RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/81
28 August 2003
(03-4531)
General Council
24-25 July 2003
MINUTES OF MEETING
Held in the Centre William Rappard
on 24-25 July 2003 1
Chairman:  Mr. Carlos Pérez del Castillo (Uruguay)
1. Iran – Request for Accession ................................................................................................. ..3
2. International Trade Centre UNCTAD/WTO – Report of the Joint Advisory
Group on its Thirty-sixth Session............................................................................................3
3. Committee on Budget, Finance and Administration .............................................................5
(a) Report of the Committee on its mee tings of January to May 2003 ............................................5
(b) Doha Development Agenda Global Trust Fund – Situation as at 30 June 2003 –
Statement by the Co mmittee Chai rman ......................................................................................6
4. Waivers under Article IX of the WTO Agreement................................................................7
(a) Introduction of Harmonized System 1996 changes into WTO Schedules of tariff
concessions – Request s for waiv ers............................................................................................7
(i) Argentina – Schedule LXIV................................................................................................... ......7
(ii) El Salvador - Schedule LXXXVII ............................................................................................. ...7
(iii) Israel – Schedule XLII .................................................................................................... ............7
(iv) Malaysia - Schedule XXXIX.................................................................................................. ......7
(v) Morocco – Schedule LXXXI.................................................................................................... ....7
(vi) Pakistan - Schedule XV..................................................................................................... ..........7
(vii) Panama - schedule CXLI .................................................................................................... ........7
(viii) Thailand - Schedule LXXIX ................................................................................................ ........7
(ix) Venezuela - Schedule LXXXVI................................................................................................ ....7
(b) Transposition of Schedules into the Harmonized System – Request for extension of
waiver – Sri Lanka – Schedule VI ..............................................................................................7
                                                     
1 The meeting was attended by H.E. Mr. Luis Ernesto Derbez, Minister of  Foreign Affairs of Mexico
and Chairman-designate of the Fifth Session of the Ministerial Conference, who made a statement just prior to
the close of the meeting.  The statement is reflected in the Annex.WT/GC/M/81
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5. Trade in Textiles and Clothing ............................................................................................... .8
(a) Developing Members’ concern about potential reduction in market (quota) access in
2003 - Communication from Bangladesh;  Brazil;  Costa Rica;  Egypt;  Guatemala;
Hong Kong, China;  India;  Indonesia;  Ma cao, China;  Maldives;  Pakistan;  Peoples’
Republic of China;  Sir Lanka;   Thailand; and Vietnam.............................................................8
(b) Anti-dumping actions in the area of textiles and clothing – Proposal for a specific
short-term dispensation in favour of developing Members following full integration
of the sector into GATT from January 2005 - Communication from Costa Rica;
Guatemala;  Hong, Kong China;  India;   Indonesia;  Macao, China;  Maldives;
Pakistan;  Peoples’ Republic of Chin a;  Thailand;  and Vietnam.............................................12
6. Negotiations on improvements and clarifications of the DSU – Extension of
timeframe – Statement by the Chairman .............................................................................18
7. Preparations for the Fifth Sessio n of the Minister ial Conf erence ......................................18
(a) Election of Officers for the Fifth Session - Statement by the Chairman ..................................18
(b) Attendance by International Intergovernmental Organizations as Observers –
Requests by:................................................................................................................... ...........19
(i) League of Arab States ....................................................................................................... ........19
(ii) Council of Europe Development Bank......................................................................................19(iii) North American Commission for Environmental C ooperation ................................................19
(iv) United Nations Human Settlements Programme ......................................................................19
(c) Reports..................................................................................................................... .................21
(i) Work Programme on Small Economies – Re port by the Chairman of the Dedicated
Sessions of the Committee on Trade and Development ............................................................21
(ii) Work Programme on Special and Differential treatment in pursuance of
paragraph 44 of the Doha Ministerial Declaration and paragraph 12.1 of the
Decision on Implementation-R elated Issues and Concerns – Reports by the General
Council Chairman and Chairpersons of subsidiary bodies......................................................21
(iii) Reports of the Working Groups on the Relationship between Trade and Investment,
the Interaction between Trade and Competition Policy, and Transparency in
Government Procurement, and of the C ouncil for Trade in Goods on Trade
Facilitation................................................................................................................... .............32
(iv) Reports of the Working Groups on Trade, Debt and Finance, and on Trade and
Transfer of Technology......................................................................................................... ....35
(v) Council for TRIPS – Report by the Chairman on examination of scope and modalities
for non-violation and situation complaints under Article XXIII of GATT 1994.......................36
(vi) Committee on Trade and Environment – Report pursuant to paragraphs 32 and 33 of
the Doha Ministeria l Declaration.............................................................................................37
(vii) Work Programme on Electronic Commerce – Reports from subsidiary bodies and on
the dedicated discussions on cross-cutting issues under the auspices of the General
Council........................................................................................................................ ..............39
(viii) Committee on Agriculture – Implementation-related issues – Report to the General
Council........................................................................................................................ ..............42
(ix) Rules of Origin – Harmonization Work Programme – Statement by the Chairman ................43WT/GC/M/81
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(x) Committee on Customs Valuation – Repor t on the identification and assessment  of
practical means to address Members’ concerns regarding accuracy of declared
values pursuant to paragraph 8.3 of the Doha Ministerial Decision on
Implementation-Related I ssues and Concerns..........................................................................46
(xi) Implementation and adequacy of technical cooperation and capacity-building
commitments in the Doha Ministerial Decl aration – Report by the Director-General
pursuant to paragraph 41 of the Doha Ministerial Declaration ..............................................47
(xii) Issues affecting le ast-developed countries................................................................................ 48
(d) Report by the Director-General pursuant to paragraph 43 of the Doha Ministerial
Declaration.................................................................................................................... ............48
(e) Report by the Director-General on implementation of the commitment by Ministers to
facilitate and accelerate  accessions of LDCs ............................................................................48
(i) Updates to the 2002 Annual Reports – General Council;  Dispute Settlement Body;
Trade Policy Review Body;  Sectoral Councils;  Committees on Trade and
Development, Balance-of-Payments Restrictions, Budget, Finance and
Administration, and Regional Trade Agreements;  Committee on Trade and
Environment;  Committees under the Plurilateral Trade Agreements .....................................51
(f) Report by the Chairman of the Trade Negotiati ons Committee ...............................................58
(g) Draft Ministerial Text – Statement by th e Chairman................................................................58
8. Extension of deadline for registration of participants at the Fifth Session of the
Ministerial Conference ......................................................................................................... 107
1. Iran – Request for Accession (WT/ACC/IRN/1)
1. The Chairman drew attention to the communi cation from Iran in WT/ACC/IRN/1 requesting
accession to the WTO Agreement pursuant to Article XII.  He recalled that the General Council had
last considered this matter at its meeting in May, and had agreed to revert to it at the present meeting.
2. The representative of the United States said that the issue of Iran's accession to the WTO
continued to be under review by his Government, and his delegation had nothing to add to its
statement at the May meeting of the General Council.
3. The representative of Tanzania, speaking on behalf of the Informal Group of Developing
Countries, said that these countries took note of the statement by the United States.  They hoped that
the United States would complete its review soon and would be able to provide a positive response on
this issue at the next meeting of the General Council.
4. The General Council took note of the statements and agreed  to revert to this matter at its next
meeting.
2. International Trade Centre UNCTAD/WTO – Report of the Joint Advisory Group on
its Thirty-sixth Session (ITC/AG(XXXVI)/195)
5. The Chairman recalled that the Joint Advisory Group of the International Trade Centre
UNCTAD/WTO (JAG) had held its Thirty-sixth Session from 28 April to 2 May 2003.  The report of
the Joint Advisory Group had been distributed in  ITC/AG(XXXVI)/195.  In keeping with customary
practice, this report had been considered initially by the Committee on Trade and Development (CTD)
at its meeting on 22 May.  The report was now before the General Council for formal adoption.WT/GC/M/81
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6. Mr. Mansour (Tunisia), Chairman of the Committee on Trade and Development, said the
Committee on Trade and Development had considered the report of the JAG at its meeting on
22 May.  The report had been introduced by the JAG Chairman, Mr. Faizel Ismail (South Africa).
The ITC's Executive Director, Mr. Denis Bélisle, who was present at the CTD, had said that 2002 had
been a very good year for the ITC and that the ITC intended to build on it to assert its relevance to
continue the process of change and to grow as a niche player in trade-related technical assistance.The plan for growth of the ITC rested on three basi c principles.  First, the ITC would remain focused
and continue to do what it did best.  Second, the ITC would continue to innovate in technical
assistance approaches and programmes.  And third, it would work towards greater field-level impact.
The JAG had highlighted the importance of trade-related technical cooperation to the integration of
developing and transition economies into the multilateral trading system in the context of the Doha
Development Agenda.  Representatives had under scored the importance of UNCTAD, WTO and ITC
continuing to work together to ensure a coherent and comprehensive approach, and the JITAPprogramme had been cited as a model of effective institutional collaboration and efficient field
delivery.  The proposal by Denmark for an independent external evaluation of the ITC had also been
discussed and some Members had mentioned their interest in that exercise.  CTD Members had
generally commended the ITC for its efforts, taken note of the JAG report, and decided to forward it
to the General Council for adoption.
7. All delegations who spoke expressed their appreciation to the ITC and its Executive Director,
Mr. D. Bélisle, and thanked the CTD Chairman for his introduction to the JAG report.
8. The representative of Cuba said her delegation wished to recognize the support the ITC had
given to the enhancement of trade and development implemented through its various programmes,
such as poverty-reduction, JITAP and other programmes on South-South trade, despite the scantresources available to it.  Cuba was aware of the role the ITC should play in promoting economic
development and poverty alleviation.  Therefore, her delegation wished to highlight the cooperation
the ITC had carried out with developing countries in general and with Cuba in particular, where this
year the Executive Director had been present at the International Fair in Santiago.  As present and
future challenges were becoming more and more difficult, Cuba appealed that more funds beforthcoming in order to help developing countries in their development efforts.
9. The representative of Mexico said that over the past few months he had been participating in
certain activities of the ITC, and his delegation fully shared the statement by Cuba.  The ITC was an
important institution.  It was fully developing South-South trade in a very creative and innovative way
and had been very successful.  Mexico hoped that more resources would be forthcoming so that theITC could do even more in this connection.  His delegation hoped that the type of projects carried out
by the ITC would be given even more backing, because the purpose of the current WTO negotiations
was to create more trade so that developing countries participated more in trade and could create more
jobs and income from trade liberalization.
10. The representative of Pakistan said that his country had always been encouraged to make use
of the ITC’s facilities and training, and the system it had developed, and had seen that this
organization had a very focussed approach.  The documentation the ITC produced was very precise,very comprehensive and of a very high standard.  Its projects were very innovative and productive,
and Pakistan hoped that the WTO would give it the full support it deserved.
11. The representative of Canada said that he had had the opportunity to participate in South
Africa in one of the ITC’s sessions on South-South trade, and also on how to better develop a closer
affinity between the private sector in developing countries and the trade policy decision-makers inthose countries.  He had witnessed first-hand how well the ITC worked and how successful it was in
implementing its programmes.WT/GC/M/81
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12. The representative of Venezuela said that the ITC's work was strengthening capacity in
developing countries, which enabled them to enhance their own trade, and Venezuela was very
grateful for this work.
13. The representative of Morocco, speaking on behalf of the African Group , expressed
appreciation for the quality of the work carried out by the ITC in the area of research and studies, and
of the work actually done on the ground in Africa.  It could be seen, thanks to the ITC ExecutiveDirector, that there really was a vision that took into consideration the concerns and problems of
African countries in helping them to bring thei r economic systems up to a level that would enable
them to be fully integrated into the world trading system.  The African Group also wished to support
all the many efforts aimed at strengthening the ITC so that it could carry out its mission under the best
conditions and also to further extend its scope of action.
14. The representative of Côte D’Ivoire said that as one of the beneficiaries of the ITC’s
activities, his country would be failing in its duty if it were not to publicly recognize the many
advantages it had drawn from the ITC’s activities.  His delegation therefore joined its voice to the
statements already made and thanked ITC Executive Director and his team for the very useful and
highly successful cooperation work they had carried out in various countries.
15. The Chairman said he was certain that the observer from the ITC at this meeting would
convey to the ITC Executive Director the many words of gratitude and thanks expressed by
delegations in recognition of the work carried out by the ITC.
16. The General Council took note  of the statements and adopted  the report of the Joint Advisory
Group in ITC/AG(XXXVI)/195.
3. Committee on Budget, Finance and Administration
(a) Report of the Committee on its meetings of January to May 2003 (WT/BFA/65)
17. Mr. Law (Hong Kong, China), Chairman of the Committee on Budget, Finance and
Administration, said that the Committee's report in document WT/BFA/65 covered its meetings held
from 29 January to 14 May.  The report should be read in conjunction with document WT/BFA/64,
which contained only the recommendations on the methodology for future salary adjustments in the
WTO discussed during the course of these meetings.  Those recommendations had been presented to,and approved by, the General Council on 15 May.
18. The matters taken up by the Committee at these meetings included (i) the methodology for
future salary adjustments, (ii) various administrative up-dates and progress reports, (iii) consolidation
of long-term temporary assistance in regular budget, (iv) biennial budget, (v) consideration of a
proposed contribution from a non-governmental donor , (vi) result-based budgeting, (vii) Trust Fund
to facilitate the participation of least-developed countries in the Ministerial Conference at Cancun,
(viii) inactive Members, (ix) election of Chairperson, (x) assessment of additional contribution to the
2003 budget and advance to the Working Capital Fund in respect of two new WTO Members:
Armenia and the Former Yugoslav Republic of Macedonia, (xi) review of the guidelines on voluntary
contributions from non-governmental donors and (xii) ITC budget forecast for 2004.
19. He drew attention to the Committee's recommendations in paragraphs 17, 31, 33, 35 and 39 of
its report in WT/BFA/65, which required General Council action.
20. The General Council took note of the statement, approved
 the Budget Committee's specific
recommendations in paragraphs 17, 31, 33, 35 and 39 of the report in WT/BFA/65, and adopted the
report.WT/GC/M/81
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(b) Doha Development Agenda Glob al Trust Fund – Situation as at 30 June 2003 – Statement by
the Committee Chairman
21. Mr. Law (Hong Kong, China), Chairman of the Committee on Budget, Finance and
Administration, said that at its meeting on 11 July, the Committee had received a report on the
situation of the Doha Development Agenda Global Trust Fund (DDAGTF).  He recalled that at its
meeting on 19-20 December 2001, the General Council had approved the terms of reference of theDDAGTF contained in the Budget Committee’s report in WT/BFA/56.  On 10 December 2002 and in
accordance with the terms of reference, the General Council had approved a target of Sw F 24 million
for the DDAGTF in 2003, in order to finance the smooth implementation of the 2003 WTO technical
assistance plan.  He wi shed to report that at the end of June 2003, the situation of the DDAGTF was
as follows:  Regarding pledges, taking into account the balance available at the end of 2002 (Sw F 6.5
million), the pledges initially made for 2002 that the Committee still hoped to cash in 2003 (Sw F 2.5
million) as well as the pledges made to date for 2003 (Sw F 11.2 million), the Doha DevelopmentAgenda Global Trust Fund had registered total pledges of Sw F 20.2 million.  Taking also into
account part of the earmarked funds to the extent they could finance activities included in the 2003
TA Plan would bring that figure just below Sw F 22 million.  This meant that between Sw F 2.3 and
2.6 million of additional pledges were still needed to reach the target amount of Sw F 24 mi llion for
the DDAGTF in 2003.
22. Regarding payment of contributions, cash-wise, the DDAGTF was safely in the black with a
cash balance of Sw F 2.2 million.  The total of the contributions received in 2003 (Sw F 7.1 mi llion)
and the balance left in the fund at the end of 2002 (Sw F 6.5 million) amounted to Sw F 13.6 million.
The terms of reference of the DDAGT F required, however, that 100% of the target amount, i.e. Sw F
24 million, be in the bank by the end of June.  That threshold had been missed by more than Sw F 10million.  Thus far, this rather low level of conversion of the pledges into actual contributions had not
had any negative impact on the implementation of the 2003 TA Plan, due in part to the SARS
epidemic and the middle-east crisis, which had delayed the implementation of a number of TA
activities through the entire Asia-Pacific region.  Ho wever, should the rate of implementation of the
Plan pick up in the second part of the year, and should the low level of payment of pledgedcontributions persist, this would undoubtedly limit the Secretariat’s capacity to respond to the Doha
mandate on technical assistance.  There was a very clear link drawn in the Doha Declaration between
availability of technical assistance and agreement to deal with the issues set out therein.  He added
that since the Budget Committee's meeting a fortnight earlier the situation of the DDAGTF just
described had not changed in any material respect.  He therefore urged all donors who had not yetdone so to transfer their promised contributions as quickly as possible.
23. The representative of Korea said his delegation was pleased to announce that Korea would
make a voluntary contribution of US$ 200,000 to the DDAGTF in 2003.  With this contribution,
Korea's voluntary contributions to the DDAGTF for the three years starting 2001 would reach US$
850,000 in total.  This reflected Korea's commitment to enhancing the technical assistance and
capacity-building activities of the WTO relating to the Doha Development Agenda.  Korea would
continue to make voluntary contributions to the DDAGTF in the coming years.
24. The General Council took note of the statements.WT/GC/M/81
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4. Waivers under Article IX of the WTO Agreement
(a) Introduction of Harmonized System 1996 changes into WTO Schedules of tariff concessions
– Requests for waivers
(i) Argentina – Schedule LXIV (G/L/606, G/C/W/452)
(ii) El Salvador - Schedule LXXXVII (G/L/608, G/C/W/454)
(iii) Israel – Schedule XLII (G/L/620, G/C/W/462)
(iv) Malaysia - Schedule XXXIX (G/L/615, G/C/W/460)
(v) Morocco – Schedule LXXXI (G/L/616, G/C/W/461)
(vi) Pakistan - Schedule XV (G/L/612, G/C/W/458)
(vii) Panama - schedule CXLI (G/L/607, G/C/W/453)
(viii) Thailand - Schedule LXXIX (G/L/611 and Corr.1, G/C/W/457)
(ix) Venezuela - Schedule LXXXVI (G/L/609, G/C/W/455)
25. The Chairman drew attention to the requests for waivers or extensions of waivers for the
introduction of Harmonized System 1996 changes into WTO schedules of tariff concessions from the
following Members:  Argentina, El Salvador, Is rael, Malaysia, Morocco, Pakistan, Panama, Thailand
and Venezuela, and to the related draft decisions in documents G/C/W/452-455, 457, 458, and 460-
462.
26. Mr. Hovorka (Czech Republic), Chairman of th e Council for Trade in Goods, reporting on the
Council's consideration of these requests, said that at its meeting on 12 June 2003, the Council had
approved these waiver requests, and had recommended that the respective draft decisions be
forwarded to the General Council for adoption.
27. The General Council took note of the statement and, in accordance with the Decision-Making
Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93),
adopted the draft decisions in documents G/C/W/452-455, 457, 458, and 460-462.2
(b) Transposition of Schedules into the Harmonized System – Request for extension of waiver –
Sri Lanka – Schedule VI (G/L/610, G/C/W/456)
28. The Chairman drew attention to the request by Sri Lanka for extension of the waiver for
transposition of its schedule into the Harmonized System, contained in document G/L/610, and to the
related draft Decision contained in document G/C/W/456.
29. Mr. Hovorka (Czech Republic), Chairman of th e Council for Trade in Goods, reporting on the
Council's consideration of this request, said that at its meeting on 12 June, the Council had approved
the waiver request in document G/L/610 and had recommended that the draft decision in document
G/C/W/456 be forwarded to the General Council for adoption.
                                                     
2 The Decisions were subsequently circulated as WT/L/523 – Argentina, WT/L/525 – El Salvador,
WT/L/531 – Israel, WT/L/529 – Malay, WT/L/530 – Morocco, WT/L/528 – Pakistan, WT/L/524 – Panama,
WT/L/527 – Thailand, and WT/L/526 – Venezuela.WT/GC/M/81
Page 8
30. The General Council took note of the statement and, in accordance with the Decision-Making
Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93),
adopted the draft Decision in document G/C/W/456.3
5. Trade in Textiles and Clothing
(a) Developing Members’ concern about potential reduction in market (quota) access in 2003 -
Communication from Bangladesh;  Brazil;  Cost a Rica;  Egypt;  Guatemala;  Hong Kong,
China;  India;  Indonesia;  Macao, China;  Maldives;  Pakistan;  Peoples’ Republic of China;
Sir Lanka;  Thailand; and Vietnam (WT/GC/W/503)
31. The Chairman drew attention to the comm unication from a number of developing-country
Members in document WT/GC/W/503.
32. The representative of India, introducing th e communication in WT/GC/W/503 on behalf of its
co-sponsors, said that the paper was fairly straightforward and its contents self-explanatory.  Their
intention was to bring to the General Council's notice an important market access problem in thetextiles and clothing sector which would adversely impact developing countries in 2004.  The avowed
purpose of the WTO, indeed also that of it predecessor, the GATT, was to increase market access
opportunities.  In the preamble to the WTO Agreement, Members recognized that their relations in the
field of trade should be conducted with a view, inter alia , to "expanding the production of and trade in
goods and services."  Members also recognized further that "there is need for positive efforts designedto ensure that developing countries, and especially the least developed among them, secure a share in
the growth in international trade commensurate with the needs of their economic development."
Members further expressed the desire to contribute to these objectives by the "substantial reduction of
tariffs and other barriers to trade ... ."
33. Under the GATT, there had even evolved the concept of a so-called “one-way street”, i.e.,
that liberalization achieved could not be reversed or reduced. Thus, the overriding purpose and
direction of the WTO was to increase market access, not to reduce it.  The so-called "carry forward"
or advanced use of access had been with Memb ers alongside the long-standing system of quota
restrictions.  Thus, successive arrangements had incorporated the possibility for advance use of some
market access.  In effect, it had provided for flexibility in quota access by some five to seven per centevery year, the rationale being to allow trade to be conducted in accordance with the requirements of
the market.
34. As Members approached the final year of the quota regime, they were faced with the prospect
of losing this flexibility.  It was therefore a matter of specific and immediate importance, because
business contracts for 2004 had to be negotiated and finalized at roughly the present time, in order toallow time for orders to be processed, goods to be produced, and arrangements for shipments to be
taken in hand.  As the paper in WT/GC/W/503 explained, loss of market access on account of
inability to use "carry forward" would severely affect exports.  Because the enterprises were also
generally small, and in many cases family-owned or medium-sized, the impact could be devastating.
As the paper also pointed out, it was equally in th e interest of the restraining Members themselves.
All knew that the back-loading of quota phase-out and the retention of the bulk of quota restrictions
until the end of the transitional period of the Agreement on Textiles and Clothing (ATC) had not beenhelpful in terms of spreading the adjustment proce ss.  Reducing market access in the last year of the
ATC would add to the problems.  It was therefore in the interest of all to ease the situation.  He
recalled that under Article 1.5 of the ATC, Members agreed to "allow for continuous autonomous
adjustment and increased competition in their markets."
                                                     
3 The Decision was subsequently circulated as WT/L/532.WT/GC/M/81
Page 9
35. In successive Declarations, Ministers had reiterated the need to make positive efforts designed
to ensure that developing countries, and especially the least-developed among them, secured a share
in the growth of world trade commensurate with the needs of their economic development.  In the
Doha Declaration, they further affirmed that "in this context, enhanced market access has an
important role to play".  Thus, Members should avoid any situation that resulted in reduction of
market access.  The co-sponsors of the paper therefore urged the General Council to decide torecommend that developed restraining Members take steps to ensure that there be no reduction in
effective quota access for developing Members by denial of carry forward in 2004.  This was a
modest suggestion which would benefit all – the exporting countries, the importing countries and the
multilateral trading system as a whole.  The co-sponsors of this paper hoped that Members would be
able to collectively deal with this problem effectively.
36. The representative of Pakistan fully supported the proposal in WT/GC/W/503 as eloquently
explained by India.  Now that Me mbers were finally moving towards elimination of quotas and free
trade in textiles and clothing, it would not be logical to be more restrictive during 2004.  Pakistan
therefore strongly urged the General Council to recommend to developed countries to ensure that
there was no discrimination in quota access on account of any quota carry forward for 2004.
37. The representative of Hong Kong, China said that as a co-sponsor of the paper his delegation
associated fully with the statements by India and Pakistan.  The proposal had to be seen from the
broader perspective of the overall liberalizing objective of the WTO generally, and the ATC in
particular, as well as the process of ATC implementation.  As had been explained in the paper, the
back-loading of quota phase-out and the retention of the bulk of quota restrictions until the end of the
10-year transition period under the ATC had not been helpful in terms of spreading the adjustment
process.  Further reducing market access in the last year of the ATC by taking away the legitimatelyexpected quota which had hitherto been available through the carry forward arrangement would only
further compound the problem.  His delegation would therefore urge the developed Members to take
steps to ensure that there was no diminution of quota access for developing Members in 2004 because
of the absence of quota carry forward from 2005, a year in which quotas would be eliminated
altogether.
38. The representative of Thailand fully supported the paper and India’s introduction of it.  As
pointed out in the paper, despite increases in quota growth rates, the number of quotas were fully
used.  This was especially so in the case of products where there was capacity to export and for which
there was demand in the restraining countries.  In such cases, carry forward had mitigated the effect of
quotas to some extent.  Developing countries could il l afford to absorb large losses in market access
that would result from loss of carry forward.  Also of concern were the systemic implications for the
adjustment process of the domestic industries in the restraining countries, the effect on prices and the
long term problems for the multilateral trading system.  The WTO Agreement provided for positive
efforts designed to encourage increasing participation of developing countries in global trade.  A
positive gesture from the restraining countries would therefore be a concrete manifestation of the
wishes and commitments of Ministers in Doha.  Thailand hoped and expected that the General
Council would take a decision as proposed in docum ent WT/GC/W/503.  It also hoped that this would
be done sooner rather than later, because export orders for the year had to be processed during the
coming weeks or months.
39. The representative of Indonesia said that, as mentioned by India, carry forward was a kind of
flexibility provided for in bilateral agreements between two countries which enabled borrowing an
amount of quota from the following year in order to use it for the current year.  This was a very long-
standing practice in international trade in textiles and clothing since the inception of the Multi-Fibre
Arrangement (MFA) in 1974, which was followed by the ATC.  As a transitional agreement to
eventually integrate the textiles and clothing sector into GATT 1994, the ATC had never been fully
and faithfully implemented, since there had been no meaningful integration.  The fact was thatWT/GC/M/81
Page 10
although the integration process had been done in three stages, the bulk of quotas were still in place.
Consequently, no adjustments could be made for those quotas which had been phased out.  In his
view, there would be a big problem as 2004 approached.
40. As all were aware, the ATC had no provision to resolve the problems that might arise in the
implementation of the ATC, such as the problem of  carry forward.  Members were now realizing that
the ATC was flawed and that there were still many questions to be further clarified.  Article 2.16 ofthe ATC was focused only on maintaining provisions governing flexibility such as swing, carry over
and carry forward applicable to all restrictions ma intained under the MFA.  In addition, those forms of
flexibility could only be used if quota restrictions were still in place.  Logically, since no more quotas
were in place for 2005, the right to use flexibility in the form of carry forward in 2004 was not
possible anymore.  Such a situation would very adversely affect trade in textiles and clothing in 2004,
because the very small supply would create an extremely high price which would ultimately
substantially decrease the benefit to both developed and developing countries.  From the businessperspective, the loss of carry forward in 2004 would have a negative impact for both exporters and
importers in their business, particularly in relatio n to fulfilment of contracts, reduction of capacity,
profit and labour etc.  For Indonesia, the textiles and clothing sector played an important role in
propelling its economy.  As this sector was highly labour intensive, it undoubtedly helped the
Government in tackling unemployment problems.
41. All were undoubtedly committed to bringing trade in textiles and clothing under the aegis of
the multilateral system as embodied in the WTO.  However, any negative impact resulting from the
implementation of this had to be avoided for the mutual benefit of all.  In this context, Indonesia
shared the view that the problem of carry forward should be resolved multilaterally in the General
Council.  It was important that this issue be smoothly resolved if Members were to have mutualbenefits from this sector.  The Doha Declaration clearly stated that positive efforts shall be continued
to ensure that developing countries, and especially the least-developed countries, secure a share in the
growth of world trade commensurate with the needs of their economic development.  His delegation
strongly emphasized the importance of this issue being fully considered, so that there would be no
loss of carry forward of quota access in 2004.
42. The representative of Bangladesh fully endorsed the statement by India.  Bangladesh attached
great importance to this issue, since any reduction in the market access due to denial of carry forward
would cause immense hardships in its garment export sector.  In 2002, Bangladesh had had to utilize
the facility of carry forward in 19 out of 20 export categories on which a major importing country
applied quota restrictions on its exports.  In 2003, it was facing the same situation.  Midway through2003, its quota for export of t-shirts had already been used to the extent of over 59 per cent, for
women's skirts to the extent of 65 per cent, for men's cotton trousers 79 per cent and for man-made
fibre trousers about 59 per cent.  These utilization rates were based on quota levels after adding the
carry forward in 2003.  Bangladesh wished to highlight that the issue was of great practical
significance for it.  The denial of carry forward, and consequent loss in business opportunities, was
hard to absorb for its small businesses.
43. Regarding carry forward in 2004, the loss in terms of export volume could be over 53 million
square meters equivalent in one market, and over 4 million square meters equivalent in another.  On
the basis of average unit value of exports of apparel to the United States realized by Bangladesh in
2002, the total potential loss in exports for Bangladesh could amount to more than US $116 million.
He drew attention to the Decision on Measures in  Favour of Least-Developed Countries adopted at
the conclusion of the Uruguay Round, in which it had been agreed that "the rules set out in the variousagreements and instruments and the transitional provisions in the Uruguay Round should be applied in
a flexible and supportive manner for the least-developed countries", and that "to this effect,
sympathetic consideration shall be given to specific and motivated concerns raised by the least-
developed countries in the appropriate Councils and Committees."  In the same Decision, it wasWT/GC/M/81
Page 11
further agreed "to keep under review the specific needs of the least-developed countries and to
continue to seek the adoption of positive measures which facilitate the expansion of trading
opportunities in favour of these countries."  If carry forward were denied, it would amount to
reduction in market access, contrary to these specific commitments and to the overall purpose of the
WTO system, to which India had referred in its statement.  Bangladesh urged the General Council to
recommend that developed Members take steps to ensure that there was no diminution of quota accessfor least-developed country Members on account of carry forward in 2004.
44. The representative of Costa Rica said that Costa Rica was a co-sponsor of the document and
wished to be fully associated with the statements by India and others.  As other delegations had gone
into the content of the document, he would not refer particularly to it.  This was a matter in which
Costa Rica had systemic as well as trade interests with regard to the carry forward of quotas, which
was a very useful instrument that it had had to resort to in several of the textiles categories, as its
exports were still subject to quotas.  It was important to clarify this issue because many jobs andcontracts for the following year could depend on it.  The principle of the gradual improvement of
market access was one of the cornerstones of the WTO, and a further example of this was paragraph 2
of the Marrakesh Protocol annexed to GATT 1994 which indicated that tariff reductions of the
Uruguay Round shall be applied commensurate with reduction of the rates.  Graduality was
facilitating elements in the transition process th at enabled the exporting as well as the importing
Member to gradually become accustomed to freer trade.  To halt this process, or even slow it down,
could create extra tensions and jeopardise the objective of full integration of the textiles and clothing
segment into the disciplines being applied in other ar eas.  Furthermore, Costa Rica considered that if
appropriate steps were taken, this would send a very positive signal on the eve of the elimination of
quotas that would certainly strengthen confidence in respect of developing-country Members.
45. The representative of Brazil said that the proposal was very straightforward and totally in line
with the spirit of the ATC.  As Members approached the end of the quota-system period, it would be
unfortunate that, because of a technicality, market access was reduced for some restrained categories
where carry forward would not be allowed in 2004.  As the ATC explicitly mentioned the need for
continuous autonomous liberalization in the course of the implementation period, this potentialreduction of market access in the last year of the ATC would be contrary to the idea of liberalization
in this sector.  Brazil supported this proposal and, together with India, wished to draw it to the
attention of the General Council.
46. The representative of China said that as a co-sponsor of the paper, China fully supported it
and associated itself with the statements by the previous speakers from the exporting Members.  His
delegation wished to highlight the following points:   First, carry forward was used by exporting
Members for product categories which were subject to the textile quota restrictions but were most
welcomed by importers and consumers in the import-restraining Members.  These product categories
also generated more foreign trade earnings for exporting Members.  Second, as analyzed in the
document, absence of carry forward in 2004 would definitely lead to market access reduction for
developing textiles and clothing exporting Members, which would not only have a negative impact on
the development of these Members by generating le ss foreign exchange earnings than expected, but
would also run counter to the liberalizing objective of the ATC and the WTO, which was that market
access should be enhanced, not reduced.  Third, because the restraining Members had back-loaded the
bulk of their quota restrictions to be removed only at the end of the ten-year transitional period rather
than progressively, any reduction in import access in  the last year of the transitional period would add
to the adjustment shock in this sector.  Therefor e, it was in the interest of both importing and
exporting Members, as well as the system, that import-restraining Members take action to avoid any
reduction in quota access for exporting Members in 2004 on account of quota carry forward.  Lastly,
considering that business contracts for 2004 had to be negotiated and finalized at roughly the present
time, China urged the General Council to recommend that concerned import-restraining Members
take the necessary steps as early as possible.WT/GC/M/81
Page 12
47. The representative of the United States said  that his delegation appreciated the comments
from several Members concerning the final year of the quota phase-out programme.  The United
States urged these Members not to lose sight of the fact that the important watershed event of the
completion of the quote phase-out programme required by the ATC was nearly at hand.  The ATC
had already led to significant expansion of quotas since 1995.  On the specific point of carry forward,
this was of course only one element of quota flexibility that was provided by the United States.  In2004 both swing and carry over would be available.  The United States had continually reaffirmed to
its trading partners that it would fully and faithfully implement the ATC as scheduled, and did so
again at the present meeting.
48. The representative of the European Communities thanked India and all the co-sponsors of the
document for presenting this proposal.  The communication in WT/GC/W/503 had only recently been
received in Brussels, and his authorities had begun to study the proposal.  They had come to the
conclusion that the proposal was not covered by the existing agreements, nor foreseen by the ATC.Consequently, the Communities were not in a position to follow up on the proposal.
49. The Chairman said that the co-sponsors of this proposal recommended that developed-country
Members take measures to ensure that there was no narrowing of quota access to the textiles and
clothing exports of those countries that could use the access in 2004.  Members had heard the
importance these countries attached to this proposal, both from a systemic point of view as well asfrom a trade point of view.  They had heard some reactions from developed-country Members, and he
was sure that the silence of others meant that th ey needed more time to reflect on this proposal and
provide a response to it.  However, this situation meant that at present the General Council would not
be in a position to take a decision as had been requested by the co-sponsors.  He therefore suggested
that the General Council take note of the statements, and that it would be his intention to holdconsultations as to the best way to deal with this matter.
50. The General Council so agreed.
(b) Anti-dumping actions in the area of textiles and clothing – Proposal for a specific short-term
dispensation in favour of developing Members following full integration of the sector into
GATT from January 2005 - Communication from Costa Rica;  Guatemala;  Hong, Kong
China;  India;  Indonesia;  Macao, China;  Maldives;  Pakistan;  Peoples’ Republic of China;
Thailand;  and Vietnam (WT/GC/W/502)
51. The Chairman drew attention to the comm unication from a number of developing-country
Members in document WT/GC/W/502.
52. The representative of India, introducing th e communication in WT/GC/W/502 on behalf of its
co-sponsors, said that this joint submission sought to bring out the trend and impact of investigations
into allegations of dumping in textiles and clot hing on developing-country Members' exports, and to
request a short-term dispensation to protect their exports in this sector from anti-dumping actions.
One could not over-emphasize the importance of textiles and clothing for a large number of
developing economies, both for export earnings and employment generation, including for women, in
these economies.  Trade in textiles and clothing had been the subject of protection by means of quota
restrictions on imports, mainly from developing countries, in major developed-country markets forover four decades.  While Ministers at Doha had "p ledge[d] to reject the use of protectionism", there
were concerns in many quarters that quota restrictions might simply be replaced by trade remedy
actions.  Indeed, the World Bank and the IMF were also expressing apprehension that political
pressures might spark greater recourse to other forms of protection once quotas were phased out, with
trade remedy actions becoming a new line of defence.WT/GC/M/81
Page 13
53. It was apparent that the textiles and clothing sector had seen a significant level of anti-
dumping activity, especially in the European Communities, where it ranked third among all sectors in
terms of new initiations in recent years, affecting exports from developing countries.  He stressed that
for developing countries concerned, the exports affected represented a large share of their total
exports.  An in-depth review of 29 out of 46 cases revealed that most often the investigations were
prompted by motivated complaints lodged by industry associations;  that a series of complaints werelodged at the same time targeting a large share – 60 per cent – of total imports in the products
concerned;  that, in several instances, investigations into the same products were revived back-to-
back, extending over long periods;  that the investigations resulted in significant disruptions for the
exporting countries concerned, causing large declines in their import shares – in one product, from 59
per cent before the initiation of investigations to  38 percent when the investigations were finally
dropped, and in another, from 52 per cent to 45 percent;  that the exporting firms in developing-
country Members were generally small- or medium-sized, and accounted for small export volumes,raising a question as to whether such small enterprises could be capable at all of dumping.  In virtually
all cases, the investigations or measures adopted had proved to be unjustified.  Although the anti-
dumping activity involving textiles and clothing products in the other major importing Member had
been less pronounced, the measures adopted by it had remained in place for long periods.
54. He would not go into the details of these findings, but wished to draw Members' attention to
the detailed analysis contained in the paper that a group of developing countries had presented to the
Negotiating Group on Rules in January 2003 on this  subject (TN/RL/W/48/Rev.l).  The developing-
country Members had, on many occasions, highlighted their concerns with respect to implementation
of the ATC.  It was no secret that even after eight and a half years of implementation, the bulk of
quota restrictions remained in place and would be eliminated only at the end of the transitional period.The following numbers of quotas still remained in place:  851 out of 932 in the United States, 222 out
of 303 in the EU, and 292 out of 368 in Canada.  When the remaining quotas were finally abolished at
the end of 2004, this was bound to exert downward pressures on prices.  A sudden fall in prices could
encourage the domestic industry/pressure groups to seek greater recourse to alternative forms of
protection, especially anti-dumping.  Under the quota regime, trade transactions had not always beendriven by normal commercial considerations alone.  Quota considerations had been an important
component of pricing decisions and arrangements.  After the abolition of all quotas, it would be some
time before trade in the sector found its normal course.
55. In view of the distortion of pricing decisions under the quota regime, allegations about
dumping in the immediate aftermath of the abolition of quotas could not be reasonably evaluatedunless there was sufficient opportunity for trade to find its normal course.  It would be in the interest
of both exporting and importing Members, as well as the efficiency of the multilateral trading system,
that an appropriate period of time be provided for business operators to compete in the market in a
meaningful way and to allow trading conditions to  adjust to the normal business environment.  It
should be Members’ collective duty to ensure that the market access opportunities for developing-
country Members exporters were not undermined in any way after the full integration of the textiles
and clothing sector into the normal WTO disciplines.  Ministers had repeatedly emphasized the needfor developing countries to benefit from increased opportunities that the multilateral trading system
generated.  At Doha, besides pledging to reject the use of protectionism, Ministers also reaffirmed
their will to continue to make positive efforts designed to ensure that developing countries secured a
share in the growth of trade commensurate with the needs of their economic development and that, in
this context, enhanced market access and balanced rules had important roles to play.  For the reasonshe had outlined, the co-sponsors of the paper proposed that the General Council recommend to
Ministers that they decide as follows:  "With a view to allowing trade in textiles and clothing to adjust
to normal trading conditions free of the influence of the long-standing quota regime following the full
integration of the sector into the WTO in accordance with the Agreement on Textiles and Clothing,
developed Members shall implement a grace period of two years during which no investigations in theWT/GC/M/81
Page 14
context of anti-dumping remedies on imports of textiles and clothing products from developing
countries shall be initiated."
56. The representative of Pakistan fully shared the concerns outlined by India and the
recommendation made to allay those concerns.  It was evident from the facts explained in
WT/GC/W/502 that fears of increased anti-dumping investigations after the elimination of quotas in
2005 were not unfounded.  Since the conclusion of the Uruguay Round negotiations, one majorMember had initiated 53 anti-dumping investigations, and 87 per cent of those were against
developing countries.  Several of these were back-to-back investigations.  For example, in the case of
bed linen, investigations had been going on in one form or another since 1994.  He recalled that
Ministers in Doha had decided that Members would exercise particular consideration before initiating
anti-dumping investigations on textiles and clothing exports from developing countries.  They had
also pledged to reject the use of protectionism.  Pakistan therefore hoped that the General Council
would take the initiative and ask developed Members to implement a grace period of two years duringwhich no anti-dumping investigations on imports of textiles and clothing would be initiated.
57. The representative of Thailand said her delegation fully shared the statement by India and the
document it had introduced.  As she had mentioned in her statement under agenda Item 5(a), the large
majority of quota restrictions that remained in place until the very end of the transitional period raised
concerns about several systemic implications in the context of anti-dumping.  These derived from theprice pressures that were bound to be generated following the elimination of quotas.  She recalled the
Decision on Implementation-Related Issues and Concerns regarding the Agreement on Textiles and
Clothing.  As already stated in the document, the present proposal was fully in accordance with this
Decision.  She wished to add that the case for making this Decision operational and effective was
indisputable.  In this regard, India had clearly pointed out various cases of a similar experience in theWTO.  She recalled that in this connection, under the ATC itself, normal GATT rights had been
curtailed for a period of 10 years.  Thailand therefore urged the General Council to decide as proposed
in paragraph 20 of WT/GC/W/502.
58. The representative of Hong Kong, China associated his delegation with the statement by
India.  Based on actual experience, a group of textil es and clothing exporters, including Hong Kong,
China, had earlier made a submission to the Negotiating Group on Rules on how anti-dumping actions
could be abused for protectionist purposes.  A very important lesson was that the very initiation of
investigations into allegations of dumping already had a serious trade-distorting effect, to the
disadvantage of the developing-country Members concerned, despite the fact that in many cases there
was no positive determination by the investigating authorities.  Another important lesson was thetendency to equate any price declines with dumping.  All this had been captured in the earlier
submission, and he would not repeat those arguments.   If past experience was any guide, and in the
light of the rather unsatisfactory back-loading in the implementation of the ATC, there was a real
danger that trade remedy actions might become a new line of defence once quotas were phased out.
Indeed, such a possibility had been acknowledged in a recent IMF/World Bank study.  The problems
created by the back-loading in quota phase-out and the consequent downward pressure on prices, and
the need for textiles and clothing trade to find its normal course in the post-ATC era were all wellarticulated in paragraphs 12-14 of WT/GC/W/502.  All these provided ample justification for the
proposal for a grace period of two years in the post-ATC era, during which no investigations in the
context of anti-dumping remedies on imports of textiles and clothing products for developing
Members would be initiated.
59. The representative of Indonesia stressed that the role of the textiles and clothing sector in
propelling Indonesia’s national economy could not be ignored.  This was a labour-intensive sector in
which millions of people were employed, and which contributed the highest range of export earnings.
It also involved thousands of small and medium enterprises.  More than eight and a half years had
elapsed since the ATC had come into effect, and wh at the developing-country Members wished to seeWT/GC/M/81
Page 15
was a rapid and sustained expansion of their textiles and clothing exports.  However, this had never
happened, since there had been no meaningful implementation of the ATC and most of the quota
restrictions were still in place, although the third stage of integration had been completed.  The issue
of market access in the textiles and clothing sector hinged on such aspects as the phasing-out of the
MFA restrictions, anti-dumping, rules of origin, and visa requirements that were barriers and appeared
to be means of protection.  This situation was absolutely inconsistent with both the letter and spirit ofWTO objectives and principles.
60. The anti-dumping actions which certain developed countries continued to carry out seemed to
be a quite permanent protection in international trade in textiles and clothing.  In addition, the
proliferation of anti-dumping actions in the importing countries directed against textiles and clothing
products already under restraint had naturally created a very heavy burden on this sector.  This had
actually led to a double protection which would have a truly adverse effect on trade in textiles and
clothing.  Most importantly, since more than 80 per cent of the quota restrictions were still in place, ifall of those quotas were phased out at once, this would have a great impact and would put great
pressure on prices, with a significant increase in imports.  Although the integration programmes for all
stages had been successful in phasing-out quantitative restrictions at the end of 2004, this would result
in a meaningless outcome, if certain anti-dumping actions continued to be imposed, especially in the
absence of quota restrictions.
61. Indonesia fully agreed with previous speakers that after the termination of the ATC, which
would result in phasing-out all quota restrictions, a sudden fall in prices and a substantial increase in
imports, domestic industries would seek greater recour se to alternative forms of protection, not only
through anti-dumping measures but also through safeguards.  For Indonesia, this was the right time to
raise this matter, as the ATC was now facing a very critical phase of implementation that requiredpolitical will from developed-country Members if there was to be a balanced outcome from the
multilateral trading system.  This was a condition sine qua non  that had to be fully taken into account.
He emphasized what Ministers had said in many fora , not only in Doha, that developing countries had
to be given the opportunity to benefit from the multilateral trading system.  As many developing-
country exporters of textiles and clothing had requested, in order to allow their domestic producers toadjust to the new area of liberalization of trade in textiles and clothing, developed-country Members
should implement a grace period of two years in which there would be no initiation of investigations
regarding anti-dumping or safeguard actions against textiles and clothing products from developing-
country Members.
62. The representative of China said that, as indicated by previous speakers, although eight and a
half years had elapsed, and only one and a half years were left for the full integration of the textiles
and clothing sector into the disciplines of the GATT 1994, most of the pre-ATC quota restrictions
which had been set up over 40 years earlier were still in place.  As a result, the current international
textiles and clothing trade was still under serious distortion, notably in terms of price.  It had been
known throughout that under the severe quota restrictions, textiles and clothing trade transactions
were not conducted on the basis of commercial considerations alone.  Quota rent had been an
important complement of pricing decisions and arrangements.  Documented costs, including thoserelating to quota application under this distribution, was another type of cost that businesses  had to
take into account in price-setting.  Consequently, it was not difficult to foresee that when the
remaining quotas were finally abolished and related quota rent and document costs disappeared at the
end of 2004, this would exert a sudden downward pressure on prices of those products subject to
long-standing quota restrictions.  A sudden fall in prices would encourage domestic industries to seekalternative forms of protection measures from the importing governments, in particular anti-dumping
measures.  The experience of the textiles and clothing sector, as reflected in the submission to the
Negotiating Group on Rules (TN/RL/W/48/Rev.1), had shown that industry interests in importing
countries were prone to equating any price declines with dumping.  Given that it would take some
time for international textiles and clothing trade to return to its normal course after the removal ofWT/GC/M/81
Page 16
quota restrictions, allegations about anti-dumping in the immediate aftermath of the abolition of
quotas could not be reasonably evaluated.  It was in the interest of both exporting and importing
Members, as well as the multilateral trading system, that a certain grace period, for example two years
as proposed in WT/GC/W/502, be clearly provided for to allow trading conditions to adjust to the
normal business environment, so that market access so painstakingly secured would not be
undermined.  China therefore urged the General Council to decide and to make recommendations asproposed in that paper.
63. The representative of Costa Rica shared the points made by India regarding anti-dumping
measures in the area of textiles and clothing.  As all knew, 2005 would be a year of crucial importance
for the sector, when textiles trade was finally integr ated in the general rules and when the quantitative
restrictions were finally eliminated.  The experience of the transition period from the MFA to the
Agreement on Textiles and Clothing in 1995 clearly showed that these changes could bring about
protectionist pressures which then led to measures like safeguards and anti-dumping in an unduemanner.  Therefore, Members had to reach an agreement in this area that would afford a certain
degree of security to textiles producers.  This was being advocated and requested without prejudice to
the need to successfully conclude the negotiations on the improvement of anti-dumping disciplines,
which would certainly provide for greater security in all other sectors.
64. The representative of Chile said that both the present and the previous agenda items pointed
up the serious and genuine implementation problems in the Uruguay Round agreements.  It seemed to
his delegation that under both items, the presentations were well-founded and persuasive in nature,
and the co-sponsors had Chile’s support in finding a solution to these problems.  In the case of the
present item, Members were faced with a vacuum – something that had not been provided for – which
was the relation between the Anti-Dumping Agreement and the ATC.  As Hong Kong, China hadsaid, this also showed how perverse anti-dumping measures could be.  It also clearly showed that
Members needed a better agreement.  More than this, he had had the impression that this problem
could be solved on the basis of certain proposals that had been tabled in the Negotiating Group on
Rules, but that quite obviously that solution would come very late in terms of responding to the
problems the co-sponsors of the paper had highlighted.  Therefore, Members needed to find a solutionto this situation.
65. The representative of Canada noted that the proposal had been presented by a number of
Members in order to provide "protection against wrongful recourse to trade remedy actions".  Canada
wished to point out that whenever a complainant approached Canadian authorities to discuss the
possibility of launching trade remedy actions, the merits of the case were examined very carefully.Canada did recognize that the initiation of an investigation caused disruption in the marketplace, but it
also had to be acknowledged that certain exportin g companies located in developing countries were
global players in this sector.  In addition, Governme nts simply could not disenfranchise or nullify the
rights of their citizens to have recourse to existing legislation.  As a result, Canada could not agree to
the proposal.  However, as decided by Ministers in Doha, Canada would, for a period of two years
following the full integration of the ATC into the WTO, exercise particular consideration before
initiating any possible investigations in the context of anti-dumping remedies on textiles and clothingexports from developing countries previously subject to restrictions under the ATC.  This was the
commitment signed on to by Ministers at Doha, and this was the commitment Canada would live up
to.
66. The representative of the United States said that his delegation had a certain sense of "déjà
vu" in the present discussion.  The United States was very concerned about proponents seeking to
reopen an issue that had been fully considered and resolved by Ministers in their Decision on
Implementation-Related Issues and Concerns.  He wo uld not review the long history of this debate,
but wished to note for the record that in fact there had been a substantial increase in developing-
country anti-dumping actions.  If one looked at the period between 1995 and 2002, there had been 102WT/GC/M/81
Page 17
final actions on textiles, of which only 25 had been ta ken by developed countries.  In fact, 34 of these
actions had been taken by one single developing  country, a co-sponsor of the proposal.  The Doha
Decision on Implementation was applicable to all Members.  Thus, his delegation found it interesting
that the concerns on anti-dumping in the proposal were focussed on developed countries.  In the next
few weeks Members would all be struggling to carry out the decisions taken by Ministers at Doha.
This was no time to be trying to reopen decisions already taken.
67. The representative of Japan thanked India and the other co-sponsors of the proposal for
sharing their thoughts regarding anti-dumping actions in the area of textiles and clothing.  The paper
included some interesting ideas.  It referred to a widely acknowledged fact that the very initiation of
investigations into alleged dumping caused considerable adverse effects on exporters and businesses
concerned, and that these allegations had often been prompted by protectionist motivations.  To
prevent such harmful effects of wrongful recourse to trade remedy actions was an important area that
all WTO Members had to pursue in the negotiations under the DDA.  This was precisely the reasonwhy many Members, including the Friends of Anti-Dumping Negotiations, were actively and
constructively participating in the rules negotiations to strengthen and clarify the disciplines under the
Anti-dumping Agreement in order to prevent the abuse and misuse of anti-dumping measures.
However, the paper in WT/GC/W/502 went a little farther and proposed a grace period in which no
anti-dumping investigations by developed countries would be initiated.  Notwithstanding that Japanbelieved that wrongful recourse to trade remedy actions should be prevented through the
strengthening and clarification of disciplines, it believed that even after the successful negotiations in
this field, there would be instances where appropriate use of anti-dumping measures would be
warranted.  Therefore, his delegation found it difficult to accept the proposal that the right of
developed-country Members to initiate anti-dumping investigations should be given up for two yearsfollowing the full integration of textile and clothing products.
68. The representative of the European Communities thanked the co-sponsors of the paper for
their presentation.  The Communities very much welcomed the integration of the ATC into the WTO
system as from 2005 and had shown in the multilateral negotiations thus far through its proposals –
and especially its sectoral initiatives in the context of non-agricultural market access – that it waslooking for further liberalization in the sector of textiles and clothing.  As had been said by some
previous speakers, there had been quite a discussion in the run-up to Doha in order to address the
concerns of textiles exporting countries that after 2005, anti-dumping action might replace current
quota arrangements.  These discussions had resulted in paragraph 4.2 of the Decision on
Implementation.  Obviously, the Communities would live up to that commitment that Members wouldexercise particular consideration before initiation of anti-dumping investigations on textiles products
previously subject to quotas.  Moreover, his delegation felt that the problem of initiation of anti-
dumping investigations should rather be tackled at a more focussed level.  The Communities had
made a far-reaching proposal to the Negotiating Group  on Rules in this respect, calling for swift
control mechanisms for initiations.  This new elem ent, combined with the tightening of initiation
standards which was also on the agenda of the Rules Group, could have a much more important,
lasting and across-the-board impact than the proposal in WT/GC/W/502.
69. The Chairman said that, with regard to the proposal by the co-sponsors in document
WT/GC/W/502, some delegations had indicated that they could support it, while others had said they
could not go along with it.  As a result, it did not seem that the General Council could take a decision
on this proposal at the present meeting.  Therefore, he suggested that the General Council take note of
all the statements on this matter.
70. The General Council so agreed.WT/GC/M/81
Page 18
6. Negotiations on improvements and clarifications of the DSU – Extension of timeframe –
Statement by the Chairman
71. The Chairman recalled that at the meeting of the TNC on 10 June, the Director-General, as
Chairman of the TNC, had suggested that any decision about a new timeframe for the DSU
negotiations was for the Ministerial Conference, or the General Council under its delegated authority,
to take and that it might well be possible to resolve this at the General Council level.  Accordingly, theDirector-General had suggested that the General Council Chairman be asked to undertake
consultations with a view to addressing this issue as appropriate at the present meeting.
72. He had given some thought to this matter in light of the discussions at the TNC meeting, and
had also discussed it with the Chairman of the Special Session of the DSB, as well as with
delegations.  It was his sense that, as suggested  by the TNC Chairman, Members would, from a
pragmatic point of view, be favourable to having this issue resolved at the General Council level,
which would also have the benefit of avoiding an overload of the agenda for the MinisterialConference at Cancún.  He was aware that a number of delegations had emphasized that an important
consideration in any decision on this matter was the fact that these negotiations were outside the
single undertaking, and therefore that any decision on the timeframe for completion of work in this
area should take this into account.  Bearing in mind these elements, and having consulted with
delegations, most recently at the meeting of Heads of Delegation on 21 July, he proposed that theGeneral Council agree as follows:  (i) that the timeframe for conclusion of the negotiations on
clarifications and improvements of the DSU be extended by one year, i.e., to aim to conclude the
work by May 2004 at the latest;  (ii) that this continued work build on the work done to date, and take
into account proposals put forward by Members as well as the text put forward by the Chairman of the
Special Session of the DSB;  and (iii) that the first meeting of the Special Session of the DSB when itresumed its work be devoted to a discussion of conceptual ideas.
73. The representative of the United States thanked the Chairman for his efforts on this issue.  In
his delegation's understanding, Members were not changing paragraph 30 of the Doha Declaration
except that they would now aim to agree by May 2004 instead of May 2003.  The United States had
no objection to this decision.
74. The representative of Japan expressed his appreciation for the Chairman's efforts in coming
up with the proposal.  As he had said at the meeting of the TNC, his delegation fully accepted and
supported the Chairman's proposal.
75. The General Council took note of the statements and agreed  to the Chairman's proposal.
7. Preparations for the Fifth Session of the Ministerial Conference
(a) Election of Officers for the Fifth Session - Statement by the Chairman
76. The Chairman recalled that Ministers at Doha requested the General Council to hold
consultations with a view to determining the presiding officers – i.e. the Chairperson and three Vice-
Chairpersons – of the Ministerial Conference who would hold office until the end of the Fifth Session.
At its meeting in February, the General Council ha d agreed that, in keeping with customary practice,
it would elect a representative of the host government – in this case Mexico – to chair the Conference.
The General Council had also agreed that its Chairm an would hold consultations with regard to the
election of the three Vice-Chairpersons of the Conference, and that the Council would revert to this
matter at a future meeting in order that the full slate could be agreed at the same time.  On the basis of
consultations that he had held recently with re presentatives of broad regional groupings, who had
themselves suggested consensus candidates to him, he was in a position to propose that the GeneralWT/GC/M/81
Page 19
Council elect the following slate of presiding of ficers for the Fifth Session of the Ministerial
Conference at Cancún:
Chairperson: Minister Luis Ernesto Derbez,
Minister of Foreign Affairs, Mexico
Vice- Chairpersons: Minister Laurens Jan Brinkhorst,
Minister of Economic Affairs, Netherlands
Minister Amir Khosru Mahmud Chowdhury, MP,
Minister for Commerce, Bangladesh
Minister Youssef Boutros Ghali,
Minister of Foreign Trade, Egypt
77. The General Council agreed to elect the above presiding officers for the Fifth Session of the
Ministerial Conference.
(b) Attendance by International Intergovernmental Organizations as Observers – Requests by:
(i) League of Arab States
(ii) Council of Europe Development Bank
(iii) North American Commission for Environmental Cooperation
(iv) United Nations Human Settlements Programme
78. The Chairman recalled that at its meeting in February, the General Council had agreed that in
keeping with past practice and the agreed Guidelines for observer status for IGOs in Annex 3 of the
General Council's Rules of Procedure, the organizations invited to attend the Doha Ministerial
Conference would also be invited to attend th e Ministerial Conference in Cancún.  The General
Council had also agreed that consultations would be held on requests for observer status at the Cancún
Ministerial Conference from any other IGOs that were not already observers at the Doha Ministerial
Conference, and who were neither observers in the General Council nor in other WTO bodies.  At theMay General Council meeting, he had informed Members that a request for observer status at the
Cancún Ministerial Conference had been received from the League of Arab States, and had invited
Members wishing to consult the communication sent by this organization to contact the External
Relations Division of the Secretariat.  He had also proposed that, in regard to this request, the General
Council proceed in exactly the same way it had in the past with regard to requests from IGOs forobserver status at Ministerial Conferences who were neither observers in the General Council nor in
other WTO bodies.  Accordingly, he had proposed that, unless any objection was received by the
Secretariat from any Member by 15 June 2003, the League of Arab States be granted observer status
at the Cancún Ministerial Conference, and that he would, as in the past, inform the General Council at
its next meeting of the situation with regard to this request.
79. However, in the light of a reservation expressed by Egypt to following past practice in regard
to this request, the General Council had agreed to revert to the request by the League of Arab States atthe present meeting.  Also, in response to a query from Canada at the May General Council meeting
regarding what would happen if requests from other IGOs were received in the meantime, he had
expressed the view that the General Council should continue to follow the normal practice it had
always followed, in the absence of a specific proposal to divert from that practice, such as had been
made in this case.  He would therefore propose that the General Council first revert to the requestWT/GC/M/81
Page 20
from the League of Arab States, before addressing the requests that had recently been received from
the Council of Europe Development Bank, the North American Commission for Environmental
Cooperation, and United Nations Human Settlements Programme.  Accordingly, he wished to ask
delegations if Members could approve the request for observer status from the League of Arab States.
80. The representative of Israel said that, at this time, Israel did not favour granting the request of
the League of Arab States for observer status at the Cancún Ministerial Conference.
81. The representative of the United States said that the United States was also not in a position to
agree to this request.
82. The representative of Egypt, speaking on behalf of the Arab Members of the WTO , thanked
the Chairman for conducting the consideration of this  request in a transparent manner.  He regretted
that it did not seem possible for the Council at the present meeting to grant the request by the League
of Arab States, which had been based on economic and trade grounds and corresponded to existing
rules.  Therefore, he requested that the General Council revert to this request at its next meeting.  Inthe meantime, he called on those delegations that had not made up their minds, to consider this
request positively and according to its own merit, so that they would arrive at a positive response at
the next General Council meeting, which he believed would be the last one before the Cancún
Ministerial Conference.
83. The representative of Jordan expressed his delegation's appreciation for the Chairman's efforts
to carry out this process in a very transparent manner.  His delegation also regretted that Members
were not in a position to adopt a decision on this request at the present meeting.  Like Egypt, his
delegation also wished to revert to this request at the next General Council meeting.
84. The General Council took note of statements and agreed  to revert this matter at its next
meeting.
85. The Chairman then drew attention to requests for observer status at the Cancún Ministerial
Conference received from the Council of Europe Development Bank, the North American
Commission for Environmental Cooperation, and th e United Nations Human Settlements Programme.
He invited delegations wishing to consult the communications sent by these organizations to contact
the External Relations Division of the Secretariat.  He proposed, in regard to these requests, that theGeneral Council proceed in exactly the same way it had in the past on requests from IGOs for
observer status at Ministerial Conferences who were neither observers in the General Council nor in
other WTO bodies.  Accordingly, he proposed that, unless an objection was received by the
Secretariat from any Member by 15 August, the Council of Europe Development Bank, the North
American Commission for Environmental Cooperation, and the United Nations Human SettlementsProgramme be granted observer status to the Cancún Ministerial Conference.  As in the past, he
would inform the General Council at its next meetin g of the resulting action with regard to these
requests.  The shorter timeframe was being proposed in order to allow these organizations to make the
necessary travel and accommodation arrangements in order to be able to attend the Ministerial
Conference.
86. The representative of Egypt said that his delegation believed that it would be more
appropriate to deal with all pending requests in the same manner.
87. The Chairman said that, in the light of Egypt's request, he would propose that the General
Council take note of the statement and revert to these requests at its next meeting.
88. The General Council so agreed.WT/GC/M/81
Page 21
(c) Reports
(i) Work Programme on Small Economies – Report by  the Chairman of the Dedicated Sessions
of the Committee on Trade and Development (WT/COMTD/SE/1)
89. The Chairman recalled that under paragraph 35 of the Doha Declaration, Ministers had agreed
to a Work Programme, under the auspices of the Gene ral Council, to examine issues relating to the
trade of small economies.  They had instructed the General Council to review the Work Programmeand to make recommendations for action to the Fifth Session of the Ministerial Conference.  In
March 2002, the General Council had agreed on a framework and procedures for the conduct of the
Work Programme, which was to be carried out in Dedicated Sessions of the Committee on Trade and
Development.  He drew attention to the report of the Committee on Trade and Development in
Dedicated Sessions in document WT/COMTD/SE/1.
90. Mr. Mansour (Tunisia) , Chairman of the Dedicated Sessions of the Committee on Trade and
Development, said that the report in document WT/COMTD/SE/1 had been adopted at the Fifth
Dedicated Session, which had coincided with the Geneva Week for non-resident Members and
observers.  The first sections of this report provided a factual account of the work carried out in the
Dedicated Sessions.  The work on small economies had begun by an educative process with the
proponents of the Work Programme outlining what they considered to be characteristics of small
economies and giving examples of the types of problems those characteristics brought with them.Problems of smallness had been identified and discussed during the first few Dedicated Sessions.  The
second stage had been the submission, by the proponents of the Work Programme, of suggested
remedies to some of the problems identified.  Seventeen proposals for action by Members had been
put forward.  These proposals were contained in document WT/COMTD/SE/W/3.  Initial discussions
of the proposals had been held in the formal Dedicated Sessions and had continued in informal modebetween interested Members.  In adopting the report, Members had decided to continue their
consideration of these proposals in the Dedicated Sessions, together with any additional proposals that
Members might submit.  This was reflected in the last section of the report on "Future Work".  This
section also stated that the aim of the continued work in the Dedicated Sessions should be to reach
agreement on recommendations for necessary action to fully achieve the mandate on small economiescontained in paragraph 35 of the Doha Declaration.  The deadline for the completion of the work was
the conclusion of the negotiations, but not later than 1 January 2005.
91. The General Council took note of the report of the Dedicated Sessions of the Committee on
Trade and Development in WT/COMTD/SE/1 and of the statement, and that the report would be
forwarded to the Ministerial Conference.
(ii) Work Programme on Special and Differential treatment in pursuance of paragraph 44 of the
Doha Ministerial Declaration and paragraph 12.1 of the Decision on Implementation-Related
Issues and Concerns – Reports by the General Council Chairman and Chairpersons of
subsidiary bodies
92. The Chairman recalled that in paragraph 44 of the Doha Declaration, Ministers had agreed
that all special and differential treatment provisions should be reviewed with a view to strengthening
them and making them more precise, effective and operational.  They had also endorsed theprogramme of work on S&D treatment set out in paragraph 12.1 of the Decision on Implementation-
Related Issues and Concerns, which mandated the CTD to report to the General Council with clear
recommendations for a decision by July 2002.  In pursuance of this mandate the TNC, at its meeting
in January and February 2002, had agreed that the review provided for in paragraph 44 should be
carried out by the CTD in Special Session.  It had not been possible to meet the deadline of July 2002or its extension to December 2002 and, in February 2003, following a report from the CTD in Special
Session, the General Council had invited him, as its incoming Chairman, in coordination with theWT/GC/M/81
Page 22
Chairman of the CTD in Special Session, to underta ke consultations immediately on how to take this
very important matter forward.  At the General Council meeting in May, he had reported that on the
basis of the consultations he had carried out, he had put forward a paper on 7 April (Job(03)/68)
outlining what he believed to be the best way to enable Members to move forward on this issue.
Based on the approach suggested in that paper, and following careful examination of all the
Agreement-specific proposals, he had circulated on 5 May an informal listing of these proposals inthree broad categories (Job 3404).  Thereafter, he had held a series of intensive informal consultations
with Members, starting with the Agreement-specific proposals listed in Category I.  He had also
indicated, inter alia , the understandings on the basis of which he would request relevant WTO bodies
to address the Agreement-specific proposals listed in Category II, and that he would make a further
progress report to the General Council at the present meeting.
93. Since the May Council meeting, he had held a series of intensive consultations at the Heads of
Delegation level on the Agreement-specific proposals in Category I.  He had also received assistancefrom a group of Heads of Delegation acting as "Friends of the Chair" who had helped considerably in
taking the process forward by exploring possible alternative drafting suggestions for a number of
proposals.  On the basis of the work so far, he had circulated to all Heads of Delegation (HODs) on
16 July a possible package of Category I proposals for consideration.  As he had indicated in his letter
to Members, this draft package was not a consensus text.  However, it represented a compromise onthe basis of which he hoped to reach agreement on as many of these proposals as possible, especially
those which in his view were economically meaningful. This package included the 12 proposals
agreed to in principle in February – but whose adoption had been deferred – as well as two proposals
agreed to ad referendum  during his consultations on 21 May.  In addition, his proposed package
included 12 proposals for which, after a first round of consultations, he had sought the help of theFriends of the Chair, as well as the 12 proposals which had been addressed in open-ended
consultations he had chaired.  This package had been considered at an open-ended informal HODs
meeting on 21 July.  It had emerged from these discussions that Members were not yet in a position to
consider his proposed language for adoption.  Some  concerns were expressed and drafting suggestions
made with respect to the proposals under consideration in the HODs consultations he had chaired.  Atthe same time there had been a suggestion, echoed by the coordinator of the Friends of the Chair, that
the Friends continue to further fine-tune the language of the proposals they had been considering.
94. Therefore, while he was disappointed that he could not submit a package of results for
Members' consideration at the present meeting, he was optimistic that Members could make further
progress towards a meaningful package for the Cancún Ministerial Conference.  With this aim inmind, he intended to work intensively with delegations immediately following the short summer
break.  At the same time, he also wanted to share with Members his assessment that in many areas the
texts he had put forward went as far as many Members could go, if not farther, and that delegations
needed to show a greater readiness to compromise and avoid going over ground already covered
without result.  Any package resulting from negotiations among 146 participants reflected a fine
balance, and there would always be aspects that were not to the entire satisfaction of one or more
delegations.  Reopening such a package would probably lead Members back to the discussions fromwhich the present text had emerged.  That being said, he wished to express his sincere appreciation for
the good faith and constructive spirit shown by all HODs  in this process, and the genuine willingness
to engage in a collective effort to understand and seek to address the fundamental needs, interests and
concerns of all delegations.  The participation of a large number of HODs through this long series of
consultations was an indication of the seriousness that all delegations attached to this work, and hehoped that, drawing on this goodwill, Members could achieve positive results soon.  Regarding the
Agreement-specific proposals in the other two categories he had drawn up in May, as Members were
aware, the proposals listed in Category I had been  referred to relevant negotiating groups and other
WTO bodies, with instructions that they be considered as soon as possible and that a report be made
to the last meeting of the General Council before Cancún on their status and the progress made.  Hehad personally been monitoring the progress of this work and had been in close touch with theWT/GC/M/81
Page 23
Chairpersons of the relevant bodies, and he would in vite them to make brief reports in this regard to
the General Council at the present meeting.
95. Regarding the proposals in Category III, he intended to take these up before the Cancún
Ministerial Conference, in order to see how Members could address the wide divergences of views
that had prevented progress on these proposals so far, and to explore whether Members could reach
agreement on at least some of them.  Finally, he recalled that several related issues from the Dohamandate on Special and Differential Treatment provisions were being addressed by the Committee on
Trade and Development in Special Session, and that the work of the Committee had remained
suspended since the February General Council meeting when he had been requested to consult on how
to take this matter forward.  While his consultations had so far focussed on the Agreement-specific
proposals, he believed that the other outstanding issues should also now be pursued.  With this in
mind, the Director-General and he had suggested language for consideration in the draft Ministerial
text (Job(03)/150) that would instruct the Committee on Trade and Development in Special Session topursue, within the parameters of the Doha mandate, outstanding work, including inter alia  on the
cross-cutting issues, the monitoring mechanism, and the incorporation of special and differential
treatment into the architecture of WTO rules, as referred to in its report in document TN/CTD/7, and
report to the General Council.  The General Council , for its part, would be instructed to report on
progress on all these issues to the next Ministerial Session.  This was his report to Members on theprogress of work in the consultations he had been holding.  He then invited the Chairpersons of the
bodies to which the proposals in Category I had been referred, to report briefly on the status of work
on these issues in their respective bodies.
96. Mr. Harbinson, Chairman of the Special Session of the Committee on Agriculture, drew
attention to his report in TN/AG/11, and emphasized th at that report as well as his oral report were
being made on his own responsibility, and merely represented his understanding of the situation and
of some of the major points made by participants during the discussions.  Four proposals on S&D
provisions had been considered by the Special Session at two formal meetings held on 1 and 18 July,
respectively.  Detailed reports of the discussions among participants on these four proposals would be
included in the Secretariat summary reports of these Special Session meetings.  All four proposalsemanated from a submission by the African Group to the Special Session of the Committee on Trade
and Development, and related to Articles 6.2, 14, 15.1 and 15.2 of the Agreement on Agriculture.
With respect to Article 6.2, participants had noted that its provisions did not limit the amount of
subsidies provided by developing countries with respect to the type of measures covered by that
Article.  It was further noted that several proposals to extend the scope of measures under Article 6.2were under consideration in the ongoing negotiations and that the revised first draft on modalities also
contained possible amendments to Article 6.2 with a view to improving its scope and effectiveness.
With respect to Article 14, several Members had noted the importance of the proposal made by the
African Group, in view of the fact that many deve loping countries continued to face difficulties in
overcoming SPS barriers.  A number of Members had noted that the SPS Committee had primary
responsibility concerning SPS issues, and had ther efore suggested that this proposal be further
pursued in that forum.  This point had not been shared by some other participants who expresseddoubts as to whether the SPS Committee could operationalize an Article of the Agreement on
Agriculture.
97. Concerning Article 15.1, and more specifically with respect to the first sentence of the
African Group proposal relating to the embodiment of S&D commitments into schedules of
commitments, it was noted that various proposals had been submitted in the framework of theagriculture negotiations that sought to address this issue and were currently under consideration.
Possible modalities were also reflected in the revised first draft.  Furthermore, it was pointed out that
many S&D provisions concerned possible changes of specific provisions of the Agreement on
Agriculture and that any such changes would not be reflected in Members' schedules.  Regarding the
second sentence of the African Group proposal, it was clear from the discussions that the treatment ofWT/GC/M/81
Page 24
preferential schemes was one of the subjects for negotiation under the heading of market access, and
that related concerns would receive further consideration in this context.  In the course of the debate
reference had also been made to the Enabling Clause, which provided that such preferences should
not, inter alia , constitute an impediment to the reduction or elimination of tariffs and other restrictions
to trade on a most-favoured-nation basis.  In considering Article 15.2 of the Agreement on
Agriculture, it was noted that many proposals, as well as the revised first draft of modalities,envisaged longer implementation periods for developing and least-developed countries and contained
a variety of suggestions as to how concerns relating to food security and rural poverty-alleviation
might be addressed.  He wished to stress that overall, the discussions were useful in clarifying certain
issues contained in the proposals.  It was also clear that many of the issues were being addressed in
the agriculture negotiations.  No doubt, the proposals would continue to be discussed in the Special
Session.
98. Mr. Balás (Hungary), Chairman of the Special Session of the Dispute Settlement Body, drew
attention to his report to the TNC in TN/DS/9.  As  Members were aware, it was foreseen in the Doha
Ministerial Declaration that participants would aim to agree on clarifications and improvements to the
DSU by May 2003, and efforts to reach agreement by that date were in the final stretch by the time
the S&D proposals had been referred to the Special Session on 20 May.  Thus, the Special Session
had had only a rather limited opportunity to discuss these proposals.  Nonetheless, it had beenpossible to integrate a discussion of these issues into the ongoing work, building also on previous
work based on S&D-related proposals presented in the Special Session itself.  Thus, on the very same
day the letter from the General Council Chairman referring these issues had been received, it had been
made available to delegations during a meeting of the Special Session.  At that meeting it was also
agreed that the issues referred to the Special Session would be considered at a meeting on 22 May.This was also confirmed to delegations in writing with a view, in particular, to facilitating the
attendance of smaller delegations.  In the course of that discussion it was recognized that the
Chairman's text, which was already available, contained provisions with an intent similar to that of
most of the proposals contained in the letter sent to the Special Session.  It was suggested that these
provisions be discussed further in detail as part of the ongoing work related to the Chairman's text.
99. Some of the proposals referred to the Special Session were new to it in that they had not been
previously submitted in the same form to the Sp ecial Session itself.  However, they related to
provisions in relation to which proposals for S&D treatment had already been submitted and
discussed in the Special Session.  Some elements of these prior proposals had been reflected in the
Chairman's text.  This made it easier to usefully incorporate a discussion of the proposals referred tothe Special Session, so that it could contribute to its ongoing work at that stage.  As Members were
aware, however, it had not been possible by the end of May to agree on clarifications and
improvements of the DSU, including any S&D treatment aspects.  He wished to add that now that the
target date for the DSU negotiations had been extended, one would expect that S&D treatment would
continue to be an integral part of the continued work on the DSU, as was also foreseen in the
proposals contained in the Chairman's text when the Special Session resumed its work post-Cancún.
100. Mr. Jara (Chile), Chairman of the Special Session of the Council for Trade in Services, drew
attention to his report in TN/S/12.  It was a very brief report, given that that the Special Session had
held an informal open-ended meeting in the course of which no major progress was recorded.  There
had also been consultations in a smaller format, but the only thing he could report at the present stage
was that no possibility of reaching a consensus had emerged as yet on these issues.  The consultations
had been focussed in particular on certain proposals made by the African Group.  As to thoseproposals relating to S&D treatment made by the LDCs in the course of the consultations, the
representatives of the LDCs had unfortunately not been able to be present because of the intense work
programme in other bodies which had prevented them from participating fully.  However, it was
possible that some of the concerns of the LDCs coul d be responded to in the context of the modalities
for S&D treatment for LDCs, which was a parallel exercise that the Special Session was developingWT/GC/M/81
Page 25
and on which it would be holding consultations in the course of August to see whether Members
could reach a consensus.  It was possible that, in this context, some of the concerns of the LDCs might
be met.
101. Mr. Groser (New Zealand), Chairman of the Negotiating Group on Rules, said that Members
in this negotiating group had been doing what they could under difficult circumstance to move
forward towards a successful outcome at Cancún.  It ha d been said that half of life was just turning up,
and he wished to direct a mild, friendly and – he hoped – constructive criticism at some of his
developing-country colleagues, who might need to reflect on that phrase.  The Rules Group had held
three meetings to consider the proposals he had put on the table, and apart from one desultory
discussion on one of them, the interested delegations had not been present to push these proposals
forward.  Thus, he could not report more than procedural success at the present point.  However, all
developed countries and the larger developing countries should show a great deal of sympathy and
understanding for the smaller delegations, given the pace of activity and the pressures on them.  Thishad been mentioned in the formal report (TN/RL/7-G/L/640).  The Rules Group would continue to
give adequate opportunity to carry forward the work delegated to it.  That was the state of play.  The
problem was not just related to the particular development-related issues referred to the Group.  It was
also a problem that Members interested in these issues had to attend other meetings or had non-
resident delegations.  He, as Chairman, was trying to find flexible and innovative solutions toconsulting with such Members.  That was the spirit in which his criticism had been made.
102. Mr. Menon (Singapore), Chairman of the TRIPS Council, said that on 4-5 June, the TRIPS
Council had considered the proposals on special and differential treatment referred to it by the
Chairman of the General Council, namely, a proposal by the LDCs concerning their transition periods
under Article 66.1 of the TRIPS Agreement (TN/CT D/W/4/Add.1), and a proposal by the African
Group, the first part of which concerned the extension of transition periods under Article 65.4, and the
second part the exclusive marketing rights under Article 70.9 of the TRIPS Agreement
(TN/CTD/W/3/Rev.2).  In concluding the TRIPS Council's discussion on this topic, he had
encouraged Members to continue their mutual dialogue on this matter.  The TRIPS Council had
authorized him to report on the further consultati ons to the General Council on his own responsibility.
Since the TRIPS Council's meeting in June, he had consulted on both proposals with the delegations
most active on them.  Regarding the proposal by LDCs on the extension of their transition periods
under Article 66.1, he had just been informed by the LDC coordinator that the Group was
reconsidering the specific proposal concerning their transition period under the TRIPS Agreement.
As such, further work might not be required on this proposal, but he would only be able to confirmthis at a later stage.  Regarding the proposals by the African Group, the African Group had been
consulting with other delegations on the proposal dealing with exclusive marketing rights.  The
delegations concerned had informed him that they were close to an agreement among themselves and
that they were continuing their consultations.  If these delegations could agree on a text, he would
then bring any such text to the attention of othe r Members for their comments, before submitting it to
the General Council.
4
103. Mr. Diab (Egypt), on behalf of the Chairman of the Committee on Agriculture, said that the
brief report he was making concerned the discussions by the Committee on a proposal by the African
Group that related to the Marrakesh Decisi on on Net-Food Importing Developing Countries
(NFIDCs).  The full report was contained in G/AG/17.  The proposal had been considered for the first
time at the regular Committee meeting in June.  At that stage, the Committee had been unable to make
progress on this issue.  However, there would be further opportunities to discuss the proposal in thecontext of the Committee's ongoing work on possible means of improving the effectiveness of the
implementation of the Marrakesh NFIDC Decision.
                                                     
4 A communication from the TRIPS Council Chairman conveying an agreement on the proposal
regarding Article 70.9 of the TRIPS Agreement was subsequently circulated in Job(03)/171.WT/GC/M/81
Page 26
104. Mr. Danvivathana (Thailand), Chairman of the Committee on Safeguards, said that the
Committee had earlier that day adopted its report to the General Council concerning the review of the
African Group's S&D proposal on Article 9 of the Safeguards Agreement.  However, no consensus
had been reached on the proposal.  The Committee's report would be circulated as soon as possible.5
105. Mr. Martin (Canada), Chairman of the Committee on Sanitary and Phytosanitary Measures,
said that a detailed report on work in the Comm ittee on issues relating to implementation and S&D
treatment had been circulated in document G/SPS/27.  He would not review the contents of the report,
but wished to draw attention to three highlights.   First, the SPS Committee had had some success in
resolving outstanding implementation issues ar ising from the Doha Ministerial Decision on
Implementation-Related Issues and Concerns.  These included a proposal by Brazil on the notification
of SPS measures and a programme of work to further the implementation of Article 4 of the
Agreement, which dealt with equivalence.  Both outs tanding issues had been addressed as part of the
regular work programme of the Committee, and this approach had yielded results, as outlined indocument G/SPS/27.  Second, the issue of S&D treatment had also arisen in the Committee's ongoing
work, particularly in its review of recommended notification procedures.  In this context the
Committee had adopted, in principle, a proposal to better identify S&D treatment provided in respect
of notified measures, at its April 2003 meeting.  However, work was continuing on further elaboration
of the mechanisms to implement this proposal.  The Committee would also be holding a special
meeting on the operation of inquiry points, in the margins of the next SPS Committee meeting on 27-
30 October.
106. With respect to the five proposals relating to S&D treatment referred to the SPS Committee
by the Chairman of the General Council on 20 May, these had been referred on the understanding that
they would be considered as soon as possible within the ongoing work of the Committee.  Followingthe successful approach used in the elaboration of the Committee's decision on equivalence, the
Committee had adopted a work plan on 24 June to pursue this matter.  At the informal and regular
meetings on 23-25 June, the Committee had undertaken a preliminary consideration of the proposals,
focusing on the specific problems to be addressed.  In accordance with the agreed work plan,
Ministers had been requested to submit comments on the proposals, including specific suggestions toaddress the differences of view regarding the proposals before 30 September 2003.  These comments
and specific suggestions would be considered by the Committee at its meeting on 27 October with the
objective of reaching decisions on as many issues as possible.  Following that meeting, he would
inform the General Council of progress made in the Committee in regard to these matters.
107. Mr. Palayathan (Mauritius), Chairman of the Committee on Trade-Related Investment
Measures, said that pursuant to the Chairman's request, the Committee had considered two proposals
on special and differential treatment submitted by the African Group with regard to Articles 4 and 5.3
of the TRIMs Agreement.  His report on the Committee's work had been circulated in document
G/L/638.  The Committee had held a number of formal and informal meetings as well as several
rounds of informal consultations.  Members had shown their willingness to work together on these
important issues.  In light of the intense efforts made during the last several weeks, he believed it
appeared to be possible to reach agreement on the first part of the African Group proposal onArticle 4, on the basis of new proposed language.  However, the proponents wished to see the
proposals adopted as a whole, and it appeared that Members were not yet there, as there were still
divergent views with respect to some aspects of the second part of the proposal on Article 4 and the
proposal on Article 5.3.  On the basis of the discussions and in an attempt to reconcile the divergent
views, some alternative language had been proposed.  As a possible way forward, several Membershad expressed their readiness to carry on work on the proposals, since they felt there would be value
in having the TRIMs Committee continue its consider ation of this issue.  Other Members, however,
were of the view that it would be appropriate at this stage to submit the matter to the General Council
                                                     
5 The report was circulated in document G/SG/64.WT/GC/M/81
Page 27
to take a decision as necessary.  Detailed discussions on the substance of the proposals were reflected
in the minutes of the TRIMs Committee's meetings of 19 June and 18 July (G/TRIMS/M/16 and
G/TRIMS/M/17, respectively).
108. The Chairman expressed his gratitude to all the Chairs for their reports and for the hard and
dedicated effort they had put in, together with delegations, to respond to the needs and interests of
developing countries in this particular area.  It could be seen from these reports that progress had beenmade on certain proposals and that possibilities did exist of having specific results before Cancún.  It
had also been said that differences still existed on many of the proposals under consideration, and that
many of the suggestions submitted on S&D were part  and parcel of the measures on S&D treatment
that were the subject of negotiations in the various sectors.  He urged the respective Chairmen to
continue their work and to keep the General Council abreast of any progress made.  Members would
have the possibility of reverting to this subject in the process that would start after the summer recess,
on the way to Cancún.  He repeated the appeal he had made at the beginning of this exercise in sayingthat Members had a process underway and that it was not his intention to have a debate on S&D at the
present time.  However, he would give the floor to any delegation that had something particular to say
on this issue.
109. All delegations who spoke expressed their gratitude to the Director-General, the General
Council Chairman, the Chairmen of the various WTO bodies, the Ambassador of Brazil and the otherFriends of the Chair for their considerable time and ef fort trying to find a resolution to these issues in
what was a very complex exercise.
110. The representative of Kenya said that judging from the reports made at the present meeting,
including the one made by the Chairman earlier, Members did not seem to have made progress – at
least not as much as the General Council Chairman had indicated.  Members might have to thinkagain and to see whether they could adopt an alternative approach that would speed up the process.
The Chairman had indicated in his report that the cross-cutting issues would be dealt with by the CTD
in Special Session, and text to this effect had been included in the draft Ministerial text.  However, he
recalled that the African Group had proposed the establishment of a monitoring mechanism to
monitor, strengthen and operationalize Agreement-specific proposals.  Thus, until Members finishedthe latter exercise, it would not be advisable to embark on another exercise.  Members perhaps needed
to look back and see what the CTD in Special Session had done and what Members had done under
the current process, and probably refer this work back to the CTD in Special Session, because none of
the reports received from the subsidiary bodies showed that any progress at all had been made.
Indeed, some of the subsidiary bodies had confused the mandate of paragraph 44 and the mandatethey had been given as negotiating bodies.  It was clear that the proposals on S&D were expected to
strengthen existing – and not future – provisions on S&D.  Thus, his delegation hoped that those
bodies would revisit the Doha mandate so that the two mandates were kept separate and not confused.
Work under the paragraph 44 mandate should not be translated into a negotiating process, because
that had not been the intention.
111. The Chairman recalled that he had put forward a package of proposals on Agreement-specific
issues.  That package remained on the table.  It was his obligation to deal with this package after the
summer recess, and to continue to work so as to get, by Cancún, the highest level of convergence on
the Category I issues.  The process might be a bit different, in the sense that it would be carried out as
part of an integral process of consultations on many issues, but he would stay with that process, which
had had the support of all Members when it was presented at the May General Council meeting.  As
to the cross-cutting issues, these were pending issues and, as he had noted earlier, the DG and he hadput forward suggestions in the draft Ministerial text that this work should resume after Cancún in the
CTD in Special Session.WT/GC/M/81
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112. The representative of Zambia recalled the Doha mandate, which appeared to have been
ignored totally in the negotiations on S&D.  It was a pity that such a well-meaning mandate had been
consigned to something the qualitative value of which was so much less than what Ministers had
meant.  He wished to explain his delegation's frustration on the process of negotiations.  The Doha
mandate called for a review of S&D provisions in order to make them more precise, effective,
operational and mandatory.  According to the Concise Oxford Dictionary, these terms were defined asfollows:  First, precise meant definite, accurate and exact;  effective meant real, actual;  operational
meant capable of action, working, etc.  Ministers in Doha knew what they meant by these words.
However, it now appeared that some Members' preoccupation was only to make sure they went with
at least something to Cancún, to show Ministers they had actually achieved recommendations on
S&D.  The whole Doha spirit appeared to have changed.  However, when it came to actual translation
of these words, whose meanings all knew – that the mandate called for fundamental adjustments and
action – it appeared that some Members had suddenly decided to dilute the actual meaning of themandate.  When Ministers had agreed on the mandate on S&D, they had also had in mind the issue of
rapid integration of LDCs into the multilateral trading system (MTS).  Integration into the MTS might
not only increase participation of developing-country delegations in WTO processes and negotiations,
but more importantly, increase participation of developing countries in international trade flows in
dynamic and high-level value-added products which should, in the long term, contribute to economicdevelopment and poverty alleviation in developing countries and LDCs.  The integration of
developing countries into the MTS in this sense required first and foremost substantial improvements
in market access conditions and domestic policy space and supply capacity for developing countries.
WTO, rules underpinned by substantial and effective S&D, had to be supportive in creating such an
enabling environment.
113. At the moment, the work being done on S&D did not point to the fact that Members wanted
to quickly integrate LDCs into the MTS.  For instance, there had been a debate that the 12 proposals
that had been "agreed in principle" constituted a dynamic instrument of integration of LDCs into the
MTS.  For his delegation, these proposals would have to be discussed again in order to strengthen
them.  Zambia would not accept these proposals as an achievement in their current form.  Most, if notall, the proposals that had been discussed could not assist LDCs to integrate into the MTS.  First, in
general, their best endeavours were mostly procedural in nature, and did not entail changes in the
balance of rights and obligations.  In any case, many if not all of these proposals were not central to
LDCs' trading interests and integration into the MTS.   These would need to be further strengthened.
As they were currently drafted, they did not address fundamental problems in the S&D provisions,which had raised the need for strengthening them  through the negotiations Members were actually
engaged in.  They were not consistent with the political spirit of the Doha mandate which Members
had applauded as constituting development.  In order to integrate LDCs and developing countries into
the MTS in the context of S&D, there was a need to obtain agreement on the proposals of the LDCs as
developing countries in respect of market access and policy space.  For example:  duty-free and quota-
free access for all products, in proposals 33 and 35;  rules of origin, in proposal 33;  erosion of
preferences, in proposal of 34;  access to services markets, particularly in respect of mode 4, inproposal 36 on the Enabling Clause and in proposal  84;  exemption from disciplines of TRIMS and
proposal 46 on subsidies;  proposal 74 on Article 66.1 of the TRIPS Agreement.  Members needed to
focus on S&D provisions that would make a real difference.  Surely, at the General Council level
Members could make a political difference in addressing S&D.  Members needed to make a big
difference between work in the CTD and in the Ge neral Council.  That, his delegation thought, had
been the purpose of bringing S&D issues to the General Council.  Under the circumstances of lack of
progress, Zambia wondered what Members would report to Cancún.
114. The representative of the United States said his delegation had frankly found the last several
interventions very discouraging.  Delegations had been working very hard trying to find solutions, and
to be told that they were making no progress was not an incentive for them to do their best to achievesolutions.  No one was playing a numbers game, or trying to find a certain number of proposals to buyWT/GC/M/81
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delegations off.  However, at the same time, at the beginning of this exercise the demandeurs had
been asked whether there were priorities among what they were proposing.  They had said that
everything was a priority.  Now it was being disc overed that only those points on which there had
been difficulty in finding agreement were priorities.  However, the United States understood the
importance of this matter and refused to be discouraged.  It continued to believe that with the
Chairman's continued efforts and with the help of the Coordinator of the Friends of the Chair,Members could find solutions if they were looking for them.
115. The representative of Cuba said that as all were aware, the subject of S&D treatment was a
priority issue for Cuba, and the balance and outcome it saw in the work that had been done thus far
was rather disappointing.  Strengthening the provisions of S&D treatment was an absolute necessity.
It was a right which developing countries had and which they would not give up.  The outcome of the
work so far was very far from strengthening these disciplines.  In fact, her delegation had seen that
these had been weakened and undermined, and could therefore say that a step backwards had beentaken.  For instance, some Members had suggested establishing categories among developing
countries.  This was something that her delegation could not accept, nor could it agree with those
delegations that thought priority should be give n to certain proposals.  The African Group and the
LDC Group had given priority to their proposals concerning development, and Cuba thought that this
fell within the mandate of paragraph 44 of the Doha Ministerial Declaration.  This was why herdelegation supported Kenya's statement as well as the statement by Zambia.
116. The representative of Botswana welcomed efforts made in the past few weeks to put
Members where they were at present in relation to these provisions.  His delegation fully associated
with the statements by Kenya, Cuba and Zambia.  The reports by the Chairpersons of the respective
negotiating bodies had confirmed the fears some Members had expressed during the initial stages ofthe Chairman's categorization process.  Botswana had expressed the fear that some of these provisions
would be lost in the various negotiating bodies to which they were referred, and wished to underscore
the point made by developing-country delegations which had spoken earlier, that S&D provisions
were crucial to the development aspirations of developing countries, including the ACP Group.
Earlier in the present meeting, Members had agreed  to extend the mandate of the DSU and that, of
course, included consideration of the provisions that had been referred to the DSB.  The reports did
not give his delegation the confidence that the Doha mandate of making S&D provisions precise,
effective and operational would be achieved.  Botswana remained committed to this process and
wanted the efforts in the General Council to continue to be focused on making an assessment of these
provisions and, indeed, achieving the Doha mandate of making them precise, effective andoperational, rather than allowing them to get lost in the respective negotiating bodies to which they
had been referred.
117. The representative of Malaysia welcomed Minister Derbez to the present meeting, and hoped
that what the latter had heard from delegations would not demoralize him when he chaired the Cancún
Ministerial.  His delegation wished to assure him that these were normal negotiating dynamics and
that, at the end of the day, there would be success in Cancún.  The approach the Chairman had
proposed on this issue, which had been accepted by all delegations, as testimony to the fact that allwere committed to seeing some substantive results come out of this exercise.  All delegations were
committed to seeing a package emerge before Cancún.  To those who had expressed disappointment
or who had stated there had been no progress, he wished to say that the exercise had not ended.
Members were still in the process of dealing with the proposals, and Malaysia was confident that in
the coming weeks, given the commitment and seriousness put into this exercise, Members would beable to bring about some tangible results.  At the outset of this discussion, his delegation had felt
somewhat depressed by some of the statements on S&D, but had been encouraged by indications that
these delegations would still work very hard to achieve some results.  All had to adopt the right
attitude in relating to this exercise.  Members should engage in good faith, and with the necessary
political will and flexibility on the part of all, they would surely be able to carry this exercise forward.WT/GC/M/81
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Some delegations had expressed reservations and were not happy with some of the results in this
exercise.  Malaysia urged them to continue with the exercise the Chairman was currently conducting,
and was certain that some headway would be made.  As the Chairman had pointed out, he would be
continuing consultations on this issue with a view to arriving at a package before Cancún, and that
was important for all.  Members should leave the process as open and as flexible as possible.  The
ultimate objective Members should be aspiring to was to achieve a tangible outcome before Cancún.All agreed that a resolution of some of the Agreement-specific proposals was important.
118. The representative of the European Communities said he agreed one hundred per cent with
Malaysia's statement.  He had personally invested a lot of time in all the meetings of the HODs, and
of the Friends of the Chair on this issue, and would not be discouraged by any statements made at the
present meeting.
119. The representative of Paraguay said the participation of Minister Derbez underlined the great
interest and commitment of the host of the Ministerial Conference to the process being conducted in
Geneva.  The issue of S&D treatment was of particular importance to Paraguay.  The efforts by the
Friends of the Chair also deserved gratitude.  Despite all these efforts, a new deadline had passed.
However, Members should not lose sight of the mandate given by Ministers.  His delegation wished
to underline the importance of establishing more effective multilateral mechanisms in order to ensure
observance and full application of the WTO Agreements and of S&D treatment.  His delegation hadplayed a highly active role in this respect, because S&D treatment applied effectively would allow a
developing land-locked country such as Paraguay to participate in the multilateral trading system.  In
this connection, he recalled that in the Millennium Declaration, Heads of State and Government
recognized the special needs and problems faced by land-locked developing countries.  Consequently,
at the 57
th Session of the United Nations General Assembly, in Resolution No. 56/180, the Secretary-
General was requested to convene an international Ministerial meeting to discuss this issue.  This
meeting would be held in Almaty, Republic of Kazakhstan, on 28-29 August.
120. Paraguay was not against the granting of preferences, but they should be granted to
developing countries in accordance with the terms of the Enabling Clause.  In other words, they
should be specific, non-discriminatory and non-reciprocal.  It was possible to be flexible, so that theycould be applied properly, but such flexibility could not result in injuring other developing economies
or prevent the elimination of trade barriers and the establishment of free trade.  In recent years,
Paraguay had been the object of trade discrimination that distorted its trade because measures were
being applied outside the scope of the WTO's instruments and rules.  This practice was causing
serious injury to its economy and particularly to the emerging industrial export sector.  Added to theserious regional crisis facing Paraguay, this made it even more difficult to achieve proper integration
into the MTS.  This was Paraguay's proposal in the negotiations on S&D treatment.  In addition to
approval of the Understanding on Full Application of the Enabling Clause in the context of the Doha
mandate, his delegation wished to see agreement on an Understanding on Waivers and Obligations
under the GATT 1994, as required by Article IX of the WTO.  Such an Understanding would be
beneficial to all developing countries, because S&D treatment should be directed to creating better
conditions for their effective participation in glob al trade and should in no way become an instrument
of unfair competition and injury to those which suffered unjust discrimination.  Paraguay wished to
reaffirm its commitment to continue to work co nstructively.  His delegation welcomed Minister
Derbez, whose participation was a source of encouragement and augured well for the Cancún
Ministerial.  It was certainly true that up until now there had been no significant progress on S&D
issues, but this could be readily understand due to the complexity and scope of this matter.  While thesubject in itself dated from a long time in the past, the approach and focus that had been given to it in
Doha made it more precise, and rather more difficult to deal with.
121. Paraguay was one of the delegations with very special interests in this subject because of its
position as a developing country with no coastline and with disadvantages which far outweighed theWT/GC/M/81
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disadvantages of other countries in promoting its trade and development in order to bring about a
better quality of life for its people.  At the Ministerial meeting on problems faced by land-locked
developing countries that would take place in Kazakhstan on 28 and 29 August, the very delicate issue
of being a land-locked country would be dealt with, especially in the context in which this situation
was combined with all the other issues facing developing countries.  Exports were of critical and
crucial importance for enhancing development.  Apart from its natural handicap of being land-locked,Paraguay had a population of five and a half million people, and had also been the subject of very
unjust trade discrimination that had jeopardized its trade, since many measures were being applied
that ran counter to WTO rules, and this damaged its import/export industry.  This was in addition to
the very serious crises afflicting the region, which made it ever more difficult and complex to become
integrated into the MTS.  Therefore, Members need ed to establish multilateral trading instruments that
were really effective, in order to ensure that WTO agreements were applied properly and fully
through S&D treatment for developing countries that had already been enacted, and thereby orientactivities and help the incipient industries and export industries of developing countries such as
Paraguay.  Otherwise,  countries like Paraguay would be injured, not only in the economic area, but
also in the political area, as this might have repercussions for its democratic system.  Under S&D,
Members had to apply the Enabling Clause and all the other agreements.  Under the Doha mandate,
Members could bring about an understanding on the application of waivers in the context ofGATT 1994.  This was Paraguay's aim, since rules and measures in this connection would be
beneficial, not only for Paraguay but for all the developing world.  S&D treatment had to be designed
to create better conditions for more effective partic ipation of developing countries in world trade, and
the mechanism linked to waivers should not become  a mechanism of unfair competition that would be
to the detriment of countries suffering from discrimination.
122. The representative of India thanked the Chairpersons of the various Negotiating Groups and
WTO bodies for their reports on progress so far on the S&D proposals submitted to them.  His
delegation had been participating actively in the work relating to the strengthening of S&D provisions
in the existing agreements, in line with the mandate given by Ministers at Doha.  As the Chairman had
observed in his opening remarks, and as referred to by many developing-country delegations at thepresent meeting, the mandate given by Ministers at Doha was to review all S&D provisions and to
make them more precise, effective and operational.  It was important to keep this mandate in mind in
the work on S&D issues and to focus on the Agreement-specific proposals with a view to addressing
them meaningfully in a definitive timeframe.  Although Ministers had prescribed a deadline of July
2002, after hearing the reports by the various Chairpersons at the present meeting, his delegation toowas disappointed to note that Members were not anywhere near addressing the proposals put forward.
His delegation agreed with Malaysia that all needed to be optimistic, although at the same time they
needed to bear in mind the mandate given by Ministers at Doha and also the deadlines set by them in
terms of achieving a meaningful and substantive outcome in line with Paragraph 44 of the Doha
Ministerial Declaration.
123. The representative of Norway said that the discussion so far had touched on the process, the
complexities of the issues, and the mandate.  All had seen the Chairman's proposal and the process he
had put into effect as a way of making progress on these issues.  Norway was a bit sceptical about
changing that process at the present stage, when substantive results were still possible.  Many had said
that these issues were complex.  That was true.  However, his delegation was not sure that it was only
the complexity of the issues that caused the lack of progress.  While that could have been said one
year earlier, Members were now beginning to unders tand the concerns behind the original proposals.
He would not comment on the mandate.  All knew what the mandate was and what they were going to
do.  However, in the course of their work in the process under the General Council Chairman's
leadership and in the Friends of the Chair process, Members had been discovered that some of the
proposals would have rather wide systemic implications.  The fact that Members did not want to go
into those implications was not because they did not want to explore possibilities to provide some
leeway on some concrete issues to LDCs and other developing countries.  His delegation hoped thatWT/GC/M/81
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the proponents had taken this in, and had realized that there were some very important side effects of
this that had to be borne in mind.  Norway agreed  entirely with Malaysia's  statement regarding the
need in further work for political will and flexibility, and on the part of all parties.  Those three
elements were the key to achieving some results in th e near future on this issue.  If any of these were
lacking, Members would be having exactly the same discussion a year later.  They had to go forward
on the basis of these three elements.
124. The Chairman said he wished to assure Members that he would be neither discouraged nor
demoralized by some of the assessments made of the process because of the lack of results.  He had
the Doha mandate clearly in mind, and would continue to make every effort to produce a broad,
substantive package for Cancún.  Members could count on him and on his readiness to work on this
issue and to push matters forward as far as possible.
125. The General Council took note of the statements and of the reports by the General Council
Chairman and the Chairpersons of subsidiary  bodies in documents TN/AG/11, TN/DS/9, TN/S/12,
G/AG/17, G/SG/64, G/SPS/27, G/L/638, Job(03)/171, TN/RL/7-G/L/640, and that the reports would
be forwarded to the Ministerial Conference.
(iii) Reports of the Working Groups on the Relationship between Trade and Investment
(WT/WGTI/7), the Interaction between Trade and Competition Policy (WT/WGTCP/7), and
Transparency in Government Procurement (W T/WGTGP/7), and of the Council for Trade in
Goods on Trade Facilitation (G/L/637)
126. The Chairman drew attention to the reports in relation to the four Singapore issues from the
Working Groups on the Relationship between Trade and Investment (WT/WGTI/7), the Interaction
between Trade and Competition Policy (WT/WGTCP/7), and Transparency in Government
Procurement (WT/WGTGP/7), and from the Council for Trade in Goods on Trade Facilitation(G/L/637).
127. Mr. de Seixas Corrêa (Brazil), Chairman of the Working Group on the Relationship between
Trade and Investment, said that the Working Group's report to the General Council in WT/WGTI/7
should be read in conjunction with the Group's annual report for 2002 in WT/WGTI/6.  This report
covered the meetings of the Working Group held on 3-4 December 2002, 14-15 April 2003, and 10-12 June 2003.  A full account of the discussions could be found in the minutes of the meetings
(WT/WGTI/M/20-22).  The Working Group had received regular updates on the Secretariat's
technical assistance activities carried out under the Doha Ministerial Declaration.  In this regard, all
technical assistance activities carried out in 2003 under paragraph 21 of the Doha Declaration had
been undertaken jointly by the WTO and UNCTAD Secretariats and, in some cases, in cooperationalso with other agencies.  The Group had continued to focus on the items set out for clarification in
paragraph 22 of the Doha Declaration as well as on additional related subjects.  Members had based
their work on written contributions by the Secretariat and Members, and on statements in the Group's
meetings.  At its meeting on 3-4 December 2002, the Group had continued its job of clarification on
the basis of communications received from India on the subjects of "Development Provisions", "Non-
Discrimination" and "Modalities for Pre-Establishment Commitments Based on a GATS-type Positive
List Approach" (WT/WGTI/W/148, 149 and 150, resp ectively).  The Group had also discussed two
other issues:  "Investors and Home Government s' Obligations", based on a joint communication
received from China, Cuba, India, Kenya, Pakistan and Zimbabwe (WT/WGTI/W/152), and
"Balance-of-Payments Safeguards", based on a communication from the European Communities
(WT/WGTI/W/153).
128. At its meeting on 14-15 April, the Group had taken up six more issues based on seven new
submissions:  (i) "Policy Space for Development", based on the European Communities' document
(WT/WGTI/W/154);  (ii) "Transparency", based on texts presented by Canada (WT/WGTI/W/155)WT/GC/M/81
Page 33
and China (WT/WGTI/W/160);  (iii) "The Interrelationship and Emerging Infrastructure of a
Prospective WTO Multilateral Framework for Investment", based on elements identified in
paragraph 22 of the Doha Declaration and on another Canadian paper (WT/WGTI/W/157);  (iv) "The
Relationship between Future Multilateral Investment Rules and the GATS" (WT/WGTI/W/156),
presented by Japan;  (v) "Consideration of the Necessity of Multilateral Investment Rules from
Diversified Viewpoints" (WT/WGTI/W/158) also presented by Japan;  and (vi) "Scope andDefinition", based on a written contribution by China (WT/WGTI/W/159).  At its meeting on 10-
11 June, the Group had had another substantive exchange on the subjects set out for clarification in
paragraph 22 of the Doha Declaration, based on a new written contribution from Canada, Costa Rica
and Korea, entitled "Negotiating a Multilateral Framework on Investment in the WTO"
(WT/WGTI/W/162).  On that occasion, delegations had had the opportunity to present their
preliminary comments on the Working Group's draft report, which would be submitted to the General
Council.  He was convinced that the Working Group had faithfully discharged its mandate.  Membersat the present meeting might find themselves in a position to evaluate the implications of closer
multilateral cooperation on investment for their economies and for their development policies and
objectives.  The Working Group had made a contribution in that regard by means of technical
cooperation activities and the many exchanges on the issues singled out for clarification in
paragraph 22 of the Doha Declaration, as well as other related subjects that had been raised in thecourse of the Group's work.
129. Mr. Saborío Soto (Costa Rica), Chairman of the Working Group on Transparency in
Government Procurement, said that the report of this Working Group to the General Council
(WT/WGTGP/7) described its work in detail.  In the course of 2003, the Working Group had held
formal meetings on 7 February and 18 June, and had continued its work pursuant to the mandate inthe Singapore Ministerial Declaration and pursuant to paragraph 26 of the Doha Ministerial
Declaration.  As agreed at an informal meetin g of the Working Group in January, the meetings had
focussed attention on (a) transparency-related prov isions in existing international instruments on
government procurement, and national procedures and practices;  and (b) technical assistance and
capacity-building.  Regarding transparency-related provisions in existing international instruments on
government procurement, and national procedures and practices, at its meetings on 7 February and
17 June the Group had had the opportunity to discuss issues included in the Chairman's informal note
entitled "List of Issues Raised and Points Made" (Job(99)/6782).  The Group had furthermore
discussed technical assistance and capacity building as called for in paragraph 26 of the Doha
Declaration.  Some Members had made specific suggestions as to how technical assistance andcapacity building in this field could be made more effective and useful for developing and least-
developed countries.  The Working Group had also discussed the importance of transparency in
government procurement for international trade and development.  Finally, the Working Group had
addressed the status of its work.
130. Mr. Hovorka (Czech Republic), Chairman of th e Council for Trade in Goods, introduced the
section on Trade Facilitation in the update to the 2002 Report of the Council for Trade in Goods
(CTG) in G/L/637.  As trade facilitation was the only Singapore issue without a separate workinggroup, he explained that this way of reporting had been agreed at the CTG meeting in June 2003, at
which time Members had agreed to follow the past practice according to which trade facilitation was
one section of the CTG's 2002 Annual Report.  The report on trade facilitation was of a factual nature.
It provided an overview of what had happened in this area since 29 November 2002.  Over this
period, the CTG had pursued its work on trade facilitation as mandated in paragraph 27 of DohaDeclaration in the course of three formal sessions in December 2002 and March and June 2003.  The
programme of work up to the Cancún Ministerial Conference, which had been agreed in December
2002, had provided the option of having an additional meeting in July 2003.  However, as no Member
had requested to continue the discussions, it had been decided not to make use of this option.  In the
three meetings, the CTG had continued its work on the agreed three core agenda items:  (i) Articles V,VIII and X of GATT 1994;  (ii) trade facilitation needs and priorities of Members, particularly ofWT/GC/M/81
Page 34
developing and least-developed countries;  and (iii) technical assistance and capacity building.  The
question of what type of a decision on modalities for negotiations in the area of trade facilitation
Members would be prepared to envisage at Cancún had not been addressed, as it had been understood
that this was an issue to be discussed in another forum.
131. The level of engagement at these meetings had been very good and was reflected in the
extremely rich and lively discussions and in the additional written contributions received, in additionto a few new papers prepared by the Secretariat.  In addition, the CTG had drawn on the work of some
other international organizations with experience in trade facilitation, and in this respect the
contributions by UNCTAD, the WCO and the OECD had been useful.  He recalled that the report on
trade facilitation should be read in conjunction with the 2002 Annual Report of the CTG (G/L/595).
132. Mr. Rogerson, Secretary of the General Council, speaking on behalf of the Chairman of the
Working Group on the Interaction between Trade a nd Competition Policy, said that the Working
Group's Report for 2003 was contained in document WT/WGTCP/7.  The report was descriptive in
nature and was intended to provide a substantive overview of the work done by the Group during the
year, but did not contain conclusions or recommendations.  As noted in its paragraph 10, the report
built on and complemented the work the Working Group had undertaken in 2002.  Consequently, for
a full appreciation of the views expressed and points made by Members in relation to the elements
contained in paragraph 25 of the Doha Ministerial Declaration, the report should be read inconjunction with the Working Group's Report for 2002 (WT/WGTCP/6).
133. The Chairman asked whether any delegation wished to speak on these four reports, keeping in
mind that the question of possible approaches to the decisions to be taken by Ministers at Cancún on
the question of modalities would be addressed in further consultations to be conducted by him at the
level of Heads of Delegations.  He requested any delegation that still wished to address these issuesmore specifically to do so under Item 7(e) of the agenda concerning the draft Ministerial text.
134. The representative of the Philippines expresse d appreciation to the Chairmen of the various
Working Groups and the CTG for the hard work they had undertaken.  All four Chairmen had referred
to the fact that their reports, which were factual and highlighted the divergences in the discussions,
were to be read in conjunction with their reports to the Chairman on their work as Friends of the
Chair.  The latter reports were based on certain objectives the General Council Chairman had
articulated in guiding the Friends of the Chair, which was that they should seek elements for the
modalities on each of the four Singapore Issues.  There was a big difference between the reports of the
Working Groups themselves and the subjective reports of the Friends of the Chair.  As he had said,
the objective was to look for certain elements that could be submitted to Ministers in Cancún in orderfor them to be able to discharge the responsibility of deciding on these issues by explicit consensus on
the modalities.  On this issue it was very apparent that there were no such agreed modalities at this
point, and therefore the search for modalities by the Friends of the Chair was very subjective and
probably did not represent Members' interests, needs or appreciation.
135. The other disturbing new element he had found in the Chairmen's reports was that there
seemed to be an insinuation that there was now sufficient material for Members to be able to come to
some kind of conclusion regarding framework agreements on these four issues.  His delegation agreedthat there was sufficient material, but he did not believe it led Members to the conclusion that there
was always a case for a framework agreement.  In fact, in most cases the reverse was true – that there
was probably no case for any multilateral framework agreement simply because Members were not
even certain among themselves on what the modalities for further work would be.  One big
stakeholder would say that this was merely a procedural issue, but the majority of developingcountries did not look at modalities as simply procedural.WT/GC/M/81
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136. The representative of the European Communities, speaking on a point of order , said that as he
had understood it, under the present agenda item Members were considering the factual reports on the
work done in this first phase by the different Working Groups.  They were not dealing with the reports
of the Chairpersons acting in their capacity as Friends of the Chair, because those reports were not on
the agenda, and indeed, there were no such reports.  He therefore had the impression that the
Philippines had gone beyond the present agenda item.
137. The Chairman recalled that in his preliminary statement he had also requested that the
comments that did not specifically relate to the factual content of these reports should be made under
Item 7(e), which dealt with the draft Ministerial text.
138. The representative of the Philippines said he had intended his statement to be general and that
he was only dealing with two issues.  One was the Chairmen's statements that their respective reports
on the Singapore issues should be read in conjunction with other reports which were not before the
Council but which had clearly been mentioned by them.  Second, his delegation had wished to react tothe insinuation which he believed he had heard from all four Chairmen that there was sufficient
material for Members to work on a multilateral framework for each of these issues.
139. The General Council took note of the reports of the Working Groups and the Council for
Trade in Goods in documents WT/WGTI/7, WT/WGTCP/7, WT/WGTGP/7 and G/L/637, and of the
statements, and that the reports would be forwarded to the Ministerial Conference.
(iv) Reports of the Working Groups on Trad e, Debt and Finance (WT/WGTDF/2), and on Trade
and Transfer of Technology (WT(WGTTT/5)
140. The Chairman recalled that in paragraphs 36 and 37 of the Doha Declaration, Ministers had
agreed to an examination, in Working Groups unde r the auspices of the General Council, of the
relationship between trade, debt and finance and of the relationship between trade and transfer oftechnology, respectively, and of any possible recommendations, and had instructed the General
Council to report on progress in these respective examinations to the Fifth Session of the Ministerial
Conference.  The reports of these two Working Groups were before Members in documents
WT/WGTDF/2 and WT/WGTTT/5 respectively.
141. Mr. Gómez (Colombia), Chairman of the Work ing Group on Trade, Debt and Finance, said
that pursuant to paragraph 36 of the Doha Declaration, the Working Group had been established to
examine the relationship between trade, debt and finance, in response to concerns of developing
countries.  As outlined in the report, the Group had identified key linkages concerning, in particular,
trade and finance, trade and debt, and coherence issues. Attendance of delegations at all meetings had
been good.  This was explained by the quality of the work presented by the various participatingorganizations, including the UN Economic Commi ssions for Latin America and the Caribbean and
Africa, IMF, World Bank, OECD, UNCTAD, and As ian Development Bank, as well as Members
such as the European Communities, the African Group, Cuba and Argentina.  The participants had
produced a total of 21 original documents, and othe rs were already in preparation, as he understood it.
After the examination of the relationship between tr ade, debt and finance, the Group had been trying
to narrow down the scope of its work to the areas that had been of greatest interest to Members.  The
Group had therefore worked on a more focussed list of themes and projects that could be the basis offurther work after Cancún.  These themes were presented in the report and had been agreed, with a
great sense of compromise, by Members in the Group.  They highlighted the particular importance of
improved market access for developing countries in general, and for highly indebted countries in
particular, the need to improve trade-financing facilities for developing countries, especially in
periods of financial crisis, and called for further collaboration with the IMF on the topic of exchange-rate instability and trade, and with the IMF and the World Bank on the sequencing and timing of fiscal
and tariff reforms, the volatility of commodity prices, and the relationship between internal reform toWT/GC/M/81
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remove supply constraints and external liberalization.  The Group's report was presented to the
General Council on a consensus basis, with the agreement from all Members in the Group.
142. Mr. Jóhanesson (Iceland), Chairman of the Working Group on Trade and Transfer of
Technology, recalled that paragraph 37 of the Doha Declaration called for the examination of the
relationship between trade and transfer of technology and possible recommendations on steps that
might be taken to increase flows of technology to developing countries.  It also required the WorkingGroup to report to the General Council on progress in this examination on order to enable the Council
to report to the Fifth Session of the Ministerial Conference.  In keeping with this mandate, the
Working Group had adopted its report at its seventh session on 10 July.  The report provided detailed
information on the meetings held, the various submissions and presentations made, and provided a
factual enumeration of the issues Members had discussed during their consideration of the
relationship between trade and transfer of technology.  As indicated in the final section of the report,
although there had been no consensus on recommendations, as mandated in paragraph 37 of the DohaDeclaration, at the present stage, some Members had identified particular themes that the Working
Group should discuss further in the context of cont inuing its examination of the relationship between
trade and transfer of technology, and of making possible recommendations on steps that might be
taken within the mandate of the WTO to increase flows of technology to developing countries.
Further work on these issues in the Working Group would no doubt be based on the directionsMinisters would give in this regard at Cancún.
143. The General Council took note of the reports of the Working Groups in documents
WT/WGTDF/2 and WT/WGTTT/5 and of the statements, and that the reports would be forwarded to
the Ministerial Conference.
(v) Council for TRIPS – Report by the Chairman on examination of scope and modalities for
non-violation and situation complaints under Article XXIII of GATT 1994 (IP/C/27 and
Add.1.)
144. The Chairman recalled that paragraph 11.1 of the Doha Decision on Implementation-Related
Issues and Concerns Ministers directed the TRIPS Council to continue its examination of the scope
and modalities for complaints of the types provided for under sub-paragraphs 1(b) and 1(c) ofArticle XXIII of GATT 1994 and make recommendati ons to the Fifth Session of the Ministerial
Conference.
145. Mr. Menon (Singapore), Chairman of the Council for TRIPS recalled paragraph 11.1 of the
Doha Decision on Implementation-Related Issues a nd Concerns, and that it had been agreed that,
pending a decision on this matter, Members woul d not initiate such complaints under the TRIPS
Agreement.  The Council had worked on this issue since its meeting in March 2002, as detailed in the
TRIPS Council's annual report and update (IP/C/27 and Add.1).  At its last formal meeting in June
2003, the TRIPS Council had discussed options for recommendations to the Ministerial Conference.
At that meeting, he had noted that there appeared to be four main options logically possible for such
recommendations.  At one end of the spectrum, one  option would be to follow the proposal by a
number of Members contained in document IP/C/W/385, and to recommend to Ministers that
violations of the type identified in Article XXIII.1(b) and (c) of GATT 1994 be determinedinapplicable to the TRIPS Agreement.  At the TRIPS Council's June meeting, this proposal had
received wide support.  At the other end of the spectrum was the option of non-violation and situation
complaints being available under the TRIPS Agr eement without subjecting them to any specific
guidance as to their scope and modalities over and above those already envisaged by the DSU, i.e. the
general safeguards provided in Article 26 of the DSU.  This option had been supported by someMembers at the TRIPS Council's meeting.  A third option would be to recommend that non-violation
and situation complaints be made available to disputes arising under the TRIPS Agreement, but to
make them subject to some specific additional guidance on their scope and modalities.  However, noWT/GC/M/81
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proposals for such provisions had been submitted.  The fourth option would be to recommend that the
moratorium be further extended so as to allow the TRIPS Council more time to consider the scope and
modalities of non-violation and situation complaints in the area of TRIPS.
146. At the TRIPS Council's meeting in June, several delegations had been willing to consider the
last option as a compromise, and some had said that such an extension should be subject to a work
programme, including specific guidelines and deadlines.   In the light of this, he regretted to report that
the TRIPS Council was not in a position to make recommendations to the Fifth Session of the
Ministerial Conference at the present stage.  This meant that further work might have to take place in
the TRIPS Council in the period between the presen t meeting and the Cancún Ministerial Conference.
147. The representative of Peru said that despite the fact that the joint proposal submitted by a
group of developing countries in IP/C/W/385 had been discussed in detail and had been supported by
a large number of Members, the TRIPS Council had unfortunately not been able to reach a consensus
recommendation.  His delegation had maintained that non-violation and situation complaints wereneither necessary, desirable, nor possible within the framework of the TRIPS Agreement.  This
measure was not necessary to protect the delicate balance of rights and obligations which had been
reached in the TRIPS Agreement.  The way of enforcing this was through good-faith application of
the provisions pursuant to the principles established in international law.  Nor was it necessary to
protect market-access commitments that were contained either in GATT or in GATS, or othercommitments agreed to in the Uruguay Round.  These commitments were adequately protected in the
aforementioned agreements and in other agreements contained in Annex 1 of the Marrakesh
Agreement Establishing the WTO.  Likewise, his delegation considered that this agreement was not
necessary in the TRIPS context because it could lead to uncertainty, by undermining the regulatory
agreement and the sovereignty of States.  It also would curtail the flexibility of the TRIPS Agreementand might encroach on public health, nutrition, transfer of technology and other objectives of public
interest of vital importance for socio-economic and technological development.
148. Moreover, the application of this measure was not possible in the context of the TRIPS
Agreement because it threatened to destabilize the balance by introducing incoherence among the
various WTO agreements, by allowing that something agreed to as part of the single undertaking,such as the GATT and the GATS, could be questioned by a Member by alleging that it cancelled or
undermined agreements in other areas such as the TRIPS Agreement .  In addition, there was the risk
that this might upset the appropriate distribution of responsibilities among Members, special bodies
and the Appellate Body.  In view of these concerns and in the absence of any clear evidence of their
applicability to the TRIPS Agreement, his delegation considered that Members should determine thatnon-violation or situation complaints were not applicable in the context of the TRIPS Agreement.
Likewise, as long as there was no consensus decision, Members should not initiate complaints of the
type mentioned in sub-paragraphs 1(b) and 1(c) of Article XXIII of GATT 1994 in this context.  His
delegation wished to thank the co-sponsors and those delegations that had supported the joint proposal
submitted in the TRIPS Council.
149. The General Council took note of the statement and of the report on this matter contained in
IP/C/27 and Add.1, and that the report would be  forwarded to the Ministerial Conference.
(vi) Committee on Trade and Environment – Report pursuant to paragraphs 32 and 33 of the
Doha Ministerial Declaration (WT/CTE/8)
150. The Chairman recalled that in paragraph 32 of the Doha Declaration, Ministers had instructed
the Committee on Trade and Environment, in pursuing work on all items on its agenda within its
current terms of reference, to give particular attention to:  (i) the effect of environmental measures onmarket access, especially in relation to developing countries;  (ii) the relevant provisions of the TRIPS
Agreement;  and (iii) labelling requirements for en vironmental purposes, and to report to the FifthWT/GC/M/81
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Session of the Ministerial Conference and make recommendations, where appropriate, with respect to
future action, including the desirability of negotiations.  Furthermore, in paragraph 33 Ministers
recognized the importance of technical assistance and capacity building in the field of trade and
environment to developing countries and encouraged the sharing of expertise and experience
regarding environmental reviews at the national level, and instructed the Committee to prepare a
report on these activities for the Fifth Session.
151. Mr. Brño (Slovak Republic), Chairman of the Committee on Trade and Environment,
expressed appreciation to Members for their constructive work in the Committee during 2002.  The
CTE had a specific reporting requirement under the Doha Ministerial Declaration.  In this context the
Committee had adopted its report by consensus at its meeting on 7 July (WT/CTE/8).  He wished to
emphasize one aspect in particular of this report.  Paragraph 32 of the Doha Declaration mandated
Members to report on work done in the regular session and "make recommendations, where
appropriate, with respect to future action, including the desirability of negotiations."  He wished tostress that the CTE's report to Ministers in Cancún did not contain any agreed recommendations for
further action, including with respect to the desirability of negotiations.  While there had been no
consensus on forwarding any recommendatio ns to Members, two proposals for such
recommendations had been made.  One proposal, from Canada, was horizontal in nature and
suggested that Members review the CTE's work programme with a view to determining whether itcontinued to meet Members' requirements.  The other proposal, from the European Communities,
suggested that the CTE hold, before the end of 2004 and in addition to its usual schedule of meetings
to be agreed, three dedicated sessions to engage in a positive dialogue on governmental and non-
governmental voluntary eco-labelling schemes, notably those based on life-cycle analysis.  Both
proposals had been submitted late in the process and the Committee had held only one meeting todiscuss them.  There had been no consensus in the Committee to forward either of them to Ministers
at Cancún.  There was no need for him to go into further detail in respect of the report in document
WT/CTE/8, which reflected the debate that had taken place in the CTE under paragraphs 32 and 33 of
the Doha Declaration.  It was structured on an issue-by-issue basis and was, in essence, a summary of
what had happened on trade and environment in the WTO outside of the negotiations.  As mentioned,
the Committee's report to Ministers covered only paragraphs 32 and 33 of the Doha Declaration.
152. There was no such specific reporting requirement in respect of paragraph 51 of the Doha
Declaration.  This was the reason he had included a short paragraph on the Committee's work in this
area in his report to the General Council in document WT/CTE/9.  Paragraph 51 of the Doha
Declaration contained a joint mandate for both the CTE and the Committee on Trade andDevelopment;  it instructed both Committees to "act as a forum to identify and debate developmental
and environmental aspects of the negotiations, in order to help achieve the objective of having
sustainable development appropriately reflected."  He wished to note that, to this end, the CTE had
held discussions on the relevant developments in the negotiating areas of agriculture, rules, services
and non-agricultural market access.
153. Finally, looking ahead, he wished to make some personal comments. First, the report to
Cancún clearly gave a snapshot of Members' positions on various issues.  While there had, of course,been some evolution of these positions over time,  the views of Members were relatively well known
and, on some items, the debate was somewhat saturated.  Looking ahead, after Cancún, it was his
view that the Committee would at some point have to reflect on where to go from here so as to avoid
unnecessary repetition of Members' positions on the various items of the CTE's work programme,
which would soon be ten years old.
154. Second, he wished to recall that the first point of the original 1994 mandate, which was still
valid at the present time, was to "identify the relationship between trade measures and environmental
measures, in order to promote sustainable development".  This seemed very close to the mandate in
paragraph 51 of the Doha Declaration which asked Members to "act as a forum to identify and debateWT/GC/M/81
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developmental and environmental aspects of the negotiations, in order to help achieve the objective of
having sustainable development appropriately reflected."  In a sense, the mandate in paragraph 51
extended the current mandate of the CTE to the on-going negotiations.  In his view, what was
essential in this was the link to sustainable development.  He had asked himself how the CTE could
contribute to the discussion in the WTO, whether w ith respect to negotiations or other regular work.
There was a need, perhaps, to have a more substantive discussion that was more systematic andfocussed, and which avoided unnecessary duplication and repetition.
155. Third, one issue that in his view stood out more than others, and which was clearly linked to
sustainable development, was the issue of market access.  This was referred to as the effect of
environmental measures, or requirements, on market access.  This was of particular concern to
developing countries, and particularly small- and medium-sized enterprises in these countries.  In this
context, the key issue was the appropriate balance between safeguarding market access opportunities
for developing-country exports, in particular, and allowing for the pursuit of legitimate environmentalpolicies.  Both aims were essential to the objective of achieving sustainable development.  In other
words, how should environmental measures be designed by importing countries in a manner that took
into account capabilities of developing countries while, at the same time, meeting the legitimate
environmental objectives of the importing country – and, of course, remaining consistent with WTO
rules.  This was perhaps an area where the CTE could do more analytical work which wouldconstructively feed in to the work done in other areas in, as well as outside, the WTO.  This would
also be in line with the mandate under paragraph 32(i) of the Doha Declaration.  Finally he wished to
reiterate his appreciation to Members for their constructive approach and work in the CTE.
156. The General Council took note of the report of the Committee on Trade and Environment in
WT/CTE/8 and that the report would be forwarded to the Ministerial Conference.
(vii) Work Programme on Electronic Commerce – Reports from subsidiary bodies and on the
dedicated discussions on cross-cutting issues under the auspices of the General Council
(G/L/635, S/C/18, IP/C/29, WT/C OMTD/47, WT/GC/W/505 and Corr.1)
157. The Chairman recalled that in paragraph 34 of the Doha Ministerial Declaration, Ministers
had agreed to continue the Work Programme on Electronic Commerce, and had instructed the General
Council to consider the most appropriate institutional arrangements for handling the Work
Programme, and to report on further progress to the Fifth Session.  Ministers had also declared that
Members would maintain their current practic e of not imposing customs duties on electronic
transmissions until the Fifth Session.  At its meeting in October 2002, the General Council had agreed
to maintain, for the duration of the work until the Fifth Session, the current institutional arrangementsfor handling the Work Programme, i.e. that the C ouncils for Trade in Services, Trade in Goods and
TRIPS, as well as the Committee on Trade and Development would examine and report on aspects of
electronic commerce relevant to their respective areas of competence, and that the General Council
would play a central role in the entire proce ss, would keep the Work Programme under continuous
review and would consider any trade-related issue of a cross-cutting nature.  The reports from the
three sectoral Councils and the Committee on Trade and Development, as well as the report on the
Dedicated Discussions on cross-cutting issues under the auspices of the General Council, were beforeMembers in documents G/L/635, S/C/18, IP/C/29, WT/COMTD/47 and WT/GC/W/505.  The reports
from the Services and Goods Councils had noted that no work had been undertaken in those bodies
since the Doha Ministerial Conference, and that unresolved cross-cutting issues were being addressed
in the context of the Dedicated Discussions under the auspices of the General Council.  He would
therefore invite only the Chairpersons of the TRI PS Council and the CTD, as well as Deputy Director-
General Mr. Yerxa to introduce their reports.
158. Mr. Menon (Singapore), Chairman of the Council for TRIPS, said that the report by the
Council for TRIPS (IP/C/29) covered the period since the circulation of the TRIPS Council's secondWT/GC/M/81
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progress report in December 2000.  During this period, the TRIPS Council had continued its work on
intellectual property issues arising in connection with electronic commerce.  Two written submissions
by Members had been presented in 2001.  At its meeting in June 2003, the Council had taken note of a
Secretariat factual background note on intellectual property and electronic commerce
(IP/C/W/128/Add.1) that had been prepared at the request of the TRIPS Council.  This updated an
earlier background note on the same topic and reflected recent developments that were relevant to thisissue, including the work carried out by WIPO and other intergovernmental organizations.
159. Mr. Mansour (Tunisia), Chairman of the Committee on Trade and Development, said that the
Committee had continued its work on electronic commerce since the Doha Ministerial Conference.
E-commerce had been a standing item on the agenda of each of the regular meetings of the CTD.
Two Members had presented their governments'  experiences with e-commerce, UNCTAD had
presented its E-Commerce and Development Report, and a seminar on "Revenue Implications of E-
commerce" had been held under the auspices of the CTD.  A full account of the work undertaken wasgiven in the CTD's report in document WT/COMTD/47, which had been adopted by the CTD on a
non-objection basis.
160. Deputy Director-General Mr. Yerxa, Chairman of the Dedicated Discussions on Cross-
Cutting Issues under the auspices of the Gene ral Council, said that the report on the Dedicated
Discussions under the auspices of the General Council on the cross-cutting issues related to electronic
commerce was contained in document WT/GC/W/505.  Work in these Dedicated Discussions had
been progressing well and, since the Doha Ministerial Conference, four Dedicated Discussions had
been held.  These had focussed primarily on the classification of the content of certain electronic
transmissions, which many delegations viewed as a key cross-cutting issue.  Other issues on which
there had been considerable discussion were:  (i) fiscal implications of electronic commerce;  and(ii) objectives to be applied to the consideration of e-commerce.  At the Dedicated Discussion held on
11 July, participants had discussed a draft report to the General Council.  At that meeting there had
appeared to be a common understanding among participants that the examination of cross-cutting
issues related to e-commerce was not complete, and that further work to clarify these issues was
clearly needed.  In line with this, many participants had indicated their desire to continue both theexamination of issues under the Work Programme and maintaining the moratorium on the imposition
of customs duties on electronic transmissions.  However, some delegations had raised concerns about
including recommendations to this effect in the report to the General Council on the Dedicated
Discussions as, in their view, there was no authority to make such recommendations.  For these
reasons, paragraph 7 of the report in document WT/GC/W/505 simply stated that “the GeneralCouncil should consider whether to recommend continuing the examination of all trade-related issues
relating to electronic commerce under the ongoing Work Programme on Electronic Commerce with
the current institutional arrangements, having the General Council report on further progress to the
next Ministerial Session, and maintaining Members’ current practice of not imposing customs duties
on electronic transmissions until the next Ministerial Session.”  While his personal sense was that
there was broad support among Members for continuing the examination under the Work Programme
and extending the moratorium, there might still be  some Members who had questions about such an
approach, and nothing in the report was intended to pre-empt their views.
161. The representative of Cuba thanked the Chairpersons as well as Deputy Director-General
Mr. Yerxa for their respective reports.  Her delegation wished to refer to the question of extension of
the moratorium on the application of customs duties to electronic transmissions in the report in
WT/GC/W/505.  In Cuba's view, the Declaration on Electronic Commerce adopted by Ministers in
May 1998 established that the decision to maintain the present practice of not imposing customs
duties on electronic transmissions should not be to the prejudice of the results of the Work
Programme nor to the detriment of the rights or obligations of Members.  When this decision had
been adopted, no substantive work had been carried out by Members on this issue, which would
provide a technical grounding for an agreement on the moratorium.  In Cuba's view, this decision hadWT/GC/M/81
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been based on the political will of Members, considering that such a measure did not have, in one way
or another, any practical implications of an immediat e nature.  Cuba believed that the right of States to
regulate domestically was an essential right in the exercise of their sovereignty and to maintain their
development policies.  Tax policies were mechanisms for collecting revenues and were used at
present by both developed and developing countries.  From the time that physical trade in goods was
gradually being transformed into a form of virtual trade through electronic transmissions, studies fromvarious international organizations such as UNC TAD had shown that this moratorium had had an
adverse effect on developing countries, because of the reduction of revenues from such customs
duties.
162. This situation had had, and would have to have, a major negative impact on those small
developing countries where tariff revenues constituted an important source of revenues to maintain
the running of the country.  It should also be borne in mind that developing countries had less
flexibility and fewer opportunities to replace such losses and could not count on any other source ofrevenue.  Therefore, there should be a guarantee of sufficient time for developing countries to
introduce and apply policies that they might wish to apply to electronic transmissions in general,
which would go far beyond the actual transactions of electronic commerce.  Many developed
countries welcomed the application of different types of tax mechanisms.  These countries would also
be affected if a moratorium were to be applied on the revenue from consumer taxes in the form ofvalue-added taxes or other forms of taxation.  Her delegation wished to point out that the country
which had spoken most energetically in favour of electronic commerce without any restriction,
applied restrictions on access to new technologies in the area of electronic commerce to Cuba and
other developing countries.  At the Thirty -fourth Session of the Committee on Trade and
Development, Cuba had introduced a communication in WT/C/W/435, which was still valid.  Onrepeated occasions, Cuba had spoken out to abolish the restrictions which were at present applied for
political reasons to several developing countries and which established an undesirable precedent in the
overall effort to liberalize and enhance the benefits stemming from electronic commerce.
163. The WTO should promote fair and balanced trade and create a level playing field which
would take into consideration the asymmetries between Members.  While it might be true that theparticipation in electronic commerce of developing countries was, for the time being, rather scant, the
international rules which might be adopted today would have an impact on those countries in the
future.  Therefore, Cuba believed that one should not limit Members' rights – in particular, developing
countries' rights – to apply duties to electronic transmissions when they believed this was appropriate
in order to meet their economic, financial and development needs, and this in the light of theirdomestic policies.  Cuba did not object to the adoption of the report.  However, her delegation
maintained its reservations regarding the recomme ndations to Ministers calling for maintaining, until
their next Session, the current practice whereby Members did not impose customs duties on electronic
transmissions.  Cuba believed that the Fifth Ministerial Conference in Cancún was the right body to
take a final decision on this issue and that the matter should therefore remain open for consideration
by Ministers.  Consequently, her delegation believed that this recommendation should not be taken as
a definitive decision.
164. The General Council took note of the reports of  the Council for Trade in Goods, Council for
Trade in Services, Council for TRIPS, Committee on Trade and Development and the Dedicated
Sessions on Cross-cutting Issues in documents G/L/635, S/C/18, IP/C/29, WT/COMTD/47,
WT/GC/W/505 and Corr.1, and of the statements, a nd that the reports would be forwarded to the
Ministerial Conference.WT/GC/M/81
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(viii) Committee on Agriculture – Implementation-relate d issues – Report to the General Council
(G/AG/16)
165. The Chairman recalled that in paragraph 2 of the Doha Ministerial Decision on
Implementation-Related Issues and Concerns, Ministers had approved a recommendation that the
Committee on Agriculture, following its regular meeting in September 2002, should report to the
General Council on:  (i) its examination of possible means to improve the effectiveness of theimplementation of the Marrakesh Ministerial Decision regarding the least-developed and net food-
importing developing countries;  and (ii) the implementation of Article 10.2 of the Agriculture
Agreement.
166. Ministers had also endorsed a decision by the Agriculture Committee to keep under review
the submission – by Members administering tariff quotas – of addenda to their notifications to the
Committee in accordance with the decision of the General Council regarding the administration of
tariff rate quota regimes in a transparent, equitable and non-discriminatory manner.
167. The Agriculture Committee had last reported to the General Council on these matters in
October 2002, and had recently submitted a further follow-up report in document G/AG/16, following
the meeting of the Committee on 30 June.  This report also provided a follow up to the
recommendation of the Inter-Agency Panel on Short-Term Difficulties in Financing Normal Levels of
Commercial Imports of Basic Foodstuffs in regard to the establishment of an ex ante financingmechanism aimed at food importers.
168. Mr. Diab (Egypt), speaking on behalf of the Chairman of the Committee on Trade in
Agriculture, said that the report before the General Council concerned the follow up by the
Committee on Agriculture to the agricultural-related issues specified in the Doha Decision on
Implementation-Related Issues and Concerns.  The report covered the implementation of Article 10.2of the Agreement on Agriculture concerning the development of international disciplines on export
credits and related facilities, the Marrakesh NFIDC Decision, as well as the provision by Members of
Addenda to their notifications on tariff quota administration.  The recommendations in the report
concerned the issue of short-term difficulties in financing food imports by LDC and NFIDCs in the
context of the Marrakesh NFIDC Decision.  This wa s a matter on which over the past two years the
Committee had worked hard to find solutions.  In this regard, in May the Committee had organized a
roundtable with expert panellists from other international organizations to discuss the need and
options for a possible safety net to assist the LDCs and NFIDCs.  However, as matters currently
stood, the Committee had not been able to come to a conclusion on this issue.  The Committee
therefore made the recommendation that "building on the work already undertaken, including theWTO roundtable of 19 May 2003, the Committee will continue to explore, as a matter of priority and
on the basis of proposals submitted by Members, options and solutions within the framework of the
Marrakesh NFIDC Decision to address short-term di fficulties of LDCs and NFIDCs in financing
commercial imports of basic foodstuffs".  Furtherm ore, as part of the recommendations contained in
the report, Members, in their capacity as members of the IMF, were urged to take into account the
concerns of LDCs and NFIDCs when reviewing the Poverty Reduction and Growth Facility and the
Compensatory Financing Facility of the IMF in 2003.  The World Bank and other relevantinternational organizations were requested to advise the Committee on the possibility of using
commodity price risk management instruments to help  stabilize the food import bills of the LDCs and
NFIDCs.
169. The General Council took note of the statement and of the report of the Committee on
Agriculture in G/AG/16, approved the Committee's recommendations in paragraph 19 of the report,
and took note that the report would be forwarded to the Ministerial Conference.WT/GC/M/81
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(ix) Rules of Origin – Harmonization Work Programme – Statement by the Chairman
170. The Chairman recalled that at the General Council meeting in July 2002, the Committee on
Rules of Origin had forwarded 94 core policy issues to the General Council for discussion and
decision at General Council level, with a view to concluding work on the Harmonization Work
Programme by the extended deadline of December 2002.  At its meeting in December 2002, the
General Council had agreed to extend to July 2003 the deadline for completion of negotiations on thecore policy issues identified in the CRO Chairm an's report to the General Council of 15 July 2002,
and also that, following resolution of these core policy issues, the CRO would complete its remaining
technical work by 31 December 2003.  Since the December meeting, both the Chairman of the CRO,
Mr. Moser (Switzerland), and the Vice-Chairman of the Committee, Mr. Costa Filho (Brazil), had
been pursuing informal consultations, at his request and on his behalf, with a view to resolving all of
the 94 core policy issues before the time of the present meeting.  He expressed his appreciation to
both the CRO Chair and Vice-Chair, as well all delegations involved, for the hard work they had beenputting into trying to seek timely resolution of these complex technical and political issues.
171. Mr. Moser (Switzerland), Chairman of the Committee on Rules of Origin, said that he was
reporting to the General Council on the progress in consultations on the 94 core policy issues which
Mr. Costa Filho, the Vice-Chairman of the Committee, and himself had held with delegations in 2003.
In order to bridge the existing gaps among Members concerning the 94 issues, following extensive,one-to-one small groups and open-ended consultations held with Members since the autumn, he had
circulated a proposal intended as a balanced package, which was contained in document JOB(03)/132.
Unfortunately, however, it had not been possible to reach consensus on this, and the deadline for
completion of this work had been missed for a fifth time.  He wished to summarise the state of play as
follows:  Concerning the implications issue, there had been a discussion about the understanding
among Members on three notions:  (1) that the harmonized rules of origin should be applied only for
goods, not for services or intellectual property;  (2) that the harmonized rules of origin should be
applied equally for non-preferential commercial policy instruments, whenever a Member was required
– or in the absence of such requirement, voluntarily decided – to determine the country of origin;  and
(3) that there were some non-preferential commercial policy instruments where an origindetermination was not necessary.
172. It appeared that there was almost agreement on the first two notions, although some Members
had raised a question as to whether any WTO agreement required a Member to apply rules of origin.
However, Members had differing views on the third notion – that is, some Members argued that the
text proposed for resolution of the implications issue should designate explicitly the specificcommercial policy instruments for which an origin determination was irrelevant, such as marking and
labelling requirements or SPS measures.  Other Members were opposed to any carve-out of specific
commercial policy instruments, as Article 3(a) of the Agreement on Rules of Origin did not create any
new rights or obligations under the WTO Agreement.  Due to these differing views, the implications
issue remained unresolved but resolvable.  As for the 93 product-specific rules, there were several
genuinely political issues, the resolution of which appeared impossible at the present stage, such as
the issue of fish taken from the Exclusive Economic Zone, or the sugar issue.  There were also otherissues that were closely linked with other trade policy issues, such as circumvention of anti-dumping
duties, export subsidy policies in agriculture, and textile quotas, the resolution of which appeared to
be difficult unless the related issues were resolved in other bodies or sub-bodies of the WTO.
However, many Members had considered the CRO Chair's proposal as a good basis for further work.
There had been a discussion on the need for a possible new working methodology in order to facilitatethe negotiations.  This issue would be further discussed at the next consultations.
173. The Chairman said that in light of the report just made, Members had to recognize that
unfortunately, and despite best efforts to date and the useful work done over the past seven months,
the deadline of July 2003 for completion of negotiations on the 94 core policy issues could not,WT/GC/M/81
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regrettably, be met.  The issues Members faced in this work were admittedly challenging and required
further time to bring to a close.  He had been discussing the question of further work with the
Chairman of the CRO, and understood that the CRO Chairman himself had also raised this matter
with delegations in the Committee.  All delegations were aware of the importance of the issues to be
resolved and the implications to be considered.  Taking this situation into account, recognizing the
need to discuss a possible new working methodology in order to facilitate the negotiations, andconsidering the CRO Chairman's proposals contained in document JOB(03)/132 as a good basis for
further work, he proposed that the General Council extend to July 2004 the deadline for completion of
negotiations on the core policy issues identified in  the CRO Chair's report to the General Council of
15 July 2002.  He also proposed that following resolution of these core policy issues, the CRO
complete its remaining technical work, including the work referred to in Article 9.3(b) of the
Agreement on Rules of Origin, by 31 December 2004.
174. The representative of Brazil said that his delegation took note with deep regret that Members
had once more been unable to conclude this outstanding mandate conferred by Ministers at the end of
the Uruguay Round.  Members were already five and a half years behind the schedule given by
Ministers, and the new deadline proposed – on which Brazil had no objections – would mean that in a
best-case scenario, Members would conclude the Harmonization Work Programme seven years later
than instructed.  His delegation was concerned because it seemed that progress was being held up dueto the so-called implications debate.  Brazil, along with a number of other Members, believed that the
provisions of the Agreement on Rules of Origin were sufficiently clear on its relationship with the
other agreements of the WTO.  Nevertheless, hi s delegation had sought to understand the concerns
some Members had, and had proposed specific language to try to accommodate such concerns.  Brazil
would not, however, be in a position to accept any understanding that fundamentally altered or
undermined the basic objectives of the Agreement on Rules of Origin.  Brazil was concerned at the
potential consequences of continued lack of progress in this area.  If Members were unable to adopt
harmonized non-preferential rules of origin, pressure would lead each Member to adopt its own
individual rules of origin.  The prospect of traders having to face different rules of origin in each of
their export markets would lead to a situation in which trade would be made more difficult on a scalethat greatly outweighed any progress that could be achieved in any potential future work on trade
facilitation.  Notwithstanding this situation, his delegation wished to place on record its deep
appreciation for the work undertaken by Mr. Moser, both in his capacity as Chairman of the CRO and
in his capacity as Friend of the Chair.  His profound technical understanding of the issues had led to a
comprehensive package that was a very good basis for a final and political push towards theconclusion of the Harmonization Work Programme.
175. The representative of India said that his delegation commended the effort made by the
Chairman and Vice-Chairman of the CRO in trying to further the resolution of some very complex
issues that were before the Committee.  However, India was extremely concerned at missing yet
another deadline.  This raised an important que stion regarding the commitment of Members to the
Harmonization Work Programme, which had not reached a conclusion despite having been directly
overseen by the General Council.  He asked what signal this sent to the world trading community.Were Members not making world trade more uncertain and less facilitative?  Were they not opening
floodgates to disputes, the brunt of which would be faced by Members with fewer resources and
technical expertise?  The fact that the dispute settlement process had failed to provide any guidance to
Members on how to operate rules of origin in a predictable manner without fear of this being a
distortion or disruption to trade and how to avoi d possible discrimination among Members, lent even
more urgency to the early finalization of the harmonization work.  While Members had taken a
constructive and pragmatic approach, being mindful of the fact that it might not be possible to reach a
satisfying solution on each and every issue, the implications debate continued to hamper further
progress in the Harmonization Work Programme.  In this regard, some new suggestions had been put
forth.  His delegation wished to reiterate that while it was willing to work constructively on this issue,WT/GC/M/81
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any suggestions that would alter or seek to reinterpret the objective of the Agreement on Rules of
Origin would not be acceptable.
176. Some suggestions had also been made with regard to adopting new and creative
methodologies in the resolution of the outstanding  core policy issues.  While India was ready to
engage in any process constructively, it felt that the issue was one of political will rather than a lack of
adequate technical input.  Members should also be mindful of the fact that, now that they wereengaged in a fresh round of negotiations, it w ould be extremely difficult – for developing-country
Members at least – to proceed further, given the fact that harmonized rules of origin were a crucial
element in the negotiations, particularly on market access for agricultural and non-agricultural
products.  His delegation would thus urge Members to show the necessary flexibility and political will
to finally complete the work by the new deadline of July 2004 that had been suggested.  Recognizing
the trade facilitation potential of harmonized non-preferential rules of origin, his delegation felt that
clear and predictable harmonized non-preferential rules of origin would go a long way to facilitatingthe flow of international trade and to reducing unnece ssary obstacles to trade.  The reluctance of the
membership to complete the outstanding Harmonization Work Programme would prove to be a
serious setback to efforts being made in trying to bring in newer rules to make for more transparent
and predictable trade via trade facilitation.
177. The representative of Pakistan said his delegation wished to join Brazil and India in
appreciating the very hard work and devotion shown by the Chairman and Vice-Chairman of the
Committee.  Members had discussed all the technical aspects of rules of origin over the past eight
years, both at the WTO and in Brussels, but these issues needed political will to be resolved.  It
seemed that some countries were using rules of origin for production purposes, and were thus not
keen on finalizing these issues.  Members' failure to agree on harmonized non-preferential rules oforigin was the biggest stumbling block for trade facilitation.  If Members were serious in moving
forward in trade facilitation, the most important step was to finalize work on this issue.  His
delegation agreed with the Chairman's suggestion that perhaps Members needed to adopt some new
modalities to finalize this issue.
178. The representative of Bulgaria supported the Chairman's proposal to extend the deadline, but
wished to ask a question concerning procedure.  His delegation had not been able to find a draft
decision in the documentation which, in principle, had to be distributed together with the convening
notice for any meeting as provided in the General Council's Rules of Procedure.  He asked what the
status would be of a decision taken at the present meeting if there were no such draft decision.  Would
the decision be in compliance with the Rules of Procedure which required that draft decisions oramendments to draft decisions had to be submitted in writing and circulated at least 12 hours before
the respective meeting at which such drafts were to be discussed?  What would the legal
consequences be of taking that decision at the present meeting, contrary to the Rules of Procedure?
Members had been discussing, in the context of internal transparency, that the key problem of internal
transparency was last-minute proposals.  That was wh at Members were trying to cope with, especially
regarding Cancún.  This was a matter of principle, and his delegation would be grateful for an answer
to these questions.  A third question was what Members would do about such a situation in the future,should the case arise.
179. The Chairman said that he understood this proposal had come forward from consultations that
the Committee Chairman had been carrying out, and asked the Committee Chairman to clarify this.
He understood as well, as Bulgaria had pointed out, that no draft decision had been circulated in
advance.  However, these two questions should be  dealt with separately.  He would first ask the
Committee Chairman to clarify the situation with regard to his consultations.
180. Mr. Moser (Switzerland), Chairman of the Committee on Rules of Origin, said that on 21 July
there had been an open-ended discussion on the 94 core policy issues, and as Members had notWT/GC/M/81
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reached consensus, they had also discussed how to continue this work.  They had discussed more or
less seven options, and the only viable way had been to continue to work at the level of the General
Council on these 94 core policy issues.  To do th at, the General Council had to extend its own
deadline.  The General Council had set the deadline and the consultations had simply been following
that mandate.  Informally on 21 July Members had reached agreement on the one-year deadline
extension, which appeared reasonable, due to the Cancún Ministerial Conference and the fact thattime was thus very limited for negotiations.
181. The Chairman said that he had wished the Committee Chairman to clarify that this was a
decision that had been consulted on previously, although he did agree with Bulgaria that Rule 28 of
the General Council's Rules of Procedure said that proposals and amendments to proposals shall
normally be introduced in writing and circulated to all representatives not later than 12 hours before
the commencement of the meeting at which they are to be discussed.  Bulgaria was absolutely right in
quoting that rule.  However, the General Council could decide on issues that had been consulted onand agreed by the membership.  An example was that at the present meeting the General Council had
taken a decision with regard to the extension of the DSU, which had been the subject of consultations
but had not been introduced in writing and circulated to all Members.  Equally, he thought that unless
there were substantive difficulties with the proposal he was making, it was the prerogative of the
General Council to take a decision in this direction.  He recognized Bulgaria's point, but consideredthat this should not prevent the General Council from taking a decision if all agreed with the proposal
at hand.  He asked if Bulgaria's question was more of a procedural nature for the future, or whether
Bulgaria had substantive difficulties with the Chair's proposal on this issue.  If the latter were not the
case, he would propose that the General Council take a decision on this issue.
182. The representative of Bulgaria recalled that he had said his delegation had no objections to the
proposal, but that this was a matter of principle, especially in light of the preparations for Cancún and
such things not happening normally.  If they happened, then it was not a normal situation.
183. The Chairman said it could be said that this was an abnormal situation.  He proposed that the
General Council take note of the statements and agree to extend to July 2004 the deadline for
completion of negotiations on the core policy issues identified in the CRO Chair's report to theGeneral Council of 15 July 2002.  He also proposed that following resolution of these core policy
issues, the CRO complete its remaining techni cal work, including the work referred to in
Article 9.3(b) of the Agreement on Rules of Origin, by 31 December 2004.
184. The General Council so agreed.
(x) Committee on Customs Valuation – Report on the identification and assessment  of practical
means to address Members’ concerns regarding accuracy of declared values pursuant to
paragraph 8.3 of the Doha Ministerial Decision on Implementation-Related Issues and
Concerns
185. The Chairman recalled that in paragraph 8.3 of the Doha Decision on Implementation-Related
Issues and Concerns, Ministers had underlined the importance of strengthening cooperation between
the customs administrations of Members in the prevention of customs fraud.  Ministers had also
recognized the legitimate concerns expressed by the customs administrations of several importingMembers on the accuracy of the declared value, and had directed the Committee on Customs
Valuation to identify and assess practical means to a ddress such concerns and to report to the General
Council by the end of 2002 at the latest.
186. At its meeting in December 2002, the General Council had considered a report from the
Committee, and had authorized the Committee to continue its work under the existing mandate and toreport back to the General Council once its work had been completed.  He had been informed by theWT/GC/M/81
Page 47
Chairman of the Committee that, despite intensive efforts in recent days, the Committee had been
unable to conclude its work, and that as agreed by the General Council in December, the Committee
would report to the General Council once its work had been completed.  He therefore proposed that
the General Council agree to revert to this item at a future meeting.
187. The General Council took note of the statement and so agreed .
(xi) Implementation and adequacy of technical coope ration and capacity-building commitments in
the Doha Ministerial Declaration – Report by the Director-General pursuant to
paragraph 41 of the Doha Ministerial Declaration
188. The Chairman recalled that paragraph 41 of the Doha Ministerial Declaration called on the
Director-General to report to the Fifth Session of the Ministerial Conference on the implementation
and adequacy of the commitments on technical cooperation and capacity building identified in
paragraphs 16, 21, 24, 26, 27, 33, 38-40, 42 and 43 of the Doha Declaration.
189. The Director-General said it gave him great pleasure to say that, regarding this issue,
Members would have good news to tell Ministers at Cancún, and that Members could take satisfaction
in their collective achievements.  At the outset, he  also wished to thank the WTO's partner agencies,
regional development banks and stakeholders, including beneficiaries and donors, for their much
valued collaboration in the delivery of training and technical cooperation.  His report to Ministers,
which would supplement and update the interim report he had provided to Members inDecember 2002, was nearly complete.  He wished, however, to have a little more time to ensure that
Ministers were given a complete picture of the efforts undertaken by the Secretariat to deliver on the
technical cooperation and training commitments contained in the Doha Ministerial Declaration.  The
report would be distributed shortly after the present meeting in document WT/MIN(03)/3, and
Members would have the opportunity to study it and comment on it.  He wished to take thisopportunity to briefly preview some of the main elements of the report.
190. First, the efforts deployed in the area of technical assistance and training had been
unprecedented in the history of the GATT and WTO.  Since Doha, the WTO had implemented some
700 activities at both the national and regional level.  Second, the budgetary allocation for Trade-
Related Technical Assistance (TRTA) had also been unprecedented.  Taking into account the share ofthe regular budget dedicated to TRTA, the Doha Development Agenda Global Trust Fund (DDAGTF)
and other extra-budgetary funds managed  by the WTO, about SwF 36 million had been disbursed by
the Secretariat between the beginning of 2002 and the end of June 2003 on the delivery of training
and technical assistance.  Third, the WTO had strengthened its institutional arrangements for training
and technical assistance by establishing the Institute for Training and Technical Cooperation.  TheInstitute, which started its operations in the spring of 2003, brought together the previously separate
areas of training and technical assistance.  This merger put the WTO's activities on a more coherent
footing, which he believed would yield synergies.
191. Fourth, he wished to mention some of the specific programmes the WTO had developed in
the recent past to help transfer and enhance local ow nership of technical assistance.  Most notably, the
WTO had started a series of Regional Trade Policy Courses in the field.  These courses, which
complemented the Geneva-based trade policy courses, had been well received and would helpstrengthen and deepen the WTO's cooperation with regional institutions and academic bodies.  The
WTO had also held a series of high profile Advanced Training Courses for Senior Government
Officials covering all issues of the Doha Development Agenda.  These courses, which had been held
in all regions, were aimed at assisting developing-country Members and acceding countries to handle
the DDA, particularly in their preparations for Cancún.  Also, he wished to mention the Geneva Weekfor non-residents.  In 2003 the WTO had made considerable efforts to ensure that Geneva Week
coincided with the last scheduled TNC meeting.  This had been generally appreciated by non-WT/GC/M/81
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residents, who would otherwise not have been able to directly provide the TNC with their inputs and
be informed on where Members stood in the preparations for Cancún.  As he would be making a
separate report on the LDC work programme under item 7(c)(xiii) at the present meeting, he just
wished to say that there had been some welcome developments on issues affecting LDCs.  On the
Integrated Framework (IF), for instance, the IF Heads of Agency, which had met just a fortnight
earlier, had agreed that clear progress was being made under the IF to the benefit of LDCs.  He wasalso pleased to report that an LDC Unit had been created in February 2003 as part of the re-
established Development Division within the WTO Secretariat.  The new Division and the LDC Unit
were part of the WTO's ongoing efforts to effectively address LDC issues and concerns within the
WTO Secretariat.
192. The large number of technical assistance activities undertaken since Doha clearly represented
an important achievement.  However, this was not e nough.  There was a need to work just as hard, if
not harder, on improving quality and impact.  The tools for training and technical assistance had to becontinually adapted to meet new circumstances and requirements.  The newly established Technical
Assistance Cooperation Audit Unit would help the Secretariat to evaluate its technical assistance
activities and ensure that its programmes were resource-efficient and well targeted.  He was also
pleased to announce the launch of the Trade Policy Clinics initiative and that a pilot mission would
soon be sent to Sierra Leone.  As Members knew, hi s intention behind the Trade Policy Clinics was to
bring the WTO's technical assistance activities closer to the practical urgent needs of beneficiaries.
He wished to assure Members that the Secretaria t was committed to pursuing its future activities with
the same vigour and focus.  It was already advancing well on the Technical Assistance and Training
Plan for 2004 and would continue to tailor its products to the needs of the beneficiaries and to the next
stage of the DDA negotiations.  It would, of course, take account of any guidelines that emerged fromthe Ministerial Conference.  The main objective of the collective efforts since Doha had been to meet
the challenges of building sustainable capacity in beneficiary countries.  These challenges were vast
and ever-increasing, and the WTO would need Members' continued support to meet them.
193. The General Council took note of the statement and that there would be an opportunity for
delegations to comment on the report by the Director-General on Implementation and adequacy of
technical cooperation and capacity-building commitm ents in the Doha Ministerial Declaration
following its circulation.6
(xii) Issues affecting least-developed countries
(d) Report by the Director-General pursuant to para graph 43 of the Doha Ministerial Declaration
(e) Report by the Director-General on implementation of the commitment by Ministers to
facilitate and accelerate accessions of LDCs (WT/MIN(03)/2)
194. The Chairman suggested that Members take up the two sub-items together.  He recalled that
paragraph 43 of the Doha Ministerial Declaration called on the Director-General, following
coordination with heads of the other agencies in the Integrated Framework for Trade-Related
Technical Assistance to LDCs, to provide a full report to the Fifth Session on all issues affecting
LDCs.  Paragraph 42 of the Doha Ministerial Declaration instructed the Sub-Committee for
Least-Developed Countries to report on an agreed work programme to the General Council at its firstmeeting in 2002.  Further, paragraph 18(v) of the WTO Work Programme for LDCs adopted by the
General Council in February 2002 mandated that a status report be submitted by the Director-General
to the Fifth Session of the Ministerial Conference on the "Implementation of the Commitment by
Ministers to Facilitate and Accelerate the Accession of the LDCs".
                                                     
6 The report was subsequently circulated in WT/MIN(03)/3.WT/GC/M/81
Page 49
195. The Director-General said that the Doha Declaration placed the interests and concerns of
developing and least-developed countries at the heart of the WTO's work programme and
negotiations.  At the outset, he wished to underscore his commitment to achieving this goal, which he
was sure was shared by all Members.  His report to the Fifth Ministerial Conference on issues
affecting LDCs, as mandated by paragraph 43 of th e Doha Declaration, would be distributed shortly
after the present meeting in document WT/MIN(03)/1.  It would supplement and update the interimreport he had provided to Members in December 2002.  Members would have the opportunity to study
the report and comment on it.  He wished to briefly preview some of the highlights of this report.
Since Doha, there had been some welcome developments on issues affecting LDCs such as the
adoption of the Guidelines on LDCs' Accessions, extensions for LDCs in the TRIPS area and the
WTO Work Programme for LDCs.  Initiatives had also been taken by the WTO Secretariat to
reorganize its structure so as to give more prominence to issues of concern to LDCs.  Further to his
announcement at the General Council meeting in December 2002, he was pleased to report that anLDC Unit had been created in February 2003 as part of the re-established Development Division.  The
new Division and the LDC Unit were part of the WTO Secretariat's ongoing efforts to ensure that
LDC issues and concerns were given serious treatment within the Secretariat.
196. His report to Ministers would reflect the work being undertaken on the different elements of
the WTO Work Programme for LDCs, such as on improving market access for LDCs, prioritizingtrade-related technical assistance for LDCs and facilitating and accelerating the accession of LDCs.
In the negotiations on market access, he welcomed the initiatives announced by several Members to
reach the objective of duty- and quota-free access for LDCs set by Ministers in Doha.  In total, some
28 Members at all levels of development had now, on an autonomous basis, announced measures to
improve market access opportunities for LDCs.  As reported in the TNC recently, he was hopeful thatforward movement on the modalities for the agriculture and non-agricultural market access
negotiations would be possible in the coming week s, and that these modalities would take into
account the concerns of LDCs.  He also understood that discussions were advanced on modalities for
LDCs in the services negotiations.  On WTO training and technical assistance, priority attention
continued to be accorded to LDCs.  The WTO had stepped up its own training and technicalcooperation activities.  At the same time, to address supply-side constraints, emphasis had been given
to cooperation with other multilateral, regional and bilateral development partners.
197. In this context, he was pleased to report that at their recent meeting on 10 July, the Heads and
representatives of the six core Agencies of the Integrated Framework had welcomed the substantial
progress made in the initial phase of the IF.  To assist LDCs to remove supply-side constraints totrade, the IF Agencies had also reaffirmed their commitment to improve coordination and to step up
assistance on trade-related infrastructure, private sector development and institution-building.  The
WTO Secretariat would continue to work closely in the framework of the IF to help countries to
expand their export base and to face the adjustment needs that might arise from trade liberalization.
More important than the initiatives taken were the steps that had been taken by the LDCs themselves.
LDC Members and observers had been actively engaged in almost all areas of the DDA negotiations.
LDCs had submitted proposals on a wide range of issues, including special and differential treatment,market access, trade in services, dispute settlement and TRIPS.  LDCs had also clearly spelled out
their negotiating priorities in the Dhaka Declaration, adopted at the Second LDCs Trade Ministers'
Meeting in June 2003 (WT/L/521).  The importance of the impact of cotton subsidies on the export
potential of LDCs, for instance, had been strongly emphasized at the highest political level.  He
believed that the statement by the President of Burk ina Faso at the June meeting of the TNC marked a
new and promising phase of LDC engagement in the multilateral trading system.  The efforts and
commitment of LDCs had to be matched by a pro-development outcome in the negotiations.  The
Fifth Ministerial Conference would be an important benchmark of progress.
198. Regarding the Implementation of the Commitment by Ministers to Facilitate and Accelerate
the Accession of the LDCs, his status report on this matter had been circulated in documentWT/GC/M/81
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WT/MIN(03)/2.  The report highlighted the main features of the progress achieved in implementing
the goals set out by Ministers at Doha to accelerate the entry of LDCs into the WTO system.  As
Members were aware, these goals had been endorsed and significantly elaborated in the form of
Guidelines adopted by the General Council in December 2002.  The report on LDCs' accessions was
comprehensive and self-contained.  It highlighted the general trend of progress, as well as background
information on the state of play in individual LDCs' accessions.  With these two elements, delegationsand their Ministers would have a complete picture of where matters stood, what future priorities
should be, and what further steps were needed, for example, in the area of technical assistance.  He
wished to briefly recapitulate some of the main points which had attracted his attention.  First, the
good news was that Cambodia and Nepal seemed to be on track to be the first LDCs to join the WTO
under Article XIII procedures since the establishm ent of the organization in 1995.  He was happy to
report that only a few days earlier, the Working Party on the Accession of Cambodia had concluded
its mandate and had agreed that Cambodia's accession would be on the agenda at Cancún for formaladoption by Ministers.  He also wished to add that an important meeting had been scheduled in mid-
August for the Working Party on the Accession of  Nepal  The accession of Cambodia and Nepal, as
well as of other countries in the process of accession, would be particularly significant achievements,
and close a major gap in the WTO's credibility as a truly global organization.  No doubt, Ministers
would be commenting on this at Cancún.
199. His second observation was that this was no reason for Members to relax, because clearly
much more needed to be done.  Efforts had to continue to ensure that Samoa, currently at an advanced
stage of its accession negotiations, was able to join the WTO by the end of 2003 at the latest.
Similarly, other LDCs' accessions which had been activated in 2003 – for example, Bhutan, Cape
Verde and Sudan – now had to be accelerated and, hopefully, completed during the next couple ofyears.  He was encouraged to be ambitious only because of the successes already achieved.  Third,
there were still other accessions, like Ethiopia, Lao PDR and Yemen, which were in their initial stages
and had to receive increasing attention in 2004.  His fourth, and perhaps most important, point related
to technical assistance.  Timely and focussed technical assistance was critical at all stages of the
accession process, starting from public awareness campaigns to specific areas like WTO-relatedlegislation and enforcement mechanisms, not to speak of training of personnel in the implementation
of complicated disciplines like customs valuation, licensing, standards, TRIPS, etc.  Taken together,
all this represented the universe of capacity building.  Major steps had been taken to improve the
provision of technical assistance.  His evaluation woul d be seen separately, of course, in his report on
technical assistance.  However, his message remained that the needs were vast and increasing, and thecapacity to meet them financially and in  terms of manpower remained very limited.
200. The representative of Zambia thanked the Director-General for his very comprehensive report
on the issue of LDCs.  There was no doubt there ha d been some forward movement regarding the
appreciation of the problems affecting LDCs.  Some training was taking place which would result in
capacity-building.  However, his delegation wished to  point out that much more remained to be done.
In addition to capacity building and market access, there was a need to look seriously at the issue of
foreign debt.  This issue was referred to as one of the impediments inhibiting the economicdevelopment of many developing countries, such as Zambia.  He hoped and trusted that somewhere
this issue would be addressed.
201. The General Council took note of the statements a nd of the report  by the Director-General on
Implementation of the Commitment by Ministers to Facilitate and Accelerate the Accession of the
LDCs in WT/MIN(03)/2, and that the report would be forwarded to the Ministerial Conference.  It
also took note that there would be an opportunity for delegations to comment on the Director-
General's report on all issues affecting LDCs following its circulation.7
                                                     
7 The report was subsequently circulated in WT/MIN(03)/1.WT/GC/M/81
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(i) Updates to the 2002 Annual Reports – General Council (WT/GC/W/504);  Dispute Settlement
Body (WT/DSB/34);  Trade Policy Review Body  (WT/TPR/134);  Sectoral Councils (G/L/637,
S/C/17/Rev.1, IP/C/27/Add.1);  Committees on Trade and Development (WT/COMTD/46),
Balance-of-Payments Restrictions (WT/(BOP /R/70), Budget, Finance and Administration
((WT/BFA/66), and Regional Trade Agreements (WT/REG/12);  Committee on Trade and
Environment (WT/CTE/9);  Committees under the Plurilateral Trade Agreements (GPA/75,Job(03)/146)
202. The Chairman drew attention to the updates to the annual reports for 2002 of the Councils and
Committees under this Agenda Item.  He suggested that – exceptionally, and in the interests of
allowing Members to conclude the present meeting on schedule – the Chairpersons of these Councils
and Committees not introduce their updating reports orally at the present meeting.  He would, of
course, invite any Chairpersons who wished to draw  particular attention to some aspect of the work
carried out in their bodies, or who wished to add anything to their updating reports, to speak.
203. Mr. Hovorka (Czech Republic), Chairman of the Council for Trade in Goods, said that further
to the report of the Goods Council in G/L/637, he wish ed to draw attention to update reports that had
been circulated recently by the subsidiary bodies of that Council.  The reports of these bodies were
contained in the following documents:  Co mmittee on Customs Valuation (G/L/490/Add.1);
Committee on Import Licensing (G/L/573/Add.1);  Committee on Market Access (G/MA/149);Committee on Rules of Origin (G/L/593/Add.1);  Committee on Technical Barriers to Trade
(G/L//580/Add.1);  Committee on TRIMS (G/L/634);  Textiles Monitoring Body (G/L/632);
Committee on Anti-Dumping Practices (JOB(03)/142);  Committee on Agriculture (JOB(03)/147);
Committee on Safeguards (JOB(03)/143);  Committee on Subsidies and Countervailing Measures
(JOB(03)/144);  Committee on Sanitary and Phytosanitary Measures (JOB(03)/148);  Working Partyon State Trading Enterprises (JOB(03)/145);  and Committee of Participants on the Expansion of
Trade in Information Technology Products (G/L/577/Add.1).
204. The General Council took note of the statement by the Chairman of the Council for Trade in
Goods.
205. The Chairman then suggested that, in relation to the update report of the Committee on Trade
and Development in WT/COMTD/46, Members take up a matter raised previously by Kenya, Uganda
and Tanzania in that Committee regarding the crisis situation created by the long-term trend towards
decline in prices of primary commodities on the trade and development of developing countries which
were heavily dependent on their exports.  A recent communication from these delegations had been
circulated in document WT/GC/W/508 with a Corr.1 document in English only.
206. The representative of Kenya said that, as men tioned in part E of the report of the Committee
on Trade and Development, Kenya had submitted, on behalf also of Tanzania and Uganda, a
non-paper highlighting the need for urgent action in the WTO to deal with the crisis situation created
by the long-term trend towards decline in prices of commodities to the trade and development of these
countries which were heavily dependent on these exports (WT/COMTD/W/113).  In addition, the
paper provided an overview of the crisis situation created by decline of these prices and the adverse
impact the problem was causing to the countries concerned.  In this respect, the paper proposed awork programme for joint action to find solutions to the problems identified during the current
negotiations.  The legal basis for such work was Part IV of the GATT 1994, and in particular
Article XXXVI, which provided for devising measures designed to stabilize and improve conditions
of world markets in primary products, including meas ures designed to attain stable, equitable and
remunerative prices.  These provisions were equally complemented by GATT Article XXXVIII onjoint action which, inter alia , stated that to this end, Members might negotiate and adopt international
arrangements providing for:  improved and acceptable conditions of access to world markets of
primary products of particular interest to developing countries;  and measures designed to stabilizeWT/GC/M/81
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and improve conditions of world markets in such products, including measures designed to attain
stable, equitable and remunerative prices for exports of such products.  During consultations on this
issue held on 3 July by the Chairman of the CTD, her delegation had indicated that the co-sponsors of
this paper would be tabling a draft text on this issue for inclusion in the draft declaration that might be
adopted at the Cancún Ministerial Conference.  This text, which had been circulated in
WT/GC/W/508, would enable Ministers to take a decision that would guide the envisaged work
programme suggested in the non-paper.  Their countries looked forward to having discussions on this
draft text with a view to coming up with a definitive decision by Ministers in Cancún.
207. Many delegations who spoke thanked the delegations of Kenya, Tanzania and Uganda for the
communication in document WT/GC/W/508 and for having raised this matter.
208. The representative of India said that the communication in WT/GC/W/508 raised a very
important issue that affected many developing countries and least-developed countries, particularly
those that depended heavily on one or two export commodities.  In fact, as Kenya had pointed out,this issue had been considered earlier and was an integral part of GATT Part IV, which said clearly in
Article XXXVI:4 that "[g]iven the continued dependence of many less-developed contracting parties
on the exportation of a limited range of primary products, there is need to provide in the largest
possible measure, more favourable and acceptable conditions of access to world markets for these
products, and wherever appropriate to devise measures designed to stabilize and improve conditionsof world markets in these products, including in particular measures designed to attain stable,
equitable and remunerative prices, thus permitting an expansion of world trade and demand and a
dynamic and steady growth of the real export earnin gs of these countries so as to provide them with
expanding resources for their economic development."  This was a very essential part of the work of
the WTO, and it was important that from now on, Members began to lay emphasis on this aspect sothat results could be achieved during the present R ound itself.  India, therefore, fully supported the
proposal.
209. The representative of Paraguay said that Paraguay seconded the proposal in document
WT/GC/W/508 with vigour.  His delegation did not wish to repeat concepts already covered, but
many developing countries were extremely dependent on primary commodities and on the situationaffecting their prices.  The prices of these commodities in the world market had been going down due
to several reasons, such as subsidies applied in some countries and the distortions in the market place
which added to the difficulties these countries faced.  Paraguay, for example, was without a maritime
coast, and thus the cost of transport affected the price and export of these commodities.  If the Doha
Development Round was to merit its name, and if Ministers in Cancún were to deserve theconsideration of the whole world for their pro-development efforts, this type of initiative should be
backed, not only by the developing countries but also by the developed countries that would have the
solution to these problems in their hands.  Therefore, Paraguay supported Kenya's statement and the
proposal it had tabled together with other delegations.
210. The representative of Malaysia said that his de legation also associated itself fully with the
importance of this issue.  This was consistent with the Doha mandate, especially in relation to the
development dimension, and it had been acknowledged by all that the interests of developingcountries should constitute the heart of the Doha work programme and negotiations.  Malaysia
therefore supported the proposal.
211. The representative of Morocco said that his delegation also firmly supported this proposal for
several reasons.  One was that this was an issue of primary importance for the development of these
countries, because their economies were based, to a great extent, on the export of certain products.Because of distortions in the world trading system, due  in particular to the subsidies paid by countries
in the North, the exports of these countries were hard hit, and their economies were upset.  Thus, it
was not only a problem of exports.  It was also a social problem and a political problem.  There wasWT/GC/M/81
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destabilization, in some cases of the very government system itself.  This was why Morocco was
interested in this matter.  Cotton, for example, was certainly within the framework of the Doha
Agenda and, as correctly pointed out by Paraguay, the Doha Round would lose its spirit if Members
did not attach great importance to the concerns of these countries. The prices of these commodities,
especially cotton, were going down.  That was why his delegation wished to offer its support and
hoped that Members would look very seriously at this matter in order to find suitable and positiveresponses to the request by Kenya, Uganda and Tanzania.  His delegation also supported inclusion of
the proposed text in the proper place in the draft Ministerial text.
212. The representative of China said that, like the previous speakers, China also wished to express
its support for the proposal in document WT/GC/W7508 presented by Kenya on behalf also of
Tanzania and Uganda.  In addition to the reasons explained by the previous speakers, his delegation
wished to make a few remarks from a different angle.  Since the early 60's and 70's and up to the early
80's, the United Nations System had done a lot of work in the field of commodities in order to helpdeveloping countries that were heavily dependent on commodities to improve their situation and the
crisis with relation to commodities.  The work done by the UN system had played some role in that
regard.  However, it had to be admitted that the prices of commodities had been going steadily down.
The problem of commodity prices and their effect on developing countries had not been
fundamentally resolved.  The proposal from Kenya and the other two countries in this regard wasuseful, and China hoped that within the multilateral trading system Members could do some useful
work to help the developing countries overcome the crisis they were facing.  Members should do their
best in that regard, and China hoped that the developed countries would, in particular, contribute a
great deal.
213. The representative of Zambia said his delegation strongly supported the proposal outlined so
clearly by Kenya.  It hoped that this proposal, whic h was of concern to so many developing countries,
would be taken into account by the WTO.
214. The representative of Uganda said that the communication in WT/GC/W/508 spoke for itself.
Therefore, his delegation would not go into the details of what was already contained in the paper, but
wished to highlight a few issues.  This issue affected many developing countries and, in particular, alarge number of African countries which were dependent on one or a few commodities.  The resulting
situation undermined the efforts by the international community, and these countries themselves,
undertaken within the process of the Poverty Reduction Strategy Papers and the other positive effects
of initiatives like the JITAP initiative.  In a nutshell, the long-term trend in decline of prices of
commodities undermined the efforts aimed at stabilization.  Uganda hoped that the membershipwould consider this matter seriously and give it the due and positive response it merited, and not – as
had been the case on some other issues – merely refer the issue to other bodies.
215. The representative of Australia said that Australia -- and no doubt all other Members of the
Cairns Group -- was clearly sympathetic to the message conveyed in the communication in
WT/GC/W/508 from Kenya, Uganda and Tanzania.  Like these countries, Australia too had struggled
for many years with falling real prices of commodities and declining terms of trade against primary
producers.  This was why, in the Cairns Group, Australia had been such a strong and ardent supporterof further international trade reform through the Doha Development Agenda negotiations.  There was
little doubt that a fairer and market-oriented agri cultural trading system would provide significant
benefits to all Members, but particularly developing countries.  His delegation had hoped that
Members would have made progress with the Agri culture negotiations promised in the Uruguay
Round, which had begun in 2000 but had very quickly thereafter run into the ground.  However,Australia had been compelled to look at a broader negotiation to try to seek the reform it was so
interested in.  Members had agreed in Doha to three very important objectives – to open up markets,
to eliminate export subsidies and to substantially reduce domestic support.  If Members could achieve
those objectives, they would get to the heart of the problem that commodity producers faced.  HisWT/GC/M/81
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delegation was very happy to look at these issues.  Many of them were before Members already in the
Special Session of the Committee on Agriculture in which Members were negotiating, and the Cairns
Group was optimistic that Members could find a way forward on modalities by the time of Cancún.
216. His delegation had one element of concern, however, related to the idea of going back to
commodity agreements.  As was recognized in paragraph 10 of WT/COMTD/W/113, Members had
had plenty of experience over the past 50 years with commodity agreements.  He himself had spent alarge part of his earlier career dealing with agreements on wheat, dairy, meat, coffee, cocoa, sugar,
rubber, bauxite, copper, tin and iron and probably others.  Most of these had failed.  They had failed
because members could not artificially prop up commodity prices through stabilization agreements
with economic provisions.  While Australia was not averse to looking at different ways of dealing
with these issues, the best approach was a market-oriented one, and this was something Members
could achieve through the current negotiations.
217. The representative of Colombia welcomed the communication in WT/GC/W/508.  Colombia
had similar concerns with regard to fluctuations in commodity prices and the impact this had on
producers.  Colombia considered, like Australia, that a good part of the solution could be found in
agricultural reform that would make it possible fo r international markets in these products to work
properly.  These markets had been distorted for many years, and these distortions had led to an
international reduction in the terms of trade of developing countries which were the main exportersand producers of commodities and in the food and fisheries areas.  The problem was not just one of
international price variations having an impact on producers, but that these deteriorations in
producers' prices was not reflected in the final price paid by consumers in developed countries.  This
showed there was a major problem as well in the area of channels of distribution, where there could
be many imperfections, such as monopolies and oligopolies, which distorted international pricesignals.  These were passed on, and resulted in a situation in which producers had the full impact of
the reduction in international prices, but consumers did not see any benefit, and thus there was no
healthy effect on consumption in developed countries.  Therefore, one also had to look at this problem
from the point of view of distribution.  The example of coffee was a very clear case in point.  His
delegation wished to add this further element to the analysis in the paper, and thanked Kenya, Ugandaand Tanzania for their contribution.
218. The representative of Rwanda said that the communication in WT/GC/W/508 truly pointed
out the vulnerability of the economies of many developing countries, including also LDCs, the
economies of which were even more vulnerable since they depended very often on only one or two
products.  Deterioration in terms of trade for coffee had had an impact on all efforts made in Rwandato reduce poverty.  Thus, Rwanda welcomed the pro posal by Kenya, Uganda and Tanzania, which had
put this matter at the core of considerations in the Doha Round.
219. The representative of Indonesia supported the proposal by Kenya, Uganda and Tanzania.  All
knew that since the 1970s, developing countries had received assistance from the World Bank or other
international organizations to develop their comm odity plans.  Later, since the 1990s, developed
countries had tried to introduce a market-oriented approach, and since then commodity prices had
deteriorated and declined.  This had had a negative impact on farmers in developing countries.  Due tothe crisis situation in developing countries, Members should find a way to assist farmers in these
countries and to give a fair price to producers.  In this context his delegation supported the statement
by Colombia to the effect that the final price of these commodities remained high in developed
countries while the price to the producers decreased.  This was not fair.  His delegation supported a
decision by Ministers in Cancún on ways to address this problem.
220. The representative of the United States said that since the communication in WT/GC/W/508
had only recently been circulated, his delegation was still in the process of reviewing it, and would do
so in conjunction with the earlier submission to the CTD on commodities.  The United States wishedWT/GC/M/81
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to take this opportunity to make several prelimin ary points.  It acknowledged that commodity prices
had a significant impact on the export earnings of some developing countries.  Export subsidies,
domestic support, and market access played significant roles in the trends in world commodity prices.
Meaningful results in the agricultural negotiations on all three pillars of the negotiations would bring
substantial benefits to commodity-dependant economies.  The United States reaffirmed its continued
support for an ambitious approach to reform in  agriculture for all commodities and agricultural
regions, including such products as coffee, cocoa and jute.  His delegation knew that Members
realized it would be much easier to move in individual sectors if there was a broad-based reform effort
put under way in agriculture.  After all, these commodities were not the only ones where there were
trade distortions, and were not the only products of interest to developing countries.  At the same
time, his delegation believed it was crucial for Members to recognize some natural boundaries of the
WTO as an institution.  Prices and terms of trade for commodities were also a function of markets.
The WTO was devoted to the ideals of competition and free trade, and therefore did not see merit incontemplating arrangements that might restrict co mpetition through managing supply.  In discussing
concerns raised in the submission from Kenya, Uganda and Tanzania, Members needed to focus on
practices that were within the scope of the WTO.  That being said, the United States would embrace a
discussion of how meaningful agricultural reform for commodities from all regions of the world could
remove trade distortions and lead to more equitable, market-driven remuneration.
221. The representative of Jamaica supported the thrust of the statement by Kenya on behalf also
of Uganda and Tanzania.  There was a clear linkage between commodity dependence, state of
commodity markets, and economic prospects of many developing countries.  It was important that the
WTO addressed this issue, which would call for multi-faceted approaches and solutions.
222. The representative of Botswana thanked Kenya for piloting the proposal on behalf of the three
East African countries that were affected.  His delegation fully supported this proposal, which was
illustrative of the vulnerability that single-commodity-dependent economies were subject to.  There
were many such countries within the ACP Group.  Botswana urged the membership to lend full
support to this proposal in Cancún.
223. The representative of Japan thanked Kenya for introducing this subject.  Japan was of course
mindful of the issues raised in the proposal in WT/GC/W/508.  At the same time, since the document
had been circulated only a short while earlier, his delegation would have to study it very carefully.
His only comment at the present time was that Japan would study it from the po int of view of how the
WTO, which was committed to liberalizing trade through a market-oriented principle, could best
respond to this issue.
224. The representative of Canada said that his delegation too was in the process of reviewing the
details of the proposal.  Canada was of course concerned about the damaging effects the downward
trend of commodity prices had had on the economic and social development of developing countries.
These ran deep and hurt, but – as a preliminary comment – Canada was not sure whether instituting a
new and dedicated work programme as envisioned by the proposal was the real answer this problem
required.  Instead, his delegation believed that essentially levelling the playing field was the best
approach, and this reinforced the reasons why Members needed to act on the mandate set out at Dohain the agricultural negotiations to phase out all forms of export subsidies and substantially reduce
trade-distorting domestic support.  This was indeed at the very heart of the problem and, rather than
going around the heart of the problem, Members should attack the source of the frustration – and,
ultimately, the economic anguish – that all too many countries faced in dealing with their
commodities.  Producers should be allowed to compete with other producers, rather than being forcedto compete with the deep pockets of some treasuries.  Canada would examine this proposal, but also
hoped that in Cancún and post-Cancún, Members would live up to the spirit and the letter of the
negotiating mandate on agriculture.  If they did, they would certainly bring the kind of relief this
proposal was aimed at addressing.WT/GC/M/81
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225. The representative of Pakistan said his delegation would not go into the details of the
communication in WT/GC/W/508, since previous speakers had made a good case in the interests of
developing countries regarding this very important issue that confronted mostly the developing and
least-developed countries.  Pakistan urged all Member s to take up this issue in earnest in order to find
positive results.  In this regard, it fully supported the call to include this issue in the Cancún
Ministerial text .
226. The representative of Norway joined others in welcoming the communication in
WT/GC/W/508.  This paper helped to identify a ve ry serious problem which perhaps had not been in
the forefront when some of the negotiating positions had been formulated.  His delegation could agree
with Australia that one should perhaps be careful about starting to go into supply management
schemes.  However, it was well worth considering various aspects of this proposal.  Of course,
Norway also agreed that, in the first place, Me mbers could address the problem highlighted in the
paper through the ongoing negotiations.  In that respect, his delegation had perhaps a different anglefrom some of the comments made thus far.  Some of the problems cut across some of the negotiating
positions that were on the table.  This was a very strong indication of the sort of flexibility that needed
to be introduced into the agriculture negotiations in order to attack and deal with the real problems
Members were facing.  His delegation sometimes got the sense that the situation in agriculture was
akin to someone with a map who went out into th e terrain and, finding that the map did not fit the
terrain, said that there was something wrong with the terrain.  Members needed, instead, to look at the
map again, and his delegation was sure that in the run-up to Cancún, this would be an important part
of looking at the totality of what was on the table as far as the proposals on agriculture were
concerned.
227. The representative of Benin said his delegation supported the communication in
WT/GC/W/508.  Benin was concerned by this matter and fully recognized the concerns of the co-
sponsors.  Members had agreed to term the Doha work programme the Doha Development Agenda
and, in this context, they had to look at the question of commodity dependence very carefully.  As his
delegation had already stated in various bodies, if one looked at the list of LDCs, which had been
created in 1971, one would see that what these countries had in common was their dependence oncommodities.  In 1971 there had been only 25 countries in this category.  However, the list had now
almost doubled, to 49.  This meant that it was very important to see what had caused the deterioration
in terms of trade for commodities.  As long as the WTO did not look at the commodities file in a
serious manner, the list of least-developed countries would grow, and many countries were already
knocking on the door.  It was not a very nice club to join, but bearing in mind the situation, quite afew countries would do so, because of their serious difficulties.
228. The representative of the European Communitie s said he recognized the importance of this
issue, and certainly acknowledged that commodity-dependent countries faced genuine problems.
More particularly, he acknowledged that the single-commodity-dependent countries faced even bigger
problems.  That being said, this matter had only recently been brought to the attention of the General
Council, and his delegation did not feel Members could engage at the present meeting in a very
substantive debate on a point of such complexity and importance.  This was a complex issue, dealingas it did with very different products, markets and situations.  On a number of these products, there
were very specific preferential access provisions for a number of LDCs.  This was also part of the
equation.  There was no single, nor simple, answer.  His delegation acknowledged that a number of
these issues were being dealt with at the presen t time in the Special Session of the Committee on
Agriculture, where the Community had shown a ve ry open mind, especially with regard to the
interests of developing and least-developed countries.  Like others, such as Australia and Norway,
who had expressed strong doubts about any market-management approaches, the European
Communities had had quite a number of exclusively negative experiences in this field in the past.
This was a fact of life.  It had also to be acknowledged that solutions were only partly within the remit
of the WTO, and that one would have to look at a coherent approach that would involve also otherWT/GC/M/81
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international organizations such as the World Bank and UNCTAD.  As a matter of fact, as far as the
Communities were concerned, the matter of commodity prices should figure prominently on the
agenda of the next UNCTAD Conference.  His delegation acknowledged that there was a serious and
genuine problem, and that part of that problem c ould be addressed – and was being addressed – within
the WTO.  However, Members could not deal with all markets and all sectors in a uniform way.
There were differing situations, and this was a problem that had to be addressed in a coherent manner,also in other international organizations.
229. The representative of Bangladesh said that this was a very important issue for least-developed
countries, and many Members of the LDC group had already addressed the subject in the WTO.  The
LDCs' share in global trade had been declining.  As  all knew, it had been around three per cent in the
1960s and, according to the most recent statistics, had declined to less than one half of one per cent.
One of the main causes was the declining terms of  trade of their commodity exports.  The question
was how to address this problem.  There had been statements about reliance on market forces, but allknew that market forces in isolation might not produce the best results.  Clearly, institutions were
involved.  An institutional framework was necessary in order to allow markets to function
competitively and effectively.  In the current nego tiations on agriculture and within the WTO, it was
important that Members dealt with the problem of how to ensure that the market functioned
effectively and produced the best results.  The issue that had been raised by Kenya, Uganda andTanzania was important, and Members needed to deal with it within this organization and within its
mandate.
230. The representative of Mali said that his delegation supported the proposal and agreed that this
question be taken into account in the draft Ministerial text.
231. The representative of Kenya thanked all delegations who had supported the proposal and had
spoken to the genuine difficulties that the co-sponsors of the proposal, as well as others, faced.  Her
delegation was truly gratified by this response and hoped that as Members prepared for Cancún, this
matter would feature prominently in the draft Ministerial text.  There were three facts that could not
be ignored.  First, 50 developing countries depended on three or four commodities for more than
50 per cent of their exports.  Second, 37 of these 50 were recognized by the international financialinstitutions as heavily indebted poor countries.  Third – and many delegations had spoken to this –
although the ongoing negotiations on agriculture could indeed resolve some of the problems, the
opening of markets alone would not guarantee stability in prices.  The issue, in fact, as all knew, went
beyond Article 20 of the Agreement on Agriculture.  Fa rmers had to get a fair price, as did consumers.
Lastly, her delegation wished to re-emphasize that this was part of WTO work.  Articles XXXVI andXXXVIII of GATT 1994 made this possible.
232. The Chairman recalled that a number of delegations had pointed to the importance of the
question of commodities and the decline in their prices.  Other delegations had expressed different
views as to how to address the problems referred to in document WT/GC/W/508.  Still others had
indicated they needed more time to examine the text .  However, there was a willingness on the part of
all to examine this matter, and it would therefore be included in the consultations in the process
towards Cancún.
233. The General Council took note of the statements and that this matter would be included in the
consultations in the process towards Cancún.
234. The General Council then took note of the updating reports from WTO bodies in documents
WT/DSB/34, WT/TPR/134, G/L/637, S/C/17 /Rev.1, IP/C/27/Add.1, WT/COMTD/46,
WT/BOP/R/70, WT/BFA/66, WT/REG/12, WT/CTE/9, GPA/75 and J ob(03)/146, and also that these
reports would be forwarded to the Ministerial Conference.WT/GC/M/81
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235. The Chairman then proposed that the General Council adopt its draft report in WT/GC/W/504
updating its annual report for 2002, on the understanding that the Secretariat would make the
necessary adjustments to that report so as to include matters considered at the present meeting and the
next.   The report would then be circulated and also forwarded to the Ministerial Conference.
236. The General Council so agreed.
(f) Report by the Chairman of the Trade Negotiations Committee (TN/C/3)
and
(g) Draft Ministerial Text – Statement by the Chairman
237. The Chairman said that given the close link between the report by the Chairman of the TNC
and the item on the draft Ministerial text, and i n order to rationalize discussion on these two items,
he would suggest that delegations address both items together in their statements.
238. The Director-General, Chairman of the Trade Negotiations Committee, said that as Members
would recall, the Trade Negotiations Committee (TNC) was established by Ministers in paragraph 46
of the Doha Ministerial Declaration to supervise the overall conduct of the negotiations, under the
authority of the General Council.  The TNC was also mandated to establish appropriate negotiating
mechanisms as required and supervise the progress of the negotiations.  The TNC had met on11 occasions to carry out this mandate.  He had summarized its work in a written report which had
been circulated, on his own responsibility, in document TN/C/3.  In the report, he had listed the
reports by the Chairpersons of the bodies established by the TNC, which he was now submitting to
the General Council for subsequent transmittal to Ministers at Cancún.  He noted that the report by the
Chairman of the Negotiating Group on Market Access had been circulated in document JOB(03)/153.In addition, the report carried his own assessment, as TNC Chairman, on the state of play in each of
the areas of work under the TNC, as well as giving his overall evaluation of the situation in the
negotiations.  He reiterated his gratitude to all participants for their constructive engagement in the
work of the TNC, and also to the Chairpersons of the negotiating bodies, whose untiring efforts to
make progress in their respective areas deserved the gratitude of all.
239. As was stated in the report, progress had been made on all fronts, but overall it was still
insufficient.  And as he had said at the July meeting of the TNC, Members did not yet have a real
negotiation.  Too often negotiators had just been waiting for the other person to show his hand.
However, he was glad to say that there were some recent signs of the beginnings of real engagement,
and he firmly believed these had to be built upon.  The views he had set out in his report on both the
overall situation and, in particular, the separate areas of work, were designed to support and
complement the first draft Ministerial text (Job(03)/150), which had been circulated by the GeneralCouncil Chairman in close cooperation with himself last week.  He had attempted to identify the key
areas and priorities in the work of the next few w eeks.  This work would be aimed at filling in the
gaps – refining and completing the draft Ministerial text so that Ministers had a clear basis for action.
Members did not have much time to do this – in fact , effectively only two more weeks.  The need was
to direct all possible negotiating energy to unblocking  the main strategic issues.  All knew what these
issues were, and they were clearly apparent in the draft text.  He would be continuing to work
intensively with the General Council Chairman and delegations to facilitate the building of consensus
on a balanced and forward-looking input to Minist ers at Cancún, and he knew he could count on all
participants to do the same.
240. The Chairman said that as Members were aware, on his own responsibility as General
Council Chairman and in close cooperation with the Director-General, on 18 July he had circulated to
all Members a draft Ministerial text in document JOB(03)/150.  Subsequently, at an open-endedWT/GC/M/81
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informal Heads of Delegation (HODs) meeting on 21 July, delegations had had an opportunity to
comment informally on the text.  In introducing the draft text at that meeting, he had stressed two
elements in the cover note to it:  First, that the text was intended as a first draft of an operational text
through which Ministers at Cancún would register decisions and give guidance and instructions, as
appropriate, in the negotiations and other aspects of the work programme agreed at Doha;  second,
that the text did not purport to represent agreement in whole or in part, and was without prejudice toany delegation’s position on any issue.  He underscored that the text had been guided by, and
faithfully reflected, the mandates given at Doha and the actions required to carry them out.  It was
based on a reaffirmation of the commitments taken at Doha, including the overall timetable for the
Round.
241. The skeletal nature of the text in some areas was a reflection of the current situation, and of
how far Members still needed to go in a number of  key areas in order to fulfil the Doha mandates.
Members’ task in the few weeks remaining was to coll ectively flesh out this text in order to make it a
workable framework for action by Ministers.  The further work on this text to that end would have to
be carried out in a variety of formats, with the greatest possible transparency and inclusiveness.  In
view of the limited time that would be availabl e to Members upon their return from the summer
recess, he encouraged all delegations to be prepared to work intensively on 11 August and every day
thereafter.  He urged all delegations to be prepared to engage in real negotiations on specific keyissues, since it was clear to all from the draft text that general discussion would take Members
nowhere.  The Director-General and he had often made the point that deadlocks on substance could
not be resolved by clever drafting alone, and he hoped that, with this in mind, delegations would
review their instructions in the key areas they had to unblock.
242. In order to get started on this work, it was his and the Director-General’s intention to foresee
an informal, open-ended HODs meeting each morning immediately following the summer break.  The
first HODs meeting would be held on 11 August at 10 a.m. and would be devoted to agriculture.  This
would be followed on the morning of 12 August an d the following mornings with meetings devot0ed
to the most urgent problems where decisions were needed by Ministers in Cancún – such as non-
agricultural market access, a multilateral system of notification and registration of geographicalindications for wines and spirits, and the Singapore issues.  Members would then discuss S&D
treatment, implementation, TRIPS and public health and, finally, towards the end of the first week,
the HODs meetings would be used to discuss – but perhaps not in as systematic a way as those
mentioned previously – the remaining issues that appeared in the draft Ministerial text,.  Obviously,
he and the Director-General would be adjusting the process according to the needs and the progressobtained.  This was a dynamic process and therefore it had to be flexible.  Members would be notified
in due course of the issues to be discussed at each of these informal HODs.  The afternoons would be
free for further consultations in other formats, smaller group meetings on certain issues, and
consultations among delegations and regional groupings.  He also believed it would be useful, in order
to identify possible compromises or trade-offs, for the Chair to have confidential and direct contacts
with different delegations in "confessional" meetings which could help orient the process.
243. It was also possible that he might ask Chairpersons of relevant bodies, acting as Friends of the
Chair, to hold intensive consultations on specific aspects of certain issues and to report to the
Director-General and himself.  To ensure transparency of the process, periodic reports on all these
consultations would be made at the open-ended informal HODs meetings.  He wished to work in close
cooperation with all delegations in a collective effort to develop further the draft Ministerial text, and
on the basis of this work, to submit to Members a revised text not later than 22 August that wouldreflect the progress achieved and form the basis for further work to be undertaken by Ministers at
Cancún.  This text would be considered at a formal meeting of the General Council on 25-26 August.
In the view of the Director-General and himself,  it would be helpful for the General Council meeting
in August to be attended by Senior Officials from capitals.  There had also been suggestions that it
would be advisable that these Officials be present before the meeting of the General Council, that wasWT/GC/M/81
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to say, in the week starting on 18 August, in order to participate in this process and the decisions to be
taken on matters of vital importance.  He hoped this would give Members a clear picture of how he
and the Director-General would be conducting this process.
244. Delegations thanked the Director-General for his report as Chairman of the TNC, and the
General Council Chairman for his preliminary comments introducing the draft Ministerial text .
245. The representative of Morocco, speaking on behalf of the African Group , said that the African
Group had taken note with satisfaction of the TNC Chairman’s report, which was exhaustive, factual
and faithfully reflected where Members stood in the negotiations.  The African Group wished to thank
the Director-General for all the efforts made during the 11 meetings of the TNC.  His self-abnegation,
his open-mindedness and his efforts to try to conciliate positions had allowed Members to make some
progress, but not to everyone's satisfaction.  The Chairman of the TNC had played his role brilliantly,
and the results of the negotiations depended on the delegations themselves.  Each and every Member
should assume its responsibility for the present situ ation.  Regarding the preliminary comments by the
General Council Chairman on the draft Ministerial text, the African Group wished to thank the
Chairman for his efforts in its drafting and conception.  They were also grateful for the references in
his preliminary comments to transparency and inclus iveness, two of the three principles on which the
African Group had insisted in the informal HODs  meeting on 21 July.  The Group intended to work
with the Chairman with seriousness and responsibility.
246. An issue on which the African Group would have liked to have some clarification was the
priority to be given to the question of development.  It had to insist on this, because it was something
all members of the Group shared.  It was neither a slogan, a title nor a label.  Rather, it was a state of
mind, a commitment, a true political will, and this commitment should be reflected in the text, given
that the Doha Declaration had started with the priority of development issues.  The African Grouphoped that this wish would be taken into consideration.  It had taken note of the fact that the document
was a draft of the Ministerial text based on the D oha Declaration.  As for the way forward suggested
by the Chairman, i.e. meetings in the morning for 15 days as from 11 August, the African Group fully
agreed with this.  Regarding the sequence of meetings and the issues to be taken up, these countries
wished to recall the statements they had made concerning the importance of development.  Whetherthis was discussed at the beginning or the end of this process, what was important was that this wish
be reflected in the final draft that would be adopted by the General Council.  The African Group was
ready for the negotiations with a sense of responsibility and engagement, and with sufficient openness
to make Cancún successful.
247. The representative of Brazil expressed his delegation’s gratitude to both the Director-General
and the Chairman for the role they were playing in guiding Members towards the mid-way station of
their long journey, which was going to be Cancún.  He would prefer not, at the present meeting, to go
into the specifics of the issues, but rather to speak  a little bit about the negotiating environment and
about the way Brazil saw this process.  Members were approaching the point where they would have
to make decisions, and as they approached this point, the situation became a little less comfortable
than it had been over the past year and half.  Members would have to negotiate, they would have to
start the give-and-take process, and it was only normal that at this stage of the negotiations – referredto by some as the “crunch” time – tensions might rise.  But that was the way negotiations were carried
out and the way agreements were arrived at.  Members had to accept this as natural.  There was a
saying in Brazil to the effect that everything ende d well.  If at any given point the situation did not
look good, it was because it had not ended.  Members had to keep that in mind.
248. There were also two important elements that Members had to keep in mind for this process to
move forward – commitment and compromise.  Commitment was important because Members were
facing a long process, a process that was deferred in time and that was fragmented into different areas.
Everything had to come together at one point.  Members had a starting point, which was the DohaWT/GC/M/81
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mandate, and a finish line, which was the deadline for the negotiations.  There had been coherence at
the beginning and there had to be coherence at the end.  In the interim period, the tendency was
towards fragmentation and hard bargaining.  The only way to go through this in a harmonious way
was for Members to keep their commitments intact  and to look for the reaffirmation of these
commitments as they inched along this long road.
249. In order to do this, the second element, the spirit of compromise, had to come into play.
Compromise was essential in all negotiations and obviously, if Members committed themselves to
these negotiations, each Member had to be prepared to do its part and to move from its original
positions as much as it could without sacrificing its vital interests.  Members had to move, as the
Director-General so often reminded them.  But it should be remembered that some would have to
move more and faster than others, because in this negotiation there undeniably a strong development
bias.  So it was obvious that those who were on the developed side of the spectrum of this
organization would have – and they committed themselves to do so at Doha – to move more and tomove faster in order to allow Members to arrive at a successful conclusion.  Morocco on behalf of the
African Group had made the point about the centrality of development in this negotiation, and Brazil
could only agree in that respect.
250. There were perhaps some misunderstandings in the WTO concerning some questions related
to development.  S&D was a case in point.  He ha d been involved, together with the Chairman of the
General Council, in some interesting and difficult informal negotiations on S&D, and he had come to
a few conclusions he wished to share, because this was an essential element in this negotiation.  One
was that S&D was not about free-riding.  It was not  about unilateral concessions or trying to get
benefits without costs.  The demand for S&D stemmed from the regressive nature of some WTO
agreements.  Members had to keep this in mind at all times.  An example was the TRIPS Agreement,which imposed similar obligations on all, but benefited the developed countries most, as could be
seen, among other things, by the flow of royalties.  Similarly, the TRIMs Agreement imposed
obligations on all, but its provisions imposed a disproportionate burden on developing countries
which were net recipients of investment, and where measures which were widely used in the past by
developed countries could perhaps assist developing countries today in promoting industrialization.This was the reason Brazil attached great importance to its joint proposals with India on the
relationship between the TRIPS agreement and the Convention on Biological Diversity, and on the
need for flexibility in the TRIMs Agreement.
251. Development in truth had two dimensions.  One was retrospective – S&D and implementation
were required and were central to these negotiations because they were destined to addressshortcomings and imbalances that existed in the current WTO agreements.  Members certainly needed
meaningful advances in both areas in order to fu lfil the mandate.  But development also had to be
prospective if this was really meant to be a development Round, and this implied taking into account
the needs and concerns of all developing countries in all the areas of negotiations, as mandated in
Doha.  This was also a point Members had to keep in mind as they approached the crunch time of the
decision-making process.  Development in the WTO was identified with three areas – S&D,
implementation and the Declaration on the TRIPS Agreement and Public Health.  These were indeeddevelopment issues, but development permeated all other sectors of the negotiations.  Members
should not forget that as they discussed agriculture,  or non-agricultural market access, or services, or
the Singapore issues, or the whole package they had ahead of them, development was an essential
component in all of these negotiations.
252. Regarding the way forward, Brazil thought that the appropriate procedures were in place.
The Chairman had just outlined a game plan that was the result of consultations he had been
conducting over the past three weeks.  Brazil  fully supported it.  This was the best Members could do
for the coming weeks, and his delegation would be prep ared to participate actively in this process.  He
wished to point out that no matter how efficient the procedures might be that Members set for the nextWT/GC/M/81
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steps in the negotiations, they would not make up for a lack of progress on substance.  All knew that
the substance of these negotiations was directly linked to progress in the agricultural area, as the
Director-General himself had recognized in paragra ph 19 of his report.  Members had to keep in mind
that unless there was clear, comprehensive progress on agriculture very soon, Members might run
some risks in Cancún, because Cancún had to go beyond mere procedural or minimal results.  If
Members did not agree at Cancún on substantive modalities for the three pillars in agriculture and fornon-agricultural market access, this would create a problem of credibility and people would soon
wonder whether it would be possible to maintain th e integrity of the mandate and to respect the
deadlines all wanted to respect.  In the context of Cancún and the post-Cancún process, the element of
credibility was the most important.  Members had to believe in what they were doing and had to come
to Geneva in mid-September reinvigorated in their determination to fulfil their mandate in its entirety
and in the allotted time.  To be able to do so, whatever they achieved had to be credible, had to be
perceived by themselves and by public opinion as something that really made a difference in thisprocess.  Members should get to work, and use the short break ahead to get fresh instructions from
capitals.  They should intensify contacts among their capitals so that when delegations came back to
Geneva they could use this hard work.  The Chairman said that this process would start with meetings
in the morning, but delegations would probably be working through the night.  However, in order to
do so they had to get a boost very soon, and this boost should come in the form of concrete andsubstantive progress on the central issue of this Round, which was agriculture.
253. He was convinced that the best way to achieve the overall balance in this negotiation was to
construct it across sectors.  He did not think that by just adding sectoral balances, Members would be
in the best position, and if they agreed that agriculture was the element that would set the level of
ambition for this Round – and Brazil insisted on that – they should get clear indications sooner ratherthan later of the perspectives for these negotiations.  Members had the time, and they had the
Chairman's draft Ministerial text to work on.  Some called it a skeleton paper.  He did not like to use
this expression because it was very difficult to bring a skeleton to life, but nothing was impossible.
Members should fill in the gaps in the draft text  with meaningful decisions and should do this in
Geneva and before Cancún.  They should do as much as they could.  Of course, the main and the mostdifficult questions would certainly have to go down to the wire.  In Cancún it would be Ministers who
would have the task to create the overall balance and to take the most difficult decisions, but
delegations in Geneva had to help them do that by advancing as much as they could in Geneva.  He
urged Members to recuperate the shared vision they had displayed in Doha.  Brazil would be prepared
to do its part, and was certain that everyone would respond to the Chairman’s leadership.
254. The representative of Canada thanked the Chairman for outlining what was a very intensive
and transparent work programme for August.  As the draft text revealed, the overall level of ambition
that could be achieved in this Round remained unclear and in question, and as the Chairman had noted
in his introduction to the text, this was a reflection of the reality of the present situation and indicated
how far Members still had to go.  The Director-Gen eral had suggested that negotiations in the real
meaning of the word had yet to start.  Members’ task now was to make that gear change from a
promotion and defence national positions to trying to converge those ambitions into a position ofconsensus reflecting the WTO as a whole, and to fu lfil the mandate all had signed on to in Doha.  The
task now was to fill in those gaps and to provide Ministers in Cancún with a workable framework, not
an unworkable framework which might zap either the political will or exceed the time available to get
the kind of progress all wanted.  Cancún was not Doha, nor was it Seattle.  Cancún would come after
having launched what some would say was an historic commitment for the current Round, but it
nonetheless remained a pivotal moment in that journey.
255. Brazil had said that as Members approached the meeting in Cancún, they would require at
least two elements, commitment and compromise, a nd Canada agreed.  However, he would add two
additional elements, which were ambition and urgency – ambition to live up to that historic
commitment in Doha and urgency to live up to the kind of time line needed to get the job done.  AsWT/GC/M/81
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Members prepared to organize themselves for the work ahead, it would be useful to step back from
the negotiations and to recall the broader, big-picture goals and objectives Members had set for
themselves in Doha, and to ask three fundamental questions:  First, did they have enough ambition in
agriculture and non-agricultural market access;  second, did they have the right approach to the
development aspect of these negotiations;  and third, what else did they need to round out the package
and ensure they had the right overall balance for all Members, developing, least-developed anddeveloped.  The blunt reality regarding one of these three questions was that the level of ambition on
both agriculture and non-agricultural market access would largely define what could be achieved in
this Round.  He was not putting the other issues in a second-class category or trying to prioritize them
in terms of Canada’s interests, but rather describing the reality of the situation in black and white.  Of
the two issues, agriculture was first among equals.
256. The Director-General had spoken earlier about the need to unblock issues, and in terms of
agriculture, there were two keys in unblocking the agriculture negotiations.  The first was the issue oftrade-distorting domestic support, where meaningful progress had not been possible on the central
pivotal issue, namely, getting much bigger reductions in trade-distorting support than had been
proposed by the major agricultural spenders or indeed by the draft Ministerial text.  The second was to
be able to agree on approaches to agricultural market access that did not compromise the level of
ambition all had committed themselves to, while providing a measure of flexibility in how to improveand obtain that access.  Without some scope for flexibility where it was needed in how to improve
market access in agriculture, Canada feared that the level of ambition would suffer, and if the level of
ambition suffered in agriculture, agriculture would suffer, but the rest of the Round – if one accepted
the premise that agriculture was first among equals – would also suffer.  That was why Canada had
argued consistently, and would continue to do so, that all elements of market access, tariffs, tariffquotas, and tariff quota administration had to be addressed in tandem.
257. More ambition was also required in the non-agricultural market access negotiations.  The
elements of the Chairman of the Negotiating Group's proposed modalities paper for these
negotiations, with adjustments and maintained as a package, would allow Members to fulfil the
collective mandate from Doha.  The modalities needed to ensure that real market accessimprovements were achieved across the board.  Ambition should be reflected through the following:
(i) a simple, single harmonizing formula applied on a line-by-line basis to eliminate the extreme
discrepancies between all Members;  and (ii) a mandatory sectoral component with sectors to be
defined, including sectors of interest to developing countries.  The modalities also needed to reflect
better equity among Members.  In particular, they would need to address the large discrepancies intariffs between countries with similar levels of development.  In the non-agricultural market access
negotiations, flexibility for developing countries ha d to be incorporated in a way that enabled all
Members to fully participate in global trade.  Development, of course, was central to the agenda, and
he would suggest that progress had been achieve d not only on a number of issues, but on different
fronts.  It was true that more remained to be done, but the objective was clear, and that was to help
developing countries integrate into the global economy and for them to benefit equally from the
international trading system.
258. There had been progress, and on the difficult issues there was a context within which these
issues were operating.  For example, there had been significant increases in donor efforts to build
trade capacity.  Over US$2 billion per year was now being spent on WTO-related Trade-Related
Technical Assistance (TRTA) and US$8 billion per year in supply-side support, and the number of
activities and financial contributions continued to grow.  Coherence among the major playerscontinued to be enhanced.  LDCs were benefiting from increased market access to developed-country
markets through measures such as those taken by Canada, and earlier the Director-General had
alluded in his report to the growing number of countries that were opening their doors to products and
services from LDCs.  Increased efforts were also being made on furthering and enhancing the
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accession.  Finally, progressive work had been undertaken since Doha to identify the specific
vulnerabilities of small economies and ultimately to do something about them.  Of course, there were
also the issues of S&D treatment, implementation, and closing the deal on TRIPS and public health.
S&D obviously was a crucial one, and Members had talked about slippage, about making progress
and then perhaps falling back, which had caused some degree of frustration.  There had been a lot of
good work dedicated by the Chair, by the Friends of the Chair and indeed by fellow Ambassadors,and Members should remain optimistic on S&D and should not panic because it sometimes seemed
they had taken one step forward and two back.  This was also an issue of timing, and if other areas
were still not completed, it was perhaps understandable, since the way these issues came together in
unison was also a factor in the equation.
259. A lot of good work had been done and would not be lost.  He remained confident that if other
things moved, Members could make significant progress on the issue of S&D.  However, Canada
remained convinced that what would unleash the greatest amount of development for developingeconomies would flow from Members’ ambitions in agriculture, in non-agricultural market access and
in services market access negotiations.  Members should not lose hope.  Much remained to be done
and little time remained in which to do it, but Members could do justice to the kind of historic
commitment they had made in Doha, and could reco gnize that historic commitments would take some
sacrifice, labour and time in order to complete.  Members could still accomplish the level of progressneeded to be made in Cancún so that they could complete the Doha journey successfully.
260. The representative of India complimented the Chairman and the Director-General for the
effective leadership they had provided so far in the negotiations.  India also gratefully acknowledged
the Chairpersons of the Negotiating Groups for their energetic efforts.  He reiterated India’s
commitment to the achievement of the objectives laid down by Ministers at Doha, within thetimeframe collectively agreed upon.  As the Chairman had mentioned in the covering note to the draft
Ministerial text, the text was somewhat skeletal in nature.  Given the current state of negotiations, it
would not have been possible to go beyond this at present.  The preparatory process so far had been
marked in general by transparency and inclusiveness.  This was in line with the confirmation by
Ministers at Doha of their collective responsibility to ensure internal transparency and effectiveparticipation of all Members.  His delegation would expect that the rest of the pre-Cancún process, as
well as the process at Cancún, would be marked by the same degree of transparency and
inclusiveness.  India was confident that the draft text and attachments would be developed in such a
manner that, at the end of the process, they would fully reflect the views of all Members, and that
wherever there were divergences of views, they would be fully and faithfully expressed.  He recalledthat the General Council had taken a clear decision in this respect in February 2002.  Members had
heard the Director-General’s statement, and the Chairman had mentioned on several occasions his
resolve to ensure the transmission of a document to Ministers that was fully owned by the Members.
This was extremely reassuring.
261. 0ne significant achievement since Doha was the guidelines agreed by Members in
December 2002 to facilitate the accession of LDCs.  His delegation had been pleased to learn that
earlier that week the documents on Cambodia's accession had been agreed upon, and that work inrespect of Nepal's accession seemed to be on track for completion before Cancún.  This would be a
significant positive development for the WTO, and India looked forward to welcoming these two new
Members into the fold at Cancún.  These would be the first LDCs to accede to the organization under
Article XII of the Marrakesh Agreement establishing the WTO.  This would be an important political
signal to the outside world, and India hoped that  the accession of other LDCs, including Bhutan,
would be similarly speeded up.  Regarding development-related issues, one issue that was of
immediate relevance and had serious humanitarian consequences was the issue of giving effect to
paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health.  It was regrettable
that Members still had not addressed this issue satisfactorily.  As a compromise, most delegations
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India would like that text to be adopted unanimously before Cancún.  This would set Members on the
right path to a productive meeting at Cancún.  If the 16 December text was to be interpreted or
qualified in any manner through a Chairman's statement or otherwise, there should be adequate
discussion in the TRIPS Council and sufficient time for delegations to consider the implications.
262. His delegation had participated actively in the work relating to strengthening of S&D
provisions in the existing agreements.  Though Ministers had prescribed the deadline of July 2002,Members were not anywhere near addressing the proposals put forward by developing countries.
India attached high importance to this issue and was disappointed to note that the draft text proposed
by the Chairman did not specify a clear deadline for completion of work on S&D.  On the contrary,
the draft text seemed to envisage a possibility of work on these issues continuing for years to come.
His delegation would like to see a very clear deadline specified for completion of the work.  In line
with the mandate contained in paragraph 44 of the Doha Ministerial Declaration, India would like the
work on S&D to focus on Agreement-specific proposals with a view to addressing themmeaningfully.  Some of the cross-cutting issues could be taken up for consideration only after
Agreement-specific proposals were addressed.  Ministers at Doha had attached the utmost importance
to the implementation-related issues and concerns and had expressed their determination to find
appropriate solutions to them.  They had laid down a deadline of December 2002 to achieve this
objective.  Unfortunately, there was now the impression that Members were losing their way inaddressing this important set of issues.  The management of implementation issues – the way they had
been tossed about among the TNC, regular bodies and Friends of the Chair – failed to give his
delegation confidence in the ability of the system to deliver meaningful results.  There was a need for
some solutions before Cancún and for a clear way forward thereafter.  This should cover all issues
under paragraph 12 of the Doha Declaration as well as residual issues arising from the Decision onImplementation-Related Issues and Concerns.  His delegation noted from the report of the Chairman
of the TNC that the latter intended to hold further consultations.  These consultations should be
properly structured and carried out within a specified timeframe.  He was sure that the Director-
General would act quickly and decisively to find progress in respect of all these issues.  Paragraph 12
of the draft Ministerial text should reflect clearly the current state of play on all aspects ofimplementation issues and should suggest an effective way to move forward with a clear deadline.
263. India noted the paragraphs in the draft text on Trade, Debt and Finance and Trade and
Transfer of Technology.  His delegation was frankly disappointed with the progress of work in these
two Working Groups, which had been established at the request of developing countries.  India was
keen to move forward on the issue of Trade and Transfer of Technology on the basis of substantive
recommendations on concrete steps, including examinat ion of the need for negotiations to increase the
flow of technology to developing countries.  India hoped it would be possible to take a decision on
this at Cancún.  His delegation had noted the paragraph proposed on agriculture.  He wished only to
say that the text should reflect the current state of play and reiterate the assurance to developing
countries that their concerns would be addressed as part of core modalities.  Clearly, ambitions on
agriculture were not the same for all countries.  On non-agricultural market access negotiations,
Members had had some useful exchanges on the modalities proposed by the Chairman of theNegotiating Group.  Some aspects of these modalities were of concern to developing countries.
Members should clearly recognize that the starting point for the current Round of negotiations was
where Members had left off at the end of the Uruguay Round, since that position reflected the rights
and obligations agreed upon by all.  Any suggestion to the contrary had no legal basis and would not
be acceptable to India, or – his delegation was sure – to most other developing countries.  Hisdelegation looked forward to wo rking with the Chairman of the Negotiating Group to explore
possibilities of coming up with modalities that would do full justice to the Doha mandate and would
address the concerns of developing countries.
264. The text on services negotiations seemed to lay emphasis on deadlines in market access
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improvements in sectors and modes of export interest to developing countries, such as Mode 4.  His
delegation believed there was need for a clear political guideline from Ministers on effective
liberalization in Mode 4, including resolution of complementary regulatory issues like recognition,
administrative procedures and so on.  India attached high importance to negotiations on rule-making
under GATS.  On the Singapore issues, the Doha mandate was clear.  Negotiations on these issues
would depend on a decision at Cancún by explicit consensus on modalities.  The modalities had to besubstantive and should go beyond the elements identified in the Doha Ministerial Declaration.  These
were sensitive issues and not all Members were convinced of the need to negotiate them in the WTO.
For a considered decision on these issues, it would be absolutely essential for each Member to be fully
aware of the commitments and obligations arising from multilateral agreements and the benefits to
Member countries.  This would be possible only if Members could come up with substantive
modalities.  Statements made by some Members in the recent past would seem to prejudge what
Ministers would decide at Cancún.  Members’ task should be to do the groundwork which wouldenable Ministers to take a considered decision on these issues.  Finally, the Chairman of the TNC had
observed in his report that the aim of the Cancún Ministerial Conference was to give momentum to
the final stage of the negotiations.  His delegation looked forward to working with the General
Council Chairman, the Director-General and the memb ership in fleshing out the draft Ministerial text
so that Ministers were presented with a clear te xt that would identify areas on which decision or
further guidance would be required, and the options in each such area.
265. The representative of Colombia reaffirmed the importance Colombia placed on the
multilateral trading system and the importance of the question of trade in Colombia’s development
agenda.  The messages in this draft Ministerial text were indeed important, because the Chairman had
maintained the level of ambition that had come from the Doha Declaration.  For Colombia it wasfundamental that Members be able to go forward and have a timely conclusion of these negotiations.
Obviously, his delegation understood that for this, all Members should be able to obtain benefits and
to have trust in the process.  It should also be understood that this was a negotiation that included
many interests, and that it would have to be taken as a package that included all aspects of interest to
Members, according to their level of developmen t.  Resolution of the issue of agriculture was
fundamental for all Members.  However, it was obvious that for all Members it was fundamental to
solve the problem of agriculture.  Thus, Colombia understood that if there was significant movement
on the part of Members that were leaders in this process – countries that should cooperate to try to
find solutions to agriculture – this would prepare the path for Members to be able to complete the
draft Ministerial text in order to present it to Ministers in Cancún.  This was why his delegation foundthe further process outlined by the Chairman at the present meeting a very good one.  Colombia
would strengthen its delegation with officials from capital where this was necessary, in order that this
process might yield the best results.  His delegation had some specific comments on the draft text and
would indicate these in the respective groups.  He reiterated Colombia's intention that Cancún should
conclude with all the objectives put forward after Doha.
266. The representative of Nigeria thanked the Chairman and the Director-General for their efforts
in producing the first draft of the Ministerial text.  That text had provoked a lot of interest, and Nigeria
hoped that the comments that would be made at th e present meeting would enable the Chairman to
produce an objective draft for the consideration of the General Council, as foreseen.  He associated
his delegation with the statements by Morocco on behalf of the African Group, by India and by Brazil.
He also wished to thank Canada for its proposals regarding developing countries, and hoped that this
would be sustained by other partners.  The whole process of preparation and the actual conduct of theMinisterial Conference in Cancún should be transparent and all-inclusive.  Nigeria was highly
encouraged by the assurances the Chairman had given during the present meeting on this issue and
hoped this would be sustained after Cancún.  The final text going to Ministers should be on the
responsibility of Members and should reflect the realities on the ground at the time of the Conference.
The text should not be presumptive or anticipatory.  Ministers should be informed of the subjectswhere progress had been made and where it had not.  The impression should not be given that thereWT/GC/M/81
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had been progress on all subjects.  Areas of differences should be clearly indicated in order to give
Ministers the true picture of the situation for their necessary guidance.  Members should agree on a
clear work programme from the present until Cancún, and his delegation thanked the Chairman for
the schedule he had outlined at the present meeting.  His delegation fully supported that schedule and
hoped that it would be made available in writing.  The informal consultations could not replace the
General Council in decision-making, including the effort to develop the final text.
267. Based on the above principles, he wished to make the following proposals regarding the draft
text.  On TRIPS and public health, the language did not reflect the current reality on implementation
of paragraph 6 of the Declaration on the TRIPS Ag reement and Public Health.  Currently, there was
no decision on implementation of paragraph 6, and his delegation did not know which document the
Chairman was referring to in square brackets.  Nigeria believed that the only text which had been
discussed extensively was the 16 December 2002 text, and that this should be the basis for a decision
on this matter.  However, if a different text was contemplated, it should be tabled early for discussionand agreed to by the General Council before Cancún.  On agriculture, Members needed to agree on
the content of the document referred to in para graph 4 on the modalities for further commitments in
agriculture which Ministers would adopt in Cancún.  These modalities should address the Doha
mandate on agriculture, i.e. drastic reduction of export subsidies and of domestic support measures
that distorted world agricultural trade, as well as improvement in market access for products of exportinterest to developing countries.  Nigeria expected  that effective, meaningful and operational special
and differential treatment would be an integral part of all elements in these modalities.  The modalities
should include flexibility regarding strategic special products and a special safeguard mechanism to
address development concerns, livelihood and food security, as proposed by developing countries.
On non-agricultural market access, the language in paragraph 5 of the draft text did not reflectrealities in the Negotiating Group.  Nigeria could not accept language tending to adopt modalities for
negotiations, when the divergences existing among Members remained very wide.  The issues of less-
than-full reciprocity and S&D treatment for developing countries had not been captured, and should
be clearly stated in the next version of the draft text.  The core modalities for the negotiations
remained very controversial and it was difficult to find any semblance of convergence on them.Similarly, the issues of sectoral elimination of tariffs, the level of binding for bound and unbound
tariff lines and non-tariff barriers, among others, remained unresolved.  In Nigeria's view therefore,
paragraph 5 should report to Ministers the exact position of things in the negotiations – that there
remained a wide degree of divergence of positions on the various elements of the negotiating
modalities.  Ministers should note the level of progress attained, and urge that further work continue,while reiterating that less-than-full reciprocity and S&D treatment should be accorded to developing
countries.  In addition, the modalities to be adopted should address the reduction of tariff peaks and
tariff escalation on products of export interest to developing countries, in accordance with the
objectives of the Doha Development Agenda.
268. On services, the text should indicate that there was no comparable progress in the rules area
vis-a-vis the market access area, as well as the need to devise innovative ways to increase the
participation of and benefit to developing countries.  On extension of the protection of geographicindications (GIs) to products other than wines and spirits, as a friend of GIs and in view of the
importance to many countries of the issue of extension, his delegation supported the inclusion of GIs
extension in the draft Ministerial text.  The text in document Job(03)/150 was silent about this issue
and Nigeria felt it should be included.  On the Singapore issues, his delegation thanked the
Chairpersons of the Working Groups and the Chairm an of the Council for Trade in Goods for their
factual reports, and proposed that these reports form the basis of a report that would be forwarded to
Ministers.  As Nigeria had stated at previous meetings, each of the Singapore issues should be treated
separately on its own merits.  Therefore, each issu e should have its own modalities based on the Doha
mandate.  However, at the present time, these modalities were not being drawn up by the Chairman of
the General Council in conjunction with the Friends of  the Chair.  Any modalities to be drawn up had
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in Cancún.  Paragraphs 13 through 16 in their present form did not reflect the reality on the ground,
and therefore, Nigeria found them unacceptable.  On Electronic Commerce, his delegation fully
endorsed the text in paragraph 22, with a minor change.  It proposed that the last sentence of the
paragraph should end with the words "until our next Session".  Thus, the moratorium should be
upheld until the next Session of the Ministerial Conference.  On transparency, his delegation wished
to reiterate two points.  The first was the issue of modalities.  If it was the intention of the Chairman toforward a set of modalities to Ministers on the Singapore issues or any other issues, these should be
discussed and agreed by consensus in Geneva.  The second point was the practice of forwarding
issues to Ministers on the Chairman's own responsibility.  While Members had full confidence in the
Chairman, Nigeria was of the view that for any matte r to command respect, it should have the support
and authority of the General Council.  Each tim e the Chairman made reference to "his own
responsibility", his delegation began to wonder what had happened to the authority of the General
Council.  Such references invoked doubt and questions as to whether the process had beentransparent.
269. The representative of the European Communities recalled that his delegation had said on
previous occasions that it considered the Chairman's draft Ministerial text a useful working tool.  He
would be brief, as he had already spoken on substance both in the TNC and in the informal HODs
meeting on 21 July.  He wished to reiterate th at the Communities' aim remained to achieve
substantive results in Cancún in all major areas of the Doha Declaration.  Members would have to
establish modalities in agriculture, modalities for non-agricultural market access and modalities for
the Singapore issues, as had been mandated in the Doha Declaration.  They would have to recite a
substantive and meaningful package on S&D and implementation, and take decisions not later than
Cancún on access to medicines.  On all these issues, the Communities were committed to workinghard in order to reach a comprehensive set of decisions.  His delegation was not discouraged by the
fact that on some key issues, real negotiations had not yet gotten off the ground.  His delegation was
in the same state of mind as Brazil and Morocco in this respect.  If delegations remained committed
and if they worked hard, what mattered was the end gain and not the present stage.  With the finish
line in sight, everyone had to engage in the fina l sprint.  However, he acknowledged that the major
partners would need to set the pace, and the Communities was willing to do so, but in tandem with
others.  This was particularly the case for agriculture.  Boosted by the its recent CAP reform, the
Communities remained committed to going for the highest common denominator in Cancún.  This
could be done, provided Members could find the right equation among the three pillars and non-trade
concerns as well.
270. Some had referred to the text in document Job(03)/150 as a skeleton.  He knew that a skeleton
consisted of bones and that Members had to put flesh on it.  In the case of GIs, the bone itself had
been left out.  On non-agriculture market access, good work had been done and the Chairman of that
Negotiating Group should be complemented for producing his paper.  As in most multilateral
negotiations, the best way to solve the problem was to start complicating it.  He thought Members
were now beyond that phase and had to start simplifying.  What was needed was a simple, single
harmonizing formula which effectively addressed tariff peaks, high tariffs and tariff escalation,provided real market access and generated higher levels of binding, while providing less-than-full
reciprocity and S&D treatment, including through co mplementary, mandatory sectoral liberalizations
to developing countries.  Substantive results in both agriculture and industrial products would no
doubt pave the way for substantive results in the whole package of decisions.  The Singapore issues
were part and parcel of this package.  Members had heard the previous day that they had the clarifyingphase behind them, with hard and important work done by the various working groups.  The
Communities would help the Chairman constructively in preparing draft modalities and, as indicated
on earlier occasions, was prepared to provide the necessary comfort to developing countries as to the
scope of negotiations – and he was saying this very directly to India.  The paragraphs in the draft text
on the Singapore issues contained a kind of multiple choice.  For the Communities, there was nodoubt about the Doha mandate, which called for adopting modalities.  While he agreed that these hadWT/GC/M/81
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to be adopted by explicit consensus, it was Members' task to prepare Ministers so as to enable them to
do this in the best possible way.
271. On special differential treatment, his delegation had already intervened the previous day.  It
might be said that Members were taking two steps forward and one backwards.  Nonetheless, he was
not discouraged, but was confident in the process, in the work the Chairman was doing and in the
work the Brazil and other Friends of the Chair were doing.  The Communities agreed with theapproach outlined by the Chairman.  What was needed was the right mix between restricted and open-
ended consultations.  His delegation was very much in favour of confessionals, and would, in those
confessionals, say the truth and nothing but the truth, provided that others did the same.
272. The representative of Japan appreciated the draft Ministerial text as it reflected the Doha
Ministerial Declaration, as well as the discussions held to date in various negotiating groups and fora.
Obviously, the text still had many gaps and parts in parentheses, and that was a good assessment of
the current situation, which was that there were still divergent views where Members needed toconverge.  His delegation accepted the text as a g ood platform for discussions towards adoption of the
Declaration.  Of course, Japan understood that the many gaps were due to the existence of differences.
Members needed first to focus on trying to bridge these gaps in the coming days in important areas
like agriculture, and on market access needed to work further and harder.  He would not go into the
substance of specific items except for the Singapore issues.  The mandate given to Members on theSingapore issues in the Doha Declaration was clear, in that Ministers agreed that negotiations would
take place after Cancún.  This mandate stipulated that negotiations would be on the basis of a decision
to be taken by explicit consensus on modalities.  The draft modalities intended for Ministers to decide
on should be simple and should avoid pre-negotiation.  At the same time, Japan was well aware that
there were Members who considered that the modalit ies should include substantive notions.  Thus, in
consideration of the positions taken by some Members, if those Members felt  more comfortable with
some language – in addition to the language agreed and put down in the Doha Declaration – Japan
remained open to discussions, provided that the modalities agreed did not prejudge the outcome of the
negotiations.  Members should go forward with the work ahead, according to the process outlined by
the Chairman.  Japan was willing to engage.  Old Japanese wisdom held that any journey covering1,000 miles or only a few could begin only with the first step.  Unfortunately, Members had been at
the starting line but had not yet taken a collective first step.  His delegation urged Members to do so
now.
273. The representative of Argentina agreed with the Chairman on the stress he had placed on the
sense of urgency Members needed in this final preparatory stage for Cancún and on the programme of
work the Chairman had suggested.  His delegation was in the Chairman's hands for this work, not
only in words but also in terms of the spirit of compromise and convergence.  His delegation shared
the essence and the letter of the statements by Brazil and Canada.  In this context, he wished to
highlight a few considerations concerning the draft text and the report by the TNC Chairman,
particularly with respect to their value as instruments to carry out the job Members had before them.
The report by the Chairman of the TNC was very useful and comprehensive, and quite appropriate for
the present stage of negotiations.  Argentina appreciated its structure.  While his delegation did notagree with all the elements in the report, in genera l it was alright.  The general assessment in the last
chapter was particularly striking with regard to th e risks and vulnerabilities of the world economy, the
need to make progress in a few key areas in the next few weeks, and the diagnosis that agriculture
would be the yardstick for progress in other areas and thus had to be made.
274. However, Argentina was concerned about the cases where the report stopped being factual
and played a role that was supposed to get the negotiating process moving by trying to bring partners
closer together.  This effort was part of the responsibilities and tasks of the TNC Chairman, but it had
to be ensured that this role was carried out in a wa y that would be effective.  Insofar as Members felt
there was no bias in this effort, this role would be strengthened and would help Members moveWT/GC/M/81
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forward.  If this effort was seen as advisable and welcome, it would help.  Some examples were the
chapters on TRIPS and on trade and environment.  Regarding the contents of paragraph 30 in the
report – that negotiations on a multilateral system of notification and registration for GIs for wines
and spirits had been foreseen to be an "early harvest" item of the single undertaking – his delegation
not only shared this aspiration and would work hard to make sure that it came to fruition, but this
early harvest was already tangible and could be achieved.  It could even be achieved at the presenttime, within the framework of the Uruguay Round commitment in Article 23.4 of the TRIPS
Agreement to facilitate the protection of geograph ical indications and not to increase the level of
protection.  His delegation had some concerns about ideas of flexibility as well as of compromise
proposals mentioned in paragraphs 32 and 33 of the report.  From Argentina's point of view, all of this
would move Members away from the current provisions  of Article 23.4.  This type of wording, which
was simple, would help Members to find consensus by asking them to move towards the centre.  That
was fair enough in certain cases, but not in all cases.  At the end of the day it led to the presentation ofdemands for the extreme.  In Argentina's view, the appeal in the Director-General's report should have
been for greater respect in terms of complianc e with the commitment, rather than for greater
flexibility.  This respect or compliance would simply  mean that the multilateral system, in the first
stage, would not increase the level of protection for GIs, but rather would facilitate having that
respect.  Second, it would not increase or accumulate the rights of Members under the TRIPSAgreement.  Third, participation would be voluntary, and fourth, those who decided to participate in
the system would be able so to do within their own legal system.  In that way, Members could very
rapidly ensure that they had texts on the table th at would enable them to have the early harvest
referred to in paragraph 30 of the TNC Chairman's report.
275. A second example of this type of appeal was to be found in the chapter on Trade and
Environment.  During the work of the Committee on Trade and Environment, there had been
diverging opinions with respect to how to tackle specific concepts included in paragraph 31 of the
Doha Ministerial Declaration, such as the concept of specific trade obligations and multilateral
environmental agreements.  Thus, the reference in the report that progress had been made on the path
to reaching an understanding with respect to the mandate in paragraph 31 should be dealt withextremely cautiously.  It was not just a question of perception relating to the magnitude or the
dimension of the alleged progress made.  In the document, Members seemed to be moving towards a
more complex field.  In paragraph 46 of the report there was a very audacious, in Argentina's view,
reference to the fact that it would be necessary to  leave to one side, for the moment, differences with
respect to the concept, in order to tackle the matter of the relationship shift between specific tradeobligations and the mandate itself.  This, to a certa in extent, contradicted the preceding statement in
the report that progress had been made.  At the same time, there was the idea that Members should
temporarily leave aside the definition of the concepts.  His delegation wondered about that, because
such definitions were absolutely vital if Members were to be able to examine the relationship between
the standards of WTO rules and the specific trade commitments set out in the MEAs.  However, the
language in paragraph 46 of the TNC Chairman's report was somewhat imperative, in saying that it
would be necessary for the moment to leave aside consideration of this issue.  In making this
comment, his delegation was only trying to contribute to ensuring that this type of report helped
Members to make progress.  He was not trying to detract from the report as a whole, but it was
extremely important to deal with these aspects, a nd Argentina asked the Director-General to take this
into account.
276. Regarding the draft Ministerial text, his delegation had participated with great interest and in
a very positive manner in the informal consultations on 21 July, where some comments had been
made that the document was controversial or possibly disappointing.  For Argentina, the text was
neither disappointing nor controversial.  It was a very valid and valuable text.  It would certainly help
Members in their work, and Argentina would have no objection to using this text as a basis for what
Members would have to achieve.  There had been some differences of opinion with respect to changesin the order of the paragraphs in the text, but Argentina saw no problem with those changes.WT/GC/M/81
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Regarding the possible inclusion of specific matters, Argentina would have no difficulty in doing this,
but these would have to be part of a very extensive list of topics included under the overall umbrella
of implementation, although they were not necessarily directly implementation matters.  His
delegation would not have objections to including dates in the draft text, in particular in paragraph 4
on agriculture.  Argentina understood that time was necessary to prepare the lists, and therefore, since
a deadline had been set out in the first paragraph, which was 1 January 2005, there was no questionthat if Members moved back the dates they had elsewhere, they would nonetheless have an absolute
deadline of 1 January 2005.  Argentina also went along with what certain developing countries had
said with respect to the strengthening of ce rtain issues of specific interest to them.
277. The representative of Switzerland underlined what the Chairman had put in the introduction
to the draft Ministerial text and what he had said in introducing it at the present meeting.  This first
draft was an operational text, and he wished to underline the word "operational", because it was time
that Members moved into an operational mode in the preparations for Cancún.  His delegation agreedfully that this first draft was a reflection of the reality of the present situation.  However, like many
other delegations, Switzerland had serious concerns over the reality shown by the TNC Chairman's
report and the draft text, since that reality was not what it should be at roughly one month prior to
Cancún.  Therefore, the Chairman had the entire support of his delegation, with a view to proceeding
along the lines he had outlined.  It was incumbent on the Members, and their responsibility, to followthat process as closely as possible.  This wa s the appropriate and only approach, and the draft
Ministerial text was the proper instrument to permit Members to make progress.  Regarding that text,
three types of issues needed to be dealt with in the near future.  First, a package of issues, which
included agriculture, non-agricultural market access and the Singapore issues.  Agriculture, because
all had to recognize that this was unfinished business of the Uruguay Round and that serious work hadto be done.  Non-agricultural market access, because it was the core sector of the WTO.  It was a
sector which represented over 80 per cent of all trade and was directly challenged by the proliferation
of free-trade agreements, and therefore it went to the heart of the WTO system based on most-
favoured-nation treatment.  The Singapore issues, because basically – and he wished to stress this –
these were directly related to market access.  Trade facilitation, government procurement and evencompetition and investment were directly related to market access.  Therefore, this kind of package of
issues had a common type of character.
278. Second, there were issues related to the development dimension – S&D, implementation, and
TRIPS and public health.  It would be a very serious situation if Members were not to take into
account the enormous work undertaken both by the Chairman and the Director-General, as well as bythe Friends of the Chair on these various issues.  The Chairman had succeeded in already providing
some possibility of concrete results, and it would be unreasonable not to try to build on that.  Finally,
there was a third package, which was the whole package of the specific issues mentioned in the draft
text.  Some issues were important for some delegations and not for others.  For example, regarding
services, Switzerland would defend the view that during the operational phase, the text included in the
draft text could be improved.  His delegation would also raise again the question of GIs, but would try
to do so in an operational way.  Switzerland was pleased that the paragraph on accession in the drafttext would lead to a formal political confirmation by Ministers of the importance they gave to the
guidelines to facilitate the accession of LDCs.  Although the text might appear to be a repetition, it
was essential to provide political confirmation.  It was hoped that the same kind of political initiative
and confirmation by Ministers would be forthcoming regarding the granting of observer status for the
secretariats of multilateral environmental agreements throughout the negotiations.  That would also bea proper move in order to improve and to conclude the draft text.
279. The representative of China said that with rega rd to the state of play of the negotiations and
its position on some issues, his delegation had made a statement at the TNC meeting and he would not
repeat it.  In the preface to the draft Ministerial text, the Chairman had stated that the text did not
purport to represent agreement in whole or in part.  With that understanding, and while his delegationWT/GC/M/81
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was still awaiting official instructions and substa ntive views from capital, he wished to make the
following preliminary and very general comments on the draft, as well as on its further evolution
during the remaining preparatory process.  China's concrete input on the specifics would be made
available when Members came to the drafting stage.  China agreed with the Chairman and the
Director-General that as a skeleton, the draft text was a reflection of the reality of the present
situation, both in the area of negotiations and in other areas of work as mandated by the Doha
Declaration.  Substantively, there might have been  no way for the Chairman to turn out a different
text, because there was simply a lack of  progress.  This was exactly the situation as described by a
traditional Chinese saying that "without necessary ingredients it would be impossible for a clever
housewife to prepare a nice meal".  However, his delegation could accept the draft text as a start for
further work.
280. On the structure of the draft text, his delegation had noted that it covered all of the elements
that appeared in the check-list prepared by the Secretariat.  However, there was still room for
necessary adjustments and additions.  An example would be to give priority in the draft text to the
three priority areas of TRIPS and public health, S&D and implementation, which were of great
concern to the majority of developing Members.  In addition, the text needed to reemphasize and
further elaborate on the development dimension of the Doha Development Agenda.  Development of
the developing and least-developed Members was at the heart of the current Round of negotiations.This should not merely be given lip-service, but be translated into specific policy measures by
Members, particularly the developed ones, and more importantly, be translated into binding rules in
the multilateral trading system.  In the next draft text, there was a need to reconfirm Members'
commitment to the developmental aspect of their wo rk and to reiterate their determination, dedication
and political will to succeed and to develop the relevant spirit of the Doha Ministerial Declaration.This spirit would certainly have to be reflected specifically in each and every part of the text on
specific issues.  After having recognized the shortage of necessary results and progress, particularly in
the areas of negotiations, Members should introduce in the draft text a brief but objective assessment
– an analysis of the situation they faced, the reasons behind their failures and the implications of the
continued existence of these failures on the multilateral trading system as well as on the worldeconomy, and on the economy of the developing-country Members in particular.  Members should
also draw lessons from these failures, so as to he lp them address the problems involved and push the
negotiations forward.  The absence of  such an assessment or analysis would be a big lacuna in the
text, and it would be very difficult for Members to make substantive progress in their future work.
Members could not afford to continue to repeat these failures if they really wanted the negotiations to
conclude successfully before 1 January 2005.
281. The Doha Ministerial Declaration confirmed the extensive market-access commitments made
by the recently acceded Members upon their accession, and their contribution to the strengthening of
the multilateral trading system.  His delegation was somewhat relieved to note that more and more
Members had acknowledged the necessity of taking this factor into serious account in this Round of
negotiations.  It was China's belief that this sentiment should be duly reflected in the draft text and
turned into practice in the specific negotiations.  China had noted that by using words such as "we
adopt" or "we decide" in the text, though in brackets, the Chairman and the Director-General had
intentionally adopted an optimistic approach in the draft in dealing with most, if not all, of the
pending issues on which Members still held seriously divergent views.  His delegation fully
understood the intention in doing so, with the hope of harvesting as much as possible in Cancún.
However, China wondered whether this intention could be realized on each and every issue underdeliberation and negotiations, since Members were too far away from each other to close the gaps on
almost all the issues, given how close the Ministerial Conference was.  In order to put things on a
more realistic and neutral basis, it might be more appropriate not to use such affirmative expressions.
One could probably just leave simple brackets to be filled in the future, without any oriented
indications.WT/GC/M/81
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282. Time was very limited before Cancún, and much still remained to be done for the preparation
and for the eventual fruitful conclusion of the Conference.  As the Chairman had indicated in his
preface to the draft text, the task ahead before Cancún wa s to fill in the gaps in this draft text so that it
became a workable framework for action by Ministers.  This certainly was no easy job.  China was
totally devoted to the objectives of the Doha Development Agenda and looked forward to joining in a
constructive manner the intensified consultations under the Chairman's guidance after the summerbreak, and would do its utmost at the level of the General Council to make the work of Ministers at
Cancún as easy as possible.  Last but not least, his delegation had also taken note of the Chairman's
statement in his preface to the draft text, that the work would continue in a transparent and inclusive
way.  The implementation of this statement in full and throughout the preparatory process of the
Conference was of paramount importance to the developing-country Members, especially to the small
delegations.  It was also an important guarantee for the real success of the Conference.  It was China's
strong request that these principles for the preparatory stage continue to be abided by in the conduct ofconsultations and negotiations at the Conference itself.
283. The representative of the United States said that as Members approached this crucial period,
many had emphasized the need for leadership on the part of the major players in the negotiations.  His
delegation agreed with that, although he would throw the net a bit wider than some as to what
constituted that leadership.  There were quite a number of Members that had to play a leadership roleas the negotiations reached the point they were reaching.  His delegation had outlined at the TNC
meeting its views on what needed to be done between the present and Cancún, and did not have
anything further to add to that.  Members needed to get past repeating their positions and to start
negotiating their positions.  The draft Ministerial text provided a solid basis for Members' work.  It
would be the basis for moving forward in the weeks ahead.  In fact, Members had already seenevidence of work to add more substance to the text.  The United States expected to use the text to
enable Ministers in Cancún to establish ambitious guideposts for the post-Cancún negotiations, in
order to successfully conclude on schedule at the end of 2004.  The United States wished to add just
one point to what had already been provided through the text by the Chairman.  This was that in the
final text, Members needed to include more about the post-Cancún work programme.  His delegationwas ready to roll up its sleeves and get to work.
284. The representative of Bangladesh, speaking on behalf of the LDCs
, said that the TNC
Chairman's report was balanced and correctly reflected the state of play.  With regard to the process
for work on the draft Ministerial text, Bangladesh supported the Chairman's reference to the principles
of transparency and inclusiveness.  Any consultations that might be convened prior to Cancún shouldbe open-ended.  The next draft text should contain the views expressed by the membership at the
present meeting and in subsequent consultations.  Many delegations had emphasized that Ministers at
Cancún should not be burdened with an overloaded agenda.  Ministers had to be given a text that
required a minimum of attention, and only on key issues.  This only reinforced the need to work out a
detailed, agreed text in Geneva before transmitting it to Cancún.  His delegation recognized the
Chairman's desire to push forward on issues, but th is should not result in an unbalanced treatment of
the subjects.  Where there were wide divergences, such as in agriculture, these could not be glossedover.  On the other hand, where there was clear c onvergence, such as on LDC-specific issues, these
had not been referred to adequately in the draft text.  On S&D and implementation issues, the draft
was devoid of a clear direction.  Members had missed several deadlines to resolve core issues.  The
fact that they had not been able to find an appropriate package on S&D and implementation issues
was a serious blow to all.  It would appear that Members needed a definitive mandate from Cancúnfor issues that remained unresolved at that stage.
285. On the other hand, despite wide divergences on the Singapore issues, the text envisaged
concrete decisions on all four issues.  Each of the Singapore issues had a separate identity and merit.WT/GC/M/81
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The LDC Group had expressed its views through the Dhaka Declaration.8  On services, the LDC
modalities had not been referred to.  This was a disappointment for the LDC Group, as these
modalities were the basis for LDCs' participation in the service negotiations, and without their
adoption, the LDC Group would find it difficult to participate effectively.  The paragraph in the draft
Ministerial text on LDCs was hardly inspirational, as it did not contain any direction or commitment
in favour of the LDCs.  Earlier in the present m eeting, the Director-General, in his report under the
agenda item on issues affecting least-developed countries,9 had highlighted many positive elements
which the LDCs deeply appreciated.  There had been forward movement, but much more remained to
be done.  For instance, in the Doha Declaration the membership had expressed a commitment to the
objective of providing LDCs duty-free and quote-free market access, which the Director-General had
also referred to.  Some Members had come forward with generous offers.  There was a need for
forward movement in this area, at least to demonstrate political will.  Technical assistance had been
mentioned, but the core demand of LDCs in improving the nature of technical assistance – to diversify
their production and export base – had not been referr ed to.  With regard to the Integrated Framework
(IF), the core agencies had been asked to explore its enhancement and to address supply-side issues of
LDCs.  The text was silent on this.  The IF had once again been endorsed as a viable model for LDCs'
development, but these countries were yet to see success stories emerging out of it.  However, there
had been positive developments, and the LDCs looked  forward to continuing their engagement in this
process.  The IF could be a viable model for LD Cs' development only if it addressed the fundamental
needs of the LDCs to effectively participate in wo rld trade.  The issues affecting LDCs had to be
adequately reflected in the draft Ministerial text.
286. Since 1995, Members had been adopting policies and programmes to help the LDCs.  Despite
all this, the LDCs' share in world trade was decreasing.  Members needed to demonstrate the positiveimpact of their policies with concrete success stories.  This Round of negotiations had to reverse the
marginalization of LDCs in world trade.  The LD Cs were committed to strengthening the multilateral
trading regime, but needed to be given a chance to integrate into the global economy.  Last but not
least, the draft had to show how far the development dimensions of the Doha work programme had
been achieved.  This had been referred to by many delegations.  The LDC Group wished to reassurethe Chairman of its full cooperation in his work to make Cancún a success.
287. The representative of Paraguay supported for the action the Chairman had undertaken at this
crucial stage in the multilateral negotiations.  Para guay had confidence in the Chairman's ability and
leadership at this critical juncture, and acknowledged the efforts made by the Director-General and the
Chairpersons of the various WTO bodies that were presenting their reports at the present meeting.For Paraguay, the strengthening of the multilateral trading system was of the utmost importance,
because it was Paraguay's intention to achieve freer,  fairer and more equitable trade so that it could
participate fully therein.  In accordance with these principles, Paraguay considered that the Doha
Development Agenda was a valid instrument.  Thus, Paraguay had hopes from, and was committed to,
fulfilling what had been agreed at the Ministerial level.  Its hopes and commitment were that
Members would comply with the Doha mandate and de adlines.  It was absolutely necessary to meet
the deadlines for all the negotiations in order to maintain the credibility of the WTO process.  For
Paraguay, agriculture was at the centre of the negotiations.  As a member of the Cairns Group, it
considered that the level of ambition of the modalities for agriculture, in terms of percentages and
timeframes for liberalization, would determine the level of ambition and the expectations of progress
in all the negotiations in the Round.  This position responded to the particular needs of all Members,
because in the final instance, Members' ambition was to liberalize trade in all sectors.
288. Paraguay remained determined that this Round of negotiations would achieve the objective of
establishing a fair and market-oriented agricultural trading system in which all countries benefited
                                                     
8 Adopted at the Second LDC Trade Ministers' Meeting in Dhaka, Bangladesh, 31 May to 2 June 2003.
9 Item 7 C (xii) (a).WT/GC/M/81
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from the expansion afforded by the global trading system.  The continuing imbalances and distortions
in trade in agricultural products had to be remedied  in the short term, so that the substantial reform
envisaged became a reality that could be achieved, and not a utopian dream.  For this reason, balance
in the negotiations as a whole had been the concept taken into account by Ministers when they
approved the mandate with the single undertaking.  Paraguay accorded the utmost importance to
agriculture, because its economy depended to a large extent on agricultural exports, and the currenttariff escalation prevented satisfactory development of the industrial sector.  This made it essential to
move ahead with the three pillars – elimination of subsidies, opening of markets, and domestic
support that did not distort trade.  Paraguay had stated its position and its expectations regarding S&D
treatment earlier in the present meeting.
289. On small economies, the objective of the mandate adopted by Ministers in Doha, namely, "to
frame responses to the trade-related issues identified for the fuller integration of small, vulnerable
economies into the multilateral trading system", would continue to receive strong support from
Paraguay.  The reaffirmation of Ministers' commitment to the Work Programme on Small Economies
at the Fifth Session was of extreme importance.  He noted that Paraguay met the requirements for
being considered a "small economy" – it had a vulnerable economy and was a land-locked developing
country, with the disadvantages this entailed, whic h decreased its competitiveness in international
trade.  Market access for non-agricultural products should receive the highest priority because itrepresented an opportunity for integration into the multilateral trading system and promoted the
development of industry, services and the creati on of jobs.  His delegation therefore supported a
global vision of the balance for market access for agricultural products, market access for non-
agricultural products, and market access for services, establishing positive links, because it had
consistent aims for all of these.  Paraguay had taken an active part in the negotiations on trade inservices.  It had presented initial requests and, with great effort and despite the fact that it was not an
exporter but rather an importer of services, it had met the deadlines and presented its initial offers
within the period foreseen.  Paraguay was ready to meet the challenges and tackle the reforms in order
to be consistent and make progress in developing fair and equitable trade with genuine opportunities
for all.  This was Paraguay's positive commitment in  the negotiating process in relation to the single
undertaking.  With regard to trade in services, his delegation was greatly concerned at the lack of
progress on horizontal rules, particularly regarding emergency safeguard measures and subsidies.  The
lack of clear and transparent mechanisms prevented the liberalization of trade.
290. At previous meetings Paraguay had expressed its point of view on the question of trade
facilitation and had noted that the Doha mandate was to review, clarify and improve relevant aspectsof Articles V, VIII and X of the GATT 1994.  Th is would allow many developing countries whose
geographical position was similar to Paraguay's – a landlocked developing country – to integrate into
the multilateral trading system more rapidly and to enhance their development.  This was why
Paraguay supported the proposal that the Fifth Session in Cancún should decide on the dates for
commencing negotiations on this issue, before the end of 2003.  At the same time, the support and
cooperation of other specialized international organizations should be sought in this task, for example,
the World Bank, the IMF, the World Customs Organization, UNCTAD and others, so as to start toidentify and assess technical assistance and capacity- building needs in this respect.  The text on the
Dispute Settlement Understanding (DSU) presented by the Chairperson of the DSU constituted a basis
for discussion.  Nevertheless, Paraguay considered that some substantive elements should be taken
into account, for example, improving access to the dis pute settlement system by developing countries.
In this context, in September 2002 his delegation had submitted a proposal, although Members hadnot had an opportunity to discuss it sufficiently.  Paraguay supported transparency in complying with
the rules and timeframes, but above all wished to see a dispute settlement mechanism that was fair
and balanced regarding rights and obligations.  Thus, it was ready to continue working on all the
proposals on the negotiating table, as proposed by the Chairman of the General Council under item 6
of the present meeting's agenda.WT/GC/M/81
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291. One subject of concern to Paraguay was the proliferation of mini-Ministerial meetings that
discriminated against countries such as Paraguay which had little international influence and were
highly vulnerable.  The negotiations should be transparent and, above all, the credibility of the
capacity of WTO Members in Geneva to reach sati sfactory feasible results in the multilateral
negotiations should not continue to be diminished.  In Doha, Ministers gave the WTO an important
new negotiating mandate, perhaps the most important for countries such as Paraguay, becausedevelopment and the interests of developing countries had been placed at the centre of the work, and
this had been reflected in the documents.  Paraguay hoped that this commitment would be respected.
The key to success in Doha had been that Ministers recognized it was urgent to achieve solidarity in
view of the dangerous economic and political uncertainties.  A negotiating mandate for agriculture
had therefore been agreed, as had also been done for other important sectors such as non-agricultural
products, services, and S&D treatment, inter alia .  The Fourth Session of the Ministerial Conference
had put an end to the loss of dynamism and lack of confidence caused by Seattle two years earlier.The fear then and the fear now concerned the credibility of the multilateral trading system.  It was
extremely important not to experience such frustration once again.  Members should not lose sight of
the purpose of the Fifth Session.  It was not to conclude the negotiations – the deadline for that was
2004 – but in Cancún Members should reach a level of progress that, above all, took into account the
needs of developing countries, as prescribed by the Doha Ministerial mandate.  Members had beforethem an opportunity to improve the terms of trade and to send a positive signal to the world and its
peoples.  This opportunity was provided by the Doha Ministerial Declaration, based on the following
three elements:  (1) the objective of the Doha Round was development;  (2) there was a high level of
ambition, founded on the global balance of negotiations;  and (3) there was a single undertaking to
ensure that all Members' interests were taken into account.
292. The representative of the Czech Republic said that his delegation could understand what the
TNC Chairman had meant when he had said that Members had not yet engaged in real negotiation.
Quite often, Members had been too inward-oriented, focussing on their own interests and concerns
without making a genuine effort to table compromise proposals. This would have to change.
Members had to start working together with a view  to reconciling divergent positions, searching for
meeting points and preparing for decisions to be taken by Ministers at Cancún.  This was not to say,
however, that nothing had happened to date.  On the contrary, a great deal of ground had been covered
in a number of negotiating and working groups.  In fact, never in the past had Members gone such a
long way to clarify the issues on the table and to enable all delegations to understand them better,
assess their eventual implications and participate ac tively in the negotiating process.  Regarding the
draft Ministerial text, he wished to thank the Chairman and the Director-General for the very
professional job they had both done to prepare this text.  His delegation recognized that this must have
been an extremely difficult and thankless task, given the circumstances and the divergent positions on
a large number of issues.  However, the utmost had been done to maintain the high level of ambition
set by the Doha Ministerial Conference.
293. The text was clearly just a first draft.  It was a starting point for the process at the end of
which Members should have something on the basis of which Ministers could carry out theirresponsibilities.  Members should be looking for a product for which all could feel a sense of
ownership, which was in line with the agreed parameters of the single undertaking, and which was
manageable and, to the extent necessary, also negotiable.  What Members now had was just a skeleton
of that kind of text.  The draft text was somewhat  shorter than all would have wished, but this was
where Members found themselves at the present point in the preparations for Cancún.  The text didreflect a reality, and all had to make the necessary efforts to meet the challenges resulting therefrom.
On agriculture, many had talked about this issue and its importance for success in Cancún.  His
delegation hoped that all Members would be equally prepared to contribute.  In practice, it required
that Members look not just at what others did.  They had to be prepared to bring to the table also their
own policies and practices.  Additional effort was needed from all.  Moreover, any new commitmentshad to be made in an equitable manner and balanced against non-trade concerns.  He was making thisWT/GC/M/81
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comment in reaction to those who had called for development-related issues to be reflected at the top
of the draft text.  His delegation could fully understand the rationale behind this demand, and could
also appreciate that for each Member some issues were more important than others.  However, his
delegation would caution against too schematic approaches.  For the Czech Republic, the Doha
Development Round was not just about implementation issues, S&D treatment, technical assistance
and capacity building.  The whole Round was about development.  The development dimension wascomprehensively included in each and every issue, be it in the area of market access or rule-making.
294. Regarding TRIPS and public health, his delegation hoped there would be an agreement on
this issue before Cancún and as son as possible, and was ready to contribute with a view to providing
the level of comfort some Members were still looking for.  Concerning paragraph 12(b)
implementation issues, like many others, his delegation had been surprised that in this specific area,
the approach taken in the draft text lacked a sort of consistency.  It was also particularly concerned
that the text was drafted in a way that did not foresee any possibility of an agreement on at least someof the other issues in question.  His delegation attached particular importance to one of these, namely,
the extension of the additional protection of geographical indications to products other than wines and
spirits, and he wished to place on record the Czech Republic's deep dissatisfaction with the manner in
which this issue had been treated in the text.  Regarding the way forward, his delegation could go
along with the suggestions made by the Chairman.  To be successful, Members needed to have aprocess which was not only credible, transparent and inclusive, but which was also efficient and
capable of producing concrete results.  In this respect, his delegation counted on the Chairman as well
as the Director-General.  Both had the Czech Republic's full confidence, and his delegation looked
forward to working with the Chairman and other Members once work resumed after the summer
recess.
295. The representative of Korea thanked all the Chairs of the negotiating groups and other
subsidiary bodies who had tried very hard to fulfil  the Doha mandates.  For Korea, the first draft
operational text was a real reality check.  Members had just not been able to make sufficient progress,
and they should not be satisfied with the current state of play that the Chairman could only produce a
less than skeleton paper due to this lack of progress.  They should be disappointed that they hadmissed deadlines set in Doha.  It was only by facing up to this reality that Members could adjust their
expectations and change their approach to conducting the negotiations.  If Members had more
truthfully adhered to the spirit of the compromise in Doha, they would be farther along than a less
than skeleton paper at the present stage.  They would have had a substantive text with possible trade-
offs for their capitals to reflect on over the summer break, and they would come back ready for thefinal stretch before Cancún.  Instead, Members had a text that in many areas did not even have any
bones upon which to place flesh.  There were certain areas where Members were essentially back to
square one.  The question was what to do now.  In golf, when one did not do well, one went back to
the basics.  Members needed to go back to the basics, and to ask themselves three basic questions –
why they were here in the WTO, how multilateral trade negotiations took place, and what they were
here to negotiate.
296. On the first question, the WTO was a multilateral, intergovernmental organization whose
purpose was to negotiate multilateral trading rules which created an environment conducive to free
and open trade among its Members.  Countries were here because all agreed with certain basic
premises.  They were here because they knew that a multilateral solution was better than bilateral or
regional solutions.  They were here because they knew that enhanced market access and trade
liberalization benefited all countries, developed- and developing-country Members alike.  They alsoknew that the principle of non-discrimination was the only path for accomplishing their market-access
goals.  To Korea, it was a telling sign that virt ually every trading entity on the planet was either
currently a WTO Member or trying to become one.  It was very important that Members not lose sight
of the fact that first and foremost the core busine ss of this organization was opening markets to trade.
All wanted to contribute to the cause of development, but the way to do this was through expandingWT/GC/M/81
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trading opportunities.  This was the essential character of this organization, and why countries were
here.  Regarding the second question, multilateral trade negotiations were constrained first and
foremost by the political realities faced by individual Members.  No responsible government could
sign onto an agreement under which it would be a net loser.  All had their own sensitive areas.
Members needed to understand that the sensitive area of their trading partners was not just a problem
for those trading partners, but also a problem for themselves, because they could not accomplish theirnegotiating goals without fairly addressing these sensitivities.  Since the early GATT days, it had been
the willingness to show flexibility, to compromise and to make trade-offs in pursuit of an overall
balanced package which everybody could sign on to that had been the crucial element for Members'
success.  As in commercial transactions, so too in multilateral trade negotiations, agreement was
reached through a willingness to compromise.  Members needed to ask themselves whether this
willingness was present in these negotiations.
297. Members were here to negotiate the Doha mandate.  Since the very beginning, virtually every
Member had at one point or another attempted to interpret the meaning and spirit of the overall Doha
compromise to its own advantage.  He asked where this had gotten Members.  In far too many areas,
they were back to square one.  If instead, they had stuck to a fair, truthful, plain and honest reading of
the Doha Declaration they would be cruising into  Cancún on a wave of success.  Members needed to
go back to the spirit of the original compromise and fairly and honestly put a deal together.  EveryMember had to agree on every issue.  The only way these consensus-based, multi-party, multi-issue
negotiations could succeed was if Members approached them from the perspective of the entire
package, and not an individual area.  He asked what lessons could be drawn from these three basic
fundamentals for going forward.  By understanding why they were here, Members could stick to their
core business.  Their main job was to open markets to trade.  It was through doing this that they couldfacilitate the development of all Members.  By sticking to their core business, Members could
accomplish many of their development goals.  Increased market access helped facilitate trade between
developed and developing countries, but also among  developing countries.  In this way, enhanced
trade contributed to the development of Members' economies.
298. By understanding how multilateral trade negotiations worked, Members could make a priority
of addressing other Members' political realities.  No matter how much Members might wish
otherwise, these were the constraints they were operating under.  There was a very real risk of
Members' excessive ambition backfiring, producing a lesser result than if a more realistic approach
were adopted.  On agriculture, flexibility for sensitive products should be a key element of the
modalities, because in the absence of such flexibility, it was simply not possible to meet the mandateof considering non-trade concerns and S&D treatment.  On non-agricultural market access, the
challenge was to adjust the proposed modalities so that Members could fulfil a high level of ambition
while accommodating the sensitivities faced by each Member.  A single tariff reduction formula with
a sufficiently low coefficient for all Members, combined with exceptions for a limited range of
sensitive products, could do the job.  By understanding what they were here to negotiate, Members
knew they needed to have an overall perspective on the negotiations.  The only way Members could
be ambitious with respect to the Doha Development Agenda negotiations as a whole, was for each tolet go of being overly ambitious in any single area.  At the present stage in the negotiations, every
issue was key, and therefore Members should be prepared to make trade-offs in the interest of an
overall balanced result.  It was true that agriculture was important, but it was just part of the package.
Non-agricultural market access, services and – for Members like Korea – real progress on the
Singapore issues were the keys to being able to  show the necessary flexibility in other areas.
Although the draft text envisaged adopting modalities for agriculture and non-agricultural market
access, there was a multiple choice of whether to do so for the Singapore issues.  This had not been
the agreement in Doha.  In Doha, Members had made the explicit commitment to adopt modalities.
The only remaining question was what these modalities would be.WT/GC/M/81
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299. Regarding the way forward, his delegation could go along with the work programme laid out
by the Chairman, as this was the only realistic way to proceed.  However, this alone was not
sufficient, and Members had to do more.  Korea welcomed that a second draft text would be produced
not later than 22 August, but that could not be the end of Members' efforts.  The second draft planned
for late August would simply not provide a sufficiently advanced basis.  If Members stopped at this
text, they might be taking a huge gamble, placing a nearly impossible burden on Ministers to resolvein a few days what delegation in Geneva had not been able to resolve for a year and a half.  The issues
to be decided were simply too complex, too numerous and too economically significant to be decided
at the last minute in Cancún.  As his delegation had said on an earlier occasion, Members could not
afford to have any surprises at Cancún.  The Ministerial Conference essentially needed to be a
scripted event.  Members were no longer operating under the same assumptions as in the GATT days.
In this sense, they should do everything they could to tackle the difficult issues here in Geneva, out of
the political spotlight.  If the thorniest issues were  left for Ministers in Cancún to resolve, there was a
very real risk that the Fifth Session would not succeed.  Members had to use every remaining moment
to make as much progress as possible in order to give Cancún the maximum chance of success.  His
delegation stood ready to actively engage in constructive discussions in all areas.  Korea was prepared
to make trade-offs where possible and would do whatever was necessary to make Cancún a success.
300. The representative of Bulgaria said that the report of the TNC Chairman was, overall, a fair
reflection of the current state of play in the negotiations.  He agreed with the Director-General that in
the very few weeks remaining before Cancún, Members needed to direct all possible negotiation
energy to unblocking the main strategic issues.  For Bulgaria, one such strategic area were the
implementation issues.  These had been designated by Ministers as a matter of priority in the Doha
Declaration, and his delegation's position in other negotiating areas would depend on progress onthose implementation issues in which Bulgaria had a specific interest.  Unfortunately, implementation
issues had not found the treatment his delegation could accept as satisfactory, either in the TNC
Chairman's report or in the draft Ministerial text.  His delegation hoped that this would be corrected in
the course of the HODs consultations announced by  the Chairman, and that one such meeting would
be devoted to these issues.  First, he wished to react to a statement in paragraph 53 of the TNCChairman's report which mentioned that it was not possible to move forward on outstanding
implementation issues due to "procedural difficulties" related to the extension of the additional
protection of geographical indications.  In connection wi th this, he wished to point out that none of the
proponents of extension had ever made progress on other implementation issues dependent on
progress on extension.  Thus, the procedural difficulties mentioned in the report probably referred tothe position of the opponents of extension.
301. The extension of the additional protection of geographical indications under Article 23 of the
TRIPS Agreement to products other than wines and spirits was an implementation issue which was
specifically noted in paragraph 18 of Doha Declaration.  On implementation issues, Ministers had
declared in paragraph 12 of the Declaration that th ey attached the utmost importance to these issues
and  "[were] determined to find appropriate solutions  to them".  Such implementation issues had to be
addressed as a matter of priority.  Unfortunately, the draft text, which he understood had been guidedby the mandates given at Doha and the commitments taken there, did not reflect this particular
mandate on the extension of the additional protection of geographical indications to products other
than wines and spirits.  Therefore, like the other proponents of this issue, his delegation was proposing
that a separate paragraph devoted to the extension of the additional protection of geographical
indications be included in the draft text.  This paragraph should provide that Ministers agree to extendthe additional protection of geographical indications under Article 23 of the TRIPS agreement to all
products.
302. The Ministerial text should reflect the sequencing in the Doha Declaration.  Therefore,
implementation issues, including the extension of the additional protection of geographical
indications, had to be treated immediately before the other negotiating areas covered by theWT/GC/M/81
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paragraphs following paragraph 12 in the Doha Declaration.  Bulgaria could not agree with the text
proposed for implementation issues in paragraph 12 of the draft Ministerial text.  Unlike the texts for
other negotiating areas, this text did not refl ect the mandate from Doha, but merely noted that
"progress had been made" and that "a number of the issues ... remain outstanding".  Bulgaria could
not accept such a double standard and insisted that the same approach be applied in the text to all
areas of the negotiations.  It could also not accept a rewriting of the Doha mandate by shifting theresponsibility on implementation issues from the TNC, as provided by the Doha Declaration, to the
General Council, as provided for in the draft Ministerial text.  At the open-ended HODs meeting on
21 July his delegation had mentioned some of its more general views on the draft text, which he
would not repeat at the present meeting, but he wished to mention briefly those three main points.
The draft Ministerial text should be non-biased, neutral and not too controversial.  It should be
acceptable to all and accepted and agreed by all before being sent to Cancún.  Only those texts that
were agreed should be sent to Cancún, and what was not agreed should not be sent to Ministers.  IfMembers could not agree on any text, then nothing should be sent to Cancún.
303. Second, the text should reflect the present status of negotiations.  He understood that in a way
– as explicitly stated in the introduction to the draft Ministerial text and in the paragraph 62 of the
TNC Chairman's report – the text reflected the level of ambition established by Doha.  However, this
was not sufficient preparation for Cancún.  Minister s would also need, as provided by paragraph 45 of
the Doha Declaration, to take stock of progress in the negotiations and also to provide guidance.
What was needed were texts which reflected the present situation as it was, and not as Members
wished it to be.  If Members started working on these texts at the very last moment, they ran the risk
of not being able to agree on formulations which would not have been controversial had they
discussed them at a sufficiently early stage, and they also ran the risk of untransparent procedureswith such hasty last-minute texts.  Third, the draft texts should not try to rewrite the Doha mandate.
In that respect his delegation had already mentioned the implementation issues and, in particular, the
extension of the protection for geographical indications to all products.  However, Bulgaria also
wished to draw attention to the establishment of new deadlines.  The deadlines established in Doha
reflected a very delicate balance of interests which had made Doha possible.  Thus, Members shouldapproach the question of new deadlines very cautiously and not try to rewrite the Doha mandate
embodied in these deadlines.
304. The representative of Chile recalled the statements by Brazil and Canada and said that his
delegation wished to join their emphasis on the concepts of compromise, flexibility, ambition and
urgency, as well as the statements by other delegations on the need for greater ambition onagriculture.  Members would have to work hard on the offers and positions in the area of agriculture,
or there would no breakthrough.  The idea of applying a single formula for market access both for
agricultural and non-agricultural products alike was sounding more and more attractive, and might
even be a powerful incentive for some Members to move in the right direction towards true
liberalization in agriculture.  On  non-agricultural market access, his delegation wished to underscore
something that was very important, now that Members were starting to prepare the texts for Cancún –
the potential erosion of tariff preferences.  Chile supported initiatives for a decision by Ministers todevelop a specific programme to deal with the problems that might arise with the erosion of tariff
preferences due to liberalization in agriculture.  This would allow Members to understand the relative
importance of the question of preferences on a country-by-country basis, for each export market and
for each product.
305. Regarding the issue of geographic indications generally, he said that, especially after listening
to the statement by Bulgaria, three concepts came to mind – frustration, resentment and confusion.
Confusion, because Members were negotiating, or trying to negotiate, on three different fronts – the
register, the extension of protection, and in agriculture.  This was not orderly.  In paragraph 33 of the
Director-General's report a link was established between a multilateral register for wines and spirits
and agriculture.  However, Chile saw no such link.  The multilateral register was an implementationWT/GC/M/81
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issue and not an obligation, but with unbridled ambition some were asking Members to take on more
and more obligations.  There was also the question of territoriality in the area of intellectual property,
and of imposing obligations on Members that did not participate in the register of GIs.  This had
nothing to do with agriculture.  It was a question of implementing obligations, and the proponents
were trying to bring in through the back door what they could not bring in through the front door.
There was frustration, because in the area of extension, time and time again over the years there hadbeen no serious discussion specifically on the concept of products and different consequences.
Members were starting to engage in this analysis under the direction of the Director-General, but
unfortunately they had not had time to finish it.  Members had to continue along those lines – to better
clarify the concepts and to have a better understanding of an area in which it was perhaps possible to
have international cooperation – but first they had to understand what was involved and what they
were talking about.  There was resentment, because some Members wished to dismantle everything –
the TRIPS Agreement provisions in the area of geographic indications, and all types of protection inthe Agreement on Agriculture.  This was a true disaster.  The Communities had said that Nigeria, as a
friend of geographical indications, was a dear friend of the Communities.  Chile was not a dear friend
of the Communities, and perhaps not even a friend, but it was a partner nonetheless, with respect to
geographic indications and traditional knowledge.
306. The representative of Venezuela said that Members were at an historical moment and that the
Director-General and the Chairman were presiding over the organization at a time when the world at
large was debating the crisis of the world trading system.  In 2001 the volume of global trade had
declined 1 per cent, in 2003 it had increased by 2.3 per cent, but in the past decade a decline of 6.7 per
cent had been registered.  Members had to ask themselves what was transpiring, and what the
prognostications, principles and expectations were that would bring about implementation of the Dohagoals.  Members had to ask what role the Doha Development Agenda (DDA) played in trade
relations, the creation of economic and social development and the alleviation of poverty.  This was
what the DDA was about.
307. The draft Ministerial text conveyed an important message about the road ahead, in that
Members were alerted to how much ground needed to be covered to comply with the Doha mandates.Doha and Cancún were not just events, but part of a very large process, and they should be understood
as such.  Otherwise, Members would become frustrated and angry, and would be tempted to indulge
in panic.  Millions of people were waiting for positive results from international trade to improve their
lives, and Cancún provided Members with an extraordinary opportunity to respond to their hopes.
What was really needed in this multilateral foru m was pragmatism.  It was important for Members to
make suggestions that were concrete, viable, balanced, and humane.  Her delegation was saying this
to the developed-country Members, who had a steep learning curve ahead of them.  Ministers in Doha
had shown great wisdom, for example, regarding the Singapore issues – which were thorny subjects –
in instructing Members to examine modalities for negotiations and in providing that full account
should be taken of the needs of developing and least-developed countries.  This showed that capacity
building and technical cooperation had been intended to strengthen and optimize consideration of
these issues.
308. The outcome of Cancún had to reflect the fact that the WTO was a forum consisting of
146 Members, of which 70 per cent were developing countries and 70 per cent of the latter were the
poorest countries.  Another 25 developing countries would eventually be joining this forum.
Members had a major challenge ahead of them of socioeconomic justice and equality.  They had to
bring energy to untangling questions of principle a nd strategy concerning development.  There was no
room for despair or complaint.  Developing countries were asking for S&D treatment.  Such treatment
could potentially rescue a developing country.  Free and balanced trade were the most important
elements for many developing countries in these negotiations, and in the few days remaining before
Cancún, concrete proposals in agriculture were needed, from which in 2005 Members would see the
results.  Members had to establish a balance, and should focus on clear and concrete elements toWT/GC/M/81
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reflect the mandates stated clearly in the Doha Declaration.  The reports on the Singapore issues were
full of information, but much was still not clear.  Transparency in government procurement was one
of these issues, but transparency could not be something that was simply abstract or theoretical.  It had
to be present every day and in each of the negotiations, such as on S&D treatment.  It was very
important in the area of contracts for goods and services at all levels, federal, state and local.
Members could not simply talk about transparency or pay lip service to it.
309. Transparency also required flexibility, and had to be ethical.  It had to be taken seriously by
the WTO to bolster the sentiments and principles of the Doha Round.  Members had to approach these
issues in a balanced way, and to take account of the nature and diversity of this organization as they
took issues to Ministers in Cancún, so that the latter could take decisions that would advance the Doha
Agenda and the cause of development.  Members had to go to Cancún with clear issues in agriculture,
TRIPS and public health, and S&D treatment.  They also had to arrive with strong faith and be
committed to decision-making and compromise – not only unilateral or bilateral compromise, butcollective compromise – in order to have results.  These elements had thus far been lacking.
Venezuela was committed to producing tangible results in accordance with the Doha mandates.
310. The representative of Norway thanked the Chairman for outlining the process he envisioned
for the work ahead, which was exactly what was needed at the present stage.  Norway was also very
grateful for the draft skeleton text.  This was the way to move the process forward.  Norway admiredthe report presented by the Chairman of the TNC, which was extremely good and set out some of the
key issues Members had in front of them.  This would serve Members well on the way to Cancún.  As
other delegations had said, it would be very important in the next few weeks to move some of the key
issues ahead.  All were aware of the need to move ahead on agriculture and on non-agricultural
market access and on the Singapore issues.  His delegation noted that the Chairman had said he wouldlike to draw on the help of Chairs of the negotiating bodies, especially on agriculture and non-
agricultural market access.  It was extremely important to do this, first, because Members had two
Chairmen in whom thy had full confidence, and second, these individuals had a vast experience of
contacts with the Members up to the present, which all had to draw on.
311. For the non-agricultural market access negotiations there was still a round of negotiations to
be held, which obviously had to be  concluded before Members took this area into the HODs process.
On agriculture, there seemed to be more nuanced views being put forward than there had been at
earlier stages, and as the Director-General had said, the interactive process among Members was
increasing, and that was a reason the Chairman of the Special Session on agriculture should play a
very important role in trying to develop new concepts.  How this should be done should be left to theChairman of that body, but Members had to bear in mind that the latter's paper had already been on
the table for three or four months, and it was hoped that he could help Members to develop some of
the concepts being discussed.  Of course, the level of ambition in agriculture, like in other areas, had
to be negotiated among Members.  However, Norway saw a big role for the Chairmen of both the
agriculture and non-agricultural market access negotiations in developing the concepts further.  His
delegation had already made the point earlier in the present meeting that on agriculture, flexibility
regarding the basis for what Members were going to end up with was extremely important, anddelegations were talking more and more about this.
312. On the Singapore issues and also on the development issues, his delegation hoped that the
General Council Chairman would take an important  lead role, as he had done up to the present,
because the Singapore issues, although very different from the development issues, had to be seen in
the context of the latter, and the Chairman had a very good grasp of the S&D issues.  Onimplementation, both the Chairman and the Director-General were doing a very good job.  Regarding
the Director-General's report as Chairman of the TNC, his delegation had noted that in paragraphs 24
and 25 regarding services, the TNC Chairman had expressed concern about the stage of the
negotiations, and Norway agreed with this.  It was a pity that the services negotiations had not movedWT/GC/M/81
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ahead more substantially than they had, as services had been in negotiations as long as agriculture,
having started on 1 January 2000.
313. In paragraph 37 of his report, the TNC Chairman had said that for many participants,
negotiations on anti-dumping and subsidies were critical elements in the overall balance of the Doha
Round.  Inclusion of something like this in the skel eton text would be a definite improvement.  His
delegation fully shared the view expressed by the Director-General in paragraph 61 of his report inwhich he underlined the character of the Cancún Conference, and especially the sentence in which he
said that Members should avoid seeing the Ministerial Conference in simplistic terms of success or
failure – that Members were working towards the end of the Round and not towards an isolated event
in itself.  This was very important for all Members to keep in mind regarding their contacts with the
media and the impression they gave of what the Cancún Ministerial was all about.  Members could
have control of some of the conclusions drawn, and had to help the media to draw the right
conclusions.  What had been suggested by the Director-General was exactly the right conclusion todraw at the present stage.
314. The representative of Kenya said that her delegation had noted from the draft text that
Ministers would be reaffirming their commitment to the Doha mandate as well as taking decisions on
the negotiations and other areas of the Doha work programme.  While Kenya agreed with this, it
believed that in order to achieve success at Cancún, the final text to be submitted to Ministers had tobe factual and to reflect the progress made in implementing the Doha work programme.  In this
respect, her delegation expected that where no consensus had been achieved, the report would
honestly reflect that, as well as the different views held by Members.  It also hoped that the draft text
would seek further guidance from Ministers on such issues.  Kenya wished to emphasize that the
Ministerial text and the reports annexed to it had to have the approval of the entire WTO membership.Kenya therefore supported the call for transparency, inclusiveness and ownership by the Members.
On TRIPS and public health the draft Ministerial text did not contain any details on the decision to be
adopted.  Kenya expected that this decision would be based on the 16 December text of the Chairman
of the TRIPS Council, Ambassador Motta.  Should a statement on adoption of the text be found
necessary, this should not tamper with the delicate balance achieved in the TRIPS Council Chairman'stext.  The issue of TRIPS and public health should be concluded before Cancún.  It could not be a
subject of protracted negotiations and discussions in Cancún.
315. On agriculture, her delegation noted that the draft text implied that Ministers would adopt
modalities for further commitments in agriculture.   No agreement on any issues had been achieved,
and Members' positions at present remained polarized on all issues.  This remained the main challengein the agriculture negotiations.  Unless meaningful progress was made to bridge the gaps that still
existed among Members within the short time remaining, a factual report on the status of progress in
the negotiations should be provided to Ministers for their necessary guidance.  Such a report had to,
among other things, highlight the importance of S& D treatment provisions to developing countries,
including the concepts of special products and special safeguard mechanism, and Kenya's recent
proposal to exempt countries on the World Bank's IDA-only list from tariff reductions.  Agriculture
was the biggest and the oldest debt, and Kenya expected it to be settled soon.  As all knew, about 80per cent of Kenya's population relied on agriculture.  As in agriculture, a detailed factual report by the
General Council on non-agricultural market access should be submitted to Ministers for their further
guidance.  This, of course, had to include the status of negotiations on the elements included in
paragraph 16 of the Doha Declaration in favour of developing and least-developed countries.  Some
Members had spoken at the present meeting of ensuring flexibility for developing countries, and herdelegation welcomed that.  However, it urged caut ion in introducing elements such as harmonization
of tariffs, which was not really in the mandate.
316. On services, Kenya had taken note of the recognition in the draft text that some Members had
not yet submitted their initial offers.  However, it was also important to note that non-submission ofWT/GC/M/81
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initial offers by some Members was due to significant technical and financial difficulties confronting
them in the elaboration of these offers.  Ministers at Cancún should be informed of the need for
enhanced technical assistance in this area, in order to enable these countries to participate fully in the
services negotiations.  Furthermore, lack of pr ogress in negotiations on rule-making under the GATS
had made it difficult for some countries to evaluate potential specific commitments they might wish to
undertake in order to come up with initial offers.  Kenya therefore welcomed what was stated inparagraph 6 of the draft text, that negotiations on rule-making under the GATS should be included in
accordance with their respective mandates and deadlines.  On S&D, her delegation wished first to
thank the Chairman and the Ambassador of Brazil fo r their efforts in advancing work in this area.
However, the draft text gave the impression that substantial progress had been made and that the
balance of these issues would be resolved mainly in the WTO subsidiary bodies under the supervision
of the General Council.  Kenya's impression was that given the slow progress that had been made, it
might be necessary to consider other ways than what was being proposed in the draft text.  It mightalso be necessary to indicate when work on this issue would be completed, instead of leaving this
open-ended.  After all, this was one of the issues on which a deadline had been specified in the Doha
Declaration.  Members had to bear in mind that the purpose of the S&D exercise was to correct the
glaring imbalances in the WTO agreements.  Members should not, therefore, expect reciprocal
concessions in this particular area, because they would not be forthcoming.
317. On the Singapore issues, her delegation had serious doubts about treating these issues as part
of the single undertaking.  It was also Kenya's understanding that each subject should be treated on its
own merits, since each had a separate mandate.  With respect to modalities for negotiations on these
issues, her delegation believed the substantive work that had taken place in the respective working
groups should inform Ministers whether, and what kind of, modalities should be adopted.  Followingthe Chairman's suggestion at the informal HODs meeting on 21 July that the Friends of the Chair on
Singapore issues hold further consultation on substantive modalities on these issues, Kenya wished to
offer the following observations:  (i) There was need to have sufficient convergence on many of the
issues identified for clarification in order to dr aw up substantive modalities on an informed basis.
Regrettably, such a convergence had not been achieved on many of the issues.  (ii) For Kenya, as formany other developing countries, development was central to these negotiations.  So far, Kenya was
not yet convinced of how multilateral frameworks on these issues would address development
objectives, needs and concerns of developing countries, such as Kenya.  Development implications of
these issues needed to be thoroughly understood, and further clarification in the respective Working
Groups was necessary to address this aspect.  (iii) Kenya was not convinced that the timeframesuggested by the Chairman for drawing up modalities on these issues was sufficient for some
developing-country delegations to make decisions on an informed basis.
318. In this respect, her delegation expected that Ministers at Cancún would be given options that
reflected the reality on the ground, in order for them to make appropriate decisions on all these issues.
On TRIPS and non-violation, the application of the TRIPS Agreement to non-violation situation
complaints raised fundamental concerns which Kenya had raised in the TRIPS Council.  In this
respect, the Cancún Ministerial Conference should adopt a decision that non-violations of the typeidentified in Article XXIII:1(b) and (c) of GATT 1994 be determined inapplicable to the TRIPS
Agreement.  Her delegation took note that Ministers at Cancún were expected to adopt the multilateral
system of notification and registration of geographical indications for wines and spirits.  Members'
positions on this issue remained sharply divided.  In Kenya's view, this system should be voluntary
and should not have any legal effects on non-participating Members.  Kenya also wished to reiterateits position on the need to recognize the role the protection of geographical indications could play in
promoting sustainable development in many countries, including Kenya.  It was therefore her
delegation's expectation that the issue of extension of additional protection to cover products other
than wines and spirits would be resolved before or at Cancún, and as such, it should be reflected in the
draft text.  Kenya agreed with those who had called for bringing the skeleton to life in Geneva –difficult as that might be – and not transporting it to Cancún in its skeletal state.  To do that, Members'WT/GC/M/81
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level of ambition on all of these issues had, of necessity, to match the level of commitments that were
undertaken at Doha.  Kenya pledged its cooperation to achieve that.
319. The representative of Costa Rica said the draft Ministerial text was very useful and would
provide a basis on which Members could work.  It reflected the state of play in the negotiations and
work, and the mandate from Ministers in Doha, with the level of ambition they wished to include in it.
Costa Rica believed that it was the single undertaking as a principle that would enable Members at theend of the day to achieve a satisfactory overall result from this Round.  Results from this level of
ambition in all areas would ensure that all would be satisfied with the results on those topics of
greatest interest to them, but it was clear that progress would not be simultaneous in all areas.  It was
also clear that what could be achieved in agriculture would determine progress in other areas of
negotiation.  Until such time as there were clear signs of significant concessions for agricultural
exporting countries regarding each of the three pillars, Members could not be optimistic with respect
to the progress to be made in the Round.  These signals were necessary to guarantee progress, with theapproval of modalities in Cancún.  The greatest contribution that could be made to developing
countries' development objectives was to afford significantly greater market access to their products
and to eliminate subsidies.  With respect to paragr aph 5 in the draft text regarding market access for
non-agricultural products, Members should leave open the possibility of including in the Ministerial
text a deadline, so that Members could submit their draft lists for tariff concessions, as in theagricultural sector.  This was linked to the type of modalities that would be agreed, but it would be
very useful to take this element into account and to leave some space available for it in the final
document.  Modalities could be agreed on the basis of the text presented by the Chairman of the
Negotiating Group on Non-Agricultural Market Access, but Members needed a much more ambitious
formula that sought harmonization on a line-by-line basis, leading to binding of tariffs for allMembers.
320. On S&D treatment there should be fair, horizontal rules.  Costa Rica believed there could be a
rapid solution regarding TRIPS and public health, where the issues were of very basic importance and
their resolution would contribute not only to achieving objectives in the health area which were
demanded by various countries, but would also increase the level of confidence in this exercise.  Hisdelegation welcomed the significant progress that had been made on S&D treatment, and trusted that
the pragmatic progress in this area and on implementation would make it possible to achieve
agreements in Cancún.  With respect to the Singapore issues, a high level of ambition on these issues
should also be part of the overall balance of results.  This would make it easier to achieve a positive
result at the end of the day.  His delegation reiterated its satisfaction with the progress made duringthe stage of study in the post-Doha treatment of these matters.  This would prepare the ground for
specific decisions regarding modalities of negotiation, which his delegation hoped would be adopted
by Ministers in Cancún.  These modalities should define procedures to carry out the negotiations and
should also deal with the substantive aspects laid out in the Doha Ministerial Declaration.  Costa Rica
was open to considering the appeal made by various delegations regarding their concern over the
elements for inclusion in these modalities.
321. The representative of Honduras said that as a general comment, his delegation was deeply
concerned that Members had so little time to engage in a transparent process of revision and approval
of a new version of the draft text for transmission to Ministers.  Honduras welcomed the intensive
programme planned, and hoped that its objectives would be reached in their entirety, so that the text
would reflect the balance Members sought.  In this connection, it considered it important that the
annexes to the text be drafted and approved by all Members.  His delegation was ready to work withthe Chairman during the time remaining, in order to  achieve positive and balanced results at the next
Ministerial Conference.  Regarding paragraph 4 of the draft text on the agriculture negotiations, his
country attached the greatest importance to this issue as a fundamental element of the negotiations for
countries such as Honduras.  Thus, it was interested in adopting modalities for new commitments only
if they were consistent with the Doha mandate, which indicated that S&D treatment should form anWT/GC/M/81
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integral part of all the elements of the modalities as a clear signal that the multilateral trading system
also took into account the needs of developing countries.  These modalities should be in an
operational form and not merely indicative.  They should also take into account strategic products and
the special safeguard mechanism and, as several developing countries has proposed, these concepts
should remain in the revised text.
322. One way of making special and differential treatment operational and also of remedying the
imbalances resulting from the Uruguay Round would be to state in the new text that IDA-only12
countries were exempt from tariff reductions in these negotiations.  It was difficult for his country toaccept tariff reductions in the agricultural sector, especially if there was no plan for significant
reductions in domestic support and elimination of export subsidies within the near future.  It was
extremely difficult to explain why countries such as Honduras had to assume further commitments on
market access when situations that were unclear, as far as agricultural trade-distorting measures were
concerned, persisted to the detriment of such countries.  For Honduras, the opportunity given todeveloped countries to provide their agricultural sectors with almost unlimited support, when the
flexibility of poorer developing countries to protect a key sector was restricted, was unacceptable, and
in the recent meeting of the Committee on Agriculture, his delegation had not seen any positive steps
forward in relation to this issue.  This was why his delegation had to insist that strategic products be
excluded from tariff reductions.  Honduras also considered that the new special safeguard mechanismshould not be linked to the tariff reduction formula to be agreed, and should be less restrictive than the
current criteria under Article 5 of the Agreement on Agriculture.  His delegation was ready to
continue working positively on this issue and welcomed the inclusion of these issues in the current
text on modalities, because these concepts should not, under any circumstances, be deleted from those
modalities.
323. With regard to paragraph 5 on non-agricultural market access negotiations, Honduras
considered that the draft text, with the necessary amendments, could become a valid basis for
adopting modalities.  Nevertheless, the document should reflect what was contained in paragraph 16
of the Doha Declaration, namely, that developing and least-developed countries should not be
required to grant full reciprocity in these negoti ations.  Consequently, Honduras considered that the
proposal of Norway, supported by a number of deve loped countries, to the effect that IDA-only
12
countries – which were the poorest members of this organization – should not make tariff reduction
commitments in these negotiations, should be included in the new modalities document.  His
delegation urged Members to give positive consideration to this proposal.  Regarding paragraph 6 on
services negotiations, the imbalance in the process continued to be of concern to his delegation, as itfocussed on market access and gave less importance to progress in the negotiations on rules.  The
success of the negotiations lay in the balance to be obtained therefrom, and that it was the
responsibility of all Members to ensure that balanced progress was made in all areas of negotiation,
especially those of interest to developing countries,  within the meaning of Article IV of the GATS – a
situation which had not yet been reached at the current stage of the negotiations.  In addition, there
should not be any strict deadlines, and deadlines should be indicative so that the situation reached in
the services negotiations could be reviewed in the light of the overall negotiating process.  Onparagraph 8 on TRIPS negotiations, Honduras would not be in a position to accept any text that
provided for compulsory participation in a multilateral system of notification of wines and spirits
containing binding commitments.  The precariousness of his country's national registration offices did
not allow it to impose burdensome and costly systems.  Thus, Honduras firmly supported any
initiative that took into account its needs.
324. With regard to paragraph 10 of the draft text on the DSU negotiations, Members should
pursue the work accomplished to date, and welcomed the extension of the deadline.  It was essential
that Members made a commitment to conclude these negotiations.  Nevertheless, the level of ambition
of some Members continued to be of concern, as an attempt was being made to include in the final
package some proposals that did not enjoy a sufficiently high level of support by the majority ofWT/GC/M/81
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Members.  This could only lead to another deadlock, with the predictable result that there would be no
concrete progress on this issue.  Concerning implementation and special and differential treatment,
paragraphs 12 and 44 of the Doha Ministerial Declaration stated that development was an issue of
special importance in these negotiations.  The approach to S&D treatment proposed by the Chairman
had facilitated discussion of the proposals.  Nevertheless, it was a matter of concern that some
delegations were trying to lower the level of ambition regarding these issues.  There should be agreater degree of flexibility in order to achieve positive results in Cancún.  Regarding the Singapore
issues, Honduras had not made any requests on these issues but was prepared to adopt a constructive
position, provided the overall balance took into account its interests and needs, particularly on the
question of agriculture.  It supported the decision to adopt modalities with respect to paragraphs 13,
15 and 16, but not paragraph 14.  The Working Group on Competition Policy should pursue its
examination, because conditions were not ripe for initiating negotiations on this issue.  There should
be no single decision on all four issues, because in principle, the Doha Declaration determinedsubstantive issues or elements for each of them, and these had been defined in the discussions in the
various working groups.  Honduras supported paragraph 22 in the draft Ministerial text on pursuing
the work on e-commerce.  His delegation was willing to continue working constructively during the
preparatory process for the Cancún Ministerial Conference, in order to achieve the success and
balance all sought.
325. The representative of El Salvador said that although the draft Ministerial text was skeletal in
nature and contained very little substance, it was a reflection of the present situation and hence clearly
showed the need for Members to pursue their work and to accelerate the pace in key negotiating areas
such as agriculture, market access for non-agricultural products, services, and the Singapore issues.
Regarding the negotiations on agriculture, if Members were to have a modalities paper ahead ofCancún, it should be in line with the mandate established in Doha.  El Salvador hoped that the
document would contain a formula reflecting the spirit of the mandate given to Members, with a high
level of ambition, and would be conditional upon progress being made on the other two pillars of the
negotiations, i.e. reduction in domestic support and export subsidies – two areas in which El Salvador
had not noted any forward movement that accommodated its interests and concerns.  As agreed byMinisters, it was also crucial that S&D treatment for developing countries form an integral part of
every element of the negotiations, especially those on agriculture in view of its importance from an
economic and social point of view.  In this connection, his delegation wished to re-emphasize how
important it was for El Salvador to see strategic products included as an integral part of the
modalities.  El Salvador also attached great importance to the feasibility of having a special safeguardmechanism.
326. His delegation thanked the Chairman of the Negotiating Group on Non-Agricultural Market
Access for his factual report of 23 July, which  El Salvador considered reflected the context in which
the negotiations had proceeded in the various meetings held on this subject.  As his delegation had
pointed out on previous occasions, it considered that this report could serve as a basis for the
negotiations, on the following conditions:  (1) deeper agricultural commitments in this Round;  (2) the
sectoral approach should be set aside for consideration in a second phase and should be voluntary;(3) treatment based on less-than-full reciprocity, because El Salvador considered that it had amply
fulfilled its current undertakings in binding its entire tariff and maintaining very low tariff averages;
(3) pursuing the task of identifying non-tariff ba rriers with a view to their elimination, since El
Salvador regarded them as a major obstacle to access to foreign markets;  and (4) concerning the S&D
treatment provisions, such treatment should be equitable and non-discriminatory in respect of alldeveloping countries.  Regarding the negotiations on both agricultural and non-agricultural products,
and with a view to joining the consensus on possible modalities, El Salvador trusted that the process
would be fully transparent and that it would receiv e a proposal in time to evaluate these modalities
before they were submitted for consideration by Ministers in Cancún.  In the services area, the text to
be agreed should be worded in such a way as to make clear that the negotiations on the rule-makingside should be concluded.  The establishment of a regulatory framework would provide clear rules forWT/GC/M/81
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achieving the desired objective, namely, a more open services sector.  Regarding the multilateral
system of notification and registration of wines and sp irits, El Salvador had taken note of the Director-
General's request in the TNC report.  From the outset, his delegation had expressed its wish to
implement the Doha mandate, as well as the TRIPS provisions, i.e. to observe the principle of
territoriality of intellectual property rights, since this was the basis on which Members would be able
to reach agreement.  The discussions so far had enabled delegations such as his to re-emphasize thatthis was an issue which, in view of its implications, needed to be extensively discussed and clarified
before a decision could be taken beyond what had been agreed.
327. One of the core items on Members' agenda was TRIPS and public health.  El Salvador
regarded this as a matter of a humanitarian nature and hoped a solution could be found.  Otherwise,
both the image and the credibility of the multilate ral trading system would suffer.  Regarding the
Singapore issues, before one could say there wa s a consensus on launching negotiations, Members
still needed to agree on the modalities for these negotiating areas, and all delegations had to be clearon those modalities.  The package should include relevant aspects for El Salvador, such as
transparency, support and cooperation in the technical field.  His delegation fully concurred with the
Director-General's statement that the success of Cancún would make itself fully apparent in 2005.  In
his delegation's view, Cancún was not an end in itself but a valuable means of attaining the objectives
Members had established together when they had launched these negotiations.  Therefore, Membersneeded to reign in their expectations and keep them  within the limits of what they could truly achieve.
Imposing on themselves the task of addressing themes on which there was no consensus on how to
proceed would make the road towards 2005 very difficult indeed.  El Salvador trusted that, as the
Chairman himself had said, the negotiating process would be transparent and fully inclusive.  His
delegation endorsed the working methodology proposed  by the Chairman for the coming weeks and
would do its utmost to ensure that the Cancún mee ting was a success and that Ministers were able to
put together a workable package.  Although many matters of procedure had to be agreed in the draft
Ministerial text, the task would be easier if some delegations showed flexibility on substantive issues.
328. The representative of the Dominican Republic said that the draft Ministerial text in document
Job(03)/150 was a good basis for continuing the preparatory work for Cancún.  His delegation had
taken note of the Chairman's introduction of the draft text, in which he pointed out that the document
did not purport to represent agreement in whole or in part, and that it was submitted without prejudice
to the different positions of delegations.  The Do minican Republic was committed to working with the
Chairman and with other delegations to ensure that the Cancún Ministerial Conference was a success.
However, it felt obliged to express its concern at the current status of the negotiations, in whichpractically all of the subjects of interest to the developing countries were in a deadlock.  This was
inconsistent with the spirit of the Doha Minister ial Declaration, in which Ministers stressed the
importance of the development dimension and placed it at the centre of the negotiations.  In this
connection, his delegation wished to refer briefly to some of the subjects included in the draft text.
The negotiations on agriculture were a priority for the Dominican Republic, and any agreement on
modalities would have to include important elements on special and differential treatment as
stipulated in the Doha Declaration.  The two main elements that had been proposed by a large numberof developing countries – strategic products and the new special safeguard mechanism – had to be
included in those modalities in order to ensure a proper balance in the negotiations.  Regarding TRIPS
and public health, a topic which was extremely important for most developing countries, his
delegation hoped that an agreement would be reached before Cancún.
329. With respect to the negotiations on market access for non-agricultural products, his delegation
agreed that the modalities to be adopted in Cancún – like the modalities for the negotiations on
agriculture – had to take account of the needs and interests of the developing countries and had to
include the principle of less-than-full reciprocity.  The negotiations on services were also a priority for
the Dominican Republic, since the services sector represented 55 per cent of the country's GDP.  It
was highly concerned at the current imbalance in these negotiations.  The draft text should be a betterWT/GC/M/81
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reflection of the reality of the negotiations in this area.  His delegation understood that no real
progress had been achieved thus far, since the negotiations on rules – particularly those relating to
emergency safeguard measures, the negotiations on disciplines in the area of domestic regulation, and
classification issues – had not progressed at all.  The text of the Cancún Ministerial Declaration
should seek to ensure a balance between the above-mentioned multilateral negotiations and the
bilateral market access negotiations.  Members should be encouraged to improve the quality of theiroffers, particularly in the sectors and modes of supply of interest to the developing countries.
Moreover, his delegation was concerned that the current draft text provided for the introduction of
new deadlines, both for the submission of improved offers and for the submission of revised offers,
with a view to finalizing the negotiations.  Th e Dominican Republic saw no need to establish new
deadlines when the Doha Declaration already established the January 2005 deadline for the
conclusion of the negotiations.  Furthermore, many countries had not submitted initial offers because
there had not been substantial improvements in the offers submitted by the developed countries, norhad there been any progress on multilateral issues.  In any case, if new deadlines were introduced,
they would necessarily have to be indicative, as in the Doha Declaration.
330. With respect to the DSU negotiations, the Dominican Republic welcomed the extension of the
time limit for their completion, and considered that Members should continue working on the basis of
the Chairman's paper.  It was concerned, however, at the excessive ambition of certain delegationswhich had prevented Members from concluding this exercise.  Regarding the four Singapore issues,
his delegation was ready to work with the Chairman and other delegations to try to reach a
satisfactory agreement in Cancún.  In his delegation's view, if Members agreed on modalities to
launch the negotiations on these issues, they should be separate for each issue, and each agreement
should be examined individually on its own merits.  The modalities had to go beyond negotiationprocedures and had to define the nature, dimension, scope and coverage of the negotiations.  His
delegation wished to urge the leading Members of this organization to take account of the needs of the
developing countries in the different areas of negotiation, so that Members could produce an
agreement that was satisfactory and balanced for all.
331. The representative of Malaysia said that in his report, the TNC Chairman had quite correctly
reflected where Members were.  It was quite obvious there were gaps, that Members had yet to
commence negotiations and that this was what they should be doing when they returned from the
short summer recess.  Malaysia fully concurred with the General Council Chairman on his statement
introducing the draft Ministerial text, and the approach and procedures he would put in place.  This
was the best possible approach one could take, and the text Members would be working on would be aconsensual text.  As he had said many times before, Members should try to avoid a situation where
perceptions arose that the way issues were being reflected in the draft text might be inconsistent with
the flow of thought of Members and delegations.  Members had a first draft, which was a good draft
and a basis for work.  When they returned from the summer break, they would have to add a lot of
meat to the draft text, and this was exactly what they should be doing.  Regarding the draft text itself,
on environment, paragraph 9 noted that the negotiations had been very complex and difficult, and his
delegation agreed entirely with the observations expressed by Argentina on this particular subject.Much ground had been covered, but it would be inaccurate to say that there had been progress in the
sessions held towards developing a common understanding of the concepts contained in the mandate.
Rather, it would be more appropriate to say that the Special Session of the Committee on Trade and
Environment had made progress on clarifying issues raised under the mandate in paragraph 31.  A
number of issues, like specific trade obligations and multilateral environmental agreements, neededfurther clarification.  Given the still tentative nature of the environment negotiations, it was his
delegation's view that Members were not terribly  optimistic that they would be in a position to
provide recommendations when it came to finalizing the report.
332. On S&D treatment in paragraph 11, his delegation's sense was that the package needed to be
credible, and that the lack of results in the bodies  and negotiating groups dealing with this were issuesWT/GC/M/81
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of immediate concern.  Ministers should provide gu idance for the way forward that would centralize
proposals within the CTD for more efficient resolution of these issues.  In Malaysia's opinion, the
second part of paragraph 11 was not appropriate.  His delegation had taken note of the African
Group's statement that Agreement-specific proposals should be addressed first.  Ministers should urge
Members to intensify efforts to resole the issues within paragraph 44 of the mandate.  On
paragraph 20, also on environment, the report of course had provided a very factual summary of thediscussions undertaken in the Committee in response to the mandate in paragraph 32n of the Doha
Declaration.  However, his delegation was of the view that Ministers should just take note of the
report.  It would be erroneous to state that there was progress towards the mandate in paragraph 32
when there was none.  If the proponents were contemplating any continuation of the same mandate,
they should put this proposal on the table for consideration.  Malaysia would certainly have
difficulties with the phrase which read "continue on the basis of progress made", as the report made
no mention of future work.
333. On the Singapore issues, his delegation wished to make some very broad observations.  The
decision on negotiating modalities to be taken on the four issues was not a foregone conclusion.
However, before the decision was made, it had to be based on the clarification process in the post-
Doha period up to the meeting in Cancún.  In this respect, his delegation noted the statement by the
Philippines during the discussion of the reports on the four issues the previous day.  Malaysiasupported the Philippines' point that although there had been work and a lot of material arising from
the relevant bodies dealing with the four issues, this did not imply that the issues were ripe for
negotiation.  It was important to bear in mind that many delegations had expressed concerns and were
not ready to initiate negotiations as there was still a lot of clarification yet to be done.  It was
important to stress that developing countries should not go to Cancún and leave Cancún with a feelingthat they had been coerced to undertake new obligations when they were not ready, or even convinced
of the need for these negotiations.  Just as some countries had argued that some implementation issues
and S&D issues could not be contemplated, the developing countries' argument regarding the
Singapore issues should also be respected.  When Members returned after the summer break, they
should all feel rejuvenated and should try to operate in a business-like manner.  They should notoperate the way they were operating at present, where the discussion was becoming like a theatre in a
university where Members were listening to lectures without actually engaging in negotiations.  His
delegation had the sense that Members had a lot of energy, and hoped that energy would return after
the summer break.
334. The representative of Jamaica said that his delegation was particularly pleased that this
opportunity for comment was being provided at a formal meeting, since it was very important that the
formal record reflect the views of the membership on this very important document.  It also hoped
that despite the pressure the Secretariat was under, the formal records of this and the subsequent
General Council meeting would be available before Cancún.  His delegation wished to join Jamaica's
voice to all those who, in earlier formal meetings and at the present meeting, had expressed the view
that an agreed text should be submitted to Ministers at Cancún and that failing this, the range of views
and the salient divergences on particular issues should be clearly and concisely put before Ministers.Both the Chairman and the Director-General had emphasized that this was a skeletal text.  It was a
skeletal text precisely because it reflected the stage and state of Members' work and the low level of
actual achievement.  The sequencing and timeframes for accomplishing certain things, which
Ministers had deliberately given to this work at Doha, had not been adhered to.  All of the deadlines
set by Ministers had been missed or had been de-emphasized by some Members, even while Ministerswere to be asked at Cancún to set new ones which presumably were to be taken seriously.  There
might be momentum in the next few weeks and at Cancún which transformed the entire process, and
his delegation was prepared to be optimistic.  However, as of the present, the draft text too often
recognized progress without reflection or comment on the actually quite sobering negotiating
experience thus far, especially for developing countries and from the perspective of a developmentRound.  In some areas, Jamaica viewed the stock-taking  in the draft text as having been done throughWT/GC/M/81
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glasses that were a bit too rose-tinted, and his delegation feared that such a text might fail to focus
Ministers' attention on the course corrections that were needed and on the remedial measures that
were necessary if the Doha mandate and spirit were to be fully adhered to.
335. In the chapeau of the draft text, Ministers – who at Doha undertook to place development
concerns at the heart of the current work programme – would now take note of the progress that had
been made towards carrying out that work prog ramme and would recommit to completing it fully.
Jamaica joined those who were of the view that Ministers should specifically address the development
dimension of the Round and the progress in this particular area in this overarching chapeau.  In
paragraph 6 on services, Ministers recognized the progress in the negotiations.  While there had
certainly been progress, Jamaica believed that a paragraph on the services negotiations at the present
juncture, especially when Ministers were renewing their determination to end the Round by
1 January 2005, had to reflect concern that relatively few Members had in fact submitted requests and
offers, and that overall this was especially true for developing countries.  Regarding paragraph 7 onrules, his authorities were of the view that a partial quoting of the mandate as it related to regional
trade agreements (RTAs) was not acceptable.  Integral to the mandate on RTAs was the last sentence
of paragraph 29 of the Doha Declaration, which stated that "[t]he negotiations shall take into account
the developmental aspects of regional trade agreements", and this element should be included where
there was a reference in the text to accelerating work on clarifying and improving RTA disciplines.
336. On the Singapore issues, his delegation observed that the titles in the draft text did not
correspond to the titles of these issues given in the Doha Ministerial Declaration.  The Doha
nomenclature captured more accurately the subject matter to be addressed.  His delegation was
somewhat puzzled by the draft text's reference to Ministers taking note of "the work on the issue of
modalities, carried out at the level of the General Council", especially since there was only oneGeneral Council meeting left before Cancún and Members had yet to do any work on modalities in
the General Council.  He said that perhaps this reference would cover any work on modalities that
might take place in informal meetings.  If so, his delegation wondered if informal discussions for
which there were no records should be referred to in this context.  Regarding the fact that one of the
anticipated outcomes on the Singapore issues was the adoption of modalities by "explicit consensus",his authorities had enquired of him whether there was a common understanding in the organization of
what was meant by "explicit consensus", and had asked him to ascertain the difference between
"consensus" and "explicit consensus", and also precisely how, in actual decision-making terms, the
distinction would be operationalized.  A footnote clarifying this question might help, and might
prevent post-decision controversy which the WTO could do without.
337. Regarding paragraph 17 on small economies, Jamaica was disappointed that the Work
Programme had not advanced to the point where Members could, in accordance with the Doha
mandate, put to Ministers specific recommendations which would provide solutions to the
trade-related concerns of small economies.  Notwithstanding this, Jamaica recognized and appreciated
the willingness of many Members to work towards fulfilment of the mandate from Doha.  However,
Jamaica found that the proposed decision in paragraph 17 was weak.  The matter of small economies
was one that required political impetus from Ministers.  Indeed, the broad issue was one with whichMinisters had been seized since the Geneva Ministerial Declaration.  His delegation noted that in
other instances where deadlines had been missed or the mandate had not been fulfilled, the text had
urged intensification of efforts or acceleration of work, but not in the case of small economies.  In
this, as in other areas, Ministers should do more than just take note of the report of the Dedicated
Session of the Committee on Trade and Development and its recommendations, and should affirmtheir desire – which Jamaica did not think was in doubt – to see the Doha mandate on this important
issue meaningfully and expeditiously fulfilled.  The examination of the relationship between trade,
debt and finance and between trade and transfer of technology was very important to developing
countries.  It was regrettable that many developing countries had not been able to devote the attention
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and the already broad scope of the work programme.  Matters would be even more difficult if the
negotiating agenda was expanded in Cancún.  His delegation noted that although it was being
proposed that the work continue, the draft text in paragraphs 18 and 19 on trade, debt and finance and
on trade and transfer of technology respectively, did not provide for any subsequent reporting to
Ministers on the work in these two areas.  Jamaica was sure that this was an oversight and that there
would be a specific provision for reporting with recommendations to the Sixth Session in the same
way that at Doha there had been a provision for reporting on these issues to the Fifth Session.
338. Regarding the TNC Chairman's report to the General Council, this was a fair and accurate
account of proceedings so far.  Although the report avoided pessimism, it managed to convey clearly
a sense of the length and difficulty of the road ahead.  Jamaica had taken note of the TNC Chairman's
comment in paragraph 28 of the report that the issue of preference erosion deserved attention, and his
urging of participants not to let this question overwhelm the other important aspects of market access
for non-agricultural products.  Jamaica was confident that an issue with such enormous potentialconsequences would be treated seriously by all negotiating partners.  It looked forward to the
proposed consultations under the Chairman's stewardship on the many important issues that Members
had either to resolve or to make substantial progress on before Cancún.  Given the Chairman's
commitment to transparency and inclusiveness, Ja maica was confident that the Chairman would take
full account of the views of all Members in the weeks ahead, and especially in the finalization of thedraft Ministerial text for consideration and approval by the General Council.
339. The representative of Indonesia said that although improvements to the draft text were
required, it could serve as a basis for further work.  His delegation stood ready to work constructively
and closely with the Chairman and with all Members during the preparatory process for Cancún.
Before commenting on the draft text, his delegation wished to say a few words on procedure.Indonesia commended the Chairman for providing the opportunity to all Members to voice their
views at the present meeting, and wished to stress the importance that all processes be open,
transparent and inclusive.  In the same vein, it was equally important that the content of the draft
Ministerial text reflect the current state of play in the negotiations.  Like previous speakers, his
delegation wished to express its views in general on the draft text.  It found the text still far from theexpectation of most developing countries, especially on the developmental aspects of the negotiations.
The draft text did not adequately reflect the importance of development issues.  Instead, the language
in much of the text was ambiguous.  It should be made clearer and unambiguous.  One of the main
reasons for the success of Doha had been pre dominantly the development dimension of the Doha
package.  With regard to S&D and implementation issues, Indonesia would like to see moresignificant progress on the negotiation of S&D provisions and also to have a prompt solution on
implementation issues before Cancún.
340. On agriculture, given the current stalemate in the negotiations, his delegation found the
language being proposed rather ambitious.  As one of the most contentious issues in this negotiation,
it would be very difficult for delegations to ag ree to any modalities in agriculture without the
assurance that they were getting something from the agriculture negotiations.  For Indonesia, without
tools such as the concept of special products and special safeguard mechanism to effectively takeaccount of food security and rural development, it would have great difficulty in agreeing to any
modalities.  In this regard, it might be useful also to have alternative language that could take account
of the current state of the negotiations.  On market access for non-agricultural products, the draft text
set an optimistic tone that Ministers would adopt the modalities.  Indonesia welcomed this optimist
statement.  The agreement on modalities on this issue would have a positive impact on the wholenegotiation.  However, the content of the draft text on non-agricultural market access would also
depend on discussions during the next meeting of that Negotiating Group.  If Members failed to reach
an agreement on modalities, something else would have to be included in the draft text.  Indonesia's
suggestion was to prepare, at the present stage, other language for this paragraph, to the effect that
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on the services negotiations, his delegation wished to emphasize the urgent need to complete the
negotiations on rule-making before the end of the negotiations on specific commitments.
341. With regard to the submission of initial offers on services, his delegation felt strongly that
Members should improve the quality of their offers by taking into account the sectors and modes of
supply of export interest to developing countries .  Only by doing so, could developing countries
benefit from the negotiation of trade in services.  On the Singapore issues, his delegation took note ofwhat was suggested in the draft text.  It was clear that the four issues were being taken together and
with the same language.  Indonesia disagreed with this approach.  It continued to believe that each
issue should be addressed separately on the basis of its respective merits and its degree of maturity.
The action to be taken by Ministers should not be equal for each issue.  There should be more
flexibility for Members to treat each issue differently.  Having read the factual report from the
Chairmen of Working Groups and the Council for Trad e in Goods, it was clear that there were still
divergent views on many elements of each Singapore issue.  Based on this conclusion, it was difficultto conceive that negotiations on these issues would be launched at Cancún.  Apart from the proposal
to agree on modalities, there was also strong support for continuation of the process of clarification in
a more specific way.  This option should also be reflected in the draft text.
342. The representative of the Philippines said that his delegation would concentrate on just a few
issues.  On the draft Ministerial text, he got the sense that the Chairman had used the term
"operational" in the business sense, and that as a chief operating officer, the Chairman wanted to
present to Ministers an executive draft on which decisions could be based.  He was not sure this
would be compatible with Members' rather theoretical and broad policy agenda in the WTO, and had
heard some misgivings about presenting issues that would cover a broader treatment of the elements
and the positions of different delegations.  However, like Malaysia, his delegation would support theChairman being able to distil from the very hefty reports of the working groups and the TNC
something brief that would be acceptable to Members and also give a sense of covering all points for
Ministers in Cancún.  For example, he was a little less uncomfortable with the reports of the TNC and
the bodies established by it because – with the exception of the agriculture modalities, which
remained open and would had only basic elements rather than a framework – the rest of the other ninenegotiating issues were straightforward issues, and some kind of a distillation – whether negative or
positive – could be drawn up in this so-called skeletal draft text.
343. Nevertheless, the nuance in the TNC Chairman's report regarding the ongoing negotiations in
services was not similarly reflected in the proposed language in the draft Ministerial text.  Therefore,
there might be a need for some kind of redrafting and more discussion on these issues and the nuancewith which they were presented.  India had also obse rved that the draft text failed to highlight the
need for improved initial offers, especially in Mode 4, and concerns had been raised by Argentina on
the TRIPS side.  This meant that if 146 Members interpreted in their own way the reports of the
working groups, Members would find that the two weeks from 11 August allotted for distilling
discussions, analysing drafting proposals and reaching final agreement would probably submerge
Members in a very confusing situation in the final drafting of this operational text for Ministers in
Cancún.  However, his delegation would persevere and hoped that Members would exercise economyof language and debate in order to come up with a text for Ministers.
344. His delegation endorsed the principle raised by Brazil that at Cancún and in the post-Cancún
negotiations, Members should be able to summon deeper commitments and some accommodation
based on balance and equity, and should be able to have a successful outcome.  His delegation thought
that Members' problems would end if they had that outcome.  The second principle was that Membersshould preserve the viability and durability of the multilateral trading system represented by the
WTO, and in this sense, Cancún should not fail and the eventual DDA negotiations should be
successful.  The WTO should be seen as capable of meeting the challenges posed by the global
economic slowdown and of demonstrating the role that the process of reform and liberalization couldWT/GC/M/81
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play in promoting recovery, growth and developm ent, particularly for the developing and least-
developed countries.  Third, it was essential to ensure transparency in the decision-making process.
The process thus far had included the strongest elements of transparency and inclusiveness, and the
Philippines hoped that this would not slowly ev aporate when the crunch to produce a draft for
Ministers, starting from 26 August, began – when in the absence of consensus, Members might be
tempted, for the sake of expediency, to look at alternatives such as a draft resulting from a green-roomprocess.
345. His delegation also supported the need to ensure an overall balance that would allow
Members with fewer economic resources and those that had suffered from the inequity of past
negotiations to be able to redress this situation.  In this connection also, his delegation supported the
centrality of the development dimension.  In the proposals for decisions that Members would send to
Ministers, his delegation found little comfort in the fact that TRIPS and public health, S&D treatment,
implementation and the agricultural reform process – which was at the core of the developmentdimension – were not about to be resolved.  Thus, there was a greater challenge for Members, and
anxiety that they might not be able to meet that challenge.  However, if they committed themselves to
this effort, they should be successful.
346. He recalled that Members had made substantive contributions at the TNC meeting on 14 July,
and that with regard to the Singapore issues, many delegations had said this was not a done deal.  TheSingapore issues were not part of the single undertaking, and Members still had to surmount the issue
of decisions on modalities that were to be taken by Ministers by explicit consensus.  The General
Council Chairman had asked the Friends of the Chair to search for elements that would go into the
modalities, basing this on the results of 5 years of work in the working groups and the Goods Council
which, since 1999, had continued to consider the same issues year after year.  However, there wereunfortunately divergences of view, and with all the information and the seminars and the symposia
that he had attended on these four issues, he could build a strong case for why there should be no
negotiations, rather than the case for a multilateral framework.  Therefore, when discussions started in
the informal process on 11 August, there might be a situation in which some argued for and some
against, and Members would never reach consensus, even with five years of discussion.  Thisindicated very dim prospects for coming up with modalities unless the Chairman presented modalities
on his own responsibility, and the elements therein would be something Ministers would have to
discuss.  His delegation hoped this would not be the case.  There should be substantive discussions on
the issue of modalities for the Singapore issues in the consultations to come, which should be fully
transparent and inclusive, providing all Members the opportunity to participate.
347. The representative of Thailand said that the draft Ministerial text truly reflected the Doha
mandate and provided a panoramic view of all the issues needed to be traded off among Members.  Its
skeletal nature made it possible for Members to start putting flesh on the skeleton in a manner that
was consistent with the mandate given in Doha, and to complete it before forwarding it to Ministers in
Cancún.  Her delegation hoped that in due course this draft text would become a feasible and
workable framework for action by Ministers.  Nevertheless, her delegation could not avoid expressing
its disappointment over the present stumbling block in the negotiations which was likely to increase
the risk of prolonging the Round as well as adding to the burden on Ministers in Cancún.  It therefore
hoped to see real action from Members from the present time on.  Members should not keep insisting
on their positions on the issues of paramount importance to them, but should be prepared to be
flexible, to consider options for trade-offs and to accommodate other concerns and priorities, so that
there could be breakthroughs in all negotiating areas mandated by Ministers at Doha, and so that theoverall negotiations would be balanced and equitable.  In this regard, her delegation wished comment
on the draft Ministerial text.  On TRIPS and public health, Thailand was encouraged to know that its
colleague had been working with its pharmaceutical industry with a view to solving this problem and
coming up with a solution that could be acceptable to all Members prior to Cancún.  On agriculture,
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all three pillars.  The negotiations should provide substantial benefits and opportunity to Thailand's
farm sector comparable to those already produced in the non-agricultural sector.  Otherwise, it would
be difficult for Thailand to persuade its constituencies and stakeholders to believe in the credibility of
the multilateral trading system and the benefits of the Doha Round.  In this regard, her delegation
hoped to see the modalities for further commitments in agriculture include substantial tariff reduction
commitments and sufficient expansion of TRQ volume, substantial reductions in the area oftrade-distorting domestic support and the elimination of export subsidies, as mandated by Ministers in
Doha.
348. On non-agricultural market access, Thailand was prepared to adopt modalities that could
provide it with the same or at least a similarly ambitious outcome as for agriculture.  These modalities
also needed to take into account the concept of S&D and less-than-full reciprocity in the formula
agreed.  In addition, sectoral tariff elimination should not be included as part of the core modalities,
but should come later, as voluntary and supplementary to them, after Members agreed on the formula,if necessary.  On services, paragraph 6 did not reflect fully the situation in the services negotiations
and was not a balanced text.  For example, market access negotiations were given prominence by
including two possible new deadlines, while rule-making negotiations were mentioned only in
passing.  Political guidance was urgently needed for the rule-making negotiations on issues such as
emergency safeguards, subsidies and domestic regulation, in order to make headway, but the currentdraft text did not lend itself to that effect.  The draft text also called for those who had not submitted
offers to do so, but did not call for efforts from those who had submitted offers to improve their
offers, particularly on Mode 4, in which so many developing countries had interests.  Thus, more
work had to be done on this paragraph, and Thailand hoped to have the opportunity to provide
drafting suggestions at the appropriate juncture and in the appropriate forum.  On WTO rules, asmandated by the Doha Declaration, Members were tasked to clarify and improve disciplines and
procedures in three areas, namely, anti-dumping, subsidies and regional trade agreements (RTAs).
Thailand attached high importance to the rules area, in particular anti-dumping.  Progress and an
outcome on this issue were important and could have positive implications for the area of market
access.
349. On RTAs, Ministers had endorsed that "the negotiations shall take into account the
developmental aspects of regional trade agreements".  Thailand thus hoped that this would be
reflected in the draft text.  On implementation issues, even though her delegation was not quite
satisfied with the results of Members' deliberations on these issues, it took note of what had transpired
in different WTO bodies, given the divergent views expressed and uneven level of developmentalaspects of Members.  However, her delegation wished to stress the need for and priority given to
extension of geographical indications (GIs), which by its nature, required more time to discuss, since
it was linked to some other implementation is sues, for example, traditional knowledge and
biodiversity.  Thus, Members should keep up th e momentum, as Ministers had done in Doha, by
making reference to GIs extension in the draft text as well.  Regarding paragraphs 13-16 on the
Singapore issues, her delegation believed that their substance would have to be considered in light of
the progress of the overall negotiations, as well as taking into account the existing divergent views ofMembers. The content of each paragraph could, therefore, be separate and different, based on the
merits of each issue.  On e-commerce, Members could not at the present stage prejudge the outcome
on this issue, and this paragraph would have to be considered by Ministers as a part of the whole
package.  On environment, with respect to the issue of observership, Thailand reiterated its position
that this should be resolved on a horizontal basi s.  On the information exchange between the WTO
and multilateral environmental agreements, her delegation did not see the necessity of sending this to
Ministers for endorsement.  Thailand was of the view that the current practice on information
exchange in regular meetings of the Committee on Trade and Environment should be adequate.  Her
delegation looked forward to working constructive ly with the Chairman and other Members in the
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350. The representative of Namibia recalled Brazil's statement imploring Members to have faith
and explaining that whatever was happening was th e dynamics of negotiation.  Like others who had
spoken, his delegation wished to commend the Chairman for the leadership he had ably provided in
the process to strive towards the full attainment of the objectives and work programme of the Doha
Development Agenda.  This was notwithstanding the difficulties that had been associated with the
process and the noted gaps between Members' positions.  The Chairman had managed to keep the shipafloat, but the ship seemed to have holes through which the water was seeping in, and if this situation
was not urgently attended to, those Members who were in close proximity to the holes might be
denied the oxygen required for all passengers to arrive at the "shores of globalization" and to attain
the necessary development-enhancing outcomes for their peoples and countries.  This scenario would
make the captain at the helm of any ship very uncomfortable at the least, and very depressed at the
most.  His delegation was sure that the Chairman wa s not yet there and that he would stay the course.
Regarding the notion of a skeletal draft, he said that skeletons had mysterious ways of infusing lifeinto themselves, and these mysterious experiences could make people run away from these mysterious
creatures.  Thus, one had to remain guarded at all times.  With respect to the process question, the idea
that informal consultations would be pursued in the coming weeks with the HODs would present real
difficulties for the non-resident delegations such as his, in the absence of a clearly defined timetable
and agreed upon dedicated sessions of the General Council prior to Cancún.  Namibia wished tosupport and associate itself with Nigeria and Botswana, who had called for scheduled sessions of the
General Council between the present and Cancún, because this would ensure transparency and
inclusiveness.  In addition, it was his delegation's considered view that any text that would be
transmitted to Ministers for consideration and guid ance should reflect the views of the membership
and not merely be based on the judgments of the Chairman alone.  Only if the text reflected collectiveviews would Ministers, in their wisdom, be able to meticulously discern and appreciate the
differences both in substance and process in the context of these negotiations, on which basis they
would ultimately take decisions and give directives at Cancún.
351. The draft Ministerial text reflected a pronounced level of ambition which in Namibia's view
was not matched by reality and was also not balanced against an agenda that addressed the areas ofinterest to developing countries.  It was quite evident that the seeming deadlock Members were
confronted with on various negotiating fronts, at the present point in time, could not be unlocked
without collective political will.  Members had to embrace realism inasmuch as they were ambitious.
In this regard, Namibia wished to support and associate with Kenya, Brazil and Jamaica, who had
called for the text to adequately address issues of strategic and direct interest to developing countries,such as S&D treatment, Implementation and TRIPS a nd public health.  Therefore, Namibia hoped that
the final text would carry the balance of interests of the entire membership, and pledged its committed
support to this end.  His delegation trusted that the Chairman would ensure that the leakage was fixed
and that the ship remained afloat and on course, th ereby avoiding skeletons from assuming their own
life.  Cancún had to represent a true and realistic expression of balance of outcomes and interests that
would finally ensure that developing countries were meaningfully integrated into the global economy
and that poverty was directly addressed and alleviated.
352. The representative of Hungary said that since his delegation had expressed its views at some
length on the state of play in the negotiations at the last TNC meeting, it would confine its comments
to the draft Ministerial text.  His delegation first wished to recognize the difficulties the Chairman
faced in preparing this draft text, given the state of play in the various bodies handling the different
elements of the work programme. His delegation had noted the principle underlying the draft, whichwas stated in the second paragraph of the covering note to the draft text, namely, that the text was
guided by the Doha mandates. Hungary believed that this was the right approach and was ready to
intensify the work using the draft text as a starting point.  It was also ready to work according to the
format the Chairman had outlined as from 11 August.  His delegation welcomed this approach to
drafting the Ministerial text because it believed that substantial progress was needed and stillachievable on the major elements of the work programme, with a view to establishing a properWT/GC/M/81
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balance acceptable to all.  Against this background, his delegation wished to address two specific
points in the draft text.  On the paragraphs deal ing with the Singapore is sues, Hungary noted that
while the draft offered two options for each of the four issues, including the adoption of modalities, in
the case of market access negotiations the text did not indicate that action other than the adoption of
modalities could be available to Members.  This distinction seemed to be clearly inconsistent with the
guiding principle of the draft to which he had referred.  In his delegation’s view, the Doha MinisterialDeclaration contained a clear mandate to negotiate after the Fifth Session on all four Singapore issues
on the basis of a decision by explicit consensus at Cancún on the modalities of the negotiations.
Members' job at present was to prepare the modalities for adoption by Ministers. Accordingly, his
delegation believed it would have been more fortunate and consistent to include in the first draft the
single option of adopting the modalities for all four issues.
353. On implementation, including the extension of the TRIPS Agreement Article 23 protection to
products other than wines and spirits, Hungary was struck by the difference in the level of ambition inthe paragraphs addressing implementation issues in the Doha Ministerial Declaration and in the
present draft text.  Despite Members' failure to arrive at substantive decisions on paragraph 12(b)
issues by the December 2002 deadline, the draft text essentially called for the continuation of work on
implementation.  As his delegation had stated earlier, Hungary regarded these issues as negotiating
ones, without prejudice to the outcome of the negotiations.  It hoped that some progress could bereached at Cancún.  Hungary was particularly disappointed that there was no specific mention in the
draft text of the issue of GI extension.  His delegation recalled that some Members had questioned
whether GI extension was in fact an implementation issue.  Therefore, an explicit mention was
needed, even if no real progress was possible.  His delegation reiterated that it saw the negotiations on
GI extension as an essential element of a package of decisions/outcomes that the MinisterialConference should put together.  It agreed with  those who had said that other essential elements
included agriculture, non-agricultural market access and Singapore modalities, a substantial package
on S&D treatment, as well as a legally sound and workable multilateral resolution on paragraph 6 of
the Doha Declaration on the TRIPS Agreement and Public Health.  For the latter, the 16 December
Chairman's text provided the best and perhaps only chance.
354. Regarding the statement by Chile on the discussions on GIs, that delegation had referred to
three concepts or feelings, namely, frustration, resentment and confusion. His delegation assured
Chile that some Members on the other side of the fence shared those feelings to a certain extent, but
for completely different reasons.  They were in deed frustrated because the negotiations on the GIs
register had not progressed much in the past three years – in fact, the talks had been dragging on forsome six years – nor had the work on extension moved an inch in the same period, including after
Ministers had instructed Members to address it pursuant to paragraph 12(b) of the Doha Declaration.
Hungary was also resentful because some of its tr ading partners – one of whom Hungary would have
an association agreement with as from May 2004 – seemed not to be able to take into account the
interests Hungary had repeatedly expressed, together with a large cross-section of the membership.
His delegation was somewhat confused, because Chile had said part of the problem was that the
demandeurs had tried to address the GI-related issues in different fora.  Hungary wished to recall thatit had been Chile, together with other opponents of GI-related issues, which had rejected the option of
conducting the negotiations on both the register and extension in a single negotiating body, namely
the Special Session of the TRIPS Council.  This option would still be perfectly acceptable to Hungary.
355. The representative of Cuba said that the TNC Chairman's report showed a high degree of
optimism regarding the status of the negotiations, wh ich contrasted with the true status of the work.
As the TNC Chairman had indicated earlier, there were only two more weeks of work before a
document that struck a balance between the commitm ents adopted in Doha had to be finalized for
submission to Ministers and, in Cuba's view, that te xt should include critical recognition of the failure
to comply with the important deadlines set by Ministers in Doha for issues concerning special and
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solution to overcome the serious situation caused by the diseases that affected the vast majority of the
developing world.  Cuba hoped that the proposals put forward by those seeking the inclusion of such
issues would rapidly receive a response, but had to emphasize that the little time available should not
lead to pressure on developing countries and LDCs to set aside their fundamental interests.  It was
better to acknowledge that it had not been possib le to reach a compromise, than to accept a bad
compromise.  Negotiations should be harmonious and should respect the mandates agreed,particularly the commitment to place the needs and interests of developing countries at the forefront
of the WTO's work programme.  Developed countries bore responsibility for ensuring that these
words were turned into concrete commitments.
356. Regarding the process, Cuba noted with satisfaction the decision to hold the last meeting of
the General Council before Cancún on 25 and 26 August, when a draft document containing clear and
unambiguous language would be adopted.  Her delegation supported Jamaica's request that the
Secretariat circulate the minutes of the present m eeting in the three working languages prior to the
next meeting of the General Council on 25 August.  It also welcomed the process the Chairman was to
undertake.  Nevertheless, when taking up the issues, priority should be given to those that were
directly related to development, before taking up other issues which – al though Cuba did not deny
their importance – could be dealt with subsequently.  Cuba also proposed that there be regular written
reports on the results of the HODs meetings in order to give all Members the same overview of theprocess.  With regard to the draft Ministerial text, her delegation reaffirmed the position it had already
taken in the competent bodies, in the TNC meet ing on 14-15 July and in the General Council the
previous day regarding the moratorium on electronic commerce.  Its position on certain elements in
the draft text were as follows:  On TRIPS and public health, it was difficult for Cuba to welcome a
solution when it did not know the details.  If one was referring to the text of 16 December, herdelegation could welcome it.  Nevertheless, it was important to bear in mind that this did not include
important elements such as vaccines, whose inclusion in the decision was essential, given their nature
and the role they played in addressing public health problems.  In addition, paragraph 6 of the Doha
Ministerial Declaration on the TRIPS Agreement and Public Health should be read and interpreted in
the context of the Declaration as a whole, and particularly its paragraphs 4 and 5, which reaffirmedthe right of Members to protect public health and the flexibility given for this purpose in the TRIPS
Agreement.
357. Regarding  other TRIPS issues, Cuba drew attention to the fact that the document did not
include the implementation issues covered in paragraphs 18 and 19 of the Doha Declaration, to which
Ministers had attached great interest.  Regarding S&D treatment, Cuba attached high priority to thisissue, although the discussions under way showed that Members were still far from achieving results
that had the necessary value for trade and could be deemed to represent progress.  In this connection,
Cuba noted that Ministers in Cancún would not only have to instruct the General Council to monitor
this work, but would also have to take concrete ac tion to continue the work in the General Council.  A
similar situation applied to implementation issues, and Ministers would have to instruct the General
Council to hold meetings to consider and resolve these issues of major importance to the majority of
developing countries.  Regarding agriculture, Cuba supported adoption of modalities for newcommitments as soon as possible.  Nevertheless, as her delegation had emphasized on several
occasions, any agreement on modalities should be consistent with the mandate adopted in Doha, and
S&D treatment for developing countries should form  an integral part of all the elements of the
modalities.  They should also include strategic products of interest to developing-country Members, a
special safeguard mechanism for developing countries and the elimination of all types of exportrestrictions or bans, especially when they were applied to food-importing developing countries, in
order to ensure an appropriate balance in the negotiations.
358. Concerning market access for non-agricultural products, her delegation considered that the
modalities should contain effective measures that took into account the special needs and interests of
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of studies and appropriate capacity-building measures to help LDC's to participate effectively in the
negotiations.  With regard to the Singapore issues, Cuba noted with concern that in the skeleton draft
text, the four Singapore issues were given equal importance, which was contrary to the position of the
majority of Members that each of the issues should be dealt with independently in accordance with its
merits.  Cuba did not understand the meaning of the words "the work on the issue of modalities
carried out at the level of the General Council …", and asked what work this referred to.  There hadnot yet been any discussion in the General Council on these elements, and her delegation did not
believe that in the little time available it would be possible to do so.  As Cuba had indicated on several
occasions, it did not believe that conditions were ripe for the initiation of negotiations on these issues,
which required further study and analysis, and assessment of the impact that the relevant regulatory
activities would have on the economic and social development of developing countries.  Regarding
small economies, transfer of technology, and trade, debt and finance, her delegation once more
underlined the importance of achieving greater progress on these issues.  It was important for allMembers to undertake a thorough analysis and discussion in order to agree on specific
recommendations that would lead to better integration of small and vulnerable economies into the
multilateral trading system, an increase in flows of technology to developing countries and an
improvement in the capacity of the multilateral tradin g system to contribute to a lasting solution of the
problem of external indebtedness of developing countries and LDC's.
359. The representative of Turkey said he wished to make general and preliminary comments on
the draft Ministerial text and to touch on two specific issues, and would submit Turkey's detailed
views and comments on the draft text during the consultations starting on 11 August.  Turkey saw this
first draft as a starting point, an evolving text which needed  to be developed into a substantive text.
As the Communities had said, most of the bones of this skeleton were there, but with one exception.He would touch on this missing bone shortly.  Turkey supported the fact that the draft was guided by
the mandates given by Ministers at Doha.  This was quite natural.  However, his delegation also saw
the need to adapt this ambitious text to the realities of the recent state of play.  As it stood at present,
the draft text was a kind of best-case scenario, and maybe an ideal one, which Members should all
aim at.  It was also a wake-up call, as put by the Director General.  However, as all knew, the realitywas different from what was written in the draft text.  Therefore, Members needed to do a lot of work
up to the General Council meeting in August, so that they could have an agreed text that had the
support of the membership.  Turkey called upon all Members to show maximum goodwill and
flexibility in order to make Cancún a success.
360. Regarding the missing bone, which was very important for Turkey, the text as it stood did not
mention the extension of GIs explicitly.  Reference was made only to implementation issues in
general, under paragraph 12 of the draft text.  Theref ore, in order to be in conformity with the Doha
Declaration, Turkey would like to see a separate paragraph on GI extension included in the draft text.
As to the sequence of this paragraph, in accordance with the Doha Declaration, priority should be
given to GI extension as an implementation issue.  Concerning paragraph 6 on services, his delegation
recognized that intensified efforts in this context c ould play an important role in bringing this process
to a successful conclusion.  However, this would not be sufficient on its own, because of the simplefact that success in the services negotiations would largely depend on developments in other areas of
negotiation.  In this context, Turkey also saw the necessity of defining what was meant by improved
or revised offers.  The deadlines foreseen in the third sentence of paragraph 6 could only be
indicative, since Members had the right and the flexibility to revise, improve or withdraw their offers
until the very end of the negotiations, depending on developments in other areas.  His delegationwished to stress that  it stood ready to work in a constructive and cooperative manner with other
delegations on the draft text, with the hope and expectation of reaching a successful outcome at the
General Council meeting in August.
361. The representative of Chinese Taipei said the draft Ministerial text was very useful and could
serve as a basis for further discussions.  While recognizing the huge amount of work ahead, hisWT/GC/M/81
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delegation was nevertheless encouraged by the messages associated with the draft text, which
represented a possible success of the Cancún Ministerial Conference.  On the substance of the draft
text, all would agree that it should remain ambitious with a view to achieving the mandated
objectives.  However, Members should be very careful not to prejudge the outcomes of the
negotiations.  The draft text should also fairly represent the major interests of different groups of
Members.  When it came to sensitive issues, such as market access for agricultural products, Membersshould try to be realistic.  In addition, special consideration should be given to certain groups of
Members, such as the LDCs and the newly acceded Members.  Regarding the newly acceded
Members, almost all of them had made considerably higher levels of concessions upon their
accession.  They therefore deserved a certain grace period in the new Round of negotiations.  These
sentiments had been shared by quite a few Members.
362. On procedure, Chinese Taipei wished to join previous speakers who had reiterated the
importance of transparency and inclusiveness.  Although his delegation did not see the concern in thisregard to be a serious one, the two principles were key to the overall success of Cancún and beyond.
On TRIPS and public health, his delegation had no reservations regarding the draft text, and urged
Members to demonstrate greater flexibility in order to find a permanent solution to the problem as
soon as possible.  Chinese Taipei was pleased with the progress being made so far, but much more
was needed to restore the confidence of all Members, especially the least-developed and developingMembers.  Regarding agriculture, his delegation shared the view expressed by most Members that the
success of the DDA hinged upon the results of the agricultural negotiations.  The way the draft text
was crafted in paragraph 4 seemed to imply that modalities would be achieved before Cancún.  Of
course, this was something all would like to happen, but as a matter of fact, Members were not yet
there.  Therefore, achieving the target would require stronger political will and greater flexibility.  Inthis connection, he associated his delegation with the statement by Canada that major trade-distorting
mechanisms had to be properly tackled.  This was the first and foremost thing to do in order to secure
a good result from the negotiations.  On the other hand, Members should also take into account the
non-trade concerns that had been eloquently advocated by many Members.  In addition, special
considerations for newly acceded Members should also be addressed in the draft text.
363. On non-agricultural market access, with one more meeting of the Negotiating Group to go in
August, Members should not prejudge the outcome of their work on non-agricultural market access
modalities.  Nevertheless, in order to successfully conclude the non-agricultural market access
negotiations, Ministers might need to instruct Members to begin substantive negotiations not later
than a certain date post-Cancún.  His delegation also wished to point out the need for an incentivesystem to encourage all Members to make substantial tariff cuts.  In the meantime, autonomous
liberalization efforts by some Members should also be credited.  Another potential problem that
concerned his delegation was the inequitable effect that could result from the Negotiating Group
Chairman's proposed formula, where Members with lower average tariffs rates would be required to
make deeper cuts.  Due adjustments should be introduced.
364. On services, generally speaking Members had made some headway in the services
negotiations.  His delegation was encouraged by the fact that Members were continuing to submittheir initial offers.  Quality offers were important to make the negotiation more meaningful.  In
paragraph 6 of the draft text, there appeared to be some imbalance in the description of negotiations
between market access and rule-making.  This should be redressed, and his delegation would like to
see more progress in the area of rule-making, especially in domestic regulation and emergency
safeguard measures.  On the Singapore issues, Members should bear in mind that the Doha mandatesrequired them to prepare draft modalities for Ministers to adopt by explicit consensus so that the
negotiations could take place after Cancún.  In the draft text, his delegation noted that the four issues
were dealt with in four separate paragraphs with very similar structures.  Given the close interrelation
of the four issues, his delegation would prefer that they were handled as a whole when theWT/GC/M/81
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negotiations were kicked off.  Chinese Taipei reaffirmed its commitment to redoubling efforts with
the Chairman and with other Members before departing for Cancún.
365. The representative of Senegal said that the draft Ministerial text was an important step in the
process leading up to Cancún.  His delegation wi shed to commend the Chairman on his sustained
efforts and clear-sightedness in conducting this process, as well as those of the Director-General in his
capacity as TNC Chairman.  It was his delegation's understanding, as the Chairman himself hadindicated, that the draft Ministerial text was a general framework that was proposed in order to guide
Members in their discussions and to help them focus on essential issues requiring decisions or
guidance by Ministers in Cancún.  His delegation was well aware that this was no easy task, and
therefore wished to assure the Chairman of Senegal's support, modest though it might be, in ensuring
meaningful progress in the work up to Cancún.  The TNC meeting a few days earlier had given
Members an opportunity to examine the reports by the Chairpersons of the negotiating bodies and to
take stock of the negotiations.  Many delegations had voiced their expectations and concerns, andtheir misgivings about the turn the negotiations – and the work in general – were taking.  Senegal's
principal concerns remained, because there had clearly been no notable developments since then.  In
his delegation's view, however, the key question at present was how to move forward sufficiently to
enable Ministers to give new momentum to the negotiations, so that the January 2005 deadline could
be met.  It was important to bear in mind a number of principles which should be followed, so that the
process leading up to Cancún was properly conducted.
366. First, due account should be taken of the development dimension by incorporating it as far as
possible in any draft text submitted.  The draft text should more clearly reflect this legitimate concern
by reasserting and firmly recalling this overall objective, so as to show that there was a genuine will to
achieve this goal in spite of current difficulties.  Reaffirmation of this principle would help set thetone for the frame of mind in which the process was to be conducted.  Second, matters requiring
decisions or guidance should be sufficiently highlighted so as to enable Members to adopt
unambiguous positions.  In this regard, Senegal endorsed the wording proposed for the TRIPS and
public health issue, because it was based on the possibility of reaching a decision before Cancún, as
almost all Members so strongly wished.  There was the same degree of optimism concerning thenegotiations on agriculture and those on non-agricultural products.  In this regard, his delegation
wished to emphasize that the modalities to be established in Cancún should incorporate a sufficient
number of appropriate elements in favour of LDCs .  Third, a review of the Doha negotiating mandates
should be out of the question – in other words, it was not timely to renegotiate negotiating mandates,
considering all the implications in terms of additional work and the difficulties in agreeing on theterms of the mandates.  Regarding paragraph 10 on the DSU negotiations, his delegation wished to
know what was meant by "[f]urther negotiations shall be carried out on the basis of work done thus
far" – whether it was a matter of initiating new negotiations in this area and, if so, whether there
would not be a risk of similar steps being taken in other negotiating areas.
367. Fourth, Members should avoid the prolifera tion of provisional deadlines that would be
impossible to meet.  This might admittedly be useful in providing indicators of regular progress in the
work, but experience had shown how easily such deadlines were missed.  Fifth, regardingtransparency and inclusiveness of the preparatory process for the Conference itself, his delegation
agreed that the WTO had made progress in this regard, but further efforts were needed in order to
improve the climate of trust, especially as far as the smaller delegations were concerned.  His
delegation had noted in this connection that participation in the discussions on S&D issues had been
particularly difficult – if not almost impossible – for Senegal and others in the same situation, not onlybecause of frequent overlapping with other major negotiating sessions, but also because of
interpretation and even document translation problems.  It was most important to put all delegations at
ease so that they could take a useful, albeit perhaps modest, part in the preparatory process for
Cancún.  His delegation hoped that such situations would not recur during the remainder of the
preparations.  Sixth, regarding the Integrated Framework, Senegal wished to see developments in thisWT/GC/M/81
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area strengthened by addressing the needs of LDCs for adequate funding and simplified conditions of
access to activities aimed at enhancing supply capacity, as identified on the basis of the diagnostic
studies.  Although he was not speaking on behalf of all LDCs, every one of them shared this concern
and that it had to be included in the priority issues which these countries would undoubtedly raise.
Overall, the Chairman had set an optimistic tone for the draft Ministerial text by repeatedly
emphasizing "the progress made".  This outlook, he was sure, reflected the will of each one of theMembers, but it implied a collective effort in pursuit of the objectives of the Doha Development
Agenda, so that by the time the Conference opened, Ministers would indeed be able to record such
progress.
368. The representative of Mauritius said that his delegation had taken note of the cautionary
language used in the covering note to the draft Ministerial text, which pointed out, inter alia , that the
text was of a somewhat skeletal nature.  It had also taken note of the Chairman's observations that the
text was guided by the mandate given at Doha and was based on a reaffirmation of the commitmentstaken there.  His delegation had sent the text to his capital and at the present stage could make only
preliminary comments.  It would revert to the draft text in due course with more substantive
comments. The text was a good basis for discussion.  Services were of crucial importance to
developing countries and particularly for small economies like Mauritius.  His delegation attached
high importance to the development of this sect or and would, therefore, request that the text
appropriately take into consideration such concerns.  In this context, Mauritius would call for
language that took into account the full implementation of the guidelines and procedures adopted in
March 2001, giving due consideration to the needs of small service suppliers.  Mauritius would also
call for an expeditions completion of the work on modalities for LDCs.  On rules, his delegation
wished to emphasize that while clarifying and improving disciplines and procedures under theexisting WTO provisions applicable to RTAs, this would not undermine the flexibility of developing
countries to pursue their development and regional integration objectives.  In this context, Mauritius
wished to underscore the role of RTAs in promoting development and integration of developing
economies into the multilateral trading system.  It therefore wished to reaffirm that negotiations
should take fully into account the developmental dimension of RTAs, and appropriate language to thateffect should be factored into the text.
369. His delegation understood that in the context of the negotiations on agriculture and non-
agricultural market access, it was clear from the text that Members were still not in a position to have
final language.  On this basis it was his delegation's understanding that the whole of paragraphs 4
and 5 of the draft text were bracketed.  On small economies, the General Council had just approvedthe report of the CTD in Dedicated Session relating to the Work Programme on Small Economies.  It
would, therefore, be in order that the language used in the report concerning the decisions to be taken
in Cancún be reflected in the draft Ministerial text.  On environment, Mauritius, like other small
island developing states, had special concerns about ecological and climatic vulnerabilities, and hoped
that these issues could be appropriately taken into consideration in the negotiations on environment.
On technical assistance, his delegation wished to underscore the necessity of capacity building and
trade-related technical assistance, which should be a continuous process.  This should be provided in away that would support national development strategies and strengthen supply side capacities and
competitiveness of developing countries, so that they could take advantage of new export
opportunities.  Mauritius would therefore request that the importance given to this issue in Doha be
fully reaffirmed and that the text be streng thened with the following language drawn from
paragraph 38 of the Doha Ministerial Declaration:  "Priority shall also be accorded to small,vulnerable and transition economies, as well as to Members and Observers without representation in
Geneva.  We reaffirm our support for the valuable work of the International Trade Centre, which
should be enhanced".
370. The representative of Tunisia noted that the Doha Ministerial Declaration contained a large
number of provisions on the question of development, which had led Members to call the workWT/GC/M/81
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programme agreed at the Conference the Doha Deve lopment Agenda.  The discussions that had taken
place following the Conference had led both developing and developed countries to consider that the
development aspect should be a main focus of the work undertaken by the WTO in implementing the
Doha Declaration.  In view of this, his delegation considered that the development question had to be
adequately reflected in the Ministerial text for Cancún.  On agriculture, the modalities should include
the question of strategic products and a special safeguard mechanism for developing countries.  Theyshould also provide for the creation of a secu rity mechanism for LDCs and net food-importing
developing countries.  On market access for non-agricultural products, Tunisia considered that the text
should ensure that the negotiating modalities took into account the economic and social development
needs of developing countries.  They should also include effective measures to respond to the Doha
mandate regarding special and differential treatment and less-than-full reciprocity, studies on
appropriate capacity-building measures and modalities for reducing non-tariff barriers.  The paragraph
on services negotiations should include deadlines for concluding the negotiations on safeguardmeasures, subsidies and classification.  There should also be a better balance between the negotiations
on market access and those on rules.
371. The interests of developing countries should also be underlined in the text, in accordance with
the preamble and Articles IV and XIX of the GATS.  The text should indicate that the revised offers
of developed countries should be improved in order to take account of the interests of developingcountries and should include substantial commitments concerning Mode 4 on supply of services.  On
GIs, his delegation noted that paragraph 8 of the draft text did not mention the question of extending
protection of GIs to products other than wines and spirits.  On S&D treatment, all Members
recognized that there had been little progress in this  respect, but this was not reflected in the draft text.
It should be indicated that Ministers should take decisive action to clarify the mandate on S&Dtreatment and to give precise and targeted instructions to the General Council in order to make S&D
provisions more precise, more functional and more effective.  On technical assistance and capacity
building, the importance of the JITAP programme, whose relevance had been recognized by Ministers
in Doha, should be underlined and there should be an indication that Ministers in Cancún recognized
the merits of the programme, particularly after its extension to eight new African countries.  At thepresent stage, Tunisia hoped that Members could move ahead on all the elements of the draft text,
with the participation of all and in a transparent manner.  His delegation hoped that Members' joint
efforts would yield results that Ministers in Cancún could use as a basis to give the impetus needed to
conclude the global negotiations on time.
372. The representative of Uganda assured the Chairman of Uganda's cooperation in trying to put
some meat on the skeletal draft Ministerial text.  The sooner that was done, the sooner it would
become attractive.  The text was currently too empty to provide any encouragement.  Uganda agreed
with and supported the statements by Kenya and Bangladesh.  His delegation wished to emphasize the
question of developmental issues, and in particular the question of TRIPS and public health.  It was
Uganda's expectation that this issue would be resolved before Cancún.  Uganda hoped its developed
partners would be able to accept the 16 December text of the TRIPS Council Chairman, which in his
delegation's view was the only viable solution on the table.  On S&D, Uganda looked forward to thediscussions the Chairman would conduct and would c ooperate fully therein.  Regarding process, his
delegation took note of the great efforts being made by the Director-General and the Chairman, but it
was important that the texts forwarded to Minister s were owned by the membership, and that where
divergences existed, this was made clear, rather than giving false hope.  Ministers would need to
know this in order to lead the way forward.
373. The representative of Zambia said his delegation supported the statement by Bangladesh on
behalf of the LDCs.  Zambia welcomed the discussion of the draft Ministerial text in the General
Council.  Despite the Chairman's hard work, Members should not be seen as abdicating their
responsibility to the Chairman.  It was of primary importance to Zambia that the draft text which
would be sent to Cancún and which had potential implications for respective Members should go toWT/GC/M/81
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Cancún as a Member-driven text, as opposed to a Chairman’s text.  The draft text at hand was
conspicuously shy on the many missed deadlines, which should have been highlighted.  Ministers in
the Doha Declaration had clearly stated the need to resolve certain pending issues, such as
Implementation, S&D, TRIPS and public health, modalities for LDCs in the services negotiations, and
so on, before or at Cancún.  There was a need to state this in the draft text in order to help Ministers to
have an informed position and for them to reaffirm their commitments.  However, since the Chairmanhad advised that the text was a skeleton, his delegation trusted that all Members would have an
opportunity to bring the necessary meat to the draft text so that it was properly beefed up, before it
was sent to Cancún.
374. Modalities for LDCs in the services negotiations were extremely important.  They were the
basis for these countries' negotiations.  Zambia was concerned that up to the present, Members had
not been able to take decisions on adopting modalities.  Similarly, on S&D treatment, his delegation
had seen a trend to dilute the modalities so that they only appealed in form but without substantivecontent.  Zambia would not accept modalities wh ich did not protect LDCs from the pressures of
negotiations at the bilateral level.  Ministers had taken a useful decision during the Uruguay Round to
include in the GATS negotiations modalities for LDCs.  Indeed, Members had taken a good decision
to work on the establishment of modalities.  However, these modalities should be of value to LDCs.
A Ministerial text as important as the one for Cancún should highlight the importance of thesemodalities.  Zambia was worried that while Members had not yet adopted these modalities,
negotiations in the form of requests and offers were going on, thereby rendering the modalities almost
valueless.  With regard to the Singapore issues, his delegation, like most, if not all, delegations from
developing countries, and even some of those fr om more or less developed countries, was not yet
ready to engage in negotiations.  For Zambia, it was important to deal with issues in the way thatMinisters in Doha – and even the Marrakesh Agreement – had put them, in proper sequence.  For his
delegation, the first things that needed to be done, if developing-country Members were to be properly
integrated into the multilateral trading system, we re capacity-building, training, technical assistance,
market access and early resolution of the foreign debt.  The resolution of the foreign debt was part of
capacity building and therefore needed a quick solution.  Once these issues had been addressed, itwould then be possible to negotiate the Singapore issues.  The Singapore issues had to be unbundled
and should not be negotiated as a package, but each subject should be dealt with separately on its own
merit.  It was the hope and desire of his delegation that Cancún would be crowned with success.
375. The representative of Romania said that the draft Ministerial text appeared to reflect a
situation in which work in Geneva had been totally successful and all provisions of the Doha mandate
had been observed.  The reality was different, and her delegation saw the draft text as basis on which
to build and to reflect the results Members would achieve during the month of August.  Under these
conditions, Romania wished to make some suggestions.  It wished to see all the subjects of the DDA
covered by the draft text.  As they had indicated at the informal HODs meeting on 21 July, the group
of friends of GIs wished to see a reference to th is implementation issue.  Her delegation wished to
assure the Chairman as well as the Director General that it was determined to contribute to completing
the draft text with clear and realistic – and, as much as possible, non-contradictory – proposals to beadopted by Ministers in Cancún.  As Cancún was approaching and as another mini-Ministerial
meeting was going to take place soon with limited participation, her delegation wished to put on
record its concern regarding the transparency and inclusiveness of the negotiating process in Geneva
and in Cancún.  This concern was due to the fact that, as with other such mini-Ministerial meetings,
Romania had not been invited and had had to obtain news on the outcome of this meeting from themedia.
376. It was also very clear that her delegation would have the opportunity to show its flexibility
and to enjoy the same from other Members during the negotiations on non-agricultural market access,
and thus to contribute to finalizing the modalities on industrial products.  For the other elements
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have HODs meetings in August as well as a General Council meeting on 25-26 August.  Romania
also wished to participate in the informal consultations of the Chairs of the negotiating groups, and
would work with the Chairman and the Director General towards a draft Ministerial text that was as
clean as possible.  Her delegation still considered the Ministerial Conference in Cancún as a mid-term
review, and as an opportunity to take stock of the results already obtained and to give Ministers the
opportunity, based on these results, to provide furt her guidance on how to fulfil the Doha mandate.
Any other non-realistic or too-ambitious objectives for Cancún, over and above the Doha
Development Agenda, would negatively affect the outcome of the Fifth Ministerial Conference, at a
time when the world was expecting a positive signal from this organization that it was able to show its
commitment to development and to a transparent, predictable and profitable system for all its
Members.
377. The representative of Pakistan said that the draft text reflected the state of play, as the
Chairman had pointed out in the covering note to it. It was indeed a reflection of the realities and
Members' positions on various key issues. Given this fact, Members could not expect much more
from the draft text.  However, Pakistan was confident that as Members moved forward, they would be
able to flesh out this skeleton and provide a workable document to Ministers at Cancún.  Like several
other delegations, Pakistan felt that a lot of work was still required if Members were to achieve
substantive results in the negotiations and to lessen the burden for Ministers.  The work that Membershad to undertake from the present until Cancún would require a lot of flexibility and political will to
achieve meaningful results. His delegation recalled the statements by Brazil and others highlighting
the need to focus on development issues, and especially issues pertaining to S&D treatment.  In
Pakistan's view, all Members should seriously cons ider the proposals by Brazil so that Members could
see positive results by and at Cancún.  Regarding some of the major issues that would require positiveand early movement for achieving a breakthrough in the work, on the agriculture negotiations there
was a need to progress.  Agriculture might still prove to be the key to success at Cancún and of the
Round as a whole.  Therefore, Members needed to move rapidly and ambitiously on all three pillars to
remove the distortions in agricultural trade.
378. Members had to aim for a balanced and equitable outcome of this Round.  For this to happen,
there would need to be an equal level of ambition in these important negotiations, both on agriculture
and on non-agricultural market access.  The other important issue for a number of developing
countries was the question of TRIPs and public health.  The Chairman’s text of 16 December
provided a balanced and positive solution.  Pakistan hoped that delegations could reach agreement on
this basis so that this important issue was resolved before Cancún.  His delegation was slightlyapprehensive of the new deadlines proposed for S&D and implementation issues, as it had hoped that
these issues would be resolved by the time of thei r original deadlines.  However, Pakistan would not
want to see pending until the Sixth Ministerial Conference.  On the Singapore issues, Pakistan was
willing to look at each issue on its merits, but would want substantive modalities to be drafted on each
issue so that Members knew what they were getting into and what their future obligations could be if
they accepted negotiations on any of the four issues.  Pakistan, like other delegations, was satisfied
with the process so far, which had been transparen t and inclusive.  It hoped that this practice would
continue until the Ministerial Conference and at Cancún itself, so that no delegation felt left out of the
decision-making process.
379. The representative of Peru said that the report of the TNC Chairman was an appropriate and
realistic reflection of the situation in which Members found themselves.  On several occasions, his
delegation had stressed the urgent need to make progress in the key areas set out clearly in the draftMinisterial text, which were, of course, the negotiations on agriculture and those on market access for
non-agricultural products.  In this connection, his delegation fully shared the Director-General's
assessment in paragraphs 62 and 63 of his report that Members found themselves in a difficult
situation.  If they were unable to overcome the current deadlocks on these key issues, showing
renewed political will, they ran the serious risk of paralyzing their work and compromising theWT/GC/M/81
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credibility of the multilateral trading system.  This was not a welcome situation for those Members
which, like Peru, considered that it was important that this Round, termed the Development Round,
was successful in order to further their development strategies and policies.  A solution to the TRIPS
and public health issue would create a positive atmosphere in Cancún.
380. Members would only be able to determine to what extent it would be possible to move ahead
in other areas, such as services and the Singapore issues, if they made significant progress inagriculture, clearly incorporating in the negotiating modalities concrete aspects of S&D proposed by
developing countries, such as the special safeguard mechanism and strategic goods, guaranteeing
better levels of market access, making substantial reductions in domestic support and eliminating
export subsidies.  With regard to negotiations on market access for non-agricultural products, it was
essential that the future modalities properly reflec ted flexibility in regard to S&D treatment and the
principle of less-than-full reciprocity.  The needs of developing countries which, like Peru, had bound
100 per cent of their tariffs in the Uruguay Round, should therefore be taken into account.  Thereshould be a concrete reflection of this aspect in the modalities and in the various components of the
formula.  In addition, the sectoral approach proposed should be the subject of further consideration.
His delegation wished to emphasize once again that this approach should complement the formula
that would ultimately be adopted and that the mechanism should be voluntary.
381. Regarding the draft Ministerial text, his delegation considered that despite the fact that it was
inevitably controversial, it constituted an objective and neutral instrument that did not prejudge the
final outcome of the negotiations.  The document's approach was along the right lines, as it was aimed
at resolving pending issues and helped to focus the consultations Members would have to undertake
over the next few weeks, maintaining the levels of ambition defined by Ministers in Doha.  Regarding
the text itself, Peru wished to make three points.  The first concerned paragraph 6 on services.  TheCancún Ministerial Conference provided an opportunity to carry out an overall evaluation of the
progress made in the negotiations.  The Director-General's report contained some elements that Peru
considered could be included in the text – for example, the reference to the objectives in Articles IV
and XIX(2).  Their inclusion in the text would provide a useful guide which Members should take into
account when improving and revising their offers.  Another element was the special emphasis thatshould be given to negotiations on drawing up rules on national regulations, subsidies and emergency
safeguard measures which, as the Director-General had rightly pointed out, had been the subject of
negotiations since 1995 without any tangible progress.  In this respect, Peru considered it was
essential to make absolutely clear that the Specia l Session of the Council for Trade in Services should
review the progress made in the negotiations as a w hole – in other words, the elements related to the
bilateral requests/offers process and those related to the negotiation of rules, an aspect of the
negotiations that was of particular importance to developing countries.
382. Peru considered that Ministers could provide additional guidelines in order to make progress
on negotiations on rules.  Consequently, it proposed that the text request the Chairperson of the
Special Session of the Council for Trade in Services to ensure that the necessary measures were
adopted to allow Chairpersons of subsidiary bodies to play a more proactive role, in order to focus
discussions on the rules applicable to services and co mply with the deadlines fixed.  All knew that this
type of involvement by Chairpersons, who conducted consultations, proposed guidelines and, where
necessary, texts under their own responsibility, had borne fruit and had made a positive contribution
to progress in those areas of negotiation where there were differences among Members.  Regarding
paragraph 21 on non-violation complaints in the case of the TRIPS Agreement, Peru urged that this
issue be resolved satisfactorily at the next meeting of the General Council in August.  Members wouldthus avoid overburdening the agenda for Ministers in Cancún and would make a positive contribution
to the process.  Regarding the Singapore issues, hi s delegation wished to reiterate that for it, the
alternatives proposed were only a guide, and in no way prejudged the final outcome of the
negotiations.  Peru reaffirmed its position to the effect that the four issues should not be dealt with
together, but that a decision should be adopted by explicit consensus on each particular issueWT/GC/M/81
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according to its own merits and taking account of the progress made in other areas of the negotiations,
particularly in agriculture.  Members had a sensitive and difficult task before them.  He confirmed his
delegation's full readiness to cooperate with the Chairman and with the Director-General to facilitate
the quest for a consensus and a balance in the key areas of the negotiations, that would allow
Members to conclude the Cancún Ministerial Conference satisfactorily.
383. The General Council took note of the report by the Chairman of the TNC in document
TN/C/3 and of the draft Ministerial text in Job(03)/150.  It also took note of the statements and that
the report by the TNC Chairman would be forwarded to the Ministerial Conference.
8. Extension of deadline for registration of participants at the Fifth Session of the
Ministerial Conference
384. The Chairman, speaking under "Other Business", informed Members that to date,
60 delegations had not yet registered for the Fifth Session of the Ministerial Conference in Cancún.
In view of this situation, and in response to requests from delegations, the deadline for registrationhad been extended to 15 August.  Delegations were requested to register as soon as possible and not to
forget to communicate in writing to the WTO Conferen ce Office the list of their participants at the
Conference.  The deadline for submitting that list was also 15 August.
385. The General Council took note of the statement.WT/GC/M/81
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386. ANNEX
- Statement by H.E. Mr. Luis Ernesto Derbez, Minister of Foreign Affairs of Mexico and
Chairman-designate of the Fifth Session of the Ministerial Conference
Minister Derbez, Chairman-designate of the Cancún Ministerial Conference, who attended
the meeting, said in remarks prior to the close of the meeting that he had attended the meeting as an
observer because he believed it important for him to get a sense of the process of preparations for the
Ministerial Conference.  Less than two months re mained to the start of the Cancún Ministerial
Conference, and it was very clear to all that a lot of  work remained to be done if they wished to arrive
there well prepared.  The technical work, and the work of defining options, providing clarifications to
questions, and finding solutions to some of the issues that had been raised and discussed at the present
meeting would have to be undertaken in large part by delegations in Geneva -- not only those who hadraised these issues, but all who considered, as did the Ministers, that transparency, effective
participation, organized and consistent work and, above all, the presentation of solutions, would make
it possible for Ministers at Cancún to eventually arrive at solutions.
All those present knew that what occurred in Cancún was dependent on them.  Ministers
would have to receive texts that were fully complete, well understood, and above all, that would allow
Ministers to arrive at conclusions quickly during the five days that their participation would last.  He
reiterated his commitment to conduct the process of deliberation and decision-making at Cancún in a
manner that was inclusive, efficient and transparen t, and to work towards agreements that would
provide an impetus to the round -- agreements that de legations here in Geneva would be forwarding to
Ministers.
Everyone had a responsibility in this endeavour.  This was the work of a generation.  If they
failed to deliver, they would be failing an entire  generation by not allowing free trade to produce the
results that all were waiting for.   Ignoring this responsibility was not easy.  This was an opportunity
for all to produce, in this generation, the results that would help the next generation of inhabitants of
this planet.   This was a collective responsibility, and it had to be understood by all as an obligation to
be successful at Cancún, not only to give satisfaction to the Press, but more importantly because the
world, and the welfare of the inhabitants of all of the countries involved, depended on it.  He thanked
all delegations for the work they were doing, and looked forward to meeting them in Cancún.
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