RESTRICTED
WORLD TRADE WT/GC/M/19
4June1997
ORGANIZATION(97-2334)
General Council
24April 1997
MINUTES OFMEETING
Held intheCentre William Rappard
on24April 1997
Chairman: Mr.Celso Lafer (Brazil)
Subjects discussed: Page
1. WTO logo ...............................................2
2. Committee onBalance-of-Payments Restrictions ........................3
(a) Consultation withIndia ..................................3
(b) Consultation withNigeria .................................4
(c) Notes onthemeetings of7February and3-4March 1997 ............4
3. Committee onBudget, Finance andAdministration ......................5
- Report oftheCommittee .................................5
4. Conditions ofservice ofWTO staff................................5
- Progress report bytheChairman oftheWorking Group ..............5
5. Follow-uptotheSingaporeMinisterialConference-WorkingGroupsontherelationship
between trade andinvestment, theinteraction between trade andcompetition policy,
andtransparency ingovernment procurement practices ....................11
- Appointment ofchairpersons ...............................11
6. Dates ofthe1998 Ministerial Conference ............................12
7. Institutional reform andrestructuring oftheSecretariat ...................13
- Draft decision onWTO Secretariat andsenior management structure ......13
8. Offices oftheDeputy-Directors-General .............................18
- Announcement bytheDirector-General ........................18
9. Marrakesh Agreement establishing theWorld Trade Organization .............19
- Extension oftime-limit foracceptance oftheAgreement bytheRepublic of
theCongo ...........................................19WT/GC/M/19
Page2
10. Waivers under Article IXoftheWTO Agreement ......................19
(a) Harmonized System -Requests forextensions ofwaivers .............19
(i) Bangladesh .....................................19
(ii) Bolivia ........................................19
(iii) Nicaragua ......................................19
(b) Senegal -Renegotiation ofSchedule XLIX ......................20
- Request forextension ofwaiver ........................20
(c) Zambia -Renegotiation ofSchedule LXXVIII ....................20
- Request forextension ofwaiver ........................20
(d) Decision ontheintroduction ofHarmonized System changes intoWTO
schedules oftariff concessions on1January 1996 ..................21
- Extension oftime-limit .............................21
11. Follow-up toparagraph 22oftheSingapore Ministerial Declaration ...........22
12. Peru-Recent customs tariff changes ...............................22
13. Frugality measures inKorea ....................................22
14. Accession ofPanama .........................................23
15. Observer status intheGeneral Council fortheHoly See...................23
16. Accession ofGeorgia .........................................24
- Chairmanship oftheWorking Party ..........................24
1. WTO logo(WT/GC/W/55)
TheChairmanrecalledthatattheGeneralCouncilmeetingon7February,Singaporehadoffered
tohandovertotheWTO foritsusethelogousedatthe1996 Ministerial Conference, together with
thecopyright thereon. Thisoffer --theonlyoneonthetable --hadreceived widespread support.
TheSecretariat hadcirculated, indocument WT/GC/W/55, amodel ofthelogoproposed forWTO
use,which didnotinclude theearth mapoftheSingapore logosince thiswould create technical
difficulties initsuseonofficial WTO papers. Ithadalsonotbeenpossible toinclude inthisdocument
thelogoincolour asmight beusedinWTO publications, because oftechnical reasons. Heunderstood
thatdelegationswereinfavourofacceptingSingapore'soffer.Accordingly,heproposedthattheGeneral
Council agree toaccept Singapore 'soffertotransfer totheWTO foritsusethelogousedatthe1996
Ministerial Conference together withthecopyright thereon, andauthorize theSecretariat towork out
thenecessary arrangements withSingapore.
TheGeneral Council soagreed (WT/L/214).WT/GC/M/19
Page3
2. Committee onBalance-of-Payments Restrictions
(a) Consultation withIndia (WT/BOP/R/22)
(b) Consultation withNigeria (WT/BOP/R/25)
(c) Notes onthemeetings of7February and3-4March 1997 (WT/BOP/R/23,
WT/BOP/R/24)
(a) Consultation withIndia (WT/BOP/R/22)
Mr.Jenkins (United Kingdom), Chairman oftheCommittee, recalled thattheCommittee had
heldaconsultation withIndia on21-22 January, andthattheprevious Chairman hadinformed the
General Council atitsmeeting on7February oftheconclusions reached atthisconsultation.
Therepresentative oftheUnited States saidthathisGovernment looked forward toreceiving
from India, atleastthree weeks prior totheCommittee 'sJunemeeting, adetailed plantophase out
allmeasures currently maintained forbalance-of-payments (BOP) reasons. AsIndia wasaware, the
United States believed thatallsuchmeasures should beeliminated inaWTO-consistent manner by
2000,orearlierinthecaseofproductscoveredbytheMinisterialDeclarationonInformationTechnology
Products.1
TherepresentativeofAustraliasaidhisGovernmentconsidereditessentialthatIndiaputforward,
bymid-May atthelatest, apackage forMembers toconsider attheJuneconsultation. Thepackage
should include aphase outprogramme fortheelimination ofimport restrictions, andaddress theissue
ofdisinvokation ofArticle XVIII:B.
Therepresentative oftheEuropean Communities saidthatthisreport, aswellasthatunder
sub-item (b),raised important systemic concerns, since Members hadagreed intheUruguay Round
tostrengthen disciplines relating toBOPprovisions through theUnderstanding ontheBOPprovisions
oftheGATT 1994. There wereclearly alsoimportant trading interests atstake. TheGeneral Council
should, forthesereasons, actively endorse theconclusions oftheBOPCommittee inthesetworeports.
TheCommunity invited bothIndia andNigeria toprovide thenecessary documentation fortheir
forthcoming consultations intime.
Therepresentative ofJapan saidthathisdelegation waspleased tonotethestatement bythe
IMFinthereport totheeffect thatIndia hadnoBOPproblem, andthatitsmeasures under Article
XVIII weretherefore notjustified. Japan looked forward tothesubmission byIndia ofaspecific plan
fortheelimination ofitsquantitative restrictions.
Therepresentative ofNewZealand saidthatNewZealand, likeothers, looked forward tothe
provision byIndia, inatimely manner, ofacomprehensive andbalanced phase-out planforits
quantitative restrictions.
Therepresentative ofIndia saidthathisdelegation hadtaken careful noteofthestatements.
Asallwereaware, theCommittee 'sconclusions hadbeenreached onthebasis ofconsensus. While
India wascommitted toabiding bythese consensus conclusions inletter andspirit, itcould notaccept
some interpretations being made thereof. Forexample, theIMFhadnotstated thatIndia'sBOP
restrictionswereunjustified.NorhadtherebeenanydiscussionintheCommitteeonthelinkagebetween
Article XVIII:B ofGATT 1994 andthe1994 Understanding. India stood byitscommitments, and
would present thephase-out planasagreed tobyit,aswellastherequired documents forthe
Committee 'smeeting, inthemanner, format andtime-frame normally followed intheCommittee.
1SeeWT/MIN(96)/16 andG/L/160.WT/GC/M/19
Page4
Hisdelegation assumed thatthemain purpose ofthestatements atthepresent meeting wastoensure
thatIndia would come upwithaphase-out plan.
TheGeneral Council tooknoteofthestatements andadopted thereport ontheconsultation
withIndia (WT/BOP/R/22).
(b) Consultation withNigeria (WT/BOP/R/25)
Mr.Jenkins (United Kingdom), Chairman oftheCommittee, saidthaton3-4March, the
Committee hadresumed theconsultations withNigeria suspended inSeptember 1996. TheCommittee
hadrecalled thatatitsprevious meeting, Members hadconsidered thatNigeria 'simport restrictions
could nolonger bejustified under Article XVIII:B andtheUnderstanding ontheBOPprovisions of
GATT 1994. Atthattime, Nigeria hadstated itscommitment toproceed withtheearly elimination
ofthese measures, andtodisinvoke Article XVIII:B. Members hadwelcomed theremoval oftwo
items fromNigeria 'simport prohibition list,buthadexpressed disappointment thatsixitems remained
thereon. While some Members hadurged immediate elimination, others hadfeltthataphase outcould
bejustified. TheCommittee didnotfindacceptable Nigeria 'sproposal ofaphase outby2005.
TheCommitteehadagreedwiththeIMF'sanalysisthatacontinuedboldandcredibleprogramme
ofeconomicandtradereformswasessentialtoachievinglastingimprovementsinNigeria'sBOPposition.
TheCommittee hadtaken noteofNigeria 'sreaffirmation ofitscontinuing commitment tophase out
theremaining import restrictions. TheCommittee hadcalled onNigeria toconsult withthose Members
thathadexpressed aninterest andtodrawupatime-schedule fortheelimination ofitsWTO-inconsistent
measures. TheCommittee hadinvited Nigeria toresume consultations intheweek beginning 7July
and,tothatend,hadrequested Nigeria tocirculate, three weeks inadvance, proposals foratime-
schedule. Meanwhile, Members hadreserved theirrights under GATT 1994.
TherepresentativeoftheUnitedStatessaidthathisauthoritiesremaineddisappointedatNigeria's
failure toabide bythecommitment ithadmade intheFebruary 1996 consultation, andconfirmed in
September 1996, thatitwould convert allquantitative restrictions toprice-based measures andcease
toinvoke Article XVIII. TheUnited States expected Nigeria toreturn totheCommittee inJulywith
anacceptable planfortheremoval ofquantitative restrictions.
Therepresentative ofNigeria saidthathisGovernment fullyagreed withtheCommittee 's
conclusions, andwasworking towards meeting thedeadline setbytheCommittee. Nigeria wastaking
concrete action toensure thatitmettheCommittee 'srequirements byJuly, andwascommitted to
fulfilling them.
TheGeneral Council tooknoteofthestatements2andadopted thereport ontheconsultation
withNigeria (WT/BOP/R/25).
(c) Notes onthemeetings of7February and3-4March 1997 (WT/BOP/R/23,
WT/BOP/R/24)
Mr.Jenkins(UnitedKingdom),ChairmanoftheCommittee,drewtheGeneralCouncil'sattention
totheother matters discussed bytheCommittee atitsmeetings on7February and3-4March.
TheGeneral Council took note ofthestatement andoftheinformation contained in
WT/BOP/R/23 andWT/BOP/R/24.
2Including thestatement bytheEuropean Communities under sub-item (a).WT/GC/M/19
Page5
3. Committee onBudget, Finance andAdministration
- Report oftheCommittee (WT/BFA/30)
Mr.Morjane (Tunisia), Chairman oftheCommittee, introducing theCommittee 'sreport on
itsmeeting of21February (WT/BFA/30), saidthattheCommittee hadpaidtribute toitsprevious
Chairman forhisefforts in1996. Ithadalsoadopted acalendar ofmeetings forthecurrent year,
although additional meetings might bescheduled, ifnecessary, topermit theCommittee toadopt the
1998budget intime. Inconsidering thematter ofarrears incontributions, theCommittee hadinvited
itsChairman toconsult withtheChairpersons oftheGeneral Council, theCommittee onTrade and
Development, andtheSub-Committee onLeast-Developed Countries, aswellaswiththeDirector-
General, todiscuss waystoresolve theissueofleast-developed countries inarrears. Inhisconsultations
withthechairpersons concerned, ithadbeenconsidered useful toawait adiscussion onthismatter
intheSub-Committee onLeast-Developed Countries before ameeting withtheDirector-General. He
hoped thattheSub-Committee would come upwithdefinite proposals which could beconsidered by
theBudget Committee, andwhich would permit thismatter toberesolved.
Onthequestion ofaccession ofnewMembers, theSecretariat hadundertaken todraw the
attention oftheworking parties concerned totheDecision byMembers thatobserver governments
intheprocess ofaccession should fullydischarge theirfinancial obligations asobservers before the
completion oftheiraccession process3.TheCommittee hadalsodiscussed theideaofdrawing upa
correlation between thebudget andageneral policy statement identifying theobjectives andincluding
awork programme fortheWTO forthecoming year. TheCommittee hadalsobeeninformed that
theHeadquarters Agreement provided foranevaluation ofitsimplementation 18months afterits
signature; ameeting hadbeenorganized withtheSwiss authorities, andaquestionnaire onthismatter
distributed toallMembers. Heurged delegations tosubmit anycomments theymight haveonthis
subject totheSecretariat bytheendofthemonth, toenable Members aswellastheSwiss authorities
toprepare forthemeetings scheduled forJune. Inconcluding, hedrew attention totheCommittee 's
recommendations inparagraphs 8and10ofitsreport regarding inactive Members andNiger 's
contribution tothebudget andadvance totheWorking Capital Fund.
TheGeneral Council tooknoteofthestatement, approved theBudget Committee 'sspecific
recommendations inparagraphs 8and10ofitsreport inWT/BFA/30, andadopted thereport.
4. Conditions ofservice ofWTO staff
- Progress report bytheChairman oftheWorking Group
TheChairmanrecalledthattheWorkingGrouponconditionsofserviceofWTOstaffestablished
bytheGeneral Council atitsmeeting on7February, wastoreport ateachmeeting oftheGeneral
Council.
Mr.Morjane (Tunisia), Chairman oftheWorking Group, recalled thattheWorking Group
wastocomplete itswork andsubmit itsfinalreport totheGeneral Council byend-May. TheGroup
hadbeenmeeting weekly andhadthusfarheldseven meetings. Ithadalternated between consideration
ofstaffregulations andpension planregulations toensure uniform progress onbothfronts. The
Secretariat hadprepared 19documents covering thedraftstaffregulations andrules, draft pension
planregulations andrelated topics. TheFrench andSpanish versions ofallbutoneofthesedocuments
would bedistributed bytheendofthatweek. Progress intheGroup hadbeenslow. Two-thirds of
thedraftstaffregulations, theentire draftstaffrulesandapproximately halfofthedraftpension plan
3Financial Obligations ofStates orSeparate Customs Territories whoareObservers totheWTO (PC/8).WT/GC/M/19
Page6
regulations remained tobereviewed. Itwould therefore benecessary toincrease thefrequency of
meetings iftheGroup wastocomplete itswork bythedeadline ofendMay. Tothisend,theWorking
Group would holdseven more meetings.
However, simply increasing thenumber ofmeetings would notguarantee completion ofthe
Group 'stasks bythedeadline. Certain delegations werestillnotinaposition tostatewhether ornot
theysupportedestablishmentoftheWTOSecretariatoutsidetheUNcommonsystem.Othersmaintained
theirpreference foracommon system solution. Acommon thread throughout thediscussions oflate
hadbeentherequest fordetailed costestimates oftheproposals contained inthedraftdecision of18
September 1996. Thequestion ofcostneutrality wascentral totheentire debate. Ademonstrably
cost-neutral solution would notonlyassuage theconcerns ofthose whofeared thatnon-application
ofthecommon system would leadtoincreased costs, butalsoeasethefearsofthose whopredicted
adomino effect iftheWTO adopted asuigeneris approach. TheSecretariat hadundertaken tomake
detailed costestimates available totheGroup atitsnextmeeting. Without these, itwould bedifficult
tomaintain theprogress needed toreach thetarget ontime.
Finally,concerningtheissueoftransparencyvis-à-visthestaff,sinceassumingtheChairmanship
oftheWorking Group, hehadsought tomaintain close contact withtheStaffCouncil. They had
received regular written ororalprogress reports andhadmetoncewiththeChairman oftheGeneral
Council andhimself, andoncewithhimonanother occasion. TheGroup hadextended anadhoc
invitation totheStaff Council tomake astatement atitssixth meeting, following which alengthy
exchange ofviews hadtaken place withmembers oftheGroup. Further suchinvitations might be
extended infuture, ifnecessary. Members hadaformidable taskbefore them. However, itwasnot
aquestion oftechnical details, ofdiscussions ontexts, orofthenumber ofmeetings; rather, itwas
aquestion ofpolicy --essentially offinancial policy --thateachhadtoface, aswellasofpolitical
considerations. Hewascertain thathecould continue tocount onthegoodwill andcooperation of
alldelegations tobring theGroup 'swork toaconclusion by31May.
TheDirector-General saidthathehadtaken careful noteofthereport bytheGroup 'sChairman.
Herecalled thatinFebruary, hehadwelcomed theestablishment oftheWorking Group andhadhoped
thatitwould conclude itswork andarrive atapositive outcome assoonaspossible --evenbefore
thedeadline ofendMay--andthattheStaff Council 'sposition would betaken intoaccount ina
transparent way. Heunderstood thatthework intheGroup hadthusfarnotproceeded aswellnor
asexpeditiously asexpected, andwasveryconcerned. There were twomain issues atstake inthe
discussion: first, there wasthebudgetary aspect ofasolution which would assure tothestaffofthe
Secretariat anindependent status fromtheUNcommon system withcostneutrality; second, thepolitical
andinstitutional decision togivetothestaffoftheSecretariat anindependent status inconformity with
thesituation oftheOrganization asanagency independent from theUNsystem. Asallwereaware,
thissituation hadbeenformalized byMember governments when theyhadgiven himthemandate to
negotiate anagreement withtheUNSecretary-General, andwhen theyhadapproved thatagreement.
Until thepresent, therealissue which hadbeendiscussed hadbeenthefirstandnotthesecond. He
suggested thatonechange theorder ofthedecisions tobetaken, soastofacilitate consensus.
Thefirstdecision should bethepolitical andinstitutional one,i.e.thattheWTO wasan
organization which hadasuigeneris status, including theadministrative aspects ofitsSecretariat.
Thereasons forthiswereclear: theMembers 'decision thatthiswasasuigeneris Organization; the
nature ofthisOrganization wascontractual andbinding --verydifferent from thatoftheUN; the
WTO 'sprocedures werebased onconsensus, butonceadecision wastaken, therewasabinding dispute
settlement procedure; thenature oftheWTO 'sdecisions wascompletely different from thatofthe
UN,andasamatter offacttheWTO didnotreport totheGeneral Assembly oranyother UNorgan;
thenature andthenumber oftheWTO Secretariat 'sresponsibilities weretotally different fromthose
oftheUN,andsowere theirmanagement problems; and,lastbutnotleast, thisOrganization hadWT/GC/M/19
Page7
onlyoneoffice, inGeneva, which made theadministrative problems oftheSecretariat completely
different from those oftheUNsystem, which wasbased inNewYork andaround theworld.
Once thispolitical andinstitutional pointhadbeenclarified, onecould address thesecond issue
inapositive spirit. Instead ofarguing about thevalidity ofagreat number ofstudies andproposals
concerning costneutrality, allcould together establish asystem which would indeed becostneutral.
Infact,onecould subject thefirstdecision tothecondition thatthisindependent status hadtobecost
neutral. Thedifference wasthatbytaking thisapproach, onewould transform asituation where a
fewdelegations maintained theiropposition ongrounds thatthemajority proposal wasnotcostneutral,
intoapartnership ofallMembers toensure thatitwould beso.
Therepresentative ofNorway saidhesupported theassessment oftheChairman oftheWorking
Group ontheprogress ofwork therein. Norway attached great importance toreaching aconclusion
tothequestion ofconditions ofservice bythe30Junedeadline. Fewtasks were more important in
theweeks tocome. Members should seektoavoid yetanother delay; theyowed thistotheSecretariat
aswellastothemselves. Norway wasconcerned bywhatseemed tobetoomuch emphasis ondetail
intheGroup andtoolittleonasolution. ThebasisoftheGroup 'sdeliberations wasthedraftdecision
of18September 1996, anditwasimportant thattheGroup beabletodeliberate onthisproposal in
good faith. Thisrequired thatMembers clarify now, orinthenextfewdays, whattheprecise goal
ofthedeliberations should be.Thiswould allow theGroup towork inamore focused andcoherent
manner.
Thefocus oftheWorking Group wasoncostconsiderations. Norway andother Members
hadbeenwilling toincrease budget contributions toreach asuccessful result, butmostMembers could
notgothatfar.Aclear majority ofMembers were ready tosupport thebudget-neutral proposal of
18September. Today, however, itseemed clear thatnoteventhatwell-founded proposal wasable
togather sufficient support without further costcutting. Onehadtoconclude from thisassessment
thatonlyaclearagreement towork towards acost-neutral solution forsalaries andpensions hadany
realpossibilityofgatheringaconsensus.ThiswaswhatNorwaywouldaskMemberstosupport,keeping
inmind thattheconcept ofcostneutrality onlyhadmeaning intheshort term. Striving towards cost
neutrality would seemtooffertheonlyrealistic hopeofproviding theDirector-General withtherequired
basis fortheestablishment ofanindependent Secretariat asfrom1January 1998. Norway wasfully
aware thatnotevenacost-neutral solution might beasufficient condition forreaching asuccessful
conclusion attheendofJune. Many factors came intoplay. Some Members hadconsiderations that
linked theUNcommon system withtheWTO, which wasasuigeneris Organization established outside
theUNsystem. Anyfinaldecision onamodified 18September proposal would therefore obviously
havetowaituntilJune. Heurged Members totakeastepintherightdirection andfocus theirenergies
onworking towards acost-neutral solution interms ofsalaries andpensions. Allweresurely ready
toshoulder theirresponsibilities intrying tofindthetechnical answers toapolitical challenge that
theyhadthemselves identified already inMarrakesh. Thisresponsibility existed inrelation tothe
Secretariat, totheWTO asanorganization, andtothemselves asMembers.
Therepresentative ofHong Kong saidthatprogress hadregrettably beenslow, anditseemed
thatsome Members might have doubts about thefundamental principle ofhaving apension and
remuneration scheme separate from theUNcommon system. Hong Kong strongly believed thatit
wasonlyappropriate thattheWTO implement aseparate scheme tomatch thedecision toestablish
theWTO asanindependent organization. LikeNorway, Hong Kong believed itwastimetoface
squarely thequestion ofwhether, andonwhatterms, Members wereprepared tosupport aseparate
pension andremuneration package. While examining details wascertainly important, unless allwere
clearthattherereally wasaconsensus forchange, much ofthisworkwaspointless. Theonlyjustifiable
concern ofMembers inthisexercise wastheissue ofcost. IftheWTO implemented apackage that
hadsignificant financial implications, thisclearly could have implications forother internationalWT/GC/M/19
Page8
organizations thatMembers contributed to.Butifabudget-neutral orcost-neutral package would be
worked out,there wasnojustifiable reason toprocrastinate further. Hong Kong considered thatthe
Working Group should change tackandaddress thebasic questions ofoverall costs. TheSecretariat
would shortly becirculating apaper setting outtheoverall financial implications ofthe18September
proposal andthatshould bethebasis forfurther discussion. Asregards thepolitical dimension of
thisissue, Hong Kong believed thattheDirector-General hadyetagain made aconvincing andlogical
caseforestablishing theindependent status oftheSecretariat 'sremuneration system, andfullysupported
hisstatement.
Therepresentative ofIceland saidthathisdelegation strongly supported Norway 'sstatement.
Therepresentative ofNigeria saidhisdelegation regretted theslowprogress ofwork onthis
matter. Nigeria supported thelogical andconvincing proposal made bytheDirector-General asameans
ofresolving thisissue. Nigeria could accept thatcostneutrality should beanimportant basisforthis
work, because costwasofnolessconcern toNigeria thantoothers. Indeed, Nigeria 'sassessed
budgetary contributions were comparable tothose ofseveral European countries andeconomies in
transition. However, Nigeria believed thatcostshould notalways beusedasanargument toslow
progress onimportant things thatshould bedoneintheWTO. Nigeria supported Norway 'sstatement.
Thequestion ofconditions ofservice ofWTO staffwasnotonlyacostissue, butalsoasystemic issue.
TheSecretariat needed tobeindependent andactive, andtobegiven incentives fortheinitiatives that
itundertook. TheSecretariat hadcontinued toperform onthebasisofmerit, andtheDirector-General
hadtaken several stepstoensure thatthiscontinued tobeso.Members had,inseveral areas, wanted
andspoken about aWTO thatshould beindependent. Itwasonlylogical thattheSecretariat ofthe
WTO should alsoitselfbeindependent. Nigeria believed thatthismatter needed toberesolved early,
andthattheDirector-General 'sproposal presented thebestwayforward.
Therepresentative ofBrazil reiterated hisdelegation 'sviewoftheWTO asanorganization
independent oftheUNsystem. Accordingly, Brazil believed thatoneshould work towards having
theSecretariat ruled byacodethatembodied thisunderstanding. Aninternal reform process was
currently under wayintheUNthatwould affect future employment conditions within thecommon
system. Members hadnotyetbeenabletoreach afinaldecision onthestatus oftheWTO Secretariat,
anditsstaffwascurrently being deprived ofthepossibility totakepartinageneral debate thatmight
haveserious andcomplex repercussions ontheircareers andpersonal lives. Brazil therefore attached
great importance tothepresent discussion, andurged Members toabide bythedeadline theyhad
established. Brazil believed thatMembers 'decision should bebuiltaround thenotion thattheWTO
wasindependent from theUNsystem, asjuststressed bytheDirector-General. Brazil stressed its
support forthedraftdecision of18September, andforallefforts intheWorking Group toachieve
acost-neutral solution. Brazil invited alltowork towards concluding, within thetime-frame theyhad
established, thearrangements thatwould grant theWTO thefullyindependent status envisioned by
itsfounders.
Therepresentative oftheCzech Republic saidthathisdelegation shared Norway 'sviews.
Acost-neutral solution would bethebestresult oftheWorking Group 'swork, andsuchasolution
should befound within theagreed time-frame. Hisdelegation strongly supported establishment of
anindependent WTO Secretariat asfrom 1January 1998.
Therepresentative ofJapan saidthathisdelegation shared theconcerns expressed byNorway,
Hong Kong andothers about theslowpaceofwork intheWorking Group. Japan agreed thatasimple
increase inthenumber oftheGroup 'smeetings wasnotsufficient. Thekindofwork being donein
theGroup, however detailed, wasindeed necessary ifonewished toestablish WTO-specific working
conditions fortheSecretariat staff. Thesense offrustration thatmany participants werefeeling was
therefore notduetothepaceofwork itself, butrather duetothefactthatthiswork wasbeing doneWT/GC/M/19
Page9
without anyreasonable expectation thatthebasicparameters uponwhich theywereworking, i.e.those
contained inthe18September draftdecision, were acceptable toall.
Japan hadsupported thisproposal. However, itrealized nowthatsome Members hadbegun
tospeak of"cost" neutrality asagainst "budget" neutrality, which hadbeenthebasisofthatproposal.
While Japan wasprepared togofurther thanasimple budget-neutral solution, andaccept areasonable
increase incontributions tocontinue tohaveapoolofhighly-qualified staff, itwould goalong with
acost-neutral solution ifthatweretheconsensus. However, ifeveninsuchanevent some governments
maintained theirinability toaccept thecessation oftheWTO 'sdefactoapplication oftheUNcommon
system, thenMembers might aswellstoptheirwork rightaway. Japan therefore requested thefew
Members thatadvocated thecontinued application ofthecommon system tostatewhether theywould
beprepared tomove forward ifacost-neutral solution could befound.
Therepresentative ofTurkey saidheagreed thatnomatter howmany more meetings were
held, theywould beinsufficient iftherewerenoagreement inprinciple onthemainissues. Hejoined
hisdelegation withNorway 'sstatement, andexpressed support fortheDirector-General 'sstatement
which hesaidproposed agood wayforward.
Therepresentative ofAustralia expressed support forNorway 'sstatement. Australia 'sapproach
tothismatter wasguided bythebroad consideration ofthemanagement andoperational efficiency
oftheWTO, recognizing theindividual character oftheorganization. Inlinewiththatbroad
consideration,AustraliajoinedNorwayinencouragingtheWorkingGroupinitswork,andinsupporting
aconsensus thatanyoutcome onsalaries andpensions becostneutral.
Therepresentative ofSingapore, speaking onbehalf oftheASEAN Members, reiterated their
support foranimprovement intheconditions ofservice ofWTO staff. TheASEAN Members believed
there should beanindependent system forWTO staffandthattheWorking Group 'swork should be
completed bytheJunedeadline. Their delegations wereflexible onthequestion ofcost,although they
believed intheprinciple ofcostefficiency. TheWTO wasdifferent fromtheUN,anditsperformance
wasbased onthetrading system, andMembers 'budgetary contributions werebased ontradevolumes.
Their delegations supported Norway 'sconcept ofcostneutrality asameans ofdeveloping aconsensus.
However, itwould perhaps bemore pertinent torefertobudget neutrality instead ofcostneutrality.
Costneutrality might imply afreeze, butbudget neutrality wasamuch more flexible andpragmatic
waytofinding aconsensus. TheASEAN delegations alsosupported theDirector-General 'sproposal.
Therepresentative ofKorea recalled thatonseveral earlier occasions hisdelegation hadstrongly
supported theestablishment ofanindependent salaries andpension system fortheSecretariat. Given
theWTO 'ssuigeneris status, itsSecretariat fullydeserved anindependent system. Korea continued
tosupport thisstrongly, andhoped thattheWorking Group would come upwithapositive result in
time.
Therepresentative ofFrance saidthatNorway 'sproposal hadundeniable merit inshedding
lightforthecontinuation oftheWorking Group 'swork. Inhisunderstanding, costneutrality implied
thatanyreform thatmight beconsidered should notimply anyadditional expenditure forthe
Organization, including inthelongterm. Costneutrality applied bothtotheimplementation aswell
asthefunctioning ofanysystem. Thiswasindispensable given thecurrent budgetary situation in
international organizations aswellasintheirMember countries. France wished torecall itsattachment
toconsistency vis-à-vis thecommon system, andbelieved thatasolution toanyidentified dysfunction
should befound within thatsystem.
Therepresentative ofSwitzerland saidthattheproblem wasnotoneoftechnicalities, butrather
ofpolicy andpolitics. Governments hadalready agreed several years earlier toreview staffconditionsWT/GC/M/19
Page10
ofservice inconnection withtheestablishment oftheWTO4.While there might bedifferences of
viewonthescope ofthismandate therecould benodisagreement onthefactthatthismatter didrequire
consideration. However, there didnotappear today tobeanyrealreview process. Rather, there had
beenahardening ofpositions ofrefusal, owing toconsiderations extraneous totheWTO. Asaresult,
evenformal assurances ofputting acaponcontributions werenoteventaken intoconsideration, and
didnothaveanyimpact onpositions thatwerebasically political. Switzerland hoped thattheWTO
would reach areasonable solution tothismatter within thedeadline established. AnOrganization which
aimed togovern world tradeintothe21stcentury could certainly establish andmanage anindependent
salaries andpension system foritsSecretariat inawaythatbudget contributions didnotincrease.
Thiswaswellwithin theWTO 'sscope andcompetence. Asregards concerns ofadomino effect on
otherorganizations,hisdelegationbelievedthatgovernmentshadpolicymeanstocontrolsuchasituation,
andpolitical andeconomic arguments tojustify theadoption ofsuchpolicies. Inviewoftheapproaching
deadlineforresolvingthisissue,Switzerlandbelievedthattheessentialtaskwastorestoreatruedialogue
andnothavejustarestatement ofpositions. Allshould takesteps forward, andlookforsolutions
rather thanfocus onproblems. Japan hadasked apertinent question ofcertain delegations, andthis
required aspeedy response forprogress tobemade.
Therepresentative ofBelgium saidhisGovernment wasamong those thatfeared theeffects
ontheUNsystem ofanindependent salaries andpension system fortheWTO, andwould prefer a
solution tobefound within thecommon system. Thequestion ofcostneutrality ofaWTO system
wasanimportant issue. However, Belgium alsocontributed totheUNsystem, andreiterated itswish
thatthose responsible fortheUNcommon system andtheUNPension Fund come totheWTO to
provide anassessment oftheimpact ofanydecision taken bytheWTO.
TherepresentativeoftheUnitedKingdomsaidhisdelegationhadheardwithinteresttheDirector-
General 'sproposal thatcostneutrality bedeemed anessential precondition ofestablishing aWTO
Secretariat independent ofthecommon system. Hewould report tohisauthorities onthisproposal,
andwasconfident oftheircareful consideration thereof.
Therepresentative ofGermany saidthathisGovernment stillhadserious concerns about the
systemic issue, andtheimpact ontheUNsystem andother Geneva-based organizations ofaWTO
decision toleave thecommon system. Germany wasalsoconcerned about costandcostneutrality.
However, ithadnotasked forcostneutrality because thedraftdecision of18September, thebasis
ofthecurrent work, wasnotcostneutral. Ifthere were nowaconsensus foracost-neutral WTO
solution, Germany could notseehowonecould, onthisbasis, findabetter solution thaninthecommon
system. Furthermore, ifacost-neutral solution werenowtobediscussed, theterms-of-reference would
needtobechanged. Germany would carefully examine theDirector-General 'sproposal thatMembers
startfirstwiththepolitical andinstitutional decision. Inthisconnection, hewished tonotethatsome
other organizations thatweresuigeneris andnotpartoftheUNsystem, alsoapplied theUNcommon
system.
Therepresentative ofIndia saidthathisdelegation hadalways supported efforts tofinda
meaningful, consensus-based solution tothisproblem. India shared others 'concerns thatthedeadline
thathadbeensetshould notbemissed, andbelieved thattheDirector-General 'sstatement could be
auseful guideline forexamining thismatter further andreaching asolution. Hehoped thatallwould
nowshow flexibility andtrytofindasolution within thesetdeadline. Herecalled, thatwithout reference
tothematter athand, India hadalways maintained thattheWTO wasasuigeneris organization, and
wasnotpartofeither theUNortheBretton Woods systems. India believed thatitwould begood
4Organizational andFinancial Consequences flowing fromtheImplementation oftheAgreement Establishing
theWTO -Decision of14April 1994 (MTN/TNC/45(MIN), Annex III).WT/GC/M/19
Page11
forMembers aswellastheOrganization ifallcould work onthebasisofcostneutrality, assuggested
bytheDirector-General, andfindanearly solution.
Therepresentative ofItalysaidthatMembers should recall thecommitments theyhadmade
atMarrakesh. These commitments stillstood and,above alldifficulties, should remain thebasis for
finding apositive outcome tothismatter. Members should identify thepoints onwhich theyneeded
towork concretely andspeedily. Costneutrality wasundoubtedly anelement ofinterest thatwould
provide guarantees toMember governments. Hisdelegation urged anapproach ofcommon-sense and
consistency. TheWTO wasnotsetupaspartoftheUNsystem, andMembers should havethecourage
toactupontheconsequences resulting fromthis.Little timeremained before thedeadline forcompletion
oftheWorking Group 'swork, anddelegations hadtoreview thesituation withtheirauthorities and
trytoreach apoint where consensus could befound onthislong-standing issue.
Therepresentative ofMorocco saiditwasclearthatifMembers wanted anefficient Secretariat
theyhadtoprovide themeans forit.Itwasalsoclearthatseveral governments hadlegitimate concerns
onthismatter. While hisdelegation supported Norway 'sstatement, itbelieved thatoneshould also
consider asking theUNtolook,together withMembers, intotheconsequences oftheWTO 'swithdrawal
fromthecommon system, andthereby trytomeettheconcerns ofsome countries. Atthesame time,
Members could continue towork ontheelements before them intheWorking Group. Hebelieved
thattechnical considerations werenolonger themajor issues, andthatpolitical impetus should begiven
totheprocess.
TheChairman oftheWorking Group saidthattheGroup wasembarked onacollective effort,
anditstask, although long, wasindispensable. Even ifMembers managed toanswer thepolitical
questions, theywould needtolookintothedetails ofthetextstobeproposed. Therefore, despite
theslowprogress, thiswork wasnecessary andinevitable. Hehoped thatwhile theGroup continued
itswork ontechnical matters, aparallel effort would bemade atthepolitical leveltohelpachieve a
compromise solution inkeeping withthetradition oftheOrganization. Heemphasized theimportance
ofmeeting thesetdeadlines iftheWTO wished tohaveanyaction taken bytherelevant UNorgans
thisyear.
TheGeneral Council tooknoteofthestatements.
5. Follow-uptotheSingaporeMinisterialConference-WorkingGroupsontherelationshipbetween
trade andinvestment, theinteraction between trade andcompetition policy, andtransparency
ingovernment procurement practices (WT/MIN(96)/DEC, paragraphs 20and21)
- Appointment ofchairpersons
TheChairman recalled thatatitsmeeting on7February, theGeneral Council hadauthorized
itsChairman toholdconsultations andtopropose totheGeneral Council names ofchairpersons for
thethree Working Groups established byMinisters inSingapore. Inthelight ofhisextensive
consultations, there appeared tobeaconsensus onthefollowing names:
- Mr.Krirk-Krai Jirapaet (Thailand) fortheWorking Group ontheRelationship between
Trade andInvestment;
- Mr.Frédéric Jenny (France) fortheWorking Group ontheInteraction between Trade
andCompetition Policy; and
- Mr.Werner Corrales Leal(Venezuela) fortheWorking Group onTransparency in
Government Procurement.WT/GC/M/19
Page12
Thetermofoffice oftheseChairpersons would bethecalendar yearof1997, withthepossibility
ofreappointment foranother yearasappropriate. Thequestion ofpossible reappointment, orthe
appointment ofnewchairpersons, would betaken uponthecontext ofconsultations ontheappointment
ofchairpersons ofWTO bodies for1998.
TheGeneral Council tooknoteofthestatement andagreed totheappointments (WT/L/215).
6. Dates ofthe1998 Ministerial Conference
TheChairman recalled thatMinisters inSingapore hadagreed thatthenextMinisterial
Conference would beheldinGeneva, andhadinvited theGeneral Council todetermine itsdateand
duration (WT/MIN(96)/SR/9). Herecalled alsothatMinisters hadinstructed theGeneral Council to
consider howthe50thanniversary ofthemultilateral trading system could bestbecommemorated,
andthatatthe7February General Council meeting, Canada hadproposed thatthecommemoration
meeting beheldback-to-back withthenextMinisterial Conference. Following informal contacts with
delegations, hehadraised thequestion ofdatesofthenextMinisterial Conference ataninformal meeting
on11April. Onthatoccasion, information concerning theavailability ofmeeting rooms andondates
ofmajor meetings ofother international organizations inGeneva scheduled thusfarhadalsobeen
provided.
From theinformal consultations, itappeared thatthere wasawidespread viewthatthenext
Ministerial Conference should beheldinthefirstsemester of1998. Asregards meeting rooms for
theConference, twooptions were currently available: theArena HallandthePalais desNations.
TheArena Hallwasamultipurpose hallandrequired additional workandexpense toinstall thenecessary
infrastructure forholding theConference, ascompared tothePalais desNations where allthefacilities
werealready inplace. Itwasnecessary todecide assoonaspossible onprecise dates forreasons of
logistics. Hetherefore intended tointensify hisconsultations inthenearfuture, andinvited delegations
toreflect onthematter inthemeantime tohelpexpedite theconsultations.
Mr.Chabert, Director, Finance andGeneral Services Division, saidthatsizewasanimportant
criterion inconsidering thepossible conference sitesinGeneva. Atprevious GATT/WTO Ministerial
meetings, thefollowing seating capacities hadbeenprovided for:2,000 inBrussels in1990; 1,800
inMarrakesh in1994; and2,500 inSingapore in1996. Inthiscontext, theArena, amultipurpose
hall,could seat3,600 persons. However, astheChairman hadstated, various costly adjustments would
berequired ifthisvenue were tobeused. Ontheother hand, theAssembly HallatthePalais des
Nations, which could seat1,900 persons, hadbeenrenovated recently andhadfulltechnical facilities
fortheholding ofconferences. Theonlyadjustment thatmight beneeded would betheprovision of
anappropriate backdrop forthepodium. Security measures would alsobeeasier atthePalais des
Nations. Furthermore, anadditional 700persons could follow proceedings atthePalais through a
video linktotheWTO 'snewconference centre, which would beready bytheyear-end. Afurther
video linktothepresent Council Room would provide anadditional capacity ofabout 200seats. A
thirdpossible venue, theInternational Conference Centre ofGeneva, withaseating capacity of1,800,
wasfullybooked fortheyear, except forAugust. Achartshowing thecurrent availability oftheother
twovenues hadbeencirculated todelegations. Boththese siteswereingreat demand and,toavoid
unfortunate surprises, thedates oftheMinisterial Conference should beestablished soon.
Therepresentative ofCanada recalled thathisdelegation hadmade some proposals onthis
matter atthe7February meeting (WT/GC/8), andhadurged anearlydecision onthedateforlogistical
reasons. Having spoken withmany delegations, andwithaview tohaving allstartthinking about
more precise possibilities, hisdelegation suggested thedates of2-4February and18-20 May, which
theChairman could takeupinhisfurther consultations.WT/GC/M/19
Page13
Therepresentative ofSwitzerland thanked Canada foritsproposals andsaidthatitwasvery
urgent, formany reasons, toreach arapid decision onthedate.
Therepresentative ofNorway agreed ontheurgency ofdeciding onthedate, andsaidthat
abodythesizeoftheGeneral Council wasnotthemostuseful forum forsubsequent discussion thereon.
Hesuggested thatthetaskbeassigned toasmall group inwhich theChairman, theSecretariat and
theSwiss delegation would haveaspecial voice.
Therepresentative ofMorocco saidhedidnotbelieve itnecessary toestablish asmall group.
Onehadtowork onapractical basis, toselect adateandseeifitwasacceptable totheMinisters and
other officials thatwould attend theConference. Thedates suggested byCanada could betaken as
aworking basis, andalldelegations asked togivetheirresponses tothose dates assoonaspossible.
Ifdelegationscouldnotgiveanaffirmativereplytoeitherofthosedates,theyshouldsuggestalternatives.
Therepresentative ofPakistan saidthattheMinisterial Conference should beheldearlier rather
thanlaterin1998. Forthisreason, ofthetwodates suggested byCanada, hisdelegation preferred
2-4February, andhoped aconsensus would bereached soon. Aworking group wasnotrequired,
butrather active efforts bytheChairman toconsult withdelegations andtocome forward withconcrete
proposals atthenextmeeting.
TheChairman saidthathewould holdextensive, open-ended consultations, andtakeinto
consideration Canada 'ssuggestions aswellasallthestatements made atthepresent meeting.
Therepresentative Japan indicated hisdelegation 'spreference foradateinthelatter partof
thefirstsemester of1998.
Therepresentative ofKorea saidthat,among thedates suggested byCanada, hisdelegation
preferred 18-20 May.
Therepresentative Cuba recalled hiscountry 'splan,announced attheGeneral Council meeting
on7February5,toholdaninternational seminar towards theendof1997 incommemoration ofthe
fiftieth anniversary ofthemultilateral trading system.
TheGeneral Council tooknoteofthestatements andagreed thattheChairman should hold
consultations onthismatter.
7. Institutional reform andrestructuring oftheSecretariat
- Draft decision onWTO Secretariat andsenior management structure (WT/GC/W/57)
TheChairman saidthatanumber ofdelegations hadbeenoftheviewthat,inlightofthefirst
twoyears ofoperation oftheWTO Secretariat, consideration should begiven tohowitsfunctioning
andoperational efficiency might beenhanced tomeet thechallenges facing theOrganization. The
view hadalsobeen expressed thatthenumber ofDeputy Directors-General should bereduced
significantly atanappropriate time. Thedraftdecision indocument WT/GC/W/57 hadresulted from
broad-based informal consultations, andheproposed thatitbeadopted.
TherepresentativeofPakistansaidthathisdelegationcouldgoalongwiththeproposeddecision.
However, while great emphasis hadbeenplaced during theconsultations onthenumber ofDeputy
5SeeWT/GC/M/18 andCorr.1, item8.WT/GC/M/19
Page14
Directors-General, thefocus should instead beonthecomposition andoperation oftheSecretariat itself,
which hadbeeninherited fromtheGATT. TheWTO wasnowanorganization withresponsibilities
extending, interalia,togoods, services andintellectual property. Itwasengaged intheimplementation
ofanumber ofagreements, innegotiating --within thebuilt-in agenda --onmany issues, andinthe
examination ofcertain newissues agreed attheSingapore Ministerial Conference. TheWTO had
alsoassumed anewandgenuinely adjudicatory roleindispute settlement. Furthermore, itsmembership
hadchanged, anditwasnowcomposed verylargely ofdeveloping countries withspecial needs and
requirements. Given this,theexercise tobecommenced should besufficiently comprehensive toaddress
theSecretariat 'snature andoperational capabilities.
Specifically, Pakistan wished toseethefollowing issues addressed: (i)thepresent capacity
oftheSecretariat todischarge theWTO 'sfunctions andresponsibilities; (ii)theroletheSecretariat
should playinassisting developing countries; (iii)themeasures required fortherationalization of
responsibilities within theSecretariat, including thecreation ofvertical andhorizontal balance and
improvement inprofessionalism; and(iv)improvements inrecruitment policy, including measures
toensure greater geographical balance intheSecretariat 'scomposition. TheGeneral Council was
undoubtedly theappropriate forum forconsidering thequestion oftherestructuring andimprovements
intheSecretariat thatwereclearly required. Pakistan believed thatwhen ittookupthismatter, the
GeneralCouncilmightwishtoconsidertheprecisemodalityfortheexaminationoftheDirector-General's
report andtheviews ofMembers onthisissue.
OntheroleoftheGeneral Council generally, herecalled thatArticle IVoftheWTO Agreement
established theGeneral Council asthesupreme bodyintheintervals between meetings oftheMinisterial
Conference. TheGeneral Council should holdmore frequent meetings, bothformal andinformal,
toconduct general policy discussions, hearreports from chairpersons ofdifferent committees and
councils, andtakeappropriate measures toensure thattheWTO remained anorganization where
transparency wastherulerather thantheexception.
Therepresentative ofSingapore, speaking onbehalf oftheASEAN Members, saidtheyshared
theviewthatthefuture number ofDeputy Directors-General should bereduced significantly, andcould
goalong withthelanguage ofthefirstpreambular paragraph inthedraft decision. TheASEAN
Members believed thatthedecision ontheactual number ofDeputy Directors-General should bebased
onmanagement needs andorganizational efficiency. Inthisconnection, theywelcomed theproposal
torequest theDirector-General tosubmit areport byOctober 1997, which should alsooutline the
comparative merits oftheoptions ofhaving oneortwoDeputy Directors-General. Given theprobability
thatthenextMinisterial Conference would beheldinthefirsthalfof1998, andinorder nottohave
thequestion ofDeputy Directors-General distract thepreparations therefor, theirdelegations hoped
thatadecision could betaken bytheGeneral Council inearly 1998. Itwould beuseful tostipulate
atime-framewithinwhichanagreementshouldbereached,andtheirdelegationssupportedthesuggestion
thatthisissue bediscussed bytheGeneral Council before theendof1997. They were alsoofthe
view thattheimplementation ofthedecision onthenumber ofDeputy Directors-General should be
carried outinconsultation withtheDirector-General.
TherepresentativeofMexicoexpressedsupportforthedraftdecision,andnotedwithsatisfaction
thatMembers would belooking notonlyatthenumber ofDeputy Directors-General, butalsoatthe
rationalizationoftheseniormanagementstructure.Mexicowasnotamongthosethathadalreadydecided
onthenumber ofDeputy Directors-General theyconsidered optimal, andbelieved itwasimportant
firsttoexamine thereport requested oftheDirector-General. Mexico interpreted "reduce significantly"
tomean lessthanfour. Itlooked forward toreceiving theDirector-General 'sreport, which would
enableMemberstoconsidertheadvantagesanddisadvantages,fromtheeconomic,functionalandpolitical
viewpoints, ofeachofthepossible future options.WT/GC/M/19
Page15
TherepresentativeofHongKongexpressedsupportforthedraftdecision.Membershadperhaps
notbeen asconsistent astheymight have been intheir attitudes towards theSecretariat 'ssenior
management structure inthepast, andnowhadanopportunity toadopt amore rational approach.
Hong Kong wasnotconvinced thatthepresent structure wasideal, andbelieved thatasignificant
reduction wasinorder. However, before giving detailed consideration tochange, Members should
drawontheDirector-General 'sveryvaluable experience. Hong Kong therefore welcomed therequest
totheDirector-General forareport withrecommendations onthebestwaytorationalize thestructure.
Thematter athandwascomplex, given thatthere werenofewer thantwenty Secretariat divisions to
oversee, newissues werebeing added totheagenda, andthattheDeputy Directors-General brought
atypeofexperience valuable totheSecretariat. Hong Kong wastherefore notprejudging theoutcome
ofanyreview. Itbelieved, however, thatthisexercise should beapproached primarily from the
viewpoint offunctional necessity andoperational efficiency. Without suchasolidbasis, theSecretariat
wasprone totoofrequent fluctuations initssenior management structure, which might notbestserve
thelong-term interests oftheOrganization.
Therepresentative ofIndiasaidthatalldelegations, including hisown,hadshown thenecessary
flexibility intheconsultations onthissubject toenable theGeneral Council toarrive ataconsensus
decision. Hisdelegation could therefore goalong withthedraftdecision. Indiaviewed thedraftdecision
asfacilitating areport from theDirector-General onenhancing theSecretariat 'sfunctioning and
operational efficiency tomeetchallenges facing theOrganization including through arationalization
ofthesenior management structure, andenabling theGeneral Council togivein-depth consideration
tothesubject attheappropriate time, taking intoaccount theDirector-General 'sreport. Hisdelegation
understood thatthedecision wasnotlimited tothesenior management structure, andthattheDirector-
General 'sreport would address allareascritical fortheefficient functioning oftheSecretariat. Itfurther
understood thatthedecision didnotprejudge anything, andthattheDirector-General aswellasthe
General Council would approach thesubject withanopenmind.
ThequestionoftheseniormanagementstructurewasofgreatimportancefromtheOrganization's
viewpoint, anditwould beunfortunate forittobelinked, consciously orunconsciously, toindividuals.
Guiding, supervising andmotivating directors andother professional staffwasonlyoneofthefunctions
oftheDeputy Directors-General. Their primary rolewastobring intotheOrganization theperspective
undoubtedly gained fromworking insenior policy positions innational governments. Itwasimportant
tohavethisperspective available totheSecretariat toenhance itsfunctioning. Moreover, theDeputy
Directors-General hadtoactasthelinkbetween thesenior professional staffandtheDirector-General,
facilitating acontinuous feedback. TheDeputy Directors-General should alsobeabletoadvise the
Director-General keeping inviewthelarger interests oftheorganization without anyinhibition, based
ontheirownexperience ofworking innational governments, continuous interaction withdelegations
andregular exchange ofviews withtheprofessional staff. Allthesefactors should beconsidered when
takingafinalviewontheoptimumnumberofDeputyDirectors-General.Furthermore,whentheGeneral
Council discussed thissubject, itwould benecessary forittoknow thethinking behind theDirector-
General 'srecommendations soastofacilitate andenrich itsdiscussion. Hewascertain thattheDirector-
General 'sreport would provide cogent reasoning foranyrecommendations. Hisdelegation believed
alsothatitwould beuseful iftheDirector-General could haveindividual meetings withinterested
delegations toheartheirviews before finalizing hisreport. Itwashisexpectation thatsuchaninteraction
would helptheDirector-General inarriving attherightrecommendations.
Therepresentative ofKorea saidthathisdelegation joined intheconsensus onthedraftdecision.
Itwashisunderstanding thattheGeneral Council 'sfuture consideration ofthismatter would bebased,
interalia,ontheDirector-General 'sreport, andwould notbeconfined onlytothenumber ofDeputy
Directors-General, butalsocover otherinstitutional aspects oftheSecretariat. Korea interpreted "reduce
significantly" tomean anynumber from onetothree, andbelieved thattheactual number ofDeputy
Directors-General should eventually bedetermined byconsensus.WT/GC/M/19
Page16
Therepresentative ofColombia saiditwasimportant tohighlight thatthescope ofthedraft
decision wasnotlimited tothequestion oftheDeputy Directors-General, butwasmuch broader, and
thattherequest forareport from theDirector-General should beunderstood inthiscontext. The
Director-General, withtheknowledge andexperience hehadacquired inhistenure ofoffice, hadan
excellent opportunity toanalyze andmake recommendations ontheSecretariat 'scomposition and
operation. Colombia didnotwishtoindicate itspreference forthenumber ofDeputy Directors-General
atthisstage, andbelieved thatoneshould notprejudge recommendations thattheDirector-General
might make inthisregard. Thedraftdecision clearly established aseparation between theappointments
ofthefuture Deputy Directors-General andthefuture Director-General, byproviding thatthedecisions
taken byMembers following theDirector-General 'srecommendations should bereflected inthe1999
budget. Colombia believed thatnoopportunity should beprovided forapolitical package dealon
thequestion ofthenextDirector-General andDeputy-Directors General, andthatthere should bea
clear separation between thetwoappointments.
Therepresentative ofNewZealand expressed support forthedraftdecision andshared others '
views ontheneedforacomprehensive lookatthestructure oftheSecretariat anditssenior management.
Thetrend ininternational organizations wastowards lean,cost-effective management. TheWTO had
often ledthewayinmany respects, anditwaspleasing toseeadetermination tocontinue onthispath,
which NewZealand hoped would beanindependent one. NewZealand believed thatthere should
beonlyoneDeputy Director-General post,withadeveloped/developing country balance between the
posts ofDirector-General andDeputy Director-General. Thisstructure could givetheappropriate
emphasis tothemerits andthecapacity oftheindividual candidates forthese posts. However, New
Zealand looked forward totheDirector-General 'sreport andtohearing hisviews ontheDeputy
Directors-General issue. NewZealand believed thatMembers should takeadecision asearlyaspossible
aftertheDirector-General presented hisreport sothatthisissue didnotgetcaught upinthefuture
selection processes fortheDeputy Director-General andDirector-General positions.
Therepresentative ofTrinidad andTobago expressed support forthedraftdecision, which
hebelieved placed aheavy responsibility ontheDirector-General and,byitsbrevity, gavehimgreat
flexibility. Hisdelegation alsosupported Pakistan 'sstatement, which itbelieved gavetheDirector-
General broader parameters thanthose outlined inthedraftdecision. Forthisreason, hisdelegation
consideredthattheDirector-GeneralshouldtakePakistan'sstatementintoaccount.TrinidadandTobago,
likePakistan, believed thattheGeneral Council wasbeing under-utilized. However, itcould notagree
withPakistan 'srecommendation thattherebemore frequent meetings. Unless Members changed their
working methods andmade theGeneral Council amore effective instrument fordecision making, he
doubted thatgreater frequency would result ingreater efficiency.
TheChairman saiditwasclearthatallthestatements bydelegations wereimportant, andthat
theywould betaken intoconsideration bytheDirector-General inthepreparation ofhisreport.
Therepresentative ofPeruexpressed support forthedraftdecision andsaidthathisdelegation
awaitedwithinteresttheDirector-General'sreport.Thereportshouldnotrestrictitselftorecommending
simply areduction ornon-reduction inthenumber ofDeputy Directors-General, butrather asenior
management structure thatwasreflective oftheentire administrative structure oftheOrganization,
keeping inmind theneeds offunctionality andefficiency andthenewissues thathadrecently been
added totheWTO 'smandate. TheSecretariat 'ssupport rolefordeveloping countries should alsobe
taken intoaccount. Furthermore, thework ofthenewcommittees andworking groups thathadbeen
established since Marrakesh should beborne inmind. Inother words, Members should bepresented
withanadministrative structure more streamlined andabletohandle theadditional issues brought into
thenewOrganization ascompared withthestructure under theGATT.WT/GC/M/19
Page17
Therepresentative ofArgentina expressed support forthedraftdecision aswellasformany
ofthecomments byPakistan andSingapore. Hisdelegation believed thatthere wasroom for
improvementintheSecretariat'srecruitmentandstaffpromotionpolicies,andthattheDirector-General's
report should include these issues.
Therepresentative ofMorocco expressed support forthedraftdecision, andendorsed Pakistan 's
statement. Hisdelegation agreed withIndia thatthequestion ofsenior management structure was
important from aninstitutional viewpoint andshould notbelinked toindividuals. While Members
mighthavetheirownviewsonthematterathand,theDirector-General'sreportwouldenabletheGeneral
Council tomake aninformed decision.
Therepresentative ofSwitzerland expressed support forthedraftdecision. Switzerland had
examined thequestion ofthesenior management structure andhadconcluded thatthenumber ofposts
ofDeputy Directors-General should bereduced toone.Switzerland awaited withinterest theDirector-
General 'sreport, which would touch uponalltheissues raised inthedraftdecision, andwhich would
bedecisive inthefinalposition taken bySwitzerland.
Therepresentative ofNorway expressed support forthedraftdecision. Norway wished to
seeonepostofDeputy Director-General. Togoupfromonetotwoorthreepostswould havepolitical,
administrative andgeographical implications thathisdelegation wished towarn against.
Therepresentative ofVenezuela expressed support forthedraftdecision, andsaidthatthe
Director-General 'sreport should propose machinery andstructures suchthattheOrganization atthe
senior management level waseffective, reflected theOrganizations objectives, andwasefficient in
terms ofachievements andresources. Venezuela wanted toseeproposals about structures capable
ofmanaging thefundamental issues facing theOrganization, ofmaking acontribution inpreparing
theopinions oftheSecretariat andofdelegations, indeveloping possible consensus onissues, andof
contributing totransparency. Transparency hadbeenanissue ofconcern tomany delegations, and
thisshould beassured through theinternal Secretariat structures. Hisdelegation therefore supported
thegeneral thrust ofPakistan 'sstatement. Likeothers, itbelieved thatMembers should refrain from
expressing preconceived opinions concerning thenumber ofDeputy Directors-General, andshould
await theDirector-General 'sreport.
Therepresentative ofTunisia expressed support forthedraft decision. Theinterest ofthe
Organization should bethefocus ofconcern inthisexercise, bothinthepreparation oftheDirector-
General 'sreport andinitsexamination. Furthermore, thisexercise should beundertaken inpartnership
withtheDirector-General.
TheGeneralCounciltooknoteofthestatementsandadoptedthedraftdecisioninWT/GC/W/57.6
TheDirector-General saidthathehadfound thediscussion veryuseful, andwelcomed the
Decision justtaken. Although thedeadline forpresenting hisreport wasrather near, andhewould
havepreferred toreport inthesecond halfof1998, heaccepted thewishofMembers tohaveitsooner,
andwould comply withtheirrequest. Hewould attempt toaddress andprovide hisrecommendations
onallthematters onwhich theDecision asked himtoreport. Hebelieved thatthescope oftheDecision
wasverywide, andthatitcovered allthepoints raised byPakistan. Hewould, inanycase, cover
allthepoints raised atthepresent meeting, andwould alsoconsult extensively withdelegations.
TheGeneral Council tooknoteofthestatement.
6TheDecision wassubsequently circulated asWT/L/207.WT/GC/M/19
Page18
8. Offices oftheDeputy-Directors-General
- Announcement bytheDirector-General
TheDirector-General saidthat,onthebasisoftheexisting situation, which wastheresult of
successive decisions taken bytheGATT CONTRACTING PARTIES andWTO Members, andon
thebasis ofextensive consultations hehadheldwithdelegations, aswellasinaccordance withthe
GATT Council Decision of15April 1987concerning procedures forthefuture appointments ofDeputy
Directors-General (BISD 34S/173), hehaddecided toextend thepresent contracts ofthefourDeputy
Directors-General until30April 1999, i.e.thedateonwhich hewould leave office. Hehaddecided
alsoonthefourth Deputy Director-General now,eventhrough thelatter'scontract didnotexpire until
ayearlater, because ofthegeneral view ofalmost alldelegations thatthefourcontracts should be
dealtwithtogether. Hehadnoted alltheviews thathadbeenconveyed during theconsultations and
haddecided onthebestandleastdisruptive course ofaction inthecircumstances. Members hadtaken
decisions inthepastthathadledtothepresent situation offourDeputy Directors-General. They had
justtaken another decision toscaledown theirnumber inthefuture.7Butmore timewould beneeded
foraconsensus tobereached ontheprecise number. InOctober, hewould present thereport requested
byMembers intheDecision taken under item7,based onhisrenewed consultations withthem.
Members didnothavetodecide today onthetransition arrangements. Hewasacting onthebasis,
therefore, ofastatus quo,andifthestatus quoremained, hewished toextend thecontracts ofthefour
Deputy Directors-General.
Onhisdecision toextend thecontracts, hesaidthat,first,theteamwasagoodone,andthere
wasnoreason tochange theindividuals concerned, taking intoaccount theDecision adopted under
item7.Second, hisdecision leftgovernments fullflexibility inreviewing themanagement structure,
interms ofthenumber ofDeputy Directors-General andthetimetable forimplementing it.Third,
hisdecision didnotpre-empt anypossibilities Members hadinthecontext ofthebudget, oranyother
context, todecide onthenumber ofDeputy Directors-General; thisalsogavetothefuture Director-
General thepossibility ofchoosing hissenior management team. Hesaidthisbecause some Members
appeared concerned thathisdecision might pre-empt thepossibility fortheGeneral Council toreview
thenumber ofDeputy Directors-General andimplement changes prior tohisdeparture on30April
1999. Hewished toactonlywithin hisresponsibilities, aslaiddown intherelevant GATT Council
procedures towhich hehadreferred attheoutset. Hebelieved thatintaking hisdecision hewasnot
touching onMembers 'freedom ofaction tochange thepresent structure andthetimetable for
implementing thatchange. Hebelieved alsothathewasacting inawaythatshould make iteasier
forMembers toreach aconsensus onalltherelevant aspects ofthequestion.
Therepresentative oftheEuropean Communities saidhewished tonotethattheDirector-
General 'sstatement didnotpre-empt, andwaswithout prejudice to,decisions thatMembers would,
hehoped, takeinearly 1998. TheCommunity expected thatthose decisions would becarried into
andreflected inthe1999budget. Itreserved itsrights totaketheappropriate andconsequential decisions
inthatcontext. TheCommunity believed thatanydecisions byMembers toreduce thenumber of
DeputyDirectors-GeneralshouldbeimplementedrapidlyandevenbeforetheselectionofanewDirector-
General in1999. Inthatcase, thedecision announced atthepresent meeting bytheDirector-General
would havetobereviewed.
Therepresentative ofColombia saiditwashisdelegation 'sunderstanding thatthedecision
tobetaken byMembers onthenumber ofDeputy Directors-General would bereflected inthe1999
budget, asprovided forintheDecision adopted under item7.Under thatDecision, theextension
ofcontracts ofthepresent Deputy Directors-General waspossible onlyuntiltheendofDecember 1998,
7SeeItem 7.WT/GC/M/19
Page19
thepurpose being todistinguish between thefuture appointments oftheDeputy Directors-General and
theDirector-General. Toallow thepossibility ofapackage dealontheappointments ofthefuture
Director General andDeputy Directors-General would becounterproductive forarational approach
totheappointment ofthenewDirector-General.
TheChairman saidthattheDirector-General hadtaken hisdecision onthebasisofthestatus
quo. Ifthere wasachange inthestatus quo,theDirector-General would draw theconclusions that
adifferent decision would require himtodo.
Therepresentative ofMexico asked forconfirmation thatintheGeneral Council 'staking note
oftheDirector-General 'sannouncement, itwasclearthatitwastheDirector-General whowastaking
thedecision ontheappointments oftheDeputy Directors-General andnotMembers.
TheChairman saidthattheGeneral Council would onlytakenoteoftheDirector- General 's
announcement because itconcerned adecision thatwaswithin hiscompetence andjurisdiction. The
Director-General, forhispart,hadnoted theGeneral Council 'sDecision onthesenior management
structure andtheviews thathadbeenexpressed, which were important inthedrafting ofthereport
hewould make under thatDecision.
TheGeneral Council tooknoteofthestatements andoftheDirector-General 'sannouncement.
9. Marrakesh Agreement establishing theWorld Trade Organization
- Extension oftime-limit foracceptance oftheAgreement bytheRepublic oftheCongo
(WT/GC/W/54)
TheChairman saidthaton25February, theRepublic oftheCongo hadnotified theWTO that
ithadratified theMarrakesh Agreement. However, thetime-limit foracceptance oftheMarrakesh
Agreement bycontracting parties toGATT 1947 eligible tobecome original Members expired on
1January 1997, asprovided inArticle XIV:1 oftheAgreement. Given thattheRepublic oftheCongo
wastheonlyremaining contracting party toGATT 1947eligible tobecome anoriginal Member before
1January 1997which wasnotyetaMember, itwasproposed thattheGeneral Council adopt thedraft
decision inWT/GC/W/54. Thisdraftdecision extended retroactively thetime-limit foracceptance
bytheCongo oftheMarrakesh Agreement to25February 1997. TheCongo would thusbedeemed
tobeaWTO Member asof27March 1997, i.e.30daysafterreceipt ofthenotification ofratification,
asprovided forinArticle XIV:1.
TheGeneral Council adopted thedraftdecision inWT/GC/W/54.8
10. Waivers under Article IXoftheWTO Agreement
(a) Harmonized System -Requests forextensions ofwaivers
(i) Bangladesh (G/L/163, G/C/W/74)
(ii) Bolivia (G/L/161, G/C/W/72)
(iii) Nicaragua (G/L/166, G/C/W/77)
TheChairman drew attention tothecommunications from Bangladesh (G/L/163), Bolivia
(G/L/161) andNicaragua (G/L/166) inwhich eachhadrequested anextension ofawaiver already
8TheDecision wassubsequently circulated asWT/L/208.WT/GC/M/19
Page20
granted inconnection withitsimplementation oftheHarmonized System, andtotherelated draft
decisions.
Mr.Johannessen (Norway), Chairman oftheCouncil forTrade inGoods, reporting onthe
Council 'sconsideration ofthese requests, saidthatthewaivers weretoexpire on30April 1997, and
thatthegovernments concerned hadrequested theirextension bysixmonths until31October 1997
toenable themtoconclude theirnegotiations under Article XXVIII ofGATT 1994. TheCouncil had
approved therequests andrecommended thattherelated draftdecisions beforwarded totheGeneral
Council foradoption.
TheGeneral Council tooknoteofthereport bytheChairman oftheCouncil forTrade inGoods
and,inaccordance withtheDecision-Making Procedures under Articles IXandXIIoftheWTO
AgreementagreedinNovember1995(WT/L/93),adoptedthedraftdecisionsinG/C/W/74-Bangladesh,
G/C/W/72 -Bolivia andG/C/W/77 -Nicaragua.9
(b) Senegal -Renegotiation ofSchedule XLIX
- Request forextension ofwaiver (G/L/165, G/C/W/76)
TheChairman drew attention tothecommunication fromSenegal requesting anextension of
itswaiver (G/L/165), andtotherelated draftdecision (G/C/W/76).
Mr.Johannessen (Norway), Chairman oftheCouncil forTrade inGoods, saidthatsince the
Council meeting atwhich thisrequest hadbeenconsidered, hehadbeeninformed thatSenegal had
concluded itspending negotiations under Article XXVIII ofGATT 1994. Inthelightofthissituation,
Senegal wasnotpursuing itsrequest onthewaiver, andtheGeneral Council therefore didnotneed
totakefurther action onthisitem.
TheGeneral Council tooknoteofthestatement.
(c) Zambia -Renegotiation ofSchedule LXXVIII
- Request forextension ofwaiver (G/L/162, G/C/W/75)
TheChairman drew attention tothecommunication fromZambia requesting anextension of
itswaiver (G/L/162), andtotherelated draftdecision (G/C/W/75).
Mr.Johannessen (Norway), Chairman oftheCouncil forTrade inGoods, reporting onthe
Council 'sconsideration ofthisrequest, saidthattheCouncil hadapproved therequest andrecommended
thatthedraftdecision inG/C/W/75 beforwarded totheGeneral Council foradoption.
TheGeneral Council tooknoteofthereport bytheChairman oftheCouncil forTrade inGoods
and,inaccordance withtheDecision-Making Procedures under Articles IXandXIIoftheWTO
Agreement agreed inNovember 1995 (WT/L/93), adopted thedraftdecision inG/C/W/75.10
9TheDecisions weresubsequently circulated asWT/L/209-Bangladesh; WT/L/212-Bolivia; andWT/L/211-
Nicaragua.
10TheDecision wassubsequently circulated asWT/L/213.WT/GC/M/19
Page21
(d) Decision ontheintroduction ofHarmonized System changes intoWTO schedules of
tariff concessions on1January 1996
- Extension oftime-limit (G/MA/W/12 andCorr.1)
TheChairman drew attention tothedraftdecision regarding theintroduction ofHarmonized
System changes intoWTO schedules on1January 1996 inG/MA/W/12 andCorr.1.
Mr.Johannessen (Norway), Chairman oftheCouncil forTrade inGoods, reporting onthe
Council 'sconsideration ofthismatter, recalled thattheGeneral Council hadgranted awaiver until
30June1996, further extended to30April 1997, tocertain Members finding itnecessary toconsult
ornegotiate under Article XXVIII ofGATT 1994 asaresult ofHS96 changes introduced intheir
schedules. Since these Members werenotinaposition toconclude thisprocess bythetimethewaiver
expired, ithadbeenproposed toextend thetime-limit ofthewaiver until31October 1997. TheCouncil
hadapproved thedraftdecision inG/MA/W/12 andCorr.1 granting anextension ofthewaiver until
31October 1997totheMembers listed intheAnnex thereto, andhadrecommended thatitbeforwarded
totheGeneral Council foradoption.
Inthisconnection, herecalled thatSwitzerland hadraised concerns atthepractice ofsome
Members ofmaking general reservations regarding thedocumentation relating tothetransposition of
some WTO schedules intotheHS96 nomenclature without further specifying thereservations and
subsequentlyenteringintonegotiations(WT/GC/W/56,G/C/W/79).Switzerlandhadproposedelements
foradecision thatwould facilitate theprocess ofintroduction ofHSchanges intoWTO schedules.
Inthelightofinformal consultations hehadheldrecently onthismatter, hewished tosummarize the
situation asfollows: (1)anoverwhelming majority ofMembers sawanurgent needtoresolve this
problem, andthere wasastrong desire toeliminate thefeeling oflegalunpredictability ofrights and
obligations towhich theSwiss proposal hadmade reference; (2)atthisstage there wasnoconsensus
ontheSwiss proposal; (3)itwasrealistic toassume thatitwould beeasier toestablish consensus
onprocedures thanonsubstance; and(4)heperceived aclearneedtocontinue asamatter ofurgency
theinformal consultations launched onthebasisofthecommunication fromSwitzerland, withaview
totrying tofindasolution intimefortheCouncil meeting on2June. Hewished tounderline the
element ofurgency regarding thisissue, andintended toholdfurther consultations intheverynear
future. Inconcluding, hestressed thatMembers hadagreed thatthesolutions tobefound onthisissue,
andtheprocess necessary toachieve asolution, should notdelay action onthedraftdecision before
theGeneral Council inG/MA/W/12 andCorr.1.
Therepresentative ofSwitzerland saidthathisdelegation wasencouraged bytheoutcome of
theconsultations heldbytheGoods Council Chairman. Itwasessential thattheGoods Council find
asolution tothisissue. Switzerland hoped thatfurther consultations under thatCouncil would enable
theGeneral Council tosubsequently takeappropriate measures, hopefully before future requests for
waivers orextensions oftime-limits relating totheintroduction ofHS96 changes intoWTO schedules.
Therepresentative ofTrinidad andTobago saidthat,under normal circumstances, Trinidad
andTobago would haveappeared under sub-item 10(a). This, however, wasnotthecase. Herequested
theDirector-General toprovide tohisdelegation thelegalbasis forthenon-certification ofTrinidad
andTobago 'sschedules aftersubmission ofdocumentation some 600daysearlier. Thiswould assist
hisdelegationintheconsultationsthatwouldfollowontheSwissproposalregardinggeneralreservations.
TheChairmansaidthattheDirector-GeneralwouldcontactTrinidadandTobagoafterexamining
thematter thathadbeenreferred tohim.
Therepresentative ofArgentina saidhefound itsomewhat irregular thatconsultations onthis
matter werebeing heldunder theCouncil forTrade inGoods rather thanunder theCommittee onMarketWT/GC/M/19
Page22
Access, which would bethenatural forum. Itwasapoorprecedent thatverticality wasnotbeing
respected, particularly since no-one hadbeenabletogiveanexplicit reason forthisdecision.
TheGeneral Council tooknoteofthestatements. Itfurther tooknoteofthereport bythe
Chairman oftheCouncil forTrade inGoods, including ontheconsultations heldontheproposal by
Switzerland (WT/GC/W/56 -G/C/W/79), andofhisintention toholdfurther consultations withaview
tofinding asolution intimeforthemeeting oftheCouncil forTrade inGoods on2June. TheGeneral
Council thenadopted thedraftdecision inG/MA/W/12 andCorr.1 inaccordance withtheDecision-
Making Procedures under Articles IXandXIIoftheWTO Agreement agreed inNovember 1995
(WT/L/93).11
11. Follow-up toparagraph 22oftheSingapore Ministerial Declaration (WT/MIN(96)/DEC)
Therepresentative ofEgypt, speaking under "Other Business", saidhisdelegation hoped that
informal consultations heldrecently byMr.Hoda, Deputy Director-General, onways tominimize
theburdens ondelegations, especially those withmore limited resources, intheorganization ofthe
WTO 'swork referred toinparagraphs 20and21oftheSingapore Ministerial Declaration
(WT/MIN(96)/DEC), would becontinued. Egypt believed thattheobjective ofminimizing burdens
ondelegations hadnotyetbeenachieved.
TheChairman saidthathehadhimself beentrying todealwiththematter referred tobyEgypt
inhiscoordination meetings withchairpersons ofother WTO bodies.
TheGeneral Council tooknoteofthestatements.
12. Peru-Recent customs tariff changes
Therepresentative ofPeru, speaking under "Other Business", informed theGeneral Council
thattariffduties ongoods imported intoPeruhadbeenmodified asof13April. Ingeneral, advalorem
ratespreviously setat15and25percenthadbeenreduced to12percent, withtheexception ofa
fewgoods forwhich thetariff would be20percent. Asaresult ofthese changes, Peru'saverage
tariff levelhadbeenreduced from 18to13percent. These unilateral changes didnotaffect Peru's
rights andobligations under theWTO Agreement.
TheGeneral Council tooknoteofthestatement.
13. Frugality measures inKorea
Therepresentative oftheEuropean Communities, speaking under "Other Business", recalled
thathisdelegation hadraised thisissue atthe11March meeting oftheCouncil forTrade inGoods
toexpress concern attheimpact onCommunity exports oftheso-called frugality campaign inKorea,
andtoinvite Korea tocorrect themisleading impression allowed togainacceptance thatimports were
harmful totheeconomy. Thisissue concerned notonlytrade ingoods butalsotrade inservices.
Since there hadbeennoadequate response from Korea, theCommunity wasraising thisissue once
again torequest theKorean Government 'sassistance inrepudiating thedangerous anddiscriminatory
approachtotheconductofeconomicpolicywhichtheanti-importcampaignentailed.Silencebypolitical
11TheDecision wassubsequently circulated asWT/L/216.WT/GC/M/19
Page23
leaders implied consent. TheCommunity reiterated itsrequest thatKorea address these concerns by
afirm,clearandsustainedoppositiontodiscriminatoryanti-importcampaigns.TheCommunitybelieved
thatthegovernment inacountry thatbenefited sogreatly from themultilateral trading system had
adutytodefend thatsystem actively, andtospeak outagainst groundless andmisleading attacks on
imported products.
TherepresentativeoftheUnitedStatesreiteratedconcernspreviouslyexpressedbyhisdelegation
intheCouncil forTrade inGoods regarding aspects ofthefrugality campaign inKorea which had
adversely affected awiderange ofUSexports. TheUnited States noted adistinction between theKorean
Government 'sunderstandable efforts topromote savings, reduction ofexcessive consumerism, and
other forms offrugality, andthesuppression ofimports. Although theKorean Government haddenied
involvement inananti-import campaign, orhaddismissed certain incidents asoccasions when low-level
bureaucrats hadallegedly acted without instructions, theUnited States hadsubstantial andcompelling
evidence thatvarious government agencies hadundertaken anactive campaign. Anygovernment actions
thatdiscriminated against imports were inconsistent withKorea 'sobligations totheWTO andthe
multilateral trading system. TheUnited States, liketheCommunity, strongly encouraged Korea to
makeanaffirmativepublicpolicystatementclarifyingthatitsGovernmentneithersupportednorcondoned
anti-import activity.
Therepresentative ofKorea saidthatonhisvisittoKorea inthepastweek, theDirector-General
hadbeengreatly welcomed, andhadhelddiscussions withKorean Government leaders, including the
President, onthefrugality campaign. Thecontent ofthese discussions hadbeenwidely publicized
inthemedia. Hisdelegation hadbelieved, therefore, thatthesuspicions oftheCommunity andthe
United States would havebeenalleviated bythistime. However, thiswasnotthecase. Hehadnoted
theUSandCommunity statements, andwould report tohiscapital theconcerns expressed. AsKorea
hadmade clear onprevious occasions, itsGovernment wasnotinvolved inthefrugality campaign,
andparticularly intargeting theimportation offoreign goods. Korea, asanimportant WTO Member,
hadabided byitsWTO obligations andwould continue todoso.
TheGeneral Council tooknoteofthestatements.
14. Accession ofPanama
TheChairman, speaking under "Other Business", recalled thatinOctober 1996, theGeneral
Council hadadopted aDecision authorizing Panama toaccede totheWTO Agreement
(WT/ACC/PAN/20)onthetermssetoutinitsProtocolofAccession(WT/ACC/PAN/21).TheProtocol
wasopenforacceptance byPanama until30June1997. Panama hadrecently indicated thatitmight
notbeabletomeetthistime-limit foritsacceptance oftheProtocol. Ifthisproved tobethecase,
adraftdecision proposing anextension ofthistime-limit would beplaced before theGeneral Council
forconsideration atitsnextmeeting.
TheGeneral Council tooknoteofthisinformation.
15. Observer status intheGeneral Council fortheHoly See
TheChairman, speaking under "Other Business", saidthatashealready informed delegations
ininformal consultations, initscontacts withtheDirector-General theVatican Mission hadenquired
informally about thepossibility ofbeing allowed toobserve theGeneral Council 'smeetings. Asall
wereaware, theVatican hadobserver status inmany organizations including theUnited Nations and
itsspecialized agencies. Given itsparticular characteristics, theVatican would not,however, envisageWT/GC/M/19
Page24
acceding totheWTO asaMember asrequired inAnnex 2oftheRules ofProcedure oftheGeneral
Council (WT/L/161). Therefore, iftheGeneral Council weretoinvite theVatican toattend itsmeetings
asanobserver itwould havetowaive thisrequirement inAnnex 2,taking intoaccount theuniqueness
oftheHoly See'ssituation.
Thecriteria inAnnex 2oftheRules ofProcedure hadbeenestablished bytheGeneral Council,
andwere notsubject toanyother WTO rules. TheGeneral Council could therefore choose notto
apply those criteria inthisspecific case. Such adecision would nothavealegally binding effect on
theGeneral Council 'sability infuture totakeanydecisions itwished concerning observer status. A
decision togrant observer status totheHoly Seecould bemade conditional ontheunderstanding that
itwould notconstitute aprecedent forfuture decisions onrequests forobserver status. Hehadinvited
delegations toreflect onthismatter andtoinform him,bythetimeofthepresent meeting, whether
theywould haveanydifficulties inconsidering, atafuture meeting, aformal request fromtheVatican
inwhich theVatican would also,interalia,provide thereasons forsucharequest. Hehadalsoprovided
delegations withtheSecretariat 'slegalopinion onthismatter. Hewished toinform theGeneral Council
thatuntilthepresent timenoMember hadindicated anydifficulty inconsidering sucharequest. He
would beconferring onthismatter withtheVatican inearlyMay, andexpected thatitwould eventually
submit aformal request forobserver status.
TheGeneral Council tooknoteofthisinformation.
16. Accession ofGeorgia
- Chairmanship oftheWorking Party
TheChairman, speaking under "Other Business", informed theGeneral Council that,following
hisconsultations, Ms.E.Herfkens (Netherlands) hadagreed toserve asChairperson oftheWorking
Party ontheAccession ofGeorgia.
TheGeneral Council tooknoteofthisinformation.