WORLD TRADE
ORGANIZATIONWT/GC/W/115
19 November 1998
(98-4652)
General Council Original:  English
PREPARATIONS FOR THE 1999 MINISTERIAL CONFERENCE
General Council Discussion on Mandated Negotiations and the Built-In Agenda
23 November 1998
Communication from the United States
The following communication, dated 19 November 1998, has been received from the
Permanent Mission of the United States.
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At the October 1998 General Council meeting, the United States presented WT/GC/W/107
containing preliminary views with respect to paragraph 9 (a)(i) of the May 1998 Ministerial
Declaration regarding “issues including those brought forward by Members, relating to
implementation of existing agreements and decisions.”  This submission is intended to supplement
our initial contribution by focusing on paragraphs 9(a) (ii) and 9(a)  (iii) of the Declaration regarding
“the negotiations already mandated at Marrakesh, to ensure that such negotiations begin on schedule";
and "future work already provided for under other existing agreements and decisions taken at
Marrakesh.”  Taken together, these submissions are aimed at building consensus among Members sothat we may develop recommendations for Ministers on decisions concerning the further organization
and management of the work program, including the scope, structure and time frames that will ensure
that the negotiations and work programs will be begun and concluded expeditiously.
The Council’s initial discussion of implementation confirmed that all Members give the
highest priority to full and effective implementation of the Agreements concluded in the UruguayRound and to ratification and implementation of the post-Uruguay Round agreements on basic
telecommunications and financial services.  Equally important, it was clear that as we prepare  the
forward agenda that Ministers will consider in November 1999, the challenges of implementation are
certainly within the realm of the manageable and do not stand as an impediment to pursuing
additional work and liberalization.  For the sake of brevity, the United States will not reiterate here allthe points on implementation previously raised that are relevant to the future agenda of the WTO.
Turning to the current agenda item, we draw several conclusions from our initial examination
of the issues: (1)  substantial preparatory work has already been commissioned in a variety of fora
sufficient to ensure that negotiations will be init iated on schedule; (2) in light of current commitments
to negotiations, our discussions should pave the way for development of recommendations forMinisters that include negotiating objectives and detailed plans to enable negotiations to begin as
envisioned; (3) preparing recommendations on how to structure the WTO’s future agenda must take
into account the existing time frames and modalities established in current Agreements, and the fact
that the Ministerial Conference is scheduled to meet every two years; and (4) deadlines already
established, particularly with respect to the built- in agenda and reviews, need to be honored and notWT/GC/W/115
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held in abeyance as they will facilitate more effective participation in the system, including by trading
partners at lower levels of development.
The following is an initial and preliminary re view that takes into account comments received
thus far in our on-going domestic consultations.  We note that we will have further opportunity to
supplement our views at subsequent scheduled discussions of the General Council.
I. MANDATED NEGOTIATIONS   - PARAGRAPH 9(A)(II)
A. AGREEMENT ON AGRICULTURE
Article 20 of the Agreement calls for Members to continue the reform process in agriculture
by continuing substantial progressive reductions in support and protection through further
broad-based negotiations which ensure that the results address the full range of trade-distorting
measures.  Members have the benefit of extensive and detailed work as a result of the Analysis andInformation Exchange (AIE) process begun at Singapore.  It  has allowed Members to identify areas
of the Agreement requiring improvement, including the existence of significant trade distortions, and
initiated the collection of data that will be required by members to make informed negotiating
decisions, in addition to the Integrated Data Base (IDB) managed by the Market Access Committee.
At the Third Ministerial Conference, Ministers will agree on the scope, modalities and time frames forthe negotiations.
Mandate for Further Reform:  Members should agree that the overall objective for the
negotiations should be to expand market access opportunities by ensuring further deep reductions in
support and protection and by strengthening the rules governing trade in agriculture as further
articulated below.  Commitments in the Round began the liberalization process in agriculture by
reducing support and protection while encouraging non-trade distorting approaches for supportingfarmers and the rural sector.   The current Agreement  resulted in disciplines in three main areas:
market access, export subsidies, and domestic support.  Commitments in these areas establish a
baseline of binding commitments from which further reduction commitments should be made, andsupplemented by additional disciplines.
- Members should agree that the existing framework provides the basis on which to pursue
further reform, and will supplement this framework to ensure that the second stage of reform
addresses new challenges facing the agricultural sector.
Expanding Market Access Opportunities:
- Members should agree to pursue an outcome that is ambitious.- Members should agree that the results will improve and expand market access opportunities
by lowering bound tariff rates to eliminate the disparity between applied and bound rates andby simplifying complex tariff regimes (e.g., the use of compound rates).
- Members should ensure that the market access results provide greater certainty and
transparency in the operation of tariff regimes.
- Members should agree to establish new disciplines on tariff-rate quota administration.
- Members should agree that further disciplines are needed on the import activities of state
trading enterprises; andWT/GC/W/115
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- Members should agree to further limit the use of the special agricultural safeguard.
Further Disciplining Export Subsidies:
- Members should agree to pursue an outcome that will result in an elimination of all remaining
export subsidies.
- Members should agree to clarify and strengthen rules on measures that can circumvent export
subsidy disciplines, such as disciplining activities of state trading enterprises, distortive uses
of export taxes and disguised export subsidies (e.g., pricing policies).
Further Disciplines and Reform of Domestic Support:
- Members should agree to set an ambitious target for the reduction of trade-distorting domestic
support.
- Members should agree to strengthen the rules so that all production-related support  is subject
to discipline.
- Recognizing the importance of a sound agricultural sector in all members, Members should
agree that the results ensure that the “green box” exemptions continue to sustain the primaryobjectives of minimizing the link between support and production and allowing members to
provide non-distortive support through appropriately-specified  policies.
Addressing  New Challenges to the Agricultural Sector:
- Members should agree that an important outcome of the reform process will be to address
additional measures that unjustifiably distort in ternational trade and to subject them to rules
and disciplines, including possibly outside of  the Agriculture Agreement.
- Members should agree to pursue additiona l multilateral approaches for implementing
commitments (for example, in the Agreements on the Application of Sanitary and
Phytosanitary Measures and on Technical Barriers to Trade) to bring more predictability anddiscipline to measures affecting agricultural products while protecting health and the
environment.
- Members should agree to pursue additional approaches that address market access issues for
biotechnology products .
Developing the Modalities for Negotiations: The AIE process has resulted in extensive
submissions by Members, and work by the Secretariat to provide information on commitments,
performance, and issues of particular importance to developing countries.
- Members should be prepared to consider  ne gotiating modalities, including possible plans for
conducting the negotiations, by the 2 nd quarter of 1999.
- Members should complete the IDB requirements to ensure that market access negotiations
will proceed, as scheduled.WT/GC/W/115
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Time frame for Conducting Negotiations: The current Agreement provides for the
implementation of commitments with different timet ables, and for the expiry of certain exemptions
from current rules.  An issue Mini sters will need to address is the avoidance of a pause in the reform
process as the next set of commitments are negotiated.
- Members should establish deadlines for the new commitments to be undertaken, taking into
account the expiration of due restraint provisions.  Members should establish mid-points to
ensure progress continues on schedule, and a means to ensure that there is no pause in the
liberalization program.
Food Aid / Security of Food Supplies:   Further reform should not adversely affect the ability
of developing countries to meet their food import needs.- Members should agree to take into account the results of the negotiations on a new Food Aid
Convention in developing the program of negotiations.
B. G
ENERAL AGREEMENT ON TRADE IN SERVICES
The Council for Trade in Services (CTS) has five main areas of preparatory work that
Members must advance if we are to develop appropriate recommendations for the scope, modalities
and time frames for negotiation.
Information exchange:   The CTS took up this work in June and, by December, will have
completed exchanges of information on 18 sectors.1  Submissions by Members and by the Secretariat
have produced a broad and useful base of information on the nature and importance of trade in
services in the particular sectors, the evolution of new or newly-tradable services, the scope of
existing commitments, and the issues requiring further attention.
- Members already have identified classification issues as requiring more attention, and the
CTS has asked the Committee on Specific Commitments to take account of information
developed to date in its classification work.
Assessment of trade in services in overall terms and on a sectoral basis with reference to the
objectives of the GATS, including Article IV:1 (benefits for developing countries):  Discussions on
this topic will begin at  the January CTS meeting, although this assessment already has been
proceeding sector by sector during the information exchange.
- Given the important role that services can play in the development of Member economies, the
assessment will facilitate the development of an  appropriate negotiating scenario that takes
into account the benefits for developing countries of services trade liberalization and GATSbindings, consistent with Article IV:1.
                                                     
1June:  postal and courier services, audiovisual services, construction and engineering services,
distribution services; July:  legal services, advertising, architecture and engineering, computer services,
environmental services; October:  health and social services, education, tourism and travel-related services,energy; November:  air, rail, road, and sea transpor t; December:  telecommunications, financial services,
accounting, “modes” of delivery.WT/GC/W/115
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Establishment of negotiating guidelines and procedures, including modalities for the
treatment of autonomous liberalization since previous negotiations, and for special treatment for
least-developed country Members under Article IV:3:
- This phase of the preparatory process will build on both the information exchange and the
assessment.  The guidelines and procedures will need to reflect the overall mandate for the
negotiations, the results of which should be both liberalizing and comprehensive in scope;
that is, the next GATS negotiations should yield broader and deeper commitments,
particularly from Members that have not participated fully in past negotiations.
Article VI:4:  measures relating to qualification requirements and procedures, technical
standards and licensing requirements: Ministers mandated an examination with a view to taking the
work as far as possible before the commencement of the next GATS negotiations.- This work will begin at the November 23-24 meeting of the CTS.  During the information
exchange, the CTS has developed information on sectors in which such disciplines may be
appropriate, as well as on relevant work already undertaken in other fora.  Thus, it is timelythat the CTS take up this work toward the conclusion of the information exchange.
Improved classification: The Committee on Specific Commitments has attempted to develop
improved classification of services, an important basis for enabling Members to schedule clear and
commercially-relevant commitments.
- The Committee was instructed by Ministers to make recommendations for improving the
technical accuracy and coherence of schedules of specific commitments and lists of
exemptions from Article II of the GATS before the start of the next GATS negotiations.
In addition to the preparatory work, Members should undertake other work related to the next GATS
negotiations:
Review of MFN exemptions: Not later than five years after entry into force of the WTO
Agreement, the CTS must conduct its first review of all MFN exemptions that have been granted for a
period of more than five years.
- The CTS should take up this issue early in 1999 so that recommendations may be made.
Review of the Annex on Air Transport Services.  At least every five years, the CTS must
review developments in the air transport sector and the operation of the Annex on Air Transport
Services with a view to considering the possible further application of the GATS to that sector.
- The United States believes the CTS should take up this issue early in 1999.  This discussion
can build on the November information exchange session on air transport services.
II. BUILT IN AGENDA ISSUES - PARAGRAPH 9(A)(III)
A. AGREEMENT ON TRADE -RELATED ASPECTS OF INTELLECTUAL PROPERTY RIGHTS (TRIPS)
The TRIPS Agreement provides for further negotiation and/or review of several provisions of
the Agreement, including the issue of biotechnology patents.    In addition, the TRIPS Agreement
provides for a review in 2000 to examine, inter alia, “relevant new developments which might warrantmodification or amendment of the Agreement.”  In th is submission, the United States calls attention toWT/GC/W/115
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what we consider to be the most critical issues Members will need to consider in terms of the reviews
required by the built-in agenda.
Patentable Subject Matter:   Article 27.3(b) allows members to exclude from patentability
plants and animals. It also states that the provisi ons of this subparagraph shall be reviewed four years
after the date of entry into force of the WTO Agreement.
- The TRIPS Council will initiate work on this item in 1999, to consider whether it is desirable
to modify the TRIPS Agreement by eliminating the exclusion from patentability of plants and
animals and incorporating key provisions of the UPOV agreement regarding plant variety
protection.
Dispute settlement: non-violation cases:   Article 64.3 requires the Council for TRIPS to
examine, during the five years from the date of entry into force of the WTO Agreement, the scope and
modalities for the complaints provided for under subparagraphs 1(b) and 1(c) of Article XXIII of
GATT 1994 made pursuant to the TRIPS Agreement, and to submit its recommendations to the
Ministerial Conference for approval.  Any decision of the Ministerial Conference to approve suchrecommendations or to extend the 5 year moratorium on non-violation cases provided under Article
64.2 shall be made only by consensus.
- The United States believes that the moratorium on non-violation cases should be allowed to
expire on schedule, on January 1, 2000.
Implementation Review: Article 71.1 requires the Council for TRIPS to review the
implementation of the TRIPS Agreement after the expiration of the transitional period referred to in
paragraph 2 of Article 65, namely after 1 January 2000.
- The United States had made suggestions regarding implementation in its earlier submission;
the review gives additional importance to ensuring effective implementation.
B. AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES
The Agreement calls for various reviews of the operation of certain provisions, and several
reviews have been or are to be completed prior to the Third Ministerial Conference.  In thissubmission, the United States calls attention to what we consider to be the most critical issue
Members will need to consider in terms of the reviews required by the built-in agenda.
Dark Amber and Green Light Rules :  Article 31 refers to the operation of Articles 6.1, 8 and
9 of the Agreement, the so-called “dark amber” and “green light” rules.  Article 6.1 establishes in
certain circumstances rebuttable presumptions of serious prejudice caused by actionable subsidies;
Articles 8 and 9 determine the treatment and non-actionable status of certain subsidies provided for
specified industrial R&D, regional development or environmental compliance purposes.  Article 31
provides that Articles 6.1, 8 and 9 will apply for a period of five years from the entry into force of the
WTO and that, not later than 180 days before the end of this period, the Subsidies Committee willreview the operation of these provisions “with a view to determining whether to extend their
application, either as presently drafted or in a modified form, for a further period.”
- The Council should be informed, at the appropri ate time,  of the progress of the Subsidies
Committee in its deliberations, recognizing that the Committee has invested significant timeand attention in the first years of the Agreement to work on formats, procedures and
guidelines to clarify and facilitate the use of these provisions.WT/GC/W/115
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C. AGREEMENT ON TRADE -RELATED INVESTMENT MEASURES (TRIM S)
Article 9 of the Agreement requires a review of the Agreement not later than five years after
the date of entry into force by the Council on Trade in  Goods.  Its purpose is to consider the operation
of the Agreement, propose amendments as appropriate and consider whether the Agreement should be
complemented with provisions on investment policy and competition policy.  Neither the Committeenor the Council have established any plans or procedures for conducting this review, which is to be
conducted before the end of next year.
Issues for the Review:  The work of the TRIMs Committee is likely to be influenced by work
underway in the Working Groups established at Si ngapore on Investment and on Competition Policy
and the reports to be submitted to the General Coun cil before the end of the year. Nonetheless, the
Committee and  Council on Trade in Goods should ex amine additional improvements in the review.
- The Committee and the Council should consider the desirability of broadening the Agreement
by expanding the disciplined list of TRIMS to include export performance requirements,
technology transfer requirements, and product mandating requirements.
D. TRADE POLICY REVIEW BODY
The Trade Policy Review (TPR) was one of the early agreements concluded in the Uruguay
Round, with implementation provided for on a provisional basis pending the conclusion of the
negotiations. The Agreement is to be reviewed before the end of 1999, and any improvements should
be implemented immediately thereafter.  While all Members will agree that the TPR plays animportant role in ensuring greater transparency and better understanding of the overall trade regimes
of individual WTO Members, it is resource-intensive for both the Secretariat and delegations.
Cooperation with Other International Organizations: As part of overall efforts on coherence
and rationalization of resources, greater effort is needed to ensure the WTO Secretariat is coordinating
its work on TPRs with other international organizations.  (We note that in the case of the
least-developed countries, this was an important element of preparations for the High Level Meeting
and the roundtables.)
- The TPR provides an excellent, on-going means for the Secretariat to consult and share
information with relevant international orga nizations and UN bodies to maximize resources
while covering the widest range of issues.
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