RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/66
10 August 2001
(01-3980)
General Council
18 and 19 July 2001
MINUTES OF MEETING
Held in the Centre William Rappard
on 18 and 19 July 2001
Chairman:  Mr. Stuart Harbinson (Hong Kong, China)
Subjects discussed: Page
1. International Trade Centre UNCT AD/WTO.........................................................................2
(a) Report of the Jo int Advisory Group.......................................................................................... ..2
2. Accession of Iran............................................................................................................ ...........3
(a) Communicati on from Iran..................................................................................................... ......3
3. Accession of the Bahamas ..................................................................................................... ...3
(a) Communication from  the Bahamas ............................................................................................3
4. Accession of Tajikistan...................................................................................................... .......7
(a) Communication fr om Tajikistan............................................................................................... ..7
5. Committee on Budget, Finance and Administration ...........................................................10
(a) Report of the Comm ittee..................................................................................................... ......10
6. Attendance of Observers at the Fourth Session of the Ministerial Conference ................10
(a) International intergover nmental orga nizations .........................................................................10
7. Election of Vice-Chairpersons of the Fourth Session of the Ministerial
Conference..................................................................................................................... ..........13
8. Waivers Under Article IX of the WTO Agreement.............................................................13
(a) Switzerland – Preferences for Al bania and Bosnia-Herzegovina.............................................13
(i) Request for waiver .......................................................................................................... ..........13
(b) Customs Valua tion Agreement................................................................................................. 13
(i) Request for a waiver by Madagascar .......................................................................................13
9. Concessions under the harmonized commodity description and coding system –
a procedure for introduction of harmonized system 2002 changes to schedules of
concessions.................................................................................................................... ...........14
(a) Draft decision.............................................................................................................. ..............14
10. Work Programme on Electronic Commerce........................................................................14
11. Review of Procedures for Circulation and Derestriction of WTO Documents.................19WT/GC/M/66
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12. Proposal to amend certain provisions of the Understanding on Rules and
Procedures Governing the Settlement of Disputes Pursuant to Article X of the
Marrakesh Agreement Establishing the World Trade Organization ................................22
(a) Submission by Bolivia, Canada, Chile, Co lombia, Costa Rica, Ecuador, Japan, Korea,
New Zealand, Norway, Peru, Switzerland, Uruguay and Venezuela for examinationand further consideration by  the General Council ....................................................................22
13. Work in the Committee on Regional Trade Agreements....................................................24
(a) Report by the Chairperson ................................................................................................... .....24
14. Reorganization of WTO Technical Cooperation .................................................................31
(a) Report by the Director-General .............................................................................................. ..31
15. Implementation-r elated issues ............................................................................................... 33
(a) Report by the Chairman of th e Committee on Rule s of Origin ................................................33
(b) Reports by the Vice-Chairman of the Committee on Agriculture ............................................39
(c) Report by the Chairman of the Committee on Sanitary and Phytosanitary Measures..............40
(d) Report by the Director-General on activities of international financial organizations
on SPS/TBT-related programmes .............................................................................................41
16. Reports of the Special Sessions of the Committee on Agriculture and of the
Council for Trade in Services ................................................................................................42
17. India – Statement on material on different WTO Agreements provided to other
International intergovernmental organizations and the WTO website by the
Secretariat.................................................................................................................... ............44
18. Switzerland – Presentation on modifications to its GSP Scheme in favour of
least- develope d countries..................................................................................................... ..45
19. Director General – Statement on certain aspects of the logistical preparation for
the Fourth Ministerial Conference........................................................................................45
20. Chairman – Announcement concerning  the Chairmanships of the Working
Parties on the Accession of Cape Verde and the Federal Republic of Yugoslavia............46
1. International Trade Centre UNCTAD/WTO
(a) Report of the Joint Advisory Group (ITC/AG(XXXIV)/188)
1. The Chairman said that the Joint Advisory Group of the International Trade Centre
UNCTAD/WTO had held its Thirty-Fourth Session from 30 April to 4 May 2001 and its report had
been circulated in document ITC/AG(XXXIV)/188.  At its meeting in May 2001, the Committee onTrade and Development had examined the report and had forwarded it to the General Council for
adoption.
2. The General Council took note of the statement and adopted
 the report in
ITC/AG(XXXIV)/188.WT/GC/M/66
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2. Accession of Iran
(a) Communication from Ir an (WT/ACC/IRN/1)
3. The Chairman drew attention to the communi cation from Iran in document WT/ACC/IRN/1
requesting accession to the WTO Agreement.  He recalled that this item had been on the agenda of the
8-9 May 2001 General Council meeting at the request of Egypt, subsequently confirmed by Malaysiaon behalf of the Informal Group of Developing C ountries, and that the General Council had agreed to
revert to this matter at the present meeting.
4. The representative of the United States said that her Government was currently reviewing this
matter and was not in a position to provide a response at this moment.
5. The representative of Malaysia, on behalf of the Informal Group of Developing Countries ,
thanked the representative of the United States for her statement.  Since the General Council meeting
on 8-9 May 2001, the Informal Group of Developing Countries had been looking forward to anappropriate response so that normal procedures w ould be followed on this issue.  However, having
listened to the US, he renewed his hope that an appropriate response would be forthcoming and
requested that the item  be on the agenda of the General Council at its next meeting.
6. The General Council took note of the statements and agreed
 to revert to this matter at its next
meeting.
3. Accession of the Bahamas
(a) Communication from the Bahamas (WT/ACC/BHS/1)
7. The Chairman drew attention to the communication from the Bahamas requesting accession
to the WTO Agreement (WT/ACC/BHS/1).
8. The representative of the Bahamas, speaking as an observer , said that his country's formal
application for accession to the WTO Agreement was a critical step in its effort toward full integration
into the multilateral trading system.  Free and fair trade promoted economic growth and prosperity
and the WTO was providing a rules-based environment for such a trade to occur.  Since July 2000, the
Bahamas had been an observer in the WTO and had been able to acquaint itself fully with its work.
The importance of the WTO to world economic stability was clear, as it was the principalorganization in the world for the liberalization of international trade and the peaceful settlement of
trade disputes.  It was for this reason, among others, that the Bahamas had decided to elevate its
participation in the WTO.  As a former colony of Great Britain, the Bahamas had achieved its
independence on 10 July 1973.  Parliamentary democracy had continued uninterrupted for nearly
275 years, forming the basis of the Bahamas' political stability.  The Bahamas had a small but stable
economy.  In 2001, its Gross Domestic Product (GDP) was estimated at US$5 billion, having
increased by some 52 per cent over the last eight years with a growth rate average of 3.05 per cent.The Bahamian economy was primarily service-based, with tourism accounting for about 40 per cent
of GDP and financial services accounting for about 15 per cent.  At present, the Bahamas' per capita
income was approximately US$15,000.  The Bahamas had an open trading economy, its largest
trading partners being the United States and Canada.  The significant deficit of its trade in goods
account was mainly financed through a surplus of its trade in services account, particularly tourism.Strong inward foreign direct investment within the last nine years had been a catalyst for the
Bahamas' recent economic expansion.  The unemployment rate decreased from 14.8 per cent in 1992,
to about 7 per cent at present.  The Bahamas had maintained a fixed exchange rate regime throughout
its modern history, with the Bahamian dollar on par with the US dollar.  Maintaining the parity
between the Bahamian dollar and the US dollar was an important factor underlying its fiscal andWT/GC/M/66
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monetary policy.  Today, that parity remained more secure than ever.  Its economic expansion to date
underpinned the important progress made by the Bahamas in improving health, education,
infrastructure and governance.  His Government fully  recognized the need to sustain and expand its
economic success and was committed to continue the fiscal discipline and reform, private sector
expansion, liberalization of trade and global in tegration.  For the fiscal year 2001/2002, the
Government had presented to Parliament a balanced budget, the first in two decades.  This had been
an important step toward sound financial management of the country's finances.  Although committed
to fiscal prudence, the Government was reforming the tax system in order to prepare for the new
economic order  in which the country found itself.  No taxes were levied directly on income, capital
gains, withholdings or other sources of income.  Indirect taxes were mainly in the form of customs
duties, stamp taxes, real property taxes and taxes on hospitality services.  Customs duties and a stamp
tax on import items currently represented 60 per cent of government revenues.  Since 1996, thenumber of tariff categories had been reduced from 129 to 29 in accordance with the "Harmonized
Commodity Description and Coding System" of th e World Customs Organization.  The average tariff
rate had also been reduced from about 42 per cent a decade ago to about 30 per cent at present.  With
the assistance of the International Monetary Fund (IMF), the Government was reviewing its current
system of taxation with the view to initiate a pr ogramme aimed at reducing reliance on customs duties
as a source of revenue.
9. The Bahamas considered the private sector as the main engine of economic growth.  The
Government was committed to facilitating business expansion and therefore to ensuring that its laws,
regulations and policies promoted competition.  As tourism and financial services would remain the
main pillars of its economy, the necessary steps were being taken to ensure that private businesseswithin these sectors continued to benefit from the opportunities that a more liberal international trade
and a globalized economy offer.  In terms of increased opportunities for private sector expansion, the
Government was putting in place the legislation, policies, educational programmes and infrastructure
necessary to establish e-commerce as the third pillar of the Bahamian economy.  The Bahamas was
also committed to privatizing state monopolies in a number of sectors, including telecommunicationsand energy.  The Government recognized that an open economy had been beneficial to the Bahamas'
economic progress.  The Bahamas' trade regime had remained liberal.  Customs duties were the main
barriers to trade, though they were used primarily for generating government revenue rather than as an
instrument of trade policy.  Tariffs did not discriminate against goods on the basis of their country of
origin.  There were only few import and export quotas and their trade impact was minimal.  In the
area of services, trade was generally liberal with foreign service providers having reasonable access to
the domestic services market.  The Bahamas expected to have an even more liberal trade regime, as itintegrated further into the multilateral trading system.  Additionally, the Bahamas was currently
reviewing its legislation and policies related to intellectual property rights in order to bring them into
conformity with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
10. The Government acknowledged that globalization was a fact of life of the modem world and
that trade liberalization was a broadly endorsed policy of the international community.  Both offeredexcellent opportunities for growth and prosperity as well as significant challenges.  As a small, open,
service-based economy, the Bahamas was vulnerable to the vagaries of external shocks in a liberal,
globalized economic system and the Bahamas' best prospects for success in such an environment was
systematic integration.  As a member of the Caribbean Community but not the Common Market, the
Bahamas was giving consideration to limited or full participation in the Caribbean Single Market andEconomy (CSME) which would integrate both the Caribbean Community and the Common Market.
The Bahamas was participating fully in negotiations to create a Free Trade Area of the Americas
(FTAA) among the 34 democracies of the Western Hemisphere.  Indeed, the Bahamas was chairing
the Services Negotiating Group of the FTAA process.  Finally, the Bahamas was applying to become
full Member of the WTO which would be a critical step in its international trade development process.The willingness to more fully integrate into regional and multilateral systems was not without
challenges.  Like many small developing states, the Bahamas was hard pressed to identify the human,WT/GC/M/66
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financial and technical resources necessary to fully engage the processes of negotiation involved with
the Caribbean Single Market and Economy, the Free Tr ade Area of the Americas participation and the
WTO accession.  Implementation and adjustments required, if and when negotiations were completed,
would be complex and costly.  The Bahamas was challenged to build confidence within civil society
with regard to global developments, as there was ofte n a high cost associated with information sharing
and adjustment support.  Because of the macro-economic success of the Bahamas, the significant
challenge of its geographical configuration was sometimes overlooked.  Of the 700 islands of the
Bahamas, 29 were inhabited.  As a consequence schools, medical facilities, social services, airports,
seaports and other public infrastructures and services had to be replicated in order to meet the needs of
its people.  There were therefore cost constraints not necessarily experienced by countries with one
contiguous land mass.  Additionally, economic growth and development was not evenly experienced
across the islands.
11. The Bahamas acknowledged the availability of WTO technical assistance and training and
hoped to avail itself of the same.  His Government was committed to the ideals of free and fair trade,
convinced that when combined with the appropriate economic, social and political policies, it
promoted prosperity and reduced poverty.  It was the intention of the Bahamas to be expeditious in
complying with the established policies and procedures in this accession process.  The Bahamaslooked forward to interacting with the Working Part y in multilateral and bilateral discussions leading
to the conclusion of a mutually satisfactory Protocol of Accession and Schedule of WTO
commitments.  The Bahamas was ready to provide any information that might be useful with regard to
its application for accession.
12. The representatives of Trinidad and Tobago, Jamaica
, Barbados , Saint Lucia , United States ,
Canada, European Communities , Honduras , on behalf of the GRULAC , Cuba , Mauritius , Romania ,
on behalf of the CEFTA countries and Croatia, Estonia, Latvia and Lithuania, Zimbabwe , on behalf of
the ACP and the African Group, Malta , India , Pakistan  and the Philippines , on behalf of the ASEAN
Members welcomed the application of the Bahamas for accession to the WTO Agreement and
supported the establishment of a working party to examine its request.  The representatives of
Jamaica, Barbados , Saint Lucia , Mauritius , Pakistan  and the Philippines , on behalf of the ASEAN
Members looked forward to an expeditious and smooth accession process of the Bahamas.  The
representatives of Saint Lucia, European Communities , Romania , on behalf of the CEFTA countries
and Croatia, Estonia, Latvia and Lithuania pledged assistance and support to the Bahamas throughout
its accession process.  The representative of Trinidad and Tobago, United States , Canada , European
Communities, Romania , on behalf of the CEFTA countries and Croatia, Estonia, Latvia and
Lithuania, Zimbabwe , on behalf of the ACP and the African Group  looked forward to working with
the Bahamas in its accession negotiation. The representatives of Honduras, on behalf of the
GRULAC, Romania , on behalf of the CEFTA countries and Croatia, Estonia, Latvia and Lithuania
and Pakistan looked forward to welcoming the Bahamas as a full Member in the near future.
13. The representative of Trinidad and Tobago said that the Bahamas, a CARICOM member, was
a small and politically stable developing country consisting of an extensive island chain, with a
population of approximately 305,000 inhabitants.  Like other CARICOM member countries, the
economy of the Bahamas was heavily dependent on a limited number of resources for generating
income.  Services constituted some 90 per cent of its GDP, with tourism alone accounting for more
than 40 per cent.  As noted in a 1999/2000 economic survey of Latin America and the Caribbean
issued by ECLAC, the budgetary allocations of the Bahamian Government reflected its primary
policy areas: health care, education, the justice system, social services, youth and the environment.
Because of its geographical configuration and small size, the Bahamas was consistently challenged in
seeking to attain its development objectives.  It had to deal not only with the constraints of its small
size but also with the administrative challenges as the result the country's geographical configuration
which consisted of many small islands.  The Bahamas had also to face the challenge of being subjectto difficult weather conditions such as hurricanes and tropical storms that if severe enough, couldWT/GC/M/66
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wipe out its tourism industry in one stroke, and the challenges of wealthier nations that had launched
attacks on the performing financial sectors of many of the Caribbean countries.  Trinidad and Tobago
congratulated the Bahamas for its decision to apply for accession to the WTO.  This decision provided
concrete proof of the sub-region’s commitment to, and support for, a fair and equitable rules-based
multilateral trading system, which allowed their countries the necessary room for manoeuvre andwhich did not reverse the progress in the economic, social, educational, health and other fields that
their societies had painstakingly achieved over the years.
14. The representative of Jamaica said that her delegation commended the application of the
Bahamas, which was a CARICOM member, as a demonstration of their desire to participate more
effectively in the global economy and their commitment to the multilateral trading system.  In this
context, she hoped that Members would not make demands over and beyond obligations currently
required in the WTO Agreements.
15. The representative of Barbados said that her country fully supported the application of the
Bahamas given their commitment to an open and liberal trade regime and the challenges which the
Bahamas had to face as a small open economy.
16. The representative of Saint Lucia said that the Bahamas was a member of the Caribbean
Community and was engaged in the negotiations in the CSME.  The Bahamas was the only
independent state of their hemisphere which was not a WTO Member.  The Bahamas had been able to
develop a promising service-based economy which underscored the potential of the services sector for
small vulnerable economies.  The Uruguay Round Agreements had held out great promises for all
developing countries, the credibility gap however ha d been the realization of the promised benefits.
She hoped that the promise of WTO membership would bring continued growth and prosperity.
17. The representative of the United States supported the Bahamas to adopt the WTO multilateral
trading rules.  The focus on trade in services in  the Bahamian economy provided strong incentive for
WTO membership.  Her delegation looked forward to working with the Bahamas in negotiations to
expand WTO coverage in this area.
18. The representative of Canada noted the Bahamas' commitments to trade liberalization and to
open internationally-oriented economy.
19. The representative of the European Communitie s said that the Bahamas was a partner within
the framework of the ACP agreement.  The Community agreed that the Bahamas was engaged in a
number of integration efforts at a regional and hemispherical level as well at a multilateral level and
that the application to the WTO constituted a critical step.  The Community was confident however
that the Bahamas would meet the challenges of the negotiating process.
20. The representative of Honduras, on behalf of the GRULAC  welcomed the tremendous efforts
that had been deployed by the Bahamas in carrying out its present economic reforms.
21. The representative of Mauritius looked forward to the accession of the Bahamas to the WTO
under appropriate terms and conditions, bearing in mind the comparatively simplified structure of the
country's economy and the specific challenges that the Bahamas had to face as an archipelago.  She
also wished to recall that the accession process for some other small island states, such as the
Seychelles and Vanuatu, had not yet been finalized and hoped that this could also be completed
expeditiously.
22. The General Council took note of the statements and of the expressions of support and agreed
to establish a working party with the following terms of reference and composition:WT/GC/M/66
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Terms of Reference:
"To examine the application of the Government of the Bahamas to accede to the WTO
Agreement under Article XII, and to submit to the General Council recommendations which may
include a draft Protocol of Accession."
Membership
Membership would be open to all Members indicating their wish to serve on the Working
Party.
Chairperson
The General Council would authorize its Chairman to designate the Chairperson of the
Working Party in consultation with representatives of Members and with the representative of the
Bahamas.
The Chairman then invited the representative of the Bahamas to consult with the Secretariat
as to further procedures, in particular regarding the basic documentation to be considered by the
Working Party.  He also invited the Bahamas, on behalf of the General Council, to attend meetings of
the General Council and, as appropriate, meetings of other WTO bodies as an observer during the
period when the Working Party was carrying out its work.
4. Accession of Tajikistan
(a) Communication from Tajikistan (WT/ACC/TJK/1)
23. The Chairman drew attention to the communication from Tajikistan requesting accession to
the WTO Agreement (WT/ACC/TJK/1).
24. The representative of Tajikistan, speaking as an observer , said that as Members were aware,
since its independence on 9 September 1991, Tajikistan had initiated the building of a democratic and
secular state, as well as radical economic reforms.  However, during the early stages of its
independent political system, Tajikistan had been faced with a number of economic, social and
political difficulties.  The situation had deteriorated during the civil conflict that had taken place in the
country and which had led to the destruction of the national economy.  Since 1997 the social and
political situation of the country had been stabilized.  At present the Government was undertakingmeasures towards the transformation of Tajikistan's political and economic systems.  The
normalization of the political situation had an immediate effect on its economic stabilization.  Since
1997 Tajikistan had achieved macroeconomic growth and stability, in accordance with the middle-
term programme of economic reforms adopted jointly by Tajikistan, the International Monetary Fund
and the World Bank.  This programme provided for reforms of its banking, financial, social, and taxsystems, and for privatization of medium- and large-scale enterprises.  Tajikistan was also
undertaking institutional reforms.  The measures taken by Tajikistan contributed to monetary and
fiscal stabilization.  A new national currency – Somony – had been introduced and reflected the
national and cultural values of the Tajik people.
25. On the international side, since 1995 Tajikistan had been carrying out foreign trade
liberalization policies.  At present all non-tariff regulations had been abolished, the only exception
was with regard to products and services which had direct effect on state security.  A number of
legislative acts had been adopted which granted all economic agents equal rights with regard to
external economic activities and protected their interests both in the country and abroad.  Overall, the
foreign trade policy and tariff regimes of Tajikistan were creating favorable conditions for a fruitfulWT/GC/M/66
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development of trade with its main trading partners.  Considering the importance and necessity of
world economic integration and taking into account the role of the WTO in the promotion of global
international trade, Tajikistan attached great importance to its accession to the WTO.  Moreover, his
Government had already taken several preparatory steps towards completing the accession process.
In particular, an inter-agency commission on the WTO accession had been set up within theGovernment and would be responsible for drawin g up all the necessary documentation for the WTO
accession negotiations.  The accession of Tajikistan to the WTO would be another step towards
further integration of its country into the world's economic community.  Tajikistan was looking
forward to Members' support throughout the accession exercise.
26. The representatives of Turkey, Switzerland
, India , Romania , on behalf of the CEFTA
countries and Croatia, Estonia, Latvia and Lithuania, United States , Kyrgyz Republic , Thailand , on
behalf the ASEAN Members, European Communities , Mauritius , Pakistan , Zimbabwe , on behalf of
the African Group and Honduras , on behalf of the GRULAC  welcomed the application of Tajikistan
for accession to the WTO Agreement and supported the establishment of a working party to examine
its request.
27. The representative of Turkey said that the application of Tajikistan for accession to the WTO
Agreement reinforced the universal character of th e WTO.  He believed that the accession process
would be instrumental in consolidating Tajikistan and would serve its people to prepare for a more
prosperous future.  Tajikistan's accession would also contribute to peace and stability in the important
region of Central Asia.  He hoped that Central Asia would be fully integrated into the world economy
through WTO membership.
28. The representative of Switzerland said that his delegation was convinced that Tajikistan's
accession application was a clear expression of its firm determination to continue with its process of
economic reforms which had already begun.  He hoped that the implementation of reforms, in line
with WTO rules, would contribute to the firm development of Tajikistan' s economy.  He hoped that
Tajikistan's accession process would be completed as soon as possible to the benefit of all.
29. The representative of India said that the strong political and economic relations between the
two countries would be further stre ngthened with the accession of Tajikistan to the WTO.  He hoped
that Tajikistan would be able to accede to the WTO on appropriate terms and conditions which would
be beneficial to it as well as to the multilateral trading community of the WTO.
30. The representative of Romania, speaking on behalf of the CEFTA countries and Croatia,
Estonia, Latvia and Lithuania said that Tajikistan's application for accession to the WTO was a very
important step in making the WTO a truly universal organization.  The accession process would
contribute to the development of market economy reforms in Tajikistan as well as to the overall peaceand stability in the region of Central Asia.
31. The representative of the United States said that for an economy moving away from state
control towards more market oriented regulatory mechanisms, the WTO accession process could
assist in promoting the kind of economic and trade reforms already under way, fostering greater
transparency, predictability and rule of law in the application of trade measures, minimizing pricecontrols, promoting privatization, eliminating quotas and bans in trade, and generally reducing
government control of trade.  The adoption of WTO provisions through trade liberalizing
commitments in the accession process could also promote investment, foster competition and
contribute to economic development.  Tajikistan's efforts in the accession process would help it to
become more fully integrated in the global economy.  The framework for trade relations with all other
Members resulting from the WTO accession would help build economic ties with countries outside
the region and would provide a forum for the pursuit and the protection for national trade interest.WT/GC/M/66
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Her delegation looked forward to the accession negotiation and to welcoming Tajikistan as a Member
at their conclusion.
32. The representative of the Kyrgyz Republic said that as a neighbouring country, trade relations
between the two countries were growing.  Accession to the WTO would be the framework for a
sustainable trade development and the economic growth of Tajikistan and of the region as a whole.
33. The representative of Thailand, speaking on behalf of the ASEAN Members  looked forward
to working closely with Tajikistan to reach a mutually beneficiary result in its accession negotiations
as soon as possible.
34. The representative of the European Communitie s said that his delegation fully shared the
assessment of previous speakers regarding the importance of this request for accession for the further
transition of Tajikistan.
35. The representative of Pakistan said that his country had a good relationship with Tajikistan
and hoped that in due course Tajikistan would become a fully-fledged Member of the WTO and
would be in a position to play an effective role in the multilateral trading system.  The growing
number of requests to become a Member of the WTO was a reflection of the confidence which
countries placed in the multilateral trading system.
36. The representative of Honduras, speaking on behalf of the GRULAC  hoped that Tajikistan
would be part of the WTO in the near future.
37. The General Council took note of the statements and expressions of support and agreed  to
establish a working party with the follow ing terms of reference and composition:
Terms of Reference:
"To examine the application of the Govern ment of Tajikistan to accede to the WTO
Agreement under Article XII, and to submit to the General Council recommendations which may
include a draft Protocol of Accession."
Membership
Membership would be open to all Members indicating their wish to serve on the Working
Party.
Chairperson
The General Council would authorize its Chairman to designate the Chairperson of the
Working Party in consultation with representatives of Members and with the representative of
Tajikistan.
The Chairman invited the representative of Tajikistan to consult with the Secretariat as to
further procedures, in particular regarding the basic documentation to be considered by the Working
Party.  He also invited Tajikistan, on behalf of the General Council, to attend meetings of the General
Council and, as appropriate, meetings of other WTO bodies as an observer during the period when the
Working Party was carrying out its work.WT/GC/M/66
Page 10
5. Committee on Budget, Finance and Administration
(a) Report of the Committee (WT/BFA/53)
38. The Chairman drew attention to the report of the Committee on budget, Finance and
Administration contained in document WT/BFA/53.  Mr. Supperamaniam (Malaysia), Chairman of
the Committee on Budget, Finance and Administration, introducing the Committee's report, said that
the Committee had met on 14 May 2001 and had examined:  (i) various administrative up-dates and
progress reports;  (ii) external auditor:  the formation of a Working Group;  (iii) a proposal to create a
trust fund to finance the travel expenses of the delegates of the least-developed countries to the Doha
Ministerial Conference;  (iv) consideration of a proposed contribution from a non-governmental
donor;  (v) the ITC 2002 Budget outline;  and (vi) the election of the chairperson.  He wished to
comment on the essential points examined by the Committee.
39. With respect to the participation of the least-developed country representatives at the Doha
Ministerial Conference, the Secretariat had recalled the past practice of establishing a Trust Fund to
finance the travel expenses of the LDC delegates in Ministerial Conferences.  In this context, the
representative of Qatar informed that his Government would provide free accommodation and
subsistence allowance to all LDC representatives attending the Ministerial Conference in Doha.  The
Committee had taken note that a Trust Fund would be established to this effect and recommended thatthe General Council urge interested donors to indicate  to the Secretariat as soon as possible the level
of financial support they would be prepared to pr ovide.  In this regard, he informed that Norway
would contribute Sw F 100,000 to this Trust Fund.  However, as needs amounted to approximately
Sw F 700,000 he wished to take this opportunity to remind Members that time was passing and he
therefore requested Members to give this question urgent and sympathetic consideration.
40. As regards voluntary contributions from non-governmental donors, a German-based non-
profit foundation – Friedrich-Ebert-Stiftung (FES) – had proposed a donation in kind estimated at
Sw F 115,000 to facilitate the participation of developing country journalists in a series of two and a
half-day seminars designed to familiarize these journalists with current WTO issues and build their
capacity to write on WTO topics.  The Committee had examined the proposed contribution in light ofthe guidelines established for such contributions
1 and had decided that the Director-General could
accept the donation in question.
41. With regard to the issue of the WTO External Auditor, the Committee had noted that a
Working Group on the selection of the WTO External Auditor would be established to examine the
five tenders received for the appointment of the WTO External Auditor.  Finally, the Committee had
also heard the International Trade Center 2002 budget outline.
42. The General Council took note of the statement, endorsed  the Budget Committee's specific
recommendation in paragraph 10 of its report in WT/BFA/53, thereby urging interested donors to
indicate to the Secretariat as soon as possible the level of financial support they would be prepared to
provide to facilitate the participation of least-developed country representatives at the Doha
Ministerial Conference and adopt ed the report in WT/BFA/53.
6. Attendance of Observers at the Fourth Session of the Ministerial Conference
(a) International intergovernmental organizations
43. The Chairman recalled that at the General Council meeting on 8 May 2001, he had drawn
attention to three requests for observer status at the Fourth Ministerial Conference by international
                                                     
1 WT/L/386.WT/GC/M/66
Page 11
intergovernmental organizations which had been neither observers in the General Council nor in other
WTO bodies.  These organizations were the following: the Arab Authority for Agricultural
Investment and Development (AAAID), the Gulf Organization for Industrial Consulting (GOIC) and
the Organization of the Petroleum Exporting Countries  (OPEC).  At that meeting, the General Council
had agreed that unless any objection was received by the Secretariat from any Member by25 May 2001, these organizations would be granted observer status to the Fourth Ministerial
Conference.  The Secretariat had received an objection before the agreed deadline concerning the
request for observer status by OPEC.  Therefore, this organization had not been granted observer
status at the Fourth Ministerial Conference.  Since no objection had been received by the Secretariat
in relation to the request by GOIC and AAAID, observer status at the Fourth Ministerial Conference
had been granted to these organizations.
44. Since the General Council meeting on 8 May 2001, the Secretariat had received three new
requests for observer status at the Fourth Ministerial Conference by international intergovernmental
organizations that had not been observers at the Third Ministerial Conference and that were neither
observers in the General Council nor in other WTO bodies.  These international intergovernmental
organizations were: the League of Arab States (LAS), the Arab Monetary Fund (AMF) and the
Advisory Centre on WTO Law.  Members wishing to consult the communications sent to theSecretariat by these organizations were invited to contact the External Relations Division.  Since the
Qatari authorities had set a deadline of 31 July for the registration of participants to the Ministerial
Conference, he proposed that unless any objection was received by the Secretariat from any Member
by 25 July 2001 concerning these requests, these organizations be granted observer status to the
Fourth Ministerial Conference.
45. The General Council so agreed.
2
46. The representative of Egypt expressed regret that some organizations had been objected to.
Her delegation would have preferred to have those organizations accepted, or at least know the
reasons for the objections.  The question of observer status of international intergovernmental
organizations had been a long standing issue, even before the Third Ministerial Conference when thesimilar requests had been discussed.  As Members were aware Egypt, together with a large number of
Members, had constantly and consistently stated that the requests from international
intergovernmental organizations for observer status to the WTO should not be politicized.  With
regard to the request of LAS to participate in the Doha Ministerial Conference, she recalled that at the
General Council meeting in May, her delegation ha d informed of the forthcoming request by that
organization.  When visiting Geneva, the Minister of Economy and Trade of Qatar, in his capacity as
representative of the host country, had also raised the issue with the General Council Chairman andwith the Director-General.  The Arab Trade Ministers, who had recently met in Cairo, had discussed
the issue of the request of LAS to participate at Doha and had sent a letter to the Director-General
asking for his assistance in order to get a positive outcome with respect to the request of LAS.  In that
letter the Arab Trade Ministers had stated that it was particularly opportune for such participation to
be initiated at the Fourth Ministerial Conference which would be held in Qatar, an Arab country.Such an issue had to be considered from the perspective that this would be the first Ministerial
Conference in an Arab country and it would be inconceivable to have that Conference without the
participation of LAS.  Her delegation would be ready to consult with all parties concerned and
requested the Chairman to undertake consultations, together with the Director-General in order to
reach a consensus with respect to the request by LA S.  Her delegation believed that one should avoid
turning this request into a confrontational issue.
                                                     
2 Subsequent to the meeting, two objections were made to the granting of observer status to the League
of Arab States (LAS) at the Fourth Ministerial Conference.WT/GC/M/66
Page 12
47. The Chairman said that with respect to the stat ement made by Egypt he wished to clarify that
only one out of the three requests had been objected to.
48. The representative of Qatar said that his delegation supported Egypt's statement and that the
request of LAS for observer status to the Fourth Ministerial Conference was of great importance to
Qatar.  As an Arab country and as the host of the Conference, Qatar considered the attendance of LASin the Ministerial Conference essential.  His delegation therefore urged and encouraged all Members
to accept this request and was ready to consult with Members so as to reach a consensus on the
matter.
49. The representative of Jordan fully supported the statements made by Egypt and Qatar.  The
issue of the participation of LAS as an observer to WTO meetings and in particular to the Fourth
Ministerial Conference which would be held in an Arab country was important to Jordan and to all
Arab countries.
50. The representative of Oman supported the statements made by previous speakers.  As
Members were aware LAS represented 22 Arab coun tries, 11 of which were WTO Members and five
were observers.  The WTO image was currently not very good in the Arab world and that image
would never improve if the request of LAS for obse rver status to the Ministerial Conference in Doha
was not agreed to.  She therefore asked Members to look into this sensitive and important issueseriously.
51. The representatives of Bahrain and Morocco
 fully supported the statements made by previous
speakers.
52. The representative of India supported Egypt's statement on the granting of observer status to
LAS.
53. The representative of Malaysia endorsed the statement made by Egypt and urged Members to
give positive consideration to the request for observership of LAS.
54. The representative of Pakistan expressed his delegation's support to the request of LAS and
fully supported the statement made by Egypt.
55. The Chairman said that it would be his intention to discuss this matter further with the
Director-General, who unfortunately could not attend the present meeting, to see if and how this
matter could be handled to everyone's satisfaction.
56. The representative of Egypt expressed appreciation to delegations for their support to the
request of LAS to attend the Doha Ministerial Conf erence.  Since the deadline for the registration of
participants to the Ministerial Conference was 31 July she asked the Chairman whether he could
inform her delegation of any objection to this request in due course.
57. The Chairman said that he took note of that request.
58. The representative of Indonesia said that Indonesia was one of the proponents for the granting
of observer status to OPEC at the Ministerial Conference.  Since that organization had not been
granted observer status at the Fourth Ministerial Conference, he informed the General Council that he
would consult his Government and reserved the right to revert to this issue at a later stage.
59. The representative of Venezuela supported Egypt's statement and expressed concern that
OPEC had not been granted observer status to the Fourth Session of the Ministerial Conference.WT/GC/M/66
Page 13
60. The General Council took note of the statements.
7. Election of Vice-Chairpersons of the Fourth Session of the Ministerial Conference
61. The Chairman recalled that at the meeting of the General Council on 8-9 May 2001, Members
had agreed to revert to the election of the th ree Vice-Chairpersons of the Fourth Ministerial
Conference in order to allow for consultations to take place.  In this regard, he informed that
consultations were taking place on the basis of a suggestion made by him of appointing one vice-
chairperson from the European region, one vice-chairperson from Africa and one vice-chairperson
from Latin America.  Progress was being made, however he was not in a position to put names before
Members for agreement at the present meeting.  He proposed therefore that the General Council agree
that he would call a special meeting of the General Council on short notice to elect the vice-
chairpersons before the next regular meeting of the General Council in October.
62. The representative of Japan said that he wished to have some information about the functions
of vice-chairpersons in Ministerial Conferences.
63. The Chairman said that in previous Ministerial Conferences the function of vice-chairpersons
had been to chair in turns plenary sessions of the Ministerial Conferences in which Ministers were
making their customary statements.
64. The General Council took note of the statements and agreed  to revert to this matter at a future
meeting after the consultations have been finalized.
8. Waivers Under Article IX of the WTO Agreement
(a) Switzerland – Preferences for Albania and Bosnia-Herzegovina
(i) Request for waiver (G/C/W/257)
65. The Chairman drew attention to the request from Switzerland for a waiver from its
obligations under paragraph 1 of Article I of the GATT 1994 until 31 March 2004 and to the related
draft decision (G/C/W/257).
66. Mr. Major (Hungary), Chairman of the Coun cil for Trade in Goods, reporting on the
Council's consideration of this request, said that the Council had agreed to forward the draft decision
(G/C/W/257) to the Gene ral Council for adoption.
67. The General Council took note of the report and, in accordance with the Decision-Making
Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93),
adopted the draft decision in G/C/W/257.3
(b) Customs Valuation Agreement
(i) Request for a waiver by M adagascar (G/C/W/259, G/C/W/268)
68. The Chairman drew attention to the request from Madagascar for a waiver from its
obligations under the Agreement on the Implementation of Article VII of the GATT 1994 until
17 November 2003 (G/C/W/259) and to the related draft decision (G/C/W/268).
                                                     
3 The Decision was subsequently circulated as WT/L/406.WT/GC/M/66
Page 14
69. Mr. Major (Hungary), Chairman of the Coun cil for Trade in Goods, reporting on the
Council's consideration of this request, said that the Council had agreed to forward the draft decision
(G/C/W/268) to the Gene ral Council for adoption.
70. The General Council took note of the report and, in accordance with the Decision-Making
Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93),
adopted the draft decision in G/C/W/268.4
9. Concessions under the harmonized commodity description and coding system – a
procedure for introduction of harmonized system 2002 changes to schedules of
concessions
(a) Draft decision (G/C/W/271)
71. The Chairman drew attention to document  G/C/W/271 containing a draft decision on a
procedure for introducing HS 2002 changes to schedules of concessions which had been approved by
the Council for Trade in Goods on 5 July 2001 and forwarded to the General Council for
consideration and adoption.
72. The General Council adopted the draft decision in G/C/W/271.5
10. Work Programme on Electronic Commerce
73. The Chairman recalled that this was a standing item on the General Council's agenda.
He also recalled that at the General Council meeting in May 2001, delegations had engaged in a first
substantive discussion on the reports submitted by the subsidiary bodies to the General Council in
July 1999 and December 2000.  At that meeting, it was agreed that the Chairman would ask theSecretariat to prepare a list of cross-cutting issues identified by Members, and would consult further
with them on this list.  Members had also agreed to have a dedicated discussion on electronic
commerce to address cross-cutting issues in June.  Following the General Council meeting in
May 2001, he had asked Mr. Stoler, Deputy Direct or-General, to consult with delegations on a
preliminary list of cross-cutting issues prepared by the Secretariat, and some changes were made tothe list on the basis of an informal consultation held with delegations on 6 June 2001.  A dedicated
discussion on the cross-cutting issues identified by delegations took place on 15 June 2001 under the
auspices of the General Council.  As agreed by Members at the dedicated discussion, the Secretariat
had subsequently prepared under its own responsibility a summary of the issues raised at the
dedicated discussion of the General Council for information.
6
74. Mr. Stoler, Deputy Director-General said that the Secretariat's summary of the issues raised at
the dedicated discussion on 15 June 2001 constituted a fair and accurate account of the meeting.  In
addition to the list of cross-cutting issues, which had served as the de facto agenda for the dedicated
discussion7, Members had also benefited from written contributions submitted ahead of the meeting
by MERCOSUR Member States, Singapore, Japan and the European Communities.  In his view, the
dedicated discussion had treated two kinds of cross-cutting issues:  first, those of a longer term
systemic interest where Members believed more study was in order, and second, an issue whichappeared to require a resolution.  In the first cate gory, he placed the development-related issues, the
fiscal implications of e-commerce, the relationship between e-commerce and traditional forms of
commerce, questions relating to customs duties, competition and certain legal questions.  In the
                                                     
4 The Decision was subsequently circulated as WT/L/408.
5 Subsequently issued in WT/L/407.
6 This summary was circulated in document WT/GC/W/436.
7 The list of cross-cutting issues is contained in document WT/GC/W/436.WT/GC/M/66
Page 15
second category he put the issue of classification of the content of certain electronic transmissions,
where he thought Members had to recognize the need to find a solution acceptable to all Members.
Although the issue of classification affected only a limited number of products, there was potential for
a considerable volume of trade in these few product categories and it thus behoved Members to find
an agreed approach to this issue as soon as practicable.
75. The Chairman thanked Mr. Stoler, Deputy Di rector-General, on behalf of the General
Council, for his assistance in relation to the work on electronic commerce.  He noted that work in the
subsidiary bodies was continuing and asked delegations to focus in their statements on the next steps
in the General Council's work on e-commerce.
76. All the representatives who spoke said that the dedicated discussion on cross-cutting issues
held under the auspices of the General Council on 15 June 2001 had been useful.  The representatives
of Brazil, Hungary , Singapore , Thailand , Korea , Panama , United States , Malaysia , Slovak Republic ,
Cuba and Venezuela  thanked the Secretariat for its summary of the issues raised at the dedicated
discussion.
77. The representative of Japan said that the participation of experts from capitals in the dedicated
discussion on e-commerce had allowed for a substantive exchange of views.  In order to assist in the
discussion, Japan had submitted a paper on classification prior to the meeting, which he hoped hadcontributed to a better understanding of the issue.  The dedicated discussion had nonetheless
demonstrated that further analysis of the cross-cutting issues was necessary and Japan was now
considering ways to maintain the momentum of this discussion on cross-cutting issues.  One option
was to hold another dedicated discussion before the Doha Ministerial Conference.  Moreover, in order
to ensure the continuation of the discussion after the Doha Ministerial Conference, Japan proposed toestablish in Doha a new forum under the auspices of the General Council to carry on with future
discussion on cross-cutting issues.  Nevertheless, Members should keep this issue moving forward
and Japan remained open to any suggestion that would contribute to this objective.
78. The representative of Hong Kong, China said  that he appreciated the importance Members
generally attached to issues such as classification and development, which were crucial to the
development of e-commerce.  Discussions so far had reflected the complex nature of some of the
issues at stake, such as classification.  His delegation appreciated the contributions by some Members
on classification and considered that more discussion was required on this subject.  In-depth
exploration and exchanges would also be necessar y for devising effective ways to take forward
developmental objectives.  In this regard, he noted with appreciation the initiative by the Committee
on Trade and Development to devise a work programme on e-commerce to help identify possible
future tasks that could address Members' concerns and developmental needs.  In light of thecomplexity and cross-cutting nature of the issues identified, Hong Kong, China would support further
dedicated discussions at the General Council level.  Apart from cross-cutting issues, Members would
have to deal with the status of the moratorium on the imposition of customs duties to electronic
transmissions, as an early settlement of this issue would help alleviate the burden of the preparatory
work for the Fourth Ministerial Conference.  Hong Kong, China was prepared to consider anextension of the moratorium conducive to all e-commerce participants and encouraged Members to
engage in timely and active discussions on this issue.
79. The representative of Brazil said that the dedicated discussion had provided Members with an
opportunity to have a thorough exchange of views on important subjects such as classification.
Despite the breadth and richness of the debate, discussions had revealed the need to examine andclarify further all of the cross-cutting issues, particularly the issue of classification and related topics
such as the concept of technological neutrality.  In Brazil's view, particular attention should be given
to classification since the treatment of this issue was closely linked to the question of what WTO rules
should apply to certain contents delivered electronically, and had therefore an impact on theWT/GC/M/66
Page 16
coherence, consistency and predictability of Members' rights and obligations.  Other cross-cutting
issues of particular interest to his delegation were development-related issues and the fiscal
implications of electronic commerce.  Dedicated discussions on cross-cutting issues in the General
Council should thus continue, focusing on classification and development-related issues and fiscal
implications.
80. The representative of the European Communities said that the dedicated discussion had
allowed a first substantive exchange of views on the issue of classification without prejudice to its
cross-cutting nature, which had shown widespread agreement among Members on the need for legal
certainty for operators.  He also noted that no-one had argued that there were virtual goods, but there
remained a key issue of market access that Members needed to address.  Another pointer in respect of
future work was the role of the Committee on Trade and Development.  Although the question as to
how far the General Council would need to be involved as opposed to the subsidiary bodies was notentirely clear to him, he noted first that Members should set aside for the moment the issues that did
not seem to be relevant or ripe for WTO work, for example the issue of jurisdiction and second that
the General Council should encourage the work of the Committee on Trade and Development, in
particular in making a study of the impact of e-commerce on public revenues.  In assessing how to
move forward with the work on e-commerce, Member s would need to take into account the workload
in connection with the preparations for the Fourth Ministerial Conference.  With regard to the issues
on which there was yet no consensus, Members ought to consider how far these issues could be taken
at this stage, or alternatively whether to revert to them at some later stage when the workload would
permit.
81. The representative of Hungary said that as agreed in paragraph 1.2 of the Work Programme
on Electronic Commerce, the horizontal issues shou ld continue to be discussed in the General
Council, preferably not in parallel to other meetings of this body.  The dedicated discussion had been
useful mainly for three reasons.  First, Members had engaged in a substantive discussion on
classification where a number of important arguments were made and relevant questions raised.  The
dedicated discussion had revealed that the issue of classification was of key importance and should begiven priority in the deliberations, since the resolution of this issue would have a bearing on a number
of issues to be tackled in the Work Programme.  Second, all delegations agreed that development-
related issues were of fundamental importance in the discussions on e-commerce.  Hungary was of the
view that these issues should also be given priority, and were best tackled in the Committee on Trade
and Development.  Third, the exchange of views or the lack of discussion on some of the issues
identified by delegations as being cross-cuttin g reinforced Hungary's conviction that a number of
these cross-cutting issues were not within the purview of WTO rules and should thus be dropped.Among these issues were jurisdiction, competition, tax implications of e-commerce, electronic
contracts and electronic signature.
82. The representative of Singapore said that although the dedicated discussion had been useful, a
number of issues were not resolved and required further work.  With regard to future work on
e-commerce, Singapore was open to have further dedicated discussions or alternatively to establish anew forum to deal with cross-cutting issues.  Given the outstanding work for the Fourth Ministerial
Conference, Singapore did not envisage to have another dedicated discussion before then, but would
look forward to a mandate for a work programme from Ministers in Doha, as well as an extension of
the moratorium on the imposition of customs duties on electronic transmissions and a set of principles
to be agreed by Members.
83. The representative of Thailand said that the dedicated discussion had provided Members with
an opportunity to have a first exchange of views on various cross-cutting issues and that Members
should continue to focus on substantive issues.  Thailand also welcomed recent developments in some
of the subsidiary bodies, particularly in the Council for Trade in Goods and the Committee on Trade
and Development.  However, discussions in various fora had shown that there could be some overlapWT/GC/M/66
Page 17
between the issues raised in different bodies.  Thailand therefore supported, in principle, a coherent
work programme for future undertakings on e-commerce.  His delegation remained open as to the
scope of such a work programme and would we lcome further suggestions by other Members.
84. The representative of Korea said that considerable progress had been made at the dedicated
discussion on the issue of classification, as well as development-related issues.  Nevertheless,
different opinions remained among Members on the issue of classification, showing a need for further
discussion on this subject.  Furthermore, other prominent cross-cutting and sectoral issues may also
require further elaboration.  Korea believed that the Fourth Ministerial Conference should invigorate
e-commerce by providing concrete direction for future work, for example by extending the mandate to
continue the work programme set up at the 1998 Geneva Ministerial Conference.  Other important
issues such as the extension of the moratorium on the imposition of custom duties on electronic
transmissions or the capacity-building of developing countries could also be addressed at the DohaMinisterial Conference and appropriately incorporated into the Ministerial Declaration.
85. The representative of India said that her delegation attached importance to the process of
focused discussion on cross-cutting issues in the General Council and supported holding further
dedicated discussions on these issues.  Members should maintain the momentum generated by the
dedicated discussion on 15 June in promoting a deeper understanding and appreciation of thecomplexity that underpinned electronic commerce.  A ll the cross-cutting issues identified by Members
should be the object of further discussion, although this should not preclude Members from adding
new issues to the list as the debate progressed further.  India also believed that it may not be
appropriate for Members to create a priority or hierarchy among the cross-cutting issues, since they
were inter-linked.  However, as was evident from the Secretariat's summary of the issues raised at the
dedicated discussion, there had been a natural focus in the discussion on classification and
development-related issues since these issues had wider implications on other cross-cutting issues.  It
was important for Members to recognize that the cr oss-cutting issues were not in themselves stand
alone issues.  The Secretariat's summary had also highlighted the fact that Members could not reach
conclusions on the issues discussed.  Therefore, it may not be appropriate to exclude any issue fromfuture discussions.  The General Council should mandate the subsidiary bodies to continue their work
on issues identified in the 1998 Work Programme on Electronic Commerce.  In this context, she drew
attention to the deliberations in the Committee on Trade and Development aimed at developing a
work programme in order to give greater focus and depth to the discussions on development issues.
Some delegations had made observations on proposals regarding the moratorium on the imposition of
customs duties on electronic transmissions that were under consideration separately in the General
Council in its preparations for the Fourth Ministeria l Conference.  In this regard, she noted that the
dedicated discussion on 15 June had refrained from addressing proposals such as these in full respect
of a prior General Council decision to reinvigorate the Work Programme on Electronic Commerce
and focus only on the examination of trade-related aspects of e-commerce.  India believed that in the
course of future work, Members should continue to take into account this decision of the General
Council.
86. The representative of Panama said that his delegation supported the statement by Brazil,
particularly regarding the issues on which Members should now focus in light of the outstanding
preparatory work for the Doha Ministerial Conference.  In this respect, Members should ensure that
any issue added to the basic agenda falls within the competence of the WTO.
87. The representative of the United States said that the dedicated discussion had highlighted the
fact that e-commerce was an evolving area that warranted consideration.  The United States would
continue to be engaged actively on these issues in the WTO.  In the context of the preparations for the
Doha Ministerial Conference, the United States was open to discuss ways to make the Work
Programme more useful, including through the establishment of an ad hoc task force or some otherWT/GC/M/66
Page 18
group under the auspices of the General Council, which could direct the subsidiary bodies to continue
work in particular areas as appropriate.
88. The representative of Malaysia said that given their complex nature many of the issues
addressed at the dedicated discussion had not yet been agreed upon.  Among these, the issue of
classification was of fundamental importance since a failure to reach an agreement on this questioncould have an impact in terms of assessing the ap plicability of WTO rules on e-commerce.  Malaysia
was in favour of holding at least one other dedicated discussion before the Doha Ministerial
Conference to consider whether Members could reach a common understanding on some of the most
difficult issues.  This was necessary in order to ensure that what would be agreed in Doha would
actually reflect the situation on the ground, and would not prejudge the outcome on some of the
pending issues such as classification and the applicability of WTO rules to e-commerce.  The
development aspect was also an integral part of the work on e-commerce.  While the Committee onTrade and Development was devising a programme for future work on e-commerce, Members should
also assess whether the Committee on Trade and Development would be able to agree on a work
programme that would actually enhance developing countries' capacity in this area, rather than being
only educative in its scope, in terms of the different kinds of technical cooperation that could be
provided to developing countries.  If Members felt that there could be a gap in this respect, the issuewould have to be considered in a different light.
89. The representative of Canada said that the dedicated discussion on e-commerce held on
15 June under the auspices of the General Council had helped Members focus on some of the
cross-cutting issues identified, including classification.  In Canada's view, further dedicated
discussions should be held under the auspices of the General Council.  Members should also givesome thought to finding an appropriate structure to pursue the educational and analytical work on
cross-cutting issues.  Although Canada had been a strong advocate of an ad hoc non-negotiating task
force to examine cross-cutting issues and would con tinue to support this idea, it remained open to
exploring and considering other alternatives that would allow Members to effectively pursue the work
on cross-cutting issues.
90. The representative of the Slovak Republic said that the cross-cutting issues related to
e-commerce should continue to be discussed in the General Council in parallel with the work in the
subsidiary bodies.  Ministers should agree in Doha on a mandate for future work on e-commerce, and
e-commerce should also be part of the agenda of a comprehensive round.  As to the concrete problems
to be discussed in the future, her delegation supported the continuation of the discussion on
classification, competition, and legal certainty for operators.  She also noted that the moratorium on
the imposition of customs duties on electronic transmissions should be extended, and that specialattention should be given to the developmental dimension of e-commerce.
91. The representative of Cuba said that her delegation was in favour of continuing the work on
e-commerce in the four subsidiary bodies.  However, there was a need to deal with some essential
issues at the horizontal level, in order to move forward on more specific aspects of the work in the
subsidiary bodies.  While her delegation supported all the items on the list of cross-cutting issues,priority should be given to the issues of classification, the imposition of custom duties on electronic
transmissions, as well as development-related issues .  Cross-cutting issues should continue to be dealt
with in special discussions in the General Council and given the full agenda in the run up to the Doha
Ministerial Conference, work should continue after the Ministerial Conference.
92. The representative of Venezuela said that the dedicated discussion had been fruitful in
allowing for a substantive discussion on the principal cross-cutting issues identified by delegations in
the General Council.  As reflected in the Secretaria t's summary of the issues raised at the dedicated
discussion, many important areas still needed to be clarified and should be considered in any future
work programme on e-commerce in the WTO.  Venezuela believed that Ministers in Doha shouldWT/GC/M/66
Page 19
decide how to proceed with the future work programme on e-commerce.  In her delegation's view,
such a work programme could provide for the contin uation of the analytical work in the subsidiary
bodies, as well as further dedicated discussions in the General Council.
93. The Chairman said that delegations had clearly appreciated the dedicated discussion held on
15 June, and that there seemed to be a will to continue to focus on e-commerce in a cross-cutting
manner.  Until the next General Council meeting in October, he encouraged delegations to continue to
discuss among themselves and with him and Mr. Stol er, Deputy Director-General, the most practical
and efficient way to carry forward future work in this important area, including the possibility of
holding other dedicated discussions at some stage, as well as the link to the Doha Ministerial
Declaration.
94. The General Council took note of the statements and agreed  to revert to this item at its next
meeting.
11. Review of Procedures for Circulation and Derestriction of WTO Documents
95. The Chairman recalled that Mr. Rodriguez, Deputy Director-General, had been conducting
informal consultations with Members on the question of the review of procedures for circulation and
derestriction of WTO documents following a General Council decision at its meeting of 3 and
8 May 2000.
96. Mr. Rodriguez, Deputy Director-General, reca lled that at the General Council meeting on
8 May 2001, he had reported that he would intensify his consultations on the issue of procedures for
the circulation and derestriction of WTO documents.  Since that meeting, he had held a number of
consultations with interested delegations as well as an informal open-ended meeting on 8 June 2001,
during which elements for a draft decision had been discussed.  He was very much encouraged by theprogress made so far.  In fact, most Members were prepared to eliminate entirely the cumbersome and
lengthy derestriction procedures currently in place and to move to much simpler procedures, which
would entail significant gains in efficiency and reflect realities.  It was widely acknowledged that the
concept of keeping a document restricted was flawed and was not working in practice for an
organization of 142 Members, such as the WTO.  It was also widely recognized that currentprocedures for derestriction were unnecessarily lengthy and complex.  The proposed procedures
would  imply that practically all official WTO documents would, as a general rule, be circulated as
unrestricted.  A large number of developed and developing countries alike had strongly urged that a
decision to be taken soon.  A few Members however still had difficulties with the suggested new
approach.  Therefore, more time was needed for consultations on the proposed elements of a draft
decision.  It was his impression that through further consultations it should be possible to
accommodate the remaining concerns and to submit a draft decision for appropriate action at the nextmeeting of the General Council.
97. All representatives who spoke expressed gratitude to Mr. Rodriguez, Deputy Director-
General for his efforts to propose elements for a draft decision on simplified derestriction procedures.
98. The representative of Bulgaria said that his country supported in principle further steps to
accelerate and simplify the derestriction of WTO documents.  He believed that for the sake of
transparency it would be appropriate to include the drafts proposed by Mr. Rodriguez at the informal
small group consultations and at the open-ended meeting, as well as substantive information on the
reactions of different delegations to these drafts in the minutes of this meeting.  This would be of
interest especially to non-resident delegations and to the general public who would be the principal
beneficiary of a further acceleration of the derestriction of WTO documents.  As regards derestriction,his delegation believed that it should be dealt with in the broader framework of external and internal
transparency.  Therefore his delegation could not accept to deal with it separately, as a "stand alone"WT/GC/M/66
Page 20
issue.  The accelerated and simplified derestriction procedures should enhance rather than diminish or
serve as a substitute for genuine improvement of external and internal transparency in the WTO.
Therefore it would be necessary to proceed with caution and to consider carefully any possible
negative side effects before taking steps to change the existing procedures.  If the possible negative
side effects were not considered in advance and if no effective measures were taken to avoid such sideeffects, an apparently simple, straightforward and seemingly radical decision to derestrict all WTO
documents might turn out to be counterproductive and lead to a deterioration, instead of an
improvement, of the state of transparency in the WTO.  One aspect which deserved particular and
serious consideration was the link between external and internal transparency.  A number of
delegations on various occasions had called attention to this link and had pointed out that external and
internal transparency were two sides of the same coin.  The issue of derestriction was a very important
aspect of this link.  A radical derestriction of all WTO documents might enhance the inclination tosubmit informal rather than formal documents, which could lead, for example, to a proliferation of
"Job" documents or other unofficial material which were of limited availability, did not remain in the
records, would never be derestricted and thus were by their very status, or lack of it, more non-
transparent.  The worst case would be that an immediate derestriction could enhance the inclination
not to submit any written advance documents at all but instead to table last minute proposals.  Lastminute proposals, possibly worked out in "green room" processes by small exclusive groups of
Members were an eloquent form of extreme internal and external non-transparency.  One should bear
in mind that civil society, the general public, NGOs, interest groups and stakeholders were not
interested in derestriction for its own sake.  They n eeded transparency in order to be informed of and
to be able to exercise a democratic control over  WTO activities.  Because of the intergovernmental
character of the WTO, however, the appropriate way to exercise such a democratic control over WTO
activities was through a consultation process by governments with their domestic constituencies.  If
WTO activities were not sufficiently transparent to governments, they would of course be even less
transparent to the domestic constituencies.  Hence, because of the intergovernmental character of the
WTO, a deterioration of the state of internal transparency, including through a proliferation ofunofficial documents and last minute proposals would also have a negative effect on external
transparency.  Genuine external transparency was impossible without real internal transparency and
one way of enhancing external transparency was th rough the strengthening of internal transparency.
For this reason, issues of transparency, including derestriction, should be approached in a sufficiently
comprehensive way.  Therefore it would be necessary, before taking any steps to further accelerate the
derestriction of WTO documents, to first provide guarantees for at least a minimum degree of internal
transparency and, specifically, to exclude the possibility of last minute proposals.  Consideration ofany issue in WTO bodies should be initiated well in advance of any decision by a formal proposal and
draft decisions should be tabled as formal documents well in advance of their adoption.  The specific
measures to be taken before a further acceleration of the derestriction of WTO documents, in order to
avoid possible negative side effects, should be the following:  first, to take steps to exclude the
possibility of last minute proposals.  One such step  would be to provide sufficient time between the
formal submission of draft decisions and their adoption.  The current time-frames in Rule 23 of the
Rules of Procedure for Sessions of the Ministerial Conference and in Rule 28 of the Rules of
Procedure for Meetings of the General Council were only 12 hours.  This, in terms of internal
transparency, was clearly insufficient for an inclusive decision-making process and, in terms of
external transparency, these time-frames were making a process of consultation with capitals and,hence, with domestic constituencies impossible.   In its communication in WT/GC/W/422, Bulgaria
had already proposed that these time-frames be extended, so that draft decisions be circulated together
with the notice convening the respective meeting.  In light of the proposal for a radical and immediate
derestriction of all WTO documents, it might be necessary to provide for an even greater extension of
these time-frames and to specify that draft decisions be submitted as formal WTO documents andreferenced in the convening notice for the respecti ve meeting.  In addition, a provision should be
included in the Rules of Procedure of WTO bodies, requiring that consideration of any issue in WTO
bodies should be initiated by proposals, submitted as formal WTO documents, in advance of
discussions in the respective body.  Second, to provide more transparency for informal WTOWT/GC/M/66
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documents.  Currently "Job" documents were, as a rule, not placed on the Members' website and, in
the exceptional and rare cases when they were placed there, were subsequently removed from the
website.  "Job" documents were not distributed to capitals.  A clear and explicit provision should be
included in the Rules of Procedure of WTO bodies th at all informal documents circulated through the
WTO Secretariat or for meetings of WTO bodies ("Job" documents) should be placed on the WTOMembers' website and not removed from it and also that they should be sent to all capitals, including
those of non-resident delegations.  Third, to esta blish deadlines for the circulation of minutes of
meetings.  At present, there were no such formally established deadlines in the Rules of Procedure of
WTO bodies.  Minutes, however, were important both for internal and external transparency because
it was through them that non-residents, small delegations which could not attend all meetings and the
public at large could learn about WTO activities.  From the point of view of external transparency,
minutes seemed to be the single most important ty pe of WTO documents, from which one could learn
about WTO activities.  It would make little sense to  provide for immediate derestriction of minutes if,
at the same time, no deadline was set for their circulation after the respective meeting.  A provision
should be included in the Rules of Procedure of WTO bodies requiring that minutes of WTO meetings
should be normally circulated two weeks after the respective meeting was held and in any case before
the circulation of the notice convening the next meeting of that body.
99. In conclusion, the adoption of the above measures would constitute an improvement in the
functioning of the WTO, even if they were taken as separate "stand alone" measures, without
introducing an immediate derestriction of all WTO documents.  Such a radical derestriction, on the
other hand, without having taken these measures in advance, could lead to the negative side effects
already described.  Therefore these measures should first be taken before any new decision on theimmediate derestriction was taken.  Bulgaria would also like to propose that the scope of further
consultations on the derestriction of WTO documents be broadened to include measures dealing with
the possible side effects of enhanced derestriction rules.
100. The representative of the United States said that as the WTO gained in stature it was critical
to share information about WTO activities with the public in a timely manner.  Her delegation
believed that Mr. Rodriguez's efforts could help simplify WTO internal procedures on documents and
make more documents immediately available to the public.  The United Stated supported his efforts
and hoped to work together in the next weeks to ensure concrete progress.
101. The representative of Canada said that his delegation hoped that a decision could be taken
soon on these proposals and to that end would welcome further consultations on the proposed
guidelines.  With regard to Bulgaria's concerns as possible negative effects of these proposals on the
timing of the submission of documents, he believed that ideas and discussion in the consultationsconducted by Mr. Rodriguez would in fact alleviat e these concerns.  Endorsement of the proposals
that had been formulated in these consultations would provide a concrete example of the type of
transparency that the WTO should engage in a nd its key to maintaining public support for the
multilateral trading system.
102. The representative of the European Communitie s that the Community was on record as being
very much in favour of a more open policy of document circulation and derestriction.  His delegation
fully supported further efforts by Mr. Rodriguez to make progress on this issue and was confident that
success was achievable within a short time-frame.
103. The representative of Japan said that his government believed that enhanced external
transparency was important to sustain public support for the activity of the WTO.  His delegation
supported Mr. Rodriguez's efforts and hoped that Members would come to an agreement based on his
proposal very soon.WT/GC/M/66
Page 22
104. The representative of India said that his delegation had participated in these consultations and
had had some concerns about the draft proposal of the Deputy Director-General, especially relating to
Secretariat documents and the time-period for dere striction of minutes.  His delegation was prepared
to continue to participate in the consultations but India's deep concerns in these two areas remained.
India shared Bulgaria's views that external and internal transparency could not be delinked.  Unlessthere was a time-limit for the circulation of minutes it would not be realistic to discuss the time-period
for derestriction of the minutes after the minutes were issued.  His delegation might change its
position if the Secretariat accepted a time-limit of two weeks for the circulation of the minutes as
suggested by Bulgaria.
105. The representative of Brazil supported a more simplified procedure for derestriction of
documents.  This was one issue, in the context of external transparency, where progress could be
made.  The only precondition for derestriction would be that WTO documents be circulated amonggovernments into the three WTO official languages before they were made available to the general
public.  Brazil did not believe that a more accelerated derestriction policy would prompt an increase
on informal papers of the type of job documents.  She had participated in the informal consultations
on derestriction of documents and had been surprised to find out that the documents that were
produced and discussed during the ongoing negotiations, were already made available as soon as theywere circulated among governments.  She believed that those documents were of particular concern to
some delegations and as far as she was aware that had not posed any problems to any delegation so
far.  Her delegation therefore welcomed further consultations on this matter.
106. The representative of Colombia said that in his delegation's view the proposal made by
Mr. Rodriguez clearly constituted concrete progress and would certainly ensure greater transparency.
Furthermore, his delegation shared in principle the comments made by India and Bulgaria with regard
to the need to ensure that there would be no counterproductive impact.  However, as stated by Brazil,
it was quite reassuring to know that countries had put forward their proposals as unrestricted
documents.  Therefore any fears that might be harboured as to the possible massive submission of
informal documents should not be overexaggerated.
107. The representative of Hungary said that his delegation would like to see concrete tangible
results concerning this issue before the Doha Ministerial Conference.  This would considerably
improve the image of this organization.
108. The Chairman said that some Members believed that these consultations were proceeding
well and should be pressed forward.  Others felt th at the Doha Ministerial Conference would provide
an excellent opportunity to confirm Members' commitments to this aspect of transparency.  However,
others appeared to still have some concerns on some aspects of the proposals.  ThereforeMr. Rodriguez and himself would hold further consultations on this issue.
109. The General Council took note of the statements and agreed
 to revert to this matter at its next
meeting.
12. Proposal to amend certain provisions of the Understanding on Rules and Procedures
Governing the Settlement of Disputes Pu rsuant to Article X of the Marrakesh
Agreement Establishing the World Trade Organization
(a) Submission by Bolivia, Canada, Chile, Colomb ia, Costa Rica, Ecuador, Japan, Korea, New
Zealand, Norway, Peru, Switzerland, Uruguay and Venezuela for examination and further
consideration by the General Council (WT/GC/W/410 and Add.1, 2 and 3)
110. The Chairman said that this item was on the agenda at the request of the delegation of Japan
on behalf of the co-sponsors of the proposal.WT/GC/M/66
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111. The representative of Japan, speaking on behalf of the co-sponsors of the proposal , said that
since the last General Council meeting on 8-9 May 2001, the co-sponsors had organized another
open-ended meeting on 8 June 2001 inviting all interested Members to discuss the proposal.  He noted
that the response by other Members had been good, and that there seemed to be an increasing level of
support for the proposal.  Nevertheless, some Members had expressed the view that certain aspects ofthe proposal needed to be discussed further before they could support it.  For this reason, the co-
sponsors intended to organize another open-ended meeting on 19 July 2001 to focus on two particular
issues raised by a number of delegations interested in the proposal:  (i) time-frames included in the
proposal and (ii) right of appeal.  In parallel to the discussion on the proposal, the co-sponsors
intended to prepare a draft Ministerial decision that would include the necessary transitional
provisions to enable the co-sponsors to submit the proposal to Ministers at the Doha Ministerial
Conference once consensus was reached.  Although a number of delegations were in favour of a morecomprehensive approach in respect of an amendment to the Dispute Settlement Understanding (DSU)
and wished to expand the scope of the present proposal, the co-sponsors were of the view that the
Chairman of the General Council had already taken up this process by asking the Chairman of the
Dispute Settlement Body to conduct on his behalf informal consultations on this subject.  While the
co-sponsors were prepared to take part in other discussions, they would continue to seek consensusaround their own proposal.
112. All representatives who spoke thanked the delegation of Japan for its report as well as the co-
sponsors of the proposal for the consultations held on this subject.
113. The representative of Thailand said that her delegation was prepared to join Members in
working towards a Ministerial decision at the Doha Ministerial Conference, which could either be a
binding decision to amend the text of the DSU or a decision to launch a mandate for a DSU review to
begin after the Ministerial Conference.  In view of these two possible options, Members should start
working towards identifying priority issues for de cision at the Doha Ministerial Conference.  This
should include the "sequencing issue", as well as other closely-related issues.  The proposal by the
co-sponsors appeared to be a good starting-point and Thailand was willing to take part in futureconsultations on this matter.
114. The representative of the United States said that her delegation continued to welcome the
opportunity provided by this agenda item to re-engage in a discussion of needed improvements to the
DSU.  The United States hoped that in the coming months, Members would be able to agree to
changes to the DSU that improved its provisions on the implementation of panel and Appellate Body
reports and enhanced the transparency of the dispute settlement process, along with other technical
changes.  However, the United States believed that the proposal by the co-sponsors did not go farenough in enhancing the transparency of the dispute settlement process, and did not provide a basis at
this time for the consensus required to adopt an  amendment to the DSU.  The United States was
prepared to discuss improvements to the dispute settlement mechanism in the DSB when the time was
right, and would listen with interest to other delegations' views on the proposal by the co-sponsors.
115. The representative of Canada urged Members to support the adoption of the proposal by the
group of co-sponsors at the Doha Ministerial Co nference.  As Japan had noted, there was no
disagreement among Members on the need to improve the existing DSU text on the "sequencing"
issue.  Moreover, the co-sponsors had made clear from the outset that the Proposed Amendment was
not a "take it or leave it" offer.  Canada therefore invited Members to address modifications to the
proposal that would result in an amendment to the DSU that would command consensus.  However,Members should approach such modifications with prudence, avoiding a full scale revision of the
DSU in the little time remaining before the Fourth  Ministerial Conference.  Members should focus on
the two priority issues that had been identified by many of them and outlined by Japan in its
statement, i.e. a possible appeal of a DSU Article 21 bis panel report, as well as time-frames.  Canada
looked forward to discussing both issues in more depth at the meeting scheduled on 19 July 2001.WT/GC/M/66
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116. The representative of the European Communities said that the proposal by the co-sponsors did
not enjoy consensus at this time and that it was unlikely that consensus would be reached by the time
of the Doha Ministerial Conference.  Nevertheless, the European Communities was grateful to the
co-sponsors for giving Members an opportunity to discuss the proposal and was prepared to take part
in further consultations on this subject.
117. The representative of Chile said that there was broad agreement among Members that the
proposal by the co-sponsors was a positive contribution, and that although it may require minor
adjustments, it was nonetheless heading in the right direction towards achieving a solution to the
problems Members faced.  He noted that certain Members had refrained from joining in a consensus
on this specific proposal as they were hoping to obtain something more, thereby making the solution
conditional to the fulfilment of other ambitions.  He hoped that a more reasonable a ttitude would
prevail over the next few weeks, thus allowing Members to reach a solution and take a final stand onthis question at the Doha Ministerial Conference.
118. The Chairman proposed that the General Council take note of the statements and revert to the
matter at a future meeting.
119. The representative of Bulgaria said that his delegation objected to a decision of the General
Council to revert to a matter that had been put on the agenda by a group of countries.  Bulgaria was of
the view that there was no need for such a deci sion, as the co-sponsors would again propose the
inclusion of this item on the agenda.  Bulgaria felt that such a decision by the General Council could
institutionalize one specific proposal on a DSU amendment while other proposals of a similar nature
could be submitted in the future.
120. The Chairman said that he had proposed to re vert to the matter at a future meeting and
therefore it would be up to the co-sponsors to request the inclusion of this item on the agenda of any
future meeting if they so wished.
121. The General Council took note of the statements and agreed  to revert to the matter at a future
meeting.
13. Work in the Committee on Regional Trade Agreements
(a) Report by the Chairperson
122. The Chairman recalled that at the General Council meeting in December 2000, the then
Chairman of the Committee on Regional Trade Agreemen ts (CRTA) had made a report to the General
Council highlighting the difficulties which had been encountered by the Committee in fulfilling its
mandate.  At its meeting on the 8-9 February 2001, the General Council had on its agenda an item on
the situation regarding the work in the CRTA, following a proposal made by India on behalf of
Australia, India, Japan, Korea, New Zealand, Paki stan, and Hong Kong, China.  It was agreed that
consultations would be conducted on the proposal made by India on behalf of the co-sponsors that the
Chairperson of the CRTA be invited to report to the General Council on the current situation
regarding the work in the CRTA.
123. Mrs. Dubois-Destrizais (France), Chairperson of the Committee on Regional Trade
Agreements, said that the situation she had found herself in was something of a predicament.  Five
months after her election as Chairperson of the CRTA, after chairing one formal session of the
Committee and a number of informal meetings and consultations, her assessment of the situation was
a pessimistic one.  Some Members might view her report as being presumptuous, as it added to the
heavy workload of the General Council at a time when the primary focus was on the preparations for
the Doha Ministerial Conference.  However, she believed she owed Members this report.  First, sheWT/GC/M/66
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recalled that her assessment was entirely in keeping with that made by her predecessor, Mr. Custodio
of the Philippines, who had drawn Members' attention at the General Council meeting in
December 2000 to what he had himself described as an impasse in the CRTA's work.  Members were
familiar with the figures, which spoke for themselves.  While a total of 145 agreements currently in
force had been notified to the GATT/WTO and examined, the CRTA had in hand only33 examination reports corresponding to agreements examined before 1995 by former working
groups.  Since its creation in 1996, the CRTA had completed the factual examination of
70 agreements but no report on these examinations had been finalized or distributed due to the
contents of these agreements and the strategy adopted by most Members vis-à-vis  these agreements.
She felt that little progress had been made since she had succeeded her predecessor.  Second, she
noted that at the General Council meeting in February 2001 a number of Members had expressed the
wish that the General Council's attention be drawn to the deadlock in the CRTA's proceedings, and itwas thus normal that they be informed of an y developments.  She had informed the Committee
members of her intention to deliver this report at the present meeting and none of them had objected
to her decision.  She nonetheless emphasized that the report was made in her personal capacity and
that its content had not been discussed in the CRTA.  Since February 2001, the CRTA had tried to
resolve some of the difficulties by modifying the presentation of the five model reports on which theCommittee had decided to focus as a matter of priority.  Although modest progress had been made
through informal, bilateral and multilateral consultations, this new approach had not enabled
Members to overcome the usual divisions within the Committee.  On the contrary, in some instances
even greater differences had emerged, and she had therefore taken it upon herself not to pursue work
on the basis of these five reports.  She noted that some delegations, including mainly delegations thatwere not party to the relevant agreements, had been disappointed by the fact that the CRTA had not
undertaken a detailed analysis of the five model reports.  However, it was unlikely that divergences
which had not been overcome in the course of bilateral consultations would be overcome by enlarging
the number of participants in the discussion.  In view of this situation, the simplest option would be
for Members not to take any action.  The CRTA wo uld hold two more meetings in 2001, the systemic
debate could be further enriched, and a new Chairp erson would then be elected.  There was, however,
a more ambitious option.  She noted that the deadlock in the Committee's work was a logical
development.  Given the importance of the dispute settlement system in the WTO, Members were
reluctant to agree to formulations, analyses or conclusions that could later be used in some unforeseen
manner or interpreted by a dispute settlement panel, to the extent that the dispute settlement system
was the sole arbitrator of Members' compliance with the rules that they had approved and ratified.
Her view on this matter had been reinforced by consultations held by the General Council's Chairmanin the context of the preparations for the Doha Ministerial Conference, where many delegations had
reaffirmed the primacy of the multilateral trading system and had expressed the wish that the CRTA's
work be considered in this framework.  This would provide to the membership an opportunity to
move forward in the process if it so wished.  She noted that the time might have come to ensure that
the Committee at least assumed its role in enhancing transparency, and left this question to Members'appreciation.  She did not wish to rush things in any way, as certain Members may consider the matter
to be minor when compared to other questions currently facing the WTO.  However, just as her
predecessor had done, she felt it was her duty to bring Members' attention to the situation in the
CRTA.  She was ready to hold further consultations in collaboration with the Chairman of the General
Council should Members deem it appropriate.
124. All the representatives who spoke thanked the Ch airperson of the CRTA for her report on the
situation of the work in the Committee.
125. The representative of the Philippines said that he was not surprised by the Chairperson's
appraisal of the situation in the CRTA and shared her pessimism.  In five years, the CRTA had only
released one examination report and this was allegedly due to the vague provisions of Article XXIVof the GATT 1994.  However, in his view, strong political will would enable Members to release
some of the reports.  The situation could only be ignored at the risk of eroding the primacy of theWT/GC/M/66
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WTO in terms of international trade policy.  A majority of Members were engaged in regional trade
agreements (RTAs), which presented differences in terms of scope, rules of origin, dispute settlement
process, and which could be either in conflict with one another or inconsistent with the multilateral
rules.  Members could decide to either ignore the situation, or adopt some kind of interim agreement
or process.  The first interim measure that the CRTA had undertaken was the discussion of thesystemic issues.  However, the systemic issues were viewed in the context of individual country
interest or vulnerabilities as far as the rules on consistency were concerned.  Moreover, the attempt to
clarify these vague provisions would require considerable time and even if Members were successful
in this process, the grandfathering concept would not apply this agreement to the RTAs already in
existence.  Article XXIV:5(c) of the GATT 1994 established a requirement for information on the
plan and time-frame of each interim RTA.  Through the application of this provision, Members could
progressively influence the formation of new RTAs, although parties to these RTAs could alwaysclaim that these were not interim agreements but 
rather agreements already in place.  The third option,
whereby the countries whose trade was impaired by RTAs would turn to dispute settlement, was in his
view the worst scenario.  With regard to the interim measures that Members should take in light of the
current situation, he noted that the ongoing consul tations would enable Members to agree on a strong
message to be adopted by Ministers at the Doha Ministerial Conference, irrespective of individualcountries' interests in the free trade agreements and RTAs that were being adopted.  In the
preparations for the Doha Ministerial Conference, he hoped that Members would be able to come up
with a more objective and wilful mandate for the CRTA along with some interim measures.  However
in the end, an objective 
reassessment and reinterpretation of the provisions of Article XXIV of the
GATT 1994 would be necessary.
126. The representative of Pakistan said that the Chairperson's report was objective, factual, and
provocative.  Pakistan felt that no progress had been made in the CRTA's work, as reflected in the
report of the former CRTA Chairman presented to the General Council in December 2000, where he
had stated that the CRTA had not been able to conclude any examination referred to it because of
various political and practical difficulties.  Pakistan had an interest in the CRTA's work, in respect ofthe examination of RTAs as well as from a systemic point of view.  The questions raised in the
Chairperson's report were therefore of great relevance and Members had to think of ways to break the
deadlock in the Committee's proceedings.  Pakistan could not support the first option presented by the
Chairperson whereby Members would refrain from taking any action with regard to the work in the
CRTA.  His delegation was of the view that the General Council needed to give further consideration
to the second option.  With regard to the issue of RTAs in the context of the Doha Ministerial
Conference, he noted that delegations were alre ady aware of Pakistan's position.  Pakistan was
concerned about the proliferation of RTAs, which tended to be inherently discriminatory towards
non-parties and which could thus marginalize non-party developing countries.  Therefore, the trade
diversion effects of these RTAs, especially for developing countries, had to be examined in the
CRTA.  The proliferation of RTAs was weakening the framework of the multilateral trading system
by creating a two-tier international trading system.  It was time to recognize the primacy of themultilateral trading system and to ensure that RTAs supplemented rather than supplanted the
multilateral trading system.  The CRTA had a mandate to bring the rules governing RTAs in
conformity with the multilateral rules.  As a custodian of the multilateral trading system, the WTO
had the responsibility to speak up for full and faithful implementation of the WTO agreements and for
upholding multilateralism over regionalism.  Pakistan therefore wished that Ministers in Doha wouldnot only take note of the slow progress in the CRTA, but also reaffirm the primacy of the multilateral
trading system and give clear directions as to how to make the Committee more effective and
successful in carrying out its mandate.
127. The representative of the European Communitie s said that the analysis presented by the
Chairperson was relevant.  The Community had played an active role in the recent consultations with
the objective of finishing a first review group, and regretted that this had not been possible.  He hoped
that Members would have a better chance of resolving the systemic problems relating to the CRTA'sWT/GC/M/66
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work in a wider round of trade negotiations.  In the meantime, the European Communities would
study all the possible options to make progress with respect to the pending reports, including those
presented by the current Chairperson and the former Chairman of the CRTA.
128. The representative of Chile said that he agreed with the Chairperson's report, which was direct
and frank.  He also agreed with the Chairperson's conclusion that the CRTA's work had been affected
by Members' fear of reaching specific outcomes in view of the legal consequences which could stem
from this and which could prejudice the exercise of current rights in the dispute settlement system.
However, Members were compelled to recognize that it was difficult to reach conclusions when the
rules were vague and imprecise, both in Articles XXIV of the GATT 1994 and V of the GATS.  It
was time for Members to review these rules and adjust them in such a way that Members would be
fully aware of the standards that future RTAs would need to comply with, and a new round could
provide Members with an opportunity to make such a review.  Thus Members would not only increasetheir understanding, but would also reduce the effect of trade distortion and diversion for Members
that were not parties to the RTAs.  He agreed with the Chairperson that something could be done in
the meantime in terms of improving transparency  and this could be discussed in the CRTA both
before and after the Doha Ministerial Conference.  He further noted that very few countries had the
resources and capacity to read and analyse RTAs in order to fully assess their effects on their owntrade interests.  For this reason, Members needed to approach these questions from a new angle and
more human resources were necessary to ensure a better understanding of RTAs.  This could be a tool
to improve analysis and transparency in the CRTA.  At the Doha Ministerial Conference, Members
could re-examine the current disciplines.  Until and perhaps after the Ministerial Conference, the
CRTA could focus on transparency.  Finally, as highlighted by Pakistan, Members needed fromMinisters in Doha a clear orientation on the primacy of the multilateral trading system.
129. The representative of Uruguay said that his delegation shared the views expressed by the
Chairperson in her report.  In his delegation's view, the problem was clearly related to the ambiguities
of the existing rules, both in Article XXIV of the GATT 1994 and in the Understanding on this Article
negotiated during the Uruguay Round.  He noted that the reports could have been approved, despitethese ambiguities.  However, certain Members were of the view that such a procedure would not be
appropriate and considered that the rules needed to be clarified before the compliance of the RTAs
under examination could be assessed.  On the contrary, other delegations, including his, believed that
Members should first analyze the RTAs and see whet her they complied with the rules, still bearing in
mind the ambiguities, on the assumption that Members could re-examine the question at a later stage
if they managed to negotiate specific rules.  There was no doubt that Members were faced with a
systemic problem in that they could not agree to negotiate on the interpretation of the rules.  Membersshould not get caught in a debate on multilateralism and regionalism, as he did not think any Member
believed that regionalism should prevail over multilateralism.  In fact, when negotiating RTAs, many
Members tried to ensure that the provisions of the RTAs were built on the WTO multilateral rules.
With regard to the way forward, Uruguay believed that Members should consider the possibility of
changing the CRTA's mandate, as the current mandate had not allowed Members to overcome thedeadlock in the Committee's work.  Uruguay agreed with the Chairperson's suggestion that the CRTA
should concentrate for the moment on increasing transparency under a mandate akin to the trade
policy review, whereby a prior analysis of all RTAs would be made by the Secretariat rather than
pursuant to Article XXIV of the GATT 1994 or to the Enabling Clause as it was currently the case.
This would set all Members on an equal footing and would increase their understanding of thefunctioning of these agreements.  Members would be able to mutually benefit and learn from one
another, avoiding the conflict which stemmed from the desire to comply with the current provisions
with respect to reaching a conclusion on the compatibility of RTAs with WTO rules.  Furthermore,
consultations should be carried out at the General Council level to see how Members could overcome
the problem of ambiguity of the current rules and Ministers should adopt a decision in Doha to clarifythe rules as Members had done in the Uruguay Round.  The most important thing was to overcome theWT/GC/M/66
Page 28
difficulties faced in the CRTA and for this purpose, the question of transparency based on a
mechanism similar to that of the trade policy review was the most appropriate.
130. The representative of Hong Kong, China said that his delegation did see some movement in
the CRTA, and was pleased to learn at the last CRTA meeting that the Secretariat was in the process
of completing studies on the product coverage of the RTAs and their transition arrangements, as wellas on preferential rules of origin, which should both be released before the next CRTA meeting in
September 2001.  His delegation looked forward to these studies, which constituted an important step
in fulfilling the Committee's mandate to enhance Members' understanding of the systemic
implications of RTAs for the multilateral trading system.  He suggested that the Secretariat could
consider holding an educational seminar early in 2002 to further Members' understanding on the
relationship between RTAs and the multilateral trading system.  Members could benefit from recent
studies on the economic effects of the RTAs and sharing of experience from both RTA parties and
non-parties.  This idea had been supported by a range of Members and the Committee could pursue it
to further fulfil its mandate on systemic issues.  With regard to the examination of RTAs, the
Chairperson had noted that the Committee had not yet succeeded in concluding any reports.
Hong Kong, China had noticed however some flexib ility already demonstrated by some RTA parties.
He noted that at least Australia and New Zealand had indicated that they could accept their ownreport, as well as others.  If some other RTA parties could also demonstrate some flexibility in
refraining from linking up the conclusions of different RTAs, Members could make some
breakthrough in the near future.  His delegation was of the view that each RTA should be examined
and concluded on its own merit and therefore differed from the Chairperson's conclusion that the
deadlock in the CRTA's work was a logical devel opment.  He urged Members to continue to try to
conclude reports in an objective manner and looked forward to further debates to examine each draft
agreement on its own merits in an open and transp arent manner with the view to concluding those
examinations which commended consensus.  As regards the way forward, a number of delegations,
including his, had suggested in the course of the preparatory process for the Doha Ministerial
Conference that Ministers in Doha could inject impe tus in the CRTA's work and that the rules relating
to RTAs should be clarified and reinforced where appropriate.  With the proliferation of RTAs, the
importance of the work in ensuring the consistency of RTAs with WTO rules would only be greater
and he welcomed the fact that other delegations had expressed similar views at the present meeting, as
well as in previous General Council meetings.  His delegation could not accept the idea that the
CRTA's mandate be limited to transparency.
131. The representative of Korea praised the Chairperson for her efforts to break the deadlock in
the CRTA regarding the examination of the RTAs.  The current situation in the CRTA was serious, as
the impasse had existed for five years and the number of RTAs had rapidly increased during that time.
The Chairperson's conclusion that the new approach with five model reports had failed compelled
Members to recognize that there was an urgent need to do something about the situation.  It was
already well known that the crux of the problem was the lack of clarity in the relevant provisions of
the WTO agreements and that current rules regulating RTAs were inadequate to ensure compatibilitybetween RTAs and the multilateral trading system.  Without providing clear standards for the
examination of RTAs, it would be difficult for Members to agree on the consistency of certain RTAs
with WTO agreements.  Korea believed that it wa s time for all Members to make efforts to provide
the CRTA with clear standards to examine the RTAs.  Given the rapid proliferation of RTAs in recent
years, Members could not continue to neglect the importance of the CRTA's role in the examinationof RTAs.  In this regard, Korea believed that the Doha Ministerial Conference provided an excellent
opportunity to strengthen WTO rules on RTAs and hoped that a clear negotiating mandate to remedy
current deficiencies in the WTO rules on RTAs would be included in the Doha Ministerial
Declaration.
132. The representative of the United States commended the Chairperson for her attention to the
problems in the CRTA.  Her delegation could understand the general reason for pessimism withWT/GC/M/66
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regard to the CRTA's work, as the Committee had not been able to make any progress recently in
deciding even on the format for issuing reports on the RTAs under review.  However, the United
States believed that in the recent months the Chairperson had steered the Committee to an approach
that held some promise.  The current problems appeared to stem from drafting differences rather than
overall differences about the approach.  The United States believed that Members should be able toresolve these drafting problems, but a first constructive step might be for the Secretariat to prepare a
bracketed text for each point in order to help Members identify the precise problems.
133. The representative of Hungary, on behalf of the CEFTA countries and Croatia, Estonia
,
Latvia and Lithuania, said that the report by the Chairperson was not pessimistic but rather objective
and realistic and he agreed with her assessment of the situation in the CRTA.  The problem could be
addressed in a wider context as was suggested by the Chairperson, provided that the question of
adoption of pending reports be solved and that Members be assured that in any future mandate, newrules aimed at strengthening or clarifying existing rules would only apply to future RTAs.  He
emphasized that what was at stake was not the primacy of the multilateral trading system, but rather
the relevance of the WTO.
134. The representative of India recalled that his country along with other countries, had submitted
a proposal at the General Council meeting in February 2001, requesting that the Chairperson of the
CRTA be asked to provide a report to the General Council.  He was grateful to the Chairperson for
her report which had raised a number of issues in a straightforward manner, and noted that it was now
for the General Council to give the CRTA Chairperson the necessary assistance to take the
Committee's work forward.  First, he noted that as a derogation from Article I of the GATT 1994,
Article XXIV of the GATT 1994 was a special provision that should be monitored carefully.  InIndia's view, the problem was not related to RTAs per se , but rather to the fact that perhaps many
RTAs did not measure up to the standards enshrined in Article XXIV of the GATT 1994.  The crux of
the problem was that Members shared different views with regard to the standards enshrined in
Article XXIV.  He agreed with Pakistan that the first option mentioned by the CRTA Chairperson was
not appropriate.  The Chairperson should continue to hold further consultations and in this respect, heagreed with Hong Kong, China that it was not appropriate to think in terms of changing the current
mandate of the CRTA, which had taken considerable time to negotiate.  A number of delegations,
including his, felt that they needed some assistance to understand the implications of some of the
RTAs notified to the CRTA.  In his view however, this did not require to change the mandate but
simply to add these procedural items to the CRTA's mandate.  For example, reference was made to
the help provided by the Secretariat in understanding the trade policies of different countries and a
similar mechanism could be added on to the process in the CRTA without changing its mandate.  Hedid not agree that a new round would solve all the problems related to Article XXIV of the
GATT 1994.  He recalled that prior to the Singapore Ministerial Conference, Members had thought
that the establishment of the CRTA would solve all the problems.  When embarking upon the work,
there had been a debate as to whether Members should address first the systemic issues and then go
into the examination of individual agreements or vi ce versa.  The reality was that there were powerful
Members with strong interests with regard to this provision, and for this reason Members faced many
difficulties in arriving at a consensus on this issue.  Although an interpretation by a panel or the
Appellate Body on a particular RTA through dispute settlement was not an option favoured by India,
it could bring a solution to the problem in the future .  With regard to the Chairperson's conclusion that
delegations were reluctant to agree to anything because they feared it could be used in a disputesettlement panel, he recalled India's proposal that the examination of the consistency of an RTA
should be left to the CRTA alone, which had been objected to by Members.  This was nonetheless a
question that Members needed to resolve.  India requested the CRTA Chairperson to continue to
consult with delegations on how the work could be taken forward.  The preparatory process for the
Doha Ministerial Conference should be used to request Ministers to give a new momentum or furtherguidance to the CRTA so that the work in the CRTA would become more fruitful.WT/GC/M/66
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135. The representative of Turkey said that the Chairperson' s report was realistic and called on
Members to face reality with regard to the situation in the CRTA.  His delegation shared the analysis
and the views of the Chairperson.  There were indeed only two possible options that Members had to
choose from, and Members could not afford to put off that decision any longer.  The broader
framework of a round of negotiations would enable Members to find a way to overcome some of theproblems in the CRTA.
136. The representative of Australia said that he was concerned at the adverse impact of the
proliferation of RTAs on the multilateral trading system.  He believed that the CRTA had an
important role to play in providing for the transp arency of RTAs and ensuring their compliance with
Articles XXIV of the GATT 1994 and V of the GATS.  These issues should be kept under
consideration in the lead up to the Doha Ministerial Conference.  In this context, he agreed with the
Chairperson's assessment that the effectiveness of the Committee had been limited by uncertaintiesabout the legal status of its evaluations and reports.  However, the CRTA had not exhausted all means
of moving forward with its evaluations and he welcomed the Chairperson's preparedness to continue
to consult with Members on ways to move forward.  As pointed out by other delegations, bilateral
consultations had made some progress on the examination report on the agreement between Australia
and New Zealand, which was now ready for adopti on.  As Hong Kong, China had mentioned, studies
undertaken by the Secretariat on coverage of the RTAs and preferential rules of origin should also
contribute to advance the discussion on these issues at the next formal CRTA meeting in
September 2001.  Moreover, he welcomed the suggestion by Hong Kong, China to hold a seminar on
regionalism in 2002 and looked forward to participate in its preparation.
137. The representative of Canada agreed that there had been divergent views in the CRTA on the
way to advance the Committee's work and this had culminated in the fact that none of the RTA
examination reports had been finalized.  Canada was prepared to continue to work in the Committee
with the Chairperson and other Members to try to find solutions to this impasse, as it felt there was a
way out of this situation.  As me ntioned by Australia, some work had been done in recent months and
Canada hoped that work would continue towards finalizing examination reports.  Canada continued tosupport the mandate of the CRTA, including not only the focus on transparency but also on
consistency, as outlined in Articles XXIV of the GATT 1994 and V of the GATS, which were two
important elements of the CRTA's mandate.  With respect to the clarification and strengthening of
existing rules on RTAs, Canada was not optimistic that Members could reach consensus on more
explicit rules in the near future, but would not oppose a discussion on this matter.  Canada was not
convinced that the problem in the CRTA was the ambiguity in the WTO provisions.
138. The Chairperson of the CRTA said that she had been encouraged by the fact that her report
had prompted positive reactions from certain delegations and reiterated her determination to continue
to work with Members.
139. The Chairman said that it was a matter of concern when an important Committee such as the
CRTA had been unable to make progress in its mandate over a prolonged period of time and such
concern had been reflected by many delegations.  He thanked the CRTA Chairperson for drawing thismatter to the attention of the General Council.  He noted that consideration was being given to some
aspects of the problem in the context of the preparations for the Doha Ministerial Conference and thus
it may be advisable for Members to see the developments in that context before directing further
attention to the situation in regular meetings of  the General Council.  In the meantime, the CRTA,
under the direction of its Chairperson, should continue its efforts to make progress in the work.  It hadbeen encouraging to hear from some delegations that they felt a little progress had been made and that
new ideas, such as the organization of a seminar on regionalism, were being considered.  It would be
open to any delegation to raise the matter again for the attention of the General Council at any time.
140. The General Council took note of the statements.WT/GC/M/66
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14. Reorganization of WTO Technical Cooperation
(a) Report by the Director-General
141. The Director-General said that the changes in  the WTO Secretariat's technical assistance and
training activities had been announced within the Secretariat on 1 June 2001 and had come into effect
on 5 June 2001.  In some instances, the changes built upon existing and successful programmes, butalso comprised new initiatives aimed at rationalizing administrative structures and achieving greater
efficiency and effectiveness in the delivery of technical assistance to least-developed and developing
countries.  The changes were as follows:  the existing Technical Cooperation Division had been
reorganized under a new Director, Mr. Chiedu Osak we.  The new Division had absorbed the former
Secretariat Working Group on the Integrated Fram ework and LDC Issues, placing the management of
WTO Secretariat technical cooperation under a single structure.  A new Management Committee on
Trade-Related Technical Assistance had been established under the Chairmanship ofMr. Paul-Henri Ravier, Deputy Director-General .  Other members of the Committee included the
Directors of the following Divisions:  Technical Cooperation Division, Development Division,
Technical Cooperation Audit, as well as the Director of the WTO Training Institute and a
representative from the Administration and General Services Division.  Representatives of Divisions
responsible for trade-related technical assistance in their fields of expertise would also attendCommittee meetings, as well as representatives of the Secretariats of other intergovernmental
agencies as appropriate.  The Committee oversaw issues of general interest related to technical
assistance, including strategy, priority-setting, and review of spending priorities.  It would report to
the Director-General and make policy recomme ndations.  A Technical Cooperation Audit had been
established earlier this year under the direction of Mr. Paul Rolian.  The Unit was responsible forongoing monitoring and evaluation of all forms of technical assistance provided by the WTO.  This
function aimed at ensuring that the financial and human resources engaged in WTO-administered
technical assistance and training programmes were used for optimum effect.  The former Training
Division had been reconstituted as the WTO Training Institute under the direction of Mr. Claude
Mercier.  The Training Institute's activities extended beyond the provision of traditional trade policycourses to include training for trainers, a diversified range of short-term policy courses, distance
learning services, and cooperation with universities and other institutions.  A Board would be formed
to advise the Institute and offer fresh perspectives on approaches to training.  The Board would
include representatives from the Members, Secretariat, other agencies and the academic community.
He emphasized that the Boards' role would only be advisory and would have no executive or decision-
making authority.  A Trade Information Centre was being established to facilitate fuller participation
of all Members, observers and others wishing to join the WTO, by enhancing access to information
through the use of information technologies.  Mr. Jean-Maurice Léger was Director of the Centre.
Particular attention would be paid to the needs of least-developed, more capacity constrained and non-
resident Members and observers.  Even a cursory analysis of the kinds of technical assistance
provided by the WTO Secretariat demonstrated that the main objective was to help Members meet
their legal obligations and take full advantage of the opportunities open to them in the multilateraltrading system.  Technical cooperation, capacity building and assistance with compliance were
therefore core functions of the WTO and were integral to the effective functioning of the system.  The
organizational changes he had outlined reflected the importance Members attached to technical
assistance and training activities.  He was confident that these changes would help improve
coordination and coherence within the Secretariat and with donor countries, beneficiary governmentsand other international agencies.  The changes would ensure that basic concepts of monitoring,
auditing and evaluation would be firmly established in the Secretariat's activities related to technical
assistance.  In a broader sense, the changes would also ensure that WTO technical assistance was
delivered within a coherent policy framework.  The overall goal was to make certain that activities in
the years ahead remained closely aligned to the real needs of Members and were delivered in a fullyaccountable and value-for-money way.  Funding for technical assistance through the regular budget
was modest.  The success of technical assistance to date had been due largely to the voluntaryWT/GC/M/66
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contributions of individual governments and he was grateful for this generosity.  He hoped that the
changes announced would allow to increase the volume and quality of the technical assistance
provided and that Members would support his ongoing efforts to have technical cooperation financed
on a more stable and predictable basis through the WTO regular budget.
142. The Chairman, as well as all the representatives who spoke thanked the Director-General for
his report and for instituting these changes to the technical assistance provided by the Secretariat.
143. The representative of Argentina supported the efforts made to give attention to an area of
great relevance to the WTO, particularly where the majority of Members were developing or least-
developed countries.  It was essential to the functioning of the WTO that the issue relating to technical
cooperation and capacity-building of developing countries be addressed coherently.  As Chairman of
the Association of former participants in the GATT/WTO Trade Policy Courses, he thanked the
Director-General for having raised the Training Division to a Training Institute.  This decision wouldenable Members to maintain the high level of this course, which all the attendants had greatly
appreciated.  Finally, as a question of general policy, he highlighted the desirability of having
technical cooperation and assistance financed through the general budget of the organization rather
than through extra-budgetary contributions from Members.
144. The representative of Israel said that as a former Director of Training who was asked to
upgrade the Training Division at his Foreign Minist ry Department he could appreciate the difficulties
but also the potential of such a reorganization.  He would be looking more closely into the new
structure and would discuss with people responsible for the WTO Training Institute opportunities to
better serve Members.
145. The representative of the Philippines said that he welcomed the improvements announced and
would be interested in the specifics of these new measures, particularly the participation of interested
delegations as far as the rationalization and effectiveness of the programmes were concerned.
146. The representative of Kenya wished to congratulate the Director-General for his efforts in
ensuring that technical cooperation became one of the core functions of the WTO and an integral part
of the work programme and noted that it behoved to  the membership to assist the Director-General in
ensuring that this activity was undertaken through the WTO's regular budget.
147. The representative of Gabon, on behalf of the African, Caribbean and Pacific Group of States ,
thanked the Director-General for all of his endeav ours in favour of least-developed and developing
countries.  Technical cooperation was an area of great interest for her delegation, as well as for a
majority of Members.  Gabon was of the view that technical assistance should be supported by the
WTO's regular budget rather than extra-budgetary resources, which could vary from year to year.  It
also behoved developing countries to be more specific about their expectations in order to fullybenefit from the Director-General's efforts in the area of technical assistance and cooperation,
particularly in terms of mobilization of funds.
148. The representative of Senegal said that technical assistance was a matter of great importance
to his country, as it was through such assistance that his country could improve progressively its
standing within the multilateral trading system.  He welcomed the Director-General's initiative toreorganize technical cooperation, which he hoped would contribute to improve the delivery of
technical assistance.  Senegal had received positive feedback from the new Training Institute, as one
of its representatives had taken part in the last Trade Policy Course.  Through this initiative, he hoped
that the WTO would deepen its cooperation with other international organizations in order to better
contribute to capacity-building in developing and least-developed countries.WT/GC/M/66
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149. The representative of Côte d'Ivoire said that his country was one of the countries that had
benefitted the most from technical assistance and wished to express his gratitude to the Director-
General for his continued efforts to make developing countries benefit from technical cooperation.
150. The representative of Paraguay said that his delegation was of the view that development
could not be achieved without education, of which technical cooperation was a vital part.  His
delegation thus welcomed the reorganization announced  by the Director-General in his report, which
would help developing countries better understand and handle the issues dealt with at the WTO.
Paraguay shared the view that financing should be autonomous and that the WTO's own funds should
be used to promote technical cooperation.
151. The representative of Nigeria wished to congratulate the Director-General for the changes
brought to Technical Cooperation and to the Traini ng Division, and hoped that these changes would
lead to a better delivery of technical assistance and training services to developing countries.
152. The representative of the European Communities said that developed countries wanted to give
developing countries a chance to speak first on this subject and that their silence should not be
interpreted as a lack of interest in the matter.
153. The Director-General thanked Mr. Ravier, Deputy Director-General, as well as the Secretariat
for their focus.  Their objective was to assure Me mbers of their accountability regarding the efficient
use of the funds.  With regard to the Training Ins titute's advisory Board, he noted that the Secretariat
had only just started to explore what could be done in terms of distance learning and other activities,
and that the Secretariat would invite the WIPO, UNCTAD, World Bank, International Monetary Fund
and other international organizations that were already doing work in this area to cooperate with the
Secretariat.
154. The General Council took note of the report and of the statements.
15. Implementation-related issues
(a) Report by the Chairman of the Committee on Rules of Origin
155. The Chairman recalled that at its Special Session on Implementation on
14-15 December 2000, the General Council had adopted a Decision concerning the Agreement on
Rules of Origin:  "Members undertake to expedite the remaining work on the harmonization of non
preferential rules of origin, so as to complete it by the time of the Fourth Ministerial Conference, or
by the end of 2001 at the latest.  The Chairman of the Committee on Rules of Origin shall report
regularly, on his own responsibility, to the General Council on the progress being made.  The first
such report would be submitted to the Council at its first regular meeting in 2001, and subsequently at
each regular meeting until the completion of the work programme."
156. Mr. Ahn (Korea), Chairman of the Committee on Rules of Origin, in introducing the report8,
said that in his first report in May 2001 he had made two points.  First, thanks to the mandate from the
General Council to the Committee on Rules of Origin (CRO) the Committee was making much-
appreciated progress with regard to the Harmonized Work Programme (HWP).  Second, the progress
made in terms of the HWP should not blind them from the enormity of the work ahead.
157. In this second report, he wished to reiterate the same two points.  First, the progress made in
the CRO had been summed up in section 2 and 3 of the report circulated earlier that morning.  The
                                                     
8 The full text of the report of the Chairman of the Committee on Rules of Origin on Implementation
related issues is reproduced in Annex I.WT/GC/M/66
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table in section 2 had summed up the progress made in the HWP which had taken place over the past
several years.  While from September 1997- September 2000 there had been 23 sessions of the CRO,
the Committee had reached consensus on only 22 issues, which was less than one issue per session.
In November 2000 the Committee reached consensus on eight issues, and the speed had increased
such that in March 2001 the Committee had agreed on 24 issues, and in May 2001 42 issues had beenagreed upon.  This had been impressive growth, and the speed in reaching consensus on many of the
remaining issues had been exponential.  Thus, he hoped that if these dynamics continued at the
ongoing session, much progress would be made and perhaps resolving 100 issues.
158. Other developments since his May report were summed up in section 3 of the second report.
An informal discussion had taken place on 19 June 2001 on implications of the HWP for other
agreements of the WTO, i.e. what implications ru les of origin, when agreed upon, would have on the
Agreements on Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Safeguards andAnti-Dumping.  That discussion had taken place be cause some Members had thought that if there was
a prior understanding of the scope of application of harmonized rules of origin, that would help them
to become more flexible, while other Members did not share this view.
159. The enormity of the task ahead had been summed up in section 4 of the report.  He reiterated
that the CRO looked to the General Council for guidance and support so that the HWP could becompleted before the Fourth Ministerial Conference in Doha.  Concrete illustrations of the difficulties
faced by the CRO were summed up in paragraph 4.4.  While Members were represented in the CRO
by experts who were aware of their national interests, he felt that all Members recalled that the CRO
worked on the mandate from the General Council and that the work of HWP should be completed by
the Fourth Ministerial Conference at Doha.  A second difficulty was that at the discussions from9-11 July 2001 on machinery chapters, the outcome of the three-day discussion had been frustrating.
No meaningful move could be made on any of the issues, with the difficulty being a rather
fundamental one.
160. The Chairman of the Committee on Rules of Origin recommended the need for a threshold
rule.  All Members agreed that assembly of a machine was origin-conferring.  Up to a certainthreshold, the assembly would be simple, and bey ond that it would become meaningful and origin-
conferring.  There had been  no meeting of minds on this very important issue.  Some Members
believed there could be one general rule in the form of value-added.  If it could be agreed that 30 per
cent or 80 per cent was origin-conferring then one ru le could provide the answer to all the questions.
However, since some Members could not accept any value-added rules,  he felt they would not get
any closer to solving the problem.  This was just one illustration of the problems in the CRO.  Unless
such fundamental issues could be resolved with guidance and support from the General Council, notmuch progress would be made in the period until the Fourth Ministerial.
161. Finally, he quoted from paragraph 4.5 of the report:  "Conclusively, the HWP is at a crucial
stage.  Members' renewed resolve and agreement on the underlying fundamental issues would lead to
a continued resolution of the remaining issues and the completion of the HWP be the Fourth
Ministerial.  Otherwise, the outcome would be a far short of the mandate of the General Council".
162. The Chairman noted the extremely substantive nature of the report, in which the Chairman of
the Committee on Rules of Origin sought guidance on a number of important and complicated points.
That was the first time that he and Members had seen the report and thus he was not sure whether
Members would be able to have a substantive debate on this important issue.  Therefore he requested
Members' views on how to proceed on the matter.
163. The representative of India said that his country had expressed its views on the Rules of
Origin Agreement over the past two and a half years.  While noting that the report had not been seen
prior to the meeting, he thanked the Chairman of the Committee on Rules of Origin for the veryWT/GC/M/66
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substantive and thought-provoking report.  He recognized that the Chairman had rushed from the
Committee meeting to present this report, but it would be helpful if reports were made available at
least the previous evening.  It would then be possible for Members to provide some meaningful
reaction.  India recognized that all the Chairpersons were under tremendous work-pressure, but hoped
that in the future reports would be presente d at least the day before the meeting.  While
acknowledging the enormous pains the Chairman of the CRO had taken to move the process forward,
he wished to discuss a few aspects raised.  He would speak later if the discussion was suspended.
However, he said that the General Council's mandate to the Committee on Rules of Origin to
complete its work by the Doha Ministerial must, at the minimum, be reiterated.
164. The representative of the Philippines acknowledged that the report was very substantial.  Her
delegation had been deeply involved in the work of the Committee on Rules of Origin, and saw merit
in suspending further discussion.
165. The Chairman suspended discussion on this report for that day, and resumed discussion the
following day.
166. All representatives who spoke expressed appreciation for the report by the Chairman of the
CRO and his efforts to resolve the numerous difficulties on the Committee's work.
167. The representative of Brazil said that the report clearly outlined the progress that it had been
possible to achieve, and Brazil was grateful in this regard for the commitment and dedication of the
Chairman with a view to accelerating the Committee's work.  Such acceleration was evident from the
figures reported in paragraph 2.2 of the report, bu t it was also evident that even this acceleration
would not allow for compliance with the deadline established by the Council.  In fact, even if the
goals set out by the Chairman of the CRO for the current session were accomplished, they would stillface almost 300 outstanding issues at the September session of the Committee.  Brazil attached
particular importance to concluding the Harmonization Work Programme within the time-frame
established by the General Council.  This was due, on the one hand, to the importance of harmonized
non-preferential rules of origin in ensuring a mo re open and transparent framework for the conduct of
commercial transactions among Members.  On th e other hand, the completion of this mandate would
be viewed as a concrete expression of the membership to seriously address implementation concerns
raised by a number of delegations.
168. In view of these factors, Brazil fully suppor ted the proposal put forward by the Chairman of
the CRO, and endorsed by the delegation of India, that the General Council reaffirm its mandate to the
CRO to conclude the HWP by the Fourth Ministerial Conference.  Brazil stood ready to actively and
constructively engage in discussions within the CRO, on possible working methodologies that may
enable it to achieve that goal.  Regarding the issue of the threshold rule, the highly technical nature ofthe discussions within the CRO would, it seemed, discourage the General Council from providing
substantive guidance on that point.  It could perhaps help the work of the Committee if the Council
were to underline the importance of adhering to the criteria laid down in Part IV of the Agreement on
Rules of Origin on the process of harmonizing rules of  origin.  With regard to the implications of the
HWP raised in the report, Brazil had participated actively in the consultations on that matter. Its viewson this issue were based on one basic assumption, name ly that the discussion of these issues must be
aimed at constructively allaying particular concerns with regard to implications of a specific nature,
but should not constitute an unnecessary obstacle in the progress of concluding the HWP.
169. The representative of Colombia agreed that work be completed by the Fourth Ministerial
Conference, and that it was important to draw up th reshold rules to make progress in the grey areas,
where it was not yet clear how the rule of substantial transformation should be carried forward.
Colombia agreed with the need to study the valu e-added criterion as an alternative and exceptional
criterion which might however entail administrative difficulties.WT/GC/M/66
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170. Colombia also believed that there were many areas and sectors where it was important to set
aside positions of principle but rather show flexibilit y so that progress could be made to conclude the
programme of work within the set time-frame.  In Colombia's view, the exercise of analysing the
impact Rules of Origin on other WTO Agreements was useful as it contributed to a satisfactory
balance between the parties. It ensured predictability and transparency in implementing thecommitments stemming from the non-preferential rules of origin.  The link that existed between
consumers and producers in trade transactions could not be subject to interpretations and discretionary
application which could be misleading.  Therefore, there was a need for absolute clarity in applying
the harmonized rules of origin and the disciplines stemming from different WTO Agreements.
171. The representative of the Philippines said that her country agreed that the work of the CRO be
completed by the Fourth Ministerial Conference, since this was the third deadline for the work on this
issue and the credibility of the WTO was at stake.  The Philippines understood the difficulties facedby the CRO on the threshold or value-added rules, but wished to recall that harmonized rules of origin
were being evolved to facilitate trade, and that purpose must be borne in mind.  It was disturbing that
in the report by the Chairman a distinction was being made between the implications of completed
harmonized rules and the implications of proposed rules for harmonization.  Article 9 of the Rules of
Origin Agreement clearly stated that "rules of origin should be applied equally for all purposes as setout in Article 1".  The General Council should consider this, and provide the necessary guidance to
the Committee if the Conference deadline were to be met.
172. The representative of Chile expressed concern over the slow process in the CRO and the
scope of issues still pending.  This might prevent the Committee to complete its work by the Fourth
Ministerial.  He observed that agreeing to certain aspects, like what constituted assembly, might createa vicious circle which would require a consensus on many rules of origin.  Aside from confirming the
mandate and giving it the highest priority it deserve d, there was also a need for awareness that in the
area of rules of origin there would never be a perfect technical solution.  While rules of origin that
worked properly were required, since perfection in th is area did not exist by definition, the decision
would always be an arbitrary one.  There must be awareness of this, so that all due flexibility could bemanifested, and the Committee could complete its wo rk by Doha.  Another option would be that the
Committee did not arrive at an agreed solution on all the chapters of the harmonized programme.
While many issues might be ready, they should not be linked to other issues that remain pending.  The
goods sector, for example, might not be linked in any way to the metal or machinery chapter.  Thus,
Chile recommended consideration of a partial solution or conclusion, so that consensus could be
achieved on those chapters where it had been possible to make progress, while leaving the other issues
pending.
173. The representative of Canada reaffirmed the confirmation by the General Council of the
Committee's mandate.  With regard to the identification of a threshold rule, her country appreciated
that this important issue had been brought to the attention of Members.  Canada believed it was too
early to make a final and definitive decision.  Not all possible avenues had yet been explored or
exhausted.  Members needed to address this issue bilaterally and plurilaterally and to consider itseriously in their capitals.  Only after all possible avenues had been exhausted, if no possible
resolution had been reached in the CRO, should this critical issue become subject to a decision by the
General Council.
174. The representative of India said that Members were aware of the importance India attached to
the completion of the Committee's mandate by the Fourth Ministerial Conference.
175. As the Chairman of the Committee had pointed out in his report, there had been added
momentum to the work being done.  Equally, it was implicit in the Chairman's plea for guidance and
support from the General Council that not enough had been done in the Committee, and that Members
needed to find the political will that would enable  the completion of the outstanding work within theWT/GC/M/66
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mandated time-frame.  India therefore fully endorsed the Chairman's suggestion that the General
Council remind the Committee that its mandate must be met, and that a slippage in meeting the
deadline for the third time would have serious implications on the credibility of this Organization, and
would spillover on other work.  The necessary polit ical will to resolve some key outstanding issues
such as the assembly rule, which had been cited by the Chairman, would have an important impact ingenerating consensus on many other issues.
176. The Chairman of the Committee on Rules of Origin had also reported on the discussions in
the Committee on the implications of some of the major proposals for harmonized rules on other
WTO Agreements.  India had been active in the consideration of various proposals seeking that the
finally agreed rule did not alter the balance reached between the complementarity of the Rules of
Origin Agreement and the other relevant Agreements.  Article 1 of the Rules of Origin Agreement
was very clear that the harmonized rules of origin shall be used in all non-preferential commercialpolicy instruments, without exception.  Article 9 made it explicit that these harmonized rules shall be
applied equally for all purposes.  Therefore, a suggestion in the Committee by a Member that the
Harmonized Work Programme would progress further if there was agreement that there may be some
dichotomy in the application or use of these rules could not be borne out by the legal requirements.
India believed that such discussion should not hinder the progress nor the momentum achieved morerecently in the work programme.  However, India was willing to discuss ways of furthering its
understanding on the implications of the proposed rules so that Members could achieve the necessary
resolution of their concerns.
177. The representative of Australia said his country attached great importance to the completion
of the work programme, and while it was disappointed with the extent of the progress made at the
present session, it recognized that at least more progress had been made.  Australia supported the
Chairman's recommendations, and in particular the exhortation that the Harmonized Work
Programme be completed by the time of the Fourth Ministerial Conference. In order to meet this
deadline, Australia urged delegations to focus more on the Chairman's recommendations as a basis for
reaching consensus on the outstanding issues.  It suggested that the onus be put more squarely oncountries opposed to these recommendations to argue more cogently for their positions, or to cede to
countries which had a greater economic interest.  Members should attach appropriate importance to
trade facilitating outcomes, and in particular  to the Chairman's recommendations to achieve
consensus.
178. The representative of the United States said that his country attached great importance to
completion of the work that had been assigned to  the CRO within the time-frame allotted by the
General Council Decision.  The United States appreciated the report of the Chairman on the progressmade to date, and like others, noted that more progress would be needed to succeed.  Certainly
underlining the need to meet the deadline would be one way.  However, that would by no means be
sufficient. What was needed to achieve progress was flexibility from delegations.  The United States
had itself been very actively involved in this effort, invested a lot of resources in it, submitted
proposals, offered compromises, acted as facilitator and would continue to do so.  He pointed out thatit was interesting that certain simple issues divided them. For example, people could still not agree
whether there was a substantial transformation from grapes into wine, or raw meat into cooked meat.
The fact that they could not reach closure on certain issues that intuitively would seem to be simple to
resolve showed some of the difficulties they were having, and the need for flexibility on the part of
delegations.  Thus, the message to the Committee's members should be both the deadline and the needfor flexibility.
179. The representative of Mexico thanked the Chairman of the Committee on Rules of Origin for
his report.  His country had taken an active part in all the work involving the HWP undertaken both in
the Committee on Technical Rules of Origin of the WCO and in the WTO Committee on Rules of
Origin, as established in respective agreements.  Mexico would continue to participate, in aWT/GC/M/66
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constructive and positive manner in the work on rules of origin.  It had no problem supporting  the
request put forward by the Chairman of the Committee with regard to confirmation of the mandate in
order to complete the HWP.  As regards other elements put forward by the Chairman of the CRO,
those were related essentially to technical work, and they should for the time being be analysed by the
Committee.
180. The Chairman of the Committee on Rules of Origin thanked all the Members for their kind
words and ideas.  With regard to the issue of implications, which had been mentioned by almost all
speakers he said that for the time being, the Co mmittee was focussing on the HWP itself.  Once this
had been completed, then other issues should be addressed by the CRO and the General Council, such
as the "coherence exercise" followed by the "implementation exercise" and then "implications".  On
the reaffirmation of the mandate given to the CRO by the General Council, all Members had been
unanimous on meeting the deadline for the Fourth Ministerial, and the CRO was also resolved to doso.  However, the main focus of his report to the General Council had been that in order to meet this
deadline several conditions had to be met.  For example, the need to keep in mind that the rules of
origin should facilitate trade rather than anything else.  In September and early October there would
be another two-week session of the CRO.  That would be a crucial opportunity to come up with a
package for the Fourth Ministerial.  Members could be represented at that session of the CRO at ahigher level so that the necessary flexibility could be shown on the part of each of the delegations.
Thus, while he fully appreciated the mandate of the General Council, he reiterated that higher-level
representation of delegates would be meaningful in that it would be indicative of their resolve to
achieve something before Doha, and would make it easier for Members to have the necessary room
for flexibility.  Regarding the threshold rule, view s had not been as unanimous as on other issues.
While some Members felt the need for providing a guideline, others felt it would be too complicated
or that the CRO may not have exhausted all the avenues at hand.  Thus, the best case option for
threshold rules would be if the General Council could give definite guidelines.  The second best
would be if all the Members represented at th e CRO would be advised to have the necessary
flexibility to come up with guideline on threshold rules.  From bilateral consultations with a largenumber of delegations it had resulted that for further progress of the HWP , the single most important
requirement would be a meeting of minds on the issue of threshold rules.  There was a unanimous
view on the need to resolve this very important issue soon.
181. The Chairman hoped that the discussion at the present meeting had been useful.  It was clear
that all Members attached considerable importance to the completion of the Harmonized Work
Programme before the deadline of the Fourth Ministerial.  A number of delegations, while
recognizing that some progress had been made, had expressed concern at the amount of outstandingwork.  The General Council would reaffirm commitment to complete the Harmonized Work
Programme by the agreed deadline.  That would requ ire delegations in the CRO to work even harder,
and show a more pragmatic and flexible attitude.  A number of delegations had also attached
importance to the trade-facilitating aspect of the work of the Committee on the HWP, which was a
point that had to be borne in mind.  He asked Members to convey the tenor of this discussion to theirrepresentatives in the Committee, and  ensure that it would be reflected in its future work.  Despite its
technical nature, this was important work and deserved high-level attention within missions.  He also
asked delegations to consider senior-level representation at the upcoming September-October
meeting.  He urged Members to show increased flexibility and pragmatism on the "threshold" rules, as
that was a key for a successful outcome.  There was also the implementation-review mechanism,where a meeting  of the Special Session of the General Council would be held the next day.  That
avenue must at least be open if the General Council wished to follow up.
182. The General Council took note of the report and of the statements.WT/GC/M/66
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(b) Reports by the Vice-Chairman of the Committee on Agriculture (G/AG/9 and Corr.1,
G/AG/10)
183. The Chairman drew attention to the report c ontained in G/AG/9 and Co rr.1 which concerned
the question of the implementation of Article 10.2 of the Agreement on Agriculture and to the report
contained in G/AG/10 which referred to the impl ementation of the Decision on Measures Concerning
the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing
Developing Countries.
184. Mr. Suzuki (Japan), Vice-Chairman of the Committee on Agriculture, said details  of the
deliberation of the Committee were contained in the reports circulated in G/AG/9 and Corr.1 and
G/AG/10.  In addition to these, there was a third implementation-related issue, which was discussed in
the Committee on Agriculture: the Addendum to the guidelines to be provided for the  tariff rate quota
management.  Five proposals had been submitted to the Committee by developed country Members
and a country in transition.  These five had not been discussed at the Committee on Agriculture since
Members had not had the time to look into the details.  He hoped there would be a substantial
discussion on this issue at the upcoming meeting of the Committee in September.  With regard to the
implementation of Article 10(2) of the Agreement on Agriculture, which provide to develop
internationally agreed disciplines on export credits, export credit guarantees, and insuranceprogrammes in agricultural trade, he said that it was the view, particularly of countries that had
submitted a proposal, that the issue of developing internationally agreed disciplines on these matters
was very much part of implementation, whereas eliminating the subsidy component of export credits,
export credit guarantees and insurance was part of the negotiation.  Therefore discussions would now
take place both in the regular sessions of the Committee on Agriculture and in Special Sessions.  Onthe question of developing internationally agreed disciplines, which was considered an
implementation issue, Members had not been able to have a substantive discussion.  This had been
partly because Members had expected the OECD to make a substantial contribution to the work,
although Members had been conscious that this was a WTO exercise, and they would not accept what
had been agreed in the OECD.  However, the OE CD had so far failed to make an input.  Some
Members were still hopeful that there would be further developments in the OECD.  However, he felt
this might not be the case.  He hoped that a more substantive discussion would take place in
September 2001 on the basis of the proposal put fo rward by MERCOSUR and certain other countries;
this would serve as a good checklist to identify the el ements required to be discussed in the exercise to
develop internationally agreed disciplines.
185. On the question of implementation of the Ministerial Decision on Net Food-Importing
Developing Countries (NFIDCs) and Least-De veloped Countries (LDCs), the Chairman had
organised a Round Table and invited the World Bank, International Monetary Fund (IMF) and the
Food and Agriculture Organization (FAO) to participate.  The proposal put forward by the NFIDCs
and LDCs contained three elements:  (i) improving access to financing;  (ii) food aid, and (iii)
enhancing the technical and financial assistance to increase food production capacities in NFIDCs and
LDCs.  At the Round Table, the Vice-Chairman of the Committee on Agriculture had taken up thefirst question, related to the improvement of access to financial resources.  As contained in the report,
the IMF had explained that it did have sufficient financial facilities to assist the NFIDCs and LDCs,
but that would only be provided in that context of balance-of-payments.  Therefore, the concerns
raised by the proponents to meet the short term need for improved access to financing would have to
be seen in that context.  The World Bank had reported that it too had facilities, but was worried thatthe request by the developing countries for rural development and other related activities had
decreased considerably over the decade.  The World Bank assistance was for longer term objectives to
increase the food production capacity, and once again there were arguments whether these facilities
were suited to meet the concerned proposals for the short-term financial needs.WT/GC/M/66
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186. He would continue to work on these questions and intended to organize an informal
consultation once again to discuss first the question of financing, but also the other two issues of food
aid and technical and financial cooperation as soon as possible.  He would look for a convenient time-
slot for all, convene another informal meeting and see how much progress he could make there.
187. The representative of Brazil thanked the Vice-Chairman for the report on export credits which
captured had the opinions expressed in the last meeting.  Brazil was pleased with the recent
discussions that had taken place in the Committee on Agriculture on the implementation of
Article 10.2.  He acknowledged that there had been a good exchange of views and noted that some
Members supported the MERCOSUR proposal on negotiating disciplines on export credits for
agricultural products in the WTO, which was the legitimate forum to work towards the development
of disciplines on export credits, credit guarantees and insurance programmes.  He looked forward to
making progress on the issue in the Committee on Agriculture, as well as during the Special Session.Brazil welcomed the views expressed by the Vice-Chairman of the Committee, particularly when he
confirmed in paragraph 5 that there was an evident willingness among Members to make progress on
the development of disciplines provided for in Article 10.2 of the Agreement in an appropriate way,
and hoped that a more specific debate in this connection would ensue.
188. The representative of Pakistan thanked the Vice-Chairman of the Committee on Agriculture
for his report and said that consultations had been held with a sincerity of purpose and with a view to
resolving the issue of possible negative effects of the imports on Net Food-Importing Developing
Countries.  The Round Table which had been organized had led Pakistan to conclude that the facilities
provided by the World Bank and IMF were not adequate to cater to the needs of NFIDCs and LDCs.
The reasons had been explained by the proponents and the international financial institutions, andwere contained in Annex 2 of the report in G/AG /10 addendum.  He reiterated that the facilities
available were not used by these countries because of the conditionalities attached to these
compensatory financing facilities.  The IMF had also indicated that such conditionalities were being
further strengthened.  At that moment only one country had used these facilities over a period of six
and a half years.  In the situation of further strengthened conditionalities there would be less chance touse these facilities.  The case was not too different with the World Bank because of the
conditionalities attached.  The specific point emphasized in the World Bank financing facility was that
social and environmental issues were genuine concer ns in the view of donor countries.  Therefore
such conditionalities were attached to financing facilities.  This was a concern for most LDCs and
NFIDCs. In the course of discussions Pakistan had also indicated the need for a third window of
possibility which was the International Fund for Agricultural Development (IFAD).  Pakistan was
hopeful that further consultations would be held by the Vice-Chairman.
189. The General Council took note of the reports in G/AG/9 and Corr.1 a nd G/AG/10 and of the
statements.
(c) Report by the Chairman of the Committee on Sanitary and Phytosanitary Measures (G/L/455)
190. The Chairman recalled that at its meeting on the 18 October 2000, the General Council had
invited the SPS Committee to examine the concerns of developing countries regarding the
equivalence of SPS measures, and to come up with concrete options on how to deal with them.  It had
also been agreed that the Chairman of the SPS Committee would report to the General Council on this
matter.  The last report by the Chairman of the SPS Committee had been presented at the General
Council meeting on 8-9 May 2001.
191. Mr. Ehlers (Uruguay), Chairman of the Committee on Sanitary and Phytosanitary Measures
hoped that the brevity of his report would also convey the serious, detailed and serene manner in
which discussions in this Committee had taken place.  He and his predecessor had informed the
General Council of developments in previous debates.  He highlighted paragraph 5 of the reportWT/GC/M/66
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(G/L/455) which had set out the basic ideas stemming from consultations.  The second point, in
paragraph 8, indicated that the Committee had before it a document that set out possible approaches to
identify the concerns raised by developing countries in this area.  These approaches had been
identified by the Secretariat , and were reflected in the annex to the report.  The Committee also had
before it a series of ideas put forward by Argentin a.  These two papers would be examined by the
Committee at upcoming meetings on 30 October 2001 and 1 November 2001.  The Committee was
open to any instructions from the General Council.
192. The General Council took note of the report in G/L/455 and of the statement.
(d) Report by the Director-General on activities of international financial organizations on
SPS/TBT-related programmes (WT/GC/46/Rev.1)
193. The Chairman recalled that at the Special Session on Implementation on 18 October 2000, the
General Council had invited the Director-General to explore with the relevant international standard-
setting organizations and relevant intergovernmental organizations, financial and technical
mechanisms to assist the participation of developi ng countries in standard-setting activities.  The
Director-General had already made two reports on this subject at the Special Sessions of the General
Council on 15 December 2000 and 27 April 2001.
194. The Director General recalled that in October 2000, the General Council had requested him to
"explore with the relevant international standard-setting organizations and relevant intergovernmental
organizations financial and technical mechanisms to assist the participation of developing countries in
standard-setting activities".  In December 2000, he had provided the General Council  with his first
report on the contacts made with the standard-setting and financial organizations (WT/GC/42).  In
March 2000, he had reported on the very fruitful meetings that had been held with the relevantstandard-setting organizations (WT/GC/45).
195. The current report was on the contacts with the relevant intergovernmental organizations
which could provide financial assistance to developing countries (WT/GC/46/Rev.1).  In
November 2000, the Director General had requested the World Bank, the Asian Development Bank
(ADB), the Islamic Development Bank, the Inter-American Development Bank (IDB) and the UNDevelopment Programme (UNDP), for information on the kind of technical and financial assistance
that they provided to developing countries to facili tate their participation in the work of international
standard-setting bodies.  He had also asked whether they could expand their assistance to developing
countries.  The main elements of the responses were as follows:
196. The World Bank had responded that it had a programme of research and capacity building in
the area of standards, technical regulations, and trade, and also offered support through its lending
operations for infrastructure modernization, export promotion and policy reform initiatives in anumber of developing countries.  It estimated that in fiscal year 1999, World Bank project funding for
infrastructure related to standards totaled US$419.2 million.  The World Bank had launched a three-
year series of initiatives on international standards, technical regulations and trade policy in
November 1999.  The overall goals of this initiative were:  (i) increased understanding of the
quantitative significance of standards and regulations as barriers to trade;  and (ii) analysis of tradepolicy aspects of governments' technical regulations, with particular emphasis on developing
countries. With additional resources, the Bank was prepared to develop educational tools and sponsor
training seminars on international standards, and best practices in standards and regulatory reform.
The WTO had been working with the World Bank in this area.  The World Bank would be included in
a high-level meeting planned for September to discuss further collaboration with the relevantstandard-setting organizations.WT/GC/M/66
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197. The Inter-American Development Bank had informed the WTO that it had recently
established a "Trade Facility" by which borrowing Member countries could obtain a credit line for up
to US$5 million through fast-track procedures for the strengthening of their trade institutions.  These
programmes had not yet included TBT and SPS-related projects in a very significant way, but the
facility was flexible and allowed for the support of programmes in these areas.
198. The Islamic Development Bank had been giving special attention to WTO-related capacity
building in Member countries.  For this purpose, the Islamic Development Bank had organized
various training courses, issue-specific workshops and seminars.  In addition, the Islamic
Development Bank was focusing its activities on preparing Member countries for future multilateral
trade negotiations.  To date, the Islamic Development Bank has organized four seminars related to the
SPS and TBT Agreements.  The WTO Secretariat had also participated in some of these activities.
199. According to the information received from  the Asian Development Bank (ADB), its
overarching goal was poverty reduction.  Recently, in response to increased demand from its members
and international organizations, the ADB had begun pr oviding technical assistance in the trade sector.
However, the ADB did not provide technical a ssistance directly related to the SPS and TBT
Agreements.
200. The United Nations Development Programme (UNDP) activities were decentralized, and
developed in partnership with the client countries.  The UNDP information on technical cooperation
activities was aggregated at the national level according to categories which did not allow the
identification of specific programmes related to SPS and TBT activities.
201. In conclusion, the Director General said he had been actively pursuing the mandate of the
General Council. All the above-mentioned organi zations were now well aware of the concerns of
developing countries with regard to standard-setting activities, and were attentive to their needs.
Although the contacts and meetings with the relevant  organizations had been very useful, the Director
General reiterated that efforts would continue.  Future discussions must focus on how to best
cooperate among organizations to ensure the most effective results.  With this in mind, the WTO was
currently arranging for another meeting at the De puty Director-General level with the relevant
standard-setting organizations, to further develop thes e collaborative efforts.  It was intended that the
World Bank be included in this next meeting.  The information that had now been received from the
various financial institutions would be a valuable input for these discussions.  He would report to the
General Council on the outcome of that meeting.
202. The General Council took note of the report.
16. Reports of the Special Sessions of the Committee on Agriculture and of the Council for
Trade in Services (S/CSS/6, S/CSS/7)
203. The Chairman recalled that at its meeting on 3 and 8 May 2000, the General Council had
agreed that the reports of the special sessions of the Committee on Agriculture and the Council for
Trade in Services would be a standing item on the General Council's agenda for the duration of the
mandated negotiations in question.
204. Mr. Chemchaeng, in the absence of Ms. Tantraporn (Thailand) Chairperson of the Committee
on Agriculture reported that at its meeting in March 2001 the Special Session of the Committee on
Agriculture had adopted a work programme for the second phase of the negotiations for continuing
the reform process under Article 20 of the Agreement on Agriculture.  As outlined in the report to the
General Council on that meeting (G/AG/NG/7 and A dd.1) the second phase of these negotiations had
consisted of "work in depth on all issues and options for policy reform set out in Members' proposals,with further elaboration as appropriate".WT/GC/M/66
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205. The work of the second phase of the agriculture negotiations was being undertaken in
informal and formal Special Session meetings in relation to a series of topics, as agreed by Members.
The first such meeting, an informal Special Session held on 21-23 May 2001, had taken up issues and
options in respect of three subjects:  (i) tariff quota administration;  (ii) tariffs;  and (iii) the amber
box.  Elaborated proposals and other informal pape rs had been submitted by individual Members or
groups of Members in each of these areas, including a contribution by a group of developing-country
Members on special and differential treatment.  These informal papers (12 in total) had since been
compiled and made available in the three working languages in an informal document SS(INF)AG/1
dated 8 June 2001.
206. The May 2001 informal Special Session meeting, following informal consultations, had also
agreed on a listing of the further issues to be taken up at the informal Special Session meetings
scheduled to be held through to the end of the current year.
207. The next informal Special Session meeting was to be held next week and this would be
followed by both informal and formal Special Session meetings in the last week of September.  In
accordance with the agreed arrangements, the Chairman would be submitting a written report on these
meetings to the General Council following the formal meeting of the Special Session of the
Committee on Agriculture on 28 September 2001.
208. Mr. Jara (Chile), Interim Chairman for the Special Session on the Council for Trade in
Services held in July 2001 said that since the last report to the General Council, the Council for Trade
in Services had held two formal sessions on 14-17 May 2001 (S/CSS/6) and 9-12 July 2001
(S/CSS/7).  As interim Chairman elected for the July 2001 session in the absence of Amb. Amorim
(Brazil), he reported on the latter session.
209. With respect to the item on the assessment of trade and services, many delegations had
pointed to the dearth of statistical information and the methodological problems that made it difficult
to have a quantitative assessment of trade in services.  Several delegations had stressed that the
assessment should not be a purely academic exercise and that the discussion needed to be more
focussed and conclusive.  Some delegations had suggested that its objective was to determine if, andto what extent, developing countries had benefitted  from developed countries' liberalization of their
services markets in line with the objective of Article IV of the GATS.  The Council had asked the
Secretariat to produce a compilation of all the statements and submissions tabled with respect to the
subject of trade in services in order to have a more focussed discussion.
210. Members had then held a second detailed discussion of the negotiating proposals submitted to
the Special Session of the Services Council, and had addressed the movement of natural persons, and
other horizontal issues (such as transparency, small- and medium-sized enterprises, classification,MFN exception) and the following services sectors: business services, communication services,
construction and distribution services.  New proposals had been tabled by the delegations of New
Zealand, the MERCOSUR countries, Columbia, Japan, Australia, Brazil, Mexico and the United
States.  The debate had been very substantive and several comments had been raised with respect to
certain elements of the proposals.  Several Members had submitted their questions in advance of themeeting and more were encouraged to do so.  The Secretariat had been mandated to produce a note on
the application of economic needs tests, drawing upon available information in the Members' schedule
and work undertaken by other intergovernmental organizations.  Members had also agreed in
principle that a symposium on movement of natural persons would be held after the Fourth Ministerial
Conference.
211. The negotiating proposals on education, energy, environmental, financial, recreational,
tourism and transport services would be taken up in October 2001.  It had been decided that the
horizontal issues under discussion would still figure on the agenda of the Special Session in October,WT/GC/M/66
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and new proposals on sectors not up for discussion may also be presented. The issue of modalities for
the treatment of autonomous liberalization had been addressed in a dedicated meeting of the Special
Session on 12 July 2001, structured around the annotated checklist of issues produced by the
Secretariat (JOB(01)/65).  Members had held extensive discussions on the issues therein. Several
delegations had pointed to the need to make the discussion less academic and more operational.  Itwas agreed that to facilitate the discussion at a political level, the Secretariat would prepare a brief
paper outlining the broad views that were emerging on each of the different issues under discussion.
Members would revert to the standing items in October 2001.
212. The representative of Brazil, commenting on paragraph 6 of the report in S/CSS/7, said that
his country had no problem in principle with the idea of holding a symposium after the Fourth
Ministerial on issues related to the movement of natural persons (mode 4).  However, it would be
preferable to wait until all the proposals on the remaining sectors had been discussed at the Octobersession before taking a decision on this issue.  This would ensure similar treatment or attention to
areas of negotiation other than mode 4, which have also been the subject of proposals by members,
including developing countries.
213. The General Council took note of the reports in  S/CSS/5 and S/CSS/7 and of the statements
made, and agreed to revert to this matter at its next regular meeting.
17. India – Statement on material on different WTO Agreements provided to other
International intergovernmental organizations and the WTO website by the Secretariat
214. The representative of India, speaking under "Other Business" said that he wished to refer to
certain communications between the WTO Secretariat and other international organizations and to
background notes, communications and information distributed by the WTO Secretariat on the WTOwebsite.  In respect of these two categories his comments pertained only to those communications
which contained explanations or questions and answers related to one or more of WTO Agreements.
With regard to the first category of communications, he pointed out that the WTO membership as a
whole was not receiving any information about them.  There were reasons to believe that the WTO
Secretariat had sent in the recent past, certain communications to other international organizations ortheir secretariats dealing with subject-matters under some of the WTO Agreements.  There should be
no difficulty for the Secretariat to share those communications with the WTO membership.  For
example, communications, if any, between the TRIPS Division of the WTO Secretariat and World
Health Organization (WHO) on matters relating to the TRIPS Agreement could be available to the
TRIPS Council and communications, if any, between the Market Access Division of the WTO
Secretariat and the World Customs Organization (WCO) in Brussels could also be made available to
the Committee on Market Access.
215. With regard to the second category of communications like background notes, information,
etc. distributed by WTO Secretariat on the WTO website, Members could be helped by being supplied
with hard copies of such material through "Infor mation Series Documents".  Such an approach would
be useful for those delegations which were lacking resources and downloading from the WTO website
was not always easy.  It would also  be useful if there was an indication in the WTO website materials
as to their source within the WTO Secretariat.  Sometimes there was some confusion as to whether
certain material had been distributed by the Division dealing with the subject or by the Media
Relations Division and that was avoidable.  India had no problem with the WTO Secretariat
corresponding with other international organizations or putting material on the WTO website. India
only sought that when such communications involv ed elements relating to the explanation of an
agreement, copies of such communications should be available to the membership as a whole. The
WTO Secretariat had to ensure that even inadvertently it did not assume for itself the power to
provide legal interpretations for any provision of any WTO Agreement.  India pleaded for greater
transparency of the WTO Secretariat's communications relating to provisions of various WTOWT/GC/M/66
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Agreements vis-à-vis  the WTO membership.  Such transparency would ensure greater acceptability as
well as accountability. He was confident that the Director-General would be sensitive to the concerns
expressed by India and would respond positively to its suggestions.
216. The Chairman proposed to draw this matter to the attention of the Director General for
consideration.
217. The General Council took note of the statements.
18. Switzerland – Presentation on modifications to its GSP Scheme in favour of least-
developed countries
218. The representative of Switzerland, speaking under "Other Business", informed Members of
recent developments in Switzerland's General System  of Tarriff Preferences (GSP).  This system had
already been subject to a major overhaul in 1997 through which customs duties on industrial goods
originating in least-developed countries (LDCs) had been completely eliminated.  This had also beenthe case for most agricultural goods.  In response to appeals being made by developing countries and
in order to contribute to the integration of LDCs in  international trade, the Government of Switzerland
had approved on 27 June 2001 a proposal intended to progressively eliminate customs duties affecting
a small number of agricultural products from LDCs, which were not already admitted duty-free.  As a
result of this operation all products from LDCs would enter Switzerland duty-free and quota-free.This revision of Switzerland's GSP Scheme was along the same lines as initiatives taken by other
Members, such as the European Communities and Norway.  The LDCs would benefit in a first stage
i.e. as of 1 January 2002 from an average custom reduction of 30 per cent of the normal tariff on all
their agricultural goods which did not yet benefit from tariff preferences. As from 1 April 2004 these
tariff levels would drop again by 30 per cent.  The Parliament would then decide in 2005 on the dateof the last phase of implementation.  Details of the recent changes in Switzerland's GSP Scheme
would be notified to the relevant WTO bodies.
219. The General Council took note of the statement.
19. Director General – Statement on certain aspects of the logistical preparation for the
Fourth Ministerial Conference
220. The Director General, speaking under "Other Busi ness", drew the attention of Members to the
enormous pressure the WTO faced in terms of available rooms in Doha.  He recalled that the
Government of Qatar had undertaken to make available 4,400 rooms for the Conference.  Members
had accepted this offer and in all meetings he had had with Qatari officials they had reassured him
concerning that commitment.  But all the Members had a duty to support the host because their offer
had been made on the basis of a certain number of rooms and they were honouring their commitment.
In light of the number of rooms Members had agreed to for the Conference, there was a need toexercise the greatest possible restraint in deciding on the size of their delegations.  The Secretariat
would do the same.  He therefore appealed to Memb ers to show restraint.  He added that Members
had agreed on attendance at the Conference by other key categories such as media and non-
governmental organizations.  Their attendance must be managed within the agreed number of rooms.
Regarding the official delegations, he said that the deadline for Members to return their registrationforms and give information concerning delegations was 31 July. This deadline had been decided upon
in order to give Qatar sufficient time to do the appropriate processing. The registration forms were
contained in the box files sent to delegations some time ago.  It was essential that the required
information be provided in timely fashion.  In th e event that Members were not able to provide the
full information by the requested deadline, it was crucially important that by the end of the monththey gave the WTO Secretariat at the least some indication of the size of their delegation.  He asked
Members to supply the name of their Delegation Coordinator to the office of Mr. Jacques Chabert,WT/GC/M/66
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Head of the Secretariat's Logistical Task Force.  Members could not rule out the possibility to discuss
and decide on a more radical means to achieve the right balance.
221. Regarding non-governmental organizations, the Di rector-General said that at its meeting on
8 May, the General Council had agreed to specific procedures for registration and attendance of
NGOs at the Doha Conference. Following that meeting, the procedures had been immediatelycirculated for the information of Members in document WT/MIN(01)/INF/3.  They had also been
placed on the WTO website to inform interested NGOs of how to register for the Conference.  The
WTO had also disseminated the information in its regular NGO Bulletin and through other activities.
He was aware too that many Member governments had circulated the information to NGOs in their
respective countries.  Some of the larger NGOs had also been proactive in that regard. Concerning the
agreed deadlines, the 2 July deadline for NGOs to submit their registration requests had now passed
and no further applications would be processed.  The requests received before the deadline were nowbeing reviewed and in order that the Secretariat, the host country and NGOs had sufficient time to
prepare for the Conference, the Secretariat was required to prepare a list of organizations eligible for
registration (under the agreed criteria) and circulat e that list to WTO Members for their information.
Immediately thereafter, NGOs would be informed about further arrangements concerning their
attendance and registration forms would be sent to them.  NGOs must complete and return the formsby 17 September. Confirmation of registration would be sent to the NGOs as from 1 October.  In
deciding on the procedures regarding registration and attendance by NGOs at Doha, the General
Council had noted that depending on the number of NGOs wishing to attend, it could not be excluded
that certain limits might be imposed.  It was already evident that the number of NGOs that wished to
attend was considerable and the WTO would need to insist on some limits. At the same time,however, the WTO was still awaiting clear information from Members as to their accommodation
requirements.  In light of these factors, and with the agreement of Members, it was his intention to
proceed as follows.  The list of NGOs eligible for registration would be circulated for the information
of Members on Friday, 3 August.  NGOs would then be advised on Friday, 10 August giving them
just over a month to complete and return the relevant registration forms.  He realized that thisprocedure included work in the August break, but  it was important that NGOs were given adequate
time to prepare.
222. Regarding the media, the Director-General said  that media interest in the Conference would
be considerable.  It was important, therefore that adequate provision was made for their attendance.
The deadline for media registration was 24 September but already indications were that requests
would exceed even the number of NGOs  wishing to attend.  As logistical preparations proceeded he
would be working to ensure that suitable provision was made for media attendance.
223. The General Council took note of the statement.9
20. Chairman – Announcement concerning the Chairmanships of the Working Parties on
the Accession of Cape Verde and the Federal Republic of Yugoslavia.
224. The Chairman, speaking under "Other Business",  informed the General Council that on the
basis of consultations held, Mr. David Shark (United States) had agreed to chair the Working Party on
the Accession of Cape Verde and that Mr. Milan Hovorka (Czech Republic) had agreed to chair the
Working Party on the Accession of the Federal Republic of Yugoslavia.
225. The General Council took note of the information.
                                                     
9 Subsequently circulated in JOB(01)/117.WT/GC/M/66
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ANNEX I
Report by the Chairman of the Committee on Rules of Origin
1. Background1.1 The General Council, at its meeting on 15 December 2000, adopted the following decision
concerning the Agreement on Rules of Origin:
"Members undertake to expedite the remaining work on the harmonization of non-preferential
rules of origin, so as to complete it by the time of the Fourth Ministerial Conference, or by theend of 2001 at the latest.  The Chairman of the Committee on Rules of Origin (CRO) shall
report regularly, on his own responsibility, to the General Council on the progress being
made. The first such report would be submitted to the Council at its first regular meeting in
2001, and subsequently at each regular meeting until the completion of the work programme."
(WT/L/384)
1.2 The first such report was made at the General Council meeting on 9 February 2001 and the
second was made on 9 May 2001.  This is the third report.
2. Progress made at the May 2001 Session of the CRO
2.1 The Committee on Rules of Origin held another round of negotiating session from 7 to
18 May 2001.  During this negotiating session, the Committee discussed outstanding issues
concerning rules of origin of Chapters 1-24 (agricultural products and fish), Chapters 25-27 (mineral
products), Chapters 41-43 (leather), Chapters 44-49 (wood and paper), Chapters 50-63 (textileproducts), Chapters 64-67 (footwear and headgear), Chapters 86-89 (transportation equipment) and
Chapters 92-97 (musical instruments and other articles).
2.2 The outcome of the discussions was very positive;  consensus has been reached on no less
than 42 issues (G/RO/M/36).  The progress since 1997 can be summed up in the following table.
Number of  issues referred to the CRO Number of resolved issues
486 September 1997-September 2000:  22 (less than 1
per session)
November 2000:  8
March 2001:  24
May 2001:  42
Total:  96 ( with 390 outstanding issues)
2.3 The new working methodology adopted in April 2001 was helpful.  The positions
recommended by the Chairman under the new methodology served as a neutral basis for negotiations
and many Members showed welcome flexibility to support the Chairman's recommendations.  The
revised recommendations were circulated in mid-June 2001 for the CRO session from 9-23 July 2001.
3. Implications of the HWP
3.1 Another important issue discussed at the CRO  since its report to the General Council on
9 May is the implications of the implementation of the harmonized rules of origin on other WTO
Agreements.  The discussion took place at the informal meeting of the CRO held on 19 June 2001.WT/GC/M/66
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Previously, the CRO had been discussing this issue since May 1998.  In this context,  there had been
submissions from the Dominican Republic and Hon duras (G/RO/W/33), El Salvador (G/RO/W/34),
India (G/RO/W/28/Rev.1, G/ RO/W/30, 42 and 50), Japan (G/RO/W/66), Korea (G/RO/W/38) and the
United States (G/RO/W/32, 48 and 56).
3.2 The summary of discussions held on 19 June is as follows:
- The informal discussion on the implications of the HWP for other WTO agreements was
conducted with respect to (1) the implications of the completed harmonized rules and
(2) the implications of the proposed rules for harmonization.
- Discussions on both subjects were lively and helped to identify many of the important
problems that should be addressed both before and after the completion of the HWP.
However, the discussion could not lead to any agreement on concrete actions.
- All the Members agreed that any discussion on the implications of the HWP should be
conducted in such a manner as to facilitate the HWP and should not hinder its progress.
4. Work up to Doha
4.1 Although the HWP has clearly been expedited  and the resolution of 72 issues over the last
three rounds of meetings is significant, it should be recognized that 390 issues are still before theCommittee.
4.2 The July session of the CRO began on Monday 9 July and will continue until
Monday 23 July, with 12 working days, including a Saturday session on 14 July.  The
September/October session is scheduled from 24 September to 5 October 2001.  The Doha Ministerialis scheduled on 9-13 November 2001.
4.3 Thus, according to the temporal deadline contained in the mandate of the General Council,
the CRO is now entering the final phase of its HWP.  In this connection, the same plea is to be made
as in the second report to the General Council: id est, the CRO continues to look up to the General
Council for guidance and support so that the Council’s mandate could be fully achieved with best
efforts on the part of the CRO.
4.4 In particular, the General Council’s guidan ce on the following points would be highly
appreciated:
- (Confirmation of the General Council’s mandate)  The delegates at the CRO should be
firmly reminded that the HWP is to be completed by the 4
th Ministerial.
- (Identification of the threshold rule)  With re spect to most of the issues remaining before
the CRO, solutions can be found only through agreement on the applicable threshold rule.
As an example, there is no question that assembly is origin- conferring.  However,assembly cannot be always origin-conferring.  Thus, the real question is to identify the
threshold of the assembly work, over which assembly can be considered as ‘substantial
transformation’.
- So far, there has been no meeting of mind on this critical issue.  Some delegations believe
that value-added rule can provide a general threshold rule, especially for machinery
chapters.  Other delegations find it difficult to accept value added rule for technical
difficulties involved.  For this reason, no substantial progress could be made in the CRO’sWT/GC/M/66
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discussion held on 9-11 July on the machinery chapters.  Without the resolution of this
critical issue, further meaningful progress in the HWP is difficult to be expected.
4.5 Conclusively, the HWP is at a critical stage.  Members’ renewed resolve and agreement on
the underlying fundamental issues would lead to continued resolution of remaining issues and thecompletion of the HWP by the 4
th Ministerial.  Otherwise, the outcome would be far short of the
mandate of the General Council.
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