RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/77
13 February 2003
(03-0918)
General Council
10-12 and 20 December 2002
MINUTES OF MEETING
Held in the Centre William Rappard
on 10-12 and 20 December 2002
Chairman:  Mr. Sergio Marchi (Canada)
1. Accession of Armenia – Report of the Working Party..........................................................3
2. Iran – Request for Accession ................................................................................................ ..7
3. China – Transitional review under Section 18.2 of the Protocol of Accession to
the WTO Ag reement ............................................................................................................. ..8
4. Council for TRIPS – Report on the implementation of Paragraph 6 of the Doha
Declaration on the TRIPS Agreement and Public Health...................................................14
5. Committee on Trade and Development – Report by the Chairman of the
Committee in Special Session on Special and Differential Treatment in
Pursuance of Paragraph 12.1 of the Doha Ministerial Decision on
Implementation-Related Issues  and Concerns (TN/CTD/6) ...............................................16
6. Sub-Committee on Least-Developed Countries - Recommendations for
facilitating and accelerating the accession of LDCs to the WTO Agreement ..................19
7. Committee on Subsidies and Countervailing Measures – Statement by the
Chairman of the Committee on the wo rk undertaken pursuant to Paragraph
10.6 of the Doha Ministerial Decision on  Implementation-Related Issues and
Concerns. ...................................................................................................................... ...........22
8. Report by the Chairman of the Trade Negotiations Committee ........................................25
9. Committee on Anti-Dumping Practices – Report on matters referred to the
Committee by the Doha Ministerial Decision on Implementation-Related Issuesand Concerns .................................................................................................................. ........28
10. Committee on Market Access – Recommendations regarding the meaning to be
given to the phrase "substantial interest" in Article XIII:2(d) of GATT 1994
pursuant to Paragraph 1.2 of the Doha Ministerial Decision on Implementation-
Related Issues and Concerns .................................................................................................33
11. Committee on Customs Valuation – Report of the Identification and Assessment
of Practical Means to address Members' concerns regarding accuracy of
declared values pursuant to Paragraph 8.3 of the Doha Ministerial decision on
Implementation-Related Issues and Concerns ....................................................................34
12. Marrakesh Ministerial Decision concerning the possible negative effects of the
reform programme on least-developed and NFIDCs – Follow-up to the Report ofWT/GC/M/77
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the Inter-Agency Panel on short-term difficulties in financing normal levels of
commercial imports of basic foodstuffs – Report by the Chairman of the
Committee on Ag riculture .....................................................................................................35
13. Rules of origin – Harmonization work programme – Statement by the Chairman .........37
14. Work Programme on Small Economies – Report by the Chairman of the
Dedicated Sessions of the Committee on Trade and Development.....................................40
15. Issues affecting least-developed countries – Interim report by the Director-
General pursuant to Paragraph 43 of the Doha Ministerial Declaration .........................41
16. Implementation and adequacy of tech nical cooperation and capacity-building
commitments in the Doha Ministerial Declaration – Interim report by the
Director-General pursuant to Paragraph 41 of the Doha Ministerial Declaration .........47
17. Procedures for the appointment of Directors-General – Communication from
the Chairman .................................................................................................................. ........55
18. Guidelines for the appointment of o fficers to WTO bodies – Communication
from the Chairman .............................................................................................................. ...61
19. Internal transparency and effective participation of Members – Preparatory
process in Geneva and negotiating procedure at Ministerial Conferences –Statement by the Chairman ..................................................................................................62
20. Work programme on electronic commerce – Report on the third dedicated
discussion on cross-cutting issues ..........................................................................................78
21. Review of the exemption provided under Paragraph 3 of GATT 1994 ............................79
22. Committee on Balance-of -Payments Restrictions................................................................82
(a) Consultations with Bangladesh .............................................................................................. ..82
(b) Note on meeting of 18 November ............................................................................................8 4
23. WTO pension plan............................................................................................................ ......84
(a) Annual Report of the Mana gement Board for 2001 ................................................................84
(b) Agreements on the transfer of pension rights between the pension plan of the WTO
and the pension schemes of the coordinated orga nizations .....................................................85
24. Committee on Budget, Finance and Administration – Report of the Committee ............86
25. Waivers under Article IX of the WTO Agreement..............................................................92
(a) Introduction of Harmonized System 2002 Changes into WTO schedules of
concessions – Dr aft decision .................................................................................................. ..92
(b) Review of waivers under Article IX:4 of the WTO Agreement ...............................................92
(i) Cuba – Article XV:6 of GATT 1994, granted on 20 December 2001 until 31
December 2006 ................................................................................................................. .......92
(ii) Colombia – Extension of the application of Article 5.2 of the Agreement on Trade-
Related Investment Measures, granted on 20 December 2001 until 31 December 2003 .........92
(iii) Dominican Republic – Minimum values under the Customs Valuation Agreement,
granted on 20 December 20 01 until 1 Ju ly 2003 .....................................................................92
(iv) EC – Autonomous preferential treatment to the countries of the Western Balkans,
granted on 8 December 2000 until 31 December 2006 ...........................................................92WT/GC/M/77
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(v) EC – Transitional regime for the EC autonomous tariff rate quotas on imports of
bananas, granted on 14 November 2001 until 31 December 2005 ..........................................93
(vi) EC – The ACP-EC Partnership Agreem ent, granted on 14 November 2001 until
31 December 2007 .............................................................................................................. .....93
(vii) Turkey – Preferential treatment for Bosnia-Herzegovina, granted on 8 December
2000 until 31 December 2006 ..................................................................................................9 3
(viii) United States – Caribbean Basin Economic Recovery Act, granted on 15 November
1995 until 31 December 2005 ..................................................................................................9 3
(ix) Preferential Tariff Treatment for Least-Developed Countries, granted on 15 June
1999 until 30 J une 2009 ....................................................................................................... ....93
26. Review of WTO Activities.................................................................................................... ..94
1. Accession of Armenia – Report of the Working Party (WT/ACC/ARM/22 and 23 and
Add.1 and 2)
1. The Chairman welcomed, on behalf of the Members, the delegation of the Republic of
Armenia, and invited the Chairman of the Working Party on the Accession of Armenia to introduce
the package of documentation relating to Armenia's accession.
2. Mr. Spencer (Australia), introducing the report on behalf of Mr. Kenyon (Australia),
Chairman of the Working Party on the Accession of Armenia, expressed the latter's regret at being
unable to be present to make his report.  As Members were aware, the Government of the Republic ofArmenia had applied for accession to the GATT 1947 in December 1993 pursuant to Article XXXIIIof the GATT 1947.  Subsequently, in accordance with the Decision of the General Council in January
1995, the existing Working Party on Accession to the GATT 1947 had been transformed into a
regular WTO Accession Working Party.  During the period 1996-2002 the Working Party held five
formal meetings and a large number of informal meetings.  The complete results of the negotiations
constituting the accession package of Armenia were contained in the following documents:  report ofthe Working Party (WT/ACC/ARM/23); Schedule of Concessions and Commitments on Goods
(WT/ACC/ARM/23/Add.1);  and Schedule of Con cessions of Specific Commitments in Services
(WT/ACC/ARM/23/Add.2).
3. This documentation had been adopted by the Working Party at its meeting on
21 November 2002 on an ad referendum basis, in accordance with usual procedures.  In concluding its
mandate, the Working Party had taken note of the communication from Armenia circulated in
WT/ACC/ARM/22.  The Working Party had proceeded on the understanding that this communication
would be brought to the attention of the General Council on the occasion of its decision on the
accession of Armenia.
4. He wished to place on record that members of the Working Party had consistently appreciated
the efforts by Armenia to put into place the necessary legislation to implement the WTO Agreements
by the time of its accession to the WTO.  These initiatives had ensured that Armenia would become afull participant in the WTO immediately upon entry into force of its Protocol of Accession.  The
appendix to the report reproduced the draft Decision and the draft Protocol of Accession.  In
accordance with usual WTO practice, the Protocol of Accession incorporated the commitments
undertaken by Armenia in relation to the matters negotiated in the Working Party.  He wished to pay
tribute to the Prime-Minister of Armenia, to his distinguished Cabinet of Ministers and to his team ofcommitted negotiators who had dealt with the challenges of this accession process with total
dedication and commitment.  He also wished to express appreciation to the Members who hadWT/GC/M/77
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participated in these negotiations, who had show n flexibility and goodwill in the traditional WTO
spirit of compromise.  The results spoke for themselves, and he wished to commend the report, its
annexes and the texts of the draft Decision and Protocol of Accession for action by the General
Council.
5. The representative of Armenia, speaking as an observer , said that from the beginning of the
1990s, the Republic of Armenia had adopted a polic y of formulation and development of a market
economy.  For the realization of this objective, and especially for Armenia's integration into the world
economy, accession to the WTO was an important step.  Armenia was proud that mutual efforts had
brought success to the process that had started in 1992.  Armenia was now entering a qualitatively
new framework of international legal commitments, and a qualitatively new economic and political
relationship.  Globalization and cultural diversity had grown rapidly throughout the world, making the
importance of the multilateral trading system embodied in the WTO ever more significant.  Accessionto the WTO was an important historical event for Armenia.  He expressed his country's gratitude to
WTO Members and to the Secretariat for their constructive and continuous assistance and
contribution to the development of Armenia's accession process and to its successful ending.  He was
convinced that the accession of Armenia to the WTO would provide a clear and predictable future for
Armenia in the world, given its deep involvement in globalization, economic integration andliberalization of trade.
6. The General Council approved the text of the draft Protocol of Accession of Armenia as
contained in the report of the Working Party 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 on the Accession of Armenia as contained in the report of the Working Party.  The
General Council next adopted the report of the Working Party as a whole in document
WT/ACC/ARM/23 and Add.1 and 2.  In this contex t, the Chairman drew attention to the
communication to the Director-General received from Armenia and circulated in document
WT/ACC/ARM/22 and, on behalf of the General Counc il and all Members, welcomed the accession
of Armenia.
7. The representative of Armenia, speaking as an observer , said that immediately after declaring
its independence, Armenia, along with its political reforms, had undertaken to implement economic
reforms.  Liberal economic principles had been implemented consistently in almost every sector of the
economy.  As a result, Armenia had achieved macro-economic stability and sustainable economic
growth, which had been possible due to the existing political stability and consistent work.  He then
presented a general review of Armenia's economic reforms and recent developments in the country.
The current macro-economic situation in Armenia was considered to be stable and predictable.  Therehad been further growth in the main macro-economic indicators and a stable fiscal and monetary
situation had been maintained.  At the same time, economic growth had been achieved at a low
inflation rate.  During ten months of 2002, there had been 12 per cent growth in GDP, 28 per cent in
industrial output, 51 per cent in exports, and 26.3 per cent in foreign investments, including 12.1 per
cent growth in foreign direct investment.
8. Owing to the increase in exports, the trade balance and the balance of payments of Armenia
had significantly improved.  In the current stage of the country's economic transition, the increase in
foreign trade turnover, and especially in exports, ha d played an invaluable role in stabilizing the
economy, as well as for securing further economic growth.  These indicators made realistic Armenia's
strivings to become, in the economic, trade and in vestment areas, a more stable, organized and
predictable country in the region.  The foreign economic and trade policy of Armenia had been
directed towards integration into the world economy, stimulation of exports, attraction of investment
and intensification of the cooperation with international economic and trade organizations.  Currently
Armenia had internationally-consistent economic legi slation and a liberal economic basis to stimulate
entrepreneurial activities.  Armenia's accession to WTO was not just a goal.  Rather, in this processWT/GC/M/77
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Armenia wanted to once again indicate that it had accepted and was practicing the rules of the world
economy, and that it was a fully reliable partner.
9. All Members who spoke welcomed and congratulated Armenia on its accession, and looked
forward to working constructively with Armenia in the WTO.
10. The representative of Indonesia, speaking on behalf of the ASEAN Members , said that his
delegation wished to thank the Chairman of the Working Party for his hard work and professional
guidance during the accession process.  Since the establishment of the Working Party in 1993,
Armenia had worked hard to pursue free-market reforms within a democratic framework.  Despite the
various economic difficulties and shortages faced by its people, the Government had stayed the course
of reform, placing particular emphasis on liberalizat ion, stabilization, and economic restructuring.  In
this light, ASEAN believed that Armenia's accession would contribute to accelerating the benefit to
be reaped by the Armenian people from the reform programme.  Armenia's accession to the WTO andits full adherence to WTO rules, objectives and principles would have important positive effects on
Armenia's economy and would further contribute to the ongoing reform process and better facilitate
the country's integration into the world trading syst em.  Furthermore, ASEAN was of the view that the
accession of Armenia would also further contribute to developing trade and strengthening economic
stability in the region.  At the same time, as a WTO Member Armenia would also reap the benefits oftrading with other WTO Members.  It was en couraging that two consecutive General Council
meetings had welcomed new Members to the WTO.  ASEAN reaffirmed its full support for a speedy
conclusion of all accession processes, in particular those of least-developed countries.  In this regard,
ASEAN wished to draw the attention of the Counc il to the Doha Ministerial Declaration, in which
Ministers stated their commitment to accelerating the accession processes of LDCs, which wouldgreatly strengthen the multilateral trading system.  In this connection, ASEAN noted with regret the
fact that no LDC had acceded to the WTO since the Fourth Ministerial Conference, and wished to
encourage the Council to be able to provide a positive report to Ministers on all accession processes,
in particular those of LDCs, at the Fifth Ministerial Conference.
11. The representative of Georgia said it was remarkable to be witnessing the further
strengthening of the multilateral trading system by the increase in the number of its Members.  As a
neighbor, a close trade and economic collaborator, and a party to the bilateral free-trade agreement
with Armenia, Georgia was strongly committed to supporting Armenia's accession to the multilateral
trading system.  Besides the close bilateral trade and economic relations, Georgia had been effectively
and extensively developing its multilateral economic cooperation with Armenia as a reliable
neighboring partner country, within various regional and sub-regional organizations, including the
Black Sea Economic Cooperation Organization and the Commonwealth of Independent States (CIS).
Accordingly, Georgia attached great importance to Armenia's accession to the WTO, which would
strengthen the multilateral trading system and would greatly facilitate the full integration of countries
of the South Caucasus region into the world economy.  Georgia also welcomed the expansion of
WTO membership to the entire region of South Caucasus, and thus supported the speedy accession of
neighboring Azerbaijan.  This would inevitably result in economic prosperity and in ensuringsustainable development and economic growth in the whole South Caucasus region.  He wished to
congratulate the Chairman of the Working Party and the Accessions Division of the Secretariat for
their efforts, leadership and guidance, which had greatly facilitated the successful accomplishment of
a difficult task.
12. The representative of the Slovak Republic, also on behalf of Bulgaria, Croatia, the Czech
Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovenia, said that these
countries were aware of the huge amount of work undertaken by Armenia in regard to its WTO
accession, liberalization of its foreign trade regime and application of the multilateral rules and
procedures.  This work was directly linked to the positive indicators of Armenia's economy – in 2001
the growth of GDP had been 9.6 per cent and was expected to reach 11 per cent in 2002, the balanceWT/GC/M/77
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of trade and payments had improved considerably and the inflation rate was low.  They also
welcomed the implementation of an "open door" policy in respect of foreign investment and were
convinced that these were steps in the right direction.
13. The representative of the European Communities said that Armenia had demonstrated
remarkable resolve to finalize its accession negotiations over the past few months.  Between July and
November 2002, significant efforts had been made to complete the alignment of Armenia's national
legislation with WTO rules in such important areas as VAT, customs, excise taxes and the protection
of intellectual property.  Overall, Armenia had been able to offer its WTO partners commitments both
for the implementation of WTO rules and for market access that were balanced and in line with its
economic capacities.  His delegation was confident that accession to the WTO would help Armenia
reap the benefits of the multilateral trading system while facilitating the consolidation of the trade
reforms it had already undertaken.  This accession was a clear sign that another country had chosenthe path of trade and development to satisfy the demands of its citizens.  The Community hoped that
this would be an encouraging example for all other countries that were currently at the beginning of
the WTO accession process, in which it would support them as much as possible.
14. The representative of the United States str ongly supported approval of Armenia’s accession
package.  The WTO accession process represented for all countries an invaluable opportunity to help
acceding countries adopt a proven system of rules and commitments that would facilitate economic
growth and promote foreign investment.  Armenia was especially to be commended for its diligence
in adopting WTO-consistent laws and for the commitments and concessions it had undertaken as a
WTO Member.  In completing the WTO accession process, Armenia had substantially revised the
legal basis for its trade regime in order to bring it  into conformity with WTO provisions, for example
in the areas of tax policy, customs fees, IPRs, customs valuation, technical barriers to trade, and
import licensing.  In addition, Armenia had undertaken market-access commitments that locked in
liberal tariff and services terms and confirmed elimination of agricultural export subsidies.  With these
commitments, virtually all of which came into force upon accession, Amenia had reconfirmed its
commitment to a market-based economic system, and its intent to participate in the WTO system asan equal partner with current Members.  Participation in the WTO on this basis would support
Armenia’s ongoing economic reforms and further economic development.  The United States was
especially proud of the role its delegation had played in shaping the commitments ultimately
negotiated, both through bilateral contacts and active participation in the Working Party process, and
joined other delegations in thanking the Working Pa rty Chairman and the Secretariat for their constant
efforts to bring this negotiation to a close.
15. The representative of Paraguay, speaking on behalf of GRULAC
, said that they were very
pleased at Armenia’s accession, due in part to the fact that many of its citizens lived in these
countries.  They were convinced that this accession would further consolidate their relations with
Armenia and would allow for freer and more profitable trade for all parties, and they were willing to
work to further consolidate this trade.  These countries were aware of the extraordinary efforts
Armenia had made in the accession process.
16. The representative of the Kyrgyz Republic fully supported Armenia's accession.  As a
member of the CIS, to which Armenia was also a signatory, and a partner to the bilateral FTA, the
Kyrgyz Republic welcomed Armenia's accession to the WTO, the process for which had been
initiated more than seven years earlier, and noted the commitments Armenia had undertaken on
horizontal issues, including but not limited to trade in agricultural products, a more liberal regime onimportation of non-agricultural goods, the abolishment of a state monopoly and assurances that as
from the date of accession Armenia would bring its legislation into compliance with the WTO
Agreements, especially regarding Articles VIII, XI and III of the GATT 1994.  His delegation was
further pleased by Armenia's extensive commitments on trade in services, and believed that this
decision would facilitate further growth of this sector of the national economy.  He noted that theWT/GC/M/77
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judicial system in Armenia had undergone serious ch anges equalizing the trading rights for Armenian
nationals and for foreigners by providing an equal playing field for businessmen, irrespective of their
origin.  All these policies were unambiguous evidence of the aspiration of the Government of
Armenia towards open and mutually advantageous trade.  He noted that in the past there had been a
long-lasting conflict involving Armenia and Azerbaijan, and said that Armenia's accession and thesuccessful conclusion of the on-going accession process for Azerbaijan would ameliorate bilateral
relations and eventually bring peace and wealth to both Caucasian nations.
17. The representative of Lesotho said that his country wished to extend to Armenia the support it
would need to fulfil its obligations and to actively participate in the WTO.
18. The representative of Japan said that his country attached great importance to the WTO as the
embodiment of international trading rules, and ex pressed appreciation to all those who had worked
hard to complete this accession process.
19. The representative of India complimented Armenia for the reform measures it had already
undertaken and for its deep commitment to what th e WTO stood for.  India looked forward to close
collaboration with Armenia in the task of making the WTO a strong and effective organization and in
ensuring that the multilateral trading system contri buted both to increased world trade and to global
development.
20. The representative of Cyprus said that his Government maintained strong and long-lasting
friendly relations with Armenia.
21. The representative of Australia noted that Armenia had acceded on the basis of no special
safeguards, no agricultural export subsidies and very low tariffs, and said that on that basis it would be
a very acceptable Member of the CAIRNS Group.
22. The General Council took note of the statements and of the expressions of welcome and
support.
2. Iran – Request for Accession (WT/ACC/IRN/1)
23. The Chairman drew attention to the communi cation from Iran in WT/ACC/IRN/1 requesting
accession to the WTO Agreement pursuant to Article XII.  He recalled that the General Council had
last considered this matter at its meeting in Octo ber, and had agreed to revert to it at the present
meeting.
24. The representative of the United States said that the issue of Iran's accession to the WTO
continued to be under review by her Government, and her delegation had nothing to add to its
statement at the October meeting of the General Council.
25. The representative of Malaysia, speaking on behalf of the Informal Group of Developing
Countries, said that these countries took note of the statement by the United States.  Iran's request for
accession had been on the agenda of the General Council for some time, and it was important for the
membership to come to a decision on this matter.  They hoped that the United States would complete
its review soon and would be able to reach a consensus on the establishment of a working party on
this accession request, and again urged the United States to provide a positive response on this issue at
the next meeting of the General Council.
26. The General Council took note of the statements and agreed  to revert to this matter at its next
meeting.WT/GC/M/77
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3. China – Transitional review under Section 18.2 of the Protocol of Accession to the WTO
Agreement (WT/GC/68, G/L/596, S/C/15, IP/C/26, WT/BOP/R/68)
27. The Chairman recalled that Section 18.2 of the Protocol on Accession of China to the WTO
Agreement required that:  "The General Council shall, within one year after accession, and in
accordance with paragraph 4 of Section 18, review the implementation by China of the WTOAgreement and the provisions of this Protocol.  The General Council shall conduct such review in
accordance with the framework set out in Annex 1B and in light of the results of any reviews held
pursuant to paragraph 1.  China can also raise issues relating to any reservations under Section 17 or
to any other specific commitments made by other Members in this Protocol.  The General Council
may make recommendations to China and to other Members in these respects."  In accordance with
Annex 1B of China's Protocol of Accession, the follow ing issues were to be addressed by the General
Council:  first, reports of subsidiary bodies on China's implementation of the WTO Agreement and ofthe related provisions of the Protocol;  second, development of China's trade with WTO Members and
other trading partners;  and third, recent developments and cross-sectoral issues regarding China's
trade regime.  He proposed that delegations address all three of these points in a single intervention.
He recalled that under paragraph 4 of Section 18, this review should take place subsequently in each
of the eight years following the first review, with a final review in the tenth year, or at an earlier datedecided by the General Council.  In connection wi th the present review, he drew attention to a
communication from China in WT/GC/68, which provided information required in Sections I and III
of Annex 1A of the Protocol of Accession.  The reports of the subsidiary bodies on their respective
reviews of China's implementation of the WTO Agreement and of the related provisions of the
Protocol were contained in document s G/L/596, S/C/15, IP/C/26, WT/BOP/R/68.
28. The representative of China thanked the Chairpersons of the subsidiary bodies for their
reports.  The following day would be the one-year anniversary of China's accession to the WTO, and
there would be many seminars, reports and comments in China's news media to mark the event.  In
China there was still unabating interest in learning about WTO rules and in discussing the impact of
China’s WTO membership on its economic and social life.  More and more people had come to seethat accession had brought China great opportunities as well as huge challenges.  During the accession
negotiations, China had made extensive and wide-ranging commitments in line with its economic
reform and open policy, and at the requests of other Members.  Although the implementation of these
commitments entailed enormous difficulties, China had made its utmost efforts to meet its obligations.
These efforts were reflected in a whole series of measures, including amending legislation to
strengthen the legal framework, heightening the tran sparency of its trade policies, lowering tariffs,
trimming down various trade restrictions, expanding market-access opportunities and improving theinvestment environment.  Positive results had been achieved in these areas to bring China’s trade
regime into line with WTO rules and accession commitments, which, he believed, were evident to all
WTO Members.
29. His Government had devoted considerable resources and time to this review.  Since the
beginning of 2002, China had started to collect the relevant information and to prepare for the review.Seventeen delegations, with more than 100 people from various ministries and departments, with an
average of seven experts in each, had been sent to Geneva from the capital since September.  They
had done their utmost to provide relevant information in accordance with paragraph 18 of China’s
Protocol of Accession, and to resp ond to questions raised by other delegations.  He was proud of the
marvelous job they had done and of the highly professional and qualified responses provided by theexperts.  From this information and these replies, Members could see the tremendous efforts his
Government had made to implement its commitments .  In the context of the review, he wished to
mention particularly the following points.  First, regarding fulfilment of transparency obligations, in
accordance with Annex 1A of China’s Accession Protocol, relevant economic data and information
had been provided to the General Council in a timely manner as required.  During this first year afterChina’s accession, its notification obligations had been fulfilled with more than 300 notificationsWT/GC/M/77
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made according to various WTO agreements.  A large amount of information had also been submitted
in advance of reviews held by subsidiary bodies.  In line with its accession commitments, the China
WTO Notification and Enquiry Center had been set up by his Government immediately after
accession in order to provide an enquiry service on trade-related information for all Members,
enterprises and individuals.  The establishment of this enquiry point had been notified to the WTO.The Chinese Government had also designated the Foreign Economic and Trade Gazette as the official
journal for the laws, regulations and other measures relating to or affecting trade in goods, trade in
services, TRIPS or TRIMS, as these laws, regulations  and measures could not be enforced before their
publication.
30. Second, regarding streamlining of laws and regulations, to meet the needs of WTO accession,
his Government, in accordance with its commitments, had launched a massive program regarding the
enactment, amendment and repeal of laws, regulations, and administrative rules, policies andmeasures which were relevant to or affected trade in goods, trade in services, trade-related intellectual
property rights and assurance of transparency and uniform application of the trade regime.  In
September 2001, the State Council had issued a special circular requesting the local governments to
review local regulations, administrative rules, policies and measures in line with the principles of
uniform application, non-discrimination and transparency.  This work had been basically finished.Third, regarding uniform implementation of trad e policy, to implement China's commitments, a
relatively sophisticated legal system had already been put in place to ensure the uniform
implementation of trade policy.  According to ex isting legislation in China, any enterprise or
individual could bring cases of non-uniform application of laws, regulations, administrative rules,
policies and measures to the attention of a relevant authority.  The governmental administration andinstitutional reform undertaken by China had form ed a solid basis for the implementation of this
system.  Fourth, regarding recent developments a nd cross-sectoral issues of the trading regime, a
sound and effective legal and regulatory system on trade administration had been set up according to
WTO rules and China’s accession commitments.  The pre-WTO administrative regime, which had
been mostly regulated by internal instruments like internal administrative rules and circulars, had been
reformed to ensure conformity with WTO rules and di sciplines.  This reform had greatly improved the
uniformity, predictability, fairness and non-discrimination of the foreign trade administration.
31. China had lowered its average tariff level, reduced the number of non-tariff measures and
realized the gradual transition from administrativ e methods to a transparent and WTO rule-based
import administration.  At present, China set out to expand the market access for service sectors
according to its commitments.  A series of new laws and regulations on foreign investment had been
promulgated for sectors including insurance, finance, marketing, telecom and professional services,with other legislation in the process of being drafted.  The industrial policies for foreign investment,
after this extensive amendment, fully reflected the commitment China had made upon accession, and
would serve as an impetus for a greater inflow of  investment.  Implementation of the WTO accession
commitments was an indispensable step in China’s striving to deepen economic reform and expand
the opening up of its market.  During 2002, despite daunting difficulties, a wide range of effectivemeasures had been taken to fully implement China's WTO commitments, which had strengthened its
economic partnership with other Members on a mutually beneficial basis.  Up to October 2002, China
had realized a 20 per cent increase in actual foreign direct investment at US$44.72 billion and an 18.7
per cent increase in import volume.  These were  the best testimony to China’s achievement in
implementation.  China would continue to enforce these laws, regulations and policies drafted inconformity with WTO rules, and would faithfully fulfill its obligations.  He wished to thank Members
for their positive contributions, understanding and support during the review process, and the
Secretariat and all the Chairpersons for their ti reless efforts for the smooth conduct of the review
process.
32. The representative of the United States said that her delegation recognized the time and effort
spent by the delegation from China on the Transitional Review Mechanism (TRM) this year.  SheWT/GC/M/77
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welcomed the work of the subsidiary bodies in playing their role in this process and believed that their
reports were a good reflection of Members' views.  She could thus be brief.  Substantively, the United
States believed that the collective reports of the 16 subsidiary bodies on the TRM served as a useful
point of reference for China as it moved forward in implementing its WTO commitments.  The United
States hoped that China would review these reports closely and would take steps to address the issuesraised therein.  It looked forward to an even more useful TRM in 2003, and hoped to build upon the
results of the present year’s effort in order to develop a more streamlined process for future TRM
exercises, to ease misunderstandings and to save all Members, especially China, time, so that it could
focus on implementing commitments rather than merely reviewing progress to date.
33. The representative of the European Communities said that China's statement was proof of
China's deep commitment to the WTO and the world trading system.  The Community appreciated the
important efforts made both by capital-based officials and the Chinese mission in Geneva, and by theChinese Government as a whole.  It also appreciated the huge efforts undertaken in China in
familiarizing the business community and the public at large with the WTO.  If all WTO governments
would make similar efforts the WTO would win any popularity contest amongst international
organizations.  He wished to make two points:  one  on substance, i.e. the implementation by China of
WTO commitments in its first year of membership;  and the other on process, i.e. the way the TRM
exercise had worked this year and how it should be improved to fully play its role in the years to
come.  On the implementation side, the Community recognized and welcomed the huge efforts made
by China in 2002, which indicated that China was generally willing to abide by the letter of its WTO
obligations.  In particular, the Community was impressed by the extremely substantial work that had
been carried out in terms of legislation to date in the field of intellectual property, trade defenseinstruments, etc.  In other areas, however, the le gislative framework would need some improvements,
for example in the area of investment in the telecommunications sector, or the lack of legislation
regarding internal branching in the insurance fiel d.  In the Community's view, the remaining problems
were mainly linked to transparency, in particular regarding the management of quotas and tariff-rate
quotas, to specific straightforward issues, such as the tariff area, and to the absence of a "commenting
period" before the promulgation of some laws and regulations, notably in the services areas.  One
issue his delegation was particularly concerned about related to the appearance of new non-trade
barriers, where it saw a risk of a certain neutralization of the liberalization brought by WTO
accession.
34. On process, the Community considered the 2002 TRM as an extremely useful exercise.  The
Community had been very careful to adopt a balanced position, highlighting the main areas where it
thought WTO implementation was problematic, but also acknowledging the tremendous efforts madeby China, taking into account the exceptional circumstances under which this first exercise was taking
place – in particular, the lack of experience, the very heavy strain on resources and the absence of
sufficient time for preparation by China.  His delegation regretted that it had not been possible to put
in place an agreed timetable for the transmission of questions and replies, as this could have facilitated
the exercise and contributed to more fruitful results.  While the Community appreciated the good-faithefforts of the Chinese experts present at the committee meetings to reply orally to questions during the
meetings, an effort should be made to improve the process for the coming TRM exercise.  The
Community continued to believe that the TRM exer cise should follow the common rules and practices
in the WTO, to ensure that questions and replies were exchanged in writing in advance of a
committee's meeting.  He wished to thank the Committee Chairmen for their hard work and all
delegations for contributing to this TRM exercise.
35. The representative of Japan said that his delegation highly appreciated the efforts made by
China in the first-year review under the Protocol of Accession.  Through this exercise, Japan believed
that mutual understanding had been enhanced on the status of China's implementation of its
commitments.  While there was still room for im provement in terms of the substance of and
procedures for the responses received, Japan trusted that China, in the coming years, would fullyWT/GC/M/77
Page 11
engage in the exercise to the satisfaction of all Members.   In this spirit of positive engagement, Japan
looked forward to the 2003 review process being conducted smoothly and efficiently.  Japan wished
only to stress its hope that China would address as expeditiously as possible the issues that had been
raised.  On the substance of implementation, his delegation would not go into detail, as these issues
had been amply dealt with during the series of review meetings already held.
36. The representative of Chinese Taipei said that  his delegation wished to give due recognition
to the efforts of the Chinese delegation in respondin g to the questions raised by Chinese Taipei and by
many other Members concerning China's implementation of its accession commitments.  Many
Members with substantial investment and trade interests in China had either submitted written
questions or intervened verbally in the course of the TRM sessions.  Since Chinese Taipei had such a
close trading relationship with China and was one of China's largest foreign direct investors, his
delegation had participated positively in the TRM process.  Altogether it had tabled ten writtensubmissions and had made considerable use of th e forum to exchange views with China's capital-
based experts.  As a result of these useful exchanges, his delegation was now in a better position to
understand the general status of China's implementation of its accession commitments and to
appreciate some of the difficulties that might have been involved.  In his delegation's view, it had
achieved, to a large extent, the shared goal of assisting China to improve its conformity with WTOrules and principles.  His delegation considered that China had been making conscientious efforts to
fulfill its obligations under the TRM, and the mechanism had proved to be extremely useful.  He
looked forward to continued improvement in the years to come.
37. The representative of Switzerland said that his delegation too wished to highlight the
remarkable efforts made by the Chinese Government to transpose WTO law into its legislation.  In
Switzerland's view this indicated a serious commitment of the Chinese authorities with regard to the
WTO as well as to China's trading partners.  His delegation understood that implementation of the
provisions of the Protocol of Accession could encounter difficulties in the phase immediately
following accession.  However, given the increasing importance of China as an actor on the
international stage and its legitimate ambitions with regard to the definition and formulation of ruleswithin the multilateral trading system, it was essent ial for the deficiencies in implementation to be
addressed satisfactorily as soon as possible.  In this regard he stressed that Switzerland was still
concerned about counterfeit and the lack of security with regard to intellectual property, and would
like this issue to be included for priority action by  China, in order to make significant improvements
in this area.  Switzerland continued to follow attentively the efforts made by the Chinese Government
and was willing to provide all the support it could for the complete realization of the implementation
of China's Protocol of Accession.
38. The representative of Chile said that his delegation agreed with China that the work done by
its officials in Geneva as well as in the capital was excellent with regard to providing Members with
all the elements relating to the implementation of  China’s commitments within the WTO.  Chile was
aware of the massive and profound changes and national regulatory instruments necessary for China
to implement WTO rules, and could well imagine that this had not always been without problems.Chile was aware of the significant efforts China had had to make to deal with some of these
difficulties.  While there would always be room for improvement, Chile hoped that all WTO Members
would deploy the same amount of massive and prof ound efforts that China had deployed in meeting
its WTO commitments.  In a recent visit of the Vice-Minister of Foreign Affairs of Chile to China,
Chile had had the opportunity to witness the efforts aimed at implementation and the positive impactthis had had in bilateral relations with Chile.  In conclusion, his delegation believed it was appropriate
to highlight China's active participation in the negotiations, particularly at the recent Ministerial
meeting of the CAIRNS Group, and the coincidence of interests China had with members of that
Group.WT/GC/M/77
Page 12
39. The representative of Canada expressed his delegation's appreciation to the Chinese
delegation and Government for the resources they had dedicated to this TRM exercise, especially with
respect to the tremendous amount of information they had provided through the Committees and
Councils of the WTO, and particularly for the specific responses they had provided to questions raised
by Canada.  Canada expected that the TRM would continue to provide an opportunity to obtainclarification of the progress in the implementation of China’s accession commitments to the WTO.
40. The representative of India said that his delegation was struck by China's deep commitment to
complete a sincere implementation of the obligations it had undertaken during the process of
accession.  It was also struck by the enormous amount of work China had done, both in changing its
legislation and in making administrative arrangements, including making its people aware of the
implications of the WTO system.  This was a huge task, as it involved making wholesale changes in
its laws and systems, and highlighted in particular China's total belief in the WTO system and itsconviction that the multilateral trading system would provide further impetus to its already impressive
growth process.  India complimented China for wh at it had done and looked forward to further
collaboration with it in strengthening the multilateral trading system.
41. The representative of Cuba said that her delegation recognized the efforts made by the
Chinese Government to implement its accession commitments and the results achieved.   While there
was always room for improvement, China deserved very high marks for the work undertaken in 2002.
The more than 300 notifications submitted, uniform application of its trade policy and streamlining of
its laws and regulations clearly showed China's commitment to meeting its WTO obligations and
served as proof of transparency and involvement.  Cuba welcomed the close cooperation with China,
both in compliance with the Doha Development Agenda and in bilateral relations, and urged otherWTO Members to refrain from imposing any conditions on China other than those it had accepted in
its Protocol of Accession.  At the same time, it hoped that other WTO Members would follow China's
example and fulfil their own WTO commitments.
42. The representative of Uruguay said that his delegation thanked China for its important
statement and wished to highlight China's end eavours to implement its WTO commitments in a
number of fields. In this respect, Uruguay believed that particular attention should be drawn to the
dedication and time invested by China in both the implementation of its commitments and the TRM
process.  In light of the fact that market access for several export products from Uruguay to China
were subject to tariff-rate quotas, his delegation wished to stress the importance to Uruguay of the
administration of these tariff quotas.  In conclusion, his delegation wished to reaffirm its satisfaction
at seeing China participating as an active Memb er of the WTO, and hoped to continue working with
China within the organization in favour of the multilateral trading system.
43. The representative of Korea welcomed the strong commitment to the multilateral trading
system which had been indicated in China's statement.  Korea congratulated China on successfully
concluding its first year as a Member of the WTO and commended China for its efforts in
implementing its accession commitments.  Korea believed China had implemented its commitments
in a faithful manner and had engaged in the TRM exercise in a comprehensive and cooperativemanner.  In this regard, his delegation particularly appreciated the assurances given by China on its
intention to fully comply with the relevant WTO agreements in implementing its domestic regulations
on trade remedies.  Korea firmly believed China would continue to play an important and responsible
role on all WTO fronts, including the Doha Development Agenda negotiations, and looked forward to
developing even closer cooperation with China in common endeavours to strengthen the multilateraltrading system.
44. The representative of Pakistan said that his de legation joined others in thanking China for its
very clear, frank and factual statement.  Like others, Pakistan welcomed China’s efforts to
satisfactorily meet very difficult and onerous requirements that had been placed on it.  The statementsWT/GC/M/77
Page 13
made thus far clearly showed that China had done an excellent job.  Pakistan congratulated China on
its domestic measures, on making an average of almost one notification per day to the WTO, and on
the number of delegations it had flown to Geneva, which were indeed record-setting.
45. The representative of Thailand said that his delegation welcomed China's statement
summarizing its efforts to implement its commitments.  During the review process Thailand had
received detailed and comprehensive information from China which had provided a clearer and better
understanding of the work that had been done by the Chinese authorities to comply with China's
obligations and commitments under the Protocol of Accession.  Thailand commended China's efforts
and the tremendous amount of work it had done to faithfully implement its commitments, and was of
the view that any excessive demand to China on this matter should be avoided.  Thailand looked
forward to close cooperation with China in the work of the WTO.
46. The representative of Zambia thanked the Chinese representative for the detailed and
informative report on the work his delegation had undertaken.  Zambia appreciated and wished to
congratulate China for its tremendous work and achievement thus far in bringing its trading regime
into line with WTO rules.  Zambia acknowledged the amount and complexity of the work the
Government of China had had to undertake, and wished to join other WTO Members in showing
increased support and flexibility in demands on China, so that it could comply fully with itsrequirements.
47. The representative of Hungary thanked China for its detailed statement and joined others in
recognizing the dedication and major efforts of China to meet its accession commitments.  This
indicated to Hungary that there was a genuine intention by China to meet its commitments.  Hungary
was also aware of the difficulties, both administrative and substantial, faced by China under the TRM.His delegation was ready to work further to ensure that the TRM met its objectives and at the same
time did not put undue burdens on China.
48. The representative of Côte d’Ivoire said that  his delegation joined others in congratulating
China for its efforts on implementation and in the TRM process, and particularly for its respect for its
commitments.  Since China has become a Member, not a day had gone by without its creating furthereconomic relations with Côte d’Ivoire, and ensuring that the rules of the WTO were applied.  His
country had companies coming from China on a daily basis and had greater ties thanks to the WTO
agreements.  He thus wished to pay tribute to China and congratulate it on its efforts.
49. The representative of China thanked all delegations who had spoken for their interventions
and positive observations on the efforts and achievements China had made with regard to the
implementation of its accession commitments.  His delegation was deeply touched and greatly
encouraged by delegations' positive remarks.  His Government was serious about implementation.  Itsexperts were sensitive to the questions raised during the discussions in the subsidiary bodies, and
would do their best to address the legitimate concerns of Members, whether on agriculture or
industrial market access or on services trade or on intellectual property protection.  The TRM exercise
was meaningful in the way it promoted exchange of information and increasing transparency.  It was
also meaningful for China to identify the areas where it should make greater efforts to improve thesituation.  His delegation shared the view of many Members that any proposal to further complicate
the process should be avoided.  China’s accession to the WTO was a major step forward in its opening
and reform efforts, and would have a far-reaching impact on China’s political, social and economic
life.  China’s rise as a responsible trading nation was a big plus for peace, stability and prosperity.  If
all kept this larger picture in mind, he was sure that future TRM exercises would be carried out evenmore smoothly.  He again wished to thank all delegations for their encouragement and positive
contribution.WT/GC/M/77
Page 14
50. The General Council took note of the statements and of the reports submitted by the
subsidiary bodies on the conduct of their respective reviews, and agreed that the first review of
China's implementation of the WTO Agreement and the provisions of its Protocol of Accession by the
General Council, pursuant to Section 18 of the Protocol, had been concluded.
4. Council for TRIPS – Report on the implementation of Paragraph 6 of the Doha
Declaration on the TRIPS Agreement and Public Health
51. The Chairman recalled that under the Doha Declaration on the TRIPS Agreement and Public
Health, Ministers had recognized that WTO Members with insufficient or no manufacturing capacities
in the pharmaceutical sector could face difficulties in making effective use of compulsory licensing
under the TRIPS Agreement.  Ministers had instructed the Council for TRIPS to find an expeditious
solution to this problem and to report to the General Council before the end of 2002.  As all Members
were aware, work on this important matter was continuing, and the TRIPS Council Chairman hadcalled the negotiators back to Geneva to pursue their efforts.
52. Mr. Pérez Motta (Mexico), Chairman of the Council for TRIPS, reported on the TRIPS
Council's consideration of this matter thus far.  As all were aware, Members had been conducting an
intensive process of discussions and consultations over the past months.  On 29 November the TRIPS
Council had decided to suspend its formal meeting in order to enable delegations to hold consultationsthat might be required and in order to encounter the flexibility needed in order to be able to continue
with the negotiating process.  Two days earlier this process had continued in an open-ended meeting
which had ended the previous afternoon.  At the conclusion of that meeting he had proposed that he
be given the opportunity to use the time available on the present day to engage in a drafting exercise
with the assistance of different groups of delegations, depending on the interests of delegations, so asto be able to present the following day a document under his own responsibility for the consideration
of the Members of the Council.  He said that he saw good willingness on the part of delegations and
had noted a clear commitment to comply with the instructions received from Ministers in Doha,
which was to have a proposed solution by the end of 2002.  For practical purposes, the end of 2002
meant precisely the present meeting of the General Council.  He proposed that the General Councilsuspend its discussion on this item and revert to it at the end of its meeting.
53. The General Council took note of the report by the Chairman of the Council for TRIPS and so
agreed.
54. At the session of the General Council on 11 December, the Chairman of the Council for
TRIPS provided an interim report on developments regarding this matter.  He had considered
convening an informal meeting of the TRIPS Council for this purpose, but had thought it would be
more convenient if he were to report to Members through this meeting of the General Council.  Whenhe had spoken on this item the previous day, he had mentioned that useful and constructive open-
ended consultations had been held earlier in the week and that he would now look to see how the
points that had been made in those consultations might best be reflected in textual form.  This was
what he had been doing since then.  To assist him in this process, he had been calling on some
delegations to share with him their advice and thinking, drawing on the assistance of differentdelegations for different parts of the text.  He wished to emphasize, however, that any text he might
produce would be presented exclusively on his responsibility.  Although the work over the past day
and a half had been useful, he did not yet feel in a position to share with the General Council a new
text. He would therefore need more time, and wished to apologise to delegations for this delay.  He
would, however, take this opportunity to summariz e how he saw the situation, and run through the
various elements of the paragraph 6 solution that Members had been working on.  As all knew, there
was an important problem regarding the coverage of the system, in particular the so-called "scope of
diseases".  He could not claim that over the past few days, significant progress had been made on this
point, where positions still remained quite far apart.  Regarding the question of eligible importingWT/GC/M/77
Page 15
countries and, in particular, the question of some Members voluntarily deciding not to use the system
in whole or in part, he believed that Members were relatively close to finding a way of handling this
matter, even if it was not yet fully clear exactly which Members would be making such statements.
55. On the question of the assessment of manufacturing capacity, useful discussion had taken
place, but it was too early to say whether there was language on this matter that he would feelconfident in putting forward.  The same was true for the issue of so-called "double remuneration".
Regarding the various procedures for notification and safeguards against diversion, he thought the
work that had been done over the past four days had increased the amount of common ground,
although some significant differences remained.  One difference, in particular, was the question of the
measures that Members importing products under the system might make available to prevent
re-exportation of these products.  Other issues on which further work was required were those of
regional cooperation and transfer of technology.  Regarding the legal mechanism, discussions hadindicated some convergence of thinking, but he wished to emphasize that some delegations had made
clear that their position on this matter was dependent on the substantive content of the decision
ultimately agreed upon being satisfactory.  In conclusion, he said that it was still his hope to be in a
position to share with the Council for TRIPS in the coming day or two a text which he felt confident
could command general support and which could then be forwarded for action to the General Council.This was the basis on which he was continuing his work.
56. The Chairman thanked the TRIPS Council Chai rman for his interim report and for his
continued hard work and perseverance.  All knew it was not an easy journey and wished him well in
the next hours and days on what remained a hugely important issue for the WTO and for people
outside the WTO.  He proposed that the General Council take note of the statements and agree tosuspend consideration of this item and revert to  it subsequently in the light of advice from the
Chairman of the TRIPS Council, but in any event not later than 20 December.
57. The General Council so agreed.
58. At the resumed meeting of the General Council on 20 December, the Chairman of the TRIPS
Council, reporting on the results of his consultations, recalled that when he had last reported to the
General Council, at its meeting the previous week, he had summarized point by point the status of the
discussion on the implementation of paragraph 6 of the Doha Declaration on the TRIPS Agreement
and Public Health.  He believed that since that time, significant progress had been made.  In the light
of further consultations, he had circulated, in his capacity as Chairman of the TRIPS Council, a draft
Decision on 16 December.  This draft appeared to command widespread but not universal support
among Members.  In particular, he wished to mention that there continued to be outstanding
difficulties with paragraph 1(a) of the draft Decision as it concerned the so-called "scope of diseases"question.  He regretted to have to inform Members that despite intensive consultations over the past
few days, it had not been possible to find a solution to this problem.  All shared the disappointment
that, having made such great efforts and having got so close to reaching agreement on the text of
16 December, Members had not been able to conclude their work by the end of the year.
59. Under the circumstances, the TRIPS Council ha d authorized him to recommend that it be
asked to resume work promptly at the beginning of 2003 to resolve the outstanding issues in the
Chairman's text of 16 December 2002, and to report to the General Council so that a decision
implementing a solution to the problem identified in paragraph 6 would be taken at the first meeting
of the General Council in 2003, which he understood was scheduled for 10 February 2003.
60. The representatives of the United States, Kenya
 (on behalf of the African Group ), Brazil ,
India, China , Malaysia , Canada , Argentina , Philippines , Botswana , Indonesia , Chile , Thailand , Cuba ,
Pakistan, Peru , Hungary , Chinese Taipei , European Communities , Japan , Switzerland , Czech
Republic, Norway  and Hong Kong, China , and the Holy See  (as an observer ) requested that theirWT/GC/M/77
Page 16
statements at the meeting of the TRIPS Council held just prior to the meeting of the General Council
be reflected also in the records of the latter.1
61. The representative of Kenya, speaking on behalf of the African Group , added that the WTO
should play a supportive role in saving lives of nearly 10,000 people who were dying every day in
African villages for the lack of needed lifesaving medicines.  The focus of work was to find a solutionfor Members with insufficient or no manufacturing capacities in the pharmaceutical sector, and not
the scope of diseases.  The African Group was ready and determined to continue the discussion on the
problems identified in paragraph 6 of the Doha Declaration, but was not convinced that the scope of
disease coverage should be part of the discussion.  She expressed the hope that when Members
resumed discussion, they would avoid focusing on the scope of diseases instead of capacity problems.
The solution should not in any way be seen to replace or modify the Doha Declaration, which
reaffirmed the existing flexibilities in the TRIPS Agreement.
62. The representative of South Africa supported the statement by Kenya on behalf of the African
Group.
63. The General Council took note of the statements, including the statements made at the
meeting of the TRIPS Council (and reproduced in  IP/C/M/38), and invited the TRIPS Council to
resume work on this matter promptly at the beginnin g of 2003 to resolve the outstanding issues in the
Chairman's text of 16 December and to report to the General Council so that a decision implementing
a solution to the problem identified in paragraph 6 of the Doha Declaration on the TRIPS Agreement
and Public Health was taken at the first General Council meeting in 2003.
5. Committee on Trade and Development – Report by the Chairman of the Committee in
Special Session on Special and Differential Treatment in Pursuance of Paragraph 12.1 ofthe Doha Ministerial Decision on Impl ementation-Related Issues and Concerns
(TN/CTD/6)
64. The Chairman recalled that pursuant to paragraph 44 of the Doha Ministerial Declaration, the
General Council at its meeting in July had considered a report by the Chairman of the Committee on
Trade and Development (CTD) in Special Session.  The General Council had taken note of that reportand had approved the recommendations contained in it, notably to extend the time-period for
completion of this work to December 2002.  The General Council had also agreed to establish a
monitoring mechanism for special and differential  treatment (S&D), and had instructed the Special
Session of the CTD to elaborate the functions, structure and terms of reference of this mechanism for
approval by the General Council.  He also recalled that the CTD in Special Session had submitted a
report to the TNC the previous week in TN/CTD/6.  However, as Members were aware, work under
this mandate was currently being pursued by the Chairman of the CTD in Special Session.
65. Mr. Smith (Jamaica), Chairman of the Committee on Trade and Development in Special
Session, recalled that the report of the Special Session detailing the work that had been carried out, in
pursuance of the mandate contained in paragraph 44 of the Doha Ministerial Declaration and
paragraph 12.1 of the Decision on Implementation-Related Issues and Concerns, during the period
from January to July 2002, had been considered and approved by the General Council on31 July 2002.  The General Council, while accepting that "a large number of issues, including some
that are complex, have been raised, both in the written submissions and the ensuing discussions", and
that "a significant amount of work remains to be done before Members can agree on clear
recommendations in a number of areas", had instructed the Special Session of the CTD to "proceed
expeditiously to fulfil its mandate, as contained in paragraph 44 of the Doha Ministerial Declaration
                                                     
1 These statements are reproduced in full in the Minutes of the TRIPS Council meeting, contained in
IP/C/M/38.WT/GC/M/77
Page 17
and paragraph 12 of the Decision on Implementation-Related Issues and Concerns, so as to be able to
report to the General Council with clear recommendations for decision by 31 December 2002".
66. Following a series of informal consultations held in September 2002, the Special Session had
adopted an intensive indicative work programme so as to fulfil the mandate given by the General
Council.  As a result, the Special Session had met eight times during the past three months, duringwhich it had continued its analysis and examination of the various Agreement-specific proposals, had
undertaken further discussion on some of the cross-cutting issues,  and had looked at the possible
elements relating to the establishment of a Monitoring Mechanism on special and differential
treatment.  Even though the level of engagement had increased significantly during this period,
differences among Members continued to exist.  He had prepared a draft report to the General Council
which had been made available to Members and had been initially discussed on 3 December.  The
main aspects of the draft report on which there were differences included the choice of options on the"Way Forward", and the possible identification of recommendations for decisions on Agreement-
specific proposals.  He had been holding consultations and wished to continue these.  In his view,
much would depend on delivering as ambitious an outcome as possible at the present time on the
Agreement-specific proposals, and on providing clear and judicious guidance to the General Council
in respect of further work.  He was aware that the present General Council meeting might conclude on13 December and wished to continue his endeavours so as to try to reach a possible conclusion on the
draft report by then.  While he recognized this might be difficult, he nevertheless wished to ask the
General Council to suspend it consideration of this item in order to give the Special Session more time
to achieve an outcome that was acceptable to Members.  In any case, he would come back to the
General Council with the latest status and developments when the item was taken up again.
67. The General Council took note of the report by the Chairman of the Committee on Trade and
Development in Special Session and suspended its consideration of this item.
68. On 11 December, the Chairman of the Committee on Trade and Development in Special
Session made an interim progress report to the General Council in an informal session.
69. The Chairman thanked the Chairman of the Committee on Trade and Development in Special
Session for his interim report and for his continued hard work and perseverance.  He proposed that the
General Council agree to suspend consideration of this item and revert to it subsequently in the light
of advice from the Chairman of the Committee on Trade and Development in Special Session, but in
any event not later than 20 December.
70. The General Council so agreed.
71. At the resumed meeting of the General Council on 20 December, the Chairman of the
Committee on Trade and Development in Special Session recalled that the report of the Special
Session of the Committee on Trade and Development (CTD) detailing the work that had been carried
out in pursuance of the mandate in paragraph 44 of the Doha Ministerial Declaration and paragraph
12.1 of the Decision on Implementation-Related Issues  and Concerns, during the period from January
to July 2002, had been considered and approved by the General Council on 31 July 2002.  The
General Council, while accepting that "a large number of issues, including some that are complex,have been raised, both in the written submissions and the ensuing discussions", and that "a significant
amount of work remains to be done before Members can agree on clear recommendations in a number
of areas", instructed the Special Session of the CTD to "proceed expeditiously to fulfil its mandate, as
contained in paragraph 44 of the Doha Ministerial Declaration and paragraph 12 of the Decision on
Implementation-Related Issues and Concerns, so as to be able to report to the General Council with
clear recommendations for decision by 31 December 2002".WT/GC/M/77
Page 18
72. After a series of informal consultations held in September, the Special Session had adopted an
intensive indicative work programme, so as to fulfil the mandate given by the General Council.  As a
result, the Special Session of the CTD had held eight formal meetings during the past three months,
during which it had (a) continued its analysis a nd examination of the various Agreement-specific
proposals, (b) undertaken further discussion on cross-cutting issues, and (c) looked at possibleelements relating to the establishment of a Monitoring Mechanism on special and differential
treatment.  Since the summer break, he felt that some progress had been made on the various issues
pending before the Special Session.  The level of engagement on many of the more than 80
Agreement-specific proposals had increased substantially.  Oral responses had been provided to many
of the various proposals, including in the back-to-back meetings with other WTO bodies. This had
increased engagement, but had also revealed significant differences on a large number of proposals
and issues.
73. As the discussions had progressed in recent weeks, it had become clear that in order to be able
to present a report to the General Council that would be acceptable to all Members, it was necessary
to reach an understanding on at least two main aspects of the work.  One was to agree on a harvest of
Agreement-specific proposals, albeit a late and limited harvest.  The second issue on which agreement
clearly was required was the structuring of further work – what had been described as the "WayForward".  Accordingly, in the first draft of the report to the General Council (TN/CTD/W/25) which
had been prepared on his own responsibility and circulated to Members on 3 December, he had
included, in addition to the factual status of the work on the various issues, a number of options on the
possible way forward.  In this draft report he had also taken account of the possibility of reaching
agreement on decisions in respect of some Agreement-specific proposals.  These were to be includedin Annex III to the report.  Most Members had accepted the draft report as a good basis on which to
work.
74. In informal consultations, a number of constructive suggestions had been made on the factual
part of the draft report, and these would be reflected in the revised version when the report was
finalized.  However, there had been divergent views on the "Way Forward" in Section VII of the draft
report.  Furthermore, many Members had emphasized the importance of making progress on the
Agreement-specific proposals, which would constitute the immediate deliverables.  In order to
expedite progress on the Agreement-specific proposals, he had identified on his own responsibility
and on the basis of the discussions that had taken place in the Special Session, a list of 22 pr oposals
on which he considered it might be possible to make immediate recommendations for decision.
Focused and interactive discussions had taken place on these proposals.  Members had agreed on four
proposals for immediate decision.  These include d two proposals on the General Agreement on Trade
in Services (GATS), one on the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) and one on the Enabling Clause.  In his view, Members were also very close to agreement on
several other proposals.  Regrettably, however, they had not been able to go the extra yard.  At the
same time, and as reflected in the consultations, there had continued to be significant differences on
two aspects of the "Way Forward".  Members had divergent views on the matter of referring some ofthe Agreement-specific proposals to other WTO bodies, including negotiating groups.  Some
Members had been of the view that the Special Session could benefit from the ongoing discussions in
these bodies, since either the issues were already under consideration, or because it would be difficult
to take a decision on them in isolation from the ongoing negotiations.  Other Members had disagreed.
They had emphasized that the Ministers had given a mandate to the CTD to carry out this work.Finally, in addition to divergent views on referrals, there had been significant differences on the
timelines for completing the remaining work of the Special Session.
75. In an effort to provide a basis for agreement, he had revised Section VII of the draft report on
the "Way Forward".  In this revised version, which had been discussed in informal consultations, he
had proposed the rationalization of the further work of the Special Session, including through theinvolvement of other WTO bodies. He had also propos ed timelines for completion of the work in twoWT/GC/M/77
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tranches – the first to 15 March 2003 and the second to 15 May 2003.  However, in spite of intensive
and prolonged consultations on the "Way Forward", Members had not been able to agree either on the
referral of Agreement-specific proposals to other WTO bodies, or on the timelines for completion of
the remaining work.  In spite of all efforts to find common ground, these differences could not be
bridged and had prevented the Special Session from coming to agreement on its report to the GeneralCouncil.  He had therefore been obliged to bring this situation to the attention of Members.  Even
though there was no agreement on the report, it was his view that this was far too important an area of
work to be left without exerting further effort towards fulfillment of the mandate.  To do otherwise
would be deeply regrettable, especially in light of the amount of work that had already been carried
out, and the progress that in his view was possible, with further effort and goodwill on the part of all
involved.  He therefore proposed that while the General Council might wish to take note of his
statement, it should also agree to provide additional time to allow the Special Session to finalize its
report.
76. The Chairman proposed that the General Council authorize the Committee on Trade and
Development in Special Session to continue its work towards finalizing its report on special and
differential treatment in pursuance of paragraph 12.1 of the Doha Ministerial Decision on
Implementation-Related Issues and Concerns, and to report back to the General Council at its firstmeeting in 2003.
77. The General Council took note of the statements and so agreed
.
6. Sub-Committee on Least-Developed Countries – Recommendations for facilitating and
accelerating the accession of LDCs to the WTO Agreement (WT/COMTD/LDC/12)
78. The Chairman recalled that under paragraph 42 of the Doha Ministerial Declaration, Ministers
had recognized that accession of LDCs remained a priority for the membership and agreed to work to
facilitate and accelerate negotiations with acceding LDCs.  Ministers had also instructed the Sub-
Committee on Least-Developed Countries to design a work programme on LDCs.  That work
programme, adopted by the General Council at its meeting in February and March 2002, included, as
one of its seven broad elements, measures to facilitate and accelerate LDCs' accession to the WTOAgreement.  At its meeting on 2 December, the Sub-Committee had agreed to guidelines to facilitate
and accelerate negotiations with acceding LDCs.
79. Mr. Molander (Sweden), Chairman of the Sub-Committee on Least-Developed Countries,
said that as a follow-up to paragraphs 9 and 42 of  the Doha Ministerial Declaration and in accordance
with the mandate contained in paragraph 18(iii) of the WTO Work Programme on LDCs, the Sub-
Committee had agreed on 2 December to Guidelines on the Accession of LDCs
(WT/COMTD/LDC/12) and had forwarded these to the General Council for adoption. Theseguidelines would make a significant and valuable contribution to LDCs' integration into the
multilateral trading system.  Since the entry into force of the WTO Agreement in 1995, no LDC had
acceded under Article XII of the WTO Agreement, while several LDCs were in the process of
accession.  Facilitating and accelerating these negotiations, including through targeted technical
assistance, should be a matter of priority for the membership.  These guidelines would make adecisive contribution to facilitating and accelerating LDCs' accession, if matched with effective
implementation.  He wished to express gratitude to the LDCs, to all Members and Observers of the
Sub-Committee, and to the Director-General and his staff for their contribution to securing agreement
on these guidelines.
80. The main elements of the guidelines he wished to outline were in the following four areas:
market access, WTO rules, process, and trade-related technical assistance and capacity building.
First,  in the area of market access, Members had agreed to exercise restraint in seeking concessions
and commitments on trade in goods and services from acceding LDCs, taking into account what hadWT/GC/M/77
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been undertaken by existing LDC Members.  Acceding LDCs also agreed to offer access through
reasonable concessions and commitments commensurate with their individual levels of development,
financial and trade needs and in line with the relevant provisions in GATT 1994, GATS and the
Agreement on Agriculture.  Second,  in the area of WTO rules, it had been agreed that the special and
differential treatment (S&D) provisions should be applicable to all acceding LDCs from the date ofentry into force of their accession protocols.  Transitional periods in specific WTO Agreements
should be granted in accession negotiations, taking into account individual development, financial and
trade needs and with a view to enabling acceding LDCs to implement and comply with the rules.  In
this regard, the transitional periods should be accompanied by action plans, and should be supported
by technical assistance for acceding LDCs.  In addition, commitments to Plurilateral Trade
Agreements should not be a precondition for accession to the multilateral trade agreements of the
WTO.  Third,  in the area of process, the guidelines focused on the good offices of the Director-
General, which should be available to assist acceding LDCs and Chairpersons of LDC accession
working parties.  Other additional measures to streamline and facilitate the accession process were
also mentioned.  Fourth,  in the area of trade-related technical assistance and capacity building,
targeted and coordinated technical assistance by development partners to cover all stages of the
accession process should be provided, with the objective of effectively integrating the acceding LDCsinto the multilateral trading system.  Finally, the guidelines would be kept under review, with agreed
review procedures for the Sub-Committee, a stockt aking at the Fifth Ministerial Conference and, as
appropriate, at subsequent Ministerial meetings.  These measures and steps would facilitate LDCs'
accessions and enhance their participation in the rules-based trading system.  Therefore, the formal
adoption of the guidelines by the General Council was important, as these would facilitate LDCs'accession negotiations and would be a move towards the universality of the WTO.
81. The General Council adopted the draft Decision in WT/COMTD/LDC/12.
 2
82. All representatives who spoke expressed appreciation to the Chairman of the Sub-Committee
on LDCs and other Members for their efforts in finalizing the draft Decision.
83. The representative of the United States expre ssed appreciation to delegations involved in the
accession process for their efforts to streamline and simplify the WTO accession procedures for
LDCs.   The United States attached particular importance to ensuring that accessions were conducted
on an expeditious basis, but with due regard to the substantive issues and the contribution that WTO
membership could make to domestic economic reform in the least-developed countries.  Her
delegation hoped that adoption of the guidelines would help Members to move forward.
84. The representative of Zambia, speaking on behalf of the LDCs , said he believed that the text
was balanced although not perfect.  In adopting this decision, one should keep in mind that the main
challenge was to translate it into concrete results by ensuring that all LDCs could accede to the WTO
Agreement in a flexible, transparent and quick manner.
85. The representative of Japan said that in his delegation's view, the past discussions on this
topic had renewed Members' awareness of the importance of facilitating the LDCs' accession
processes as well as their integration into international trade and the multilateral trading system.Japan sincerely hoped that LDCs could realize their accessions in the very near future, either before or
at the next Ministerial Conference, through the collective effort of both the applicant countries as well
as Members.  In accordance with the decision, Japan would constructively take part in the LDCs'
accession processes.
86. The representative of the European Communities said that his delegation welcomed the
agreement reached and would live up to it.  With these new guidelines and Members' collective
                                                     
2 The Decision was subsequently circulated in WT/L/508.WT/GC/M/77
Page 21
commitment to facilitate and accelerate ongoing LDC accessions, one should see concrete results and
welcome new LDC Members as soon as possible.
87. The representative of India said that it was significant that no LDC had acceded to the WTO
Agreement since the establishment of the organization in 1995.  He hoped that adoption of the
guidelines would facilitate faster accession of LDCs to the WTO Agreement.  While his delegationwould have preferred more specific provisions, it realized that the draft Decision under consideration
was all that could be agreed upon collectively.  India supported the adoption of the decision and
would fully implement the guidelines agreed upon.
88. The representative of Norway said that his delegation welcomed the adoption of these
guidelines which were an important step in the right direction toward facilitating LDCs' accession
process.  As acceding LDCs might consider their accession process to be extremely burdensome and
uneven, with regard to their specific resource constraints and limited negotiating capacity, he hopedthat Members would limit their requests to LDCs, which were perhaps the biggest constraints
experienced so far in LDCs' accession negotiations.  However, it should also be recognized that the
negotiation process was also an important educational tool which might facilitate and strengthen the
understanding and use of the WTO rights and obligations of the applicants.  With regard to technical
assistance, it was necessary to continue ensuring a coordinated approach.  As resources were notunlimited, technical assistance should be needs- and result-oriented in order to facilitate the accession
process of the LDCs.
89. The representative of Kenya, speaking on behalf of the African Group
, said that most LDCs
belonged to the African Group.  The guidelines were  an important step, but as stated by the Chairman
of the Sub-Committee, they would only be successful if matched by effective implementation andtechnical assistance.
90. The representative of Canada said that his delegation had taken an active part in the work to
reach consensus on recommendations for facilitating and accelerating the accession of LDCs.  This
was an excellent example where constructive engagement among developed, developing and – most
notably – LDC Members had worked to advance practical measures to achieve the desired objective.Canada welcomed the recommendations from the Sub-Committee and would work to implement them
in a timely and effective manner.  It looked forward to cooperating with LDC acceding countries and
with all other WTO Members to that end.
91. The representative of Hungary said his delegation hoped that these guidelines would ease
somewhat the burden of the accession process on LDCs, which strained the capacity of even countries
with higher and more developed resources.  It al so hoped that these guidelines would help speed up
the process on substance, where a fine balance should be sought.  On the one hand, LDCs should beexpected to meet certain basic obligations, but on the other hand, as experienced in recent accession
processes, LDCs should not be asked to undert ake commitments which were not commensurate with
their capabilities, their situation and their levels of development.  Hungary hoped that as a result of
these new guidelines there would be a higher level of realism and that accession processes would be
speeded up.
92. The representative of China welcomed the General Council's adoption of the guidelines to
facilitate and accelerate the accession of LDCs to the WTO Agreement.  This was a step forward in
the special and differential treatment in favour of LDCs.  China hoped this would promote full
participation of the LDCs in the work of the multi lateral trading system and, more importantly, their
integration into the world economy.
93. The representative of Cuba said the guidelines should facilitate and accelerate the accession
process of the LDCs.   At the same time, the guidelines should prevent Members from requestingWT/GC/M/77
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commitments from LDCs that were beyond their economic and development possibilities.  This was
the first step in the direction of the better integration of LDCs into the multilateral trading system.
Cuba hoped that Members would demonstrate a re al political will in the implementation of the
guidelines.
94. The Chairman expressed appreciation to delegations for their generosity of spirit which had
permitted the adoption of the guidelines.
95. The General Council took note of the statements.
7. Committee on Subsidies and Countervailing Measures – Statement by the Chairman of
the Committee on the work undertaken pursuant to Paragraph 10.6 of the Doha
Ministerial Decision on Implementation-Related Issues and Concerns.
96. The Chairman recalled that under paragraph 10.6 of the Decision on Implementation-Related
Issues and Concerns (WT/MIN(01)/17), Ministers at  Doha had instructed the Committee on Subsidies
and Countervailing Measures to take certain actions with regard to the extension of the transition
period for certain Members, under the rubric of Article 27.4 of the Subsidies Agreement, for certain
export subsidies provided by such Members.  The Chairman of the Subsidies Committee had
indicated to him that he wished to report to Members on the successful work that had been undertaken
in the Committee pursuant to this mandate.  He commended the Chairman and Members of theCommittee for the efforts they had made to respond to the needs and interests of developing countries
in this particular area.
97. Mr. Hovorka (Czech Republic), Chairman of the Committee on Subsidies and Countervailing
Measures, said that while paragraph 10.6 of the Doha Decision on Implementation-Related Issues and
Concerns contained no reporting requirement, he wi shed to report to the General Council that the
Committee had almost completed its mandate, and was continuing to work in a very constructive way
to finish the work.  Throughout the process, all Members had engaged in a very positive manner,
unfailingly respecting both the letter and the spirit of the mandate from Doha.  In this sense, this had
been an extremely beneficial exercise for building confidence in the institution at a very important
time.  The issue covered by paragraph 10.6 of the Implementation Decision was a procedure creatinga "fast track" or simplified basis for certain developing-country Members to obtain an extension of the
eight-year transition period for the elimination of export subsidies.  That period came to an end on
31 December 2002.  While Article 27.4 of the Subsidies Agreement contained a provision enabling
developing-country Members to obtain an extension of this transition from the Committee, the
provision contained no procedural guidelines.  For a number of developing-country Members who
had been facing difficulties in implementing their obligation to eliminate export subsidies, obtaining a
measure of certainty in their ability to obtain su ch extensions had been key to their joining the
consensus to launch a new round of negotiations.
98. The procedures approved at Doha had been developed in an intensive process in the
Committee conducted in 2001 by the previous Committee Chairman.  These procedures established a
simplified transparency- and standstill-based process for developing-country Members meeting
certain thresholds for share of world trade and total Gross National Income to obtain extensions forexport subsidies in the form of tax and duty exemptions.  At Doha, Ministers had approved the
procedures by directing the Committee to use them to grant extensions for qualifying export subsidy
programmes.  Ministers had also directed the Committee to use the same procedures in granting
extensions for the same sorts of programmes of Members at similar stages of development and having
a similar order of magnitude of share in world trade as those meeting the numerical thresholds setforth in the procedures.  A total of 20 developing-country Members had requested extensions directly
based on the fast-track procedures, in respect of a total of 45 programmes.  That list had eventually
been narrowed down to 19 Members in respect of  43 programmes, as certain programmes had beenWT/GC/M/77
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subsequently withdrawn by the demandeur Members.   One other Member had invoked the clause in
the Doha Implementation Decision as to similar level of development and similar order of magnitude
of world trade, and on that basis had requested fast-track extension of two programmes.  Given that
the eight-year transition period expired on 31 December 2002, the Committee had been working
intensively since January on the mandate from Doha.  In particular, an exhaustive exercise had beenconducted based on the fast-track procedures, involving detailed notifications of the programmes in
question, and exchanges of written and oral questions and answers.  All Members had repeatedly
expressed their satisfaction both with the level of transparency achieved and with the very
constructive and cooperative spirit in which all had engaged.
99. He wished to give enormous credit to all Members for scrupulously adhering to the terms of
the mandate from Ministers.  At no time had any Member attempted to introduce any other factors or
conditionalities into the process, and this had been the key to success.  Just before the summer break,it had become apparent that the transparency exer cise had been completed in respect of the large
majority of the programmes notified in the fast-track process.  This had led, just after the summer
break, to an extremely positive initiative undertaken jointly by the delegations of Australia, Canada,
the European Communities, Japan, Switzerland and the United States, which proposed an early
harvest of fast-track approvals for the programmes for which the transparency process had by thenbeen completed.  This very constructive proposal had formed the basis of the work during the two
months that had followed, in which the Committee had refined the text of the draft decision originally
proposed by a group of delegations, and had completed the transparency exercise for the programmes
that had not been included in the proposal as originally formulated.  All Members had engaged in an
extremely positive and cooperative way in the Committee's work to formulate the draft decisions foraction.  Thanks to this constructive spirit and to Members' making themselves available for frequent
informal consultations, at its special meeting on 22 November the Committee had been able to take
decisions in respect of all of the extension requests, based directly on the fast-track procedures.  In
total, the Committee had taken 43 separate decisions, in respect of the qualifying programmes of the
19 demandeur Members.  This was undoubtedly an achievement of great significance for thedemandeur countries, in terms of allowing them the extra time for policy adjustment that had been a
critical element in their joining the consensus at Doha.  It also represented a major accomplishment
for the Subsidies Committee, but more importantly for the organization.  The Committee had received
a clear mandate from Ministers, and all Members had worked with a common purpose to fully and
faithfully fulfill that mandate.  This should be a matter of enormous satisfaction to all.
100. While all of the work in respect of the requests based directly on the fast-track procedures
was finished, the Committee had not yet completed its work in considering the fast-track request byone Member that had invoked the language in the Implementation Decision as to similar level of
development and similar order of magnitude of world trade.  However, he was conducting a very
intensive series of informal consultations to explore possibilities to find an appropriate solution.  This
could be done, but it was clear that this would only be possible with a further concerted effort and,
importantly, a renewed commitment on all sides to find the maximum possible flexibility.  Heappealed to the delegations concerned to redouble their efforts in this regard.  Time was extremely
short, and Members should make all efforts towards progress.
101. Finally, he wished to inform the General Council on the Committee's activities in respect of
requests for extension of the export subsidy transition period that were based on Article 27.4 of the
Subsidies Agreement only, and not covered by the mandate from Ministers.  In a number of cases, thedemandeurs were also demandeurs in the fast-track exercise.  The difference, for those Members, was
that the programmes involved did not qualify for fast-track treatment.  There also, Members had been
engaging very constructively in the review process, seeking to identify the basis for a consensus in
respect of these requests.  Some of these requests were, however, much more complex and difficult
than others and, with the deadline of 31 December 2002, time was running short.  However, he wasconfident that an agreement would be reached on all of the outstanding requests.  He appealed to theWT/GC/M/77
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interested delegations to continue to intensify their efforts to develop the remaining necessary
information in respect of the programmes and the nature of the requests, and requested all Members
concerned to join in the efforts to find a solution acceptable to all.
102. The representative of the United States said that for well over a year, the United States had
been intimately involved in addressing the practical concerns expressed by many developing countries
regarding the extension of the transition period under Article 27.4 of the Subsidies Agreement.  Her
delegation had assisted in the development of the special extension procedures leading up to the
Fourth Ministerial Conference and had supported the Implementation Decision taken at Doha which
had adopted those procedures.  In the last several months, her delegation had been actively engaged in
addressing very difficult technical issues and ultimately in obtaining the early approval of the requests
made by virtually all of the small exporters.  The United States was pleased that the extension
requests of 19 developing-country Members had now been approved and congratulated theCommittee for its dedication and productive work.  Her delegation would continue to work
constructively on the outstanding requests and hoped that a consensus could soon be reached on the
appropriate terms for these extensions.
103. The representative of Colombia said his delegation regretted that a decision had still not been
taken with regard to an extension for Colombia of the transition period for some of its subsidy
programmes.  He wished to express appreciation to the Committee Chairman for his efforts to further
the process, to the Secretariat, and to the group of countries which, at the September meeting of the
Committee, had tabled a proposal which had subseque ntly been circulated in G/SCM/W/521.  In that
proposal Colombia was included among the countries eligible for “early harvest” and for the fast-
track extension procedures.  He also wished to thank the group of countries which, together withColombia, had presented in mid-2001 this implementation-related issue as part of the transparency
process.  His delegation was convinced that with goodwill on the part of all countries, in particular
those few which had not yet been able to join the consensus, Colombia's request would be agreed
upon.
104. The representative of Japan expressed gratitude to the Committee Chairman for his
outstanding efforts to move this matter forward.  As one of the original proponents of the so-called
early harvest proposal, he wished to congratulate those countries which had been granted an extension
of their programmes.  Japan believed that the exercise in the Committee had received a sufficient level
of cooperation from those countries in answerin g questions and submitting information, thereby
contributing extensively to the transparency of those programmes.  Japan had been encouraged to hear
the optimism of the Committee Chairman for the rema ining work, as it wished to see the remaining
extension issues decided by the end-of-year deadline.
105. The representative of Barbados expressed appreciation to the Committee Chairman for his
report and his outstanding work.  Barbados welcomed the fact that the Committee had been able to
take a decision on these matters and approve the extension of certain export subsidies.  This was
particularly significant within the current context of stalemate on other implementation issues.  He
wished to express gratitude to the membership for acknowledging the particular circumstances ofsmall developing-country Members and the critical importance of these programmes to them as they
were trying to diversify their economic structure.  A few outstanding matters were still before the
Committee, and Barbados looked forward to their satisfactory resolution.
106. The representative of the European Commun ities thanked the Committee Chairman for his
hard work and expressed satisfaction that in large part the mandate of the Doha Implementation
Decision under this point had now been fulfilled.  This had been due to the immense work that had
been carried out in the Committee, mainly by the developing countries who had notified the
programmes offered for the first time and who had cooperated fully in the review process.  They
deserved special acknowledgement in view of their resource constraints.  The process had brought anWT/GC/M/77
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unprecedented amount of transparency and had been a clear success story in this particular
implementation area.  The Community was determined to continue its efforts so that the work could
be completed, and hoped that the remaining requests would be decided upon before the end of 2002.
107. The General Council took note of the report by the Chairman of the Committee on Subsidies
and Countervailing Measures and of the statements.
8. Report by the Chairman of the Trade Negotiations Committee
108. The Director-General, Chairman of the Trade Negotiations Committee, reporting on the
TNC's fifth meeting on 4-6 December, said that two items had been taken up:  reports by the
Chairpersons of bodies established by the TNC, and reports on outstanding implementation issues by
relevant WTO bodies pursuant to paragraph 12(b) of the Doha Ministerial Declaration.  With respect
to the reports by the Chairpersons of bodies established by the TNC, the long discussion which had
taken place had greatly contributed to Members' continuing effort.  The thoughtful statements by alarge number of delegations had been useful, and had given him strong and clear signals as to the
direction in which Members should be moving.  At the start of the meeting, he had characterized the
current situation as being rather mixed, inasmuch as Members had made progress on all fronts, but in
an uneven way, and perhaps not as quickly as they needed to.  He had reiterated that more clarity in
negotiating positions was needed so as to begin to forge consensus, and that all the areas ofnegotiation needed to move forward together, so that  all participants could have an early idea of the
possible overall balance of gains and concessions under the single undertaking.  He believed that this
time around there might well be no room for a last minute deal.  Delegations had generally agreed
with his opening remarks, and it had been clear fr om their statements that everyone was cognizant of
the breadth and complexity of the issues.  However, he had warned that everyone should recognizethe sense of urgency and not wait until the last minute to make a move.  He was convinced that
Members could clearly not afford to go to Cancún with an overloaded agenda and with too many
unresolved issues.  Views had been expressed on all the areas of work under the TNC, with a general
emphasis on agriculture, on the work of the Special Session of the Committee on Trade and
Development, and on the issue of TRIPS and Public Health.  In his conclusion, he had said thatdelegations were right to have concerns about the way things were going.  However, one should also
be realistic in admitting the positive trend of the rising level of participation since October.  He had
underlined the need to keep up this esprit de corps, perhaps with a sense of compassion to give it a
human touch, particularly when dealing with development issues.
109. With regard to future meetings of the TNC, he believed Members might need to meet more
often to address not only the substance of the negotiations, but also the positive linkages between the
different negotiations in a broader context.  He was considering how to engender a more interactivetype of discussion at the meetings, turning general statements into more specific ones, with the aim of
clarifying positions and moving towards convergence.  The TNC would also need to continue to keep
the question of the scheduling of meetings under close scrutiny, in line with what was set out in the
Principles and Practices agreed early in 2002.  This would require careful management, striking a
balance between flexibility and predictability.  The schedule should allow a balanced time allocationto all negotiating groups to underscore his principle of balanced and concerted movement on all
negotiating fronts.  Members should make their best efforts to take into account the special needs of
small delegations.
110. With regard to the reports on outstanding implementation issues by relevant WTO bodies
pursuant to paragraph 12(b) of the Doha Ministerial Declaration, he recalled that paragraph 12(b)provided that the outstanding implementation issues for which no specific negotiating mandate had
been provided in the Declaration would be addre ssed as a matter of priority by the relevant WTO
bodies, which would then report to the TNC by the end of 2002 for appropriate action.  These
outstanding issues had been considered by nine regular WTO bodies during 2002.  From the reports ofWT/GC/M/77
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these bodies, it had been clear that despite all the hard work that had been done, Members did not
seem to have reached agreement on definitive solutions on most of the issues before them.  In
preparing for the TNC meeting, he had consulted with the Chairpersons concerned and with a number
of delegations to seek their advice on how the TNC could handle the issues in each area.  He had
reported to the TNC that his consultations had also showed that significant differences persisted aboutwhat action the TNC should take.  On the basis of suggestions made prior to the meeting, he had
suggested that the possible courses of action for any given issue could include the following:
(i) resolving the issue;  (ii) agreeing that no furthe r action was needed on the issue;  (iii) referring the
issue to a negotiating body;  (iv) continuing work in the relevant subsidiary body under enhanced
supervision by the TNC and with a clear deadline, perhaps June 2003;  and, (iv) undertaking further
work at the level of the TNC.  However, he had had to report also that he had not detected an
emerging consensus on any of these options.  In the TRIPS Council, a reservation had been placed onthe adoption of the report of that body.  In the lig ht of delegations' statements at the TNC meeting,
Members had been able to reach agreement to lift the reservation, and that the report would therefore
be considered to have been presented to the TNC.  He was pleased to report to the General Council
that, at the end of the discussion and on the basis of what had been said, the TNC had been in a
position to take note of consensus regarding th e implementation issue considered by the Committee
on Sanitary and Phytosanitary Measures (SPS).  He believed that this was a good example of how a
Committee could develop concrete procedures to address a specific concern.  However, on the other
issues, although encouraging progress had been made in some areas, there did not yet appear to be any
agreed solutions.  The discussion had also made it clear that Members had not been able to reach
agreement as yet on an approach to the outstanding implementation issues, with the exception of SPS.In the light of this, he had informed the TNC that he saw no alternative to suggesting that, during the
end-of-year break, Members reflect further on the reports and on what they had heard during the
meeting.  For his part, he would consult informally, as part of his overall responsibilities as TNC
Chairman, on possible next steps.  The TNC would then come back to the question of appropriate
action on these issues at its next meeting, which was currently scheduled for 4-5 February 2003.However, he believed that Members should not underplay the progress in some areas, such as
technical barriers to trade.  For this reason, he had encouraged delegations also to continue working
with each other and with the Chairs of the relevant bodies, to see if the outcomes which had appeared
to be within reach in some areas could be achieved by the time of the next TNC meeting.
111. The representative of Norway thanked the Director-General for his report and asked whether
it could be circulated. 3
112. The representative of Bulgaria said that Members were at a very important moment of the
negotiations which had been launched by the Ministerial Conference in Doha.  The first of the three
years of negotiations was over and certain time-frames and deadlines provided for in the Doha
Ministerial Declaration expired at the end of 2002.  These time-frames and deadlines were part of the
very delicate balance achieved in Doha among the various interests of Members, and on the basis of
which the launching of the negotiations had become possible.  The deadlines for implementation-related issues and concerns were the first deadlines established by the Doha Declaration because of
the importance attached to them.  Paragraph 12 of the Doha Declaration stated that Ministers "attach
the utmost importance to the implementation-related issues and concerns raised by Members and are
determined to find appropriate solutions for them."  Pursuant to paragraph 12(b), those
implementation issues had to be addressed "as a matter of priority" and the relevant WTO bodies hadto report to the TNC by the end of 2002 for appropriate action.  However, it was clear that for all but
one of the outstanding implementation issues, no appropriate solution had been found and no
appropriate action had been proposed by the relevant WTO bodies.  In fact, the relevant WTO bodies
had not fulfilled their mandate pursuant to paragraph 12(b).  The reports which had been submitted,
and on which the Chairman of the TNC had reported, were not those envisaged by paragraph 12(b)
                                                     
3 The report was subsequently circulated as Job(02)/212.WT/GC/M/77
Page 27
since they did not contain any appropriate action.  They were only factual reports of the discussions.
Thus, Members had not been able to undertake the very first step in the negotiations agreed to in
Doha.  Therefore, the delicate balance of interests re flected in the deadlines agreed to in Doha was no
longer present.  Bulgaria continued to attach sp ecial importance to some of the implementation issues
and would have to draw the necessary conclusions.  Wi th the failure to undertake this first step, which
was a matter of priority, Bulgaria would have difficulty in taking the next step in the negotiations.  It
would have to rethink its position in other areas of the negotiations, including the next deadlines, and
reserved its position in those areas.
113. The representative of India said that his delegation shared Bulgaria's views.  Members' failure
to adhere to the deadlines prescribed in the Do ha Declaration had complicated matters considerably
for most developing countries.  India would have preferred more positive results at least by the end of
December, and regretted that Members had not been able to make adequate progress.  India noted thatthe TNC Chairman would hold further consultations with the concerned delegations and hoped that
when the TNC Chairman reported at the TNC meeting on 4-5 February, developing countries would
feel satisfied with regard to the results achieved and the road map ahead.
114. The representative of Kenya, speaking on behalf of the African Group
, welcomed the report
of the TNC Chairman on the TNC's work.  She wish ed to register the African Group's disappointment
that the deadlines set by Ministers at Doha had not been adhered to and appealed to Members to take
the issue of deadlines very seriously as it would affect the work programme and the progress to be
made towards Cancún.  She welcomed the consultations to be held by the TNC Chairman and
encouraged him to ensure that these would yield a balanced outcome for developing countries,
including and in particular for countries of Africa.
115. The representative of China said that his delegation shared the views expressed by previous
speakers.  The end-2002 deadline set by Ministers in Doha for implementation issues was
approaching, but from the reports submitted by the relevant WTO bodies, his delegation believed that
the mandate given by the Ministers at Doha in paragraph 12(b) of the Ministerial Declaration had not
been fulfilled.  Although these bodies had discussed the implementation issues before them, not muchsubstantive progress had been made and further work remained to be done to address these issues of
great concern to developing-country Members in a meaningful manner.  It seemed to his delegation
that the situation regarding the outstanding implementation-related issues remained almost the same
as it had been before and at the Doha Ministerial Conference.  Among other things, the issues
concerning implementation of the Agreement on Te xtiles and Clothing contained in paragraphs 4.4
and 4.5 of the Doha Declaration remained unresolve d, and his delegation looked forward to an early
solution to these issues.
116. Resolution of the outstanding implementation issues would have a substantive impact on the
negotiations under the Doha Development Agenda.  Members should redouble their efforts, first, to
build confidence for the developing-country Members in the multilateral trading system and second,
to pave the way for the smooth running of this round of new multilateral negotiations.  Since all the
regular bodies, with the exception of the SPS Committee, had either failed to reach any consensus ormade no recommendations, it was high time that the TNC decided to take appropriate action.  It was
not appropriate to send these issues back to the regular bodies, as there was no hope of making any
progress.  His delegation supported the proposal by  India and others that the TNC should deal with
these issues directly, as they were an integral part of the Work Programme. His delegation also
supported the idea that these issues should not be left until the Fifth Ministerial Conference, andbelieved that Members should try their hardest to reach proper solutions to them over the next couple
of months.
117. The General Council took note of the report by the TNC Chairman and of the statements.WT/GC/M/77
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9. Committee on Anti-Dumping Practices – Report on matters referred to the Committee
by the Doha Ministerial Decision on Im plementation-Related Issues and Concerns
(G/ADP/9 and G/ADP/10)
118. The Chairman recalled that under paragraph 7.4 of the Decision on Implementation-Related
Issues and Concerns, Ministers at Doha had instructed the Committee on Anti-Dumping Practices to
draw up guidelines for the improvement of the annu al reviews provided for under Article 18.6 of the
Agreement on the Implementation of Article VI of GATT 1994, and to report its views and
recommendations to the General Council for subsequent decision within 12 months.  He drew
attention to the Committee's recommendations in document G/ADP/9 in this regard.  He further
recalled that Ministers had also instructed the Committee, under paragraphs 7.2 and 7.3 of the
Implementation Decision, to examine matters relating to Articles 15 and 5.8, respectively, of the
Agreement, and to draw up appropriate recommendations within 12 months.  The Committee'srecommendation regarding Article 5.8 was contained in document G/ADP/10, and the Committee had
met on 9 December to pursue its consideration of the issue relating to Article 15.
119. Mr. Espinosa (Ecuador), Chairman of the Committee on Anti-Dumping Practices, said he
wished to report4 on his own responsibility and without prejudice to the position of any Member, as
Chairman of the Committee on Anti-Dumping Practic es, pursuant to paragraph 7.4 of the Decision on
Implementation-Related Issues and Concerns.  In that paragraph, Ministers had agreed that "The
Committee on Anti-Dumping Practices is instructed to draw up guidelines for the improvement of
annual reviews and to report its views and recomm endations to the General Council for subsequent
decision within 12 months".  He also wished to report, on his own responsibility and without
prejudice to the position of any Member, on the activities of the Committee and its Working Group onImplementation pursuant to paragraphs 7.2 and 7.3 of the Implementation Decision, although neither
of those paragraphs contained a specific obligation with respect to reporting.
120. Paragraph 7.2 provided that Ministers recognized "that Article 15 of the Agreement on the
Implementation of Article VI of GATT 1994 is a mandatory provision, the modalities for its
application would benefit from clarification.  Accordingly, the Committee on Anti-Dumping Practicesis instructed, through its working group on Implementation, to examine this issue and to draw up
appropriate recommendations within twelve mont hs on how to operationalize this provision".
Paragraph 7.3 provided that Ministers took note that "Article 5.8 of the Agreement on the
Implementation of Article VI of GATT 1994 does not specify the time-frame to be used in
determining the volume of dumped imports, and that this lack of specificity creates uncertainties in
the implementation of the provision. The Committee on Anti-Dumping Practices is instructed,
through its working group on Implementation, to study this issue and draw up recommendationswithin 12 months, with a view to ensuring the maximum possible predictability and objectivity in the
application of time frames".
121. Since establishing a framework for discussing the issues referred to the Committee and its
Working Group on Implementation at a special meeting in December 2001, the Committee and
Working Group had been engaged in discussing proposals on each of the three topics underdiscussion.  The Committee and Working Group had held a series of informal meetings, and he had
also conducted informal consultations on numerous occasions.  Members had submitted documents
containing proposals, explanations, questions and answers, and draft recommendations, and had
engaged actively in discussions.  This process had led to a clarification and distillation of the issues.
A technical summary, giving an overview of the main points in Members' proposals, questions andresponses, and discussions, was attached to his report.
1  The discussions had revealed that many
Members recognized the importance of the issues raised.  During the course of the discussions,
delegations had expressed their understanding, and, in some cases, support, in respect of some of the
                                                     
4 The report was subsequently circulated in document G/ADP/11.WT/GC/M/77
Page 29
proposals or elements thereof.  In addition, his perception was that many delegations, regardless of
their views on the substance of the proposals made, had found the discussions useful in furthering
their understanding of the proposals and the technical issues involved, and of other Members' views
concerning the proposals.  This was confirmed by the highly constructive spirit with which Members
had engaged in the detailed discussions on these highly technical and complex issues.
122. As a result of the cooperative spirit shown by Members throughout the discussions, he was
pleased to report that the Committee had adopted two recommendations with respect to two
implementation issues referred to it by Ministers.  First, with respect to the mandate in paragraph 7.4
of the Implementation Decision, the Committee had adopted, on 27 November, a recommendation
regarding annual reviews of the Anti-Dumping Agre ement (G/ADP/9).  In order to provide useful
information to Members and the public, and to enhance transparency, the Committee had
recommended that additional information, concerning the number of anti-dumping revocationsreported by Members, be included in the annual report, that the annual report include a comparison of
the number of preliminary and final actions reported by Members on an ad hoc basis and in their
semi-annual reports, and that developed-country Members should include in their semi-annual reports
the manner in which the obligations of Article 15 of the Agreement had been fulfilled.  This
information would be compiled and included in a table in the Committee's annual report, and wouldinclude noting where Members had not provided such information.  He believed that this additional
information to be included in the Committee's annua l reports would indeed improve those reports and
promote transparency.  As Chairman of the Committee, he recommended adoption of this
recommendation by the General Council.
123. With respect to the mandate in paragraph 7.3 of the Implementation Decision, the Committee
had adopted, on 27 November, a recommendation concerning the time-period to be considered in
making a determination of negligible import volumes for the purposes of Article 5.8 of the Anti-
Dumping Agreement (G/ADP/10).  In order to provide guidance in this regard, the Committee had
recommended that Members determine the volume of dumped imports with reference to one of three
defined time periods, notify the Committee as to the chosen methodology to be used in allinvestigations and, if in any investigation the chosen methodology was not used, provide an
explanation in the public notice or separate public report of that investigation.  He believed that this
recommendation, implemented by Members, would ensure predictability and objectivity in the
application of time-frames in anti-dumping investigations to determine negligible import volumes for
purposes of Article 5.8 of the Agreement.
124. With regard to the third implementation issu e referred to the Committee and its Working
Group, his sense was that there continued to exis t substantially divergent views on the matter of
operationalizing Article 15 of the Agreement.  Despite the many discussions and the intensive efforts
of a number of Members in consultations, he was unable to identify any significant basis for
consensus on a recommendation by the Committee responsive to the mandate under which the
discussions had been conducted.  While the discussions had revealed areas of common ground among
Members with respect to the proposals made, this had not proved adequate to attract support for aconsensus on a recommendation on these areas.  Certain delegations had expressed the view that the
areas as to which there was some degree of common understanding were insufficient as a substantive
matter to warrant a recommendation.  Other delegations had expressed disappointment in this regard,
as they had hoped that the Committee might be in a position to formulate some sort of
recommendation on some or all of the issues.  However, it was clear that the issues raised in theproposals, as developed and clarified through the discussions, might yet form the basis for further
discussion, should any Member submit proposals concerning them for discussion in an appropriate
forum.
125. In light of this, he considered that in the context of the mandate from Ministers to the Anti-
Dumping Committee and its Working Group, the discussions of these issues had been taken as far asWT/GC/M/77
Page 30
possible.  He realized that what the Committee had succeeded in accomplishing might be less than
what had been originally expected by some Members.  However, he was pleased with the two
recommendations that had been adopted, and confident that they would improve the quality of the
Committee's annual reports and the predictability and transparency of anti-dumping investigations.
Moreover, he was convinced that the exchange of ideas had been valuable in itself, and the quality ofthe discussion and the information exchanged among Members supported his belief that Members had
usefully spent this time.  He wished to thank Members of the Committee for their active and
cooperative engagement in this process, the previous Vice-Chairperson of the Committee for her work
on these issues, as well as the Secretariat for the support given to him in this process.  Finally, as the
Committee had completed its work under the existing mandate, he hoped that Members would find
useful the information in the technical report of the Committee's discussions on the matters referred
by Ministers to it and to its Working Group on Implementation.
126. All representatives who spoke expressed appreciation to the Chairman of the Anti-Dumping
Committee for his tireless efforts to bring these issues to a successful conclusion.
127. The representative of Korea said that his delegation welcomed both recommendations
adopted by the Committee on Anti-Dumping Practices.  Given the very limited number of agreements
that had been achieved by Members on the outstanding implementation issues mandated by Ministersat Doha, the recommendations adopted by the Anti-Dumping Committee would have significant
meaning and implications for the discussion of implementation issues.  This success was due in part to
the fact that the provisions in the Anti-Dumping Agreement had not needed to be amended, and thus
there had been no undermining of the balanced rights and obligations of Members under the
Agreement.  However, this did not mean that the adopted recommendations had limited importanceand effect.  While these recommendations focused on the technical aspects, they would increase the
level of transparency and predictability in the investigation procedures and in the application of anti-
dumping measures.  It was regrettable that the Committee had failed to produce a recommendation on
operationalizing Article 15 of the Agreement in spite of its hard work and the significant convergence
achieved on most areas.  Given the effort and flexibility shown by Members in order to achieveconsensus during the discussions, the absence of an agreement should not be misinterpreted as a lack
of their interest in operationalizing special and differential treatment (S&D) for the benefit of
developing countries.  His delegation urged Members to continue their constructive consideration of
the S&D issues in the appropriate fora.
128. The representative of Brazil expressed his delegation's frustration at recent developments in
discussions in the Committee, because the issue of operationalizing Article 15 of the Anti-Dumping
Agreement was by far the most important of the three paragraphs of the Implementation Decision thathad been referred to the Committee for appropriate recommendations.  A positive outcome to this
issue would have demonstrated the willingness of developed countries to address the legitimate
concerns of developing countries in this area.  From the beginning of the process, Brazil had been
actively involved in these discussions.  In January 2002, together with two other developing countries,
Brazil had presented proposals on this issue and had thereafter engaged in a process of answeringquestions posed by Members.   Brazil had then presented a revised proposal in which its ambitions
had been significantly lowered.  Unfortunately, his delegation's flexibility had not been matched by
corresponding flexibility on the part of a few developed countries.  The recent versions of the text that
had been under discussion had added virtually nothing for developing countries, compared to the
rights all Members already enjoyed under the Anti-Dumping Agreement.  Even worse, in some cases,the language suggested by a few developed countries diminished the rights developing countries
currently had, and this would be an unacceptable result.
129. Until the very end of the process developing countries had endeavoured to find an acceptable
text with a minimum of value-added.  In a final effort and as an attempt to break the deadlock, they
had indicated a series of issues on which they would be ready to negotiate, asking in exchange, for theWT/GC/M/77
Page 31
inclusion of some vague wording for a few selected points which would not cause problems for the
developed countries.  The developing countries were looking for a package solution, but this approach
had not been successful either.  On a more positive note, his delegation appreciated that some other
developed countries had engaged very constructively in this process and, in some cases, had even
come up with language to overcome some of the difficulties.  The lack of a positive outcome for theArticle 15 recommendation overshadowed the two recommendations that had been negotiated.  The
recommendation with regard to Article 5.8 went in the right direction;  however, it was not an S&D
text.  The recommendation related to the Committee's annual reports had a minor part that dealt with
S&D – as it related to compliance – and its main elements were of a general application.  Brazil hoped
that in the Rules Negotiating Group, the issue of operationalizing Article 15 of the Anti-Dumping
Agreement would be given the attention it deserved and that substantive progress in this area would
be made, as this area needed urgent and deep rethinking.
130. The representative of Chile expressed appreciation for the efforts made by the Chairman, the
Secretariat and Members to reach a positive conclusion on the issue of operationalizing Article 15 of
the Anti-Dumping Agreement, which was of interest to many Members, be they developed, or
developing, or somewhere in between.  Like Brazil, Chile had been frustrated by the lack of a
recommendation on this issue.  The language of the proposal, which aimed at achieving modestresults, should not have given rise to problems for any delegation, particularly for any developed
country.  Chile appreciated the efforts made by many Members to reach a satisfactory solution.  At the
end of the day, as stated by Brazil, the recommendations by the Committee would have a minimal
impact, involved merely a clarification of the Agreement and had nothing to do with S&D, as they
provided no special treatment for developing countries.  However, on Article 15, Members could havemade some modest progress.  However, a consensus had not been reached due to the sensitivity of
some Members.  While Chile was grateful for the effort that had been made on this issue, it was also
frustrated.  Once again, Members had failed to seize an opportunity to push the system in the right
direction.
131. The representative of Colombia said that implementation of Article 15 of the Anti-Dumping
Agreement had always been a priority for Colombia.  Ministers at Doha had admitted that adequate
implementation of Article 15 should be one of the priorities in the negotiating process launched at
Doha.  In the beginning, Colombia had hoped that, though far from the initial position stated by
developing countries, a solution would be found, even if minimally significant.  Therefore, his
delegation shared the frustration of Korea, Brazil and Chile.  Colombia thanked those delegations who
had contributed to trying to find a solution to this implementation issue.  It noted that no solution had
been found either on this issue or on many other implementation issues.
132. The representative of India said that in paragraph 7.2 of the Implementation Decision,
Ministers had recognized that while Article 15 of the Anti-Dumping Agreement was a mandatory
provision, the modalities for its implementation would benefit from clarification.  Since the beginning
of 2002, his delegation had engaged constructively in the discussions on this issue.  It had put forward
proposals and provided clarifications sought by Members.  In the process, it had shown flexibilitywith a view to reaching a consensus in this ma tter. India had already taken some of the important
elements of its proposal to the Rules Negotiating Group.  Ultimately, it had been left with only one
element, which was the price undertakings.  Even on this element, India had engaged very
constructively to find a solution.  While India had been flexible on many of the details, there were
three concepts his delegation felt were important in order for it to realize any value from the decision.India was extremely disappointed that it had not been  possible to work out a solution that would add
value to the existing provisions of the Agreement.  The issue of operationalizing S&D provisions of
the Anti-Dumping Agreement was of tremendous importance to a number of developing countries.
India regretted Members' inability to come up with meaningful recommendations on this issue.WT/GC/M/77
Page 32
133. The representative of the United States expressed disappointment that the Committee had not
been able to reach agreement on Article 15, but said this had not been for any lack of trying on the
part of her delegation or on the part of many other Members.  It should be remembered that the
Committee had been able to reach agreement on tw o other difficult implementation issues, including
on a paragraph in its recommendation on Article 18.6 specifically to address the concerns ofdeveloping-country Members about Article 15 compliance.  The US appreciated that these were
neither S&D issues nor implementation issues, but they had been raised by developing countries
throughout the process and the US had assumed that a positive result would be important to
developing countries.  The US had worked very hard to try to bring about an agreement on Article 15
as well.  When discussions had appeared to be at a standstill, it had submitted a proposal for the
September meeting of the Anti-Dumping Working Group that had received a great deal of favorable
attention and comment from other Members.  When its proposal had been the subject of seriousdiscussion at the October meeting, the US had worked very quickly to draft and table a revised
proposal at that meeting to address the concerns that other Members had expressed, so that the US
proposal could be turned into a draft recommendation for Members to consider as a possible basis for
consensus.  Her delegation had been fully engaged in the consultations on this issue, and had
continued to support further modifications to the proposals in order to address other Members’concerns.  Canada’s tabling of a proposal at the November meeting had been a very helpful effort to
bridge the gap, and had come very close to providing a basis for the Committee to reach consensus.
The Chairman’s tireless efforts had also been extremely helpful, but unfortunately Members had not
reached consensus.
134. The representative of Japan said that Ministers at Doha had instructed the Anti-Dumping
Committee to examine and draw up recommendations or guidelines on three specific issues.  His
delegation welcomed the fact that the Committee, through its Working Group on Implementation, had
successfully concluded its discussion on two of the issues, namely, on Article 5.8 and on Article 18.6
of the Anti-Dumping Agreement.  The two recommendations on these issues, which had been adopted
by the Committee, were extremely useful in Members' implementation of the Agreement.  Japanregretted that Members had not been able to reach a consensus on the issue relating to Article 15,
despite their extensive efforts.  Nevertheless, Japan believed that the exercise had proven to be
successful in revealing areas of common ground, and agreed with the Committee Chairman that the
discussions would serve as a good basis for further successful discussions in the area of anti-dumping
in the Committee or in other fora, including the Rules Negotiating Group.  Japan looked forward to
continuing work in this area.
135. The representative of Malaysia said his delegation welcomed the consensus achieved on two
implementation-related issues mandated by Ministers in Doha, namely Article 5.8 and Article 18.6 of
the Anti-Dumping Agreement.  However, it regretted that no consensus had been achieved with
respect to the issue related to Article 15, operationalizing the S&D provision of the Anti-Dumping
Agreement, despite the flexibility shown by developing countries like Malaysia to move on certain
issues and to make concessions in order to achieve a consensus.  However, several developed-countryMembers had refused to budge from their entrenched positions, and had merely offered what was
already provided for on price undertaking in th e Anti-Dumping Agreement.  Malaysia had worked
throughout this process looking for elements that could add value to what was already in the
Agreement, such as ways to operationalize constructive remedies like price undertakings, and areas
where S&D could be provided.  In so doing, Malaysia sought neither to add to the obligations of thedeveloped countries nor to add to the rights of developing countries.  It had merely sought
clarification of certain issues and how to operationalize certain provisions like those regarding price
undertakings, which were already in the Agreement.  In the process, some developed countries had
flatly rejected the concept that the standard of response in the questionnaires from developing
countries, which were used in anti-dumping investigations, was within the scope of Article 15, andhad quoted a panel interpretation that the questionnaire was outside the scope of Article 15.  In
Malaysia's view, the standard of response of such questionnaires could be discussed within theWT/GC/M/77
Page 33
context of Article 15.  Malaysia regretted that there had been no consensus despite the tremendous
amount of flexibility it had shown.  However, it hoped that in the months to come in the lead up to
Cancún, Members would be able to constructively address all the implementation-related issues, as
they would have to answer to Ministers in Cancún wi th respect to the mandate given to them in Doha.
136. The representative of Canada welcomed the consensus on two implementation issues, which
would add predictability and transparency to the implementation of the Anti-Dumping Agreement.
Like previous speakers, Canada was disappointed that the Committee had been unable to reach a
consensus on the issue of operationalizing Article 15 of the Agreement.  Canada acknowledged the
importance of this issue and regretted that no consensus could be reached despite the hard work and
the flexibility shown by all Members involved in the discussions.  However, Canada was optimistic
that the progress made by the Committee on this issue would continue in 2003, either through the
work of the Anti-Dumping Committee or through the continuing work of the Rules NegotiatingGroup, and looked forward to addressing these issues at that time.
137. The representative of Indonesia said that like other speakers, his delegation was disappointed
that no agreement had been reached on the issue of operationalizing Article 15 of the Agreement.
That issue was undoubtedly one of the most important for most developing countries, including
Indonesia.  Trade remedy instruments, such as anti-dumping, were frequently misused for the purposeof protection, such as repeated anti-dumping investigations that caused trade harassment and unfair
trade restrictions.  In order to ensure that th e Anti-Dumping Agreement was implemented fairly and
with maximum predictability, clarification of the implementation of certain provisions, such as those
regarding time-frame for negligible import volume  and opertionalization of the S&D treatment in
Article 15, were imperative.  Regrettably, the provis ions of Article 15 were not mandatory and lacked
precision, thus making them difficult to operatio nalize.  Indonesia hoped that in the coming months
Members could reach agreement on this issue.
138. The General Council took note of the report and of the statements, and approved
 the
recommendation contained in document G/ADP/9.  The General Council also took note of the
recommendation contained in document G/ADP/10, as well as the report by the Chairman of the
Committee relating to Article 15 of the Anti-Dumping Agreement.
10. Committee on Market Access – Recommendati ons regarding the meaning to be given to
the phrase "substantial interest" in Article XIII:2(d) of GATT 1994 pursuant to
Paragraph 1.2 of the Doha Ministerial Decisi on on Implementation-Related Issues and
Concerns (G/MA/119)
139. The Chairman recalled that Ministers at Doha, in paragraph 1.2 of the Decision on
Implementation-Related Issues and Concerns, noted the issues raised in the report of the Chairperson
of the Committee on Market Access (WT/GC/50) concerning the meaning to be given to the phrase
"substantial interest" in paragraph 2(d) of Article XIII of the GATT 1994, and directed the Market
Access Committee to give further consideration to the issue and make recommendations to the
General Council as expeditiously as possible, but in any event not later than the end of 2002.  The
report by the Committee on Market Access had been circulated in document G/MA/119.
140. Mr. Phoho Setipa (Lesotho), Chairman of the Committee on Market Access, said the
Committee had not been in a position to make any recommendations to the General Council regarding
the meaning to be given to the phrase "substantial interest" under paragraph 2(d) of Article XIII of
GATT 1994.  Instead a report had been prepared by the Committee and circulated in G/MA/119.  The
Committee had had a very useful discussion on this subject on the basis of reflections, both oral andwritten, from several delegations during the course of the year in the context of informal and formal
meetings.  While a number of delegations had agreed that this issue was of importance to small and
medium-sized economies and recognized the difficulties such economies faced, there had been aWT/GC/M/77
Page 34
divergence of views regarding the recommendations  to be made to the General Council on this
subject.  In short, some Members had been of the view that the Committee should continue discussing
this issue, especially in light of a recent submission by a Member, while some other Members had
been of the view that the Committee had discussed this subject to the maximum extent possible and
could not take it any further.  As a result, the Committee could only conclude that a consensus was notpossible on recommendations to the General Council on this issue, and that it should be referred to
that body for consideration.
141. The representative of Honduras said that his delegation wished to place on record that
"substantial interest" had to be measured according to the importance of the product or commodity
within the economy of each country, or that the same product, at a given time, had been subject to an
Article XXVIII negotiation and substantial interest had already been shown, either through some type
of legal action or by proof that the product played an important role within the economy.
142. The representative of Jamaica said that this was an issue of importance to many small
suppliers.  It was an issue which Jamaica believed bore directly on the capacity and preparedness of
the WTO to respond to those Members who had only a limited range of exports and who were small
suppliers in sometimes very few markets which they could effectively access.  It was also an issue on
which there had been considerable discussion before the Doha Ministerial Conference and to whichMinisters had given priority when, in paragraph 1.2 of the Decision on Implementation-Related Issues
and Concerns, they had directed the Market Access Committee to give further consideration to these
issues and to make recommendations to the General Council as expeditiously as possible, but in any
event not later than December 2002.  The intent of the proposal was to give some security and
predictability in terms of market access to small suppliers, by taking into account such factors as theimportance of the product to the exporting Member , in determining substantial interest for the
purposes of future "allocations" under Article XIII.  His delegation deeply regretted that no consensus
had been reached on this important implementation issue in the Market Access Committee.  It was
also concerned that other implementation issues would be the subject of consultations by the
Chairperson of the TNC and were therefore likely to be subject to further processes.  In the case ofthis particular implementation issue, Jamaica was unclear what its status would now be.  Jamaica
believed it warranted further discussion and should not simply wither on the vine.  If the latter were
the case, Jamaica would have to take this into account in a very serious way in contemplating how
implementation issues that had emerged from Doha were being treated, and the level of
responsiveness that was occurring in respect of these issues.
143. The representative of Mauritius said that his delegation wished to underscore and support
Jamaica's statement.
144. The Chairman suggested that Members might wish to reflect further over the end-of-year
break on the various views that had been expressed on this matter, particularly with regard to the
future course of action, and said that as all delegations were aware, this issue might be raised again by
any Member in any WTO forum it deemed appropriate, including in the negotiations under the Doha
agenda.
145. The General Council took note of the report and of the statements.
11. Committee on Customs Valuation – Report of the Identification and Assessment of
Practical Means to address Members' concern s regarding accuracy of declared values
pursuant to Paragraph 8.3 of the Doha Minist erial decision on Implementation-Related
Issues and Concerns (G/VAL/50)
146. The Chairman recalled that in paragraph 8.3 of the Doha Decision on Implementation-Related
Issues and Concerns, Ministers underlined the importance of strengthening cooperation between theWT/GC/M/77
Page 35
customs administrations of Members in the prevention of customs fraud.  Ministers also recognized
the legitimate concerns expressed by the customs administrations of several importing Members on
the accuracy of declared values, and directed the Committee on Customs Valuation to identify and
assess practical means to address such concerns and to report to the General Council by the end of
2002 at the latest.  The report by the Committee on Customs Valuation had been circulated inG/VAL/50.
147. Mr. Karoblis (Lithuania), Chairman of the Committee on Customs Valuation, said that the
Committee had only the previous day adopted its report to the General Council on paragraph 8.3 of
the Decision on Implementation-Related Issues and Concerns.  The draft text which had been adopted
was contained in G/VAL/50.  An integral part of this report was the attached terms of reference for
the Technical Committee on Customs Valuation which had been established under the Customs
Valuation Agreement.  The preparation of these terms of reference had been a separate exercise fromthe preparation of the report.  These terms of reference were contained in draft form in G/VAL/W/117
and had also been adopted by the Committee the previous day.  He recalled that the Committee's
mandate in paragraph 8.3 stated that, "recognizing the legitimate concerns expressed by the customs
administrations of several importing Members on the accuracy of the declared value, the Committee
on Customs Valuation is directed to identify and assess practical means to address such concerns,including the exchange of information on export values and to report to the General Council by the
end of 2002 at the latest."  Substantive work on this mandate had been carried out at three meetings of
the Committee.  There had been three submissions aimed at satisfying the mandate of identifying and
assessing practical means to address concerns related to the accuracy of the declared value.
Discussions had been held on the basis of these submissions.  Members had shown a positive andconstructive attitude in these discussions, and this had been a key factor in reaching a common
understanding on the way to proceed.  The report su mmarized the main aspects of the submissions
received.  It was essentially a factual presentation of the Committee's work to date under this mandate,
and informed the General Council of the Committee's need for technical input and advice in order to
further evaluate all submissions and views.  It had requested this from the Technical Committee onthe basis of the attached terms of reference.  The Committee had asked the Technical Committee to
conclude its examination and to report back to it by 15 May 2003 in order that it might consider the
technical inputs and advice provided.  In this regard, the Committee requested the General Council to
allow it to continue to work under the existing mandate, and to establish an appropriate time for
reporting on this matter, as the Committee had not been in a position to recommend an appropriate
time.
148. The Chairman proposed that the General Council take note of the report and of the progress to
date and authorize the Committee to continue its work under the existing mandate and to report back
to the General Council once its work had been completed.
149. The General Council so agreed.
12. Marrakesh Ministerial Decision concerning the possible negative effects of the reform
programme on least-developed and NFIDCs – Follow-up to the Report of the Inter-Agency Panel on short-term difficulties in financing normal levels of commercial
imports of basic foodstuffs – Report by the Chairman of the Committee on Agriculture
150. The Chairman recalled that at its meeting in October, the General Council had taken note of
the report of the Inter-Agency Panel on short-term difficulties in financing normal levels of
commercial imports of basic foodstuffs, and appr oved the recommendations contained in paragraph
168 of the report.  With regard to the recommendation in paragraph 168(b), the General Council had
taken note that the question of feasibility of an ex-ante financing mechanism would be pursued by the
Committee on Agriculture, on the understanding that a proposal regarding the establishment of an ex-
ante financing mechanism would be submitted by the WTO net food-importing developing countries,WT/GC/M/77
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and that a follow-up report concerning the discussion of the proposal would be submitted to the
General Council following the regular meeting of the Committee in November.
151. Dr. Farahat (Egypt), Chairman of the Committee on Agriculture, reporting on the
Committee's deliberations on this matter, said that his report concerned the recommendation in
paragraph 168(b) of the report by the Inter-Agency Panel regarding the question of the feasibility ofan ex-ante financing mechanism aimed at food importers.  As the Chairman had recalled, at its
meeting on 15 October the General Council had instructed the Committee on Agriculture to pursue
this issue and to report back to it.  A proposal for the establishment of an ex-ante financing
mechanism had been submitted by Bangladesh, Cuba, Egypt, Jordan, Kenya, and Sri Lanka on behalf
of the WTO Net Food-Importing Developing C ountries and the Least Developed Countries
(G/AG/W/58 and Corr.1).  On the basis of the proposal, a series of informal consultations and formal
discussions had taken place at the November meeting of the Committee, in the course of which thesponsors of the proposal had been given an opportunity to clarify a number of technical points
concerning their proposal.  It was his understanding that wide differences of opinion remained, in
particular between the donor Members and the sponsors of the proposal.  A number of donors
continued to question the need for establishing a new financing scheme and had raised doubts
regarding the viability of the proposed ex-ante revolving fund.  For their part, some NFIDCs hadlinked their position concerning specific aspects of the agriculture negotiations to acceptance of the
proposal.  Some donor Members had argued that since this was an implementation issue it should not
be tied to impending deadlines in the agriculture negotiations.  On the basis of his informal
consultations with interested Members, he felt it would be useful to continue the informal process.  He
intended to intensify his consultations beginning early in 2003, with a view to preparing a decisionregarding the proposed ex-ante fund by the Committee at its regular meeting in March 2003.  A report
regarding the outcome would be made to the General Council as soon as possible thereafter.
152. The representative of Jordan thanked the Chairman of the Committee for his report and for
the efforts exerted by him and the Secretariat on this issue.  His delegation also wished to express its
sincere thanks to the donor countries for their cooperation and for their positive spirit in trying toreach a satisfactory conclusion.  Intensive consultations had taken place, and Jordan supported the
Committee Chairman's proposal to continue the informal process.  As one of the NFIDCs, Jordan
attached great importance to this issue, due to the fact that such a fund would be a kind of safety met.
While the process was taking a long time, Jordan hoped there would be an agreement or decision on
establishing the fund before March 2003.  The projections of some international organizations in their
latest reports showed that the liberalization taking place in the agriculture sector would create a sharp,
or at least some, increase in the prices of basic foodstuffs, which confirmed the need to establish theproposed fund.
153. The representative of Cuba said that his delegation had taken an active part in the work to
date on this issue.  It appreciated the Committee Ch airman's efforts to find an appropriate solution to
the problem of establishing a revolving fund to finance the normal import levels of net food-importing
and least-developed countries.  In this respect, Cuba fully endorsed the Committee Chairman's reportwith a view to continuing consultations. Cuba urged other Members to participate constructively in
order to reach an effective solution as soon as possible to what was a pressing problem for many
developing and least-developed countries.
154. The representative of Nigeria said that his delegation supported the call by the Committee
Chairman for further work on this issue and hoped that a solution could be reached very soon.
155. The representative of Tunisia said that his delegation attached great importance to the
implementation of the Marrakesh Decision on the negative effects of the reform programme on least-
developed and NFIDCs.  This issue had been included in the Doha Declaration as an implementation
matter which had not yet been integrated into the agricultural process.  It had the same degree ofWT/GC/M/77
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importance as other matters and should be dealt with in the General Council.  The process of reform
in agriculture, in particular as it concerned the reduction of all internal support and thus created a
distortion, would have negative effects on the developing countries and in particular on the NFIDCs,
as prices for commodities would increase.  The negative effects of the reform programme had been
shown, and Tunisia wished to see the NFIDCs and the least-developed countries receive somereassurances in this respect.  It appealed to Members regarding the proposed ex-ante financing
mechanism, so that it would be able to participate in such a fund.
156. The Chairman, in the light of the report by the Chairman of the Agriculture Committee,
proposed that the General Council take note of the report and of the statements and authorize the
Agriculture Committee Chair to continue his consultations with a view to preparing a decision by the
Committee on the proposed ex-ante financing mechanism at its regular meeting in March 2003, and to
report back to the General Council on the outcome as soon as possible thereafter.
157. The General Council so agreed.
13. Rules of origin – Harmonization work programme – Statement by the Chairman
158. The Chairman recalled that at the General Council meeting in July, the Committee on Rules
of Origin had forwarded 94 core policy issues to the General Council for discussion and decision, and
had recommended that the General Council focus first on 12 of these issues.  In the light of theCommittee's recommendations, the General Council had held two informal meetings, first on
7 October and most recently on 25 November, to discuss these crucial policy issues.  At the same
time, at his request and on his behalf, both the Chair and Vice-Chair of the Committee had been
pursuing informal consultations on these issues, with a view to furthering this work as much as
possible before the present meeting.  He thanked both the CRO Chair and Vice-Chair, as well alldelegations involved, for the hard work they had been  putting into trying to seek an early resolution to
these complex technical and political issues.
159. Mr. Costa Filho (Brazil), Vice-Chairman of the Committee on Rules of Origin, reported on
behalf of its Chairman, Mr. Moser (Switzerland), on the results of the consultations which they had
held with a number of delegations, as well as the outcome of the work carried out by the Committeeon Rules of Origin in 2002.  First, there had been some progress on the implications issue, which was
a major stumbling-block to progress in the negotiations.  Strong support had emerged among
delegations for the notion that "whenever there is a mandatory legal requirement in the determination
of origin in the WTO Agreement other than the Agreement on Rules of Origin, the harmonized rules
of origin must be used".  However, some Members still maintained differing views on this issue, and
consensus had not yet been reached.  Second, concerning the 11 crucial issues, during the one-to-one
consultations with the CRO Chair, several delegations had indicated flexibility on several issues.Many delegations had also clearly indicated their bottom line.  These indications were useful
information for further consultations.  It had also been confirmed that major progress could only be
made after reaching a consensus on the implications issue.  In order to address the 156 outstanding
issues, the Committee had held three negotiating sessions, in April, June and November, and had
resolved 19 technical issues, thus reducing the number of remaining issues to 137.
160. The representative of India recalled that the work programme on the hamonization of rules of
origin had been initiated 8 years earlier and that Members were still some distance from completing it.
India was disappointed that yet another deadline wa s being missed.  This was an example of an issue
on which the time schedule specified in the Agreement had not been kept.  While his delegation
appreciated the work and effort put in since the General Council meeting in July 2002 and at themeeting in September, it felt that the lack of progress was on account of a lack of political will rather
than any technical difficulties.  Of the 12 core issu es which had been referred to the General Council
as a test case, the main stumbling block appeared to  be the implications issue, which in India's viewWT/GC/M/77
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had been settled by the Agreement on Rules of Origin.  Some Members seemed to be having doubts
on this, which could only be resolved if there was some constructive engagement from their side.
Alternative suggestions had not been forthcoming, despite the fact that renewed efforts had been
initiated by the General Council Chairman in September to resolve this matter.  A positive attitude
and creativity were now required to break this deadlock.
161. India also wished to draw Members' attention to the trade facilitation potential of harmonized
rules of origin.  This was one of the important imperatives of trade facilitation, and the extent of
Members' commitment in this area could be gauged by reference to the progress made in the
harmonization of rules of origin.  India was perplexed at the incoherence in approach towards the
harmonization work programme on the one hand, and on the other hand the efforts being made to
bring in newer rules for more transparent and predictable trade via trade facilitation.  It was important
to remember that countries could not be expected to undertake new obligations on trade facilitationwhen even the existing instruments of trade facilitation in the WTO Agreements were not fully
operational.  Members now needed to reflect on how a new deadline could be met, and to show
flexibility and the necessary political will to meet this deadline.  India sincerely hoped that this would
be the last extension.  His delegation emphasized that pr ogress or lack of it in this area of work would
also have an impact on progress in other related areas of work.  A focused and pragmatic schedulewould need to be established to achieve the target and to maintain the credibility of the process and
the system as a whole.
162. The representative of Brazil said that his delegation shared the overriding sentiment of
disappointment and frustration, in that Members were once again facing a situation in which the
General Council had to take note of another missed deadline in the conclusion of the harmonizationwork programme for non-preferential rules of origin.  Brazil had been reasonably optimistic at this
time in 2001 that the conjunction of two new elements would inject renewed impetus into this
process:  the first was the agreement to bring the "core policy issues" of the harmonization work
programme under the direct responsibility of the General Council in the second semester of 2002;
and the other was the political commitment demonstrated in the launching of a new round ofmultilateral trade negotiations at the Doha Ministerial Conference.  Brazil's expectation had been that
these two factors would be translated into the political will to conclude the real unfinished business
from the Uruguay Round.   It was particularly frustrating to see that more decisive progress was being
held up by the so-called "implications" debate, when a significant number of Members were of the
view that the relationship between the Agreement on Rules of Origin and other WTO Agreements was
already clearly outlined in the former's provisions.
163. With a view to overcoming the lingering doubts, Brazil had taken the initiative of proposing
specific language to further detail this relationship, in a proposal which seemed to address the
concerns of some delegations.  It expected those Members who were not yet comfortable with the
proposed solution to come forward with clear indications of their persisting doubts, if any, and
specific proposals to overcome them, in order to al low work to move forward.  Despite this somber
evaluation, Brazil remained confident that Members w ould be able some day to conclude the Uruguay
Round.  In this spirit, it accepted the proposed extension of the deadline until July 2003, in the
expectation that this would allow Members to report to Ministers at Cancún that the harmonization
work programme had been finalized.  However, he wished to add a word of caution that it would be
incoherent, at best, to inform the Fifth Ministeria l Conference that Members had been unable – in the
eight and a half years since the entry into force of the Uruguay Round Agreements – to complete theharmonization work programme on non-preferential rules of origin and, at the same time, propose the
inclusion of new areas like trade facilitation into the agenda of the WTO for negotiation in one and a
half years.  He recalled that the Agreement on Rule s of Origin recognized in the preamble that "clear
and predictable rules of origin and their application facilitate the flow of international trade".WT/GC/M/77
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164. The representative of Hong Kong, China said th at the Agreement on Rules of Origin provided
for a harmonization work programme which aimed to develop a set of harmonized origin rules for all
non-preferential commercial policy instruments.  Due to the complexity of the issues, the deadline for
completing the work programme had been extended  three times from the original deadline of July
1998.  Over the years, technical experts had made considerable progress in tackling numerous issuesin the work programme, but with the considerable num ber of policy issues remaining to be resolved, a
further extension of the deadline seemed unavoidable.  However, given the lack of progress in the past
round of consultations, there was a need to consider seriously how the consultations could be
intensified to achieve a breakthrough, and what actions should be taken to crack the outstanding
issues step by step.  This would require commitment among Members in the coming months, in
addition to the already busy negotiation schedules and preparatory work for the Cancún Ministerial.
Hong Kong, China was committed to the continued work in this Committee and would participatefully and actively in future discussion and consultations.
165. The representative of the United States said  that her delegation remained committed to the
effort to reach agreement on harmonized rules of origin.  The United States believed that no Member
had expended greater time and resources in this negotiation than it had.  Regrettably, many Members
had concerns about how harmonized rules would affect their interests in a number of WTO areas suchas TRIPs, SPS and antidumping.  Her delegation believed the solution to this negotiating logjam was
to find a solution to the so-called implications issue.  If this issue could be resolved, a reasonable
solution could be found for the remaining product-specific issues.
166. The representative of Japan said his delegation believed that the next step towards completing
the harmonization work programme on non-preferential rules of origin should be to continue efforts to
resolve the issue of implications and to accelerate discussions on the other 11 crucial issues through
confessional-type bilateral meetings between the Committee Chairman and each interested Member.
Further, in 2003 Members would need to tackle not  only the 12 crucial issues but also the other core
policy issues in order to complete the harmonization work by the proposed deadline.  In order to
resolve the remaining core policy issues, one suggestion would be to undertake confessional-typebilateral meetings, similar to those conducted regarding the 12 crucial issues.  Japan was fully
prepared to work with other Members in order to  complete the unfinished harmonization work in a
timely manner.  To this end, it urged other Members to show a certain flexibility regarding the
outstanding product-specific issues, on the assumpti on that all Members would do the same in order
to conclude a difficult negotiation in its final stage.
167. The representative of Norway said that his delegation supported those who had said it was
important to move ahead with this issue.  Norway was grateful for the efforts made over the past six
months to try to solve this issue.  However, it had been clear that merely transferring this issue from
the Committee to the General Council was not enough, if the political will to change some positions
was not forthcoming.   In Norway's view, some of the crucial issues had been identified.  The
implications issue was obviously the crucial issue for moving forward.  While this might not solve
everything, it was a basic pre-condition for moving ahead.  His delegation hoped that whateverprocedure was being considered, Members would show some political will to get a break-through on
these issues.  Otherwise, this issue would continue unresolved for another seven or eight years.
168. The Chairman said that in light of the Committee Chairman's report, Members had to face the
fact that despite their best efforts to date, the deadline of end-December 2002 for completing the
harmonization work programme could not be met.  At the same time, it had to be acknowledged thatMembers' credibility was at stake in setting any new deadline, and that a further extension could not
be approached lightly.  Taking into account the importance of the issues to be resolved and the
implications to be considered, and in the full knowledge of the consequences of a failure to meet
another new deadline, he proposed that the General Council extend, to July 2003, the deadline for
completion of negotiations on the core policy issues identified in the CRO Chair's report to theWT/GC/M/77
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General Council of 15 July 2002.  He also proposed that following resolution of these core policy
issues, the Committee on Rules of Origin complete its remaining technical work, including the work
referred to in Article 9.3(b) of the Agreement on Rules of Origin, by 31 December 2003.
169. The General Council took note of the statements and agreed  to the Chairman's proposal.
14. Work Programme on Small Economies – Report by the Chairman of the Dedicated
Sessions of the Committee on Trade and Development
170. The Chairman recalled that at its meeting in February/March 2002, the General Council had
taken note of a framework and procedures for the conduct of the Work Programme on Small
Economies, under which this Work Programme would be a standing item on the General Council's
agenda.  The framework and procedures also provided that the Committee on Trade and Development
would report regularly to the General Council on the progress of work in its Dedicated Sessions on
this subject.
171. Mr. Abbott, Deputy Director-General, speaking on behalf of the Chairman of the Dedicated
Sessions of the Committee on Trade and Development, said that his report was being made pursuant
to the Decision of the General Council at its meeting in March 2002 (WT/L/447).  As stated in the
first report, the Committee on Trade and Development had formally begun this work by holding a first
Dedicated Session on 25 April 2002.  A joint submission had then been made by Barbados, Belize,Bolivia, Cuba, Dominican Republic, El Salvador, Fiji, Guatemala, Haiti, Honduras, Jamaica,
Mauritius, Nicaragua, Papua New Guinea, Paraguay, Solomon Islands, Sri Lanka, and Trinidad and
Tobago (WT/COMTD/SE/W/1).  The second Dedicated Session had been held on 1 July 2002.  The
proponents of this work programme had requested that the third Dedicated Session be scheduled to
coincide with the "Geneva Week" for non-resident Members and observer governments.  The thirdDedicated Session, initially scheduled for the beginning of October, had had to be postponed when the
"Geneva Week" was rescheduled from the beginning of October to the beginning of November, and
had been held on 4 November 2002.
172. The meeting had been well attended, as a number of non-resident delegations who did not
normally attend the meetings of the CTD were present.  At the second Dedicated Session, asubmission had been made by Barbados, Belize, Bolivia, Cuba, Dominican Republic, El Salvador,
Fiji, Guatemala, Honduras, Mauritius, Nicaragua, Paraguay and Sri Lanka, which contained proposals
for changes to some existing WTO agreements  (WT/COMTD/SE/W/3).  A second submission had
then been made by Macao, China which related to the structural impediments of small economies and
the nature of their economic vulnerabilities (WT/COMTD/SE/W/2).  As delegations had not had
enough time to study those submissions for that meeting, they were on the agenda for continued
consideration at the third Dedicated Session.  At this Session, a group of small economies alsopresented a document (WT/COMTD/SE/W/7) containing responses to a number of questions posed
by the delegation of the United States regarding previous proposals made by the small-economy
group (WT/COMTD/SE/W/3).
173. In addition, three documents prepared by the Secretariat were before Members at that
meeting.  The first was a literature review which contained an overview of how the issue of smallnesshad been dealt with in the economic literature (WT/COMTD/SE/W/4).  That document included a
discussion of the different measures of smallness that had been used in the literature.  It also discussed
how the issue of "vulnerability" had been approached in the economic literature.  The second paper,
entitled "Trade and Economic Performance – The role of economic size?" was a more analytical
document which had been prepared as a result of Members' suggestions (WT/COMTD/SE/W/5).  This
paper looked deeper into some of the issues disc ussed in the literature review and included issues
Members had indicated as being of interest to small economies at the first two Dedicated Sessions.  In
particular, this paper discussed the variable "share in global trade" as a potential measure forWT/GC/M/77
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economic size.  After a discussion of the differen t measures of economic size, the document analysed
a number of questions, such as:  how do economies of scale and transport costs affect small
economies' competitiveness in global markets?;  to what extent does economic size affect economies'
openness to trade and the diversification of their export structure?;  what do data on volatility in
export earnings and volatility in GDP say about econom ies' vulnerability to external shocks?;  and
how does economic size relate to measures for ec onomic performance, in particular GDP per capita
and GDP per capita growth?
174. The Secretariat had collected relevant data for each of these questions for the membership.
That data was presented and analysed in the paper, and whenever possible, the findings of the data
analysis had been compared with the results of more sophisticated econometric analyses found in
recent literature, in order to control for the robust ness of the results.  This paper aimed at providing
Members with an in-depth analysis of the variables of relevance to small economies in the multilateraltrading system.  The paper had been particularly appreciated and had given rise to an interesting
debate.  The third document contained a list of  WTO provisions which could be of particular
relevance to small economies (WT/COMTD/SE/W/6).  The Committee would continue its work to
fulfill the mandate given in paragraph 35 of the Doha Ministerial Declaration and the instructions
given to it by the General Council in March 2002, at future Dedicated Sessions of the CTD.
175. The representative of Japan said his delegation appreciated that the proponents of this issue
had a constructive attitude towards the need to frame the term "Small Economies".  In order to address
this issue, it might be useful to have the relevant countries submit, along with the relevant data,
proposals that addressed common characteristics found in the small economies.  Consideration of this
issue should be conducted on the basis of relevant provisions of the WTO agreements, within theparameters set forth in paragraph 35 of the Doha Ministerial Declaration.  Members also had to avoid
duplicating work being conducted in other committees.
176. The representative of the United States said her delegation was pleased that work in the
Dedicated Sessions was advancing and, while the work had not come to definitive conclusions, it
believed there were a number of practical issues that could be advanced that would address problemsbeing experienced by small economies.  The United States had seen some good progress in the
Subsidies Committee in the Article 27.4 exercise th at would benefit small traders, including many
Members active in the small economies group, in particular.  For its part, her delegation would
continue to engage actively to try to address these problems, consistent with its overall approach of
addressing such issues pragmatically, wherever possible.
177. The Chairman said that given the General C ouncil's mandate to review the Work Programme
and to make recommendations for action to the Fifth Ministerial Conference, he would urge all
delegations to continue to give this subject their focussed attention as they moved into the new year,
so that they could fulfill the mandate from Ministers.
178. The General Council took note of the report by Deputy Director-General Mr. Abbott on
behalf of the Chairman of the Dedicated Sessions of the Committee on Trade and Development, and
of the statements.
15. Issues affecting least-developed countries – Interim report by the Director-General
pursuant to Paragraph 43 of the Doha Ministerial Declaration (WT/GC/W/485)
179. The Chairman recalled that Ministers in Doha, under paragraph 43 of the Doha Ministerial
Declaration, had requested the Director-General, following coordination with heads of the other
Integrated Framework agencies, to provide an in terim report to the General Council in December
2002 on all issues affecting LDCs, and a full report to the Fifth Session of the Ministerial Conference.WT/GC/M/77
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180. The Director-General said that in accordance with paragraph 43 of the Doha Ministerial
Declaration, he had circulated an interim re port, which was before the General Council in
WT/GC/W/485.  The Interim Report addressed "all issues affecting the Least-Developed Countries".
The Doha Ministerial Declaration placed the needs and interests of developing and least-developed
countries at the heart of the WTO's work programme and negotiations.  Ministers in Doha hadcommitted themselves to make positive efforts designed to ensure that developing countries secured a
share in the growth of world trade commensurate w ith the needs of their economic development.  In
according attention to their development needs, Ministers had recognized the particular vulnerability
of the LDCs and the special structural difficulties they faced in the global economy.  The
marginalization of the 49 LDCs, whose share in world trade had decreased from 0.8 per cent in 1980
to 0.5 per cent currently, was one of the biggest challenges facing the multilateral trading system.
Moreover, 50 per cent of the population in LDCs was living on less than a dollar a day.  One recentstudy estimated that on current trends, the incidence of poverty would increase by about one third by
2015 unless steps were taken to redress this situation.
181. He strongly believed that the multilateral trading system, and the Doha Development Agenda
in particular, could make positive contributions to address this situation. At the same time, he also
wished to stress that other associated and companion policies going beyond the competence of thetrading system would be required.  In light of the complex challenges faced by the LDCs, there were
no magic formulas, no one-size-fits-all formula, and no quick fixes.  Nonetheless, Members were
resolved to address this challenge with determination underlined by realism and in coordination with
other development partners – agencies, donors, and the LDCs themselves.  To give work more focus,
he was currently considering the most effective way to establish a dedicated LDC unit within theSecretariat.  With respect to his interim report, he  wished to underline a few essential aspects.  This
report showed the measures and actions the WTO membership, together with other players in the
international community, had taken since Doha in addressing the needs of LDCs.  Progress had been
made, but there was scope for action.
182. There were two main components in the report before the General Council.  The first was the
implementation of the WTO Work Programme for Least-Developed Countries, which had been
adopted by Members pursuant to the mandate in the Doha Declaration and reported to the General
Council in February 2002.  The second compone nt was the Integrated Framework (IF), whose
implementation had been carried out in partnership with LDCs themselves, bilateral donors, and the
six multilateral economic institutions, namely, IMF, ITC, UNCTAD, UNDP, World Bank and WTO.
Overall, he was confident in reporting that progress had been made in the one year since Doha.  One
such achievement had been already reported under agenda item 6 of the present meeting regardingLDCs' accession.  He welcomed the adoption of the Guidelines to facilitate and accelerate LDCs'
accession and integration into the rule-based multilateral trading system, and expressed appreciation
to the Chairman of the Sub-Committee on LDCs for his effective stewardship of this issue.  With
regard to the IF, there had been the highest level of commitment from the Heads of Agency on the
implementation and extension of the IF to as many LDCs as possible.  At the same time, there wasscope for improvement.
183. As he had mentioned in his interim report, implementation of the Work Programme for LDCs
was proceeding well.  He wished to highlight some elements of the Work Programme and the steps
taken to effectively implement the commitments contained.  First, with regard to market access for
LDCs, improvements in access for LDCs had been recently announced and reported by Australia,Canada, Japan and Switzerland.  Further improvements towards the objective of duty- and quota-free
access could be expected with progress in the Doha negotiations.  Second, with respect to trade-
related technical assistance and capacity building, priority had been accorded to the delivery of
assistance to LDCs.  This had been reflected in the WTO Annual Plan for Technical Assistance and in
his interim report on technical assistance.  As to work  carried out on  the accession of LDCs to the
WTO Agreement, this had already been mentioned.  The Guidelines adopted could facilitate andWT/GC/M/77
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accelerate the LDCs' accession negotiations. However, as he had stressed already, these Guidelines
needed to be matched with actual and meaningful implementation.  He would report on this particular
aspect to Ministers at Cancún.  While he believed that the multilateral trading system could make
positive contributions to trade-led development in LDCs, the WTO could not do it alone.  The trade
needs of LDCs were numerous and complex, ranging from problems related to the implementation ofWTO agreements and the lack of human and institutional capacities, to infrastructural bottlenecks.
Addressing these problems in a comprehensive manner required the competence and resources of
other players, including bilateral donors and other multilateral economic institutions.  This was the
basic idea that underpinned the revamped IF, which was to complement and maximize available
means for assisting trade development of the mo st vulnerable members of the international
community.
184. As he had underlined in the report, the LDCs themselves had the right and the responsibility
to manage the process of their meaningful integr ation into the multilateral trading system and the
global economy.  He attached priority to the implementation of the IF, as did other Heads of
Agencies, the donors and the LDCs themselves.  He had had the opportunity to review this situation
with the Chairman of the IF Steering Committee (I FSC).  With the support of bilateral donors and
LDCs, the IF, while its experience to date was short and limited, had so far demonstrated theimportance of mainstreaming trade into countries' national development plans and poverty reduction
strategies, country ownership, capacity building, partnership and coordination, as well as coherence.
He could not over-stress the need for improvement in the implementation of the IF, especially in the
follow-up phase to the Diagnostic Trade Integration Studies (DTIS).  He hoped that in the upcoming
months leading up to Cancún, the six agencies, together with bilateral donors and LDCs, could makethis work better, by accelerating the rate of implementation in the LDCs already included, as well as
by accelerating the pace of extension to meet the increasing demand for the IF from other LDCs.
185. All representatives who spoke expressed appreciation to the Director-General for his interim
report.  The representatives of Djibouti, Haiti
, Benin  and Guinea  welcomed the Director-General's
initiative to set up a special unit for the least-developed countries within the Secretariat.
186. The representative of Djibouti welcomed the interim report and noted that the Director-
General would make a complete report on all problems affecting the least-developed countries to the
Fifth Ministerial Conference.
187. The representative of Japan said the LDCs' effective integration into the multilateral trading
system was important and Japan attached particular importance to the WTO Work Programme for the
LDCs.  His delegation would continue its constant efforts to work toward the fulfilment of the Work
Programme and wished to comment on a number of points stressed in the Director-General's interimreport.  First, on LDCs' accession, Japan welcomed the Guidelines on LDCs' accession that had been
adopted earlier.  As urged in the Director-General's report, Members should exert their efforts to
translate these Guidelines into concrete and meaningful practice.  In this context, Japan noted a certain
optimism among Members regarding LDCs' accession in the near future.  Second, regarding the
Director-General's comments on market access, Japan was one of the most determined Members towork toward the objective of duty- and quota-free market access for all LDC products.  Before the G8
summit meeting in Kananaskis in June 2002, Japan's Prime Minister had taken the decision to
immediately examine the expansion of the coverage of duty- and quota-free treatment for LDCs'
products, by revising Japan's tariff-related law for the fiscal year beginning 1 April 2003.  Lastly, on
trade-related technical assistance, Japan noted with satisfaction that the WTO 2003 TechnicalAssistance Plan would continue to give priority to the LDCs.  It also noted that the Director-General's
report focused on how the DTIS of the Integrat ed Framework would be implemented.  In Japan's
view, the IF was one of the most important instruments for LDCs to mainstream trade into their
respective development policies and contribute to the discussion on how to ensure the effective
implementation of follow-up after the DTIS.  He concurred with the interim report that a strongWT/GC/M/77
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political and financial commitment on the part of the beneficiary governments was crucial, as well as
strengthened synergies among the Agencies and the donors.  Japan, as a lead facilitator for Cambodia,
wished to note that the response by Cambodia in that respect was an excellent example.
188. The representative of the European Communitie s said that the Community was a significant
contributor to the IF Trust Fund.  As an IF facilitator for three countries, namely, Mauritania, Senegal
and Ethiopia, it was putting resources into trying to make the IF work on the ground.  Overall, the
Community welcomed the implementation of the IF as a potentially useful tool for mainstreaming
trade into national development and poverty reduction strategies.  It acknowledged that the first
results, which had started to materialize, seemed to be encouraging.  The Community looked forward
to further work and to the Director-General's final report to the Fifth Ministerial Conference.
189. The representative of Zambia, speaking on behalf of the LDCs , recalled that the purpose of
technical assistance to LDCs was their integrati on into the multilateral trading system in order to
allow them to benefit from expanded trade, which would eventually help them alleviate poverty,
address a number of health issues and increase their trade shares.  The LDCs' need for technical
assistance arose because of their difficulties in participating effectively in the multilateral trading
system.  This was why many paragraphs of the D oha Ministerial Declaration contained mandates for
technical assistance and trade-related capacity building.  The key problems faced by the LDCsincluded:  (i) their limited capacity in both Geneva and capitals to deal with WTO issues as well as the
expanded work programme, and the fact that many of them had no mission in Geneva;  (ii) their
limited understanding and awareness of WTO issues at capital level by key stake-holders which
included the business sector, civil society, institutions and even government ministries;  (iii) their
difficulty in implementing WTO rules and disciplines – and in that connection, paragraph 6.2 of  theTRIPS Agreement was specifically aimed at this;  and (iv), the expanded set of issues resulting from
regional and sub-regional trade initiatives, such as the EU-ACP initiative, which further challenged
the LDCs' capacity to participate fully.  The mandate s contained in the Doha Declaration with respect
to technical assistance provided that it should as sist LDCs to adjust to WTO rules and disciplines,
implement their obligations and exercise their rights.  Based on their experience of the delivery oftechnical assistance so far, the LDCs believed that that the design of any technical assistance would be
enhanced if certain principles were observed.  For example, a technical assistance programme should
contain a balance between the issue of implementing obligations and the issue of utilisation of rights
under the WTO Agreement.  Second, it should provide tools to identify the developmental impact of
trade rules at the national and regional levels.  Third, it should enhance LDCs' negotiating capacity in
Geneva and in capitals to ensure that trade rules matched their development needs.
190. Paragraph 43 of the Doha Ministerial Declaration endorsed the IF as a viable model for LDCs'
trade development.  The Director-General's report contained information on the implementation and
performance of the IF since its inception.  For example, the IF had assisted in the opening up process
in recipient countries and in the first step of th eir economies' integration into the multilateral trading
system.  However, the IF failed to address severa l issues such as follow up, the low number of LDCs
which had completed the process of the IF, and the low rate of delivery on the ground compared to therate at which issues were coming up in the WTO.  As Members were aware, most LDCs would need
to benefit from the IF before they could participat e fully in the WTO.  Therefore, the delivery of
technical assistance under the IF to LDCs should be increased significantly.  Finally, the procedures
should be looked at so that the IF could be provided at a more efficient and effective rate.  He thanked
Members and the donor community for their interest in the IF despite the negative evaluation of thefirst phase and the mixed results foreseen from the next evaluation phase.  Members should persevere
and try to find ways to make improvements in this area, so as to enable many LDCs to benefit from
the IF as soon as possible.  In this connection he wished to recall that Ministers at Doha had endorsed
the IF as a viable model for LDCs.WT/GC/M/77
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191. The representative of Haiti associated his delegation with the statement by Zambia on behalf
of the LDCs, and expressed his delegation's satisfaction that the Director-General had taken the LDCs'
concerns seriously.  The creation of a unit for LDCs in the Secretariat would enable the LDCs to feel
further integrated in the organization and to better follow the WTO's work, along with the acceleration
of market access and technical cooperation.  This unit, with the support of other organizations, wouldhelp to enable the LDCs to reinforce and diversify their production capacity in order to better benefit
from market access.  In Haiti's view, the number of countries who would be able to participate in and
benefit from the IF would increase as a result of the creation of this unit.  In the context of the setting
up of the unit, he wished to emphasize the importance of having a linguistic balance so that all LDCs
could find someone with whom to communicate, be it in English, French, Spanish, or Portuguese.
Haiti would continue to support this new unit, so that it could be the prize the WTO could present at
Cancún.
192. The representative of the United States welcomed the progress made in the IF and, as noted
by the Director-General, also recognized that more could be done in the area of follow-up activities.
It was encouraged that the diagnostics would be completed for the 11 additional LDCs by the end of
the first quarter of 2003 and hoped that follow-up ac tivities would begin shortly thereafter.  In her
delegation's view, the lead facilitator in each country would be invaluable in steering the processforward, and early identification of lead facilitators would improve the success of follow-up activities.
A better definition of the role of the lead facilitator would help all participants manage the process
better.  The United States shared the Director-Gener al's view that coordination among least-developed
countries and multilateral and bilateral donors represented another an important step forward.
However, more could be done there as well.  In this regard, bilateral donor missions should beengaged early in the process.  Each national coordination committee should ensure that all key
players, including their own public and private sector as well as major donor missions, were pulling in
the same direction.  The United States strongly supported the idea of sharing technical assistance and
capacity building responsibilities among multilateral donors, bilateral donors, and recipient countries
in order to optimize resources and efficiency, while responding to the evolving technical assistanceneeds of developing countries.  Each participant should work to meet the challenges of LDCs' trade
development in areas where their competencies and expertise were most relevant.
193. The representative of Norway said that the Director-General's report gave a clear picture of
the work, the progress and the way ahead.  Norway welcomed the fact that more countries were
following the example set by it and by the Commun ity in granting tariff- and quota-free treatment to
products from LDCs.  The IF was the best tool availa ble for helping to mainstream trade into national
development plans and was also an important coordinating mechanism for trade-related technicalassistance activities provided by the WTO, other organizations and bilateral donors.  Like Zambia,
Norway also believed that financing active involvement and follow up, in order to ensure
implementation, were the key challenges of the IF.  Trade policy priorities, based on the findings of
the DTIS and integrated into the Poverty Reduction Strategy Papers, had to be followed up and
implemented by the LDCs themselves, and by th e involved organizations and the donor community
through trade-related technical assistance and capacity building.  Norway was expanding its activities
in these areas.  It had donated US$500,000 in 2001 to the Global Trust Fund for the IF and had nearly
tripled that amount for 2002.  In addition, Norway planned to take more practical steps as lead
donor/IF facilitator, and by being more active in the coordination and discussions on trade policy at
the national level.
194. The representative of Switzerland said that in addition to statements his delegation had made
on this matter in other bodies, he wished to note that the IF constituted a crucial effort by the
international community to step up its support to LDCs' trade institutions and trade projects.  Since
Doha, the IF had become focused and instruments had been set up to make it operational.  The so-
called "revamped phase" of the IF had been so far conducted under time pressure, and despite the factthat the progress made had been below expectations, Members were now moving in the rightWT/GC/M/77
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direction.  It was now time for Members to learn from the experience of the first partner countries that
had participated in the IF, with a view to further improving the IF.  In this regard, the forthcoming
evaluation of the IF would be of the utmost importance.  In his delegation's view, some systemic
questions would have to be tackled over the coming years:  The IF was available to LDCs in a
sequencing of interventions that depended essentially on the capacity of the World Bank to hireconsultants for initiating the DTIS.  This process should be organized in a more pragmatic way so that
other countries could benefit from the process.  Ways would have to be found to expand the
programme quickly – not necessarily with exactly the same modalities – to other low-income and
lower middle-income countries.
195. The IF's governance could be improved if donors and developing partner countries would take
the lead, and if the functions of the existing institutional arrangement could be assumed by a
mechanism consisting of a small independent technical secretariat that would have operationalresponsibility and would be guided by a bilateral or multilateral group which met regularly.  The
follow-up issue was pressing and needed a clear solution and sharing of responsibilities between
donors, agencies and beneficiaries.  There was also a need to improve substantially the identification
of concrete projects based on the DTIS.  This could be facilitated by the preparation of a clear
mapping following the DTIS, setting priorities, sequencing and responsibilities.  Finally, Membershad not yet built the crucial element of guidance and ownership by the partner country.  In his
delegation's view, the IF would succeed only if the partner country was able to guide the process.
Members had to determine the best ways to give support to the partner countries in making use of the
IF.
196. The representative of Canada said that Canada was fully committed to the mandate described
in paragraph 43 of the Doha Ministerial Declaration and was a major contributor and participant, as
one of the two donor coordinators, in the IF.  Canada believed that donors were fully committed to
ensuring that the IF yielded the results it had been intended to produce.  As one of the primary donors
to the revamped IF, Canada was fully engaged in the process of strengthening the follow-up to the IF
diagnostics, as highlighted by the Director-Gen eral and by some previous speakers.  Canada
considered that the evaluation of the IF process was of utmost importance and looked forward to it in
2003.  Such an evaluation was to assess the IF process and the extent of achievement of its objectives
of mainstreaming trade into national development plans, linking trade development and poverty
reduction, and more closely coordinating donor support with a comprehensive policy framework.
197. The representative of Kenya said that her delegation attached great importance to issues
affecting LDCs and was grateful to the Director General for his efforts and for the steps he had
undertaken, as well as to those who had announced that they would further assist the integration ofLDCs into the multilateral trading system.  Kenya welcomed the progress made with the IF and
agreed with Zambia's statement on behalf of the LDCs that LDCs should receive the support required
to adjust to WTO rules and disciplines, implement obligations and exercise rights of membership.
Kenya supported Switzerland's statement on the need to expand the IF to other low-income countries.
198. The representative of Benin supported the statement by Zambia on behalf of the LDCs.  The
special unit in the Secretariat for LDCs should have human, financial and material resources
necessary to fulfil its mission, which should be clearly defined with the cooperation of the main
beneficiaries.  Benin was willing to make proposals at the appropriate time.  The IF should be
expanded to the countries that would need to be integrated, in particular LDCs.  His delegation
supported Canada's suggestions in this regard.
199. The representative of Guinea associated her delegation with the statement by Zambia on
behalf of the LDCs.  The Director-General's interim report on the implementation of the IF was of
particular interest to her country, since it would be one of the beneficiaries of the second phase of the
pilot programme.  Her delegation thanked the partners who had invested in the success of the IF.WT/GC/M/77
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Guinea invited developed partners to act as facili tators, because this would guarantee the success of
the IF activities in Guinea.  She welcomed the cooperation with other organizations for the
implementation of programmes in favour of LDCs.  With regard to the special unit in the Secretariat
for LDCs, this unit would allow LDCs to be able to  improve their awareness and understanding of the
provisions of the WTO Agreement.
200. The representative of Djibouti said that the necessary steps should be taken to ensure a
linguistic balance with respect to the unit for LDCs in the Secretariat.
201. The General Council took note of the interim report by the Director-General and of the
statements.
16. Implementation and adequacy of techni cal cooperation and capacity-building
commitments in the Doha Ministerial Declaration – Interim report by the Director-
General pursuant to Paragraph 41 of the Doha Ministerial Declaration (WT/GC/W/484)
202. The Chairman recalled that in paragraph 41 of the Doha Ministerial Declaration, Ministers
had instructed the Director-General to report to the Fifth Session of the Ministerial Conference on the
implementation and adequacy of the technical coop eration and capacity-building commitments in the
Doha Ministerial Declaration, with an interim report to the General Council in December 2002.
203. The Director-General said that his interim report, which was before the General Council in
WT/GC/W/484, addressed the implementation and adequacy of the technical cooperation and
capacity-building (TC/CB) commitments undertaken by Ministers at Doha.  In paragraph 41 of the
Doha Ministerial Declaration, Ministers had reaffirmed the specific commitments they had
undertaken on TC/CB, as contained in several substantive paragraphs of the Declaration.  These
commitments were summarized on page 3 of his repo rt.  He wished to highlight a few key points of
that report.  First, the TC/CB mandates embedded in the Doha Ministerial Declaration were
unprecedented.  Ministers at Doha had confirmed that  TC/CB were core elements of the development
dimension of the multilateral trading system.  They had established an extensive mandate and had
undertaken a firm set of commitments on TC/CB. This unprecedented mandate had challenged the
way Members had previously conducted technical cooperation.  He believed that the Secretariat, withthe strong support of the membership, had begun addressing that challenge.
204. Second, coordination had been at the centre of the Secretariat's response to the Doha
mandates on TC/CB.  The challenges of TC/CB coul d not be met by one agency alone, no matter how
large.  The demands were numerous and supply was limited.  For that reason, he had emphasized the
urgent necessity for greater coordination and stra tegic partnerships.  The Doha Declaration had
involved an explicit mandate for coordination enco mpassing not only the WTO Secretariat, but also
bilateral donors within the Development Assistance Committee of the OECD, the core multilateraleconomic institutions, and regional institutions, particularly regional development banks.  Ministers
had requested the WTO Secretariat to coordinate with all those institutions.  He was pursuing that
coordination objective with determination.  Even at the present early stage, coordination efforts had
yielded results.  However, even with current far- reaching coordinated efforts, the results showed that
the task was monumental and would for some time be a work in progress.  He assured themembership of his firm commitment in this regard, and would continue to report on the dividends
from his coordination efforts.
205. Third, the Joint OECD/WTO database was a key element in coordination efforts and in
monitoring the response to the Doha mandates on TC/CB.  To better coordinate and monitor the
international response to the Doha mandates on TC/CB, the OECD and the WTO, jointly, had
launched the DDA database on trade capacity building.  All agency and country providers of technical
assistance were parties to the database.  Virtually all parties, including the regional developmentWT/GC/M/77
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banks, had reported to the database.  The database would enable the international community to
coordinate better, avoid duplication, identify gaps in the international response, and thus better
estimate progress in the implementation of the Doha mandates.  He had met with the Secretary-
General of the OECD two weeks earlier.  Among other things, they had reviewed progress and were
confident they were on the right track.  The first report on the database was also currently beforeMembers.  That report would be issued twice yearly.
206. Fourth, the 2002 and 2003 TA Plans had laid the basis and established the overall structure
for WTO TC/CB for post-Doha and beyond.  The 2002 TA Plan had been the first WTO annual plan
on technical assistance.  It had also been the first plan based on the Doha mandates, and had been
experimental and transitional.  His interim report provided a report on its implementation and, more
importantly, highlighted the lessons that the Secretariat had drawn from its implementation.  The 2003
TA Plan would build on the lessons of the 2002 TA Plan.  He believed that the 2003 TA Plan hadbeen enhanced significantly by the rigorous process of discussions, negotiations and brainstorming to
which it had been subjected.  On 8 October, he had attended the meeting of the Committee on Trade
and Development to set out in detail his vision of TA for the short-, medium- and long-term.  He had
listened carefully throughout the morning session to  the views and guidance from the membership,
and had benefited enormously.  As a result, the 2003 TA Plan had been much better targeted andfocused.  He expressed his sincere appreciation to the membership for authorizing the 2003 TA Plan
at the meeting of the CTD on 22 November, and to the Chairman of that Committee for his tireless
efforts and successful management of the consultations and negotiations on the 2003 TA Plan.
207. Fifth, the subject of TC/CB was a subject to which he attached priority, and this had been his
starting-point.  He had identified it as one of the fo ur pillars of his work as Director-General.  He
would continue to accord this issue his direct personal attention within the Secretariat and in close
cooperation with the membership.  This attention did not stem only from the fact of a mandate from
the membership, but also because TC/CB were inhe rently linked to assisting capacity-constrained
Members to make use of trade as an engine for poverty alleviation, growth and development.  Finally,
he wished to report that the TC/CB commitments undertaken by the membership at Doha was an areawhere there had been demonstrably meaningful progress.  However, there was yet scope for
improvement.  The progress that had been made had, however, created a good basis for beneficiary
countries to be better prepared in the ongoing negotiations and other aspects of the Work Programme.
Because of the high number of demands and the ever-expanding priorities, adequacy and
implementation of TC/CB would always be a challeng e.  He would continue to monitor progress in
this area and would offer a full report to the membership at Cancún.
208. The representative of Japan said Japan believed that trade-related technical assistance and
capacity building were among the most important tools for developing-country Members to be able to
participate effectively in ongoing negotiations and in  the multilateral trading system.  Therefore, it
welcomed the progress on TA which had been made at an early stage of the implementation of the
Work Programme after the Doha Ministerial Conference.  Japan was determined to contribute to the
effective implementation of the WTO TA Plan and to the coordinated work among Members on waysand means to further improve TA activities.  In this  context, Japan appreciated the Secretariat's efforts
to promote strategic partnerships with other international organizations, regional organizations and
bilateral donors, with a view to meeting the needs of beneficiaries more efficiently and effectively.
Meetings with the Heads of Agencies of the IF and the database developed with the cooperation of the
OECD were concrete examples of such efforts.  The recent Workshop on Trade and Investmentorganized by the WTO in cooperation with UNCTAD and with support by the Japan International
Cooperation Agency had been part of Japan's contribution in this respect.  Japan paid tribute to the
Secretariat's responses to Members' needs and concerns through a number of consultations with
Members, both developed and developing, which was the best way to build mutual understanding and
confidence.  WTO TA was a work in progress, and therefore faced many challenges.  However, Japanshared the view expressed in the Director-General's interim report that WTO TA/CB had created aWT/GC/M/77
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strong basis for adequate engagement by beneficiary countries in the ongoing negotiations as well as
other aspects of the Work Programme and the implementation of WTO agreements and future
agreements.
209. The representative of the European Communities thanked the Secretariat for the work that had
yielded a timely adoption of the 2003 TA Plan, and appreciated that a number of points and concerns
of interest to the Community had been taken on board in the preparatory phase of the Plan.  In a
constructive approach, the Community had given a favourable opinion of the 2003 TA Plan, which
had been adopted on 22 November 2002 by the CTD.  He thanked the Chairman of the CTD for his
effective chairmanship. However, the Community woul d be watching very carefully how the Plan was
implemented.  It was important that Members make real efforts to move from TA delivery to more
management, outsourcing and quality-control functions.  The Community shared the concerns over
the limited degree of information which had been made available up to the present on theimplementation of the 2002 TA Plan.  It welcomed that the Secretariat was committed to more
transparency and to providing complete information regarding the management and implementation
of technical assistance.  It looked forward to the recently adopted 2003 TA Plan being implemented
properly to the benefit of the participating developing countries, and to the further report at the Fifth
Ministerial Conference.
210. The representative of Egypt said she wished to make a few remarks with regard to the
Director-General's report.  First, Egypt did not agree totally with the assumption made in the report
that the current degree of delivery of TA/CB was adequate to allow developing countries to move
forward with the ongoing negotiations and the Do ha Work Programme.  Most of the developing
countries still faced serious difficulties in tabling the negotiation positions that would safeguard theirinterests, and did not have a clear understanding of the implications for their economies of many
issues under negotiation.  Second, Egypt considered  the creation of the Technical Cooperation Audit
Division in 2001 to be very positive.  Auditing had proven to be an essential element for the success
of the administration of TA and allowed for the rectification of mistakes and maximization of good
practices.  Her delegation looked forward to systematic and comprehensive evaluation of TA and theaudit report on the implementation of the 2002 TA Plan, which would be circulated to Members in
February or March 2003.  Third, Egypt supported the Director-General's efforts to coordinate with
other agencies the TA delivery that focused on commercial infrastructure for poverty reduction, in
order to generate appropriate supply-side responses.  Fourth, as for the delivery modes of TA/CB, the
report had not elaborated on using information technology.  Her delegation wished to ask the
Director-General to give particular attention to th is matter.  Last, Egypt would prefer national and
regional events that focused on specific trade issues of particular interest to the developing countriesand with direct effect on the CB process.  In this  regard, Egypt welcomed the convening of the first
regional training course for senior Arab Government officials to be held in Cairo on 18 January 2003,
and assured that it would provide all the necessary facilities to ensure the success of this event.
211. The representative of Norway said that since the Doha Ministerial Conference, the WTO had
done much to put into effect the mandate from Ministers on TC/CB.  Norway attached great
importance to securing predictable funding for the annual WTO TA Plan.  In his delegation's view,
future WTO TA should be at least at the same level as in 2002 and what was foreseen for 2003.
Moreover, a repetition of the process Members had experienced prior to the approval of the 2003 TA
Plan would not be satisfactory.  The Secretariat had to work within a predictable financial framework.
The Secretariat, the Budget Committee and the CTD had to work together to ensure that there wasconsistency between the Plan and its related costs.  At the outset, the Plan should be drawn up based
on the resource constraints, i.e. personnel and financial resources on the one hand, and requests for
assistance on the other hand.  The priorities set out in the Plan should be based on the recipients'
needs, and LDCs should be a clear priority group.  Norway looked forward to the evaluation and audit
of the 2002 TA Plan by March 2003.  This would also be an important basis for further financialcontributions.  Assessing the quality of the assistance given was an important challenge.  QualityWT/GC/M/77
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assessment was difficult, but both donors and beneficiaries were interested to know what worked well
and what did not, in order to allow for planning and implementation of new activities based on past
experience.  In this respect Norway welcomed the Secretariat's efforts to coordinate and build
strategic partnerships with other organization s, such as UNCTAD, ITC and the World Bank.
212. The representative of India thanked the Secretariat for coordinating and carrying out the
2002 TA Plan despite severe resource constraints, as well as the donor countries for their support for
TA activities.  The 2002 TA Plan had been an experiment, and a number of lessons had been learned
from its implementation.  His delegation thanked the Secretariat for the considerable efforts it had
made to coordinate the preparation of the 2003 TA Plan in consultation with Members.  Paragraph 6
of the Director-General's interim report indicated that 89 per cent of the planned regional activities
and 82 per cent of the planned national activities had been implemented by November, for which
India wished to compliment the Secretariat.  Paragraph 18 of the report indicated that out of 458activities delivered by the end of November, 133 were ad hoc activities.  The ad hoc activities issue
had been discussed during the preparatory process for the 2003 TA Plan.  While recognizing the need
for some flexibility in the implementation of TA activities, India welcomed the fact that in the
execution of the 2003 TA Plan, such ad hoc activities would be limited to five per cent.  His
delegation looked forward to further discussion on this issue in the CTD.  India welcomed theincreasing coordination by the WTO Secretariat with other relevant international institutions in the
delivery of TA/CB activities, in particular with UNCTAD, which was a strategic partner for
delivering TA.  In this context, cost sharing arrang ements in the case of joint activities with other
international organizations, including UNCTAD, shoul d be finalized early.  During the process of
finalizing the 2003 TA Plan, it had been agreed that the CTD would consider all issues relating totechnical cooperation in 2003 as well as the scope of TA/CB activities.  India looked forward to the
discussion in the CTD on that issue.  In paragraph 54 of the Director-General's interim report, it had
been noted that since Doha, at various interna tional conferences such as the Monterrey Summit on
Financing for Development and the World Summit on Sustainable Development in Johannesburg, the
Doha Development Agenda had been transformed fr om a trade agenda into a global agenda.  His
delegation was unclear about this reference and sought clarification as to what this implied.  India
hoped that the TC/CB programme being coordinated by the WTO Secretariat as mandated by
Ministers at Doha would lead to building the human and institutional capacities of developing
countries, LDCs and low-income countries in transi tion, and would assist them in adjusting to WTO
rules and disciplines and to draw on the benefits of an open and rule-based multilateral trading
system.
213. The representative of Kenya said that as men tioned in the Director-General's report, TC/CB
were core elements of the development dimension of the multilateral trading system, and
consequently formed an integral part of the Doha Development Agenda.  As stated in the Ministerial
Declaration, the delivery of TA should be designed to assist developing, LDCs and low-income
countries in transition to adjust to WTO rules and disciplines, implement obligations and exercise the
rights of membership, including drawing on the benefits of an open rule-based multilateral tradingsystem.  Her delegation acknowledged that much progress had been made in the delivery of TA, and
agreed with the Director-General's report that there was scope for improvement.  African countries
still faced an uphill task in that regard.  Her delegation was encouraged that JITAP had been given a
new lease on life that would consolidate the achievements made so far and would extend its
programme of activities to other African countries.  She looked forward to an immediateimplementation of the new phase.  She also welcomed the inclusion of NEPAD in the TA Plan and
hoped that the cooperation between WTO and NEPAD would have meaningful results.
214. Her delegation noted that the report did not mention the two trade policy courses that had
been undertaken in Nairobi and Casablanca in 2002.  These courses had been pilot projects of
12-weeks duration each, and had been completed in September and evaluated thereafter.  The resultsof these evaluations should have formed part of the interim report.  Any positive contribution by theWT/GC/M/77
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WTO to the capacity-building efforts of developing countries should be commended, developed and
replicated.  Therefore, she was disappointed that such results had not been reflected in the interim
report.  However, she expressed appreciation for the two courses slated in the 2003 TA Plan.  Her
delegation hoped that this would become a permanent feature of future technical assistance plans and
was confident that such courses would positively contribute to sustainable capacity building.  Sheunderlined that WTO TA should be directly relevant to the negotiations and implementation of
commitments and should respond to the needs of the recipients.  Complementary TA activities by
organizations such as UNCTAD, as well as by bilateral donors, should be delivered within a coherent
framework.  In this regard she welcomed the Director-General's plans on a strategic partnership with
other organizations.  This would go a long way to integrating developing and least-developed
countries into the multilateral trading system.  Finally, her delegation commended the Director-
General and the Secretariat for the continuous efforts to improve the quality of TA offered todeveloping countries and LDCs.  The current level of engagement between the Secretariat and the
membership would ensure that a meaningful contribution was made towards the effective
participation of these countries.
215. The representative of Djibouti expressed his delegation's satisfaction that several
organizations participated in WTO TA activities, such as the regional organizations dealing with
development issues or other UN bodies.  Regarding the evaluation and follow up of these
programmes, his delegation wished to highlight that two- to three-day seminars, be they in Geneva or
in the field, were not long enough to achieve a good result and to enable beneficiaries, in particular
African countries and LDCs, to understand the WTO Agreement.  Members should discuss the issue
of the duration of seminars.  Djibouti was contributing to technical assistance at its level.  At least oneregional seminar had been held yearly in Djibouti for African French-speaking countries or LDCs.  In
January 2003, a seminar on trade and investment would be held in Djibouti, and another one on
environment and trade would be held after the Cancún Ministerial Conference.  He thanked the
Secretariat in this regard.  However, the length of the seminars should be reviewed, and the statement
by Kenya was important in this regard.  A two- to  three-month seminar would enable the beneficiaries
to really familiarize themselves with WTO rules.  Therefore, seminars, in particular those for LDCs
and African countries, should last longer, should financial conditions so permit.  This was an
important element to be taken into consideration by Members in order to enable LDCs to integrate
into the multilateral trading system.
216. The representative of the United States expressed appreciation to the Secretariat for its work
to make the 2003 TA Plan a success.  While pleased with the adjustments to the Plan, the United
States continued to have some concerns regarding issues ranging from redundancy and cost sharing toaccounting practices and quality assessment.  The WTO should direct its efforts principally to those
activities which focused on the WTO’s capabilities for building trade capacity and for effective
participation in negotiations.  It should be cost-e ffective and within the budget.  Like Norway, the
United States supported plans to evaluate and audit the Plan after implementation, and hoped that
such evaluations would be ongoing throughout th e year.  Lessons had resulted from Members'
considerations. First, the programmes should respond to developing countries' concerns regarding
repetitive training, by providing modular sequencing of courses.  Second, there was a need for
improving how the Secretariat incorporated re commendations or requests for TA from WTO
Committees into the 2003 TA Plan.  For example, the efforts by the Committee on Technical Barriers
to Trade to identify needs did not appear to be reflected in the 2003 TA Plan.  On regional tradepolicy courses, the Secretariat was heavily burdened with work in the 2003 TA plan.  The
Secretariat’s own evaluation suggested that the courses were a worthwhile endeavour, but could
benefit from greater guidance.  The United States believed that it would be useful to establish an
advisory group of six or seven experts with trade and university management experience to develop
three- to five-year plans for these activities.WT/GC/M/77
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217. The representative of Thailand said that the Director-General's interim report was very useful
in informing Members of progress in the TC/CB im plemented so far, as well as in providing an
indicative direction of what should be done in 2003 and in the long run, in order to fulfil the
commitments in this important area.  Her delegation appreciated the hard work done in collaborating
with other multilateral and regional agencies in the delivery of joint TC/CB activities andcoordinating with the World Bank and the major regional development banks, which not only
guaranteed funds for the implementation of the Doha mandates but provided policy knowledge and
intellectual contributions.  Her delegation took note with great interest of the database which had been
established.  This would be a good basis for future work, and would reduce the duplication of
activities and increase the efficiency of the TA programme.  Thailand also believed that much
remained to be done in order to fulfil the long-term objectives of poverty reduction, integration and
development of the developing- and least-devel oped-country Members.  While the agreed 2003 TA
Plan was not yet the solution, it had been developed from the lessons learned from 2002 with more
focus on the needs of recipient countries, in which the results should be closely monitored and
assessed.  In this regard, phased TA might be necessary to ensure that the areas of priority for the
recipient countries were kept well focused, with a degree of intensity.  Thailand realized the limitation
of human resources in the Secretariat which meant that it could not meet Members' demand, and thussupported the plan to have more regional rather than national TA, although the specific needs of each
Member might not be met.  In this connection, equal distribution of TA among regions should be
ensured.
218. The representative of Zambia underlined the importance of ownership in the design of the
TRTA/CB Plan by allowing for the input of individual countries to its design.  This would ensure that
the TRTA/CB Plan was tailored to individual need s rather than a "one-size-fits-all" plan.  The
adequacy of resources for addressing TA was a challenge.  However this should be weighed with the
benefits of an expanded, effective participation of a range of Members, as well as the commitments
undertaken by Ministers at Doha.  Zambia appreciated the direction the Director-General was taking
in ensuring cooperation and coordination between the WTO and other agencies, such as ITC andUNCTAD, in the delivery of TRTA/CB, and this cooperation should been cemented.  As noted on
several occasions, addressing the supply-side aspects of LDCs' economies was crucial.  LDCs had
recently been offered a number of trade preferences by many countries.  In order to be able to take
advantage of these preferences, LDCs wished to see an expansion in technical assistance and trade-
related capacity building on the supply side of their economies.  Zambia welcomed the establishment
of the WTO/OECD database.  Allowing LDCs to input information into that database, particularly in
the design of the many variables, would be of direct relevance to their situation and would increasethe usefulness of the database.
219. The representative of Pakistan said that the Director-General's personal commitment to this
area had given it a substantial boost, as evidenced by his report.  He fully shared the Director-
General's view that the work undertaken so far had made the WTO TA programme substantive,
meaningful and credible.  The increasing emphasis on cooperation with other agencies in poolingresources, especially with UNCTAD and OECD, would make this work more cost-effective and more
transparent.  It was his understanding that the WTO was considering an initiative of having trade
clinics, which his delegation welcomed.  This would help provide answers to problems arising from
the implementation of WTO rules.  Such clinics would provide invaluable support for building
institutional capacity building.  Pakistan hoped that in the ongoing discussions on the WTO budgetthere would be no reduction in the budget for TA work.
220. The representative of Jamaica welcomed the strategic approach which had been adopted on
development and delivery of TA, and noted the three objectives of WTO TA, namely, the building of
negotiating capacity relating to the negotiations and work programme launched at Doha;  the building
of institutional capacity for understanding the rules and implementing the WTO agreements;  andtechnical assistance for developing and enhancing commercial infrastructure.  This approach wentWT/GC/M/77
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beyond providing TA narrowly for the implementation of the Doha mandates – important as this was
– and also sought to address some supply-side elements.  Jamaica welcomed the efforts of the WTO
in seeking to coordinate with the relevant international and regional organizations to the fullest extent
possible, in order to realize these objectives, since the WTO alone could not fulfil all of the various
objectives.  Jamaica commended the Secretariat for devising, under the Director-General's leadership,new methods to provide TA.
221. His delegation had always maintained that more innovative and creative means of delivering
TA had to be developed to address the needs and requirements of Members, particularly small
resource-constrained Members.  In this connection, Jamaica commended the Secretariat on the
development of new technical assistance modes, such as expansion of the WTO internship
programme and the implementation of new training courses, which would serve to complement the
more conventional modes of delivery.  In his delegation's view, more sustainable training structuresshould be put in place as, for example, programmes for the training of trainers.  As indicated in the
interim report, Jamaica also agreed that TA and market access were not substitutes for each other, but
complementary.  TA was a means to an end, and was not a substitute either for fair rules or for
reasonable obligations that were commensurate with the levels of development of Members.  The year
2002 had been a turning-point in the manner in which the WTO Secretariat strove to deliver TA.Critically, it was now more demand-driven, and the responsibility was increasingly on Members to
ensure that TA responded to their priorities as incorporated in their overall development plans.  The
success of this new strategic and demand-driven approach would depend to a significant extent on the
provision of adequate and predictable resources.
222. The representative of Canada supported the statement in the report that TC/CB commitments
undertaken by the membership at Doha were an area where there had been demonstrably meaningful
progress.  However, there was scope for improvement and more work remained to be done.  In his
delegation's view, all Members had engaged fully in partnership with the Secretariat to ensure that a
process for funding was established, that funding was provided and that the TRTA needs were
identified and substantially delivered in the very first year.  Members had again engaged in anevaluation exercise of 2002 TA activities in order to make the 2003 TA Plan more effective.  Like
several previous speakers, his delegation believed that this evaluation was important.  The Secretariat
would provide reports and evaluations within specific time-frames, and his delegation looked forward
to receiving these documents and giving them full attention.  In this connection, the Secretariat should
consider undertaking very early in 2003 consultations to come up with guidelines and criteria for the
selection of TA and ad hoc activities, as Members had agreed at the time of approval of the 2003 TA
plan.  Canada had made a contribution to the Global Trust Fund of CAN$ 1 million, and encouragedother donors who had pledged funds but not yet forwarded them, to do so with the least possible
delay.
223. The representative of Morocco said that paragraph 41 of the Doha Ministerial Declaration had
placed TC/CB as a priority in the development pr ogramme.  More directly targeted TA activities
would be very important in order to substantially increase and improve TA within the framework ofthe new strategy which had been approved by Members.  Capacity building was a long-term process
which required an integrated approach that would involve the institutions of developing countries
dealing with WTO issues, with a particular emphasis on the training of trainers.  Moreover, it would
be very useful to be able to draw lessons from previous plans, since the organization had to adapt
itself constantly in order to better respond to the needs of developing countries.  Like Kenya, hisdelegation believed that reference should be made in the report to the two courses held in Nairobi and
Casablanca.  These courses were very promising, not only as a new form of TA but also as a means of
reinforcing capacity building in the field.
224. The representative of the Côte d'Ivoire said that his country had benefitted from technical
cooperation and capacity building in the field as well as training within the WTO.  The TC/CBWT/GC/M/77
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activities had been provided by WTO, UNCTAD, ITC and JITAP.  He thanked those institutions for
providing such assistance as well as the donors without which such TA could not have been provided.
As a beneficiary of TA, Côte d'Ivoire believed that national seminars had been very effective, as they
had allowed operators to participate and to understand better WTO rules.  There should be more
regional seminars, as this would allow groups at the regional level to better formulate their demandswith regard to the group to which they belonged, such as the ACP Group or the African Group.  If
national and regional seminars could not be organized, thematic video conferences should be set up to
help participants better understand specific issues of interest.  The dissemination of WTO training
modules through electronic format would allow the training of trainers, who would then disseminate
the information to other operators, in order to increase understanding of WTO rules.
225. In considering TC/CB, the first question to be examined should be the working language
issue.  Documents should be translated into a language which beneficiaries understood, in order forthem to participate better in the seminars and to be able to disseminate such information in their
respective countries.  He also wished to propose the organization of bilateral meetings, such as
between the European Union and WAEMU, and between the United States and ECOWAS, to
increase understanding of the multilateral trading system and WTO rules, and to have information on
the objectives of options and commitments in that context.  For example, his country had receivedrequests from the European Union but had no information as to the objective of such requests.
Moreover, countries like his had difficulties in undertaking commitments as they could not assess the
rationale and the consequences of these commitments.  Therefore, assistance to make such evaluations
would help his country to assess the commitments.
226. The representative of Nigeria associated his delegation with the statement by Kenya.  Nigeria
supported further evaluation of TA in order to improve its delivery.  Technical assistance should be
provided which took into account the needs of beneficiaries.
227. The representative of Mauritius expressed his delegation's satisfaction with the efforts to give
a new orientation to TA delivery.  The emphasis now was not only quality, but also in terms of the
new institutional set-up the new strategy had introduced.  For example, internal auditing seemed to bea very good instrument in ensuring that delivery was as effective and efficient as possible.  He
thanked Members and the Secretariat for having worked so well on this issue, as well as all donors
who had been contributing generously to the TA programme.  Mauritius supported the statements by
Kenya and Zambia with respect to the new orientation and dimension of TA, and would like to see the
JITAP programme extended to some other countries in Africa.
228. The representative of Cuba said that the Director-General had lent his full support to the TA
issue since he had taken up office at the WTO.  TA was also a priority area for Cuba and a means to
help developing countries to increase their institutional capacity. Nevertheless, this means to help
developing countries implement their obligations under the WTO Agreement should not be a
substitute for the development of fair rules that would help developing and least-developed countries
integrate better into, and benefit from, the multilateral trading system.  It was essential that TA be
designed to meet national requirements.  The development of new forms of TA with otherinternational institutions, in particular UNCTAD and the ITC, was a very positive element, since these
organizations had a comparative advantage and experience in dealing with their respective areas of
competence.  Cuba supported the statements by Kenya and Jamaica in this regard.
229. The representative of Burkina Faso said that as an LDC which had benefited from WTO TA
and from the JITAP programme, Burkina Faso thanked donor countries which had allowed it to better
understand the rules of international trade and to integrate into the multilateral trading system.  His
delegation hoped that this form of TA would expand in the future and that many donors would
support this aspect of TA.  Burkina Faso was very optimistic regarding the place that LDCs wouldWT/GC/M/77
Page 55
occupy in the world trade, thanks to this form of TA which would enable them, despite their modest
means, to participate in WTO activities.
230. The Chairman said that with respect to India's request for clarification, the Secretariat would
be in touch with that delegation directly.5
231. The General Council took note of the Director-General's interim report and of the statements.
17. Procedures for the appointment of Directors-General – Communication from the
Chairman (WT/GC/W/482/Rev.1)
232. The Chairman recalled that the General Council Decision of July 1999 on the appointment of
the next Director-General (WT/L/308) called for a comprehensive set of rules and procedures for the
appointment of Directors-General to be elaborated  and adopted by the end of September 2000, and
that considerable work had been done under this mandate by the previous Council Chairs.  He also
recalled that at the May meeting of the General Council, he had indicated his intention to pursueconsultations on procedures for the appointment of Directors-General with the aim of trying to bring
this matter to a conclusion by the end of the year as had been suggested by many delegations.  Since
then, he had held extensive consultations – including three open-ended informal meetings of the
General Council in June, October and December – aimed at ascertaining delegations' views and
developing a text that could be considered for adoption at today's meeting.  He thanked all delegationsfor their very constructive discussions and many helpful suggestions throughout this process, all of
which had helped enormously to advance work in this area to its present stage.
233. On the basis of the most recent open-ended consultations on 2 December, he had circulated
for Members' consideration a revised draft text in document WT/GC/W/482/Rev.1.  He had proposed
three modifications to an earlier text circulated as WT/GC/W/482:  First, in footnote 2, he hadproposed the addition of the phrase "including the right of permanent residency";  second, in
paragraph 15, he had proposed the addition of the phrase "including their vision of the WTO";  and,
third, in paragraph 20, he had proposed replacing the word "assistance" by the word "support".  He
believed that the text with these minimal changes struck a careful balance among the many views that
had been expressed in all the deliberations on this matter, and embodied the common ground thatexisted among Members at the present stage.  He did not believe this text could be pushed any further
without unravelling that balance, and he therefore requested all delegations to give it their favourable
consideration.  In his view, this text represented a solid step forward in improving the procedures for
the appointment of Directors-General of this organi zation by elaborating and clarifying the procedures
and making them more predictable.  Furthermore, his sense of the discussion at the informal meeting
on 2 December was that there was a solid basis of support for its adoption with minimal
modifications.
                                                     
5 With regard to India's equest for clarification re garding the Director-General's statement in paragraph
41 of the Interim Report the Secretariat provided the followi ng clarification:  "The Director-General participated
at the Johannesburg World Summit on Sustainable Devel opent (WSSD), including at the High Level Side Event
on the Future of Multilateralism.  In most of the indi vidual statements made by over 100 participating Heads of
State and Government, there was a re-affirmation of the Doha Development Agenda and a renewed commitment
to its implementation.  Furthermore, in agreed language,  the WSSD collectively re-affirmed the text of the Doha
Ministerial Declaration.  The WSSD re-affirmed the DDA, in both the "Implementation Plan", as in paragraphs90 to 92, and in the "Johannesburg Declaration".  On this basis, the Director-General has urged WTO Membersto implement the DDA including its time-frames.  In doing so, he has underscored the specific point that theDDA should not simply be seen as an agreement or development agenda reached amongst trade ministers thatmet at Doha, but that the DDA should also now be seen  as a global agenda because of its endorsement and
increased profile at subsequent Summits such as the Johannesburg WSSD".WT/GC/M/77
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234. Accordingly, he proposed for adoption the draft procedures for the appointment of Directors-
General in document WT/GC/W/482/Rev.1.  As indica ted in the Note at the end of that document,
these procedures would apply in their entirety to the appointment of the next Director-General.
235. The General Council so agreed (WT/L/509).
236. The representative of Bulgaria thanked the Chai rman for his efforts to find a solution to some
of the institutional questions the WTO was facing, including the positive outcome of the work on
external transparency and the derestriction of documents, as well as the three institutional issues that
were on the agenda of the present meeting.  Bulgaria was among those Members who had insisted
during the previous appointment process that clear procedures be adopted which would ensure that
there was no repetition of the painful experience Members had had in 1998 and 1999 when the
organization had been paralyzed for a considerable period of time.  At the Doha Ministerial
Conference, his delegation had reiterated once again the importance it attached to the institutionalproblems facing the WTO.  He therefore wished to express his satisfaction that the Chairman had
devoted considerable efforts to bringing about some progress on these issues.  On the procedures for
appointment of Directors-General, Bulgaria's positi on had always been that there was a need for clear
and strict procedures with deadlines for the different stages of the selection process which would
allow for as little discretion as possible and which would guarantee a conclusive outcome.Unfortunately, the procedures just adopted were incomplete and not entirely unambiguous.  They
were incomplete because they did not contain a voting procedure in the case of recourse to voting as a
last resort, but merely provided that such a procedure would be determined at that time.  He agreed
with those delegations who had suggested that during the appointment process it would be more
difficult to agree on a voting procedure.  The procedures just adopted were also not unambiguous onthe consultation process.  An earlier draft circulated as JOB(02)/152 of 25 October had proposed that,
for the process of elimination of candidates, those with the lowest level of support should be
identified.  That had been changed in the current te xt to candidates "least likely to attract consensus",
which could mean either those having the lowest level of support or something else, and was therefore
even less unambiguous.  It was not clear, for example, what question delegations would have toanswer, and it might then be left to the discretion of  the Chairman and the facilitators to assess the
level of objections, and it was not clear whether the objections by some Members would not have
more weight than those of others.  The current text seemed therefore to be a step back from the
25 October text since it did not guarantee a definitive and conclusive outcome to the selection process.
Nevertheless, his delegation believed that the procedures just adopted contained some elements, such
as the process of elimination of candidates, which itself constituted a positive step forward when
compared to the existing situation.  As the Chairman had stated, this was a step forward whichimproved the procedures and Bulgaria was therefore satisfied with the text that had been adopted.
237. The representative of Botswana said his delegation joined others in thanking the Chairman for
his painstaking consultations on this subject, which had culminated in the text just adopted.  He was
also gratified that this text incorporated the modifications suggested by his delegation at the most
recent consultations.  His delegation nevertheless had some minor reservations, in particular withregard to paragraph 9 as read along with paragraph 13 of the text in WT/GC/W/482/Rev.1.
Paragraph 9 involved a nomination process by Member states, while paragraph 13 involved what
appeared to be a self-nomination process by a serving Director-General.  There appeared therefore to
be an element of inconsistency between the two which could possibly suggest that a serving Director-
General should enjoy preference over other candidates, and he did not believe that was the intention.In the interest of fair play, a serving Director-General should be subject to the same nomination
process as for new candidates.  There was also a danger in assuming that a serving Director-General
would have the support of his nominating Government to serve a second term, which might not
always be true.  In order to avoid that danger, th erefore, a serving Director-General should also be
subjected to the same nomination process as for other candidates.  His delegation's other concernrelated to paragraph 14 regarding the respresentativeness of candidates.  In the interests ofWT/GC/M/77
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inclusiveness and of facilitating the integration of  developing countries into the multilateral trading
system, his delegation considered that the post of Director-General should alternate between
developed and developing countries.  A precedent for this existed with regard to chairpersons of the
General Council, where the post alternated between developed and developing countries, and this
practice should apply also to the post of the Director-General.  Paragraph 14 made reference to allregions, which gave rise to some discomfort, and also provided that, in a situation where a final
selection had to be made amongst equally meritorious candidates, one of the factors to be considered
would be the diversity of the WTO membership.  The deliberate intention should be to strike a
balance between the interests of developed and deve loping countries, which was not provided by the
current wording of paragraph 14.  This paragraph therefore needed to be reviewed if Members
intended to integrate LDCs and developing countries  into the multilateral system.  Otherwise, the
weaker Members of this organization would continue to be the losers.
238. The representative of Brazil said his delegation wished to commend the Chairman for his
tireless efforts in attempting to strike a balanced and acceptable result on this issue.  He saw merit in
approving a set of procedures that would orient future Chairs of the General Council on the difficult
and complex task of selecting a Director-General for the WTO.  Despite the wide range of opinions
expressed during the consultations, Brazil was pleased to note that virtually everyone supported thenotion that decisions should be reached by consensus.  However, strong differences arose when there
was an absence of consensus, which was precisely the problem that this set of procedures intended to
address.  Regrettably, no consensus had been possible on this very important issue, as a result of
which the agreed solution proved to be less than satisfactory.  While Brazil would not object to the
decision on this matter, it wished to state for the record its preference for strict adherence toArticle IX.1 of the WTO Agreement, which stated th at  " … where a decision cannot be arrived at by
consensus, the matter at issue shall be decided by voting.  At meetings of the Ministerial Conference
and the General Council, each Member of the WTO shall have one vote."
239. The representative of Kenya, speaking on behalf of the 
African Group, expressed
disappointment at the way this decision had been  adopted.  She believed that a text on such an
important issue for the African Group should not have been adopted in haste, and that this text would
go down in history as one that they did not fully endorse.  Members would recall that the African
Group had proposed that the Director-General shou ld, on a rotating basis, be nominated and selected
from a developing- and a developed-country Member.  Furthermore, where Members were faced in
the final selection with equally strong candidates, they should take into consideration the desirability
of reflecting the diversity of the WTO's membership in successive appointments to the post of
Director-General.  However, paragraph 14 of the text in WT/GC/W/482/Rev.1 indicated that the
desirability of reflecting the diversity of the WT O's Members in successive appointments to the post
of Director-General would be one of the factors to be taken into account where Members were faced
in the final selection with equally meritorious candidates.  The African Group believed that the
diversity of the WTO's membership in successive a ppointments to the post of Director-General should
be the sole determinant to be taken into consideration when selecting final candidates.
240. The representative of Nigeria thanked the Chairman for making the best possible efforts to
ensure that the text was acceptable to all delegations.  His delegation had already made its views clear,
particularly on paragraph 21 of the text in WT/GC/W/482/Rev.1 relating to recourse to voting as a last
resort.  Lessons from previous exercises on this issue did not permit Members to toy with the matter
or shy away from taking a firm decision on it.  He recalled that his delegation had proposed that theparagraph in question stop after the first sentence, and that the rest of the paragraph be deleted.  He
wished also to support the statements made earlier by Botswana and Kenya.
241. The representative of Norway congratulated the Chairman on the adoption of more specific
guidelines for the appointment of Directors-Genera l, which he hoped would be helpful in future.
Unfortunately, it had not been possible to agree on a "circuit breaker" in paragraph 21 of the text inWT/GC/M/77
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WT/GC/W/482/Rev.1.  The lack of a circuit breaker was the main cause for the blockage during the
selection exercise in 1999, when it became clear that resort to the voting procedures under Article IX
of the WTO Agreement was not possible.  It was also against this background that delegations had
tried to find a solution to the question of a circuit breaker, so as to avoid similar problems in the
future.  Therefore, in his delegation's view, the formulation in paragraph 21, which provided for thepossibility of recourse to a vote as a last resort "by a procedure to be determined at that time" could
only mean a voting system different from the provision in Article IX of the WTO Agreement.
Norway's recommendation to colleagues in the futu re would be to agree on a double majority system,
i.e. a majority of Members that accounted for at least 50 per cent of world trade.
242. The representative of Cuba recognized the Chairman's efforts in the development of the text
that had been adopted.  Nevertheless, Cuba wished to state that this text did not take into account all
the points it had made during the consultations.  In particular, Cuba wished to place on record itsdisappointment that paragraph 21 of the text in  WT/GC/W/482/Rev.1.did not state clearly that the
only applicable procedure in the case of a vote was that established in Article IX.1 of the WTO
Agreement.  In this respect, Cuba endorsed the statement made by Brazil.  It also endorsed the
statements by Botswana and Kenya on behalf of the African Group on the need for rotation between
developing and developed countries to ensure the representativeness of the candidates established inparagraph 14 of the text.
243. The representative of Jamaica thanked the Chairman for his hard work and the effort he had
put into producing this text.  Although Jamaica realised that this was a compromise text, it wished to
comment on two issues.  First, Jamaica would have wished paragraph 14 of the text in
WT/GC/W/482/Rev.1, regarding rotation, to be more explicit in its recommendations.  Second, onparagraph 21 concerning voting, there should have been clarity on the voting procedure that would
apply in the absence of consensus.  Jamaica believed that Article IX of the WTO Agreement should
apply, although it was not a sound approach to have  a situation where a decision on voting procedures
would take place in the middle of an electoral process.  This was unheard of in a democratic process,
and clarity on the process should be established from the outset.  This notwithstanding, his delegationhad joined in the consensus on this text, and wished  again to thank the Chairman for his hard work in
producing it.
244. The representative of Chile thanked the Chairman for his tireless efforts in bringing this
matter to a conclusion.  Chile believed that the text was as good as it could get, and while one could
perhaps never get a perfect solution, it was nevertheless a timely one.  To have let this matter drag on
and overlap with other work towards the Cancún Ministerial Conference might possibly have led to a
much worse end result.  While one could go on haggling forever on bits and pieces of the text, Chilebelieved the text was a good one and that delegations needed to keep this in mind.  The text had
resulted from a number of consultations, and while his delegation had not been involved in all of
them, it was confident that the process had been very transparent and one in which every Member had
had the possibility of making its views known.  His delegation therefore did not believe that the
decision had been adopted in haste.  Regarding paragraph 21 of the text in WT/GC/W/482/Rev.1, hewished to be on record as being in full agreement the statement by Brazil.  His understanding of the
reference in that paragraph to voting procedures to be determined was that it referred to issues such as
the time, date, place and form of the vote, i.e. whether electronic or paper, the procedures for recount
if necessary, and the question of how non-resident Members would vote.  However, the rules
concerning voting and rights are written, cast in stone in Article 9.1 of the Marrakesh Agreement.And finally a comment on rotation.  I think what we need is to always have a strong DG.  At least it is
in the interest of smaller, weaker delegations like mine to have a very strong DG.  To only select the
DG on the basis of rotation would lead us, perhaps inevitably, to have a weaker DG than we otherwise
need and deserve.  Therefore, I think that the result that we have achieved is a good and balanced one.WT/GC/M/77
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245. The representative of Australia said that there was often a fine line between delegations who
were commenting for the record – and there had been a number of those since this text had been
adopted – and those who were suggesting that the process had been one of haste.  He supported the
comments just made by Chile.  In his delegations's view, the Chairman had the right thing in declaring
his intention back in May that Members would seek to have a decision by the end of the year on thisissue, and for his painless efforts in the months since then to broker a consensus among all
delegations.  He considered that the process on this issue had been one of the greatest transparency.
There had been a number of open-ended meetings and, while he sympathized with the ability of
smaller delegations to come to open-ended meetings, delegations had had a very full discussion.  The
Chairman had asked at the most recent informal meeting whether Members felt they had the basis of a
consensus, and his delegation believed that at that stage they did.  All recognized that their preferred
position was not in this document, and if Members ever tried to get a consensus among 145, soon tobe 146 Members, it was always going to be difficult.  If there was one message that came out of the
recent discussion under the Trade Policy Review B ody which reviewed developments in international
trade, and the concerns expressed there about regional trade agreements – which some considered
were a good thing, although many disagreed – was that if Members did not show that they could make
some progress at the multilateral level, then the process of bilateral and regional integration andpreferential agreements would continue apace.  The same applied to the text under consideration.
There had been a considerable amount of discussion on it, and while it was not a perfect text and all
would wish to tinker with it, it was at this stage the best that all could collectively do.  The time had
come to move on.  The end of the year had arrived, and the time had come to adopt this as the General
Council had done.  Any implication that this had been done in inordinate haste and had not reflectedthe broad position of most delegations was quite unfair.
246. The representative of Switzerland said that his delegation very largely shared the views just
expressed by Australia, and joined other in expressing gratitude to the Chairman for the efforts he had
made in conducting the discussion on this issue.  Having followed these efforts from the very
beginning, his delegation could say that they were conducted in an exemplary and transparent manner,and the subject had been given the thorough attention it deserved.  Following this procedure, and
following the decision the General Council had taken on this text, Members had achieved the
welcome result of clarifying and giving shape to procedures for the nomination of Directors-General.
It was not the result that his delegation, for its part, would have wished, and there was no doubt that
this was not the optimum result all would have wanted.  The essential point had been the question of
paragraph 21, and the advisability of laying down a procedure for voting in the event that there was no
consensus.  Switzerland had considered it important to be able to agree on a procedure for a vote otherthan that provided in Article IX of the WTO Agreement, which, ultimately, would not be of great
help.  It was important to define a voting procedure for two reasons.  First, because a voting procedure
which could have been accepted by consensus would have required more discipline on the part of the
Members engaged in the exercise of nomination of the Director-General, a discipline which had been
singularly lacking in the past.  Second, a decision by vote would have served as an element ofpressure and a deterrent in the event of a blockage in the process of nomination by consensus.
Switzerland believed that a procedure based on a double majority would have been the most suitable.
It would meet the needs of overcoming a possible blockage in reaching consensus, and would better
represent the spirit behind the consensus that had not been reached.  His delegation believed that, even
with the improvements, the text as adopted proposed a largely traditional procedure.  It believed toothat this would not be the last word on this issue in the light of developments which might occur in
future.  Finally, the fact that Members had not resolved the question of a voting procedure in a manner
that his delegation would have wished to see would mean that Members would have to show greater
discipline and a greater sense of responsibility at the time of nomination of future Directors-General.
Switzerland certainly did not want a repeat of the earlier nomination process, which it believedMembers could ill afford.WT/GC/M/77
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247. The representative of Barbados said his delegation wished to commend both the Chairman
and Secretariat for their hard work during the consultative process that had led to the adoption of the
procedures for the appointment of Directors-General.  Barbados recognized that this matter was not a
simple one and that the text that had been adopted was a product of the difficult circumstances with
which Members had been confronted.  However, Barb ados shared some of the concerns expressed by
other delegations about certain paragraphs and hoped that at some future date there would be an
opportunity to make improvements to this text.  On the issue of recourse to voting in the event that
consensus were not possible, Barbados wished to place on record its position that in such an
eventuality it would not be able to support any form of voting based on trade shares or any other such
criteria.  Its position was based not only on the fact that with a share of trade of 0.000 per cent
Barbados might not get an opportunity to have a say in the vote, but essentially because it felt that in
the interests of the good governance of this organization, any voting should be on the basis of the one-Member-one-vote principle.
248. The representative of the Philippines said that his delegation had unfortunately not been
present either at the time of adoption of this text or at the most recent open-ended consultation.
However, as far as he could remember, the issue of a double-majority vote had been eliminated from
the Chairman's draft text as early as two months ago.  It was lamentable that this idea was beingrevived, when delegations at this stage, as responsible and serious officials, should be agreeing to this
text on the basis of an amicable consensus.  If so me delegations wished now to place on record their
positions on an issue that had been dropped two months earlier, then all were facing a very serious
problem.  He hoped that all Members would be able to abide by taking a decision on appointment of
Directors-General on the basis of Article IX:1 of the WTO Agreement.
249. The representative of Chinese Taipei said that although in reality the text as adopted was
definitely not a perfect one, a tremendous amount of time, energy and creativity had gone into
drafting this text.  Credit should be given where it was due.  His delegation wished particularly to
express its sincere appreciation to the Chairman as well as to other colleagues for their contributions
which had made this text possible, and believed it to be a thoughtful, unbiased and well-drafted textwhich he was more than pleased to endorse.
250. The representative of Hungary said that, having listened to some of the statements, he
believed that justice needed to be done to the characterization of the process conducted on this text.
There had been some negative comments, including that this was an untimely and hasty decision,
which he believed were unfair.  His delegation believed the process that the Chairman had undertaken
had been exemplary in its inclusive and transparent nature.  Members had spent some 8 months on
this – a procedural question – and if this did not seem sufficient, with the dozens of meetings that hadbeen held in various formats, and if some considered  this to have been hasty, then it did not bode well
for any outcome of the DDA negotiations.  On substance, his delegation wished to say that it saw two
principles confirmed by the procedures that had been adopted.  First, that the job of Director-General
of WTO was simply too important to be anything other than merit-based.  This was a very important
criteria, and should remain so.  The reference in the procedures to representativess and the need toreflect the diversity of the membership was sufficient  to provide for the necessary change, if there was
need to do so, among various groups of countries.  However, the first, and important, qualification
was merit.  Second, the fact that no agreement on the form of a vote had ultimately proved possible
was a confirmation of the working method of consensus in the WTO which had served everyone well.
His delegation hoped that voting would be used in rather exceptional circumstances.  Although therewas clearly not much use in discussing at this stage the nature of the vote to be taken at some point in
the future, he wished to mention – since reference had made by a number of speakers specifically to
Article IX:1 of the WTO Agreement – that Hungary did not consider it at all realistic to assume that
the Director-General could be selected by countries that represented less than 5 per cent of world
trade and less than 5 per cent of budgetary contributions.WT/GC/M/77
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251. The representative of Mexico said that although his delegation did not usually intervene to
support others, he believed that in this case it was important to do so.  He wished to join Chile,
Australia, Switzerland, Hungary and others in expressing gratitude for the exhaustive and transparent
process that had undertaken on this issue, and that the process in this case had been of great value.
All were aware that this was the time to be reason able not only because of the status of the ongoing
negotiations, but also because of the state of the world economy on which delegations had had an
exchange earlier in the overview discussion in the Trade Policy Review Body.
252. The representative of the United States said that although, as others had stated, the text that
had been adopted was not a perfect document, the United States would not spend time going through
all the different points where it might have wished the document to be otherwise.  The Chairman had
provided her delegation with every opportunity to do so in his consultative process, which it believed
was thorough and fair.  In the end, the Chairman had put forward a document which represented hisbest judgement as to were consensus could be found.   The United States was not going to take the
floor to interpret every word of it because it believed the words in the document really had to speak
for themselves.  The key question was whether, at the time of the next DG selection process,
Members would be able to say that, with this doc ument, they were better off then than they were
before.  Her delegation believed, despite any misgivings it had about the document, that the answerwas yes.  She thanked the Chairman for his persistence, dedication and wisdom in leading this
process.  Frankly, had the Chairman been able to come up with a document that satisfied everyone,
given the different points of view that existed, she believed he would have had to have another title –
perhaps magician.
253. The representative of Japan said that having heard some of the statements under this item, his
delegation felt the need to intervene.  As others had said, the document that had been adopted was not
perfect.  That was the nature of coming to a consensus text.  Japan felt that in helping Members arrive
at this text, the Chairman had done a wonderful and exemplary job.
254. The Chairman said that the many generous comments that had been addressed to him
certainly belonged to all the delegations who had spent literally countless hours after many months
going over the crossing of t's and the dotting of i's.  The document could certainly have been better
from many perspectives, but this was the best that Members could do and what they were prepared to
live with for today.  As the United States had stated, it was better that what one currently had, which
was nothing.  As a result of this text, the gove rnments who would be nominating candidates in the
future, and candidates for the office of Director-Gen eral themselves, would know what the rules were,
what the deadlines were, and Members had imposed on them and on everyone collectively, a greater
sense of discipline.  He also expressed gratitude to the Secretariat, who had helped both him as well asMembers a great deal on this and two other issues on the Agenda of the present meeting.  While he
would take criticism, he felt it was unfair to characterize this decision as one that had been taken in
haste.
255. The General Council took note of the statements.
18. Guidelines for the appointment of officers to WTO bodies – Communication from the
Chairman (JOB(02)/198/Rev.1)
256. The Chairman recalled that at the General Council meeting in February, several Members had
indicated their dissatisfaction with the current process for appointment of officers, and had expressed
the wish that Members try to devise a better approach to this process, which would, inter alia, allow
for greater transparency.  Subsequently, at the General Council meeting in May, he had indicated hisintention to pursue this question in consultations after the summer break, in order to be able to reach
some understandings before the year's end which could be used as an input into the next appointments
exercise.  Since then, he had held extensive consultations, including two open-ended General CouncilWT/GC/M/77
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meetings in November and December.  In all of his consultations there had been a broadly shared
view that the existing Guidelines (WT/L/31) were  basically sound, but that they would benefit from
being supplemented in order to reinforce certain existing provisions as well as to improve the
transparency of the process.  Delegations had suggested, in this connection, that this exercise should
draw largely on the extremely useful suggestions made by the three former Chairpersons of theGeneral Council in their paper circulated in August (Job(02)/98).
257. On the basis of the most recent open-ended consultations on 2 December, he had circulated
for Members' consideration a revised draft text in JOB(02)/198/Rev.1.  He had proposed two
modifications to the earlier text.  First, in guideline 1.1, the correct reference in the text should be to
guideline "6.1", and this correction had been made.  Second, in the Annex, he had added the Trade
Negotiations Committee in the list of bodies in Group 5, as suggested by Chile, with a footnote to
clarify that the agreement reached by the TNC regard ing the appointment of its chair and the chairs of
its subsidiary bodies would continue to apply to such appointments.  He had tried to respect the view
expressed by many Members that modifications to the 1995 Guidelines be kept to a minimum so as
not to risk opening discussion on sections of that text that had been broadly acceptable at the time
they had been drafted.  He believed that this text represented a careful balance among the many views
expressed in all of the deliberations on this matter, and his sense of the discussion at the informalmeeting on 2 December had been that there was a solid basis of support for its adoption with minimal
modifications.  Accordingly, he wished to propose for adoption the draft guidelines for the
appointment of officers to WTO bodies in Job(02)/198/Rev.1.
258. The General Council so agreed (WT/L/510).
259. The Chairman then  said that in accordance with the guidelines just adopted, he wished to
inform the Council that he would be starting the se lection process for the appointment of Chairpersons
to the WTO bodies outlined in Groups 1, 2, 4 and 5 of the Annex to the Guidelines.  Also, in
accordance with Guideline 7(b), he would be assisted in this process by Mr. Perez del Castillo
(Uruguay), the serving Chairman of the Dispute Settlement Body, and Mr. Bryn (Norway), the only
former Chairman of the General Council still serving in Geneva as Permanent Representative.Further, in keeping with Guideline 7(c), he requested the Secretariat to distribute a list of past Chairs
of major bodies in order to provide some structure for Members' subsequent deliberations on the
possible distribution of chairs based on past practice and the need for balance.  On a preliminary basis,
he hoped to begin these consultations the followin g week, as he knew the time in January would be
short.  He invited any Member wishing to speak to hi m or to relay a message either of interest in one
of these positions or advocating someone else for a position, to contact him or the colleagues who
would be assisting him.  He, along with his two co llaborateurs, would try to do justice to the improved
Guidelines Members had just adopted.
260. The General Council took note of the statement.
19. Internal transparency and effective participation of Members – Preparatory process in
Geneva and negotiating procedure at Ministerial Conferences – Statement by the
Chairman (JOB(02)/197)
261. The Chairman recalled the dedicated discussions on this important issue at the May and July
General Council meetings as well as at an informal open-ended consultation on 24 October, and said
that at the latter meeting, delegations had encouraged him to consult with a smaller group in order to
make progress on this important matter.  As he had reported at the informal meeting of the General
Council on 2 December, these smaller group consultations had considered some draft elements whichsought to outline areas of convergence, as well as those areas where positions remained far apart.  He
also recalled that at 2 December meeting, Members had engaged in a discussion of a draft Chairman's
Statement (Job (02)/197) which sought to identify areas of common ground based on discussions overWT/GC/M/77
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the course of 2002.  He recalled that a  number of suggestions for modification to this text had been
made and passionately advocated, and that he had tried to take into account as many suggestions as
possible without tilting the balance in the original text.  These were found in Job(02)/197/Rev.1.  He
then went through the six modifications which had been made to the earlier text, and said that all of
these had been made in an effort to err on the side of accepting more proposals, approaches andformulations aimed a providing greater transparency and openness.  (i) In the first paragraph, second
sentence, the phrase "While the statement carefully attempts to reflect the main thrust of discussions
so far" had been deleted.  (ii) In the first paragraph, last sentence, "past" has been replaced by "our
improved".  (iii) In Section II, first bullet, "should" had been replaced by "shall".  (iv) In Section III,
first bullet, first sentence, the words "and unique" had been added before "issues facing each
conference".  In addition, the text previously cont ained in the second-to-las t bullet of Section III had
been moved to this bullet point, with two additions:   the word "therefore" had been added to the first
sentence, and the phrase "and the elements set out in this statement" had been added to the third
sentence.  (v) In Section III, third bullet, sec ond sentence, "serious" had been added to qualify
"consideration".  (vi) In Section III, fifth bullet , the phrase "as far as possible" had been deleted.
262. Having said this, he said that there had remained a number of proposals that simply did not
enjoy consensus.  In addition, it was important to emphasize that the current text in no way pre-empted further improvements, just as the text gavelled by the General Council Chairman in 2000 had
not prevented Members from returning to this issue and seeking improvements.  The General Council
was about to gavel improvements that built on what had been achieved in 2000.  He had every
expectation that his successors, in future attempts returning to this issue, would continue to build on
the improvements already made.  He believed that the submissions thus far in this process –WT/GC/W/422 by Bulgaria, WT/GC/W/471 by Indi a and 14 other countries and WT/GC/W/477 by
Australia and 8 other countries – as well as the constructive discussions over the past year would
serve Members well in the pursuit of further improvements to the decision-making practices.  As he
had indicated at the 2 December meeting, he was hopeful that the General Council would agree to
endorse the attached statement as it stood, in recognition of the fact that Members' collectiveconsideration of improvements in internal transparency and effective participation, including in
relation to the preparation and organization of Ministerial Conferences, was an ongoing process.  He
said that in the interest of time he would not read out the statement in JOB(02)/197/Rev.1, and for
which he sought the endorsement of the General Council.
263. All representatives who spoke expressed their delegations' appreciation for the Chairman's
efforts to reach an understanding on this important matter.
264. The representative of Bulgaria said that his delegation had devoted special attention to the
issue of internal transparency, and had tabled a submission which suggested some guarantees against
the appearance of last-minute proposals worked out in small-group meetings and which other
delegations were not given sufficient time to assess (WT/GC/W/422).  The last 24 hours at Ministerial
Conferences and the problem of draft decisions prepared at the last moment in small "Green Room"
type meetings had been identified as the key problem of internal transparency.  It had triggered thediscussions on internal transparency in 1999 and had been taken up as a priority item immediately
after the Seattle Conference.  Unfortunately, despite the efforts undertaken and despite the Chairman's
personal efforts in this respect, this key problem could not be solved.  The guidelines contained in the
Chairman's statement did not contain significant elements which would constitute a major step
forward.  On the contrary, they seemed to legi timize small-room consultations without giving
sufficient guarantees for participation by delegations in the decision-making process.
265. He said that an example was the second tiret of the second bullet in Section II of the
Chairman's proposed statement, which spoke only of the opportunity of Members "to make their
views known".  Bulgaria felt that this was insufficient for guidelines on internal transparency and
effective participation of Members in the preparatory process for Ministerial Conferences.  It hadWT/GC/M/77
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proposed at the informal meeting that the phrase "making their views known" be replaced by the
phrase "participation in the preparation of draft texts".  His delegation felt that this would reflect the
basic rights of Members to participate in decision-making in what claimed to be an intergovernmental
organization.  Unfortunately, this proposal had not been reflected in the latest draft.  Bulgaria was
among those delegations who had expressed a preference that the Chairman's statement be taken noteof by the General Council instead of being endorsed, as had been proposed.  He recalled the statement
by the General Council Chairman in 2000 had initially been taken note of.  It was perhaps more
appropriate to take note of the Chairman's proposed statement and to see in future whether it would be
endorsed.  Bulgaria continued to believe that taking note of the statement would be more appropriate,
mainly because it had not been possible to solve the key problems that had triggered the discussions
on internal transparency and effective participation, but also because his delegation had doubts as to
whether it was appropriate to endorse a text whose elements – and he was quoting the Chairman'sstatement – "were not fully negotiated".  Bulgaria believed this might set a precedent which could
have negative implications for the intergovernmental character of the WTO, which operated on the
basis of consensus.
266. The Chairman said that the reason he had proposed endorsing the statement at the present
meeting was that a number of Members who had been arguing for more transparency felt that an
endorsement by the General Council would be a st ronger commitment.  He shared that view and
therefore felt that it would perhaps be worth doing that, and building on the statement that had been
taken note of in 2000.  His idea was to build on a stronger foundation, and this was his reason for
proposing that the statement be endorsed.  In doing so, he noted that he was drawing on the
experience with the TNC's principles and practices, which had been endorsed by the TNC inFebruary 2002.
267. The representative of India recalled that Ministers had confirmed, in paragraph 10 of the
Doha Ministerial Declaration, their collective responsibility to ensure internal transparency and the
effective participation of all Members.  India agreed with the Chairman's assessment that Members
had come a long way since Seattle and that the preparatory process for Doha had been marked byimproved levels of transparency.  However, on some crucial aspects, there was scope for
improvement.  This was evident from the experience gained in organizing the preparatory process for
the Doha Ministerial Conference and at Doha itself.  India wished to commend the Chairman for
holding consultations on the question of internal tr ansparency with a view to coming up with agreed
guidelines and procedures.  It had noted carefully the efforts the Chairman had made to reflect the
concerns expressed by many developing countries on this issue.  His delegation had gone through the
revision in JOB(02)/197/Rev.1.  It had expressed some views at the last informal session held on
2 December.  While the Chairman had no doubt taken some of these points on board, there were
certain other important aspects, such as transmi ssion of documents and the so-called "Green Room"
process, which India wished to discuss at greater length with other Members under the Chairman's
guidance, so that an agreement could be reached.  India was also conscious that it might not be
possible to achieve this in the next day or two, and therefore wished to suggest that furtherconsultations be held to bridge the gap and to come up with a document acceptable to all delegations.
It was essential that this crucial issue, in which many developing countries were interested, was
addressed satisfactorily before the preparatory process for the next Ministerial Conference started.  As
mentioned by India at the TNC meeting, this woul d be an important confidence-building measure that
would reassure the developing countries that all their efforts in Geneva would be useful inputs at theMinisterial Conference.
268. The representative of Canada said that the effective participation of Members in the
preparatory process and negotiating process at Ministerial Conferences was an issue of intense interest
to Canada and, presumably, to all Members as it affected the most fundamental aspect of Members'
work in the WTO.  His delegation had associated itself with the paper submitted by eight otherdeveloped and developing Members of  the organization as a means of contributing to this consultationWT/GC/M/77
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and debate (WT/GC/W/477).  That paper examined the diverse membership and interests of the
organization, and considered the challenges faced by a large and diverse membership which reached
decisions by consensus.  To meet the objectives set by Ministers at Doha would call for a large
amount of work in a limited period of time.  Members needed to draw on the experience of recent
years to find practical ways to achieve consensus in both the preparatory process and the MinisterialConference, with particular reference to the next Ministerial Conference in Cancún.  Canada also
drew certain conclusions from its own analyses an d from the debate which the subject had engendered
among the membership.  He then highlighted two of these.  First, in a Member-driven organization
processes needed to be kept flexible.  In Canada's view prescriptive and detailed approaches to the
preparatory processes would not create the best circumstances for consensus to emerge in Cancún or
in future Ministerial meetings.  Second, the preparatory process had to leave space for the Ministerial
Conference and Ministers themselves to take up those issues which called for resolution at a politicallevel.  The statement presented by the Chairman met the shared objective of continuing to improve the
preparatory and organizational processes under wh ich Members operated, and provided a framework
that was sufficiently flexible to be adaptable to the individual circumstances of each Ministerial
Conference.  Canada strongly believed that it was in the interests of the organization as a whole to
harvest the consensus in areas where the Chairman's exhaustive consultations had demonstratedconvergence, and hoped that the membership would endorse the Chairman's statement.
269. The representative of Cuba said that his delegation greatly appreciated the written and oral
contributions submitted by Members during the course of these consultations.  His delegation, along
with several others, had submitted document WT/GC/W/471, which reflected Cuba's position on this
major issue.  His delegation noted that in the Chairman's statement a number of important pointsremained unresolved and that some issues needed to be studied in greater depth, inter alia :  all
consultations should be transparent and open-ended and any consultations or meetings held outside
this process were not part of the formal preparatory process;  there should be sufficient time for
delegations to consider documents in order to facilitate proper consideration by, and consultation
with, their capitals.  Cuba also regretted that the statement did not clearly and unambiguously statethat the draft Ministerial Declaration should be based on consensus and that, when this was not
possible, differences should be fully and appropriately reflected and the various options suggested by
Members listed.  Cuba therefore endorsed India's suggestion to continue the consultations with a view
to obtaining a statement which really did cover all of the elements under discussion.
270. The representative of Kenya, speaking on behalf of the African Group
, said that these
countries were extremely encouraged by the inclusiveness of the process of consultations undertaken
and agreed that there had been incremental improvement since Seattle as far as internal transparencyand the effective participation of Members was concerned.  These countries welcomed the
improvements to the text the Chairman had just ou tlined, in particular regarding Section II, first
bullet, where the word "should" had been changed to "shall".  The African Group had felt from the
beginning that this process had to proceed under the very close supervision of the General Council.
She wished to raise two other issues:  one was that in agreeing that work on the declaration should becompleted in the preparatory process to the maximum extent possible, she wished to add that any
unfinished business should be then forwarded to the Ministerial Conference in very clear language
that would reflect the different and divergent views of the membership, so that there was absolutely
no confusion as to what the General Council meant when it transmitted a draft declaration to
Ministers.  The other issue was that at the Ministerial Conference itself, the African Group wouldexpect all meetings and consultations to be transparent and all-inclusive.  Restricted meetings should
be discouraged.  As all decisions made at the Conference were binding on all Members, it was
reasonable that all Members should be part of the decision-making processes that took place at the
Conference.  Transparency was necessary in order to ensure the participation of all Members at that
forum.  Indeed, she said that the chances of success at Cancún would be enhanced if Members wereable to create confidence among all delegations in the preparatory process and at the Ministerial
Conference itself.  She agreed that the principles and practices as outlined in the Chairman's statementWT/GC/M/77
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went a long way in the pursuance of greater transparency and inclusiveness in future work, but also
supported India's suggestion to continue consultations on this issue.
271. The representative of the European Communities said that in his consultations the Chairman
had ensured the highest possible degree of transparency and predictability, which in itself rendered
full participation yet more effective.  The Comm unity applauded that goal.  Finding the balance
between transparency and predictability on the one hand, and sufficient flexibility for Ministers to do
their work on the other hand, was extremely difficult.  His delegation felt that the Chairman had
struck the right note, and that further consultations risked unravelling a delicate balance.  It could
therefore endorse the Chairman's statement.
272. The representative of Norway said that the Chairman's statement was an excellent effort to get
some lines on paper on an issue where there was a need for concrete guidelines.  He wished to make
some comments on the statement in Job(02)/197.  The first was that there had been a very preliminarystatement in December 2000 on this issue.  When he compared some of what was in the 2000
statement with the statement in Job(02)/197/Rev.1, there did not appear to be many elements that
were contradictory.  However, there were perhaps two or three points he wished to highlight that
could be useful.  First, the statement did not touch the point in the December 2000 text that "Members
reiterated that Ministerial Conferences should be held at WTO Headquarters unless the MinisterialConference or the General Council decided to accept an offer by a Member to host a Ministerial
Conference".  This point might be worth considering,  in order to avoid giving the impression that the
opposite was the rule.  His delegation felt that the general rule should be that Ministerial Conferences
should be in Geneva, especially for the period of the Doha Round, because Members were not going
to launch a negotiating round every second year.
273. Second, regarding the negotiating structure, the December 2000 text made a point that the
setting up of any negotiating structure and working groups, as well as Chairmanship, should also be
agreed during the preparatory process.  While Members might not always succeed in this, it was part
of the normal preparatory process, and this was not as clear in the Chairman's statement as it should
be.  Third, and most importantly, the December 2000 text read, "there seems to be broad agreementamong Members that the Chairman of the General Council, with the support of the Director-General
and the Secretariat, should assume a central role in the preparatory process as well as during the
Ministerial Conference, especially in a negotiation of any agreed outcome.  The host country would
normally provide the Chairperson of the Conference who would Chair the Ministerial debate".  The
point was, how would Members move from what was described in Section II of the Chairman's
statement, that is, the preparatory process, to what was described in Section III, which was the
Ministerial Conference?  The link between those two elements was definitely the Chairman of theGeneral Council and the Director-General, and Norway  felt that this should be recognized, perhaps at
the expense of the local Chairman, if the Conference was outside Geneva.  This might have been
spelled out a bit more clearly.  He had heard other comments made by colleagues and shared some of
the difficulties both New Zealand, and Malaysia in an earlier discussion, had referred to.  However, he
had also perhaps come to the conclusion that what was in the draft text was very much what themarket could bear.  Then, perhaps in a couple of years, there would be another Chairman discussing
exactly the same thing that was being discussed now.
274. The representative of Indonesia said that Indonesia welcomed the Chairman's statement in
Job(02)/197/Rev.1.  It saw the paper as an opportunity for Members to consider further the effort to
improve the preparatory process and also to understand better the matter at hand.  The last informaldiscussion on this issue had been very useful.  Indonesia was glad Members were approaching it in a
candid and pragmatic way using practical examples from the experiences both in Seattle and Doha.
On the preparatory process for the Ministerial Conference, while agreeing that smaller consultations
might also take place involving individual Members or groups of Members, he said that it should be
noted that the establishment of many consultations should take into account the difficulties faced byWT/GC/M/77
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some Members, particularly the smaller delegations, in covering a number of consultations.  The point
was to avoid the establishment of so many contact groups.  The number of, and structure and
facilitators for, such working groups should be decided in the General Council in Geneva.
Nevertheless, Indonesia could agree that such consultations should be reported expeditiously back to
the full membership for further consideration.  His delegation supported that work on draftdeclarations be completed in the preparatory process to the maximum extent possible.  It went without
saying that given transparent and all-inclusive processes, outcomes from the Geneva process should
be nearly complete.  Ambassadors in Geneva were exercising the political mandates and judgments of
their Ministers.  Only those issues on which different positions were reflected should be left for
Ministers to deliberate at the Ministerial Conference, and such differences should be fully and
appropriately reflected in the draft declaration.
275. Regarding the process at Ministerial Conferences, Indonesia agreed that there should be a
Senior Officials Meeting (SOM) prior to the Ministerial Conference.  This was a common practice in
all multilateral meetings, which should be continued.  However, it should be noted that the SOM
should start in Geneva.  There would be tangible value in the involvement of capital-based senior
officials during the Geneva process.  Indonesia also welcomed the establishment of a Committee of
the Whole.  This would be the main forum for decision-making, and all of its meetings should beformal.  Indonesia agreed that any extension of a Ministerial Conference should take place only in
exceptional circumstances, and given the inclusive and transparent nature of the meeting, this
extension should be agreed upon by consensus.
276. The representative of Japan said that under the Chairman's able stewardship, the discussion on
this issue had gone as far as it could within the time available.  Japan believed that the Chair's draft
statement well reflected the discussions held so far and would serve as a useful record of Members'
arduous work.  Such a record would not only enable those involved in the preparation of Ministerial
Conferences to appreciate Members' concerns, but would also serve as a point of reflection in
Members' endeavour to enhance the transparency of the whole process leading up to and during each
Ministerial Conference.  Thus, his delegation supported the General Council's endorsement of theChair's statement as presented, as a snapshot of where the General Council stood.
277. The representative of China said that his delegation had made its comments and proposed
amendments on the paper in JOB(02)/197 in the previous informal consultations.  Among those
comments and proposed amendments, he wished to re-emphasize two points which China believed
were of critical importance to the smooth and fair proceeding of preparatory work for and the conduct
of Ministerial Conferences.  The first point was with regard to the preparatory process in Geneva for
the draft declaration.  The draft declaration for submission to the Ministerial Conference should bebased on consensus.  Where this was not possible, differences should be fully and appropriately
reflected in the draft, so that Ministers could take into account all divergent views and make
appropriate political decisions.  This did not mean that the draft should include hundreds of square
brackets, but Members should be able, through cons ultations, to narrow down to three or four square
brackets the major differences for the Ministers to take political decisions on.  Ministers had to beinformed of the major differences, and should not be led to believe, by a clean text, that there was
already consensus, when this was not the case.  This was why Members had to try to have the right
draft to present to Ministers.  This was common practice in many other international organizations,
and he did not think there was any justification for the WTO not to follow this practice.  His
delegation had demonstrated its flexibility on procedures for the selection of Directors-General.Although it had had great sympathy with the positions of Kenya, Cuba, Botswana and other
delegations on that text, it had gone along with the decision.  However, there was no room for
flexibility on the present point.
278. The other point was the decision on the selection of the chairpersons and facilitators to
facilitate consensus building on outstanding issues at the Ministerial Conference.  The decision on theWT/GC/M/77
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number, structure and chairpersons/facilitators should be made through consultations with the
Members in Geneva or immediately before the Minist erial Conference.  This was an important step to
ensure the neutrality and impartiality of chairpersons/facilitators.  Finally, China shared India's view
that there should be further consultations in order to improve the text.
279. The representative of Panama said that his delegation considered that the proposal in
JOB(02)/197/Rev.1 contained positive elements to try to remedy procedures and practices that had
been called into question within and outside the organization.  The proposal would contribute to no
voice being unheard.  Panama agreed with Kenya's statement, and would always be in favour of
initiatives which would help Members to plan their participation on issues of interest to them.  The
proposal was not perfect, and Panama did not agree with all of it.  However, it was a significant step
forward and therefore his delegation could support it.
280. The representative of Nigeria said his delegation believed that a lot had been achieved in
improving inclusiveness and participation of Members in the decision-making process of the WTO.
However, with regard to preparations for Minister ial Conferences, a number of key issues still needed
to be resolved.  For example, there was a need for further work or added clarity in the area of
transmitting draft texts to Ministers, facilitators and ways of indicating in draft texts where consensus
had been reached and where it had not.  Nigeria therefore joined others in suggesting that furtherconsultations be held to come up with an improved text for further consideration.
281. The representative of New Zealand said that this issue and the previous two agenda items had
absorbed a lot of time both for the Chairman and for delegations, but that these were important issues
and that the results thus far were already worthwhile.  There seemed to be continuing differences over
some aspects, but this should not be a surprise.  Members had tackled these same issues in the past,especially after Seattle, without reaching full consensus, and differences over process were often
difficult to separate from differences over substance.  The question was where to go from here,
bearing in mind that there was a set of extremely di fficult issues to resolve in the lead-up to Cancún,
including some related to Members' mandate.  Ideally Members should get the preparatory process
underway early in 2003.  The existing 2000 guidel ines had served Members well in the Doha
preparatory process in 2001 and in Doha itself.  That preparatory process and the Doha Conference
had not been easy, and many had unhappy memories of some aspects.  However, his delegation's
sense was that ultimately the problems primarily reflected deep differences over issues rather than
critical deficiencies in process.
282. In both the preparatory process and at the Conference, Members had been forced to depend
very heavily on the judgement of the respective Chairmen.  They had been fortunate to have Mr.
Harbinson and Minister Kamal at Doha.  His delegation found it hard to visualise a process that didnot rely on the General Council Chair in Geneva and the Chair from the host country.  Someone
ultimately had to carry the responsibility on behalf of the Members.  New Zealand's conclusion was
that the General Council Chair and the Chair from the host country needed to have, within agreed
guidelines, the flexibility needed to deliver the ingr edients that Ministers needed to put together.  This
was not to say the process could not be improved.  His delegation felt this exercise had been useful inidentifying some areas where changes could be made that responded to concerns identified by
Members.  It continued the post-Seattle effort to learn from experience.  There was an inevitable need
for compromise in an area as sensitive and complex as this.  Nevertheless, the Chairman's statement
was a step forward.  In these circumstances, no twithstanding some of the comments by other
delegations at the present meeting, New Zealand saw no realistic alternative to proceeding with thepreparatory process on the basis of the improved guidelines set out in the Chairman's statement.  It did
not see a realistic prospect of consensus on a more prescriptive approach that would tie the hands of
the General Council and host Chairmen.  In the circumstances Members should all reflect carefully on
the implications of not endorsing these guidelines, as  some had suggested.  Finally, in an effort to be
helpful, he wished to leave Members with a questio n that was prompted by the last point raised byWT/GC/M/77
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China, namely, whether a Senior Officials Meeting convened before a Ministerial Conference might
not prove to address that point.
283. The representative of Honduras said that his delegation joined all those who had suggested
the Chairman continue his consultations on this issue.
284. The representative of Zimbabwe said that his delegation had noted the statements by India
and Kenya on behalf of the African Group.  Zimbabwe felt there was still room for improvement in
JOB(02)/197/Rev.1, and greater clarity was needed on the transmission of documents to Ministerial
Conferences as well as regarding the hosting of future ministerial meetings in Geneva.
285. The representative of Singapore said that the issue of internal transparency had been
discussed on several occasions in the General Council in both formal and informal modes.  There had
also been several rounds of informal consultations in smaller groups on this matter.  Three
submissions had been made by various delegations .  Two of these reflected almost diametrically
opposite positions on how the preparatory process for Ministerial Conferences and the Conferences
themselves should be conducted.  While some delegations had argued for tighter procedures, others,
including Singapore, had argued for more flexibility in the way Members prepared for and conducted
Ministerial Conferences.  No two Ministerial Conferences were the same.  Therefore, approaches
should also be flexible and tailored to meet the circumstances prevailing at the time.  Given thedivergence of views among Members on this issue, his delegation was of the view that what the
Chairman had produced was the best possible outcome.  While it might not be the perfect text,
Singapore recognized that it represented the middle path or common ground, and was a fair reflection
of the balance of interests on this issue.  As was stated in the last paragraph of JOB(02)/197/Rev.1, the
document established a "foundation of convergence" at the present point in time upon which furtherimprovements could be made based on future experience.  While probably no one was completely
satisfied with the text and some would like to tinker with it, his delegation did not think any further
changes would be helpful.  They were also unlikel y to find consensus.  As the Community had noted,
any further attempts to try to improve the text posed the risk of unraveling what had been achieved
thus far.  For these reasons, his delegation's position was that the General Council should endorse thedocument presented.
286. The representative of Hong Kong, China said that in his work on this and the two previous
agenda items the Chairman had set a fine example of how to build consensus in the organization.  He
wished to congratulate him for his skilful handling of these matters and his leadership, and to thank
him in particular for his openness in listening to and taking into account many of the concerns
expressed, including by Hong Kong, China.  The Chairman's statement on internal transparency was
the fruit of his painstaking efforts since May.  Indeed, it had built upon the efforts made in recentyears, particularly since Seattle, to enhance internal transparency and inclusiveness in the
organization.  While the principles and practices set out in the statement might not be perfect and
some colleagues had expressed concerns about certain aspects not adequately covered in the
statement, his delegation was of the view that this  was probably the most and the best that could be
achieved at the present stage.  A number of delegations had expressed the wish to see clearer andmore detailed prescriptions of how Ministerial Conferences should be organized.  His delegation
appreciated such desires, but felt it would not be appropriate for delegates in Geneva to impose too
many restraints on how Ministers should conduct their work at Ministerial Conferences.  Thus, as
Members were already hard pressed in negotiations and would be heavily engaged in the preparatory
work for Cancún in 2003, his delegation was not sure it would be wise for Members to keepburdening themselves with continued debates which were unlikely to produce early results.  Therefore
his delegation fully supported the Chairman's statement and hoped it could be endorsed by the
Council.WT/GC/M/77
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287. The representative of Korea said that while it was necessary to achieve internal transparency
and participation as much as possible in the preparatory process in Geneva and in the organization of
Ministerial Conferences, this should not be at the expense of other important principles such as
effectiveness, flexibility and practicality.  In spite of  the fact that there were still remaining issues that
some Members wished to discuss further, his delegation believed that now was the time to harvestwhat had been achieved so far.  The revised Chairman's statement was certainly improved, and
bearing in mind that there was room left for furt her improvement in the future, Members had to take
an incremental approach to this matter.  Therefore, Korea supported endorsement of the Chairman's
statement.  In this way Members could establish a more solid foundation for further improvement.
288. The representative of Malaysia said that his delegation shared the sentiments expressed by
others in respect of the hard work and commitm ent the Chairman had shown in dealing with this
issue.  He had indeed had a number of consultations, including an open-ended informal on2 December, and his delegation had participated actively and constructively in all of the discussions
held.  It acknowledged and recognized that as a result of these consultations an outcome had been
achieved which would greatly enhance the internal transparency and effective participation issue.
However, the suggestions that were being made were not intended to unravel the package that had
been presented, and he had been surprised at the Community's reference to this.  He was certain thatthe issue of "unravelling the package" would come up very frequently as Members proceeded with the
negotiating issues at a later stage.  He recalled that in the Uruguay Round Members had talked about
this unravelling of the package, but his delegation did not consider this to be relevant in the context of
the present exercise.  What was being discussed was a process and building on the progress achieved,
and progress had indeed been achieved as a result of the Chairman's personal involvement in dealingwith this exercise.
289. His delegation had said many times there were a couple of issues it thought needed a little
more attention.  Malaysia was confident that as all delegations had shown a very constructive spirit in
dealing with this exercise, the same kind of spirit would prevail when dealing with these issues, which
were the following:  Many delegations had allu ded to the draft declaration to be forwarded to
Ministers.  It was of the utmost importance to forward to Ministers a draft that was a fair reflection of
the situation at hand.  This principle was embodied in Section 1 of the Chair's statement,
"chairperson's are also instructed to reflect areas of consensus as well as different position on issues".
As this principle had been agreed by all, it was only logical that the same principle should apply to the
kind of draft to be forwarded to Ministers.  On chairpersons and facilitators, Malaysia was not against
appointing facilitators to help the Chair of the Mi nisterial Conference to facilitate the process of
consensus-building on the negotiating issues.  What was needed for the sake of transparency was that
there should be consultations on who the facilitators would be.  This was not an unreasonable request,
because consultations were always held when a post of Chairman was to be filled.
290. It had been said that it was very difficult to ascertain the dynamics of the negotiations.
Malaysia accepted that it was very difficult to predict the work and process that would take place in
the last 24 hours of a Ministerial Conference.  However, it was important that Members not be put in asituation where they were surprised with last-minute drafts.  This should not become the norm.  It had
not been so in the past, but unfortunately it had happened in Doha.  There had to be an agreed process
that would allow some time for delegations at least to consider the last-minute draft or even consult
with the members of regional groupings.  These were some of the issues on which a little more time to
consult was needed.  Many delegations had suggested there be further consultations on these issuesand his delegation encouraged the Chairman to continue these consultations with a view to finding an
amicable solution for all Members.  The Chairman had not only been a good architect, but was a good
engineer and on top of that a good plumber.  His delegation was confident that he would be able to fix
the problems, and was prepared to work with him in a very constructive way to find an amicable
solution to these issues.WT/GC/M/77
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291. The representative of Hungary said that the process leading to the present draft text had been
useful and there had been a thorough discussion on the issues.  Although this was certainly not a
perfect text, his delegation wondered if there would ever be a perfect text in this organization.  The
present text was definitely an improvement over what Members had had thus far.  On substance, the
question of transparency was a difficult issue.  One could say it was as old as the organization or evenits predecessor, GATT.  The question was how to ensure both transparency and inclusiveness, on the
one hand, and at the same time the efficiency of the negotiating process.  He knew from firsthand
experience as a Chairman the problems involved in meeting these twin objectives.  This problem was
that it was extremely difficult to find, especially when it came to drafting, solutions in large groups.  It
had been said that the definition of a camel was a horse designed by a committee, and this might be
the case – or worse, as in the case of the text sent to Seattle – for many WTO texts.  Repetition of the
Seattle experience had to be avoided.  The question was how.  A number of delegations had said itwould be necessary to show in a draft declaration where there were differences in position.  This was
exactly what had happened in Seattle, and the General Council Chairman at that point had found it
impossible to do otherwise than show all the differences, resulting in hundreds of square brackets.
This was an experience every Member wanted to av oid repeating.  The problem was how to show that
there were differences but avoid the situation of hundreds of brackets.  His delegation had no answerand wondered whether it was possible to give any prescriptive answer for this kind of situation.  Some
delegations had suggested that perhaps not all, but just the major differences on the few really
important issues should be shown.  The problem wa s that for each proponent its own issues were the
most important, and a separate negotiation would be necessary to try to settle which were the really
important differences that should be taken to Ministers.  In Hungary's view, this would have to be leftto next year's Chair, and it wondered how much further Members could go in this process.
292. Malaysia had said that some time would be need ed at Ministerial Conferences for a final draft
to be looked at and digested by delegations.  This was a fair request.  However, this was all that could
be included in the text, and it was perhaps not necessary to specify it in the text, but rather for it to be
understood in the process.  His delegation had doubts about how far one could go in the details ofthese guidelines.  Hungary recognized that ther e seemed to be no consensus on endorsing these
guidelines at the present meeting, as a number of delegations had said they were not ready.  He asked
these delegations to consider how much time they wanted to spend in 2003 on designing the process
when they should already be dealing with the substantive issues going to Cancún.
293. The representative of Chile said that when things were looked at in perspective, it could not
be said there had been no great improvements on this issue.  Members had certainly drawn lessons
and learned since Seattle, and had devised better procedures and better working habits which hadproduced a successful result in Doha.  That result had certainly not been perfect, but it was credible
and necessarily so in terms of the transparency n eeded.  This transparency referred mainly to the
preparatory process which Members were currently embarked on.  What the Chairman seemed to be
proposing was to pick up on and improve upon this good experience, project it into the future, and
take a further step towards looking for greater stability, greater certainty, and greater guaranteesregarding internal transparency with respect to th e working procedures in the organization.  As had
been said by various delegations, including New Z ealand at the present meeting, there was a need to
be sufficiently flexible.  Each Ministerial Conference was different from any other, and consequently
the instruments and tools had to be sufficiently flexib le to adapt to varying situations.  It seemed that
the result of the consultations on this issue was fairly reasonable, fairly sound, and something whichdid contain common sense and judgement.  Chile would be very ready to endorse these procedures as
they stood, or to adopt them or take note of them or endorse them.
294. His delegation gathered, however, that there were some who wanted to improve these
procedures even further.  Perhaps that possibility existed or should exist, and his delegation would
therefore suggest that there was perhaps a need for further consultations, and Members should set astheir target a decision to be taken on this matter at the next General Council meeting inWT/GC/M/77
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February 2003, but not later.  To go beyond February would mean Members would be arriving in
Cancún with the existing procedures.  It was not a good idea to replace the substantive work that had
to be done in Cancún with procedural discussions and debates.  His delegation was simply not ready
to do that.  Thus, the level of flexibility had to be great, but not to the extent that it would affect the
substantive work and delay the preparations Members had to make for Cancún, to which Chileattached great importance.  Chile wished to endorse these procedures at the present meeting, but if an
additional effort was necessary this should not go beyond the middle of February.  At that point,
Members would have to settle with the results they had achieved by then, whether there was complete
consensus or not.
295. The representative of Egypt said that the current outcome of the consultation process was
only a Chairman's statement which lacked the necessary legal power for enforcement in this
organization.  Indeed, there was no decision by the General Council on any structure or method forthe preparations for Ministerial Conferences that ensured predictability and clarity.  However, with
the necessary commitment and political will from all parties, the elements contained in the Chairman's
statement could be observed.  Egypt recalled the efforts and improvements that had been made by the
General Council Chair in 2000 to make the consultation process more inclusive.  A subsequent
Chairman, Mr. Harbinson, had also followed suit.  Egypt supported the statement by India that there
was scope for improvement and that further consultations were required in order to bridge the gap and
to come up with a text that reflected wider consensus.  It also hoped that the outcome would serve as a
guideline to help Members avoid the recurrence of the difficulties encountered to date in the
preparatory process for Ministerial Conferences a nd during those conferences, and particularly with
regard to the next Ministerial in Cancún, thus ensuring a smooth preparatory process.  Nevertheless,his delegation would have liked to see some other elements addressed in the outcome, such as
guidelines concerning the work in regular bodies of the General Council not covered by the existing
principles and practices of the TNC (TN/C/1), and on where the authority lay for transmitting texts to
the Ministerial Conference.
296. The representative of Australia said his delegation would not repeat all the points it had made
at the July General Council meeting and at the subsequent discussions when it had introduced the
paper in WT/GC/W/477.  Australia remained convinced that decision-making machinery for the
conduct of Ministerial Conferences should be as light and as flexible as possible and that any attempt
to be overly prescriptive had to be avoided.  The statement the Chairman had asked Members to
endorse reflected what Australia considered to be a reasonable balance of the views among Members
and his delegation welcomed the opportunity to endorse it.  Australia also encouraged others to
endorse it.  As many delegations had said, any attempt to review or revise the current text risked thechance of unraveling it, and it might take a long time to put it together again.  He wished to make two
points about some of the comments he had heard at the present meeting.  China had made a further
plea for the use of square brackets in texts transmitted to Ministers.  It had pointed out that in its view,
this was a well accepted practice in other international organizations, and questioned why it should
not be adopted in the WTO.  Australia recognized th at in China's view the aim of the exercise was to
use square brackets only where absolutely necessary, and that Members should focus much only on
major differences.  However, having being a Member of the WTO and its predecessor the GATT
since its inception in 1947, Australia had a different perspective on the approach of delegations to
square-bracket game theory.  WTO delegations played with square brackets with great gusto.  It was
the second must popular preoccupation after rules of procedure.
297. He asked where Members would be at present on the negotiations over paragraph 6 of the
Doha Declaration on the TRIPS Agreement and Public Health and on S&D, if they were playing
according to the square-bracket game theory.  Ce rtainly the Chairmen of the TRIPS Council and the
Committee on Trade and Development in Special Session would not be engaging in detailed
consultations working to hammer out a compromise.  Instead, they would be presiding over a group of
Ambassadors haggling over a Chinese checkers game with square brackets.  The likelihood was that aWT/GC/M/77
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result would take twice as long to achieve and Me mbers would find themselves in six months exactly
where they were now.  The fact was that the culture of the organization was that Members could not
resist playing games with square brackets.  This ha d been seen in the lead-up to Seattle.  The result
there had not been simply another failed Ministerial Conference.  In his view, Seattle had resulted in a
paradigm shift in attitudes towards multilateralism.  A number of delegations who had previouslywholeheartedly supported multilateralism, finally decided they had better take the route of
bilateralism, preferential trade arrangements and regional trade agreements.  Thus, he appealed to
China to think very seriously about the practicability and the consequences of going back to thinking
that issues could be resolved by putting things in square brackets.  It would never be possible to have
simply two square brackets on an issue that was going to Ministers, but rather 145, reflecting all
Members' positions.  Delegations would get in th e trenches and this would make it harder for
Ministers to find their way out.
298. The second point he wished to make was to address those who were advocating further
consultations.  His delegation could not oppose the requests further consultations if the Chairman
agreed to take these on board, but cautioned those suggesting this that opening up the text risked the
problem that there would not be agreement.  In another meeting, Mexico had pleaded with Members
not to crowd the agenda for Cancún, but given the direction some Members were taking, there was agood chance of a real log-jam for Ministers in Cancún.  His delegation was most reluctant to spend
more time in 2003 consulting on this issue, if this meant crowding out the negotiations Ministers had
mandated in Doha.  Members had already seen the consequences of deferring action until the end of
2002, as they were mired in a lot of work and many were saying they could not keep up with the
process.  But if Members did not agree to something very soon – and he would suggest endorsing thetext at the present meeting – they were going to find themselves in more trouble in 2003, with the
consequence that Ministers would again not thank them for not having resolved this matter promptly.
299. The representative of Argentina said that after Australia's statement, his delegation had a
clearer picture of the enormous difficulties in this area.  The Chairman had tried to include within his
statement certain principles and practices regarding transparency.  That, in Argentina's view, was anew and important step in the right direction.  His delegation had participated in the discussions on
this issue , and some of its suggestions and thoughts, along with those of other delegations, had been
incorporated in the draft text.  A key point in the draft text, which Argentina greatly appreciated, was
the reference to the effect that Members should continue to pursue further improvements on these
issues.  All were aware that decisions taken at Ministerial Conferences were extremely important to
all Members.  As a consequence, his delegation felt that no effort should be spared to ensure that the
results of Ministerial Conferences were seen as emanating from an open, transparent and inclusiveprocess.  The difficulty was that there were very divergent views as to how to proceed.  His delegation
could understand Australia's statement about the square-brackets game.  At this time, he found it very
difficult to understand how the Chairman's proposed text could state that the language of draft
Ministerial Declarations should be clear and unambiguous, when positions of Members were strongly
divergent.
300. On the question of facilitators, his delegation believed that the suggestion by New Zealand
could solve the second difficulty raised by China in its intervention.  The other issue, regarding the
text of the draft declarations, was key, and the problem with the existing language on this issue in the
draft text was that it ran against a basic principle of  the negotiating process, i.e. that each subsidiary
body should report upwards on the basis of consensus, and where there was no consensus, on the basisof reporting the alternative views.  He understood well what had been said by Australia regarding the
possibility of operating with hundreds of square brackets, but perhaps the General Council could find
some way to narrow down these differences and reduce their number.  China had perhaps been too
optimistic when it had said that such differences could be reduced to three or four.  His opinion was
that it should be possible to narrow the differen ces down to a reasonable number, higher than three or
four, but reasonably manageable anyhow.  Obviously, Ministers were sovereign and in the face ofWT/GC/M/77
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counter-proposals could decide on a middle road.  The General Council would not be preventing that.
The point he wished to make was that there was a wide margin for compromise between the extreme
options of a text with hundreds of brackets and a "clear and unambiguous" draft.  It would be very
difficult for the General Council to produce such a draft.  His delegation was willing to leave the
redrafting of the statement by the Chairman in the Chairman's hands.  It did not believe that theGeneral Council was in a position to redraft it, but trusted fully in the Chairman.  If Argentina's
position regarding the draft Ministerial Declaration was recognized, his delegation would be in a
position to endorse the statement by the Chairman.
301. The representative of Pakistan said that in general his delegation agreed with the Chairman's
analyses of the proposals and felt that the draft text reflected a lot of painstaking effort and was the
way forward.  As time went on, the text would perhaps have to evolve.  However, he wished to make
two points:  he did not know how Members were going to ensure that what was in the text would beimplemented, and there was also the question of mini-Ministerials.  The latter were part of the
preparatory process for Ministerial Conferences and to the majority of Members who did not attend
them, they were very opaque.  Pakistan wished to see some of the guidelines the Chairman had
prepared, especially regarding the outcome of such consultations to be reported back to the full
membership to be followed in this regard.  The la st time there had been such a mini-Ministerial, most
Members had known nothing about it except what they had learned through the press.
302. The representative of Switzerland said that regarding internal transparency, his delegation's
impression was that the WTO’s working methods had considerably improved since the unfortunate
experience in the preparation for the Seattle Ministerial Conference.  In its view, noteworthy progress
had been made towards greater transparency.  The Chairman's proposal was moving Members in theright direction.  It would make it possible to have  more certainty regarding these improved practices
in the context of preparations for Doha, and this  was why Switzerland was willing to support these
procedures.  These procedures would better signpost the preparatory processes for Ministerial
Conferences and would provide a necessary dose of transparency.  His delegation had taken note that
some delegations had expressed doubts on the Chairman's proposal and that in all likelihood,consultations would have to continue.  Switzerland was entirely willing to participate constructively
in any such consultations and, as Chile had said, hoped that these consultations could be completed as
soon as possible and not encroach on the important substantive work this organization had to
accomplish in the first half of 2003.  There was one point of substance which particularly concerned
Switzerland and which was the most controversial poin t in the discussion at the present meeting.  This
was the form and nature of the text to be sent to Ministers by the TNC.  Switzerland shared the view
that this text had to constitute a practical and operational basis for a decision, and that any drafts ofthese texts had to be clear and unambiguous as much as possible.  This meant that Members had to
accept that individuals who held consultations and who directed the preparatory process had to have
the necessary flexibility for the preparation of this text, so that it would be an operational basis for a
decision.  Regarding the problem of square brackets, Switzerland's position was that any measure
taken should make it possible to avoid a proliferation of such square brackets such as in the text sentto Seattle.  The nature of that text had actually sunk any hopes Switzerland had had in the outcome of
Seattle.  His delegation fully endorsed the comments on square-brackets by Australia.
303. The representative of Haiti said that the draf t text was a result of the consultations the
Chairman had conducted.  While Haiti had not been able to participate in all of the consultations,
having seen the revised draft text and having heard the statements made, his delegation wished tosupport the suggestion by India and many other countries.  Since this text had not been fully
negotiated it would be better to work on it further so that consensus could be reached.  The text did
contain the foundations which could take Members towards this consensus, but having heard
Australia's statement regarding China's proposal, Haiti felt that it was even more pressing to postpone
endorsing the text until a later stage.  China was proposing just one formula for providing clarity inthe text to be sent to Ministers.  Members should not try to attempt to submit a perfect text toWT/GC/M/77
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Ministers, but rather a text containing the points of convergence and the points of divergence.  This
was Haiti's analysis of the last point in paragra ph 2 of JOB(02)/197/Rev.1, that Ministers should be
given a text which was clear and unambiguous.  This meant that where there was consensus, Ministers
would know there was a consensus, and where consensus had not yet been reached, Ministers would
also know.  This way Ministers would be able to take political decisions on the unresolved issues aswell as on the resolved ones.  Regarding what the Chairman was proposing in the draft text, he said
that China’s proposal was not out of context.  It was one formula, and there might be other
approaches, but Members needed to work on being able to submit to Ministers a text which reflected
the state of thinking of Members.  Members could not aim to submit a consensus text while
divergences still remained.  The purpose of a Ministerial Conference was precisely to be able to bring
all Members to a consensus.  He asked why, if a completed text was to be sent Ministers at the
Ministerial Conference without it being open for any discussion, a Ministerial Conference should beheld.  While the text in JOB(02)/197/Rev.1 contained the main points, further consultations were
needed in order to achieve a consensus on it.  This would avoid a re-run of Seattle.  Members should
be able to reach an understanding on this.  Therefore, he reiterated his delegation's position supporting
the suggestion that the text be taken back to the drawing board, as a decision on it did not seem to be
ripe yet.
304. The representative of China recalled his earlier intervention that any draft presented to
Ministers should be clear.  If there was consensus on it this would be clear, and if there was no
consensus the draft had to reflect the differences, whether there were square brackets or not.  The
latter was not the issue.  The issue was that if there were different opinions, a clean text could not be
sent to Ministers pretending to reflect consensus.  The facts had to be reflected.  Even if there were nosquare brackets but there were still differences, Ministers had to talk with each other and to have
consultations.  The draft text presented to the Ministers had to reflect the actual status of the
discussions carried out, whether in the preparatory informal consultations or at different levels.  This
reflection had to be objective and could not be misleading for Ministers.
305. The representative of India said his delegation had listened to the discussion and was very
pleased that there was a convergence of thinking that a lot of work had been done by the Chairman
and by delegations and that Members should move forward and try to tie up this work as quickly as
possible.  India would fully and constructively engage in this task and was sure that even Australia
would fully and constructively engage in it.  India was totally confident that Members could go
forward and achieve results within the shortest pos sible time, and had complete confidence in the
Chairman and in all the other Members.
306. The representative of Australia said that he accepted totally the view expressed by China that
any communication that went to Ministers had to reflect the positions of delegations if there was no
consensus.  However, this seemed to reflect a lack  of confidence that the Chairman could reflect the
positions of delegations, a lack of confidence that was badly misplaced.  There also seemed to be a
sneaking element of lack of confidence that China would be able to ensure that its positions were
reflected.  Australia had no doubt that China would en sure that its views were accurately reflected in
any document that went to Ministers, and was rather surprised that China did not seem to have that
confidence.  He said that the more Members tried to make the text proposed by the Chairman more
prescriptive, the more they would be dragged in to a never-ending morass of playing with words.
There had to be flexibility and Members had to express full confidence in the Chairs that were elected
or appointed to head committees.
307. The representative of Malaysia said that his delegation did not hold the view that Members
had no confidence in the Chairpersons.  It had full confidence in all the Chairpersons appointed, as it
had participated in appointing them.  He did not think that when China had talked about reflecting
positions he had been thinking in terms of having 100 or 200 brackets.  Several delegations had made
reference to the Seattle experience, but his delegation did not understand why these delegations hadWT/GC/M/77
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not explained how Members had ended up with so many square brackets on the road to Seattle.  He
himself had been surprised at the text that had been sent to Seattle, as it was a recipe for disaster.
However, drawing references to Seattle in the present context was totally irrelevant because since
Seattle there had been tremendous improvements in terms of internal transparency and in terms of
working on the issues, whether it was in small groups or in big groups, and Members had resolved alarge number of issues on the basis of consensus.  He also wished to clarify that the text that had gone
to Doha had been a good text, in the most part.  There had been, at least in one or two instances, an
initial draft that had been produced by the Chairman with two options, but subsequent texts had had
no options at all.  Apart from one particular area, his delegation had thought the text was good.  This
issue needed to be approached in the proper co ntext, without merely referring to the Seattle
experience.  In the run-up to Seattle, Members had spent almost six months trying to resolve the issue
of the selection of a Director-General, and there had been little time to focus on the draft declaration.Had there been then the number of consultations there had been in the run-up to Doha, there would
not have been so many brackets in the text.  Memb ers needed to look at this issue in the proper
perspective.  Australia's analogy about square brackets was overly simplistic and grossly exaggerated.
All Members had a sense of responsibility and w ould certainly work towards reaching consensus on
as many issues as possible.
308. The representative of Australia said that no one had the intention of ever having more than
maybe one or two square brackets, but all knew what it was like, and that Members could not resist
the temptation to include square brackets in an attempt to reflect their respective positions.  This was
exactly what had happened in Seattle.  Once the square brackets were there, delegations felt obliged to
defend them.  He agreed that things had changed, and his delegation felt that the Chairman's proposalreflected some very good changes, but to go that one step further and to admit having just two or three
square brackets would result in a mess.
309. The Chairman said that Members had again had another thorough discussion at General
Council level on this issue.  He would try to summarize that discussion, and then perhaps respond to
the proposal by India which quite a few Members had supported.  First, many delegations had pointedto the desire to harvest what was before the General Council at the present meeting, which they felt
represented improvements.  It could be argued how big the improvements were or why other
improvements had not been made, but there were improvements.  If these were gavelled it would
improve, starting immediately, the preparatory process in Geneva leading to the next Ministerial
Conference, and it built on the improvements made in 2000.  Many delegations had asked, quite
fairly, why those improvements, which were the fruits of so many hours of work, should be denied.
One of the things people outside the WTO did not understand was that type of logic.  SeveralMembers had said that Members could implement the improvements on the table while continuing to
work.  This was a practical question Members should answer in the affirmative.
310. Second, a number of delegations had argued for continuing the discussions because a number
of issues had not been settled.  They had said they had great confidence in him to fix it.  However, he
had worked on this issue with delegations for almo st a year, and there were some issues on which
there was no consensus after almost a year of working and discussing, for example, on the
transmission of documents to Ministers.  Did Members expect him to be able to solve this the
following week or before the last Council mee ting he would preside over?  Members had had this
discussion before Seattle and before Doha.  It was a difficult issue and there had been no consensus on
it for several years.  Members should not expect  consensus the following week, regardless of how
capable a given Chairman might be.  He asked Members to reflect on the fact that when they had sent
the draft text to Doha, there had been a covering note, signed by the Chair at the time and by the then
Director-General explaining that the text did not pretend to be a consensus document.  Indeed, the
covering note was a political note for Ministers to read in plain language, indicating that there were
considerable differences still to be resolved regard ing the draft text.  At the time that had seemed to
his delegation to be a common-sense pragmatic approach which addressed a number of delegations'WT/GC/M/77
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concerns, such as China's, that Ministers should be made aware – if this were the case – that there
were issues on which Members had differing positions.  His predecessor in the Chair had run a great
process and this had been acknowledged by all.  New Zealand had asked whether it was a question of
bad process or of where Members did not see eye to eye on some issues.  Ministers in Seattle had not
been happy with a 35-page document that had hundreds of brackets.
311. Several delegations had asked him to fix the so-called "Green Room" problem.  This was
ironic because Members had asked him in October to consult on internal transparency with a small
group of delegations.  He had done that and it had been successful.  Regarding the last 24 hours of a
Ministerial Conference, no one could predict what would happen.  This was not a science, nor was it
orderly sometimes.  There was no ready formula.  It was impossible to predict what documents wold
come out on the last day of a Ministerial, but ultimately the WTO was still a consensus-based
organization and ultimately in the Committee of the Whole and in the Plenary delegations could raisetheir flag and say they could not accept a document produced by a small number of delegations.  That
was the power all Members had.  However, to try to get a guideline to predict Ministers' action was
impossible.
312. Regarding the issue of facilitators at Ministerial Conferences, he asked what more could be
done.  His Minister had served as a facilitator both in Seattle and Doha, but had been approached todo so only at the Ministerial Conference itself by the Conference Chair.  He asked what delegations in
Geneva were supposed to do.  Were they to inform the Chair of the Ministerial of the facilitators he or
she was to choose, and on what issues?  Ministers would do what they wished and not what
delegations in Geneva told them to do.  Nor could they be asked to inform delegations in Geneva in
advance of what they would do.  This was not an issue he could simply fix.  He was flexible and wasprepared to accept the proposal by India and others to continue consultations, provided Members
could harvest what was on the table at the present meeting – to implement the agreed improvements
and continue to consult on other issues.  He noted that the last paragraph of his proposed statement
read as follows:  “I believe that through the endorsement of these principles and practices Members
are establishing a foundation of convergence upon which further improvements should continue to bemade taking into account the views that have been expressed in this ongoing discussion”.  If Members
were not able to endorse the text in JOB(02)/197/Rev.1 at the present meeting, he would simply have
to acknowledge that view, and to wish his successor well.  He asked India if this would be a fair trade-
off for all the work that all delegations had done and for the work to be done.
313. The representative of India said that on this issue as in other areas, his delegation had a lot of
admiration for the way the Chairman had conducted the proceedings.  India had tried to be as flexible
and constructive as possible on most issues.  However, there could be certain issues where there werecertain cardinal interests which many Members had, particularly going into a stage of negotiating very
important matters that would have a tremendous impact on their economies and on the well-being of
their people.  A certain degree of clarity was inevitable and unavoidable.  His delegation would be
very unhappy should the Chairman take the view that Members had to take whatever was given and
then look for more in the future, because the genera l view of the entire membership had to be taken
into account.  There might be one or two who had a different opinion, but the general view was that
the text should be further considered.  India appreciated what had been done and there were just one
or two issues where Members needed to discuss a little more.  India would like the opportunity to
discuss with Members on one or two cardinal issues that were very important, in order to see if a
solution could be found.  Members should not get stuck on one text, but should go forward.  Thereshould be a package which all delegations and capitals felt more comfortable with.  This was not to
say that in any way India doubted the Chairman's ab ility to lead Members.  The Chairman had led
Members very well in the past and would certainly continue to do so in the future.  However, it would
be an extremely unfortunate development if the Chairman took the position that unless the text in
JOB(02)/197/Rev.1 were accepted he would wash his hands of it.  He suggested that the Chairman
take the sense of the house that all were interested in further discussing this issue and in trying to findWT/GC/M/77
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a solution as quickly as possible.  It would not take much, and India was sure that a solution could be
found.
314. The representative of Australia said that if Members took the attitude that they could not
reach agreements and move forward on these issues because a couple of delegations wanted just a
little bit more, it made a mockery of paragraph 47 of the Doha Declaration which talked about theidea of an early harvest.  He asked if what India was saying was that on S&D, for example, if there
was no agreement on all issues none could be harvested, or that on implementation, if there were not
answers to every implementation issue, none could be resolved, or that on the Dispute Settlement
Understanding, if agreement could not be reached in May on an early harvest, Members should give
up.  Members were doing what Mexico had asked them not to do, which was stack things up for
Ministers in Cancún.  The Chairman's proposal was eminently sensible, and his explanation of some
of the history of Seattle and Doha was correct.  Australia urged all Members to work on the basissuggested by the Chairman.
315. The Chairman asked if delegations would be in a position to harvest what they had been able
to agree to date, even as they continued consultations to try to resolve the issues on which they had
thus far been unable to agree, or whether they wished to continue toiling on the basis of the current
draft text.  He said that he was putting this question to Members out of respect for a majority ofdelegations who had worked long and hard on this issue.
316. The representative of India said that Members should toil a little more.
317. The Chairman said that in the light of the discussion, he would propose that the General
Council take note of his statement and of the statements by delegations.
318. The General Council so agreed.
20. Work programme on electronic commerce – Report on the third dedicated discussion on
cross-cutting issues
319. The Chairman recalled that Ministers at Doha had agreed to continue the Work Programme
on Electronic Commerce, and had instructed the General Council to consider the most appropriate
institutional arrangements for  handling the Work Programme and to report on further progress to theFifth Session of the Ministerial Conference.  At its meeting in October 2002, the General Council had
agreed to maintain, for the duration of the work until the Fifth Ministerial Conference, the current
institutional arrangements for handling the Work Programme on Electronic Commerce, namely, that
the Councils for Trade in Services, Trade in Goods and TRIPS, and the Committee on Trade and
Development would examine and report on aspects of electronic commerce relevant to their
respective areas of competence, and that the General Council would play a central role in the entire
process, would keep the Work Programme under continuous review and would consider any trade-related issue of a cross-cutting nature.  There had also been agreement on a notional schedule of
future dedicated discussions on cross-cutting issues under the auspices of the General Council.  In
accordance with this schedule, the third Dedicated Discussion on cross-cutting issues had been held
on 25 October under the Chairmanship of Deputy Director-General Mr. Yerxa.
320. Mr. Yerxa, Deputy Director-General, said that as the Chairman had just noted, the third
Dedicated Discussion under General Council auspices on those cross-cutting issues identified in the
course of the WTO Work Programme on Electronic Commerce had been held on 25 October.  In line
with Members' decision at the July 2002 General Council meeting that the agenda for future dedicated
discussions should be narrowed in order to focus the debate, the agenda for this discussion had
included only two items:  (i) "classification" issues, and (ii) fiscal and other revenue-related issues.Also as agreed in July, Members had taken up the question of the appropriate format for the reports onWT/GC/M/77
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these discussions.  The classification issue – i.e. whether a product that could be traded electronically
should be considered a good and subject to the disciplines of the GATT, or a service and subject to
the disciplines of the GATS – continued to elicit a wide range of views.  However, there did seem to
be broad agreement that what was at issue was a very narrow range of products that could be traded
either physically or electronically.  In this regard, a large part of the October discussion had centeredon the treatment of software.
321. While the discussion had enabled Members to deepen their appreciation in this area, there
were still very different views on how this issue mi ght be resolved, and thus a clear need for further
discussion on this question.  Regarding the fiscal implications of e-commerce, while there had been
no discussion under this item, it had been suggested that the focus under this item – which was
typically on the imposition of customs duties on electronic transmissions – should instead be on how
liberalizing key services sectors could help improve overall economic efficiencies and therebyincrease GDP.  On the question of the appropriate format for the reports on these Dedicated
Discussions, Members had agreed that for the time being, the Secretariat should continue to produce a
short factual note, but that in future they might wi sh to consider changing that format, for example to
include attribution of positions to delegations.  In line with this decision, a factual summary of the
October dedicated discussion had been prepared by the Secretariat on its own responsibility(WT/GC/W/486).
322. The General Council took note of Deputy Director-General Mr. Yerxa's report.
21. Review of the exemption provided under Paragraph 3 of GATT 1994 (WT/L/444)
323. The Chairman recalled that paragraph 3(a) of GATT 1994 provided an exemption from Part II
of GATT 1994 for measures under specific mandatory legislation, enacted by a Member before it
became a contracting party to GATT 1947, which prohibited the use, sale or lease of foreign-built or
foreign-reconstructed vessels in commercial appli cations between points in national waters or waters
of an exclusive economic zone.  On 20 December 1994, the United States had invoked the provisions
of paragraph 3(a) with respect to specific legislation that met the requirements of that paragraph.
Paragraph 3(b) of GATT 1994 called for a review of this exemption five years after the date of entryinto force of the WTO Agreement, and thereafter ev ery two years for as long as the exemption was in
force, in order to examine whether the conditions  which created the need for the exemption still
prevailed.  The General Council had last considered this matter at its meetings in May and July 2002.
In July the General Council had agreed to revert to  this matter at a future meeting before the end of
the year, and that consultations would be held in the meantime with the aim of trying to get a sense of
the way forward and to bring some closure to this issue at a future meeting.
324. At his request, Deputy Director-General Mr. Thompson-Flôres had held consultations in the
past month to which all delegations who had spoken on this matter in the General Council had been
invited.  Mr. Thompson-Flôres had reported that given the short time available to him since his taking
office, and given the firm differences of view on th e nature of the review, he had focused in his two
consultations on trying to reach some understandings on the conduct of the process.  Unfortunately,
Mr. Thompson-Flôres was on mission for the WTO a nd thus not available to report himself on the
results of his consultations.  However, Mr. Thompson-Flôres had reported to him that delegations
were agreeable to proceeding along the following lines:
First, that the General Council would ta ke note that under the two-yearly cycle
provided in paragraph 3(b) of GATT 1994, this exemption would have to be reviewed again
in 2003.
Second, that at the present meeting delegations would be invited to speak for the
record with regard to the review under the cu rrent cycle.  The General Council would takeWT/GC/M/77
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note of the views expressed and agree to come back to the issues in the context of the review
to be conducted under the next cycle in 2003.
Third, that the General Council would agree that this review would be on the agenda
of the General Council at its first meeting in  2003.  At that meeting, the Chairman would
draw attention to the review to be conducted pursuant to paragraph 3 of GATT 1994.  The
Chairman would invite interested delegations to submit comments and questions to the US
regarding the operation of the legislation under the exemption, to which the US would be
invited to respond.  These questions and responses, together with the annual report to be
provided by the US under paragraph 3(c) of GATT 1994, would form the basis for the review.
Finally, for the purposes of the review, this matter would be on the agenda of
subsequent General Council meetings in the course of 2003 as the Chairman deemed
appropriate or at the request of a Member.  At its meeting in December 2003, the General
Council would be invited to take note of the disc ussions held in the course of the review until
then, and take any other action it might agree on.  It would also take note that the subsequent
review would normally be held in 2005.
He also invited the General Council to note that, as provided in paragraph 3(e) of
GATT 1994, this exemption was without prejudice to solutions concerning specific aspects of
the legislation covered by this exemption negotiated in sectoral agreements or in other fora.
325. The representative of Panama said that his delegation had on previous occasions expressed, as
it wished to do at the present meeting, its concern over the way in which the legislation notified by the
United States pursuant to paragraph 3 of GATT 1994 was being interpreted and implemented.  His
delegation wished to reaffirm to the United States  its willingness to examine the interpretation and
implementation of the notified legislation.  Several years subsequent to the notification of thelegislation, a substantive review had still not been initiated in this multilateral forum.  His delegation
had, on other occasions, expressed the need to explore other options available under paragraph 3 of
GATT 1994.  It had previously mentioned the importan ce of seeking solutions to the specific issues
raised by the notified legislation in other fora or ev en at the bilateral level.  In this respect, Panama
had held constructive technical discussions with the United States.  Although it could not at present
announce a settlement of its differences with the United States, it wished to thank the United States
for the opportunity to hold talks w ith authorities from its capital on the technical aspects of the issue
in dispute.  Panama urged the United States to continue to use such options with a view to seeking
solutions to the specific issues raised by the notified legislation, and was convinced that the use of
these options would also prove an effective tool for narrowing the existing differences.
326. The representative of Chile said in his delegations's view this was a worrying and highly
unsatisfactory situation.  This was perhaps a good example of special and differential treatment in
operation for a given Member.  Members had tried to remove this S&D in agriculture and textiles, and
yet it continued to benefit a given Member.  The United States and other delegations should be
thinking about flexibility and a sensitive approach to the needs of other countries in areas which did
require effective S&D treatment.  It should be questioned whether the examination of the measures
invoked by the United States should be distinct from the examination of other issues or othersituations facing other countries.  For example, the review of China's implementation of its accession
commitments had been extremely exhaustive, and Chile saw no reason why in the case at hand, the
type of review should be different.  Chile found it difficult to accept that the Member whose measures
were to be examined should decide both the substance and form of the review process.  This seemed
to be a very unfair situation.  Chile wished the review or examination to be such as to enableMembers to understand all matters of form and substance, and to enable them to take a decision as to
whether the conditions which had given rise to the need for the exemption still prevailed.  To do
otherwise would be to depart from the principles of non-discrimination and basic transparency.  ThisWT/GC/M/77
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situation did not seem to be satisfactory and could be greatly improved upon.  If what the Chairman
had suggested was all that could be done, Chile was grateful for the effort but wished to register its
grave dissatisfaction with the prevailing situation.
327. The representative of the European Communities said his delegation largely agreed with
Chile's statement.  The Community had repeatedly said there was a need for a substantive review, an
objective which thus far had not been achieved.  The United States had to do more than just submit
statistics.  It  had to respond on the substance which had been raised by WTO Members and justify its
case for continuing to benefit from this excepti on.  The Community had agreed in July that there
should be informal consultations on how to take the review forward.  Some meetings had taken place
but had not led anywhere.  His delegation thus urged a substantive consultation and a substantive
review on this exception.
328. The representative of Japan said that his delegation attached the greatest importance to the
substance of this issue, on which it had very strong feelings.  Japan appreciated the efforts made by
the Chairman and by Deputy Director-General Mr. T hompson-Flôres on this issue, and regretted that
it had not received an explanation of the Jones Act to its satisfaction.  Japan hoped that Members
would be able to engage in the review in 2003 with substantive inputs from the US, and on this basis
could support Mr. Thom pson-Flôres' proposal.
329. The representative of Hong Kong, China said his delegation considered the steps outlined by
the Chairman to represent an acceptable basis for th e process.  Regarding the review under the current
cycle, his delegation wished to associate with the statements by the EC, Japan and Panama regarding
the review itself, and wished to state for the record, once again, the following views of his delegation:
The Jones Act was an outdated piece of legislation which was inconsistent with the fundamentalprinciples of the GATT/WTO and did not meet modern  business needs.  It was also incompatible with
the United States' generally liberal services regime and its call for further substantial liberalization of
trade in services in the current round of multilateral trade negotiations.  Maritime transport was a
major service sector.  His delegation wished to note that the guidelines and procedures for
negotiations on trade in services stated that "[t]here shall be no a priori  exclusion of any service
sector".  However, the exemption under paragraph 3(b) of GATT 1994 represented a major
impediment to any meaningful market access and national treatment commitments in the maritime
transport services sector.  His delegation therefore considered it important for the US to engage in a
meaningful and substantive review of the exemption provided under paragraph 3 of GATT 1994,
commensurate with the great importance it attached to the services negotiations, of which maritime
transport services was a crucial component.  Hong Kong, China was disappointed that up to the
present, a meaningful and substantive review of the exemption had not been undertaken.  It hoped thatsuch deficiencies could be redressed in the upcoming cycle of the mandated review due to be
undertaken by the General Council in 2003.
330. The representative of Australia said that, as his delegation had observed when this item had
been on the General Council's agenda in the past, this was a significant derogation granted to one
Member of the WTO.  Whether it was special and differential treatment remained to be seen.  Thecondition attaching to that derogation as reflected in paragraph 3(b) of GATT 1994 was that there had
to be a proper review of the derogation five years after the date of entry into force of the WTO
Agreement, and every two years thereafter.  In the period since the Marrakesh Ministerial Conference
there should have been two such reviews, and Memb ers should be about to enter the third review in
2003.  Australia regretted that in this seven-year period there had not been what it would  regard as asubstantive engagement with the US on the justific ation for the maintenance of this derogation, and
that the exchanges to date had been rather sterile.  As Members entered the third scheduled review
cycle, Australia hoped that all parties with an interest in this important issue would have an
opportunity for a more meaningful exploration of the circumstances justifying the derogation.  As itWT/GC/M/77
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had said on previous occasions, Australia's concerns in this area were not only those of important
issues of principle, but also of important commercial opportunities.
331. The representative of Norway said that this  was an important issue for Norway, as the
exemption in Article 3(b) in GATT 1994 in essence made it impossible to sell ships to the US.  It had
therefore participated actively in the consultations.  Norway believed that the review should focus onthe salient point of paragraph 3(b), which was the examination of whether the conditions which had
created the need for the exemption still prevailed.  Unfortunately, this had not been possible, as the
US had refused to discuss anything but the statistical information it had submitted under paragraph
3(c).  That being said, Norway could go along with the procedures suggested by the Chairman, to the
effect that Members would revisit this issue at the first meeting of the General Council in 2003.  His
delegation would present its questions to the United States after receiving the new statistical
information.  These questions would, however, also go to the core of the question of whether theconditions which had created the need for the exemption still prevailed, which Norway doubted.
332. The representative of New Zealand said that while his delegation had not been able to
participate fully in consultations held on this issu e, this was not an indication of the importance it
attached to it.  This remained an important issue of principle for the organization, as Chile and others
had said.  In addition, there were very important commercial issues at stake.  Therefore, under theprocess outlined by the Chairman, it seemed that the critical thing was to achieve a substantive review
rather than the unsatisfactory exchange Members had had to date, and his delegation wished to
participate in this review on that basis.
333. The representative of the United States said that paragraph 3(b) of GATT 1994 required the
General Council to review this exemption for the purpose of examining whether the conditions which
had created the need for the exemption still prevailed.  Those conditions still existed.  There had been
no changes to the legislation, and the conditions which had created the need for the exemption still
existed.  Since the last review – indeed, since the United States had invoked this exemption in 1994 –
there had been no statutory or other changes in any way decreasing the conformity of the notified
legislation with Part II of GATT 1994. The United States had continued to provide WTO Memberswith annual statistical reports pursuant to the requirements of paragraph 3(c) of GATT 1994,
submitting reports for 1999 in WT/L/341, 2000 in WT/L/387 and 2001 in WT/L/444.  These reports
provided detailed annual reporting of vessel orders and deliveries from US shipyards as required by
paragraph 3(c).  The next report would be submitted shortly, i.e., by the end of 2002.  While it was
clear that Members held differing views on the natu re of the review provided for under paragraph 3 of
GATT 1994, the United States was looking for ways to make these reviews a more satisfying
experience for all concerned without prejudice to any Member's position.
334. The General Council took note of the statements and agreed
 to the procedure for the conduct
of the review under the next cycle starting in 2003 as outlined by the Chairman.
22. Committee on Balance-of-Payments Restrictions
(a) Consultations with Bangladesh (WT/BOP/R/64)
335. Mrs. Campano (Romania), speaking on behalf of the Chairperson of the Committee on
Balance-of-Payments Restrictions, introduced the Committee's report on its consultations with
Bangladesh.  The Committee had met on 2 October to resume and conclude consultations with
Bangladesh.  It had approved the maintenance of import restrictions for balance-of-payments purposes
under Article XVIII:B on four additional products un til 2009:  chicks (01.05), eggs (04.07), cartons
(48.19), and common salt (25.01).  Members had recognized the unique circumstances ofBangladesh's least-developed country status and the continuing balance-of-payments difficulties it
faced.  Members had also recalled the conclusions agreed on 15 December 2000 (WT/BOP/R/57)WT/GC/M/77
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with regard to Bangladesh's maintenance of impor t restrictions for balance-of-payments purposes, and
had welcomed the fact that Bangladesh had already begun the removal of these restrictions under the
agreed timetable.  They had understood that Bangladesh would continue to consult on a regular basis
with the Committee as required under the WTO provisions, biennially in 2004 and 2006.  It was
agreed that Bangladesh would present a phase-out plan to the Committee not later than 2007.Members had encouraged Bangladesh, should there be any improvement in its balance-of-payments
situation, to consider bringing forward the phase-out of its restrictions.
336. The representative of Bangladesh said that recognizing the unique circumstances of
Bangladesh's least-developed country status and the continuing difficulties it faced, the Committee on
Balance of Payments Restrictions, at its meeting on 2 October 2002, had approved the maintenance of
import restrictions under Article XVIII:B on four products – chicks, eggs, cartons and common salt –
until 2009.  It had been agreed in the meeting that Bangladesh would continue to consult on a regularbasis with the Committee, biennially in 2004 and 2006, and would present a phase-out plan to the
Committee in 2007.  Bangladesh welcomed the decision of the Committee.  At the same time, it
wished to draw the General Council's attention to the background for seeking import restrictions on
the four products mentioned.  The products chicks and eggs had begun to be produced within the
country on a large scale only recently.  The production was solely for domestic consumption and salein the local market.  It was expected that this se ctor would grow in importance, in order to provide
cheap protein to the very large population Bangladesh had.  The sector had been identified as a key
sector, with good potential to create employment opportunities in rural areas and thereby contribute to
the Government's effort to alleviate poverty.  A large number of non-governmental organizations were
involved in this sector, primarily providing credit  and technical assistance.  Bangladesh hoped the
coordinated efforts of the Government and NGOs w ould lead to growth of private poultry firms
within the country.  Given the large and growing population, it had been felt that restrictions on
imports were required, without which there would be a major drain on the country's foreign exchange
reserves.
337. The product carton was produced, to a large extent, by small- and medium-sized enterprises
and employed about seven per cent of the labor fo rce.  The carton manufacturing industry was based
on paper made from locally produced sugarcane waste and thus was linked to the cane-growing
segment of the agricultural sector.  The industry had emerged recently and was developing fast to
meet the domestic needs.  The Government considered it necessary to continue import restrictions on
this product until the industry reached a certain level of efficiency, and in order to avoid a drain on its
foreign exchange.  The product salt had traditionally been produced in the small and cottage industry
in the coastal areas of Bangladesh.  The industry employed a large number of low income, poorpeople in the coastal areas.  The salt produced was solely for domestic consumption.  Restrictions on
salt imports would facilitate the development of this industry, and also ease a potential drain on the
country's foreign exchange.  These four categories of products had initially been under the coverage
of GATT Article XVIII: B.  Taking into account the special circumstances faced by these industries, it
was his Government's intention to maintain restrictions on imports for a longer period of time thanwas traditionally done under Article XVIII: B.  In exploring the provisions of GATT, Bangladesh had
thought that Article XVIII:C was appropriate for use by the least-developed countries in the
circumstances Bangladesh faced.  However, following consultations with the interested delegations, it
had become apparent to Bangladesh that its requirement for import restrictions on the four products
for a longer period of time could be met under Article XVIII: B.
338. The balance-of-payments situation in Bangladesh was in a difficult position, following a fall
in export revenue in fiscal year 2001-2002, after rising steadily for many years.  In comparison to
exports, imports had continued to surge. This placed severe strains on the country's balance of
payments.  Unless there was an expansion of the export base, the situation was not likely to improve
in the near future.  Under the circumstances, Bang ladesh deeply appreciated the cooperation of the
Members in reaching the understanding that was reflected in the report of the Committee on BalanceWT/GC/M/77
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of Payments Restrictions contained in WT/BOP/R /64.  It would continue to consult with the
Committee, as required under the WTO provisions and the decisions referred to, and would present an
appropriate phase-out plan not later than 2007.
339. The representative of the United States said that her delegation welcomed the approval by the
Committee of the maintenance by Bangladesh of import restrictions for balance-of-payments purposes
under Article XVIII:B on four sensitive products unti l 2009.  It looked forward to the phase-out plan
Bangladesh would submit for consideration by the Committee in accordance with its decision.  Her
delegation had listened to the statement by Bangladesh and understood the difficult balance-of-
payments situation in which Bangladesh, a least-developed country Member of the organization,
found itself.  Furthermore, it could well appreciate  how a unique combination of circumstances had
led Bangladesh to have to request the maintenance of restrictions on the four products in question.
Those circumstances had convinced the United States that it was necessary for Bangladesh to be ableto maintain those restrictions in place for a prolonged period, as the Committee had concluded.  The
United States welcomed the Committee's approval of the maintenance by Bangladesh of import
restrictions for balance-of-payments purposes under Article XVIII:B on four products until 2009, and
looked forward to the phase-out plan Bangladesh would submit for consideration by the Committee in
accordance with its decision.
340. The General Council took note of the statements and adopted
 the report on the consultations
with Bangladesh (WT/BOP/R/64).
(b) Note on meeting of 18 November (WT/BOP/R/69)
341. The Chairman drew attention to the Note on the Committee's meeting of 18 November
(WT/BOP/R/69).
342. The General Council took note of the information in the Note on the Committee's meeting of
18 November (WT/BOP/R/69).
23. WTO pension plan
(a) Annual Report of the Management Board for 2001 (WT/L/497)
343. The Chairman drew attention to the Annual Report of the Management Board for 2001
(WT/L/497), which was being submitted to the General Council in accordance with Article 5(d) of the
Regulations of the Pension Plan (WT/L/282).  This was the third report of the Management Board
since the establishment of the Pension Plan on 1 January 1999.
344. Mrs. Whelan (Ireland), Chairperson of the Management Board, introducing the report, said
that 2001 had not been an easy year for the WTO Pension Plan.  As a result of the difficult economic
situation and continuing uncertainty in the investment markets, the Pension Plan had recorded its first
negative real rate of return since the establishment of the Plan in 1999.  The WTO Pension Plan hadnot been alone in producing a poor performance in 2001.  A survey of Swiss plans had shown that
pension funds generally had recorded negative results in 2001.  The United Nations Joint Staff
Pension Fund had recorded a real rate of return of -17.4 per cent for the period ending 31 March 2001
and -0.8 per cent for the period ending 31 March 2002.  She said it was important to remember that
short-term results were not meaningful in the c ontext of a long-term investment strategy.  The
Management Board continued to pursue an investment  strategy designed to maintain a careful balance
between risk and return over the medium-to-long term  rather than taking the risk inherent in seeking
very high short-term returns.WT/GC/M/77
Page 85
345. 2001 had marked the third year of the Pension Plan’s existence and therefore the first three-
yearly actuarial valuation.  That valuation had show n that the rate of contribution required to ensure
the long-term balance of the Pension Plan had increased slightly but was still below the actual rate of
contribution of 22.5 per cent.  The Management Board had decided that the actuarial balance should
continue to be monitored on a yearly basis in view of the continuing difficult economic situation.  TheManagement Board was now assisted by an Investment Committee comprising three members who
provided their expert services on a pro bono  basis.  The Investment Committee was currently
reviewing the Plan’s investment strategy in light of the experience gained over the first years of the
Plan’s existence.  The Management Board had been studying the need to take out what was known as
a stop-loss insurance in order to protect the Pension Plan against major death and disability claims.
Following the decision to outsource a significant part of the administrative services of the Pension
Plan to a specialized firm, work had been continuing on the adaptation of the firm’s software to thePlan Regulations and Administrative Rules.  It wa s now expected that the firm would take over the
administration of the Pension Plan in 2003.  The Pe nsion Plan Secretariat would continue to provide
the link with participants and beneficiaries and would have direct access to the outsourced database.
The number of participants in the Pension Plan had increased from 581 to 618 in 2001 and the number
of beneficiaries from 6 to 16.
346. She wished to draw attention to a problem which had been confronting the Board over the
past few months.  It had become increasingly difficult to assemble the necessary quorum for Board
meetings.  In order to function, the Board had to have present at least three representatives from the
General Council side and three representatives from the participants’ side.  The Board was composed
of four members and four alternates representing the General Council, and four members and fouralternates representing the participants.  It had been necessary recently to cancel a Board meeting
owing to a lack of representation on the General Co uncil side.  She appealed to the General Council to
ensure that it was fully represented at Board meetings in order not to prejudice the smooth functioning
of the Pension Plan.
347. The Chairman said he wished to support what the Chairperson of the Management Board had
just said, particularly on the issue of quorum.  She had brought this matter to his attention in the past
and he had tried to be as helpful as possible and to be in touch with the representatives from the
General Council on the Management Board, in order to encourage them to attend Board meetings,
notwithstanding the workload everyone faced.  He appreciated the work and the leadership the
Chairperson of the Management Board had given to this issue under, as she had said, trying
circumstances.
348. The General Council took note of the statements and of the Annual Report of the
Management Board for 2001 (WT/L/497).
(b) Agreements on the transfer of pension rights between the pension plan of the WTO and the
pension schemes of the coordinated organizations6 (WT/GC/W/483)
349. The Chairman recalled that Article 10 of the Regulations of the WTO Pension Plan
(WT/L/282) provided for the conclusion of transfer agreements with Member governments and
intergovernmental organizations in order to secure th e continuity of pension rights for participants in
the Pension Plan.  Transfer agreements had been drawn up by the Management Board of the WTO
Pension Plan with the Pension Schemes of the following coordinated organizations:  the Council of
Europe, the European Centre for Medium-Range Weather Forecasts, the European Space Agency, the
                                                     
6 These are the Council of Europe, European Centre for Medium-Range Weather Forecasts, European
Space Agency, North Atlantic Treaty Or ganization, Western European Union .WT/GC/M/77
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North Atlantic Treaty Organization, and the Western European Union.  These had been submitted in
WT/GC/W/483 for the concurrence of the General Council.
350. Mrs. Whelan (Ireland), Chairperson of the Management Board, said that WT/GC/W/483
contained the transfer agreements with five of the six organizations.  An agreement with the sixth
coordinated organization, the OECD, had been endorsed by the General Council in December 2001.The present five agreements were identical to what had been endorsed by the General Council in
2001.  The Pension Plan’s consulting actuary had confirmed that the Plan’s interests were fully
protected under the proposed agreements, which ha d been approved by the Management Board at its
meeting in November.  She recalled that Article 10 of the Pension Plan Regulations stated that the
Management Board might, subject to the concurrence of the General Council, approve transfer
agreements with Member Governments and with intergovernmental organizations with a view to
securing continuity of pension rights for participants in the Pension Plan.  As in the case of thetransfer agreements already concluded with the United Nations Joint Staff Pension Fund in December
2000 and the OECD Pension Scheme in December 2001, the five agreements currently before the
General Council were of the “outer circle” rather than “inner circle” type.  In other words, the
transferring participant was credited by the receiving Plan with the strict actuarial value of his or her
accumulated pension rights in the releasing Plan, calculated according to the Regulations of thereceiving Plan.  In the case of “inner circle” agreements concluded by Plans with identical benefit
structures, such rights were transferred on a one-to-one basis.  Such transfer agreements formed an
important part of the organization’s policy to facilitate the mobility and interchange of staff.
Although the five organizations concerned might not be directly comparable with the WTO on the
operational side, they certainly employed similar categories of staff on the administrative and supportside.
351. The General Council took note of the statement and concurred
 with the transfer agreements
contained in WT/GC/W/483.7
24. Committee on Budget, Finance and Administration – Report of the Committee
(WT/BFA/62)
352. The Chairman drew attention to the recomme ndations of the Committee on Budget, Finance
and Administration which had resulted from the Committee's extensive meetings in October,
November and December.  These recommendations had been circulated in document WT/BFA/62.
353. Mr. McMillan (United Kingdom), Chairman  of the Committee on Budget, Finance and
Administration, said that this had been an exceptionally difficult budget year.  These difficulties had
prompted the Committee to think about some wider issues.  While there had been no formal
recommendations on these in WT/BFA/62, he noneth eless wished to bring them to Members'
attention.  It was clear that the annual budget process could not, due to the present constraints in a
large number of Members' economies and the need for financial planning stability, deliver more than
incremental changes in the resources provided to the WTO.  Those same planning constraints also
created difficulties when finance ministers faced what they might regard as repeated annual requests
for increased resources.  At the same time, it was clear that the demands placed on the Secretariat byincreased membership and wider negotiations were ever growing.  In the light of this, he said that it
might be useful for the Committee in 2003 to undertake a review of resources available to the
Secretariat against the tasks it needed to fulfil.  This review could also examine, taking into account
the report of Mr. Slater in 2001, whether some of the tasks in question might be better carried out in a
different fashion so as to reduce the direct workload of the staff involved.  It could indeed look atwhether some tasks inherited from the GATT still required the same level of commitment.  Such a
review could provide recommendations to the General Council and the Director-General.  However,
                                                     
7 The transfer agreements were subsequently circulated in WT/L/513.WT/GC/M/77
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he cautioned that international organizations could easily end up with an infinite number of priorities,
according to the varying interests of the membershi p.  Any high-level decision on resources and the
work of the organization would thus need to be rigorous in its differentiation between the desirable
and the necessary.  It would also need to be made on the basis of the possible, with a clear
understanding that those who held the domestic purse strings had fully bought into the proposition.
354. The WTO had been spending some SwF 17 million a year on temporary staff.  It would make
a lot of sense to look, particularly, at those posts which had been filled for a number of years by
temporary staff, and for which there was a need for staff in the foreseeable future, and to consider
whether, in the 2004 budget, at least some of these posts should be converted into permanent posts.
The cost of this would be minimal.  The budget still included some SwF 1.5 million for postage, and
SwF 1.4 million for expendable equipment, of which a sizeable proportion was paper.  Over 80 per
cent of Members had functioning e-mail systems, and he urged Members, including non-residents, tothink about whether they could receive the majority of WTO papers electronically.  However, one had
to remain sensitive to the needs of smaller and poorer countries, and delegations with no alternatives
should not be forced to give up the paper option.  Nevertheless, a saving of even 25 per cent on these
two headings could have provided the Director-Gener al with five extra posts in 2002.  Turning to the
report of the Committee and the recommendations therein, in what had been a difficult discussion anumber of delegations had underlined the need for at least some focusing of priorities to support the
negotiations in the run-up to Cancún.  In this respect, he was assured that the required reallocations
and savings would be effected.  The Committee had also allocated a matching amount from the
savings made on the Director-General's revised proposal to release altogether SwF 480,000 for this
purpose.  In this the Committee had been conscious of the vital importance of trade policy reviews inaiding developing countries to participate more fully in WTO negotiations.
355. He wished to draw attention to the fact that the Secretariat did not intend for the moment to
organize a pledging conference in order to gather the resources necessary to reach the target amount
proposed at the present meeting for the General Council's approval for the DDAGTF in 2003.  He
therefore wished to further emphasize the call for new contributions contained in paragraph 7(e) of therecommendations of the Budget Committee.  According to the terms of reference of the DDAGTF,
the Budget Committee, together with the Committee on Trade and Development, would closely
monitor the availability of funds for the implementation of the 2003 Technical Assistance Plan and
would report back to the General Council as necessary.
356. The Chairman, on behalf of the entire membership, extended his appreciation and
compliments for the hard work the Chairman and members of the Budget Committee, together with
the Secretariat, had put into this report.  As in many administrations, the budget cycle involved a veryconcentrated period of work involving matters of complexity and sensitivity.  In this regard, he was
aware that many Members felt it would be helpful to work towards a more long-term budgetary
planning process, which could encompass broader co nsiderations and aid a smoother handling of the
work.  Concerning the elements in the Committee's report dealing with Secretariat staff salaries and
allowances, he had had some consultations with  the Director-General, with Members, and with
representatives of the Staff Council.  He wished to underline that these consultations had been marked
by a positive and constructive spirit on all sides.  It was widely recognized that, while the WTO was a
member-driven organization, a close partnership between Members and the Secretariat had always
been essential to its success, and would remain so  in the future.  The General Council would take a
decision at the present meeting on the overall budget and its components.  The proposed increase of8.3 per cent over 2002 represented a considerable effort by Members.  At the same time, he was
confident that Members would continue to receive a very good return on their investment in this
organization, at this crucial stage in its life.  As Members were aware, the budget provisions included
a salary adjustment for the Secretariat of four per cent:  three per cent awarded on 1 January  2003 and
the remaining one per cent on 1 July 2003.  The Budget Committee had also recommended suchfurther adjustment as was necessary to restore parity with the UN Common System.  In addition, theWT/GC/M/77
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Committee had recommended that it carry out a review of the methodologies for future pay
adjustments, to be completed by 31 March 2003.
357. In reviewing these methodologies, the Committee would have to undertake a very important
task in a rather short time.  All had an interest in an objective and credible process which produced a
fair outcome.  To help guide the Committee's work, the following elements should be taken intoaccount:
(a) the work should begin as soon as possible in the new year and the recommendations
which resulted from it should be forwarded to the General Council not later than
31 March 2003.  In addition, the Committee was requested to make a progress report
to the General Council at its meeting on 10/11 February 2003;
(b) to assist the Committee, appropriate opportunity should be given to the Secretariat
staff to be fully consulted and to express their views;
(c) in developing methodologies, the Committee should aim to provide WTO staff
salaries, benefits and other conditions that were sufficiently competitive
internationally to attract and retain a highly skilled and motivated staff;
(d) to enhance the predictability of the remuneration system, the methodologies that
resulted from the Committee's work should be implemented fully and in good faith byall concerned;  and
(e) in order to ensure a smoother evolution in salary levels and facilitate overall
budgetary planning for Members, salary adjustments based on the agreed
methodology should be made on an annual basis.
358. He believed that these elements would help the Committee to arrive at a  remuneration system
which would be equitable and forward-looking.  He spoke for all Members when he said that they
looked forward to seeing this work on salary  review methodology carried out in a way which
reinforced partnership and mutual respect, and he was saying this in the knowledge that the
membership and the Secretariat staff were united in  their commitment to this organization and what it
stood for.
359. He then proposed that the General Council take note of the statement by the Chairman of the
Budget Committee and of his own statement and approve the recommendations contained in
WT/BFA/62, and said the General Council looked forward to receiving the Budget Committee's
progress report in February.
360. The General Council so agreed.
361. The Director-General said that the consensus on the budget was welcome and necessary.  He
wished to highlight his appreciation for the work and efforts of the Chairman of the Budget
Committee.  He also fully appreciated the efforts of delegations who had, despite the prevailing
climate of financial stringency, taken into account to the maximum extent possible the wider context
of the WTO's human resources needs, even if it had not been possible to meet in full what had been
asked for as a reasonable increase.  He was particularly grateful to the General Council Chairman for
his own active and constructive influence on the budget discussions.  The statement the latter hadmade complemented in a very useful way the recommendations of the Budget Committee.  He would
do his best to ensure that the resources made available to the Secretariat would be optimally used, in
particular for work related to the Doha Development Agenda.  It would be a challenge to manage this
workload up to and beyond Cancún.  He had noted the interim measures agreed by the BudgetWT/GC/M/77
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Committee which would allow WTO Secretariat pay to catch up with UN rates by, at the latest,
1 July 2003.  Now that the UN pay increases for professional staff had been decided, it would be
discussed with Members how to factor that into the Budget Committee's package.  Interim measures,
by definition, were not intended to solve the whole set of problems which had arisen following the
1998 decision to take the WTO out of the UN Common System and to set up a fully independentorganization.  The methodology review, which was to be completed by 31 March 2003, would be a
vitally important next step.  He said that he c ould not emphasize strongly enough the importance of an
agreed-upon methodology in settling the terms and conditions of employment for the Secretariat.  A
reasonable outcome that reflected the value Members placed on a highly trained and internationally
recruited staff was the best way to forestall future problems.  He looked forward to working closely
with Members in that process, to defining objective criteria and parameters for the review, to
determining future pay scales, and to setting up a system for more regular annual adjustments.  He hadnoted and welcomed some helpful references in th e General Council Chairman's statement to various
aspects of the methodology review, and looked forward to the progress report which would be made
to the General Council at its next meeting in February 2003.
362. As Members were aware, many staff felt – he believed with some justification – that there had
been a tendency in recent years for the Members to demand greatly increased output for modestlyincreased input.  All had to recognize that this approach ultimately had its limits.  He said that he had
considerable sympathy with a number of the issues raised by the staff.  The Secretariat did need more
resources overall.  It did need to attract and retain high-quality staff.  Surely by now the Secretariat
should already have a settled and equitable mechanism to adjust salaries regularly.  It was certainly
not the best budget practice – and it was certainly inappropriate human-resource practice – to rely soheavily from year to year on temporary assistance to perform work which was of a permanent nature.
Having said this, as the person responsible for making sure that the Secretariat carried out the
Members' directions in an efficient manner, he had always called, and would continue to call, for
moderation and discussion.  In particular, the Doha  Development Agenda could not be put at risk.
The following year Members faced important deadlines and a vital Ministerial Conference.  He alsohad to recognise that the Members had their own constraints.  He believed that at the present stage, all
should be forward-looking.  He appealed to all to concentrate on carrying out the Budget Committee's
recommendations, as complemented by the General C ouncil Chairman's statement, adding substance
along the way to the various important tasks set out for 2003.  As had already been suggested, the
annual ad hoc bargaining exercise which was called the budget was no longer good enough for an
organization as important as the WTO now was.  There should be more planning and strategic
thinking for the future.  That way, both the Secretariat and Members would have greater predictabilityand fewer surprises.
363. All representatives who spoke expressed their delegations' appreciation to the Chairman of
the Budget Committee for his hard and effective work, and to the General Council Chairman for his
participation in bringing this matter to a successful conclusion.
364. The representative of China said that his Government had reservations regarding the 8.3 per
cent budget increase which added to China's already sharp increase in its budget contribution due to
the expansion of its total trade.  In the interests of the system, his Government did not intend to block
a consensus on this matter, but wished nevertheless to place its reservations on record.
365. The representative Chile said that his delegation sympathized with the difficult tasks the
Budget Committee Chairman had had over the past week and thanked the General Council Chairman
and the Director-General for their statements.  The WTO was an important organization and a very
poor one by the standard of other international organizations.  His delegation agreed on the need for
considerable improvement in terms of management and budget practices.  As the Director-General
had said, the organization could not continue this way.  There should be a strategic, long-term view
and more planning, and there was a lot to be done in these respects.  He had also taken note that thereWT/GC/M/77
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had been a good atmosphere in the contacts with the Secretariat staff.  Chile was fully aware of the
staff's concerns and had the greatest sympathy and respect for them.  More had to be done in this
regard.  He asked if the approval of the budget and the good atmosphere and environment that had
been detected meant that the organization would retu rn to normal work, or whether the "work to rule"
approach of the staff would continue.  It was important to have the right atmosphere in which to work,not only regarding work related to the budget over the next month, but also work in the negotiating
bodies.  That good atmosphere needed to be restored.  His delegation was more than willing to work
closely with others in the Budget Committee over the next month to achieve these important goals and
to make a reality of the vision the Director-General had outlined.
366. The representative of Djibouti expressed his delegation's satisfaction that a solution had been
found regarding staff conditions and the budget.  He wished to thank the African Group for their
support, because Djibouti was very proud of the work done by the Secretariat on behalf of allMembers and particularly on behalf of the small delegations.  As Chile had said, one could not expect
the organization to work properly if the staff did not have proper working conditions.  It was
important that whenever staff issues were discussed in the Budget Committee, a personnel or staff
delegate was present, so that the Committee, the Members and the Secretariat could all work together
and find solutions.
367. The representative of Haiti expressed his delegation's satisfaction at the adoption of the
budget.  He also wished to pay tribute to the General Council Chairman and to his good offices, which
in fact had saved the organization.  The two contentious points in the budget concerned salary issues
and the Trade Policy Review Division.  Thanks to the efforts of the Committee and General Council
Chairmen, Members had managed to smooth over the difficulties.  Haiti welcomed this for tworeasons:  First, because the staff claims were based on firm recommendations made by the consultant
and by the Director-General, who in all good faith wished to correct an error which the membership
had been unable to correct in 1999.  In 2002 the staff should have received an eight per cent salary
increase which, due to Members' constraints, large and small, they had been unable to provide.
Thanks to the General Council Chairman's good offices, it had been possible to get around thisproblem.  Members were now being asked to find a solution to this problem by July 2003.  The
second reason was that the problem regarding the Trade Policy Review Division had been solved
through the acceptance of this budget.  For Haiti, the Trade Policy Review Division was the backbone
of the organization.  This was the Division which made it possible for even the poorest countries, as
well as the most developed, to better understand each other.  Through these regular trade policy
reviews Members could understand their respective weaknesses and their comparative advantages,
which would be impossible without them.  Haiti welcomed that Members had finally managed tosalvage the programme prepared for the trade policy reviews and were also solving the staff problem.
While the 8.3 per cent increase seemed enormous, Members had to recognize that, if the organization
was to meet Members' needs, they had to make a s acrifice in order to be able to implement the Doha
Development Agenda.  The minimum had been accepted – in view of the objectives Members had set
for themselves, the 8.3 per cent increase was indeed a minimum.  Haiti hoped that by 2003 the BudgetCommittee would be able to work on the basis of the recommendations from the Slater Report, so that
Members would be better able to rationalize the budget and avoid reaching these stages of conflict at
the end of the year.
368. The representative of Kenya, speaking on behalf of the African Group
, expressed their
appreciation for the General Council Chairman's effo rts in resolving one of the more critical issues
Members had had to deal with in 2002, and thanked the Director-General for his statement, which
they fully supported.  They welcomed the Budget Committee Chairman's report and hoped that it
would go some way in meeting the expectations of the Secretariat staff and would allow Members to
resume fully their responsibilities.  This was an extremely sensitive time in the preparations for
Cancún and all needed to be fully engaged.  The African Group was encouraged and pleased that theCommittee, in carrying out its work under very difficult circumstances and pressures, had resisted theWT/GC/M/77
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temptation to make recommendations that would negatively impact on the excellent work the
Secretariat had been doing in carrying out its tasks, especially regarding technical assistance and
capacity-building needs of developing and least-developed countries.
369. As the Chairperson of the Trade Policy Review Body, she wished to thank the representative
of Haiti for his statement.  She was particularly concerned that the functioning of the Trade PolicyReview Division and the programme of work already agreed for 2003 not be affected.  These reviews,
especially for developing and least-developed countries, had had a dramatic impact on identifying the
technical assistance and capacity building needs of these countries.  The reviews had also played a
more significant role in helping countries understand the WTO and the issues under discussion, and
had contributed to the implementation process as well as to strengthening the Cancún preparatory
process.  The reviews played an important role in helping to mainstream trade into the economic
policies of this group of countries and allowed for the sharing of best practices, while at the same timeencouraging strict adherence to WTO agreements.  The Trade Policy Review Division, the Technical
Cooperation Division and the Training Division made the WTO relevant to the economically weaker
Members of the organization.  These divisions were, for many Members, the face of the WTO.  The
African Group believed these divisions should be continuously strengthened, especially as new
Members acceded who would undoubtedly require their services and support.  She therefore urged theBudget Committee to consider this a priority in its future work.
370. The representative of Chinese Taipei expressed his delegation's satisfaction that a solution
had been found and adopted.  His delegation endorsed the decision just taken and took note of the
statement by the Director-General.  It hoped that the good atmosphere created by the approval of the
recommendations would continue up to and beyond Cancún.
371. The representative of Uruguay said that his delegation endorsed the previous statements, in
particular by Chile.  He said that through his involvement in the consideration of a number of budgets
of other organizations, he had quickly reached the conclusion that Members should re-examine the
budget and the levels of remuneration of WTO staff as compared to other organizations.  This issue
deserved a comparative review, and Uruguay was certain that the outcome would go in the rightdirection.  His delegation sincerely hoped that  having approved the Budget Committee's
recommendations, Members would be able to return as soon as possible to a normal working
situation.  He said that without wishing to comment on the legitimacy of the staff action over the past
weeks, the situation that had resulted from this had caused small delegations such as his very great
difficulties in their normal functioning.
372. The representative of Barbados expressed his delegation's satisfaction that Members had been
able to come to a constructive and useful solution and conclusion to the work of the Budget
Committee, and wished to state for the record that Barbados supported the sentiments expressed by
Kenya regarding the importance of the Trade Policy Review Division and the Technical Cooperation
Division to the needs and interests of developing countries and, in Barbados' case, to small developing
economies.
373. The representative of Zambia associated his delegation with the statement by Haiti, which
was the focal point for the LDC group of countries in the Budget Committee, and with the statement
by Kenya, which Zambia strongly supported.
374. The representative of the United States thanked all involved for their dedicated and hard work
in bringing this most difficult of budget processes to a successful conclusion.  Her delegation
committed itself to full and constructive engagement in the continuing work Members had set out forthemselves in the first quarter of 2003 on the compensation system.  The United States agreed with
the Budget Committee Chairman on the need to examine the way Members did business in order to
ensure they made the best use of their resources.  Clearly the budget process had to reflect theWT/GC/M/77
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priorities agreed by Members, while recognizing that when everything was a priority, nothing was a
priority.  Her delegation welcomed the Director-General's comments on the need for more long-term
planning.
375. The Chairman informed Members that he had received that day a letter from the Chair of the
Staff Council enclosing a message from the staff, which he had been asked to circulate to delegations
at the present meeting.  He trusted that Members would read this letter and would take on board some
of the concerns articulated in it.  He had very much appreciated the constructive spirit with which the
Members he had consulted regarding his statement under this item had approached it, admittedly at a
fairly late stage and after a fairly intensive period in the Budget Committee.  Regarding Chile's
question as to whether there would be a return to normal working conditions, that was not for him to
answer.  However, it was his hope that this could be done, and he wished to thank the Staff Council
representatives with whom he had been in touch fairly regularly over the past few days, for theirconstructive implementation of staff feelings the past week.  He had asked them, because of the
important work on the General Council's agenda, to refrain from the planned "walk throughs" to end
the present meeting at a certain hour.  In fairness and to their credit, they had done so.  He said he felt
that this issue had been concluded, for the present year, on a high note, and that the challenge was to
continue it into the following year.
376. The General Council took note of the statements.
25. Waivers under Article IX of the WTO Agreement
(a) Introduction of Harmonized System 2002 Changes into WTO schedules of concessions –
Draft decision (GC/W/436 and Corr.1)
377. The Chairman drew attention to the draft Decision in GC/W/436 and Corr.1 concerning this
matter.  On behalf of the Chairman of the Council for Trade in Goods, he reported that at its meeting
on 22 November 2002, the Goods Council had approved the draft Decision for the listed Members
and recommended that the draft Decision in G/C/W/436 and Corr.1 be transmitted to the General
Council for adoption.
378. The General Council took note of the statement and, in accordance with the Decision-Making
Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93),
adopted the draft Decision in document G/C/W/436 and Corr.1.8
(b) Review of waivers under Article IX:4 of the WTO Agreement
(i) Cuba – Article XV:6 of GATT 1994, granted on 20 December 2001 until 31 December 2006
(WT/L/440, WT/L/496)
(ii) Colombia – Extension of the application of Article 5.2 of the Agreement on Trade-Related
Investment Measures, granted on 20 December 2001 until 31 December 2003 (WT/L/441)
(iii) Dominican Republic – Minimum values under the Customs Valuation Agreement, granted on
20 December 2001 until 1 July 2003 (WT/L/442)
(iv) EC – Autonomous preferential treatment to the countries of the Western Balkans, granted on
8 December 2000 until 31 December 2006 (WT/L/380, WT/L/503)
                                                     
8 The Decision was subsequently circulated as WT/L/511.WT/GC/M/77
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(v) EC – Transitional regime for the EC autonomous  tariff rate quotas on imports of bananas,
granted on 14 November 2001 until 31 December 2005 (WT/L/437)
(vi) EC – The ACP-EC Partnership Agreemen t, granted on 14 November 2001 until
31 December 2007 (WT/L/436, WT/L/504)
(vii) Turkey – Preferential treatment for Bosnia-Herzegovina, granted on 8 December 2000 until
31 December 2006 (WT/L/381, WT/L/499)
(viii) United States – Caribbean Basin Economic Recovery Act, granted on 15 November 1995
until 31 December 2005 (WT/L/104, WT/L/498)
(ix) Preferential Tariff Treatment for Least-Developed Countries, granted on 15 June 1999 until
30 June 2009 (WT/L/304)
379. The Chairman recalled that in accordance with paragraph 4 of Article IX of the WTO
Agreement, "any waiver granted for a period of more than one year shall be reviewed by the
Ministerial Conference not later than one year after it is granted, and thereafter annually until the
waiver terminates."  There were nine waivers before the General Council for review.  The Decisions
on the waivers for Cuba, Turkey and the United States, and on two of the waivers for the EC,
provided that an annual report should be submitted by these Members on the operation or
implementation of the respective waivers, with a vi ew to facilitating their annual review by the
General Council under Paragraph 4 of Article IX.  The reports from these delegations on the relevant
waivers had been circulated in WT/L/496, 503, 504, 499 and 498 respectively.
380. The representative of Honduras said his delegation first wished to clarify that it did not wish
to go into the matter of how or under what conditions the waiver for the ACP-EU Partnership
Agreement had been granted at the Fourth Ministerial Conference.  It did, however, wish to voiceconcerns in relation to the EC's banana import regime, given that the EC policy continued to be very
dynamic.  In particular, Honduras had noted that both the current quota and the licensing system
would be affected by the accession of new members to the European Communities as of 2004 and by
the decision to adopt a single tariff on a most-favoured-nation basis as of 2007, as indicated in
WT/MIN(01)/15 which had been adopted at the Fourth Ministerial Conference.  Honduras wouldclosely monitor the negotiations on enlargement of European Union members and would keep a
watchful eye on its development in order to ensure  that the EU-15 regulatory framework was properly
extended to new members.  Likewise, Honduras would be taking the necessary steps to ensure that the
new enlargement policies were consistent with the terms and conditions of the waiver granted.
Furthermore, when the Community launched the negotiations agreed at Doha to adopt a single tariff
on an MFN basis for banana imports, Honduras hoped to play an active role in both the tariff
negotiations and any arbitration processes related to the waiver – rights which had already beenrecognized by a Panel and in the Doha Agreements  of November 2001, as stated in the Annex to the
Decision granting the waiver for the ACP-EU Partnership Agreement.  Nevertheless, his delegation
wished to reaffirm that all necessary steps would be taken to prevent an excessive tariff which could
damage Honduras's vulnerable developing economy.  This issue continued to be a priority for
Honduras and it hoped the waiver would not create undue barriers or harm its trade interests.  It wason this basis that Honduras asked the General Council to continue to oversee the implementation of
this waiver with the utmost care.
381. The representative of Ecuador said that his delegation took note of and thanked the
Community for its report on the waiver regarding its obligations under paragraphs 1 and 2 of Article
XIII of the GATT 1994 with regard to the implemen tation of a separate tariff quota of 750,000 tonnes
for bananas of ACP origin.  Ecuador recalled that this waiver had been granted on a temporary basis
to facilitate the implementation of a transitional regime for banana imports to the Community market,WT/GC/M/77
Page 94
and that as of 1 January 2006, all tariff-rate quotas were to be eliminated and the regime replaced by a
tariff-only import regime which was fully consistent with WTO rules.  Ecuador would closely monitor
all of the commitments made by the Community whic h had resulted in this exceptional treatment of
imports of bananas of ACP origin to the European market.  Ecuador also took note of and thanked the
Community for its report on the waiver which it and the ACP States which were WTO Members hadbeen granted in respect of their obligations under Article I.1 of the GATT 1994 with regard to the
provision of preferential treatment to products originating in ACP States.  Ecuador was pleased to
note that the objectives of the Cotonou Agreement were being met and that trade between the
Community and ACP States had increased over the past year.  It hoped that this situation would
continue.  In view of the fact that this was the first annual report submitted by the Community
pursuant to paragraph 5 of the waiver, Ecuador wished to make the following points which, in its
opinion, should be taken into consideration by WTO Members with regard to this exceptional waiverwhich had been granted to parties to the ACP-EC Partnership Agreement.
382. The benefits which a number of WTO Members enjoyed as a result of the implementation of
this waiver were not unrelated to the multilateral trading system and therefore affected other
Members, in particular certain developing countries.  Ecuador wished to recall that the conditions
established in the waiver did not in any way prejudge the multilateral negotiations under the DohaDevelopment Agenda, in particular the agricultural negotiations and negotiations on market access for
non-agricultural products.  In view of the fact th at the Community was preparing for the enlargement
of its market upon the accession of new members, it was worth recalling that the conditions of this
waiver could not be automatically transferred to the new EU members.  The Community's transitional
banana import regime would remain in force without interruption until 1 January 2006, on which datethe Community was to implement a fully WTO-consistent tariff-only regime.  To this end, the
Community should engage in consultations on a timely basis with interested parties in accordance
with the relevant procedures provided for in Article XXVIII of GATT 1994.  It should be recalled that
this waiver was governed by the additional provisions in paragraph 3 bis of the related Decision and
the Annex thereto, which stated that consultations with interested parties with a view to defining thenew banana import regime should commence in 2004.  Agricultural negotiations would have made
headway by that time and the Community would probably have enlarged its market.  These elements
merely confirmed what had already been stated, namely, that the waiver granted to the ACP States
and the European Communities was not unrelated to the outcome of other negotiations concerning
either the WTO or the multilateral trading system.  However, in spite of this link, the outcome of these
negotiations was not covered by this waiver, nor could the implementation of the waiver determine
the development of any other negotiation.
383. The General Council took note of the statements and of the reports in WT/L/496, 498, 499,
503 and 504.
26. Review of WTO Activities
Reports of:
(a) General Council (WT/GC/W/481), Dispute Settlement Body (WT/DSB/29 and
Add.1), Trade Policy Review Body (W T/TPR/122), Sectoral Councils (G/L/595,
S/C/16, IP/C/27), Committees on Trade and Development (WT/COMTD/44),
Balance-of-Payments Restrictions (W T/BOP/R/67), Budget, Finance and
Administration (WT/BFA/61), and Regi onal Trade Agreements (WT/REG/11)
(b) Committee on Trade and Environment (WT/CTE/7)WT/GC/M/77
Page 95
(c) Working Groups on the Relationship between Trade and Investment (WT/WGTI/6),
the Interaction between Trade and Competition Policy (WT/WGTCP/6), and
Transparency in Government Procurement (WT/WGTGP/6)
(d) Working Groups on Trade, Debt and Finance (WT/WGTDF/1), and Trade and
Transfer of Technology (WT/WGTTT/4)
(e) Committees under the Plurilateral Trade Agreements (GPA/73, WT/L/500)
384. The Chairman, in pursuance of the Decision concerning procedures for an annual overview of
WTO activities and for reporting under the WTO (WT/L/105), drew attention to the annual reports of
the various Councils and Committees in the documents referred to above.  He proposed thatexceptionally, and in the interests of allowing Members to conclude this meeting on schedule, the
Chairpersons of the various Councils and Committees not introduce their reports orally at this
meeting, unless they felt that they should draw particular attention to some aspect of the work carried
out in their respective bodies.
385. The General Council took note of the statement, adopted
 the report of the Committee on
Trade and Development in WT/COMTD/44, and took note of the following reports of the other WTO
bodies, including the reports of the bodies under the Plurilateral Trade Agreements:  Dispute
Settlement Body (WT/DSB/29 a nd Add.1), Trade Policy Review Body (WT/TPR/122), Council for
Trade in Goods (G/L/595), Council for Trade in Services (S/C/16), Council for TRIPS (IP/C/27),
Committee on Balance-of-Payments Restrictions (WT/BOP/R/67), Committ ee on Budget, Finance
and Administration (WT/BFA/61), Committee on Regional Trade Agreements (WT/REG/11),
Committee on Trade and Environment (WT/CTE/7), Working Group on the Relationship between
Trade and Investment (WT/WGTI/6), Working Group on the Interaction between Trade and
Competition Policy (WT/WGTCP/6), Working Group on Transparency in Government Procurement
(WT/WGTGP/6), Committee on Government Procurement (GPA/73), Committee on Trade in CivilAircraft (WT/L/500).
386. The General Council then adopted the draft report of the General Council contained in
WT/GC/W/481, on the understanding that the Secretariat would make the necessary adjustments to
that draft report so as to include matters that had been considered at the present meeting.
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