WORLD TRADE
ORGANIZATIONWT/GC/W/148
24 February 1999
(99-0700)
Original:  English/
French
DEVELOPING COUNTRIES AND THE WTO
DISPUTE SETTLEMENT MECHANISM
Communication from the European Communities
The following communication dated 12 February 1999 has been received from the European
Communities with the request that it be circulated to Members.
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During 1998 the needs of developing countries in relation to the settlement of disputes
through the WTO mechanism attracted increasing attention and a number of ideas were developed in
Geneva with a view to exploring ways to address this issue.  In particular, a proposal was submitted
by Venezuela in the spring of 1998 under the DSU review process.  More recently, in October 1998,
another proposal was circulated informally by a group of countries in Geneva.  The focus on disputesettlement (DS) and its use by developing countries is better understood as part of the more general
awareness of the need to take into account the concerns of the developing countries over their
participation to the WTO and their ability to reap the benefits of it.
The Community analysed ways to increase the participation of developing countries in the
WTO dispute settlement.  One possibility would be to seek to strengthen the WTO Secretariat skills
and unmatched experience in the dealings of the WTO regulatory system.  This prompted us tosuggest to follow a line of thought based on the idea to enhance the WTO Secretariat's ability to
provide case-specific technical assistance, without undermining the wider impartiality of the WTO
Secretariat.
I
It is clear that the WTO Secretariat resources available at present to provide technical
assistance in relation to the dispute settlement mech anism are insufficient.  This point is underlined in
the proposal of the group of countries and it is the core point of the proposal submitted by Venezuela.
At present the WTO Technical Cooperation and Training Division (TCTD) employs two
full-time legal officers and two part-time external consultants, plus other part-time legal consultants as
necessary, in order to provide additional legal advice to developing countries, as requested by
Article 27.2.
Our proposal would be to create a new unit with one permanent and four consultancy posts in
addition to the existing two permanent ones in the WTO Secretariat.
The enhanced capacity of the WTO Secretariat and the highly qualified and sensitive tasks
entrusted on it call for the establishment of an independent unit, as already suggested by Venezuela,thus detaching the new unit from the TCTD.  The Head  of this unit should report directly to the
Director-General of the WTO.  It is in any event important to highlight the uniqueness of this unit inWT/GC/W/148
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the Secretariat and its policy independence from the rest of the structure.  In the same vein, its
functioning should be financed by a separate trust fund - to which WTO Members would contribute
freely - dedicated to this unit.
II
As for the functions of such a new unit, the Community believes that they could include:
- A preliminary analysis to explore whether a perceived trade problem appears to be a
violation of WTO obligations or rights;  identification of relevant WTO provisions
and/or any case law precedent;
- advice on preparation of consultations envisaged in the DSU and in the WTO
Agreements;
- assistance with the preparation of a "basic brief" on the strengths and weaknesses of a
case;
- mediation upon request (Article 5 and Article 24.2 DSU), promoting amicable
resolution of disputes and thereby offering the possibility of reducing the number of
cases within the system.
The function of the unit would not extend to representing WTO Members in panels.  The
legal presentation of the arguments in submissions to the panel and the oral presentations in hearings
are the task of legal counsels, whether available in -house in the Administration or hired from outside.
The unit could nevertheless offer information on lawyers offering expertise in these areas.  This does
not, however, mean that the impartial advisory activ ity of the Secretariat, foreseen in Article 27.2 of
the DSU, would not be available throughout a dispute settlement procedure.  Research work andadvice on existing rights and obligations as well as on any case law precedents could well be
performed by this unit, in full respect of the impartiality rule.
III
Another important aspect on which there is convergence of views among the existing
proposals is the need to create legal expertise in the developing countries themselves, by means oftraining lawyers especially for WTO dispute settl ement.  In order for this capacity-building
programme to be most effective, the internship formula seems the most appropriate.  In the proposal
from a group of countries as well "The Centre would provide … internships for officials dealing with
WTO legal issues."
We would like to propose an approach to internship, which involves all the WTO Members,
or if this is not possible at least all the EU members and the WTO Secretariat.
Under this new proposal we would open intern ship programmes for legal trainees/lawyers
from the developing countries.  They would work w ith our legal expert(s) in the Delegation of the EC
and in the Missions of those MS who can accommodate for this to happen in Geneva, otherwise in the
capitals.  Each of them would stay for one year on a grant.  This would allow between 30 and
50 lawyers to be trained in WTO matters directly in Geneva over only three years (up to 10-
16 lawyers per year) by the EU alone.  These lawyers could return to their capitals or be posted in
Geneva to work for their governments for a minimum number of years.  They could also form anassociation to support each other's work once they  complete the one-year programme.  They would
have built good personal connections both within their group and in the trade legal experts'
community.WT/GC/W/148
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Other developed WTO Member countries, such as the United States, Canada, Australia,
New Zealand, Switzerland, Norway and Japan would be invited to join in this programme.  In this
case, the WTO Secretariat could act as "match-maker" between offer and demand.  If others choose
not to join, we will have to manage it (possibly from Geneva).  Other variables include the possibility
for the trainees to spend the first month with the WTO Secretariat or following a general seminar onWTO issues, etc.  If the programme is a success, the creation of a foundation to manage it might be
envisaged over time.
The proposal made for internship on dispute settlement could work well for other WTO
specialities or even for general WTO familiarisation programmes, as in the NL "Programme for
Trainees" with the WTO Secretariat.  MS could expl ore the feasibility of having interns on TRIPs and
on Services.  Respect of confidentiality would be requested from the interns.
IV
In conclusion, the Community suggests that the provision of legal advice to the developing
country Members of the WTO could potentially be strengthened by:
- Establishing a new unit under the WTO umbrella to act as a WTO Law Advisory
Centre;
- staffing it with five full-time legal staff;  and- completing the initiative by a robust capacity-building programme of internships, as
described under III.WT/GC/W/148
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DEVELOPING COUNTRIES AND THE DISPUTE SETTLEMENT SYSTEM
Financing Aspects of the Community Proposal
Member States have requested further information on the operating costs of the WTO Law
Advisory Centre and the internship training programme.
New WTO unit
Assuming that the WTO Law Advisory Centre consists of:1 Head of Unit, WTO staff member
4 lawyers, of whom:  one staff member and three on temporary contracts
1 assistant
1 secretary
The total cost would be in the order of only Sw F 1 million, or roughly 625,000 Euros per
year.
1  Actually the cost would be even lower, as this amount includes the costs currently charged to
the WTO budget for the functioning of the small unit that already exists (approximately
Sw F 290,000, or 180,000 Euros).  Hence the Community proposal would involve new contributions
of less than Sw F 800,000 or 440,000 Euros.
The Centre would be of no cost to the deve loping countries, which would derive all the
benefits.  It would cost only a tenth of other more complex solutions.
The Trust Fund
Any WTO Member would be free to participate.  The question of the direct contribution of
the Community as such is open.  However, the Community budget for 1999 does not include any
allocation for this purpose.  For the year 2000, on the other hand, a request would have to be
submitted at the end of October of this year, in accordance with the Community's budget procedures.
Internship system
The closest experience is that of the "Programme for Trainees" financed by the Netherlands,
which is currently in its first year of implementation.  The cost per intern and per year has been
reckoned at around Sw F 180,000, taking into account the standard salary of a "Professional" staff
member, plus travel costs, including those involved in the selection of candidates.  As the interns in
the new system would not be working in the WTO Secretariat, and in any event should be assimilatedto young officials, the necessary amounts could vary.
If the programme is supported by several WTO Members, the system of a trust fund
administered by the WTO is the most appropriate.  If the Community alone were to provide this
opportunity for lawyers from developing countries, other solutions could be envisaged, such as thecreation of internships in accordance with the spec ific rules of each national administration.  This
solution has the advantage of simplicity but would have less visibility in terms of the WTO.
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1 This calculation is based on the figures in the WTO 1999 budget estimates.  The standard cost of a
"Professional" staff member (levels 7 to 10) is 168,000 Sw  F/year and that of a "General Services" staff member
(levels 1 to 7) is 121,000 Sw F/year.