RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/47
30 August 1999
(99-3576)
General Council
Special Session
29 July 1999
MINUTES OF MEETING
Held in the Centre William Rappard
on 29 July 1999
Chairman:  Mr. A. Mchumo (Tanzania)
Subjects discussed: Preparations for the 1999 Ministerial Conference
- Continuation of discussion of substantive issues arising from the
Ministerial Declaration of May 1998, including proposals by
Members, with the following suggested focus:  "Further
discussion of proposals on paragraphs 9 and 10 of the Ministerial
Declaration, and the organization of future work".
1. The Chairman recalled that, as agreed by the General Council at its Special Session on
25 February, the suggested focus of the present meeting was "further discussion of proposals on
paragraphs 9 and 10 of the Ministerial Declaration and the organization of future work", and noted
that since the General Council Special Session on 7 July, several additional proposals had been
received in regard to paragraph 8, 9 and 10 issues.  As regards the organization of future work in thepreparatory process, he said that the next phase of work would require the General Council to produce
the text or texts and the recommendations to be sent to Ministers at Seattle for their decision.  Clearly,
there was now a substantial amount of material on the table from which to distil recommendations to
Ministers.  Indeed, the process of distillation had already begun in recent informal meetings.  In view
of the task ahead, he suggested that the next phase might be characterized as recommendation-drivenand multi-layered.  Recommendation-driven in the sense that its main aim was to produce
recommendations to Ministers, and because it would be important to focus the work around draft
recommendations as soon as possible.  Multi-layered because Phase 3 should be structured with
maximum flexibility in order to make the most efficient use of the limited time available.  He
suggested that this entailed a process which, firstly, combined frequent informal General Councilmeetings - hopefully more and more at the Head-o f-Delegation level - with less frequent Special
Sessions.  This level of meetings would be the guarantee of transparency and full participation, and all
results in other fora would have to be brought back to it.  Secondly, there would be a need, as on all
past occasions, to hold other informal consultations at short notice to take up specific issues, and for
detailed drafting work.  Such consultations were an essential part of a result-oriented process.  Theyshould, of course, be conducted in full respect of transparency and non-discrimination.  It might, if
Members agreed, be useful to associate the Director-General with such consultations.  Thirdly, he
would be stepping up his own consultations with delegations at the individual level, and he expected
that delegations would also be intensifying the pace of their own multilateral and plurilateral
discussion.  Clearly, the General Council would be the body to which the work in this multi-layered
process would all come back to.  While he had noted the emphasis that delegations had placed on the
primacy of the General Council in the preparatory pr ocess, in all the past experience a multi-layerWT/GC/M/47
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structure such as he had outlined had been proven indispensable to enabling the work at the level of
the General Council to reach a successful outcome.
2. Since the core of work in Phase 3 would be the recommendations to be submitted to
Ministers, it was important to get a draft setting out possible elements on the table as soon as possible,
and he understood that some delegations were actively considering possible language.  On his ownresponsibility as Chairman, he intended to circulate a draft outline of a Ministerial text or texts to
delegations in the first week of September.  He wished to emphasize that this would be an outline, and
without prejudice to Members' positions regarding the elements that might eventually be included in
the text or texts that would go forward from the process to Ministers.  His intended outline would take
into account the work in Phases 1 and 2 and could serve as a basis for assisting the work in Phase 3.
With this aim in mind, he would circulate shortly to delegations a schedule of work in Phase 3
beginning with an informal General Council meeting on 8 September. He suggested that at thatmeeting Members continue their examination of specific proposals, including any that might have
been submitted over the summer break, and undertake a first reading of the draft outline.   The process
in the next phase would clearly have to be flexible, with more meetings added as necessary in the light
of his earlier comments.  He suggested that the Ge neral Council aim to finish its work in Phase 3 in
Geneva by the beginning of November in order to allow time for consideration of the resulting text incapitals, as well as time for translation and processing.  The Special Session that he would propose be
scheduled at the beginning of November could, however, remain on call so that any necessary
amendments could be made.
3. The representative of Venezuela, introducing a proposal on behalf of Cuba, Honduras,
Paraguay and Venezuela on TRIPS, said that their countries believed that the traditional knowledge of
the indigenous and local communities should be protected through one of the existing systems of
protection of intellectual property or a new ad- hoc system to address the concerns of these
communities on the lack of protection of their knowledge.  Although attempts had been made in
international conventions to redefine the rights of  indigenous peoples by recognising their intellectual
property rights, discussions and even disputes on this subject had intensified since the entry into forceof the TRIPS Agreement.  Similarly, different actions had been undertaken on this complex issue at
WIPO, such as the round table on indigenous intellectual property held on 23-24 July 1998.  At
present, intellectual property was defined as a form of property, generally private, which was a
temporary exception to free competition to allow exploitation of specific creations of human
ingenuity.  This exception did not offer protection for the traditional knowledge of local and
indigenous communities, such as art, music, medicine, and handicrafts, because this knowledge
represented the collective rights of a community or a people, and therefore did not have a knowncreator or author.  Their countries believed that the specific contribution of indigenous and tribal
peoples and communities to the cultural diversity, and social and ecological harmony of mankind
should be recognized.  In this regard, the expectations of these people to participate in global
economic development should be met, without discrimination and under conditions of trade
permitting access of their products and knowledge to other countries with due protection.  Exports ofvalue-added products resulting from ancestral knowledge should also be facilitated, to allow their
economic value to quantified and income to be generated to promote development and welfare in
these communities.  It was not equitable that c ountries with such communities were compelled to
assume accelerated technological development and to give protection to emerging technologies
without being able to protect the custodians of their traditional knowledge.  They therefore requestedthat, at the Ministerial Conference, a mandate be elaborated for a detailed study of the manner in
which protection could be accorded to these intellectual property rights including the traditional
knowledge, medicinal practices and folklore of local and indigenous communities.  This study should
be carried out under the TRIPS Council within two years, and a final report should be presented to the
fourth Ministerial Conference. Furthermore, on the basis of this study and the final report,negotiations should be mandated to establish multilateral rules to accord effective moral and
economic intellectual property rights in this area, taking into account the social and collective natureWT/GC/M/47
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of these rights.  These rules should become provisions of the TRIPS Agreement and enter into force
on 1 January 2004.
4. The representative of Brazil, introducing a proposal on the Anti-Dumping Agreement
(WT/GC/W/269), said that the Agreement, a lthough being an improvement over the previous
situation, still had serious gaps in the text that allowed some Members to use it as an instrument ofprotection.  On the one hand, affected countries often had insufficient legal resources to contest the
legitimacy or legality of anti-dumping measures, and, on the other,  countries imposing the measure
were protected by the lack of clarity in the Agreem ent, giving room for manoeuvre with respect to the
criteria for the imposition and collection of duties, the procedures for reviews, and the methodology of
calculations.  In addition, Article 17 provided the imposing Member a safe haven from challenges
raised by other Members in the context of the Dispute Settlement Understanding.  To address this
situation, Brazil believed that several provisions of the Agreement should be improved, with a view toreducing the ability of Members to arbitrarily apply anti-dumping measures, and to prevent the
perpetuity of such measures or their widespread use as a means to protect inefficient sectors of
domestic industry.  Brazil also highlighted in the proposal that the special and differential provisions
in the Agreement were inadequate, as the provisions of Article 15 were only recommendatory, and
there was no evidence that, since the Agreement had come into force, developed-country Membershad implemented, or even intended to implement, these provisions.  Brazil therefore proposed, first,
that the Anti-Dumping Agreement should be improved, and had outlined the areas where
improvement was feasible and necessary.  Second, the provisions of Article 15 should be made more
comprehensive, operational and mandatory.  Third, when investigating dumping of imports from a
developing country, the use of the "lesser duty" rule should be made mandatory.  Finally, Article 17 ofthe Agreement should be modified to allow Member s to effectively challenge, under the Dispute
Settlement Understanding, any aspect related to the implementation of the Agreement or to a specific
anti-dumping measure.  In particular, Brazil believed that panels should be authorized to fully assess
whether or not the investigating authorities had properly established and evaluated the facts of a
specific case and to determine conformity of a measure based on the panel's own interpretation ofrelevant provisions of the Agreement.
5. Presenting a proposal on the Agreement on Subsidies and Countervailing Measures
(WT/GC/W/270), he said that the Subsidies Agreement had established equal disciplines, rights and
obligations for all Members, and except for a few transitional provisions, there were no actual clauses
for special and differential treatment, which would allow the use of incentives by developing
countries to address their economic, financial or social policy needs.  This might be the result of
developing countries believing, at the time of th e Uruguay Round, that if subsidies were disciplined to
such an extent that no Member would subsidize production or exports, developing countries would be
the beneficiaries.  During implementation of the Agreement, it had become clear that some obvious
inequalities among Members had not been addressed in areas such as investment attraction,
availability of external financing, acute regional contrasts, as well as shortcomings for developing
countries in terms of financing of research and development projects.  All these were structuraldeficiencies that could not possibly have been overcome within the short transition period allowed for
in the Agreement. Article 27, regarding special and di fferential treatment, stated in its first paragraph
that Members recognized that subsidies might play an important role in economic development
programmes of developing-country Members, which was a major contradiction in the Agreement as
that paragraph was followed by a transitional provision allowing developing countries to make use ofthose provisions only for a period of eight years.  In its proposal, Brazil had suggested, first, that the
review of Article 8, as mandated by Article 31, classify, as non-actionable subsidies, measures
implemented by developing countries with a view to achieving legitimate development goals, such as
regional growth, technology research and de velopment funding, production diversification,
development and implementation of environmentally sound methods of production, manufacture ofhigh technology and value-added goods.  These areas were not all included in Article 8, which, in
essence, only included subsidies of interest to developed countries.  Brazil also suggested thatWT/GC/M/47
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Article 27 should be re-evaluated so as to address, under a more permanent and adequate framework,
the needs and specificities of developing countries concerning incentives and subsidies.  In addition,
the language of the Agreement regarding investigation procedures should be further clarified, possibly
by incorporating provisions that would improve disc iplines in areas such as review procedures, facts
available, sampling, significant volumes, calculation of the amount of a subsidy, and imposition andcollection of a countervailing duty.  Finally, the proposal touched on the sensitive issue of export
financing.  Brazil believed that the language of item (k) of Annex I of the Agreement did not address
the disparities between developing and developed countries.  Brazil's recent experience before a panel
led it to believe that a developing-country Member having costs of capital higher than those of a
developed-country Member could not match the export financing terms of a developed country with
regard to long-term financing. Brazil believed this to be unacceptable, and that this important
systemic issue for  developing-country Members should be addressed before Seattle if possible, orduring the next round.
6. Introducing a proposal on the TRIMs Agreement (WT/GC/W/271), he said that this
Agreement disregarded obvious structural inequali ties among Members, which could not have been
overcome within the five year transition period for developing countries. Implementation of
development policies in developing countries was usually constrained by lack of official funds,domestic or foreign.  While investments from the private sector were important in this regard, they
had proved to be highly volatile and closely linked to the circumstances of the international financial
markets.  Other important fiscal and monetary factors also came into play, such as the high volatility
of international capital flows which aggravated balance-of-payments difficulties inherent to the early
stages of productive investments, which was when expenditures on imports largely outstripped export
revenues.  Brazil believed that this was an important issue in the light of possible further liberalization
in international trade, as new undertakings usually set off an investment cycle in developing countries
that required special care in sensitive areas such as employment relocation, currency stability, and
fiscal equilibrium. Brazil suggested that developing countries should have some flexibility in the use
of TRIMs and be allowed some latitude in devising policies that might attenuate the negative effectsof investment cycles and create a hospitable environment for foreign and domestic investors.  It was
therefore fair and imperative to review the concepts that had led to the acceptance of horizontal and
uniform TRIMs disciplines without due consideration to the needs and singularities of developing
countries.  Brazil's proposal was very broad in this regard, and suggested that specific provisions be
included in the TRIMs Agreement to provide developing countries the necessary flexibility to
implement development policies.  Proposals by other Members in this area had suggested the
extension of time-frames, and Brazil believed that, although this might be appropriate in somecircumstances, it was not sufficient in this case, and was seeking more than a temporary exemption or
a favourable transitional provision for developing countries.
7. The representative of Hungary said that his delegation supported the proposals by Cuba also
on behalf of several other Members, the Czech Republic, India and Turkey regarding the extension of
the scope of additional protection for geographical indications to products other than wines and spiritsunder the TRIPS Agreement. Hungary believed that the extension of the product coverage of
Article 23 of the Agreement should include agricultural products and foodstuffs. It was also important
to establish, as soon as possible, a multilateral system of notification and registration of geographical
indications as provided for in Article 23:4, since in the absence of such a system, paragraphs 1, 2 and
3 of Article 23 were very difficult to apply in a reliable and consistent manner.  Hungary recognized,however, that additional protection was not legally dependent on notification and registration.  He
noted that several delegations had observed in the TRIPS Council that the multilateral registration
system should not impose undue administrative burdens and costs on the WTO Secretariat, and
Hungary supported this view.  For this reason, Hungary proposed
1 that the Ministerial Conference
should consider whether to invite the International Bu reau of WIPO to take part in the management of
                                                     
1 Subsequently circulated as WT/GC/W/294.WT/GC/M/47
Page 5
the new system.  A precedent for such involvement already existed, whereby, under Article 3 of the
1995 Agreement between WIPO and WTO, the procedures relating to communication of emblems
and transmittal of objections under the TRIPS Agreement was administered by the International
Bureau of WIPO.  The different membership of WI PO and WTO had not proved to be an obstacle to
the establishment and operation of that implementation scheme, which had led to a considerablesaving of resources.  As regards the mandated negotiations on agriculture, he informed the General
Council that his delegation would shortly be submitting a proposal also on behalf of the Czech
Republic and the Slovak Republic regarding agricultural market access.
2
8. The representative of Hungary, speaking on behalf of the CEFTA countries and Latvia ,
addressing the issue of non-violation complaints under the TRIPS Agreement, noted that the proposal
by India on this issue (WT/GC/W/225) called for the modification of Article 64:2 of the Agreement in
order to clarify that subparagraphs 1(b) and 1(c) of GATT Article XXIII should not apply to theTRIPS Agreement. Article 64:3 mandated the TRIPS Council to examine, before 1 January 2000, the
scope and modalities for complaints of the type provided for under these subparagraphs of
Article XXIII pursuant to the TRIPS Agreement and to submit its recommendations to the Ministerial
Conference for approval. The CEFTA countries and Latvia shared the view that for the adoption of
these recommendations, consensus was needed in the TRIPS Council. Furthermore, in theirunderstanding, approval by the Ministerial Conference of the recommendations on the scope and
modalities for non-violation complaints made pursuant to the TRIPS Agreement was a pre-condition
of the application of these subparagraphs of Article XXIII. Thus, irrespective of the expiration of the
five year period provided for in Article 64:2, non- violation complaints would remain indispensable
under the TRIPS Agreement until the Council's recommendations were adopted by consensus at theMinisterial Conference. In the light of the lack of clarity regarding even the basic notions with respect
to non-violation complaints, the genuine complexity of the issue and the divergence of views as to the
applicability of this remedy, further in-depth analysis was needed. The CEFTA countries and Latvia
believed that the deadline of 1 January 2000 could not be met, and that a new realistic deadline for the
examination should be set to allow the necessary analytical work and consensus building to beundertaken. During this analytical phase, complaints under the subparagraphs of Article XXIII should
be inadmissible under the TRIPS Agreement.  The CEFTA countries and Latvia were not convinced
of the need for and applicability of the non-violation remedy, as the TRIPS Agreement contained a
fine and fragile balance of rights and obligations, and they were concerned that the introduction of
non-violation disputes under the Agreement, particul arly without a proper understanding of the issue,
might unsettle this delicate balance.  The CEFTA countries and Latvia would shortly be tabling a
proposal in this regard
3, and supported the proposal for an extension of the five-year period in
Article 64:2 submitted by Canada.
9. The representative of Japan, referring to his Government's proposal on trade facilitation
(WT/GC/W/257), said that there were many WTO agreements related to trade facilitation, and that a
number of developing countries were facing serious difficulties in implementing the existing
agreements.  Thus, as a first step to progress in this area, the difficulties faced by developing countriesand the necessary remedies needed clarification. For example, a number of developing countries were
facing difficulties in implementing the Customs Valuation and TRIPS Agreements, and these
difficulties were due not only to lack of knowledg e of the Agreements but also to not having the
appropriate information on the correct way to implement the Agreements while maintaining proper
customs clearance and taxation.  It was not enough to disseminate only general explanations on suchagreements, and for this reason Japan had suggested that a study be undertaken by WTO on the
possibility of establishing schemes for further cooperation, such as sending experts or receiving
trainees, taking into account the actual needs of customs offices in developing countries.  Specific
issues to be addressed in the Customs Valuation Agreement included measures for implementing a
                                                     
2 Subsequently circulated as WT/GC/W/285.
3 Subsequently circulated as WT/GC/W/275.WT/GC/M/47
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post-entry audit system, the training of customs officers on valuation techniques for goods and various
types of transaction, and a customs clearance system with a proper allocation of officials in
accordance with the flow of cargo.  In the TRIPS Agreement, issues included measures for
distinguishing IPR infringing goods, and for maintain ing balance between the rights of importers and
those of the IPR owners.  He also wished to request three clarifications on the proposal in this areasubmitted by the European Communities (WT/GC/W/190).  First, in paragraph 2 it was stated that a
rules-based approach would guarantee transparency and predictability for traders, and his delegation
would be interested to know whether this meant the amendment of existing WTO agreements or the
development of a new agreement.  Second, as a background to the proposal, his delegation wondered
if the EC recognized that existing WTO agreements  relevant to trade facilitation were being fully
implemented, and if this were not the case, that all Members, including developing countries, should
ensure the full implementation of existing WTO agreements.  In this regard, his delegation would beinterested to know what the EC thought about taking necessary measures, such as technical
cooperation, to secure the implementation of existing WTO agreements.  Finally, with regard to the
fourth indent of paragraph 3, his delegation would like clarification of the concept of "seamless
integrated transactions".  Turning to the question of electronic commerce, he said that while this was
an area that had been growing rapidly, countries were still exploring which rules and disciplinesshould be applied to it.  Japan believed that a free trading environment, without unnecessary
regulations, should be developed so that the benefits of electronic commerce could be fully realized.
In this regard, Japan has submitted a proposal in this area (WT/GC/W/253), and he wished to
highlight three salient points of the proposal.  Firs t, with respect to the treatment of digital contents
transmitted electronically, it would be appropriate to examine the issue further so that the GATTprinciples of  MFN, national treatment, and the general elimination of quantitative restrictions could
be applied to digital contents.  Second, Members should maintain the current practice of not imposing
customs duties on electronic transmissions.  And third, measures for privacy and consumer protection
and so on had legitimate policy objectives in themselves.  However, a balanced approach was
important in order to ensure that such measures did not develop into unnecessary regulations indeveloping a free trading environment.
10. He also wished to briefly introduce his Government's proposal under paragraph 10 on the
organization and management of the work programme.  Japan proposed that the negotiations should be
comprehensive, conducted as a single undertaking, and completed within a period of approximately
three years. The scope of the negotiations should include issues clustered around five areas:
(i) implementation and rules;  (ii) agriculture;  (iii) services;  (iv) industrial tariffs, and forestry and
fishery products;  and (v) response of the WTO under a globalized economy.  With regard to thestructure of the negotiation, the Ministerial Conference should be the primary body to supervise the
next negotiations.  At the same time, several options could be considered for the actual negotiating
structure, taking into account factors such as efficiency and the burden on developing-country
Members, as well as horizontal aspects such as meeting developing-country concerns and
environmental factors.  With regard to the tim e-frame, the Fourth Session of the Ministerial
Conference should be held towards the middle of 2001 to review results and to provide guidance for
the period covering the remaining negotiations. The Fifth Session of the Ministerial Conference
should be held at the end of 2002 for the conclusion of the negotiations. Japan welcomed the proposal
submitted by Hungary on behalf of the CEFTA countries on a draft Ministerial Declaration, and
believed that it would facilitate work in Phase 3.
11. The representative of Kenya said he wished to introduce four proposals on behalf of the
African Group, which reflected preliminary views of the Group and were without prejudice to the
positions of individual Members.  With regard to technical assistance, the African Group firmly
believed that increased participation of developing countries, and in particular LDCs, in international
trade should remain one of the priority areas of the WTO.  This should also be one of the mainobjectives of WTO technical assistance activities.  The Group's proposal in this area (WT/GC/W/299)
suggested that Members should reaffirm their commitm ent to technical assistance as a core activity ofWT/GC/M/47
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the WTO, and technical assistance should be implemented in a manner that would effectively achieve
the previously agreed objectives. An increasing share of technical assistance should be financed
through the regular budget. In this regard, the objective should be to meet the current level of
technical assistance requirements through the regular budget in a phased manner by equal amounts,
and the African Group believed that this should be achieved within a period of three years.Furthermore, any surplus in the WTO budget should be allocated to technical assistance activities.
Finally, Members should undertake an annual examination of technical assistance activities in the
General Council.  This examination should be based on the consideration of reports and
recommendations from subsidiary bodies, in particular the Committee on Trade and Development and
the Budget Committee, on their consideration of issues related to technical assistance activities.  The
Secretariat should also be requested to prepare a comprehensive report on technical assistance
activities that would include the difficulties encountered and possible ways and means of addressingthem.  The African Group believed that this would contribute to the achievement of a more coherent
approach to WTO technical assistance.  This would also contribute to ensuring that technical
assistance was better matched to the needs of developing countries.  This examination might consider,
inter alia :  (i) planning technical assistance activities;  (ii) financing technical assistance;
(iii) improving monitoring and evaluation methods;  and (iv) the coordination of technical assistancewith other organizations, and in particular sub-regional organizations. Turning to the proposal on the
interaction between trade and competition policy (WT/GC/W/300), he said that the African Group
had long recognized the signficant potential development dividends that could accrue from the reform
process underway in African countries, including in trade policy, with the application, inter alia  of
competition policy.  For this reason, it had given its support to the decision by the General Council inDecember 1998 on the continuation of the work of the Working Group on this subject, including
focussed discussion on:  (i) the relevance of fundamental WTO principles of national and most-
favoured-nation treatment, and transparency in co mpetition policy; (ii) approaches to promoting
cooperation and communication among Members, including in the field of technical cooperation;
(iii) the contribution of competition policy to achi eving the objectives of the WTO, including the
promotion of international trade; and (iv) issues raised by Members relating to the interaction between
trade and competition policy.  In this regard, the African Group proposed that Ministers mandate the
following:  (a) continuation of the educative, exploratory and analytical work of the Working Group;
(b) assistance to developing countries, in particular African countries, to participate more effectively
in the work of the Group; (c) establishment of a special competition technical assistance programme
in collaboration with UNCTAD and the World Bank, adequately and sufficiently funded, and
especially designed to meet the individual needs of developing countries, in particular Africancountries, in the area of work related to competition policy;  (d) strengthening and assisting Members
with existing legislation and agencies which requested such assistance; (e) elaboration of practical
approaches to institution and capacity-building that would economise on costs; and (f) promotion of
coherence between competition policy and related laws, policies and WTO disciplines in the context
of international coherence initiatives.
12. In connection with the implementation of the Agreement on Customs Valuation, he said that
53 developing countries, including 22 African countries, had invoked the special provisions set out in
Article 20:1 in order to delay application of the Agreement for a transitional period of five years.
However, it appeared difficult for the African countries to implement the Agreement by the scheduled
date of the year 2000, owing to their lack of inst itutional and human resources. With the exception of
the technical assistance supplied by the WTO Secretariat with its limited means, the developed
countries had not lived up to their commitment set out in Article 20:3 of the Agreement concerning
special and differential treatment.  This paragraph provided for drawing up programmes of technical
assistance relating to the training of personnel, the preparation of implementation measures, access to
sources of information regarding customs valuation methodology, and advice on the application of theprovisions of the Agreement. In its proposal (WT/GC/W/301), the African Group had stated that,
given the non-implementation of Article 20:3, the majority of African countries considered that the
transition period granted them was insufficient and they would be obliged to request an appropriateWT/GC/M/47
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extension, in accordance with the relevant provisions of the Agreement, in particular Annex III, in
order to enable them to acquire the necessary t echnical assistance and expertise to implement the
Agreement without affecting their comparative advantage.  Finally, the African Group's proposal on
the TRIPS Agreement (WT/GC/W/302) set out some of the key issues of interest to the Group,
highlighted some of the difficulties being faced an d made suggestions as to how these difficulties
should be addressed. The issues addressed in the submission related to Article 64:3 on non-violation
complaints;  Article 66:2 covering incentives for transfer of technology to LDCs;  Article 27:3(b)
concerning protection of plant varieties, on which the African Group shared the views expressed by
Venezuela on behalf of some other members at the present meeting; and Article 23:4 on the
establishment of a multilateral system of notification and registration of geographical indications.
13. The representative of the United States said  that her delegation shared with others the
responsibility to ensure that the Ministerial Co nference highlighted the role of trade in world
development and prosperity, and resulted in an agenda that opened an era of accomplishment for the
trading system. Over the previous months, her Government had held a series of intense consultations
domestically and with other trading partners to help develop consensus on such an agenda.  The
proposals submitted by the United States reflected many of the ideas developed through these
sessions, which had indicated a broadly shared agreement that the work ahead should give specialfocus to the built-in agenda, expanding market acces s, implementation of existing commitments and
ensuring that Members' actions reinforced the sh ared commitment to further integrate countries into
the system.  At the present meeting, her delegation was submitting a number of additional proposals
relating to technical assistance and capacity building, transparency in government procurement,
agriculture (export competition, market access, domestic support and biotechnology products), andtrade facilitation.
4  Regarding the implementation of existin g commitments, she said this was critical
to confidence in the system and the credibility of new negotiations.  Blanket extensions and
exceptions to key disciplines would unravel the balance of concessions that allowed completion of the
Uruguay Round Agreements.  The United States was prepared, however, to look at issues and
problems on a case-by-case basis, and where there were legitimate problems, find ways to addressthem.  Many developing countries had asked that the WTO be active in assisting with implementation.
The proposals submitted by the United States were aimed at addressing many of the concerns raised,
focusing on specific problems, methods to address them, and ways to make technical assistance
programs more effective in promoting full in tegration into the world economy.  Two examples
included an action agenda that would adapt, improve and expand the existing Integrated Framework,
and new work on trade facilitation linked directly to technical assistance.  Next, a negotiating agenda
should be developed that met the major priorities of WTO Members.  Once consensus on the agendawas achieved, the appropriate structure for negotiations could then be adopted.  It was clear that any
final package should be broad enough to create a political consensus by addressing the market access
priorities of all Members.  While much consultation remained ahead, the discussions so far had
indicated a broad view that the core of the agenda should be market access concerns and issues,
complemented, amplified and balanced by a work programme to address areas in which consensus didnot yet exist for negotiations, and by measures to improve the functioning of the WTO.  Market
access negotiations should cover the built-in agenda of agriculture and services, and should also
extend to non-agricultural goods.  In agriculture, objectives would include completely eliminating all
remaining export subsidies, substantially reducing trade-distorting support while preserving criteria-
based "green box" policies, lowering and binding tariffs and improving administration of tariff-ratequotas, strengthening disciplines on the operation of state trading enterprises, improving market
access through a variety of means to the benefit of least-developed Members, and addressing
disciplines to ensure that trade in agricultural biotechnology products was based on transparent,
predictable and timely processes.  In services, the United States was looking to liberalize restrictions
in a broad range of services sectors, ensure that GATS rules anticipated the development of newtechnologies, prevented discrimination against particular modes of delivering services, such as
                                                     
4 Subsequently circulated as WT/GC/W/254, 276, and 286-290.WT/GC/M/47
Page 9
electronic commerce or rights of establishment, and developed disciplines to ensure transparency and
good governance in the regulation of services.  In the area of non-agricultural goods, the United States
sought to engage in a broad market access negotiation in the next round, building upon APEC's
Accelerated Tariff Liberalization initiative, with objectives including reducing tariff disparities,
providing recognition for bound tariff reductions made as part of recent autonomous liberalizationmeasures or other WTO measures, ensuring use of applied rates as the basis for negotiation, and
incorporating procedures to address non-tariff measures and other measures affecting conditions for
imports, and, as in the case of agriculture, improving market access for least-developed Members
through a variety of means.  Clearly, some Members had interests beyond this set of core issues, and
others had raised concerns about the difficulty of fulfilling existing commitments.  This suggested that
certain issues would be appropriate for a forward work programme that would help Members,
including the United States, better understand the implications of newer topics and build consensusfor the future.  One especially important area was the relationship between trade and core labour
standards.  While the Singapore Declaration had been an important first step, more attention to the
intersection of trade and core labour standards was warranted as governments and industries wrestled
with the complex issues of globalization and adjustment.  As her delegation had stated in January, the
United States believed a recommendation should be forwarded to Ministers for the establishment of aforward work programme in the WTO to address trade issues relating to labour standards and where
WTO Members would benefit from further information and analysis on this relationship and
developments in the ILO.  The United States further urged consideration of specific institutional links
between the ILO and the WTO to help facilitate a common agenda on issues of concern to both
organizations.
14. In addition, the past five years of experience in the WTO had revealed areas in which the
institution could be further strengthened, including institutional reforms that could strengthen
transparency, ensure citizen access and build public support for the WTO and its work.  Here,
objectives would include improving means for stakeholder contacts with delegations and the WTO,
and enhancing transparency in procedures to the maximum extent possible.  Capacity building was anexceptionally important issue which could help Members implement commitments, use dispute
settlement effectively and take maximum advantage of market access opportunities.  Specific
objectives would include improving cooperation among international organizations, bilateral donors
and NGOs, building upon and expanding the Integrated Framework concept, ensuring the most
effective use of resources in technical assistance, strengthening capacity building efforts on regulatory
and other infrastructure needs, and exploring a development partner program for the least-developed
nations.  The United States had been consulting with others on these ideas, and looked forward to
continuing to develop a joint effort in this area.  Improved trade facilitation could help ensure that less
developed economies and small businesses could take full advantage of a more open world economy.
Here, objectives would include clarifying and strengthening the transparency requirements of WTO
agreements, and improving customs and other trade-related procedures.  Finally, as Members
embarked on a new round, they should be guided by their shared commitment to sustainabledevelopment.  This would include focus on institut ional reforms, pursuing trade liberalization in a
way that was supportive of high environmental standards, and pursuing areas of trade liberalization
with particular promise for direct environmental benefits, such as elimination of tariffs on
environmental goods, liberalization of trade in environmental services, and elimination of fishery
subsidies that contributed to overcapacity.  Members could work together to find additional areas aswell.  To help accomplish these objectives, the United States was submitting a number of proposals
5,
including the use of the Committee on Trade and Environment as a forum to identify and discuss the
environmental implications of issues under negotiation.
15. Altogether, these actions would create broader market access opportunities, ensure that they
were shared across developed and developing countries, create opportunities to develop and benefit
                                                     
5 Subsequently circulated as WT/GC/W/304.WT/GC/M/47
Page 10
from new technologies, strengthen the WTO, and build public support for the institution in the years
ahead.  In the months leading up to the Ministerial Conference, Members had several opportunities to
reach concrete results that would help build a foundation for this work.  First was the accession of
new WTO Members, on commercially meaningful  grounds.  Since 1995, seven new Members had
joined, with one more to follow shortly.  With 31 accession applicants, the United States lookedforward to further accessions in the coming months, applauded those that had completed the process
and had made progress on accession, and believed their work should be recognized at Seattle.
Clearly, however, not all the applicants would complete their accession processes by the opening of
the new round.  In these cases, as had been the case in the Uruguay Round, Members would need to
find a formula under which these economies could be involved in the new negotiations while moving
ahead with their accession processes.  Second, a strong and credible dispute settlement system was
essential to the credibility of the WTO system as a whole.  These goals had informed the participation
of the United States in the dispute settlement review, focusing on transparency and ensuring timely
implementation of panel findings.  The United Stat es was particularly interested in providing for
earlier circulation of panel reports, making parties' submissions to panels public, allowing for
submission of amicus briefs and opening hearings to observers from the public.  Ministers should be
in a position to ratify the results of the review by the Ministerial Conference.  Third, one of the mostexciting commercial developments of recent years had been the adaptation of new technologies to
trade.  This had especially important implications for developing regions, which would only be
realized if electronic commerce continued to develop unfettered.  As a first step, Members should
extend, at the Seattle Ministerial Conference, the May 1998 multilateral declaration not to assess
customs duties on electronic transmissions.  Furthe rmore, Members should work toward agreement on
clarifying the applicability of existing WTO rules to electronic commerce, and agreement on
modalities for integrating electronic commerce into the work after the Ministerial.  Fourth, many
Members were committed to achieving agreements to expand market access on a range of goods of
interest to countries at all levels of development, such as the ITA II, and the Accelerated Tariff
Liberalization initiative.  Fifth, trade policy ha d important potential to support broader policy
objectives, and Members should build consensus on improving the WTO's ability to collaborate with
international institutions in these areas, through reciprocal observer status, joint research when
appropriate, and other methods to ensure that issues with implications for trade and other policy
objectives were addressed as effectively as possible.  Sixth, Members should agree upon specific
measures to improve transparency throughout th e system, including ensuring maximum understanding
and access to WTO meetings and procedures, consistent with the government-to-government nature
of the institution.  Dispute settlement was a special focus for this work, as already outlined. Inaddition, the WTO could help promote transparen cy and good governance world-wide, through an
early agreement on transparency in government procurement.  Finally, it was clear that interest in the
WTO and its work on the part of civil society organizations, including businesses, labour
organizations, agricultural producers, environmental groups, academic associations and others, was
growing.  Delegations and WTO staff would also benefit from hearing a broad range of opinions andviews on the development of trade policy.  Before the Ministerial Conference, the United States was
looking for agreement upon methods for such stakeholder organizations to observe meetings as
appropriate, and share views as delegations developed policy.  In summary, the coming months and
years offered Members a remarkable opportunity. The founders of the GATT, those who had
developed the system in the succeeding decades, and the negotiators of the Uruguay Round had left aworld economy more productive and prosperous than ever before.  With a successful round, Members
could do the same for the next generation, raising living standards and creating new opportunities for
billions of people.  As host and chair of the Ministerial Conference in Seattle, the United States felt a
keen responsibility to help build the consensus that would allow Members to realize this vision.
16. The representative of Singapore, introducing his Government's joint proposal with Indonesia
on electronic commerce (WT/GC/W/247), said that with the advent of electronic commerce, there was
a need to examine its impact on existing WTO rules,  as the interpretation of these rules was clearly
being impacted, and a clear and predictable approach was required.  Electronic commerce involvedWT/GC/M/47
Page 11
cross-cutting issues that straddled GATT, GATS and TRIPS commitments and, in this context, an
overarching guide in the form of an understanding on the interpretation and application of e-
commerce in relation to existing WTO commitments might be useful and necessary. This was to
ensure that electronic transmissions could be easily and unambiguously classified as either goods
subject to GATT, services subject to GATS or as intellectual property subject to the TRIPS
Agreement. The understanding proposed in the submission set out the manner in which the existing
framework of WTO rules could be applied to electronic commerce. Singapore and Indonesia
suggested that the framework address the following  three key elements:  (i) an appropriate legal
framework;  (ii) market access;  and (iii) issues relating to technical assistance and capacity building
for developing countries. With regard to an appropriate legal framework, clear criteria would need to
be established to classify digitized products, and it was paramount that the criteria for classification
should provide legal certainty as to how the digitized product, whether a good, service or intellectualproperty, was treated.  On market access, Sing apore and Indonesia believed it was necessary to
examine whether existing services commitments covered the whole range of electronic commerce
activities, and whether additional commitments or clarification of existing commitments would
support the growth of electronic commerce. In this  respect, the proposal highlighted the need to
consider international access and network services, and addressed the problems and complicationsrelated to the imposition of customs duties on digitised goods delivered electronically. A solution
would be to extend temporarily the current practice of not imposing customs duties on these goods.
Finally, on capacity building and technical assistance, the WTO could play a role, not just in terms of
providing technical assistance programmes and building infrastructure capabilities, but also in terms
of access to the requisite technology for developing countries. Singapore and Indonesia lookedforward to hearing the views of others on whethe r the proposal provided a basis for further work
before Seattle and thereafter.
17. The representative of Panama said that her delegation supported the Chairman's proposal on
the organization of work on the drafting of the Ministerial Declaration, and believed that due account
should be taken of the suggestion by India at the informal meeting held earlier with respect to holdinginformal consultations to ensure balance in the Declaration, and also of the suggestions by
Switzerland and Singapore. Her delegation also supported suggestions that the Secretariat prepare a
document summarizing the proposals submitted thus far, which would allow identification of the
areas of convergence and divergence.  However, it would perhaps be preferable not to attempt to
summarize the proposals but rather to include the full texts, so as to avoid misinterpretations. With
regard to the second phase of the preparatory proc ess, Panama welcomed the various submissions by
Members and shared, for the most part, the concerns expressed by the developing countries.  Panamareserved its right to submit proposals after the summer break.  Panama's preliminary views on the
future negotiations were that there was a need to achieve real and balanced market access for goods
and services, in particular in the sectors of agriculture and tropical products, light industries, and
labour-intensive services. In implementation, Panama's concerns were in the areas of non-tariff
measures, high tariff peaks, the use of subsidies for protectionist purposes, the need for more efficientapplication of special and differential treatment for developing countries, and the need for technical
assistance with a more efficient focus to strengthen institutional capacity.  Since its accession to WTO
in September 1997, Panama's economy had absorbed much structural change and her Government
continued to implement its Uruguay Round commitments with the aim of optimizing the country's
comparative advantage and to take full advantage of  the multilateral trading system. In this regard,
Panama called on all its trading partners to participate in developing future negotiations on the basis
of transparency, fairness and full implementation of commitments.
18. The representative of Korea supported the proposals on trade and investment submitted by
Japan, the European Communities, Switzerland and Hong Kong, China.  Korea's own proposal in this
area (WT/GC/W/267) was along lines similar to those suggested in these proposals. His delegationalso welcomed the proposals by Poland and Costa Rica.  Korea believed that a stable, transparent and
predictable environment for investment was a prerequi site for facilitating freer flows of investment,WT/GC/M/47
Page 12
which contributed to expanding global welfare.  The existing network of bilateral and regional
investment arrangements was effective to some degree in creating a favorable climate for foreign
investment but had fundamental limitations.  The discrepancies in the disciplines of these
arrangements might make the world investment environment more complicated and distort investment
flows, and multilateral rules on investment offered a solution to this problem.  Considering the evercloser interface between trade and investment, investment was an issue that deserved a rightful place
in the WTO.  The rule-based multilateral tradin g system could be further strengthened with the
establishment of WTO rules on investment. Korea's proposal did not attempt to cover all the specific
issues relevant to the interaction between trade a nd investment, but was aimed at offering a possible
WTO approach to a multilateral framework on investment in the light of diverse views among
Members.  First, Korea believed that negotiations on a WTO agreement on investment should aim at
facilitating investment flows through enhanced transparency and predictability.  Such a goal,however, should be reconciled with the need to pr ovide flexibility for host countries in formulating
their own policies, in particular development policies of developing countries.  WTO rules on
investment should reflect the different realities faced by each Member so as to represent an overall
balance of interests among Members.  Second, any agreement should focus on foreign direct
investment, and Korea did not believe that the WTO was an appropriate forum for tackling the issueof short-term capital flows.  Similarly, caution shou ld be applied in dealing with portfolio investment
in the light of its implications for financial security.  Third, the fundamental WTO principles of most-
favoured-nation and national treatment should be adopted as guiding principles of the agreement.  At
the pre-establishment phase, however, a bottom-up approach as in the GATS appeared to be an
appropriate model to follow.  The agreement should also establish a reasonably high standard ofinvestment protection by consolidating key elements of protection included in a variety of existing
bilateral and regional arrangements. The agreement should, however, preserve the host country's right
to regulate according to its unique economic situation as long as the regulations were compatible with
the agreement.  Fourth, a set of rules on transparency should be included as a core component of the
agreement.  Given the limited capacity of many developing countries, the agreement should alsoinclude provisions for technical assistance to countries desiring to enhance the overall level of
transparency of their investment regime.  Fifth, the agreement should address the concerns about
performance requirements and investment incentive s with a view to minimizing their distortive
effects, while recognizing their potential value as domestic policy tools.  Sixth, the existing WTO
dispute settlement procedures should be applied to the agreement, and in the light of the
inter-governmental nature of the WTO system, the agreement should focus on disputes between WTO
Members, to the exclusion of state-investor dis putes.  Finally, and most importantly, the agreement
should reflect the interests of developing countries, and the development dimension should be an
integral part.  Korea believed that some of these concepts and ideas might require further examination,
and all the issues involved should be identified and solutions sought during the negotiations.
19. The representative of the European Communities said that the second phase had given rise to
a very ambitious range of proposals for future work, which the Community welcomed.  The proposals
presented in the previous three months demonstrated a genuine desire to strengthen multilateral rules
and to continue to liberalize trade, and explicitly or implicitly, represented an overwhelming vote for
further, substantive negotiations.  Not only did the Community see a collective wish to improve the
multilateral trading system further, it believed that there was the beginning of convergence amongst
Members on how to do so.  Surveying the list of proposals for negotiations, one was struck by therange of countries that had come forward with ideas, developing, developed, and countries in
transition alike.  The large proportion of proposals from developing countries aimed at rule-making.
As to the range of issues on which changes or improvements to the WTO were sought, there was a
fairly even balance between the negotiations on the built-in agenda, the Singapore work programme,
and other issues such as market access or the revision of existing rules.  There was also a widespreaddesire to ensure full and timely implementation of existing Agreements.  Thus, the call by Ministers in
1998 for a broad-based and balanced agenda had certainly been followed both in letter and spirit.  On
the basis of the proposals made, and the common elements between them, the Community believedWT/GC/M/47
Page 13
that the objectives of the next round could already be identified.  These objectives were at least
fourfold.  First, to bring about further liberalization to the benefit of all.  Second, to strengthen the
WTO and improve the multilateral system through the review of existing rules or establishment of
additional multilateral rules.  Third, to increase WTO's responsiveness to the developing international
economic environment, including through greater coherence between trade policy making and othermultilaterally determined economic policies.  A key objective of the new round should be
development, and this should not remain rhetorical.  Development could best be served by improving
market access for developing countries and by adopting rules that reflected their needs.  A broad
agenda offered the best chance of doing so.  The outcome of the Seattle Conference should ensure this
in the following ways. The WTO should first and foremost help halt the marginalization of least-
developed countries.  The Community would give duty-free access to essentially all products exported
by LDCs and believed it was time for others to do the same.  Developed Members should thereforecommit themselves by Seattle to offer duty-free market access to products from these countries by
2003.  It was simply unacceptable that the commitments entered into at the 1997 high-level meeting
remained unfulfilled.  Apart from the launch of the round itself, this was the other important objective
for the Seattle meeting.  The new round should also include measures to build capacity in developing
countries so that they could take advantage of trade liberalization.  Furthermore, the implementationof the results of the Uruguay Round remained an issue of concern to many developing countries and
needed serious attention.  At the same time, it was necessary to distinguish between genuine
implementation issues, some of which could be resolved in the short-term, and those issues that,
although labelled implementation, required the renegotiation of existing Agreements and could only
be accomplished in the context of a round.  Intensive informal consultations should be started, withthe help of the Chairman and the Director-General, to  identify issues that could be resolved in the
short-term and those that could be taken up in the new round.  The Seattle Ministerial Conference
should agree on the action to be taken to resolve immediate problems and identify issues for
negotiation.  While it did not necessarily share their assessment, the Community welcomed the
suggestions by Egypt, Kenya, Zambia, and others aimed at ensuring the successful implementation ofthe Uruguay Round agreements.  These submissions could help to identify what could be done in the
short term and what could not.  The Community also welcomed the submissions by India aimed at
redressing perceived shortcomings or imbalances in the Uruguay Round results.
20. The Community believed that the following issues should fall within the core agenda for the
round.  Starting with agriculture, there was a common basis for the negotiations in Article 20 of the
Agriculture Agreement, and the Community welcomed the proposals by the Cairns Group, Japan,
Korea, Switzerland, the US and by a broad range of developing countries.  Similarly, in services,Article XIX of GATS gave clear guidance.  Most of the submissions, including those submitted by
Japan, Hong Kong China, Switzerland, India, Pakistan and the Community, proposed the scope of the
negotiations.  The Community would look positively in the negotiations at proposals by developing
countries regarding further liberalization of movement of personnel, and the possibility of granting
credit for autonomous liberalization carried out by developing countries, where this was bound in theGATS.  This credit was also a more general question addressed in the Community's recent paper on
coherence and capacity building.  Turning to investment, the Community welcomed the proposals by
Switzerland, Hong Kong China, Korea and others, many of which showed a remarkable degree of
convergence on the aims of the negotiations.  Many Members clearly shared the aim of creating a
more stable and predictable climate for foreign direct investment, through a multilateral framework ofrules.  Most proposals were also clear about what the investment rules in WTO should not contain.
The rules should not seek to replicate the failed  MAI instrument of the OECD, require host countries
to open up all sectors to investors, or cover short term capital movements.  The focus should be
exclusively on foreign direct investment.  Furthermore, the rules should exclude investor-state dispute
settlement, and should not call into question the right of countries to regulate investments on theirterritory.  As regards trade facilitation, the Community welcomed the proposals by Switzerland, the
United States, Japan, Turkey, Kenya and Norway.  There appeared to be agreement on the benefits of
trade facilitation and that the WTO had a role to play.  There was also significant convergence on howWT/GC/M/47
Page 14
to address this in a new round.  These proposals, including the Community's, aimed at negotiations to
establish a framework of rules to simplify trade procedures, including import, export and customs
procedures.  As regards trade and competition policy, this was of particular interest not only to the
Community but also to many developing and developed countries that were keenly conscious of the
need to promote a competitive domestic environm ent in an era of growing globalization, and the
Community noted in particular the submission by Turkey.  Negotiations on trade and competition
should aim at establishing a multilateral framework of basic rules on the application of core principles
of competition law and policy.
21. In the area of market access for non-agricultural products, many delegations had submitted
proposals to negotiate further in this area, from which a number of common features could be distilled
for inclusion in a Seattle negotiating mandate.  First, the idea of comprehensiveness.  Negotiations
should cover all non-agricultural products, without any a priori exceptions, with the objective ofachieving substantial improvement in market access for all countries.  Some proposals pointed also
towards greater tariff harmonization, elimination of peaks, reduced tariff escalation, and work to bind
all tariffs.  The interests of developing Members should be fully reflected in the tariff negotiations,
and only a comprehensive approach would ensure the coverage of their legitimate export interests.
The approach should also be sufficiently flexible to allow developing-country Members to subscribe.Trade and environment was also of importance for the next trade round, and any discussion and
negotiation of trade and environment issues should meet all Members' interests, including those of
developing countries.  In this respect, the Co mmunity welcomed Norway's proposal to clarify the
relationship between the WTO and Multilateral Environmental Agreements, and the question of the
WTO compatibility of eco-labelling schemes.  The Community would add to this the need to address
the question of the manner in which the precautionary principle was addressed in WTO.
22. The above were a number of important areas that for the Community were a sine qua non for
the new round.  But there were many other issues of importance both to the Community and to other
Members that should be taken up in the round, and he wished to identify some of them.  The TRIPS
area was one on which many proposals had been submitted.  Countries at different levels ofdevelopment had proposed to further clarify and expand the TRIPS Agreement.  The Community had
noted the proposals by Egypt, India, Japan, Pakist an, Indonesia, some central American countries and
a number of African countries.  Extension of protection under geographical indications had been
suggested, and some proposals had also raised the relationship between the TRIPS Agreement and the
Convention on Biological Diversity, which showed  that the Community was not alone in seeking to
clarify the relationship between the WTO and multilateral environmental agreements.  There had been
similar interest in strengthening and clarifying the Agreement on Technical Barriers to Trade inproposals submitted by India, Kenya and Japan, and the recently circulated proposal be the
Community.  Another area where many Members were seeking to clarify and strengthen existing
WTO rules was in the area of trade defence.  The Community was not seeking negotiations in this
area but had noted the desire of many other delegations to take up the Anti-Dumping and Subsidies
Agreements in the new round, and the Community was open to discussing such proposals in thecontext of a comprehensive round.  Finally, there was interest among some Members, including the
Community, to work towards the gradual multilateral liberalization of government procurement of
goods and services.  These were the issues that could be addressed in future negotiations, subject to a
single undertaking.  In parallel to the negotiations however, the WTO should be ready to address a
range of institutional questions.  The Community had recently circulated a proposal on capacitybuilding and coherence in international economic policy-making (WT/GC/W/297), in which it
suggested a new approach to capacity building and technical assistance, and argued for a large and
highly overdue qualitative leap in practical cooperation in support of trade liberalization and rule-
making between the WTO and the Bretton Woods institutions, in particular.  The aim was to promote
complementary action between these organisations in  support of much greater coherence, and the
Community suggested that a concrete work programme be launched at the Seattle Ministerial
Conference to that effect.WT/GC/M/47
Page 15
23. Turning to the structure and organization of the future negotiations, the Community
welcomed particularly the submissions by Australia on behalf of several Members, the CEFTA
countries and Latvia, Turkey and Switzerland.  Among the different proposals, there was general
agreement that the negotiations should be conducted and concluded as a single undertaking.  Only a
single undertaking offered the guarantee of a balance of benefits.  The Ministerial Declaration shouldalso set the date for the formal conclusion of the ne gotiations within three years.  Integral to the
concept of the single undertaking was the premise that all issues should be treated equally in terms of
process.  The Community would not accept the establ ishment of priorities between the different issues
for negotiation in the new round, nor did it believe that Members would be helped in their task by the
establishment of false distinctions between market access and rule-making.  Multilateral rule-making
was certainly as important as further trade liberalization.  This was not going to be just a classical
market access round, but a round in which liberalization and the development of the rules-basedsystem proceeded hand-in-hand.  The ability of Members, collectively and individually, to
demonstrate to their respective societies that the WTO was an effective instrument to manage
globalization and promote equitable growth and development crucially depended on this.  The Seattle
Declaration should reflect the concept of a single  undertaking in the structure of the negotiations.
First, there was a need for a Trade Negotiations Committee under the chairmanship of the Director-General to conduct the negotiations, provide political authority and ensure that the single undertaking
was maintained.  Second, there was also a need for individual negotiating groups to carry out the
negotiations of the different subjects, and, on the basis of the possible agenda, the Community
believed seven or eight groups would suffice.  Third, these groups should report to the TNC which
would have the overall authority to monitor and direct their work, and the negotiations should remainindependent from the regular work of the WTO.  Fourth, each negotiating group should determine its
own schedule of work and individual negotiating plans subject to any direction provided by the TNC.
To ensure that Members respected the commitment to undertake and conclude the negotiations in
three years, the Community believed that such schedules and negotiating plans should be submitted to
the TNC for approval early in 2000.  Fifth, also with the objective of ensuring an effective and earlystart to the negotiations, and to encourage an early end, Members should make initial proposals in all
areas early in the process, and a date for this shoul d agreed. Finally, the Community believed that the
Committees on Trade and Development, and Trade and the Environment had a key role to play, and
that they should monitor the negotiations as a whole to ensure that sustainable development was
reflected in the relevant negotiating groups, and report to the TNC.  In conclusion, the close of the
second phase of work left Members with a much clearer understanding of the issues that could form
the agenda for the new round, as well as issues that could be dealt with outside the negotiations.  Thediscussions had enabled identification of many areas of convergence on which the Community
believed it was possible to begin building the Seattle Declaration.  The time had come to start
formulating in a concrete way the elements of that Declaration, and this should be a top priority for all
Members after the summer break.  The Community was pleased to note that Switzerland had already
submitted concrete proposals in this regard.  This was very timely.  The Community expected theChairman to act as a facilitator in consulting w ith Members, ensuring convergence and consensus in
the process, and the necessary transparency.  Finally, the Community supported the Chairman's
proposed schedule of meetings.
24. The representative of India recalled that India had, from the outset, highlighted the
importance of addressing implementational issues a nd concerns in the preparatory process.  India
believed that if Members did not address these issues then the basic credibility of the organization
would be affected.  India had submitted specific proposals in the context of its implementational
concerns, and hoped to submit some additional proposals early in September.  It would be evident
from India's submissions that the issue of special and differential treatment for developing countries
was of crucial importance.  The S&D provisions in the existing agreements had not been properlyimplemented, either because of lack of clarity in the provisions or because of their best-endeavour
nature.  These provisions had been designed to take into account the constraints inherent in the
international trade relations of developing countries occasioned by the peculiar structural featuresWT/GC/M/47
Page 16
characterizing their economies, their low level of i ndustrialization, their inability to access advanced
technologies, and the non-availability of adequate infrastructure.  It was therefore important that these
special and differential implementational concerns and the other implementational issues raised were
adequately addressed in the preparatory process.  Unfortunately, developing countries were being
advised that implementational concerns could only be met if they agreed to what was being termed asa "comprehensive new round", since it would appear that only this would provide an opportunity for
Members to look at specific agreements.  India did not agree with this, and strongly reiterated the
need to address the concerns about implementationa l issues, especially those relating to special and
differential provisions, which had to be addressed up-front and without any linkage to any future
negotiations.  At the same time, some delegations were trying to downplay implementation issues and
concerns raised by developing countries by arguing that such issues could be resolved through
increased technical assistance.  India wished to state clearly that these issues and concerns were of aserious nature and it would be unrealistic for any delegation to imagine that they could be resolved
through technical assistance alone.  Implementational issues and concerns obviously required
handling with a certain amount of political sensitivity  especially in the light of the current perception
about the multilateral trading system.  His delegation hoped that Members would realize this and
suitably respond in an endeavour to find meaningful conclusions to these problems and concerns.  Onissues under paragraph 9(a)(ii), he reiterated India's view that the mandated negotiations in agriculture
and services were both extremely important.  Article 20 of the Agriculture Agreement provided the
basic guidelines for the new round of agriculture negotiations, and the most important aspect was that
these negotiations should address the concerns and shortcomings which Members, particularly
developing-country Members, had faced in implementation of the Agreement since its adoption.  Henoted that a large number of developing countries had predominantly agrarian economies, where a
large percentage of the population was dependent on agriculture for its livelihood.  The main concern
of these countries had been to ensure the continued provision of livelihood to these large rural
populations and to improve their income levels.  It was in this perspective that he wished to
emphasize that, for India, the most important asp ects of the forthcoming negotiations would be issues
related to food security and the maintenance of rural employment.  70 per cent of India's population of
nearly one billion was dependent on agriculture for its livelihood, and ensuring the availability of food
to this large rural population and preserving the viability of rural employment would therefore be of
paramount concern to India.  With regard to services, he emphasized that the concept of progressive
liberalization, already built into the GATS, was extremely important to India, and reiterated the
importance of mode 4, or the movement of natural persons, in which even the existing commitments
by developed countries had been rather meagre and had not been properly implemented because ofbarriers such as the economic needs test and visa and residency requirements.
25. Turning to issues under paragraph 9(a)(iii), he  reiterated the importance of the reviews and
examinations provided for in a number of Agreemen ts. Such review provisions had been built into
various agreements during the Uruguay Round negotiations, mainly because of the strong feeling in
the minds of almost all delegations at that time that these agreements provided for substantialcommitments in many areas and their apprehension as to the effect that implementation of these
provisions might have, especially on developing countries. He wished to reaffirm that India was
totally committed to the mandated reviews; as it was to the mandated negotiations.  With regard to
paragraph 9(b), concerning the four Singapore issues, his delegation had repeatedly stated that
redressal of implementational concerns referred to in paragraph 9(a)(i), mandated negotiationsreferred to paragraph 9(a)(ii), mandated reviews referred to in paragraph 9(a)(iii), and issues relating
to least-developed countries referred to in paragraph 9(c) already constituted a fairly big agenda for
the next round, and India did not want the WTO agenda to be overloaded with the issues referred to in
paragraph 9(b) or other new issues under paragraph 9(d).  India had agreed with great difficulty to a
study process in the WTO on these four subjects.  His delegation was actively participating in theeducational work that was currently under way, and believed that the study process should continue to
enable the Members to understand these subjects clearly.  India believed that there was still a long
way to go to the point where it could be in a position to gauge the necessity for multilateral rules,WT/GC/M/47
Page 17
which had been proposed by some Members.  The terms of reference of the two working groups on
trade and investment and trade and competition policy had made clear that the work to be undertaken
should not prejudge whether negotiations would be initiated in the future.  The process was to be an
educative one, based on an information sharing exercise.  It was therefore unfortunate that an attempt
was being made to preempt these discussions by proposing multilateral rules, particularly since thedevelopment dimension was only now gradually percolating into the discussions in the working
groups.  It would be unfortunate if this educative and exploratory process on the Singapore issues was
brought to an abrupt end by prematurely empha sizing the need to develop multilateral rules.
26. With regard to issues raised under paragraph 9(d), such as proposals for industrial tariff
negotiations, initiatives in the trade and environmen t area, greater transparency in the functioning of
WTO through, inter alia,  greater involvement of "stakeholders", India believed these were premature.
India was still in the process of implementing the last round of tariff negotiations, for example, andwould need time to assess the impact of these reductions before launching into any new commitments
in this area.  Overloading the WTO agenda would not be productive, and this was not the time to talk
about any comprehensive new round of negotiations , as suggested by some.  India was also opposed
to attempts to introduce non-trade issues such as labour standards into the WTO agenda.
Implementation problems and the built-in agenda should be addressed first.  It was important toensure that trade became an instrument for promoting development, as envisioned by the Uruguay
Round negotiators. One should bear in mind the limitations of developing and least-developed
countries and their inability to undertake more and more commitments and to discharge a growing
number of obligations in diverse sectors.  The thrust towards global free trade would be far more
fruitful if the realities prevailing in the world economy were fully understood and the needs andproblems of developing countries taken on board.
27. Turning to the organization of future work and issues under paragraph 10, India believed that
the second phase of the preparatory process had been extremely useful. This phase of work needed to
be extended to the middle of September, to provide Members a final opportunity to submit additional
proposals.  The third phase of the process would be  extremely important as delegations would need to
start drafting the Ministerial Declaration on the basis of the proposals made by Members, and India
believed that this drafting exercise would be best started once all the proposals had been tabled.
During the preparatory phases of both the Singapore and Geneva Ministerial Conferences the drafting
exercise had been initiated by the Chairman of the General Council and carried forward through a
process of intensive interactive discussions.  India believed that the same procedure should be adopted
for the third Ministerial Conference, with the Chairman and/or a senior official of the Secretariat,
acting on behalf of the Chairman, initiating the drafting exercise.  With regard to the structure andtime-frame of the negotiations, these would obviously depend on the scope of the negotiations,
something on which there was still no consensus.  A clear view on the nature of the undertaking,
single or otherwise, could perhaps be better taken once there was greater clarity on the parameters of
the decisions that were to emerge from Seattle.  India's position on this issue would to a large extent
be dependent on what the Ministers finally mandated, but it believed that the existing WTO bodiesshould be able to deal with all such issues, that is the built-in agenda, and it might not be necessary to
create separate negotiating bodies for this purpose.  It might also be difficult to take a priori decisions
on the time-frame for the negotiations at this stage, and this would depend on the needs of the
negotiating process.  India agreed that the negotiations should not be as long as the Uruguay Round.
However, while specifying a time-frame had certain advantages, it might inhibit flexibility, which wasan important ingredient of any such negotiations.  Many developing countries had small delegations,
and an over-compressed time-frame could generate undue pressure on them.  It might therefore
perhaps be best to have only an indicative time-frame of three years for completing the negotiations.
28. The representative of Norway, introducing a proposal on the financing of technical assistance
also on behalf of Bangladesh, Canada, De nmark, Netherlands, Sweden and Switzerland
(WT/GC/W/259 and Add.1), said that technical cooperation was a systemic issue of fundamentalWT/GC/M/47
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importance, as reflected in the relevant provisions of the WTO agreements and confirmed by
Ministers in past Ministerial Conferences.  Technical assistance was provided in order to build
institutional and human capacity and to enhance the ability of Members, developing countries and
LDCs in particular, to meet their rights and obligations, and was an integral WTO activity.  The
proposal sought to remedy the fact that a large part, perhaps 80 to 90 per cent, of the technical
assistance provided by the WTO Secretariat had, up to the present, been based on voluntary, extra-
budgetary contributions by some Members. This situation was unsatisfactory, as it made planning
even short-term technical cooperation activities difficult for the Secretariat. Furthermore, it made
long-term planning virtually impossible since there was a high degree of uncertainty and volatility in
the availability of funds.  In the light of this, their countries suggested that a decision be taken at the
Seattle Ministerial Conference to the effect that technical assistance, in principle, should be financed
through the regular WTO budget.  The necessary increase in the budget to meet at least the currentannual demand for technical assistance, which was around Sw F 10 million, would be phased in over
a three-year period with equal rate increases each year. It was clear that this proposal did not exclude
further extra-budgetary contributions, and a Global Trust Fund for technical assistance had been
established in July 1999 for this purpose. Their countries fully recognized that, while technical
assistance remained an important element in securing compliance with WTO agreements, it was by nomeans a panacea for dealing with all aspects of implementation.  His delegation also welcomed the
main thrust of the proposal submitted by the United States on technical assistance (WT/GC/W/276),
which was to strengthen the Integrated Framework, and believed this proposal to be complementary to
the one he had introduced.
29. The representative of Hungary, speaking on behalf of the CEFTA countries
, said that their
countries appreciated the many proposals tabled thus far in the process by a significant number of
Members, developed and developing alike. The second phase had really been  Member- and proposal-
driven, clearly demonstrating the commitment of Members towards the goals set out in the Geneva
Ministerial Declaration.  The CEFTA countries, collectively and individually, had participated
actively in the second phase and had tabled several proposals on different issues with a view tohelping to shape the possible scope of the future  negotiations.  They hoped that any further proposals
would be tabled by early September at the latest, to allow the General Council to have a full menu by
that time.  The primary task in the third phase, from the beginning of September, would be to produce
a draft Ministerial Declaration, and the CEFTA countries believed that there were enough elements
already on the table to begin the consideration of such a draft.  This did not exclude the possibility of
further discussions on specific proposals in parallel at the very beginning of the third phase.  There
had been different views expressed as to how th e work could be best organized, and the CEFTA
countries did not believe that it would be useful to engage in further long discussions on the groupings
of different individual proposals.  If work was begun at an early stage on drafting the Ministerial
Declaration, such groupings of issues might not be so important. Further detailed negotiations on
specific issues before Seattle was also unnecessary, as that would be the task of the negotiations to be
conducted after the Ministerial Conference. On the other hand, at the beginning of September, a clear,objective, synoptic table from the Secretariat showing the converging and diverging elements of the
individual proposals on the different subjects would be useful to Members, and the Chairman's draft
outline of a Ministerial Declaration would be an important contribution.  The CEFTA countries
believed, like Switzerland,  that it would be useful to contribute to the start of the third phase and had
thus decided to present a non-paper on a proposal for a draft Ministerial Declaration on a new roundof WTO trade negotiations (Job(99)/4552).  This proposal aimed to take into account the wide range
of views expressed thus far or tabled in different documents, but was by no means to be considered
exhaustive.  It was aimed at serving as a possible basis for further focused discussion in the
preparatory process, and therefore did not necessarily reflect the views and positions of the CEFTA
countries in certain cases, and was without prejudi ce to these delegations' individual views on certain
specific issues, such as some market access issues, and the organization and structure of future
negotiations.  He also wished to emphasize that the CEFTA countries had, from the start, considered
the issue of implementation to be very important, and had actively contributed to the discussions on it.WT/GC/M/47
Page 19
They continued to believe that it would be desirable to accomplish as much progress in this area as
possible in the lead up to Seattle, and were also sympathetically considering some of the proposals by
developing countries on the eventual continuation of the consideration of these issues beyond the
Ministerial Conference.  In their draft Declaration they had dealt with those aspects of the
implementation issues which by their nature could be part of the single undertaking.  The CEFTAcountries hoped that their proposal would help the deliberation of the last, most critical stage of the
preparatory process.
30. The representative of Canada said that his delegation had hoped to table a number of
proposals for future multilateral negotiations by the end of July.  Canada had tabled one proposal with
respect to TRIPS (WT/GC/W/256) and co-sponsored the proposal introduced by Norway on technical
assistance (WT/GC/W/259), and hoped that additi onal proposals would be reviewed by Canadian
Ministers later in the summer and tabled shortly th ereafter.  This timetable reflected the extensive
consultation process that his Government had undertaken to identify Canadian interests and priorities
for future negotiations in the WTO, a process involving a wide range of interested stakeholders,
Parliamentary Committees, provincial governments, industry representatives and broader elements of
civil society. While Canada had not submitted many proposals to date, it had been involved actively
on a range of issues that would help lead to a successful Ministerial Conference and the launch of newnegotiations.  Canada's non-paper on the implementation clauses of the Dispute Settlement
Understanding had provided a concrete focus fo r discussions in the DSU Review and enhanced
prospects for a successful resolution of this matter.   Canada had co-sponsored, with the United States,
a proposal on transparency and the derestriction of documents, and as a member of the Cairns Group,
had participated fully in the development of various statements during the second phase, based on theearlier Vision Statement. Moreover, Canada's positions were well known on a range of issues
including further reducing industrial tariffs and el iminating non-tariff barriers; curbing the abuse of
trade remedy measures; developing new disciplines, where appropriate, in such areas as electronic
commerce, investment, and competition policy; enhancing trade facilitation; extending the coverage
of rules on trade in services, including profession al services; addressing public concerns about the
social dimensions of trade; and achieving greater coherence between the WTO and other international
institutions engaged in addressing the challenges of the global economy.
31. Referring to a topic that Canada had raised in  recent international meetings involving Trade
Ministers and Ministers responsible for culture, namely the treatment of cultural goods and services in
international trade and investment agreements, he said that this had been the subject of much
discussion in Canada.  Earlier that year, Canadian cultural industries (publishing, film and video
production, sound recording, broadcasting and multi-media) had produced a report entitled "NewStrategies for Culture and Trade".  The report had outlined the challenges and opportunities facing
these industries and had surveyed what Canada and other governments were doing in support of the
creation, production and distribution of cultural goods and services.  The report had concluded by
recommending that Canada, and other governments, should negotiate a new international instrument
that would specifically acknowledge the importance of cultural diversity and address the cultural
policies designed to promote that diversity.  The report had been circulated to other delegations in
Geneva for information.  In Canada, the report had been the subject of hearings in the spring
conducted by the Parliamentary Committee on Foreign Affairs and International Trade on Canadian
priorities for future trade negotiations, and had been considered by the Standing Committee on
Canadian Heritage.  Outside Canada, Canadian Ministers had expressed the view that any futurenegotiations that had an impact on cultural goods and services should take into account the role these
products played in promoting cultural diversity and identity.  Canada believed that an increasing
number of WTO Members would come to identify their individual and collective interests in this
emerging debate.  Some of the observations of the cultural industries' report had underlined the
following commonality of interests:  (i) most WTO Members had cultural policies to support thecreation, production and distribution of cultural goods and services;  (ii) cultural goods and services
were to some extent already covered in, or affected by, WTO agreements and Members had attemptedWT/GC/M/47
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to address their unique aspects through scheduled commitments, with certain restrictions, or by
excluding entire cultural sectors;  and (iii) technological developments were creating new
opportunities for trade and investment but were also raising legitimate concerns about how
governments could promote cultural diversity and identity while negotiating new rights and
obligations in trade agreements. Canada believed that th e issues raised in this report were ones that the
governments of most WTO Members would want to examine.  Canada had been examining these
issues and hoped to come forward with some specific ideas in the coming weeks.
32. The representative of Venezuela, introducing a proposal on special and differential treatment
and the spaces for policies in the WTO as elements of the development dimension (WT/GC/W/279),
said that the forthcoming negotiations should take place in two dimensions, which complemented
each other:  one that could be termed "trade per se", or "the trade dimension in restricted sense", in
which the aims were to liberalize trade, widen the possibilities of market access and facilitateinternational flows of goods and services, and another dimension that could be termed “the spaces for
policies”, which included a range of policy instrume nts that could be used to promote not only the
growth of traditional trade flows of developing countries, which were to a large extent based on
commodities, but also the structural transformation of their economies and the increase in their level
of competitiveness.  Regarding the first dimension, or trade in restricted sense, WTO Membersseemed to agree upon the basic postulates and objectives of liberalization and, in the light of this, the
efforts made thus far in this dimension could converge.  However, the situation was not the same with
regard to some issues in the negotiations that were particularly relevant for developing countries, such
as those included in the TRIMs, TRIPS and Subsidies Agreements and the GATS, and in areas such
as those related to foreign investment, government procurement, transfer of technology andcompetition rules.  These matters were development-policy issues and part of the "space for policies".
The usefulness of policy instruments in the implementation of market-oriented development strategies
had become a reality. In the recent past some of these mechanisms had been applied with success by
developing countries, to overcome failures in coordination, and external and technological problems,
to obtain progressive improvements in their competitiveness and productivity, to promote technicalprogress and to foster domestic economic dynamism. There were two other goals in the area of the
development of competitiveness in which the usefulness of this type of policy was clear: the
development of technological innovation capacities and the construction and exploitation of business
networks.  It was recognized by both developed and developing countries that these goals were not an
automatic result of trade liberalization, nor were they reached through transition periods and technical
cooperation as already established under the principle of special and differential treatment. To reach
these goals, there was a need for market-oriented supply policies, focused on specific developmentobjectives.  If the multilateral trading system legitimized spaces for these kinds of policies, as well as
for policies on the demand side, a wide range of policy instruments could be implemented by
developing countries in order to reach their development objectives within the framework of a market
economy, and to allow implementation in a manner consistent with their multilateral commitments.
33. In this regard, Venezuela proposed two concrete actions in connection with the forthcoming
negotiations and the future work programme. First, in order to ensure that the development dimension,
i.e. the S&D provisions and the "spaces for policies", was properly addressed, it was proposed to
include it as a general mandate at the third Ministerial Conference through the following specific
actions:  (i) in reviewing the implementation of existing agreements, as well as in the negotiations
foreseen under the built-in agenda, it was necessary to identify and recognize the market-orientedpolicy instruments already existing in the agreements or that could be introduced in them, under the
condition that they were consistent with the general WTO principles.  This exercise would not
prejudice the need to improve the S&D provisions as conceived at the present time;  and (ii) in any
negotiations on new issues under paragraphs 9(b) a nd 9(d) of the Geneva Ministerial Declaration, the
necessity of identifying and recognizing the market-oriented policy instruments that could be placedin the resulting agreements, under the condition that they were consistent with already existing WTO
commitments.  Second, with regard to the future WTO work programme and paragraph 10 of theWT/GC/M/47
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Geneva Ministerial Declaration, a Working Group should be established with the following specific
objectives:  (i) to follow-up on the steps taken to fu lfil the above-mentioned mandate;  (ii) to develop
the idea that the development dimension in the multi lateral trading system should cover the following
two sets of instruments that would run through various agreements: special and differential treatment,
and spaces for development policies;  and (iii) to identify and analyse policy instruments within thosetwo categories that could be considered to be consistent with multilateral trade rules, and that should
be recognized as being of legitimate benefit to developing countries.
34. The representative of Mauritius said that his delegation had noted the Chairman's proposal for
the organization of future work, including his clarifications on certain aspects, and believed that the
General Council needed to focus its work in the third phase.  Mauritius supported the suggestion that
the Secretariat should prepare a more functional checklist of the proposals submitted, which would be
of help to small delegations such as his. As to the objectives of any negotiations, his delegationbelieved that Members needed to reflect further on the suggestion made regarding setting-up a
taskforce or a group of friends to deal with functional issues.
35. The representative of Australia said that the second phase of the preparatory process had done
what it had set out to do, namely to produce a menu of proposals from which recommendations to
Ministers at Seattle would have to be selected and elaborated.  While his delegation expected thatmore proposals would be submitted elaborating on areas already covered by existing proposals, it was
working on the assumption that the elements of the menu were complete, and that there would be no
major surprises.  In terms of substance, the second phase had shown that there was convergence in
some areas and divergence in others.  The proposals on services, for example, were similar in many
respects, although Australia and others wished to see an explicit focus on improved market access inthe next round of services negotiations.  The proposals on agriculture on the other hand, showed that
Members' positions were as yet far apart, and intensive work would be needed to bridge the different
views that had been expressed thus far. Australia had also noted that the proposals on non-agricultural
tariffs were broadly similar, but that a small although diminishing number of WTO delegations had
yet to agree to the principle of holding such negotiations.  Australia was also pleased at what seemedto be the growing acceptance of the idea of a short multilateral round conducted as a single
undertaking.  The conclusion that Australia drew from these proposals was that the best way forward
for the WTO was to agree at Seattle on a market access round that would focus on services,
agriculture, industrials and the rules that underpinned market access in these areas and that would
deliver balanced gains for all Members in a short time-frame.  Australia believed that such a round
would achieve the best balance between realism and ambition.  Australia did not reject negotiations in
other areas, whether described as implementation issues or new issues, but would be concerned iflikely gains in market access that would be of immediate benefit to all Members were held hostage to
potentially longer negotiations in other areas.  If Members were to achieve real and balanced gains in
a short negotiation, it would be crucial for negotiators to be given as much and as clear guidance by
Ministers at Seattle as possible.  That meant that the decisions to be taken by Ministers should be
detailed and should, wherever possible, set negotiators realistic goals.  Ministers should also agree onnegotiating plans, as it would be crucial that scarce negotiating time not be wasted discussing issues
that could be decided beforehand. Australia understood that some Members were concerned to avoid
what they described as pre-negotiation, and accepted this.  But one had to be realistic, and accept that
there was no clear dividing line between detailed guidance on the one hand and pre-negotiation on the
other, and thus Members should be governed by the pragmatic consideration of what must be done toget the negotiations off to a good start. If decisions at Seattle were to be detailed and ambitious, work
on drafting needed to start as soon as possible.  The task would not be easy, and certain elements
would be crucial. First, the General Council would need to start drafting a Seattle Ministerial
Declaration straight after the summer break and a first draft by the Secretariat would be useful,
together with Members contributing their own inputs.  Second, work on the Declaration would need toproceed in parallel with intensive work on specific issues, since it would not be possible to leave work
on the Declaration as a whole until there was agreement on individual areas.  Third, delegationsWT/GC/M/47
Page 22
would have to be flexible about the nature of thei r work, and the requirements of transparency would
have to be balanced with those of efficiency.  Not all areas proposed for Seattle would be of the same
level of interest to all delegations, and the initial stage of intensive work would perhaps best be done
in open-ended inclusive informal meetings.  General Council meetings would, of course, be crucial
for transparency. Fourth, both the Chairman of the General Council and the Director-General wouldhave to play active and important roles in the work. For its part, Australia was committed to playing
an active and constructive role in the final phase of the preparatory work which, it hoped, would lead
to the launch of a new round of trade negotiations with ambitious but realistic goals.
36. The representative of Peru, referring to the proposal presented by Venezuela on behalf of a
group of Members on the protection of intellectual property rights on traditional knowledge in local
and indigenous communities, said that her delegation agreed on the necessity to grant adequate
protection to traditional knowledge through a new ad hoc system of intellectual property rights orthrough an existing system. A contradictory situation existed in the area of intellectual property at the
present time, where consideration was being given to increasing intellectual property rights, but at the
same time no protection existed for the ancestral knowledge of local and indigenous communities.
Peru believed that recognition should be given to the legitimate rights of these communities to
promote economic and social development, and in this regard, the Ministerial Conference shouldadopt a decision to undertake a study on the most suitable manner to protect these rights with the aim
of establishing  multilateral rules in this area.
37. The representative of Mexico said that it was important to start exchanging ideas on possible
elements for the Seattle Ministerial Declaration, and welcomed the proposal on a draft Ministerial
Declaration introduced by Hungary on behalf of the CEFTA countries (Job(99)/4552), as well as that
by Switzerland (WT/GC/W/260).  Although Mexico might not agree with some of the elements in the
CEFTA proposal, it agreed with the structure.  As regards suggestions for a work programme on
labour standards to be established at Seattle, Mexico supported the statement by India that non-trade
concerns should not be part of the future work programme of WTO.
38. The representative of Uganda said that his delegation, as a member of the African Group,
fully endorsed the proposals introduced by of Kenya on behalf of the Group.  The discussion at the
present meeting had clearly shown levels of ambition and areas of convergence, and his delegation
would be considering possible outlines of a Declaration and the programme of work.  His delegation
supported the Chairman's proposal on the organization of work, subject to the clarifications he had
made, and agreed on the usefulness of a synopsis of the proposals in discussing the outline.  Time was
not on the side of delegations, and Uganda welcomed the proposals by the CEFTA countries and
Switzerland as useful inputs for the Declaration.  He reiterated his delegation's support for thestatements by various LDCs on their expectations, in particular the statement on implementation by
Zambia on a previous occasion. For Uganda, implementation was the most critical aspect of the future
work. His delegation also supported the position of the LDCs regarding labour standards, namely that
this matter should not find its way into WTO discussions.
39. The representative of Hong Kong, China noted that when Ministers met for the third Session
of the Ministerial Conference in Seattle, they would pursue an evaluation of the implementation of
individual agreements, and the realization of thei r objectives pursuant to paragraph 8 of the Geneva
Ministerial Declaration. In this regard, he introduced a paper6 submitted by members of the ITCB that
were also Members and Observers of the WTO c oncerning the evaluation of the implementation of
the Agreement on Textiles and Clothing, which was intended as an input for Ministers' deliberations.The paper noted the significance of trade in textiles and clothing for developing countries, a sector
which accounted for some 19 per cent of developing-country exports of manufactures in 1997, and a
higher share for some countries, especially the least-developed.  The paper recalled that the central
                                                     
6 Subsequently circulated as document WT/GC/W/283.WT/GC/M/47
Page 23
objective of the ATC was progressively to phase out the quota restrictions carried over from the
Multi-Fibre Arrangement and thereby to contribute to the liberalization of trade in the sector. The
paper went on to analyse, article by article, the extent to which concrete progress had been made
towards achieving the realization of this objective given that almost half of the ten year transition
period for full implementation had elapsed. It had been noted that, since integration programmes forthe first two stages of the implementation process had already been put in place covering a period of
seven years, these programmes in fact covered 70 per cent of the transition period.  The conclusion of
the analysis in the paper was that the implementation of the Agreement on Textiles and Clothing
during the first five years of the transition period had failed to come up to developing countries’
expectations, and that the committed liberalization had yet to materialize.  Although 33 per cent of
trade might have been integrated by the restraining countries in a narrow legal sense, only a few quota
restrictions had actually been liberalized.  For example, in the United States, out of a total of750 quotas, only 13 quotas had been eliminated thus far, representing 1.7 per cent. In the European
Union, only 14 quotas, or 6.4 per cent, of a total of 219 had been eliminated.  Such additional access
as there had been had not resulted in any lessening in the restrictive nature of quotas. For example, the
ITCB had estimated that in the previous year 171 quotas, or 27 per cent of the total,  had exceeded the
respective quota ceilings in the United States, compared with only 23 per cent in 1997, whichindicated that the quotas were biting even more.  Developing countries, including small suppliers and
least-developed countries, had not received any meaningful increases in their access possibilities. In
this regard, the additional annual access for small suppliers under stage 2 of the integration
programme was only 1.17 per cent in the United St ates and 3.54 per cent in the European Union.
Ironically, these figures were well below the 6 per cent notional annual growth rate that had beenconsidered the norm before the ATC era. Thus, despite solemn commitments, the process of
liberalization had failed to be progressive in character, and had not allowed developing countries to
benefit from strong consumer demand. The restraining Members had made few efforts to facilitate
increased competition in their markets. On the contrary, attempts had continuously been made to
condition the implementation of already-agreed commitments on additional reciprocal and sectoralaccess by developing countries.  A large number of actions for new restrictions had been invoked by a
major developed restraining Member, affecting over a billion dollars worth of additional trade.
Significantly, a large majority of these actions had been found to be inconsistent with the provisions
of the ATC. Many of these cases had involved exports from small suppliers for whom the Agreement,
in fact, envisaged more favorable treatment, not less favourable. Changes in rules of origin and
tightening of customs and administrative procedures had created substantial disruptive effects for
trade and impeded the full utilization of access under the Agreement. Another major WTO Memberentity had invoked many anti-dumping actions targeted particularly at products that were already
under quota restrictions.  The conclusion of the paper, which was supported throughout by argument
and fact, was that the balance of advantages for developing countries had been impaired, and that
there was a necessity for immediate corrective measures by the developed-country restraining
Members, without any further concessions by developing countries. The Members submitting thepaper were considering the formulation of a number of suggestions for such corrective action which
would address some of the concerns outlined in the paper.
40. The representative of Chile said that, with regard to the organization of future work, her
delegation supported the Chairman's proposal for the schedule of meetings from September to
November, and saw no inconvenience in working in parallel to allow discussion of proposals tocontinue, some of which had not yet been submitted, in the third phase.  In this phase, work would
have to intensify and focus on what would be th e outcome of the Seattle Ministerial Conference. It
would be necessary to structure a draft Ministerial Declaration on the basis of the proposals submitted
during the second phase and those yet to come. Her delegation supported the suggestions that the
Secretariat prepare a synoptic table of all proposals submitted to date, clustered around the substantiveissues. In September, it would be necessary to start consideration of a draft structure for the
Ministerial Declaration, to allow all the elements to be taken into account, and in this regard her
delegation welcomed the Chairman's proposal to circulate a draft outline which, taken together withWT/GC/M/47
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the proposals by Switzerland, Singapore and the CEFTA countries, would constitute a good point of
departure for starting the discussion in the third phase. Chile believed that the Ministerial Declaration
should start with a political statement on the importance of the multilateral trading system, the
rejection of protectionism, the importance of timely implementation of the Marrakesh agreements, the
need to deepen efforts for trade liberalization, and any other element of the multilateral trading system
which needed to be highlighted. Next, the Declaration should refer to the future work programme,
distinguishing between the issues which would be subject to negotiation and those which would be
treated alongside the negotiations, such as implementation which contained issues where there would
be no need for negotiations, the follow-up to the high-level meeting on LDCs, and the issues
contained in the Singapore Ministerial Declaration if not included in the negotiations. The work
programme for issues requiring negotiation should contain details on the launch, objectives and
principles of the negotiations, the substantive issues identified in the most clear manner possible, theorganization of the negotiations in terms of structure, calendar and modalities, and participation in the
negotiations. With regard to possible immediate actions, or deliverables, at Seattle, these should form
part of one or several separate decisions, and any future work on these issues should continue within
the existing bodies of the WTO. Chile was ready to participate in the development of deliverables, but
these should be for agreement at Seattle. There did not seem to be consensus at the present time onpossible subjects for consideration as deliverables, and to be able to make progress in this area, it was
essential that any subject reflect an adequate bala nce of interest of all Members. In this regard,
Members would have to put to one side the domestic agendas of a few important trading partners, as it
was important to avoid deliverables being interpreted as down-payment for agreement on a new
round. Considering the small amount of time until the Ministerial Conference and the complexity ofthe issues to be agreed in the area of future ne gotiations, Chile believed that the General Council
should concentrate on defining the negotiating mandate, which would be a concrete, realistic and
significant deliverable.
41. The representative of Uruguay supported the Chairman's proposal on the organization of
future work, and believed that the third phase should start in September with consideration of a draft
Ministerial Declaration in parallel with further discussion of proposals.  Uruguay supported the
proposals on agriculture submitted by Australia on the basis of the Cairns Group Vision Statement
(WT/GC/W/156), in which Uruguay had participated. The Vision Statement had expressed the
objectives which the Group hoped to develop in the future negotiations, and subsequent proposals had
taken up specific issues.  On previous occasions, his delegation had supported these proposals and
emphasized its own areas of interest.  His delegation also shared the concerns expressed in many of
the proposals by developing countries, in particular those by Pakistan (WT/GC/W/161) and Cuba onbehalf of a number of countries (WT/GC/W163).  However, some of the other proposals caused his
delegation great concern, in particular those by Korea (WT/GC/W/170), Japan (WT/GC/W/220) and
Norway (WT/GC/W/238).  His delegation was concerned that the countries whose development,
progress and wealth had come from the benefits obtained from liberalization, the expansion of trade,
and from a strengthened multilateral trading system, were those that were suggesting the exclusion ofthe rules and principles of the multilateral trad ing system from an entire economic sector on a
permanent basis.  He referred in this regard to the last sentence of paragraph 8 of Norway's proposal
(WT/GC/W/238) which suggested that "agriculture, also in the future, will have to be treated
separately within the multilateral trading system".  Uruguay could not accept such a permanent
discrimination for agriculture vis-à-vis  other goods and sectors.  If  such discrimination were allowed,
the consequence would only be an increase in protection.  His delegation would not accept agriculture
being continually sidelined in negotiations.  Uruguay believed that proposals of this sort could have
important consequences for the multilateral trading system, which all Members said they wished to
preserve and strengthen.  While no government was protectionist for the sake of being so, when it
started to bow to pressure from domestic groups or sectors, and when this pressure became moreimportant than its international commitments, such as those set out in Article 20 of the Agriculture
Agreement, producers in other countries which also felt harmed or discriminated against would also
appeal to their governments to adopt similar permanent measures. In the end, all would be harmed. HeWT/GC/M/47
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wondered what would happen if these arguments for maintaining protectionist measures in the
agricultural sector with the aim of achieving specific objectives, some of which might be legitimate
and valid, were also applied in the industrial sector, or in services.  If the proposed solution for each
sector in which sensitivities or problems existed was to exclude it from multilateral disciplines, he
wondered what would be left to negotiate and what would be left of the multilateral trading system.Uruguay was a developing country, with a small and vulnerable economy which, in line with the
principles of free trade, had recently undergone a costly process of adjustment and significant
restructuring of its productive sectors with the associated economic, social and political consequences.
Previously protected sectors which had not been able to compete, nationally or internationally, had
been obliged to adjust to new realities, to recycle and modernize.  Uruguay was thus well placed to
talk about this matter, as it had assumed its re sponsibilities towards other more competitive and
efficient countries.  It could not accept that efficient agricultural producers, such as itself, would bepenalized because developed countries with inefficient agricultural sectors did not want to assume
their responsibilities in turn.  While Uruguay did not deny that there were valid non-trade concerns in
these countries, it noted that similar concerns also existed in other countries, and especially in other
sectors, not just in agriculture.  The arguments advanced by developed countries on food security had
nothing to do with the problems of the developing c ountries in this area. The developed countries had
the financial resources necessary to achieve food security for their populations and, in reality, it was
more a question of not wanting to accept the political price which would have to be paid for changes
to irrational, inefficient, and distortive policies of self-sufficiency. Uruguay was also concerned by the
manner in which Japan had interpreted the objectives of the future negotiations, ignoring the
objectives clearly set out in Article 20, and proposing that "the objectives for the next agriculturalnegotiations are to establish a set of rules and disciplines that are genuinely fair and equitable for both
food importing and exporting countries, as well as for developed and developing countries, and which
allow a coexistence of the various types of agriculture among Members" (WT/GC/W/220,
paragraph 1).  For Uruguay, this concept of coexistence appeared to be confused and incoherent.
More surprising was that, in paragraph 3(b) of its proposal, Japan indicated that a review of theAgriculture Agreement should facilitate a reform process for market-oriented approaches in
agricultural policies undertaken by Members.  His delegation would be interested in hearing Japan's
explanation of the manner in which the two concepts could be reconciled, especially as it was
preferable that market-oriented adjustments be undertaken by one's own producers, and this seemed to
be the case in the dispositions of the agricultural law recently adopted in Japan by the Diet.  Further,
in paragraph 9, Japan had suggested that the next agricultural negotiations should be conducted in a
manner to ensure in particular the three objectives of multifunctionality, food security, and redressingthe imbalance between exporting and importing countries. Uruguay wondered how these objectives
could possibly match the objectives laid out in Article 20 that the next negotiations should be
conducted to ensure substantial progressive reductions in support and protection. Uruguay did not
agree with these interpretations of the objectives of Article 20.
42. Finally, on the concept of multifunctionality in agriculture, it should be clear was that there
was no difference between this concept, as presented in several of the proposals, and the concept and
origin of protectionism itself.  At different times in history, governments had erected different levels
of protectionist barriers, and this had generally been to support or defend a sector or a social group, to
preserve the environment, to maintain an aspect of traditional life, to provide production incentives in
a particular sector or activity, or to safeguard employment.  This applied not only to agriculture but tomany other sectors and activities.  Article 20 of the Agriculture Agreement established that non-trade
concerns should be taken into account in the negotiations on agriculture.  However, these proposals
meant that the agreed negotiations on agriculture taking into account non-trade concerns would be
transformed into negotiations on multifunctionality taking into account agriculture. It would be useful
to consider the horizontal aspects of this new concept in different areas so as to see more clearly theapplicability of the concept to other sectors in future negotiations.  Some developed countries claimed
that the adoption and acceptance of the concept of multifunctionality would the most appropriate
solution to the problems faced by developing countries. Uruguay believed that this was only a pretextWT/GC/M/47
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for continuing protectionist and distortive policies, and developing countries would never be able to
compete against the treasuries of the industrialized countries.  This type of competition was neither
right nor legitimate and would not lead to a positive outcome.  There were indeed some important
non-trade concerns, such as food security in developing countries and LDCs, and special and
differential treatment in this respect should be an  integral element of the future negotiations.  The
most important aspect of food security was that net food-importing countries needed some form of
income to be able to buy the necessary food when their harvests failed, and this was not a question of
food aid, which had nothing to do with the Agriculture Agreement. To obtain this income these
countries had to be exporters.  The solution suggested by some developed countries appeared to be to
close the markets and increase the use of subsidies so that prices would fall.  However, what should in
fact take place was that markets should be further opened so that income would be generated and food
could be bought if necessary. Uruguay firmly believed that market access for developing countrieswas a major element of the concept of food security. Uruguay had always supported and defended the
multilateral trading system, and the objective of promoting a freer, rules-based system, aimed at
reducing market distortions. In recent years, one had seen unprecedented openness and growth in
international trade in goods and services.  Some sectors, however, had long been left behind. Many
developed countries continued to protect excessively sectors which were vital for developingcountries, such as agriculture, where the effects of global liberalization were still minimal. Continuing
this situation prevented developing countries from expanding activities in which they had a
comparative advantage.
43. Although the continuation of agricultural negotiations had been mandated at Marrakesh,
Uruguay had long been calling for a new round of negotiations, taking into account the interests of allMembers, as the most suitable and pragmatic way to obtain significant results in all sectors. For this
reason, Uruguay had shown flexibility when considering new issues for future negotiations, on the
understanding that additional liberalization and reform in the agricultural sector, given its situation
compared to other sectors, would be of a high priority.   However, Uruguay had been disappointed by
the proposals submitted by some industrialized countries.  It believed that its own suggestions werereasonable, aimed at putting agriculture on the same footing as trade in other goods, and it was ready
to discuss these suggestions with other Members with the aim of persuading them of the merits and
benefits for the whole international community.  Uruguay and the Cairns Group were working
towards the adoption at Seattle of a clear and detailed mandate for the agriculture negotiations, and it
should be made absolutely clear that if due atten tion was not accorded to agriculture in the future
negotiations, the Seattle Ministerial Conference would be a failure.
44. The representative of Cuba thanked the Chairman for his efforts to push forward the work in
the preparatory process.  His delegation agreed with Pakistan and India that the second phase of the
preparatory process had not yet been completed.  It was very important to be able to receive all the
proposals in the process, and to analyse them thor oughly before proceeding further.  Cuba believed
that the evaluation of the implementation of individual agreements as required under paragraph 8 of
the Geneva Ministerial Declaration was also an important exercise, which would help to determinerecommendations to Ministers aimed at correcting the imbalances in the existing WTO agreements
that had been perceived in the course of implementation.  Cuba agreed with other delegations that it
was premature to start work on a draft declaration at this stage.  Work on a draft declaration should be
the result of intense reflection, and the conditions fo r this did not yet exist.  Issues had not yet become
sufficiently mature for them to be  considered for inclusion in a draft text.  His delegation also agreed
with others who had suggested that the Secretaria t prepare a synoptic table of all the proposals made
thus far in the process, which would help delegations to take decisions.
45. The representative of Bolivia welcomed the Chairman's proposal to circulate a draft outline of
a declaration in the first week of September, and believed that it would be helpful in the work on
elaborating a Ministerial Declaration. Her delegation also agreed on the need for flexibility in thescheduling of informal meetings on phase 3 of the preparatory process, but believed, like otherWT/GC/M/47
Page 27
Members, that it was important to ensure that all proposals were translated into Spanish and French
before these meetings to permit delegations to consult with capitals.  Bolivia considered useful the
suggestion by some delegations, both at an earlier informal meeting and at the present meeting, that
the Secretariat prepare a synoptic table summarizing the texts of the proposals submitted thus far.
However, her delegation also realized the burden of work that such summaries would involve for theSecretariat, and suggested therefore that delegations themselves undertake to provide summaries of
their proposals to the Secretariat which could then assemble them into a synoptic document.
46. The representative of Japan said that, with regard to the organization of work in the third
phase, the time available from September would be very short and this should be kept in mind. There
was a heavy workload ahead, so work on the draft Ministerial Declaration should start immediately in
September and his delegation fully supported the Chairman's draft schedule of meetings. There was
also work remaining from the second phase and some proposals were yet to be submitted, so parallelwork would be necessary, as suggested by some delegations. It was feasible to continue discussion of
the proposals while drafting the Declaration, as it would be necessary to look at the proposals during
this work. There was not, therefore, any need to finish the discussion on proposals before staring work
on drafting the Declaration, and in any case time would be too short to allow this.
47. The Chairman said that he had noted all the points of view concerning his proposals for
further work in the preparatory process. In the light of the discussion, he confirmed his intention to
circulate, on his own responsibility, a draft outline of  a Ministerial text or texts in the first week of
September.  He assured delegations that he would consult further in the course of preparing this text.
In line with what he had stated earlier about the multi-layer process in phase 3, there seemed to be
wide agreement that the third phase should also include provision for the further examination ofproposals, including those yet to be submitted which he hoped would be submitted sooner rather than
later. On the understanding that the process in phase 3 should be structured with maximum flexibility,
he intended to circulate to delegations shortly an indicative schedule of meetings for phase 3,
beginning in early September. The suggested focus for each meeting would be communicated to
delegations at a later date. He noted that in the discussions, both at an earlier informal meeting and atthe present meeting, there had been some suggestions  for the Secretariat to compile summaries of the
proposals submitted thus far.  He recalled that on earlier occasions, reservations had been expressed
about requesting the Secretariat to make such summaries particularly since not all submissions were
in the form of concrete proposals.  Taking into account other suggestions as to how this work might
be accomplished, he suggested that the Secretariat circulate an initial compilation of proposals which
would reproduce fully the text of the specific proposals presented in the submissions by Members, as
well as the full texts of submissions not in the form of specific proposals.  Delegations would then beinvited to indicate to the Secretariat how the full s ubmissions might be included in summary form in a
revised version of this initial document. The compilation would be regularly updated in the light of
further proposals.
48. The General Council took note of the statements and agreed 
to the Chairman's suggestions for
the organization of further work in the preparatory process.
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