstill onWT/COMTD/M/26
Page 13
customs duties on electronic transactions had substantial revenue implications for developing
countries, and further discussion was needed in the General Council.
49. The representative of Uruguay thanked the secretariat for the paper, and supported the
changes suggested by Brazil, especially in regard to the last section of paragraph 11.  Regarding the
point made by the representative of Mexico regarding domain names, the representative of Uruguaybrought to the attention of the CTD the fact that there was taking place a meeting of the TRIPS
Council in which the question of domain names was being addressed.  He said that the TRIPS Council
was the proper forum in which to address the question of domain names, adding that his delegation
did not have any objection to the inclusion of domain names under the rubric of  questions for further
study, as proposed by Mexico.
50. The representative of Egypt asked the secretariat how future work would be dealt with, in
particular the issues raised in the illustrative list of questions and expressed the hope that a paper
would be prepared rapidly.
51. The representative of the European Communities said his delegation had no strong views
about the proposals that had been made regarding modifications to the text of the paper.  He said a
procedure was needed to allow the CTD to adopt the paper in time for the General Council meeting of
15 July 1999.
52. The representative of Switzerland said he had a number of detailed comments his delegation
had received from their experts.  He followed Br azil in saying that the paper should be called a
progress report.  He said that as the paper was a  compilation, it did lack some analytical depth, and
additional elements could be brought in at the follo wing stage of the process.  Regarding the section
on questions for further study, he said that paragraphs 27  and 28, relating respectively to the effectsof electronic commerce on the commercial presence and the movement of natural persons, and the
effects of electronic commerce on  market access opportunities for developing country enterprises,
were unclear.  He said that paragraph 27 should cover all four modes of supply rather than just those
of commercial presence and the movement of natural persons.  The representative of Switzerland said
clarification was needed as to how work done in the CTD would be tied in with work done in otherbodies in the WTO and in other fora.  He said that reference should have been made to the World
Bank, given the importance of financial aspects, infrastructure and technical assistance.  Finally, he
sought clarification from the Chairperson as to how work on the subject of e-commerce would
proceed in the CTD.
53. The representative of the United States said that his delegation found the proposals regarding
modifications to be made to the text to be acceptable. He suggested that the modified document be
circulated to delegations, with a deadline of 72 hours for comments.  Regarding point 7, he said thatwhile the delegation of Brazil was technically correc t in stressing information technology, rather than
electronic commerce, in relation to trade facilitation, it was also true that electronic commerce was a
new phenomenon to which it was necessary to draw attention.
54. The representative of Canada said her delegation was willing to go along with the changes
proposed.
55. The Chairperson said that it was imperative to forward the contribution of the CTD to the
General Council on the work programme on electronic commerce after the end of the 26th Session.
She proposed the document be updated to take into account the comments made at the 26th Session to
which there had been no objections, and that the document be forwarded to the General Council along
with the Chairperson's accompanying letter by 12 July 1999.  Regarding future work,  she proposedthat discussion be taken up at a subsequent date.WT/COMTD/M/26
Page 14
56. The representative of the United States repeated his suggestion that there be a  period of
72 hours be given to delegation to comment on the revised document, adding that his delegation were
not in a position to sign off on the comments made at the 26th session without an examination of the
final document.
57. The Chairperson made an appeal for understanding on the part of the delegation of the
United States saying that  Members were ready to go along with the document which would take into
account the comments made at the 26th Session, adding that the subject had been already discussed at
length and that all members had had ample opportunity to make their views known.  It was necessary
to take into account existing deadlines, and forward the contribution of the CTD to the
General Council by 12 July 1999.
58. The representative of the United States said his remarks concerned comments made at the
26th Session.  While he did not expect that his delegation would have difficulty with a revised version
of the document that incorporated these comments, he was of the view that delegation should
reasonably be given the opportunity to scrutinise the revised document before it was forwarded to the
General Council, and that his delegation would not be  able to go along with the document unless this
opportunity was provided.
59. The representative of Uruguay said that the deadline given to the CTD to submit its
contribution to the General Council was the same as for the Council on Trade in Service and the
TRIPS Council, namely 31 July 1999.  Given that the 26th Session was on 8 July, there was still time.
He said that the revised document should be circulated to delegations by fax, with a period of 48 to
72 hours for comment.  He said it was the manner of proceeding of the WTO to allow delegations to
examine documents before they were adopted, and supported the course of action suggested by theUnited States.
60. The Chairperson said it was her intention to ask the Secretariat to revise the document in the
light of comments made, and to circulate the revised document by fax by the afternoon of 8 July, so as
to give Members time for comment before the document was forwarded to the General Council.
61. The representative of Egypt proposed that the Secretariat prepare a paragraph, for
consideration at a future meeting, as to how it intended to follow up the topics mentioned under the
illustrative list of questions for future study.
62. The representative of Brazil said his delegation had no objection to the course of action
suggested by the United States, and supported Egypt regarding the importance of following up the
topics listed for future work.  He said that the CTD should examine the work done in other bodies,
notably the TRIPS and Services Councils, and comment on this work from the point of view of
development.
63. The Chairperson proposed that the secretariat revise the document to take into account
comments made, and circulate the revised document by fax by the afternoon of 8 July 1999.
Members had until 12 July to make comments, at which point, the revised document would be
forwarded to the General Council, along with the Chairperson's accompanying letter, as the CTDs
contribution to the work programme on electronic commerce.
64. It was so agreed.
(b) Presentation by UNCTAD
65. The Chairperson said that one delegation had proposed that the CTD invite the representative
of UNCTAD to update the Committee on its activities in the area of electronic commerce.  SheWT/COMTD/M/26
Page 15
believed this was a useful request had therefore taken the initiative of inviting Mr Bruno Lanvin, of
the UNCTAD Secretariat, to make a presentation on a recent seminar held by UNCTAD on electronic
commerce and on its ongoing work.
66. Mr. Lanvin thanked the Chairperson for the invitation and said he would begin by briefly
summarising the proceedings of a workshop organised by the UNCTAD and held from
17-18 June 1999 on the theme of the experience of enterprises involved in electronic commerce.  He
also said that he would provide an overview of ongoing work on electronic commerce in the
UNCTAD, and its links with the work on electronic commerce followed by the CTD and the WTO in
general.
67. Mr. Lanvin said that  the workshop  was the first of its  type in the context of preparations for
UNCTAD X.  The working group of experts had a ddressed two fundamental aspects of electronic
commerce as it related to the work of enterprises in developing countries: that is, an assessment of thecurrent state of play, and second the identification of areas of action to enhance the participation of
developing country enterprises in electronic commerce.  In connection with the first rubric, he said
that presentations had been made, notably by the ITU, which provided up to date data on
infrastructure, internet connectivity and relative costs of electronic commerce in developing countries.
It was noted that situations diverged widely between developing countries, and that a number ofissues that went well beyond the subject of electronic commerce had to be addressed  in order to
enhance the participation of developing country enterprises, and notably small and medium
enterprises (SMEs), in electronic commerce.  Key priority issues included the deregulation of the
telecommunications sector and competition policy in relation to internet access.  A significant place
was given to the direct exchange of experiences between companies that were either users ofelectronic commerce or service providers to electronic commerce users.  Experts present included a
number from advanced countries, but also least-developed countries such as Nepal and Benin.  A
special session had also been held on domain names. A number of experts involved in the ICAN
process updated the meeting regarding the latest developments in the area.  Experts from the WIPO
had made a presentation on the link between domain names and trademarks.
68. Mr. Lanvin said that the second part of the of the workshop devoted to areas of action
identified four domains.  The first concerned the facilitation of access and the reduction of access
costs relating to electronic commerce infrastructure and the internet.  It was noted that innovative
policy approaches were in place in a number of deve loping countries. In this context,  the exchange of
information between countries that had already put their approaches in place and those that were still
at the drawing board, was of great value.  Second, it was noted that in order to stimulate the
participation of developing country enterprises, and particularly SMEs,  in electronic commerce, linkshad to be developed between the virtual world of electronic commerce transactions and the physical
world of transactions in goods.  While it was clear that trade in services benefitted clearly from
electronic commerce, developing countries were liable to rely heavily on trade in manufactures and
raw materials and that in this context it was necessary to address issues such as transport, payment
and customs formalities as components of an overall strategy.  Third, the issue of confidence buildingwas addressed, particularly regarding the security of transactions and payments.  Examples of
innovative policy approaches were noted.  The need to enable SMEs to engage in electronic
commerce through modalities that were familiar, notably the use of local languages to describe
conditions of sale and offer, was emphasised.  Fourth, evidence from countries that had implemented
strategies for the development of electronic commerce pointed to the need to develop a nationalelectronic commerce culture.  The embryonic nature of regional strategies was noted, and the
possibility of  using existing regional structures, notably in regard to customs, was emphasised.
69. Mr. Lanvin said that a complete report on the proceedings of the workshop would be
forthcoming. The report would also be made available on the UNCTAD web-site, and it was hopedWT/COMTD/M/26
Page 16
that the web-site for the workshop would serve as a focal point  for discussion between  experts from
the private and public sector interested in the question of electronic commerce and development.
70. Mr. Lanvin turned to other work of UNCTAD with regard to electronic commerce.  He
informed the CTD that a  workshop had been held at the national level in Caracas, Venezuela from
28-29 June 1999.  The workshop was geared to the development of national strategies for electroniccommerce and drew  on many of the conclusions adopted at the workshop of 17-18 June he had just
presented.  The Caracas seminar had led to the creation of a national working group involving private
sector and public sector participants, which sought to develop the legal, technical, economic and fiscal
details of the overall strategy for electronic commerce.  It was intended that the results of the
workshop held in Caracas feed into a regional meeting on electronic commerce for Latin American
and Caribbean countries programmed for 4-5 August  in Lima, Peru.  This regional meeting was one
of three regional meetings planned by the UNCTAD for 1999, the other two being  programmed forOctober 1999 for the African and Asia Pacific regions, to be held respectively in Kenya and
Sri Lanka.
71. Mr. Lanvin informed CTD that a meeting of an UNCTAD working group of legal and
regulation experts was planned for 14-16 July 1999 to address issues relating to electronic  commerce
and development.  The fourth session of the UNCTAD on electronic commerce  was planned for19-23 July 1999, in order to discuss developments since UNCTAD IX and possible themes for
UNCTAD X.  Mr. Lanvin said that since the  launching of UNCTAD's work on electronic commerce
in 1994, the organisation  had followed a cooperative approach, and had invited organisations and
agencies with competencies in a number of different areas.  Thus both the WTO and the WIPO were
invited to the meetings planned for 19-23 July.  The UNCTAD had also enjoyed reciprocal treatmentfrom a number of organisations.
72. The Chairperson thanked Mr. Lanvin and proposed that the CTD take note
 of his
presentation.
73. The representative of Japan thanked Mr. Lanvin for the presentation and informed the CTD
that the holding of the workshop held on 17-18 June had been originally proposed by the delegation of
Japan.  The objective was to stimulate the use of electronic commerce by enterprises in developing
countries.  He said that the objectives set  for the seminar had been achieved, and he looked forward
to the full written report from the UNCTAD Secretariat.
VI. TECHNICAL COOPERATION: PRESENTATION BY THE SECRETARIAT
74. The Chairperson recalled that  Mr. Jean-Maurice Léger had, on the occasion of the
25th Session of the CTD, made a presentation regarding technical cooperation activities held by the
Secretariat, and in particular, on the budgetary difficulties encountered in this context.  She said a
number of Members were of the view that it was important to provide technical cooperation activities
with a more solid budgetary base and, in particular, to incorporate, technical cooperation activities
into the regular budget of the WTO.  She said that she as aware that, since the 25th Session of the
CTD, the African Group had held discussion on this subject.  She therefore invited Mr. Léger toprovide Members with an update on progress made on the subject of technical cooperation activities
and their funding since the 25
th Session.
75. Mr. Léger said that the importance of technical assistance in terms of capacity and
institutional building was recognized in many of the technical assistance provisions included in WTO
Agreements, as part of "Special and Differenti al Treatment", and had also been confirmed by
Ministers in past WTO Conferences.  It was also realized that the ability of developing countryWT/COMTD/M/26
Page 17
Members to meet their obligations and commitments remained, at least partly, contingent on the
provision of adequate and satisfactory technical assistance.  Notwithstanding the high priority
accorded to technical cooperation, the Regular WTO Budget for technical assistance had remained at
the same level during the past four years, that is, at CHF741,000.  Only through extra-budgetary
contributions had the Secretariat been able to fulfill many of the requests for technical assistance fromleast-developed countries, developing countries and economies in transition.  Even regarding the
least-developed countries, to which high priority  was attached, the 1997 High-Level Meeting did not
result in any new financing to implement the Inte grated Framework.  In addition, the High-Level
Meeting also endorsed two other recommendations affecting LDCs.  These concerned the need to
assist least-developed countries in the process of accession, and the need to provide assistance in
preparing their Trade Policy Reviews.  No additional resources had been made available for these
programmes either.  Furthermore, the growing Membership of WTO was likely to result in a furtherincrease in technical assistance.
76. Mr. Léger said that when the Secretariat last presented the financial situation regarding
technical assistance on 4 June 1999, a shortfall of CHF 2.6 million was projected for 1999.  On
projected expenditures of CHF9.4 million for 1999, already 60 per cent had been committed at that
time.  The situation was even worse one month later, at the time of the 26
th Session.  On a cashflow
basis, that is, assuming that no additional funding were received in 1999 through extra-budgetary
contributions, the available funds had already been entirely committed.  In other words, the Secretariat
was not in a position to  respond positively to any new request for technical assistance in 1999 unless,
of course, additional funding was forthcoming (refer to Annex).  The financial constraints being faced
in 1999 were first announced to the Budget Committee on 25 March 1999 in document CRP(99)07.Owing to the inadequate nature of the regular WTO budget for technical assistance, it had become
becomes highly difficult for the Secretariat to undertake any serious planning, even in the short term,
and impossible to envisage on-going programmes, when 90 per cent of projected expenditure for 1999
were financed through yearly ad hoc grants which, in turn, were subject to each Member's financial
situation and priorities, introducing volatility in the funding process.
77. Mr. Léger said that  the Secretariat remained  firmly committed to augmenting the availability
of technical cooperation through out-sourcing.  He reaffirmed the Secretariat's intention to continue to
work closely with other international organizations, and to enlarge the scope of application to allow
the engagement of external consultants to supplement its work.  However, it was not possible to out-
source all subjects, and the need would remain for a WTO presence in regional and national seminars.
Out-sourcing through consultancy contracts, would further increase the financial requirements for
technical assistance.
78. Mr. Léger said the establishment of the Global Trust Fund for WTO Technical Cooperation is
an important initiative to achieve a more efficient management and implementation of WTO technical
cooperation activities.  However, as stated in the preamble to the Memorandum of Understanding
establishing the Global Trust Fund, this initiative was not a replacement for an adequately funded
WTO regular budget for technical cooperation.
79. The representative of New Zealand thanked Mr. Léger for his presentation, and said that her
delegation was disturbed by the poor financial situation affecting technical cooperation activities.  She
said that New Zealand had made an  additional  contribution of  CHF130,000, and that a similar
contribution was to be made in August 1999 specifically for activities in the Asia-Pacific region.  She
hoped that other Members would take heed of Mr. Léger's comments and find  additional funds intheir budgets.
80. The representatives of the European Communities said that his delegation were very
concerned about the financial situation of technical cooperation activities.  His delegation had
understood that the Budget and Finance Committee had not pronounced itself on this issue, and hadWT/COMTD/M/26
Page 18
not had an in-depth discussion on the issue.  He supported the idea put forward by Mr. Léger that the
secretariat prepare a paper presenting information on the financial situation, as this be helpful in
initiating action from the capitals as soon as was possible.
81. The representative of Egypt said his delegation were disturbed by the alarming picture
presented by Mr. Léger, and expressed their extrem e disappointment at the situation.  Extra-budgetary
contributions were made  by a small number of donors who were not on the whole major trading
partners.  Technical assistance was an important part of the overall balance of rights and obligations
of the Uruguay Round Agreements.  Referring to the comments made by the European Communities,
he said that donors should take the funding difficulties more seriously.  The paper prepared by
Mr. Léger should address possible solutions to financing problems.  The representative of Egypt said
that those members who were talking about comprehensive negotiations, and about further
commitments, needed to be aware that developing c ountries would have great difficulties in accepting
new commitments while they experienced difficulties with existing commitments, and technical
assistance was not forthcoming.
82. The representative of Senegal supported the statement made by Egypt, and added that his
delegation had made a presentation on the subject to the African Group.  He recalled the commitment
in the Agreement Establishing the WTO to ensure that developing countries, includingleast-developed countries,  benefitted from a share in  the increase in world trade that was
commensurate with their development needs.  It wa s universally recognised that technical assistance
was one means by which the increased participation of developing countries, and least-developed
countries, in world trade could be achieved.  It was therefore important that technical assistance
provided was of good quality and had a  concrete impact on the trade of developing countries.  Hesaid that the needs of developing countries were increasing, while the technical assistance resources
availed to them were diminishing.  From this point, his delegation had a number of proposals.  First it
was absolutely necessary that WTO members reaf firmed their commitment to Technical Assistance
activities that would respond to the needs of develo ping countries, including least-developed countries
Second, it was necessary to respond to financial constraints by incorporating the funding of Technicalassistance activities through the regular budget.  Third, it was  necessary to address the financial
constraints affecting the WTO, by establishing a floor for resources (say, CHF10 million) allocated to
technical assistance activities, without prejudice to further funding from extra budgetary sources.
Finally, the WTO should organise on an annual basis a day devoted to reflection by members on the
issue of technical assistance, which would cover a  range of issues such as  financing, the delivery of
technical assistance and an assessment of its impact.
83. The representative of Djibouti said that technical assistance was the only means by which
developing countries could arrive at an understanding of the functioning of the WTO.  He said it was
necessary to properly evaluate the delivery of technical assistance;  this would be of benefit to donor
countries who wished to ensure that the funds they provided were well used.
84. The representative of Norway recalled that his delegation had intervened at length on this
issue in a previous meeting, and reiterated the importance of funding technical assistance through the
regular budget.  He said that the establishment of the Global Trust Fund was an intermediate solution
which would improve the management of technical assistance, and since his delegation had
participated in drafting the modalities for the fund it would disburse its extra budgetary contributions
through the fund.  He emphasised that the Global trust Fund would not on its own solve the
fundamental problem of long term budget planning as  this required that all funds be disbursed through
the regular budget.  He said that there was an issue of fairness at stake, since technical assistance was
one of the core activities of the WTO.
85. The representative of the European Communitie s, reacting to the comments made by Egypt,
said that they would do what was possible to impr ove the situation regarding the funding of technicalWT/COMTD/M/26
Page 19
assistance activities.  It was untrue for some delegations to assert that donors such as the European
Communities were not taking the problem seriously;  the bulk of financing for technical assistance
came from the European Communities.  He also recalled that at the High Level Symposium on Trade
and Development, two Member States of the Communities had each pledged an extra CHF1 million at
the meeting.  He said that it was of no use to start a polemic regarding the funding of technicalassistance,  as this would detract from the seriousness of the issue.
86. The representative of Haiti supported the proposal made by Norway that the funding of
technical assistance activities be fully integrated into the WTO budget.  He said it was necessary to
find a long term, sustainable solution to the problem of funding technical assistance.  He said it was
vital to avoid situations where requests  for technical assistance were rejected owing to lack of
funding, adding that this would have particularly adverse consequences for least-developed countries.
87. The representative of Namibia said his delegation associated itself with Egypt and Senegal in
stressing the need to develop sustainable means of supporting the delivery of technical assistance.  He
said that the situation reported by Mr. Léger was an embarrassment, and added that technical
assistance was not altruism but a necessary condition for the effective participation of developing
countries in the multilateral trading system.  Developing countries could not take on board additional
obligations without technical assistance.  While his delegation  were sympathetic to the constraintsfaced by the Technical Cooperation Division, they  did not share the view that outsourcing was
necessarily a solution, on the basis that external resource persons often lacked a detailed knowledge of
the multilateral trading system, when compared to in-house experts.  He said that his delegation
supported the proposal by Senegal that a seminar be convened on technical assistance.
88. The representative of Pakistan took note of the alarming situation presented by Mr. Léger.
His delegation associated itself with the remarks made by Egypt, Senegal and Namibia, and
welcomed the contribution announced by New Zealand.  Technical assistance was a bridge between
developed and developing countries, and all the more so as the third Ministerial Conference drew
near.  His delegation wished to place on record its concern regarding the state of funding of technical
assistance activities, and requested that Mr. Léger's presentation  be circulated to Members.  Therepresentative of Pakistan thanked the European Communities for clarifying its position, adding that
prior to clarification, the delegation of Pakistan had the same understanding of the European
Communities' position as that held by Egypt.
89. The representative of Mauritius welcomed the statements made by New Zealand, Norway and
the European Communities, thanked Egypt, Djibou ti, Namibia and Senegal for their remarks, and
associated his delegation with the remarks made by Haiti.  He echoed the remarks made by Norway
that a long term solution to the problem of financing technical assistance was required.  He said thattechnical assistance was part and parcel of Part IV of the GATT, and was necessary to build lasting
capacity in developing countries.  He singled out programmes for "training trainers" run by the
European communities and the UNCTAD as having been particularly beneficial, and providing value
for money, saying that this could be considered as a model.
90. The representative of Canada shared the views expressed by a number of delegations that the
situation regarding the funding of technical assistance was critical, and welcomed the preparation of a
paper by the Secretariat giving the details of the deficit, and suggested that the secretariat also make
some suggestions as to possible remedies.  She also welcomed the proposals made by the African
Group regarding technical assistance, and particularly the proposal relating to the holding of a one day
discussion  on technical assistance.  She said that the CTD could be an appropriate forum in which tohold the discussion.  Finally, she said that Canada was giving serious consideration to integrating
technical assistance into the assessed contributions to the regular budget.WT/COMTD/M/26
Page 20
91. The representative of Egypt, responding to the comments made by the European
Communities, said he had not intended to offend anybody.  He repeated that the situation surrounding
the funding of technical assistance was alarming, and said that the response made by the European
Communities, that they would seek to initiate action as soon as possible, would have been acceptable
6 months before when the issue was first raised.  Egypt was very grateful for assistance receivedthrough the WTO, and funded by member states of the European Communities, as well as others.  His
delegation also acknowledged the contributions made by a  number of European Members towards
the establishment of the International Law Centre.  However, one had to judge by observable results,
and the truth of the matter was that the projected shortfall in the funding of technical assistance
activities was not a new issue, but one that had been the subject of discussion for at least six months.
He reiterated that major trading partners had major responsibilities, and that  those that benefitted
most from the multilateral trading system needed to be  the biggest contributors.  He repeated that the
major component of funding  for technical assistance activities came from Members that were  not
themselves major trading partners.  His delegation held the view that adequate provision of technical
assistance was a test by which to measure the commitment of developed country members to ensure
the effective integration of developing and least-developed countries and the equitable distribution of
the benefits of the multilateral trading system.  He said it was therefore distressing that every reportconcerning the funding of technical assistance activities was worse than the preceding one, and added
that his delegation would take up the issue at every possible occasion to ensure that it was properly
addressed.
92. The representative of Cuba supported the statements made by Egypt, Senegal and Mauritius.
He said that technical assistance was  a means by which to integrate developing countries into the
multilateral trading system, and was an integral part of the balance of rights and obligations.  If the
provision of technical assistance to developing countries was inadequate, they would not be in a
position to accept new obligations, nor in a posit ion to fully implement existing commitments.  He
also made reference to discussions that had taken place in the Committee on Market Access, and said
that developing countries had been required to provide information to the Integrated Database.Developing countries could not meet this requirement owing to lack of capacity, and at the same time
they were told that the funds were lacking to provide the necessary technical assistance.  This was a
glaring internal consistency  in the working of the WTO.  Finally, he said that while it was appropriate
to thank donors for providing funding, it was also appropriate to encourage all developed trading
partners to provide resources for the delivery of technical assistance.
93. The Chairperson said that certain delegations , namely Denmark, Finland, Hong Kong, China,
the Netherlands, Norway, Sweden, Switzerland, the United Kingdom, and the European Commission,
had requested her to inform the CTD regarding the initiative taken by these Members to establish a
Global Trust Fund  (GTF).  The text referring to the GTF had been circulated to Members, along with
a cover letter, in document Job No.3788/Rev.1.  She in vited the representative of Sweden to take the
floor on this matter.
94. The representative of Sweden said that the GTF  was  intended to improve the management
and delivery of WTO technical assistance, to complement resources made available for these
activities through the budget, and to address the administrative complications caused by the
multiplicity of national trust funds.  Sweden had transferred the resources it had committed to WTO
technical assistance from its national trust fund to the GTF.  The GTF was open to receive voluntary
contributions from donors.  He invited other Members to contribute to technical assistance through theGTF.
95. The representative of Japan said that the current funding situation was grave.  It was
necessary  to bear in mind both short term and long term perspectives, the short term perspective
being that fact that there was a shortfall of CHF 2.6 million relative to existing funding requirements.
He proposed that the Chairperson write to the Chairperson of the Budget Committee to suggest thatWT/COMTD/M/26
Page 21
the issue of funding for technical  assistance be discussed.  A longer term perspective needed to take
into account the fact that there had seemed to be a surplus at the end  of 1998.  It was also important
to take into account the fact that forthcoming trade negotiations would place heavy demands on the
human resources of the WTO Secretariat.  One solution, from a longer term perspective, to the
problem of adequate provisions of resources, both financial and human, for technical assistance lay inincreased coherence with other international organisations, notably the International Monetary Fund
and the World Bank.
96. The representative of Ghana said his delegation supported the statements made by Egypt,
Djibouti, Mauritius, Haiti and Pakistan, adding that his delegation were alarmed by the presentation
given by Mr. Léger.  He said the present crisis stemmed from the persistently low level of funding
through the regular budget.  The establishment of the GTF was a stop-gap measure, and a long term
resolution of the problems relating to the funding of technical assistance activities required that waysbe developed to increase funding through the regular budget.  He proposed that the Chairperson
initiate consultations on this matter.
97. The representative of Hong Kong, China said that the situation was critical, and added that the
issue of providing adequate funding for technical assistance activities should be taken up the
Membership as a whole.  She said that the Norwegian proposal for the funding of technical assistanceactivities through the regular budget should be given serious consideration.
98. The representative of Switzerland said that there appeared to be a broad consensus regarding
the nature of the problems affecting the financing of technical assistance, and the consequences of
these problems.  His delegation supported  the establishment of the GTF, and added that increased
contributions through the regular budget was a logical step on from the GTF.  He echoed the pointmade by Japan that it was necessary to take into account aspects that went beyond purely financial
considerations, to include the question of human resources.  The organisation of technical assistance
activities needed to be examined, and he stressed that outsourcing of activities was a viable option as
other organisations did have a comparative advantage in certain areas of assistance.  It was also
necessary to take into account qualitative aspects relating to the delivery of technical assistance,through the implementation of evaluation procedures.
99. The representative of Djibouti said that seminars and other activities  held at a regional level
were very valuable in facilitating the exchange of information and ideas at a high level between
policymakers from Members states.  Such activities also increased policymakers' knowledge of
multilateral trade rules, which helped further trade liberalisation.
100. The representative of Brazil said the surplus alluded to by Japan was illusory and transient in
nature.  He said that the increased financing of assistance through the regular budget would entail
increased contribution by all Members.  He recalled that a number of developing countries already
were in arrears in regard to the payment of th eir contribution to the WTO, and that the Budget
Committee had been engaged in work relating to the threshold for minimum contributions to the
WTO in order to lessen the burden on developing countries.  He agreed with Japan that forthcoming
trade negotiations would place additional burdens on the human resources of the Secretariat, as wellas on developing country delegations.  He said that as a number of new trade issues were not asked
for by developing, but rather developed, members, developing Members should not be asked to share
equally in the cost of providing technical assistance.  He said that there was a differentiated
responsibility between groups of Members regarding the provision of technical assistance.  Regarding
solutions to the funding crisis, he said that it followed from what he had just said that his delegationwould have reservations regarding the proposal to fund technical assistance entirely through the
budget.  Alternatives which attracted the sympathy of  his delegation were the possibility of voluntary
contributions from donors, or increased cooperation with other organisations.WT/COMTD/M/26
Page 22
101. The representative of Senegal said that Brazil had made a number of relevant points, but that
these concerned modalities and procedure, whereas it was important in the immediate to secure
agreement the principle of funding technical assistance through the regular budget.  He noted that
many Members shared the point of view of his delegation that technical assistance was not getting the
financial support that it was rightfully due.  This was contrary to the commitments made by Membersand to the principle of solidarity between Members.  He recalled that technical assistance was
beneficial to developing countries, but also developed country members, since the latter would benefit
from the development of their trading partners.  He clarified that his delegation did not seek to
organise a one-off seminar on technical assistance, but rather to hold on an annual basis a day of
reflection on all aspects of technical assistance.  He thanked Canada for its support in this respect.
102. The representative of New Zealand said her delegation supported a number of the points
made by Egypt and Senegal, and especially the points made by Haiti, Namibia and Senegal that
technical assistance benefitted all Members.  She said that New Zealand, as a developed Member and
a donor, had gained much from the contributions it had made towards technical assistance projects,
especially from those that had targeted to countries in the Asia-Pacific region.  She echoed the point
made by Switzerland that there was consensus as to the nature of the problem faced, and that it was
necessary to seek solutions.  She said that the proposal by Senegal to hold a day of reflection ontechnical assistance was a useful first step, and she encouraged the Secretariat to examine whether this
could be taken up in the near future.  Her delegation also welcomed the establishment of the GTF.
103. The representative of Namibia said his delegation had understood that the GTF was a
transitional measure.  Regarding the question of outsourcing, he said that the point his delegation had
wished to make was that in the experience of Namibia, the outsourcing of technical assistanceactivities had usually not been productive in terms of the delivery of effective technical assistance.
He added that the difficulties faced in delivering technical assistance needed to be addressed in a
systemic way.
104. The Chairperson said that the discussion that had been held reflected the importance attached
to technical assistance, and requested the Secretariat to take note of all proposals that had been made
so that some of them might be implemented, citing the proposal made by the delegation of Senegal
regarding the holding of a day of reflection on technical assistance as one particularly worthy of
attention.  She said that following the discussion held in the 25th Session of the CTD, she had
addressed a letter to the Chairperson of the Budget Committee, and that both committees were liasing
with each other in order to set a convenient date on which to hold an extraordinary session devoted to
the financial crisis affecting technical assistance.  The Chairperson said that she would address a
second letter to  the chairperson of the Budget Committee, informing her of the discussion held at thismeeting.  The Chairperson said that she also envisaged holding discussions with the Chairman of the
General Council.  She expressed the hope that the support of the whole CTD could be counted on,
concerning the incorporation of funds in the regular budget, and also for the establishment of the
GTF.
VII. REVIEW OF THE APPLICATION OF SPECIAL PROVISIONS IN THE
MULTILATERAL TRADE AGREEMENTS AND RELATED MINISTERIAL
DECISIONS IN FAVOUR OF DEVELOPING COUNTRY MEMBERS, IN
PARTICULAR LEAST-DEVELOPED COUNTRY MEMBERS:  BACKGROUND
NOTE BY THE SECRETARIAT
105. The Chairperson recalled that by decision of the CTD at its 22nd Session on 2 November
1998, the Secretariat was requested to prepare a Background Note compiling information on the
difficulties, if any, that members may have experienced either in the implementation of theseWT/COMTD/M/26
Page 23
provisions and/or in making use of these provisions.  The Secretariat had  circulated a questionnaire
on 12 November to members in order to collect the information required for the preparation of the
document.  As of the 25th Session of the CTD on 4 June, a mere five delegations had provided
responses to the questionnaire, a number which subsequently rose to six when the delegation of
Australia submitted its response.  The  Secretariat had also been making use of information availablewithin the Secretariat.  She informed the CTD that, as indicated at a previous informal meeting, the
Secretariat had put together a first draft document based on the information supplied by delegations
and collected form Secretariat sources.  It had been circulated as a draft document (initially in English
only).  The Chairperson invited Mr. Tulloch, Director, Development Division, to present the draft
report.
106. Mr. Tulloch apologised for the late circulation of the draft document, and said he hoped that
Members had some initial comments to make.  He reca lled that it had been agreed in the CTD that the
Secretariat would do two things.  First, it was to compile and analyse answers to questionnaires
circulated to Members concerning difficulties, if any, in the implementation of provisions for special
and differential treatment.  Second, it was to analyse information already available in the Secretariat.
He said that the draft document was the first result of the Secretariat's efforts, and said that the note
had two parts.  The first presented the information provided by the six Members that had responded tothe questionnaire circulated in November 1998.  It had not been possible to conduct any meaningful
analysis, given the low level of replies.  The second part compiled information available in the various
WTO bodies that  were responsible for the administration of the different WTO Agreements.  The
section included statements made by members in the Trade Policies Review Body,  the review process
of the Dispute Settlement Understanding, and in the different councils and committees of the WTO.As requested by members the Note focused on the statements made concerning the implementation of
special and differential provisions, rather than broader implementation concerns.  Where statements
on special and differential provisions were tied in with broader  concerns regarding  implementation,
these concerns were presented under the heading "General Comments" at the start of each section.  He
said that the document as a whole provided a picture of the genuine concerns that Members hadregarding the implementation of special and differential provisions.  He reiterated that the document
was being circulated in draft form, with a view to completing it in the light of comments made in the
committee.
107. The representative of Brazil said he would make some preliminary and limited comments.  He
said that the broader the approach taken by the paper, the better, and that even if broad concerns were
not related to specific special and differential provisions, the should still be included, perhaps in a
different category.  Regarding  the section on responses to questionnaires, he said his delegation hadnever been optimistic about the level of responses to the questionnaires, since many developing
country delegations were over-burdened with work owing to the preparatory process for the
Ministerial Conference.  The representative of Brazil said that the stage had been reached where the
CTD could profit from discussions held in the General Council Special Sessions. During these a
number of proposals had been tabled that covered agreements regarding which information waspresented in the draft document, though no reference had been made to the proposals.  This was not
surprising  as the material contained in the proposals presented tot he General Council was not
available in specific committees.  He said that committees such as the respective committees on anti-
dumping, safeguards and subsidies had limited their work to operational and house-keeping
exercises, without there being much debate or work of any analytical nature.  His delegation did notbelieve that the Secretariat need limit the circulation of  the document in order to take into account  the
proposals made to the General Council; such work could be done subsequently and separately.
108. The representative of Uruguay said his delegation regretted that his delegation had not had
time to study the document in detail, and added that  the document would be forwarded to his capital,
and that his delegation would provide further comments at a later date.  Referring to page 13 of thedocument and the section on agriculture, he said that while there may not have been any statementWT/COMTD/M/26
Page 24
made in the Committee on Agriculture regarding special and differential treatment, one submission at
least had been made - by Australia - to the General Council as part of the preparatory process.  The
delegation of Uruguay supported this proposal, along with other Members belonging to the Cairns
Group of  countries.  He wished to know whether only information available in subsidiary bodies was
going to be taken into account, or whether the number of proposals submitted to the General Councilwould also be considered.
109. The representative of the European Communities said that the mandate given to the secretariat
was to examine the work conducted by subsidiary bodies, and expressed the unease of his delegation
regarding the suggestion that proposals submitted to the General Council be examined.  He said that
such an examination would be carried out in any case elsewhere, and that the exercise conducted by
the CTD was of a factual nature, and should therefore avoid entering into the more political debate
that occurred in the General Council.
110. The representative of Egypt said that his de legation would comment on the document in detail
in subsequent meetings, and urged delegations to submit responses to the questionnaire in order that
these responses be included in an updated version of the document.
111. The representative of Pakistan said that the document was a useful one, and that his
delegation would use it as a reference tool.
112. Mr. Tulloch thanked Members for their prelimin ary comments, and said he would appreciate
receiving further comments.  Referring to the  point made by Brazil regarding the General Council
process, and also the view expressed  by the European Communities in this regard, Mr. Tulloch said
that such considerations had been carefully weighed in the preparation of the document, and that the
decision had been made not to consider the proposals made in the General Council Special Sessions,given that this was an on-going process.  He said that information on special and differential
provisions  contained in subsidiary bodies had highlighted issued similar to those raised in the General
Council, with the exception of the Agreement on Agriculture, regarding which he shared the surprise
expressed by the delegation of Uruguay that no statement had been  made..  Mr. Tulloch requested
that Members provide their views on whether the CTD should conduct some work regarding theproposals submitted to the General Council as a supplement to the work it had already initiated on the
implementation difficulties of provisions for  special and differential treatment.
VIII.  POSSIBLE INPUTS BY THE CTD TO THE 3
RD WTO MINISTERIAL
CONFERENCE
113. The Chairperson recalled the discussions that took place at the 25th Session of the CTD.  It
was agreed that the Secretariat would prepare an Informal Note on the Committee's possible input into
the Seattle Ministerial Conference, reflecting the discussions held.  This note was duly prepared and
circulated to Members on 22 June 1999 as  Job No.3578.  The Chairperson invited delegates to
comment on this paper, and to provide further thoughts regarding possible inputs for the Seattle
Ministerial Conference.
114. The representative of Brazil recalled that in the last meeting his delegation had expressed
concern about the way in which the CTD could contribute to the discussion held in the General
Council regarding the preparatory process for the third Ministerial Conference.  He said that several
Members envisaged that the third Ministerial Council would create new rights and obligations for
Members and added that Brazil did not necessarily wish to dissociate itself with this view.  He said
that on the basis of the experience of implementation of Uruguay Round Agreements and of thespecial and differential provisions contained therein, the expectation of Brazil had been frustrated inWT/COMTD/M/26
Page 25
several areas.  He said that in the first instance, those special and differential provisions which were of
a temporary nature, and which were due to  expire, had proved to be insufficient to address the
structural problems of developing countries.  Furthermore, a number of special and differential
provisions were limited to best endeavour clauses, which were often not  observed.  There was also
the question of the interpretation of special and di fferential provisions in the context  of dispute
settlement procedures.  Very often, such provisions  were considered to be exceptions to the rules, and
the burden of proof often fell on developing countries to justify recourse to such provisions.  All these
deficiencies needed to be addressed.
115. Brazil had two objectives: first to ensure that the imbalances of the  Uruguay Round were
corrected, and second, to avoid a situation in which any new rights and obligations failed to take into
account the development concerns of Members.  He said that the CTD had an important role to play
and that the contribution of the CTD needed to be effective and directed towards the negotiatingprocess.  He said developing countries had difficulty in identifying and protecting their interests.  It
was necessary to be realistic about the ability of developing countries to engage fully and properly in
negotiations, and that care was needed to ensure that developing countries were not left behind in the
preparatory process owing to their shortfalls in capacity, and a fragmentation of the preparatory
process.  He quoted from the Geneva Ministerial Declaration which stated that "a process (…) beestablished under the direction of the General Council to ensure full and faithful implementation of
existing agreements and  to prepare for the Third Session of the Ministerial Conference".  He noted
that in a number of subsidiary bodies, there were efforts to speed up the preparatory process, which,
though they could be understood, carried the danger that developing country interests would not be
reflected at the third Ministerial Conference.
116. The representative of Brazil said that it was recognised that the CTD was a special and
peculiar body within  the structure of the WTO, since  its work was, by necessity, of a  cross-cutting
and horizontal nature, and because it addressed one of the pillars of the organisation, namely the
question of development.  There were several ways in which work could be conducted within the
CTD so as to have an impact on the preparations of the Ministerial, in addition to preparing Members.One way was for Members  to use the work of the CTD to develop and present proposals to the
General Council, either as individual Members or as clusters of Members.  A second way was for a
Member to propose that the General Council mandate the CTD to conduct work which would serve as
an input to the preparatory process.  He recalled th at  one of the terms of reference of the CTD was to
"review periodically (…) the application of special provisions  in the Multilateral Trade Agreements
and related Ministerial Decisions  in  favour of developing country  Members, and in particular least-
developed country Members, and report to the General Council for appropriate action.".  The CTDwas thus mandated to consider any question that arose in the application of special and differential
provisions.  He said that there had been a number of proposals made in the General Council regarding
special and differential treatment, but none of these had been discussed, for several reasons.  The
CTD, however, had the time and the mandate to consider such proposals, and developmental concerns
in general, and suggested  in this respect that an emphasis could be placed on implementation issues
and the built-in agenda.  Above all, the focus of the work conducted by the CTD should have as its
focus the mainstreaming of development into the WTO.  He suggested that on possibility was for  the
Secretariat to developing a work programme leading to the Ministerial Conference that focussed on
analysing and debating the proposals submitted to the General Council which had a bearing on special
and differential treatment.  Second, it was necessary to examine how best to reflect the work of theCTD in the General Council, and he reiterated his delegation's concerns that the preparatory process
would be fragmented if a number of subsidiary bodies made contributions on their own initiative.
One possibility would be for the secretariat to prepare a paper based on a compilation of proposals
made and discussion held.  He acknowledged the concern expressed by the European Communities
that the CTD avoid engagement in political debate, and sad that any paper prepared by the Secretariatneed be purely factual and not analytical.WT/COMTD/M/26
Page 26
117. The representative of the European Communities said that it was necessary to focus on what
was feasible, and recalled in this context that one delegation had suggested that the CTD's
contribution needed to be ready by 30 September 1999.  He said that there was agreement that the
CTD did not have the mandate to present, on its own initiative, recommendations to the special
session of the General Council.  The CTD could however focus on work under its mandate, and reportto the ordinary General Council. In doing so it could signal that the work undertaken was useful
background material to the Ministerial Conference, and the General Council could then come to a
decision as to whether the work done by the CTD  was relevant to the preparatory process.  Referring
to the Secretariat Note (Job No.3578) and paragraph 4, he said that a point regarding coherence issues
in relation to technical assistance should be included.
118. The representative of Pakistan said that his delegation agreed fully with the statement made
by Brazil, and welcomed the proposals that had been made.  He said that members could benefit fully
from the work of the CTD, and recalled Pakistan's intention to use the document prepare by the
Secretariat on the implementation of special and differential provisions as a background document.
He said that the Secretariat Note, Job No.3578 regarding possible inputs to the Ministerial Conference
constituted a basis from which proposals could be derived.  He said that if the CTD were to follow the
work programme and proposals suggested by Brazil, it would be able to contribute in a most effectivemanner to the preparation of the Ministerial Conference.
119. The representative of Uruguay said that the Geneva Ministerial Declaration was clear that the
preparatory process was under the mandate of the General Council, and that it was important that the
process not be fragmented as this would create difficulties for developing countries.  He cautioned
against advancing at a speed that was greater that that at which the General Council handled thepreparatory process.  He said that development was a horizontal theme, and supported one of the
suggestions made by Brazil that the CTD could solicit from the General Council the mandate to
undertake work of a horizontal nature concerning development with  a view to making a contribution
to the preparatory process for the third Ministerial Conference.  He said that above all, the CTD
needed ensure that developing countries were well prepared to face forthcoming trade negotiations,and said that his delegation wishes to support what had been said by Brazil in this regard.
120. The representative of Hong Kong, China expressed the interest of her delegation in the
statement, and proposals contained therein, made by Brazil.  She said that the CTD had  a mandate to
fulfil, and added that there was a realisation in the General Council that there was a need to for
coordination of  work undertaken within the organisation, given that it was difficult  for the General
Council to comprehensively address all  issues across the full range of WTO agreements.  Referring to
Job No.3578, she said that ideas, recorded in para graph 4, had been put forward by Members, and that
these issues needed to be further discussed.  Under paragraph 5, which dealt with the future work
programme of the CTD, she said that were the document WT/COMTD/W/31 on the Participation of
Developing Countries in International Trade issued in 1997 to be updated, comments made by
Members in the CTD  when the previous version was discussed needed to be taken into account.
121. The representative of the United States said that one detected from the statements made by
Brazil, Pakistan and Uruguay, a logical train of thought regarding the role of the CTD in terms of
preparations  for the Ministerial Conference.  Ther e was a certain inevitability in tasking the CTD to
undertake certain types of work, on the basis of items that had been tabled in the General Council,
aside from the CTD's own mandate.  He noted that it had also been pointed out that such work should
be undertaken on the basis of an initiative of a Member in the General Council, to ensure thefulfilment of the General Council's role at all times as established by the Geneva Ministerial
Declaration.  This was the right way of proceeding, especially in light of the resource constraints that
affected developing countries.  He said that the Secretariat Note, Job No.3578, was somewhat
ambiguous as to the role of the General Council, adding that it was somewhat presumptuous in
paragraph 4 in referring to the input of the CTD to the Seattle Ministerial Conference, and that itWT/COMTD/M/26
Page 27
would perhaps be necessary to reword this statement while a decision was awaited from the General
Council.
122. The representative of Egypt said that his delegation wished to support many of the elements
contained in the statement made by Brazil, and that these could be incorporated into a work
programme that extended to the third Ministerial Conference.  He echoed the point made by theEuropean Communities that many of the inputs listed in paragraph 4 of the Secretariat Note,
Job No.3578, could be incorporated into the work programme of the CTD.  However, it was necessary
to bear in mind that the third Ministerial  Conferen ce would be held by the end of 1999, and that there
was a need for developing country Members to be equipped and have a contribution to make to the
Ministerial Conference.  He agreed that the chapeau of paragraph 4 was perhaps misleading, as the
contribution of the CTD would be to the preparatory process, or for the direct use of delegations, but
not directly to the Ministerial Conference.
123. The representative of the European Communities said he found some of the proposals made
to be  somewhat contradictory.  On one hand, it was being held that the preparatory process should
not be fragmented, while on the other hand a mandate was being sought from the General Council for
the CTD to undertake work for the preparatory process.  He said that while his delegation would not
stand in the way of seeking a  mandate from the General Council, his delegation would cautionagainst excessive ambition, and notably a situation in which the CTD would take on matters that went
beyond its mandate, in particular work that went beyond factual reporting.  He noted that the General
Council  was not due to meet prior to the end of July, and that if a mandate was to be sought from the
General Council, no work could be undertaken prior to the end of July.  If in the event the mandate
given by the General Council to the CTD did not go beyond the CTD's existing mandate, time wouldhave been wasted.
124. The representative of India said that his delegation fully supported the views expressed by the
delegation of Brazil, and in addition proposed that market access issues should be addressed under
paragraph 4 (a) of the Secretariat Note, Job No.3578, but that this should be done in the context of
anti-dumping  and countervailing measures. Issues relating to access to technology should also beaddressed, as should the questions of  performance requirements and mandatory transfer of
technology under the TRIMs agreement.
125. The Chairperson thanked Members for their cont ributions and said that the CTD took note
 of
statements made.  She invited the secretariat to develop a work programme, as this would be helpful
in the context of future discussion on this point.
IX. PARTICIPATION OF DEVELOPING COUNTRIES IN WORLD TRADE: RECENT
DEVELOPMENTS AND TRADE OF THE LAST-DEVELOPED COUNTRIES
126. The Chairperson said that at the 25th Session of the CTD, a number of Members recalled that
the Secretariat had at regular intervals produced a document examining the participation of
developing countries in world trade.  The last time such a document had been prepared was in
September 1997, in the form of WT/COMTD/W/31.  In the course of informal consultations, thedelegation of Egypt proposed that the Secretariat prepare a new document addressing the participation
of developing countries in world trade.  She called  to the floor the delegation of Egypt, and any other
delegation that wished to take the floor on this point.
127. The representative of Egypt  recalled the request made by his delegation at the 25
th Session of
the CTD that document  WT/COMTD/W/31 be updated, and wished to know what the status of the
request was.WT/COMTD/M/26
Page 28
128. Mr. Tulloch thanked the delegation of Egypt for their proposal to update document
WT/COMTD/W/31.  He said that it was appropriate to present an updated version, on account of the
third Ministerial Conference, but also because it would be possible to assess the impact of the
financial crisis on developing countries.  He recalled that WT/COMTD/W/31 covered the period
1991-96.  It would be useful if the updated document examined three period of time:  first,  the verylong run from the foundation of the WTO to the present; second the medium term, that is the 1990s as
whole; and finally the period surrounding the financial crisis, that is 1996 to 1998/1999.  The outline
for the paper envisaged five sections.  First, a section on long run trends which would  largely be
structured along the lines of the corresponding section of the Background Paper prepared for the High
Level Symposium.  Second, a section on data for the 1990's, which could include data on trade by
region and product structure, as well as data on south-south trade.  A third section  would provide a
factual account of developments in trade policies and practices in developing and transitioneconomies since the start of the Uruguay Round trade negotiations, using data from Trade Policy
reviews and other sources.  The fourth section would address the  recent financial crisis and its impact
on trade, by assessing changes in trade patterns in the period 1997-98 as compared with the period
preceding the crisis.  This section could examine the trade of developing countries with countries
affected by the crisis, and changes in the regional and product structure of trade.  The last sectionwould address the participation of least-developed countries in international trade, and provide
updated information on the share of least-developed countries in world trade.  Measure and initiatives
taken at or since the High Level Meeting on Least-Developed Countries could also be examined.
129. Mr. Tulloch noted that delegations had expressed the hope that the paper could be prepared
by September.  He indicated that the statisticians within the secretariat had indicated that datafor 1998 would be available either in September or early October, and that  it was the intention of the
Secretariat to produce the paper for the CTD's consideration at its October meeting.
X. OTHER BUSINESS
130. The Chairperson proposed that an informal session of the CTD be scheduled for 15 October
1999, which would be followed immediately by the 27th Session of the CTD.
131. It was so agreed.
132. The Chairperson thanked the interp reters for their collaboration, particularly in view of the
fact that they had stayed on after 1 p.m. during the morning session, and brought the meeting to a
close.
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