RESTRICTEDWORLD TRADE
ORGANIZATIONWT/COMTD/M/36
14 January 2002
(02-0160)
Committee on Trade and Development
Thirty-Sixth Session
NOTE ON THE MEETING OF 26 NOVEMBER 2001
Chairman:  H.E. Mr. Nathan Irumba (Uganda)
Subjects discussed:
A. A DOPTION OF THE DRAFT AGENDA ............................................................................................2
B. O BSERVERS ............................................................................................................................... ..2
(i) Request for attendance for ad hoc observers..............................................................................2
(ii) Further consideration of requests for observer status by the League of Arab States,
the Organization of the Petroleum Exporting Countries (OPEC), The Gulf
Organization for Industrial Consulting, and the Organization Internationale de la
Francophonie................................................................................................................... ...........2
(iii) New request for observer status from  the Common Fund for Commodities (CFC) ...................2
C. I NTERNATIONAL CONFERENCE ON FINANCING FOR DEVELOPMENT .........................................3
D. S PECIAL AND DIFFERENTIAL TREATMENT ..................................................................................8
(i) Work Programme Resulting from the 4th Ministerial Conference ..............................................8
(ii) Note by the Secretaria t (WT/COMTD/W/77/Rev.1)....................................................................8
E. G ENERALIZED SYSTEM OF PREFERENCES .................................................................................10
F. E LECTRONIC COMMERCE ..........................................................................................................11
(i) Presentation of a Count ry Experience (Panama).....................................................................11
(ii) Presentation by UNCTAD:  E-Commerce and Development Report 2001 ..............................12(iii) Work Programme on E-commerce............................................................................................16
G. W
ORK PROGRAMME FOR 2002..................................................................................................17
H. O THER BUSINESS ......................................................................................................................18
1. The Chairman, welcoming delegations, said that this was a particularly important meeting of
the Committee on Trade and Development (CTD) since it was the first meeting of the Committee
after the successful Ministerial Meeting in Doha, which had set up a Work Programme on Special and
Differential Treatment.  Under the Ministerial Decision on Implementation-related Issues and
Concerns, paragraph 12, that work was the responsibility of the CTD.  Paragraph 51 of the MinisterialDeclaration also created a particular role for the CTD in assessing development-related elements of
future negotiations.  The CTD therefore had a new start to make.WT/COMTD/M/36
Page 2
A. ADOPTION OF THE DRAFT AGENDA
2. The Chairman introduced the draft Agenda for the meeting, contained in
airgram WTO/AIR/1661/Rev.1 of 23 November 2001.  He said that it was his intention to only have
one discussion on special and differential treatment under agenda item D.  He therefore suggested that
the two sub-items under agenda item D be merged and that the Secretariat document be used as astarting-point for the discussions on the work programme on special and differential treatment
contained in the decision on implementation related issues and concerns adopted by Ministers in
Doha.  He recalled that Ministers had instructed the CTD to take fully into consideration previous
work undertaken as noted in WT/COMTD/W/77/Rev.1.
3. The agenda was adopted as amended.
B. OBSERVERS
(i) Request for attendance for ad hoc observers
4. The Chairman recalled that at previous sessions of the CTD it had been agreed to invite the
following intergovernmental organizations on an ad hoc, meeting-by-meeting basis.  Those
organizations were: the Arab Maghreb Union (AMU);  the Economic Community of West African
States (ECOWAS);  the Economic Cooperation Or ganisation (ECO);  the Inter-Arab Investment
Guarantee Corporation;  the Islamic Development Bank (IDB);  the Organisation of African Unity
(OAU);  Organisation of the Islamic Conference (OIC);  the South Centre;  the South Pacific Forum;
the United Nations Environment Programme (UNEP); the West African Economic and Monetary
Union (WAEMU);  and the World Intellectual Property Organisation (WIPO).  He proposed that
those organisations be invited to the next formal meeting of the CTD.
5. It was so agreed.
(ii) Further consideration of requests for observer status by the League of Arab States, the
Organization of the Petroleum Exporting Countries (OPEC), The Gulf Organization for
Industrial Consulting, and the Organization Internationale de la Francophonie
6. The Chairman said that at the last few meetings the Committee had had before it four
outstanding requests for observer status from the L eague of Arab States, OPEC, the Gulf Organization
for Industrial Consulting and the Organization Internationale de la Francophonie.  He recalled that,
pending the outcome of the General Council process, those would be on an ad hoc basis.  The
positions of delegations were well-known and on the record.  Unless there had been any recent change
of position, he proposed that the Committee revert to those requests at its next formal meeting.
7. The representative of the United States said  that with respect to the Arab League, her
delegation was interested in entertaining requests for observer status from economic affiliates of the
Arab League such as such as the Arab Authority for Agricultural Investment and
Development (AAAID) and the Arab Monetary Fund (AMF).
8. The representative of Israel said that she was awaiting instructions from her capital.  Her
delegation meanwhile reserved its position on the issue.
(iii) New request for observer status from  the Common Fund for Commodities (CFC)
9. The Chairman said that the Committee had received a request for observer status from the
Common Fund for Commodities.  The request had been faxed to Members and copies were availableWT/COMTD/M/36
Page 3
at the back of the room.  Additional information-material was available with the Secretariat.  It was
understood that the request would be for ad hoc observer status until the general question of observer
status had been resolved in the General Council.
10. The representative of Egypt said that his delegation welcomed the request by the Common
Fund for Commodities for ad hoc observer status.  His delegation acknowledged the contribution the
CFC made to the development of the commodity sector in developing countries and wished to grant it
observer status.  Consistent with the past prac tice of the CTD, the request of the CFC should be
considered along with the pending requests for observer status in agenda item B(II).  He reiterated that
his delegation supported the granting of observer status to all the organizations requesting such status
together as a package.
11. The representative of Jordan supported the statement made by Egypt.
12. The Chairman said that there did not yet appear to be any consensus to grant ad-hoc observer
status to the Common Fund for Commodities.
13. The Committee took note of the statements made and decided  to revert to the request at its
next formal meeting.
C. INTERNATIONAL CONFERENCE ON FINANCING FOR DEVELOPMENT
(i) Background Note by the Secretariat
14. The Chairman recalled that the CTD was the WTO focal point relating to the International
Conference on Financing for Development (FFD).  At this meeting, the Committee had the honour of
the company of Ambassador Ruth Jacoby, who was Ambassador at the Permanent Mission of Sweden
to the UN, and one of the Co-Chairs of the Bur eau to the Preparatory Committee (PrepCom) for the
Conference.  She had come to the CTD to discuss preparations for the Conference under sub-item (ii).
However, he first informed the Committee, that si nce its last meeting in October, the PrepCom had
held a meeting in New York at which the WTO had been represented by the Deputy Director-General,Mr. Ablassé Ouedraogo and Mr. Alain Frank, Dire ctor, External Relations.  The Secretariat was
invited to inform the Committee of the latest developments in the UN process from a WTO
perspective, and to introduce the new background note by the Secretariat contained in
document WT/COMTD/W/94 of 21 November 2001.  The Chairman further proposed that following
the Secretariat's presentation, the meeting would be moved into informal mode, to allow a freeexchange of views with Ambassador Jacoby, and s ubsequently the meeting would revert to formal
mode.
15. The Director of the Development Division stated that the WTO had been involved through
the Membership and at Secretariat-level in the various stages of the preparatory process for the FFD
Conference.  The WTO was recognised as a major institutional stakeholder in the preparatory processfor the Conference, which was to be held in Monterrey, Mexico in March 2002.  He reiterated that
Deputy Director-General Mr. Ablassé Ouedraogo a nd Mr. Alain Frank had attended the most recent
PrepCom held in mid-October 2001.  He went on to  note that the October 2001 PrepCom meeting had
been held before the Doha Ministerial.  Doha was a watershed that made a difference in the WTO's
approach to the FFD Conference, since WTO Members had now agreed to a Ministerial Declaration.At the October 2001 PrepCom meeting, the main item on the agenda had been the draft Outcome of
the Facilitator, which had been distributed at the last CTD session.  According to reports he had
received, there had been substantive and lively discussion on the draft Outcome, which was to be
revised and reissued at the end of November 2001.WT/COMTD/M/36
Page 4
16. The Director then drew the meeting's attention to the Secretariat background
note WT/COMTD/W/94.  He apologised for the paper not being translated into the three languages
but indicated that translation would soon be available.  The paper aimed to give an accurate
description of the process, the PrepCom and WTO' s involvement in the process.  The key issues
raised in the note were contained in paragraph 30 on Page 5, and governed the interrelationshipbetween what would happen in Geneva following D oha, and the ongoing process in New York in the
lead up to the Monterrey Conference.  Four questions  were raised in this regard:  (1) How can the
FFD process contribute to the furthering of the results of the Doha declaration?  (2) How can elements
of the Doha declaration be incorporated into the discussions on  FFD?  (3) How should the two
institutions of the WTO and UN best cooperate in the future, especially in this regard?  and (4) How
can individual members ensure that trade and development issues are treated in a consistent manner
within the two processes?  The Secretariat thought th at it was important to maintain consistency in the
flow of information between New York and Geneva in the process leading to the Conference in
Monterrey in 2002.  He hoped that some of the questions would be used as a background to the
informal discussions to be held with Ambassador Jacoby later on.
(ii) Discussion with the Co-Chair of the Preparatory Committee
17. H. E. Ms. Ruth Jacoby, Ambassador, Permanent Mission of Sweden to the UN, congratulated
the WTO membership on the results of Doha and indicated that she was impressed and encouraged by
the results that had been achieved.  Members of the WTO should have been proud.  The last PrepCom
had been held in October 2001 and had brought about many discussions and negotiations.  She felt
encouraged by a number of things that had happened since that PrepCom meeting.  One was theMinisterial Conference in Doha, and another was the meetings of the Development Committee and
the International Monetary and Financial Committee (IMFC) recently held in Ottawa
(17-18 November 2001), where Ministers of Finan ce and Ministers of Development Cooperation had
agreed on two Communiqués, one of which she felt wa s particularly forward looking and represented
the latest, most authoritative view on the trends of world development and the direction to be taken.Those two important Ministerial meetings had set the parameters and framework for substantially
moving forward the common agenda of development and improvements in standards of living in the
developing countries, in the coming months.  That was encouraging.
18. Ambassador Jacoby went on to indicate that the next meeting of the PrepCom of the FFD
process would take place in mid-January 2002 for two weeks, and it was presumed to be the last
PrepCom meeting, before the actual Conference.  It would definitely be the last formal PrepCom, but
it was possible that there would be some intersessional last minute drafting exercises beforeMarch 2002, and a lot of work was on-going.  The Facilitator, who had prepared a first draft of an
Outcome document which was circulated to the CTD at its last meeting, was working on a revised
draft after having received comments from members during the last PrepCom meeting.  This revised
document would be discussed again at the January 2002 meeting.
19. The representative of the European Communities agreed that the Conference was an
important event which should be seen in the perspective of the important work that the WTO was
trying to commence after Doha.  He said he wished to ensure that the WTO had some messages for
the Ambassador to take to New York in order to achieve an optimum result of the Conference.  He
acknowledged that the Members had channels in New York to do so, but was of the view that it was
appropriate to have discussions at the WTO, given the past involvement of the WTO and also thefuture approach which the CTD had been informed about.  The WTO had played an important role in
the process.  The questions outlined in the background note were pertinent, and outlined how his
delegation saw the follow-up to Doha developing.  The most important point was that the Conference
was a platform to consolidate, reinvigorate and make known to a broader constituency outside the
trade world, the results – namely, the development dimension of the Doha Declaration - which was
innovative, new, and much more development-oriented than before.WT/COMTD/M/36
Page 5
20. The Conference would also be expected to be complementary in areas where the WTO could
not deliver all the promises in the Doha Declarati on on its own.  This was especially with respect to
technical assistance and capacity-building, where ma ny of the commitments in the Doha declaration
could only be delivered with the help of Members development agencies or Ministries and Ministries
of Foreign Affairs.  Policy consistency and follow-up were necessary, in addition to strong politicalcommitment, to ensure that what had been agreed to  at Doha came into effect.  This was not only true
for technical assistance and capacity building, but for the substantive contributions which were
mentioned in the Facilitator's first draft outcome document and other reports from the preparatory
process.
21. He drew attention to the trade part - and to a le sser extent to the development, debt and other
issues parts - of the existing facilitator's draft outcome document and indicated that there were many
points that were already made and could be reinforced and made more concrete after Doha.  Forexample, the draft outcome document started with the general message that trade liberalisation was a
useful tool.  This however, needed to be re-modelled, as it was not just any type of trade liberalisation
but was very specific.  The draft outcome document went on to consider anti-dumping, and the
strengthening of rules and disciplines – things that the WTO had decided to do in the Ministerial
declaration.  The document also mentioned further liberalisation of trade in agricultural products – theWTO had a firm, new mandate for the agricultural negotiations.  The reduction of tariff peaks which
affect developing countries exports was also mentioned in the document – the WTO had concrete
non-agricultural market access negotiations coming up, including some analytical work on exactly
what it meant for developing countries.  In addition, the draft outcome document referred to textiles
and trade and health – again, the WTO had a declaration on these issues coming out of Doha.  Thedocument also discussed regional trade integration, on which there was a negotiating mandate within
the WTO for better rules.  The document also addressed market access (the Everything But Arms
initiative) and the issue of coherence, among many others.  In the area of investment, the draft
outcome document looked at how to ensure that developing countries have a capacity, and that the
international system should be responsive to the fostering private investment flows.  The Fourth
Ministerial Declaration again gave the WTO a mandate to look at rules in this area.
22. His delegation was of the view that developments emerging from Doha should be reflected
and followed-up in the FFD Ministerial Declaration with concrete pointers saying, "we note and take
note again of these commitments, and we will do our part these commitments are followed-up, that
the money is there, that the political commitment is  shared by our governments in this Conference, as
well as those who went to Doha."  In the area of technical assistance, which was an important area
with respect to the financing question, the delegate went on to state that the facilitator's draft outcomedocument called for multilateral and bilateral donors to work on the issue.  The WTO Ministerial
declaration also called for coherence in this field.
23. The representative of the European Communities proposed that, to get the "good news of
Doha" into the UN process, in addition to meetings held in Geneva and New York, the WTO
Secretariat could be asked to briefly look in a fact ual way, at what had been decided that was relevant
to the themes of the International Conference.  Such a factual paper would indicate for each item in
the FFD, how it was concretely addressed in the Doha Declaration, what the commitment was, and
what the WTO Membership had agreed to do.  This would ensure that the decisions and ideas from
Doha were included in the process and that the WTO had something to say on the elements of the
FFD process, be it reinforcing or complementary to the political objectives which all WTO membersshared.  His delegation would therefore propose going beyond the recommendation in the WTO
Secretariat's background note provided in paragraph 29, and not only make an intervention on the
results of Doha, but provide a factual analysis, aimed at putting together the elements which were
already in the Facilitator's draft outcome document and other papers which had come out from the
FFD process, and point out how the developments th at have come out of Doha were relevant.  The
idea was to give the persons who had to decide on concrete action and concrete commitments in theWT/COMTD/M/36
Page 6
FFD process a solid basis to do so, without having to read the whole WTO Declaration in order to
find the all the sections/paragraphs on one issue.  The WTO Secretariat, possibly under its own
responsibility, could be tasked to sum up and provide such a paper to the Conference.
(iii) Further Involvement by the Membership
24. The Chairman recalled that earlier in 2001, the CTD had sent a contribution to the Preparatory
Committee, contained in document WT/COMTD/30, and that at that time, the WTO had been
working towards the Doha Ministerial Conference.  The WTO was currently in a new situation: the
Ministerial Declaration and Decisions had been adopted; the decision on the extension of transition
periods for subsidies had been taken; and the waiver of GATT 1994 for the EU/ACP
Cotonou Convention had been adopted..  The WTO ha d a clear work programme of negotiations and
other work which would take it through to 2005.  In addition, the WTO had admitted China andChinese Taipei as Members.
25. He therefore proposed that, as a first step, the CTD as the official point of contact for the FFD
process, should send copies of the Ministerial Declaration, the Decision on Implementation-Related
Issues and Concerns, the Declaration on TRIPS and Public Health, the Decision on extensions under
Article 27.4 of the Subsidies Agreement, and the De cision on the EU/ACP Waiver, to the Co-Chairs
of the FFD Preparatory Committee for the information of the Preparatory Committee at its next
meeting in January 2002.  He further proposed that at the January 2002 meeting of the PrepCom, the
WTO Secretariat and himself could update the PrepCom on developments in Geneva since
26 November 2001, in particular on steps towards the creation of a Trade Negotiations
Committee (TNC).  At the January 2002 Preparatory Committee meeting, it would be open to anyMember to state their views concerning the Work Programme of the WTO and the contribution that it
might make towards FFD.  He reminded the Members of the EU's proposal, which had been endorsed
by Switzerland, for the Secretariat to undertake work on areas in which cooperation should continue,
and enquired whether Members would be agreeable to that  process.
26. The representative from the United States asked exactly what the representative of the EC had
suggested.  References had been made to anti-dumping and other elements, when the development of
the trade section of the paper on FFD was being described.  The proposal needed to be discussed
more, informally, for all to get a better idea what they would be agreeing to with respect to the
illustrative list proposed.
27. The representative of the European Communitie s indicated that the idea was to ask the WTO
Secretariat to draw up a more succinct report of wh at had happened in Doha, rather than just sending
the Fourth Ministerial Declaration.  The proposed report would make  clear where the elements thathad been identified so far in the FFD discussion were addressed in the Declaration.  The major part
would be on technical assistance and capacity building because there were so many firm
commitments to be followed-up.  It was also worth noting that many of the other substantive points
which the Facilitator and others had raised which would be the elements which would really be
conclusive to financing development by using trade means, such as better market access.  Forexample, it could be stated that the question of market access had been addressed and that the WTO
had a commitment to negotiate further.  What the specific commitments were in the Least-Developed
Countries (LDC) section of the Declaration, could also  be pointed out.  That would enable a reader to
have a succinct and comprehensive overview of wh at the relevant commitments  undertaken in the
Declaration were and that would assist the New Yo rk based FFD process.  The aim would not be to
push anyone into a negotiating position.  It was a fact that the WTO had agreed to strengthen the rules
for example, and the language that was in the WTO Ministerial declaration paragraph on rules, did
make reference to certain disciplines.WT/COMTD/M/36
Page 7
28. The representative of Canada indicated that the proposal did not cause them any problem.  It
was a good proposal, although some concerns might need to be worked out.  It was a good idea to
indicate succinctly what could be done within the confines of the WTO and what went beyond that.  It
should be indicated, where linkages were necessary, and where the coherence agenda would have to
come into play, to make it clear that the World Bank, IMF and other organisations would be drawn
into certain of the supply-side considerations in particular.
29. The representative of Argentina, indicated that there might be certain costs for developing
countries from the Doha Declaration, and the proposed factual report should not lose sight of them it
was to give a balanced picture of the situation.  That had to be further considered, so they were not in
a position to come up with an analysis at that time.
30. The respresentative of the United States said that her delegation would welcome an informal
discussion on what the list may entail, since her delegation might  not necessarily share the views of
certain other delegations, although it would probably share some of the indications coming from the
representative of Canada, especially with respect to the supply-side requirements and the  linkages
that would be found in the International Conference.   She also found some of the comments by the
representative of Argentina interesting.  She did not wish to re-draft the WTO Declaration and
Decisions, which had been negotiated intensively in Doha.
31. The representative of Japan indicated there seemed to be a lot of capacity building and similar
supporting activities included in the Declaration, and the WTO had to work with the other
international, regional and bilateral donors to implement those activities.  He therefore wished to see
the proposed paper, if such a paper was prepared, include the good collaboration and cooperation in a
coherent manner to work toward the common target of development.  He supported the advantageexpressed by previous speakers that supply-side capacity constraints, including infrastructure
hardware with regard to trade, had to be tackled in a coordinated manner.  The WTO was not
accustomed to doing that all alone.  Wording with  respect to further cooperation and collaboration
therefore had to be included.
32. The representative of Paraguay found that the proposal risked interpreting the Doha
Declaration.  That was why such a proposal had to be taken with caution and judiciousness.  He
agreed with the representative of Canada that it should be much more a question of looking at ways to
supplement the Doha Declaration, but the Committee should not look for ways of interpreting what
had actually been stated in the Doha Declaration, as that would be dangerous.
33. At this point in the discussion, the Chairman reminded the meeting that there were two
proposals: the proposal of the representative of the European Communities and a proposal to send the
factual documents which were previously indicated - the Ministerial Declaration, the Decision onImplementation-Related Issues and Concerns, the Declaration on TRIPS and Public Health, the
Decision on Extensions under Article 27.4 of the Subsidies Agreement, and the Decision on the
EU/ACP Waiver - without any comme nt, duly notifying them of the decisions taken.  The latter
proposal did not seem to raise any problems.  There was also a proposal to update the PrepCom on
progress in the preparation of the setting up of the WTO TNC.  He hoped that that this could beagreed.  With respect to the proposal made by the representative of the  EC, he noted that although
there had not been opposition, it has been agreed that further discussion was necessary.  The
Committee could  consult later on how to proceed on that issue.  No decision could be taken at that
moment.
34. The representative of the European Commun ities said that with respect to what the
representative of Paraguay had said, it was not a question of an interpretation of the WTO declaration.
The idea was to give persons who prepare for FFD, a tool, showing them what had been done at Doha
on the issues in the FFD process.  For example, the Facilitator and others had raised the issue ofWT/COMTD/M/36
Page 8
Market access.  The market access sections of the Doha Declaration could then be quoted.  He
understood that some delegations were uneasy about what the proposal actually meant and how it
could be done, so he agreed to the Chair's suggestion to continue the discussion informally.  However,
the Committee should not wait too long since the PrepCom meeting was in January 2002.
35. The representative of the United States stated that even if a factual document was prepared, it
could be of concern, as a factual presentation could contain an indication of an interpretation by the
mere fact of what was placed in it.  More time was needed to get a better sense of what the exercise
was about.  The CTD should consider what the next steps were as far as a WTO contribution was
concerned.  Even if it was to be a factual listing, Members would need to say what that factual listing
would be.
36. The representative of Argentina said that he did not entirely agree with what the
representative of the US had said.  He agreed that an informal meeting be held, before the CTD went
any further on the matter.
37. At this stage, the Chairman just wanted to verify.  He imagined that there was no problem
with the decision to transmit the documents adopted in Doha.  He enquired whether the US objected
to this.
38. The representative of the United States indicated that she did not understand, and enquired
whether the CTD was going to transmit documents approved by the Ministers in Doha.  The
representative indicated that she did not understand why the CTD was transmitting the documents,
since she was not sure of the competence issue.  In addition, the delegate wanted to know where the
CTD was going to transmit the documents.
39. The Chairman proposed that the CTD, as the focal point designated for the FFD, transmit the
documents that had been adopted at Doha, to the PrepCom, without any comment.
40. The representative of the United States reiterated that an informal meeting was necessary
before arrangement could be reached on the issue.
41. The representative of Argentina indicated that his delegation agreed with what was said by the
representative of the US.
42. The representative of Barbados also agreed to the need for an informal meeting.
43. The Chairman said he would speak to the WTO Secretariat to see if a time for informal
consultations on this issue, could be arranged.
D. SPECIAL AND DIFFERENTIAL TREATMENT
(i) Work Programme Resulting from the 4th Ministerial Conference
(ii) Note by the Secretariat (WT/COMTD/W/77/Rev.1)
44. The Chairman said that the issue of Special and Differential Treatment (S&D) had been given
a new departure in the Doha Ministerial Declaration, to which the CTD had to respond urgently.  As
reflected in paragraph 44 of the Ministerial De claration (WT/MIN(01)DEC/ 1), Ministers had agreed
that that all S&D provisions should be reviewed with a view to strengthening them and making them
more precise, effective and operational.  In that connection, they had endorsed the work programmecontained in Paragraph 12 of the Decision on Implementation-Related Issues andWT/COMTD/M/36
Page 9
Concerns (WT/MIN(01)/17), also adopted at Doha.  Copies of the text of the work programme on
S&D were available at the back of the room.  As  delegations would have noted, two aspects of the
work programme had firm deadlines instructing the CTD to report to the General Council with clear
recommendations for a decision by July 2002.  It was therefore critically important to commence the
work immediately and that Members considered how they wished to organize the work.  Only threeformal Committee meetings had been scheduled before the end of July 2002.  It would therefore be
necessary to schedule a number of informal meetings, in addition to the formal meetings, if the CTD
wished to make good progress.  In principle, he proposed to call one informal meeting a month in
order to ensure progress on S&D.  However, that programme might have to be varied according to the
progress made.
45. He went on to recall that the work the CTD carried out was without prejudice to that carried
out in respect of implementation by other WTO bodies.  In that connection he drew delegations'attention to the fact that other WTO bodies would be carrying out work on specific S&D provisions,
either under the mandate handed to them by the Decision on Implementation-Related Issues and
Concerns, or as part of their treatment of outstanding implementation issues under paragraph 12 of the
Ministerial Declaration.  He would be seeking the guidance of Members, as the work progressed, on
how to coordinate the work done in the CTD with that done elsewhere, in order to meet the CTDmandate, and to avoid duplication of efforts.  Regarding how the CTD approached the substance of its
work, he suggested that the meeting focussed in particular on that part of the mandate contained in
paragraph (i), of the work programme, which instructed the CTD to do the following three things, and
then to report to the General Council with clear recommendations for a decision by July 2002.  Those
three things were:
• to identify those special and differential treatment provisions that were already
mandatory in nature and those that were non-binding in character;
• to consider the legal and practical implications for developed and developing
Members of converting special and differential treatment measures into mandatoryprovisions;  and
• to identify those that Members consider should be made mandatory.
46. As a starting-point for the discussions, he suggested that the Committee used the information
provided in Document WT/COMTD/W//77/Rev.1.  Th at document contained, amongst other things, a
discussion of the operation of S&D, an illustrative list of questions, and also the nucleus of a
distinction between provisions that were mandatory and those that were not.  He also recalled thatMinisters had instructed the CTD to take fully into consideration previous work undertaken as noted
in WT/COMTD/W/77/Rev.1.  Members had had that document in their possession for some time, and
he was convinced that it had prompted many thoughts.  He therefore urged Members to direct their
comments towards taking forward the work the Committee had been mandated by Ministers to carry
out.  Document WT/COMTD/W/77/Rev.1 was not an exclusive basis for work.  For a start, he
believed that it would be useful to ask the Secretariat to assist the Committee by identifying in more
depth the mandatory S&D provisions.  Of course, Members were free to make their own proposals,and he recalled that Ministers had taken note of a proposal for a Framework Agreement on S&D made
by a group of Members.  He suggested that the Committee proceeded by holding its first discussion in
informal mode.  However, if any delegation wished to make a statement for the record, an opportunity
to do so would be provided after the informal discussion.
47. After the informal discussion, the Committee decided to hold further informal consultations
on the issue in the near future.WT/COMTD/M/36
Page 10
E. GENERALIZED SYSTEM OF PREFERENCES
- Note by the Secretariat (WT/COMTD/W/93)
48. The Chairman said that at the last meeting of the Committee, Members had had before them a
Note by the Secretariat entitled "The Generalised System of Preferences:  A preliminary analysis of
the GSP schemes in the Quad" contained in document WT/COMTD/W/93.  That study had been
prepared in response to requests from delegations for further information on the benefits of the
Generalized System of Preferences.  However, as the document had only been issued shortly before
the last meeting, it had been decided to give Members more time to study it and another chance to
revert to it.
49. The representative of Sri Lanka said that her delegation found the document a useful source of
reference, particularly for developing country users of the GSP schemes.  It described the schemes of
the Quad countries, reviled shortcomings and suggested solutions as to how those shortcomings could
be overcome.  Delegations should be given more time to elaborate on the text.  Her delegation
therefore suggested that the item be retained on  the agenda for the next formal meeting of the
Committee.  One conclusion that could be drawn was that the share of trade covered by the GSP
compared to the share of trade covered by MFN was fairly small.  Another was that few beneficiaries
were using the GSP scheme effectively.  One reason for that was the supply-constraints of developing
countries which had led to the question of graduation and counter-graduation.  In addition, when
comparing the agricultural and the non-agricultural sectors, the report reviled that the utilization was
higher in the industrial, non-agricultural product sect or.  In order to enhance the utilization of the GSP
there was a need to focus on those product sectors.  From the statistical part of the part of the papershowing the utilization rates, it was clear that the situation had not changed during the last couple of
years.  Sri Lanka's utilization rate of the United States GSP scheme was fairly high as most of the
items entered duty-free.  However, the actual coverage of the United States' GSP scheme had to be
analyzed as certain important sectors had been excluded.  Whereas the European Communities'
scheme had a broader coverage, the utilization rate was lower.  The reason for that was known.  It wasthe rigid rules of origin requirements and quota restrictions.  The report could be a guide of how to
improve the GSP schemes.  She had cited the reason s for her country's low utilization rate, however,
other Members would have other explanations for their low utilization rates.
50. The representative of Canada said that she wished to bring a factual error to the attention of
the Committee.  The last sentence of paragraph 23 on page 7 of the English version stated, with
respect to the Canadian GPS scheme that "Agricu ltural products included in the scheme are covered
by a positive list, while excluded industrial goods are given in a negative list."  However, there wereno positive, nor negative lists in the Canadian GSP scheme so that phrased had to be removed.
1
51. The representative of the United States said that the Note, in the future, could include more
information on how beneficiary countries were taking advantage of the GSP.  That was an evolving
subject and more information on utilization could be provided as it became available, as could
information about how to assist beneficiaries on the supply-side for them to take additional advantageof the GSP schemes.
52. The representative of the European Communities praised the study for its analytical qualities.
The points made in part V were the most important ones.  The questions of utilization and utility
addressed in the tables were interesting.  The two should not be confused and utility is what really
counts in the end.  His delegation concurred with the questions put forward in part V.  One of theconclusions was that preferences could be useful but that they were not always used and that one of
the reasons for that was the supply-side constraints.  Another reason was the one the European
                                                     
1 See WT/COMTD/W/93/Corr.1.WT/COMTD/M/36
Page 11
Communities had tried to address in its reform and that was simplicity: simple rules of origin and easy
access.  His delegation was willing to work on the issues put forward as his delegation believed that
these schemes still were useful.  The Note and the conclusions that could be drawn from it were useful
for the negotiations which were to begin in agriculture, industrial tariffs and regional trading
agreements.  All of them could benefit from a background showing how certain preferences work.  Inaddition, the Note was also relevant for the identification of technical assistance needs and constraints
of developing countries.  The Note was a reminder to his delegation, as a granter of preferences, that it
could still do better.  The instrument which constituted the GSP would not be abandoned in the near
future, it would be improved.  Long discussions on preferences had also been held in other parts of the
WTO and they demonstrated that preferences, if applied correctly, did work.  The discussions should
be led by those who used the preferences to get access to developed country markets.  More
comments from beneficiaries would therefore be welcome.  It would be useful, if the resources of theSecretariat permitted, not only to look at the Quad countries, but also the ambitious schemes of some
other countries which could be a source of future innovation and future reflection on how the GSP
instrument could be used and improved.
53. The representative of Japan said that certain improvements to the purpose of the GSP schemes
had been proposed and they constituted a good ground for his government to study the GSP.
54. The Committee took note of the statements made and requested  the Secretariat to look into the
possibility of extending the study to additional preferential schemes.
F. ELECTRONIC COMMERCE
(i) Presentation of a Country Experience (Panama)
55. The Chairman introduced Mrs. Cristina Thayer, acting head of the Trade Negotiations Unit,
Legal Department of the Ministry of Trade and Industry in Panama who currently attended the WTO
trade-policy course.  Mrs. Thayer should have participated in the seminar on Government Facilitation
of E-Commerce for Development in June 2001 but had been unable to attend at the last minute.
56. For the presentation by Mrs. Cristina Thayer, please see Annex.
57. The representative of the United States said that her Government applauded the efforts made
by the Government of Panama to become e-ready and to take certain action from the government
perspective which would facilitate e-commerce.  She hoped that those efforts would continue and that
the CTD would be able to hear further reports from the Government of Panama on the benefits that its
enterprises were gaining from the outstanding work that the Government was engaged in to facilitate
e-commerce in Panama.
58. The representative of Costa Rica said that such an exchange of experiences was valuable and
that her delegation hoped to share its country's experience at the next meeting of the Committee.
59. The representative of the European Communities said that her delegation would be grateful if
it would be possible to make the presentation available in writing.  The presentation had highlighted
the importance of a coordinated approach.  The Government of Panama seemed to have covered many
areas because of the interlinkages.  The Government of Panama had not only been looking attelecommunications but also the underlying legislation which is required to support that and to
encourage involvement.  Her delegation looked forward to further reports on process in Panama.
60. The Chairman said that he had been informed that the representative of Panama would
circulate her statement in writing after she had made some corrections to it.  He further said that heWT/COMTD/M/36
Page 12
considered the sharing of country experiences important and hoped that the Committee would be able
to continue to invite different delegations to make presentations on an ad-hoc basis.  In that regard he
welcomed the offer made by the delegation of Costa Rica to share its experience at a later date.
(ii) Presentation by UNCTAD:  E-Commerce and Development Report 2001
61. The Chairman introduced Dr. Susanne Teltscher, Economic Affairs Officer in the Electronic
Commerce Branch of UNCTAD.
62. Dr. Teltscher said that that the UNCTAD "E -commerce and Development Report 2001" had
been published the previous week.  It was available on the UNCTAD Website for free download2 and
delegations should have received copies through the official UN distribution system to the
Geneva-based missions.  If delegates still required hard copies, the UNCTAD Secretariat would be
happy to provide extra copies.  The overview of the report was available outside the meeting room in
the three WTO languages while the main report was in English only.  It was the first time thatUNCTAD had considered the issue of e-commerce and development in such a comprehensive way
even though UNCTAD had worked on e-commerce and Information and Communication
Technologies (ICT)-related issues, particularly in the area of trade facilitation for a long time.  It was
a new publication which UNCTAD planned to release on an annual basis in the future.  The goal with
UNCTAD's work in this area, and with the report, was to assist developing countries benefit from thenew technologies and that way contribute to the narrowing of the digital divide.  The report should
also be considered as an input into the UN Secretary General's new task force on ICTs which had held
its first meeting the previous week in New York, US.
63. She said that she would give an overview of the topics covered by the report and then give
more detail on a few of those.  The introduction discussed the lessons learned from the previous year's"dot com"-crisis.  The first chapter treated the subject of measuring electronic commerce.  The second
related to e-commerce and economic growth.  Th e following chapters were about e-tourism,
e-marketplaces, e-government, legal and regulatory issues, electronic payments and logistics in the
e-commerce age.  Finally, there were two empirical chapters; one on e-commerce in ten LDCs and
one on China.
64. She said that she wished to share a few of  the results of the UNCTAD "E-commerce and
Development Report 2001" in various areas.  There was a discussion on what had happened in the
past year as far as the Internet market was concerned and the rise and fall of the "dot com" companies.
One of the lessons drawn from those developments were that the economic and business implications
of ICT and the Internet had to be properly understood by all players: companies, investors and
consumers.  The same business rules applied to the "new economy"-companies as applied to the "old
economy"-companies.  Developing countries had largely remained unaffected by those events, mainlybecause they had not had access to the same amount of venture capital as companies in the developed
countries, especially companies in the U.S.  It was an opportunity for companies in developing
countries to learn from the mistakes and misconceptions that had prevailed in the past years on the
Internet market.  One of the conclusions drawn in the introductory chapter was that the changes
brought about by ICT and e-commerce would be fundamental and lasting and that the actual benefitsand the potential that the new technologies would bring were only beginning to become obvious.  A
main challenge ahead was related to the business culture.  That was true for both developed and
developing countries.  Many other challenges were also discussed in the report but unless businesses
changed as far as their flexibility and openness was concerned towards adopting e-commerce
strategies it would be difficult to participate in the new developments.
                                                     
2 http://www.unctad.org/ecommerce/docs/edr01_en.htmWT/COMTD/M/36
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65. The second chapter of the UNCTAD "E-commer ce and Development Report 2001" looked at
measuring electronic commerce.  Even if many were interested in how much e-commerce there really
was, most data provided by the private sector companies only provided rough estimates.  Those
estimates of the value of e-commerce in a given future year varied substantially depending on which
source it came from.  The lack of information about the value of e-commerce was a real problem.  Thefact that the numbers varied and the data was incomparable as they were based on different definitions
and methodologies had been giving rise to an international effort towards providing guidelines which
could be used for measuring e-commerce.  As a result of that effort a working definition of
e-commerce was available as were statistical indicators which could be used by national statistical
offices.  Some national offices had begun to collect e-commerce statistics.  That had proven to be
useful for policy makers as well as for businesses when taking decisions on investment and other
policies.  There was an urgent need for coordination and cooperation in the area of e-commercestatistics, in particular between those statistical offices which already had experience in measuring
e-commerce with statistical offices in developing countries who wished to begin but who did not yet
have experience.
66. The macro-economic impact of e-commerce was dealt with in a separate chapter of the
UNCTAD "E-commerce and Development Report 2001".  An economic model had been used tocalculate some of the implications of ICT.  It was assumed that ICT would raise the productivity in
the services sector.  Based on that assumption, the UNCTAD Secretariat had worked with two
scenarios: one in which developing countries fell behind the developed countries as far as their
productivity growth in the services sector was concerned, and a second in which the developing
countries caught up with the developed countries.  In the second case, a productivity growth had beensimulated in selected developing countries only.  A number of results for different variables had been
achieved.  In the first scenario in which a 1 per cent productivity growth had been simulated in
developed countries only, the result was that there would be negative changes in economic welfare in
all developing country regions apart from Asia.  Whereas in the second scenario where a 1 per cent
productivity increase were simulated in selected developing countries only, positive welfare gainswere noted in those regions.  The 1 per cent productivity change was an arbitrary number and the
figures should not be taken as absolute numbers, but rather underline the importance that new
technologies can play for countries' productivity growth and its possible implications for their
macro-economic indicators.
67. The UNCTAD "E-commerce and Development Report 2001" also included a chapter on legal
and regulatory issues.  She would only mention two issues: taxation and customs duties.  As far as
taxation was concerned, there had been a large discussion on sales taxes and which jurisdiction shouldbe applied for e-commerce, the one for the consumer or the one of the supplier.  The current tendency
seemed to be to apply the jurisdiction of the consumer, although it was not yet clear how the sales
taxes would be collected from foreign suppliers in those cases.  For example, there had been a debate
in the European Communities regarding taxation and foreign suppliers supplying European
Community consumers with goods delivered electronically were currently exempted from sales tax.With respect income tax collection from businesses, there had been discussions about how the concept
of permanent establishment would apply in cyberspace with respect to e-commerce.  The OECD
countries had agreed that a web-server could constitute a fix place of business or permanent
establishment of a company, if that company owned the server, and if the company carried on its main
business activities through the server.  The company would then have to pay taxes in the country oflocation of the server.  As far as customs duties were concerned, WTO Members had extended the
Moratorium on customs duties on electronically transmissions for two more years.  There had been
questions about the potential fiscal implications of that decision.  The UNCTAD Secretariat had
carried out extensive calculations at the country level.  Import revenues had been calculated on
digitised products (software, music, printed matters, video-products) based on 1999 imports.  Thevalue of the tariff revenue that potentially could be foregone was about 1 billion US dollars.  The
developing countries would have the larger share of that.  If other duties were added, surcharges andWT/COMTD/M/36
Page 14
import duties such as consumption taxes on imports the value added up to a potential loss of
8 billion US dollars.  In that case, developed countries would take the larger share of the loss, given
their large trade volumes and high consumption taxes on the products concerned.
68. E-tourism was the topic of Chapter Three.  It was an area that was important in e-commerce
and it mainly referred to on-line bookings and reservations of flights and hotels.  It was a leadingsector in business-to-consumer e-commerce, because at the point of sale, the tourism product was
largely an information product and was therefore ideally suited for marketing and selling over the
Internet.  It had been an important sector for developing countries.  The UNCTAD Secretariat
estimated that currently about 50 per cent of all e-commerce took place in the area of tourism and that
there was good potential for increases in that sector.  Developing countries only had about a 3 per cent
market share in e-tourism but it was estimated that it could be increased to about 30 per cent.  The
chapter discussed the type of action that could be taken to increase the share of developing countriesin the sector.
69. In the chapter on LDCs there were some interesting examples of servicing the Diaspora
market.  Family members who lived abroad would order goods and services from home through the
Internet.  Teleservices such as remote processing (data processing, software development) and on-line
call centers.  A number of interesting examples of call centers were spelt out in the report.  In Togo,Internet telephony had been used to get around some of the Internet access costs.  A number of sectors
where developing countries companies made successful use of the Internet were discussed.  Some of
the solutions had been to use secure servers and on-line payment facilities in other countries to allow
customers to buy and make electronic payments thr ough the Internet.  That would progressively create
consumer trust which was a key goal for a company to become successful on the Internet.
70. The UNCTAD "E-commerce and Development Report 2001" contained a chapter on
developments in China.  China had impressive growth-rates of the number of Internet users: the rate
had doubled every six months between 1997 and 2000.  The mobile-phone market was also increasing
rapidly.  Almost 100 per cent in 2000 and China currently had the largest market in the world of
mobile phone subscriptions.  It had even surpassed the U.S. with 120 million subscribers.  TheUNCTAD report estimated that the current figure of 27 million Internet users would increase to
68 million by 2005 which was still only 5 per cent of the population.  However, the growth curve
would begin to flatten, while still showing growth, as had already happened in the US and in some
EU countries.  The IT industry already contributed 12 per cent to China's GDP growth but it was still
in its infancy and there were a number of barriers that had to be tackled such as trust, business culture,
Internet access costs.  The lack of credit card use made on-line payment almost impossible.  Language
and content restrictions added additional burdens for Internet service providers in China.  The gradualopening of the telecommunications and the financial sector, which both were important for the
development o e-commerce, could be expected to improve the environment for e-commerce in China.
It was therefore likely that further development and improvement of e-commerce in China would take
place within the short to medium term.
71. The representative of the United States said that her delegation had taken note of the effects
and impacts on developed and developing countries.  She had found the calculations of the fiscal
losses, as mentioned in the executive summary distribu ted, to be particularly interesting.  In that
connection, she noted that the draft work programme for the CTD included a seminar on the issue of
fiscal implications.  The CTD work programme had been initiated in 1998 and an overall WTO work
programme on e-commerce had been launched under the supervision of the General Council.  Themandate for the overall work had recently been renewed.  Her delegation asked whether the
UNCTAD calculations regarding fiscal losses were similar to the World Bank analysis on the same
issue carried out two or three years back.  It would be particularly interesting to see what kind of
product coverage UNCTAD had used as far as including certain digital products in the calculations
were concerned.  She asked if any comparison had been made as to the scope of the analysis.  It wasWT/COMTD/M/36
Page 15
interesting to note that developed countries took the larger burden due to consumption taxes and their
volume of trade, as was the concern that absolute losses of tariff revenues and potential tariff revenues
foregone in developing countries owed to higher tariffs applied to the digital products traded.  It
would be interesting to consider the possible effects of imports of digitised products over time.
Developed countries were willing to recognize the gains in comparison to the losses even though theremight be a concern of the level of the revenue loss.
72. The representative of Brazil said that the issue of fiscal implications and forgone revenue was
one of the issues of the report which was of interest to his delegation as well.  On page 125 of the
report, the study seemed to indicate that there was a consensus in the WTO regarding the Moratorium
on customs duties and on any implications of that Moratorium on internal taxes.  The consensus was
that the Moratorium only covered tariffs, not internal taxes.  Both the Geneva and the Doha
Ministerial Declarations reflected that understanding.  In light of that, he asked why, in thecalculations of foregone revenue, the UNCTAD Secretariat had taken foregone tax revenue, in
particular consumer taxes such as VAT and sales taxes into account.  The Study made reference to a
group of products used as the basis for the calculation of the tariff losses.  It was said on page 126 that
"…a number of commodities have been selected, which traditionally have been shipped physically
and been subject to border tariffs, but which today can be transformed into a digitized format and sentthrough the Internet".  The study made reference to a footnote, but the footnote in turn referred the
reader to another study.  Although some examples  of the type of products were given, such as
(i) printed matter;  (ii) software;  (iii) music and other media products;  (iv) film;  and (v) video
games, he sought clarification as to which the products included were, with specific examples.  He
suggested that it would be more accurate to say that that revenue might be foregone in a contextwhere tariffs were being levied on electronic deliveries as opposed to saying that that revenue was
actually being lost.
73. The representative of UNCTAD said, in response to the question posed by the representative
of the United States, that there were some similarities and some differences between the World Bank
and the UNCTAD studies.  More of less the same limited number of product categories had been usedin both.  However, the UNCTAD Secretariat had used a slightly different classification code for its
calculations which had allowed it to separate so ftware products from other products.  The UNCTAD
Secretariat calculations also included a larger number of countries, in particular more developing
countries, than had been included in the World Bank study.  Furthermore, apart from the tariff
calculations, the UNCTAD Secretariat had added another database to calculate other customs
surcharges and import taxes on those products.  The UNCTAD Secretariat had not only calculated the
potential tariff revenue losses but also those that could occur if additional surcharges levied onimports were taken into account as well.  Regarding the question from the delegation of Brazil, she
said that the UNCTAD Secretariat had wished to include not only the tariffs, but also the other duties.
That was why the Study included both an analysis of information on tariffs only and an extended
analysis including other duties that could be foregone, as those other duties would not be collected
either if the products were imported digitally.  It had been unclear what kind of duties the WTOMoratorium included; if it was limited to tariffs or if it had a broader reach.  That would probably
have to be looked into in the future.  As far as the products were concerned, the UNCTAD Secretariat
was happy to provide delegations with the other, more detailed study and would provide further
information on the different calculations and more country and commodity details.  The representative
of Brazil was correct in that the calculations represented upper-level potential losses and did not claimto represent actual losses today.  In addition, the figures were based on 1999 actual imports.
74. The Chairman said that he hoped that the WTO would continue to cooperate with UNCTAD
on the matter.
75. The Committee took note of the UNCTAD report "E-Commerce and Development
Report 2001" and the statements made.WT/COMTD/M/36
Page 16
(iii) Work Programme on E-commerce
76. The Chairman said that a draft programme of work on e-commerce for the CTD had been
discussed at an informal meeting of 17 July 2001.  A revised version, contained in
document WT/COMTD/W/92, had been before the Committee at its last meeting.  While there had
not been any objections to the content, some delegations had believed that the CTD should wait forthe 4
th Ministerial Conference before moving ahead with the work programme.  He therefore hoped
that delegations were in a position to consider the draft work programme in the CTD.  The work
programme was of course without prejudice to any decision the General Council might take with
respect to the overall WTO Work Programme on Electronic Commerce.  The draft work programme
for the CTD outlined work the Committee could pursue in respect of the development implications of
e-commerce and it also suggested the format such work could take.  As he had said before, he
believed that the work programme should be flexible enough to take account of requests from theGeneral Council and individual Members as well as opportunities to invite speakers who happened to
be in Geneva.
77. The representative of the United States said that there was a footnote reference to the overall
WTO Work Programme approved in September 1998.  She suggested that there also be a reference to
the CTD continuing its work consistent with the mandate approved by the Ministers.  Her delegationrecognized that the issues presented in the draft CTD Work Programme were issues raised by
different Members in the interest of seeing them taken up in the course of seminars.  If there was an
agenda for a particular seminar, her delegation wish ed to see it in advance in order to adequately
prepare its participation in the seminar.
78. The representative of Brazil said that there did not seem to be any major changes to the
proposed Work Programme from the version delegations had considered in July.  He reminded
Members that, at that occasion, his delegation's understanding had been that the list of issues to be
considered under the Work Programme at the regular meetings of the CTD would be open-ended and
that any delegation therefore could bring up any issue of interest to them.  He noted, with respect to
seminars, that revenue implications was one of the horizontal issues taken up in the General Council.He reiterated that Members should participate in the drawing up of the agenda for the seminars so that
the process be as Member-driven as possible.  He had some concerns with the wording of paragraph 4
of the Work Programme which stated that the results of the seminars be "fed back into the regular
work of the WTO.  It would therefore be natural to report to the CTD from the various seminars held
under its auspices."  His delegation's understanding was that that did not mean that any conclusions
drawn at the seminars would be formally incorporated into the minutes or a formal discussion of the
CTD regarding e-commerce.
79. The representative of Canada said that the discussions, the presentation by the delegation of
Panama, by UNCTAD and the promise by the delegation of Costa Rica already implemented some of
the elements of the Work Programme and demonstrated that the activities of the CTD prove to be
helpful and would continue to be so.
80. The representative of the United States sought clarification from the representative of Brazil
concerning reports of seminars.  Although she recalled that the delegation of Brazil had made similar
comments earlier, Members had also said that if a particular delegation wished to make reference to
something that had been learned from an expert at a seminar, that delegation could bring up that topic
for discussion at its own responsibility into the regular discussions of the CTD.  Delegations would
not be barred from taking advantage of export information provided during seminars.  There wouldotherwise not be any use of holding seminars.WT/COMTD/M/36
Page 17
81. The Chairman said that if he reported on his own responsibility, it would not mean that
delegations approved or disapproved it.  It would be a factual report of what had happened at the
seminar for the information of the entire Membership.
82. The Committee took note of the statements made and the Committee approved  going ahead
with the Work Programme on Electronic Commerce.
G. WORK PROGRAMME FOR 2002
83. The Chairman said that all delegations had received a fax containing a draft CTD Work
Programme for 2002 and additional copies were available at the back of the room.  That draft Work
Programme was based on the existing work of the Committee.  At the same time, it was clear that as a
result of the 4th Ministerial Conference the WTO had a great deal of additional development-related
work to do.  Not all that work would be carried out in the Committee on Trade and Development.Some areas were mentioned as falling under the aegis of other WTO bodies such as work on small
economies, trade, debt and finance and trade and transfer of technology which would be carried out
under the General Council.  Paragraph 51 of the Ministerial Declaration dealt with developmental
aspects of the negotiations.  It was clear that the Committee on Trade and Development was named as
the forum where development-related aspects of the negotiations should be identified and debated.  Inaddition, he recalled that both the CTD and the Committee on Trade and Environment had been asked
to do work in relation to sustainable development.  It was clear that that work covered elements of
sustainability and development and that the CTD next year would have to look at what those concerns
were.  That work might require cooperative efforts among Members and the Secretariat on both
development and environment issues.  In addition to the identified areas, the CTD might be involvedin reviewing and assessing the overall WTO Work Programme and a particular role might be
envisaged for the CTD in relation to the expanded programme for technical assistance and capacity
building.  The Work Progamme therefore necessarily had to be flexible.
84. The representative of the United States asked whether it had been assured that the dates for
the meetings of the CTD meetings did not clash with the dates of the General Council or other major
WTO bodies.
85. The Secretariat said that the schedule of meetings of other WTO bodies had been checked
before scheduling the CTD meetings.  However, it could not be guaranteed that, in the future, other
WTO bodies did not schedule additional meetings on the same day the CTD had planned to hold a
meeting.  The Secretariat had even checked that the CTD meetings did not clash with other major
meetings outside the WTO, such as major UNCTAD meetings, as far as such meeting dates were
known.
86. The representative of the European Communities said that it might be useful for delegations
to pay attention to the footnote of the Work Programme which stated that the Work Programme was
"without prejudice to any additional work that may result from the work programme established by
the Fourth Ministerial Conference".  A structure for the negotiations was being developed and it was
unclear how it all would fit together and where individual pieces of work would be undertaken.Examples of that were issues such as small economies and special and differential treatment.  A
disclaimer was therefore necessary and  issues such as the two examples given might have to be
looked at when it was clear how the CTD should address those issues.  In addition, the CTD might
wish to make some input into the Rio Plus Ten Conference which so far only had been discussed
under the Committee on Trade and Environment.  It should be kept in mind that that conferencetreated the issue of development as well and might entail some future work for the CTD for coherence
and policy consistency reasons.  There was a footnote with respect to seminars in the Work
Programme and it should be clear that the Committee could come back to that if necessary.WT/COMTD/M/36
Page 18
87. The Committee adopted its draft CTD 2002 Work Programme with the understanding that it
was without prejudice to any additional work that may result from the work programme to be
established following the Fourth Ministerial Confer ence and that additional seminars on development
topics could be considered during the course of 2002.
H. OTHER BUSINESS
88. No item was raised under Agenda Item H on "Other Business".WT/COMTD/M/36
Page 19
ANNEX
National Experience of Panama in the field of Electronic Commerce
Presentation by Cristina Elena Thayer
89. Greetings, ladies and gentlemen.  It is a pleasure to be with you at last, having cancelled my
participation in the seminar on electronic commerce last summer for health reasons.  I must confess to
you that when I received the invitation to address you a few days ago, I had some misgivings as to
whether I should accept:  having come to Geneva to attend the current Trade Policy Course, I did not
bring with me the materials and information required to make a high-quality presentation.
90. However, I thought about if for a while and concluded that sharing national experiences is
possibly one of the most efficient ways of gathering valuable information on what we are doing well,
and of course, on what we could improve.
91. It is in that spirit that Panama would like to contribute its two cents' worth by rapidly
outlining before this assembly the progress it has made, for what it is worth, in the hope that it will
also receive ideas and comments from the experts in the audience.
92. I shall begin my paper, then, by stating that my country's experience in coordinated work
towards the use of new technologies as a development tool is limited.
93. There have been many highly commendable efforts in the different sectors and considerable
work has been done on various fronts;  but until very recently, there has been little interdisciplinary
and interinstitutional coordination, with the result that efforts have sometimes been duplicated andprogress hindered.
94. Thus, I shall be referring, perhaps in a somewhat disorderly but hopefully comprehensive
manner, to the different efforts on the part of both the Government and private enterprise that have
had some impact on the development of electronic commerce.
95. On the subject of human infrastructure, I would like to mention the work of the National
Secretariat of Science and Technology (SENACYT), at tached to the Office of the President of the
Republic, whose programmes have played a leading role in the development and integration of new
technologies in the country.  SENACYT (www.senacyt.gob.pa), an institution set up at the beginning
of the 1990s to introduce and coordinate technological development in the Isthmus, created, with the
support of the Inter-American Development Bank, the Infoplazas programme through the Infoplazas
Foundation.
96. Infoplazas consist of centres for community access to the Internet and education and training
in the use of computers.  The basic computer courses offered by the Infoplazas are free, while the
specialized courses are provided at relatively low cost according to the geographical area in which
each centre is located within the country.
97. Admission to the Infoplazas programme requires the participation of a community or a
community association and an organization capable of administering it for a period of 24 months.During those 24 months, equipment installation costs, Internet service costs and the costs of starting
up the centre itself are covered by the Infoplazas Foundation.  The remaining costs, for example
maintenance, staff, electricity, water and waste disposal, are covered by the Infoplaza administrative
partner.  By the end of this period, each centre must be self-sufficient, and no longer receives support
from the Infoplazas Foundation.  This self-sufficiency must be achieved through the income earnedfrom the services provided to the communities.WT/COMTD/M/36
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98. To date, there are 28 Infoplazas in rural and suburban areas in the nine provinces of Panama.
In absolute terms, this number may appear low, but it must be borne in mind that Panama is a small
country with an area of about 77,000 square kilometres and, according to the latest census, a
population of less than three million.
99. Meanwhile, a number of very similar initiatives have gradually emerged in the private sector.
Certain non-profit organizations as well as large business groups have understood the importance of
"training with a view to hiring".  Every year, ne w organizations emerge as "technological sponsors",
providing public schools in strategic low-income areas with computer laboratories and Internet access.
This is what has been done, for example, by the Gabriel Lewis Galindo Foundation as well as other
leading local financial institutions and international institutions with their headquarters in Panama.
100. But, not only are the educational programmes dire cted at education in new technologies:  new
technologies are increasingly being used for education.  Thus, a number of private and State
universities have begun using virtual Internet courses and/or distance education through
teleconferencing, with international-level teachers who would otherwise have been inaccessible to the
Panamanian student.
101. Panama also has a front-line pilot project k nown as "City of Knowledge", made up of four
basic components:  educational programmes, technological innovation, research and cultural
exchange.  The City of Knowledge is an intern ational complex of some 120 hectares, located in
Clayton, a former US military base, where it is able to avail itself and make use of the existing
infrastructure.
102. The technological innovation component of this complex takes the form of a Technopark
which offers facilities to attract local and foreign investment at a relatively high technological level
and involving high-value added.  Through the Technopark, Panama is seeking to promote technology
transfer and competition among existing enterprises while fostering the creation of new enterprises.
103. Some 25 enterprises, local and international, have been given the authority to operate in the
Technopark, including such international companies as Citibank, OMNES Schlumberger and XEROXas well as local companies such as Arango Software and Panama Virtual.
104. These companies are involved in a wide range of activities relating to electronic commerce,
such as development of applications or software, call centres and web hosting, with the clear
advantage of the telecommunications infrastructure and fibre optics capacity that Panama has to offer
owing to its strategic geographical position.  Panama currently has access to five fibre optic
submarine cables (Global Crossing, Arcos, Maya, Cable Panamericana and the Cable and Wireless
ring), a fact which considerably boosts its potential as a centre for electronic commerce and makes thePanamanian Isthmus an ideal location for setting up data centres.
105. In this technological development cluster, an important role is also played by the transport
infrastructure projects, with the creation of Pacific and the Atlantic multi-modal transport centres.
These initiatives aim at taking full advantage of Panama's geographical position by concentrating
land, maritime and air transport services in a single area, significantly contributing to the logisticalinfrastructure needed for further development of trade in goods by electronic means.  These major
centres have already been developed to varying degrees, and the remaining work to be done before
they can be put into operation should be completed soon.
106. In the area of support to SMEs and their real access to new technologies, the National
Authority for Small and Medium Enterprises (ANPYME) created, this year, a credit guaranteeprogramme for computer-related activities.  This programme provides for the guaranteeing of loansWT/COMTD/M/36
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up to 50 per cent of the amount required for such activities granted to SMEs by accredited financial
institutions.  The amount to be guaranteed must not exceed $25,000.  For educational activities, the
loan guarantee can be increased up to 65 per cent.  While this credit guarantee programme is not
specifically aimed at stimulating electronic commerce among SMEs, nothing prevents the companies
from taking advantage of the progamme to introduce or improve their technological capacity.  SinceANPYME is currently in the process of selecting the financial institutions that will be admitted to the
programme, it is too early to comment on any spec ific results that might give an idea of the
programme's utility.
107. At the same time, certain local private financial institutions periodically launch soft credit
programmes and portfolios for the purchase of comput er equipment.  If I am not mistaken, Citibank
and the Banco General, a locally owned banking institution, maintain portfolios of this kind.
108. In the area of funding, the Ministry of Labour also offers companies a co-financing
programme (up to 50 per cent) for the training of their workforce.  As in the case of the SME support
programme, the co-financing offered by the Ministry of Labour is not exclusively for education in
new technologies, but since each enterprise determines its own staff training needs, it is perfectly
possible to give preference to that aspect in implementing the programme.
109. As regards the legal framework, a law was adopted in the middle of this year which gives
legal validity to contracts signed through the internet and makes them enforceable against third
parties.  This law, which was developed on the basis of the Model Law on Electronic Commerce
drafted by UNCITRAL, is the fruit of a joint effort by the Government and the private sector.  It also
envisages a regulatory framework for enterprises offering electronic signature authentication services
based on technological neutrality.
110. In the area of intellectual property legislation, Panama is a signatory to the so-called WIPO
Internet Treaties –  the WIPO Copyright Treaty (WCT) and the WIPO Performances and Phonograms
Treaty (WPPT) –  which have formed part of our domestic legislation since 2000.
111. As regards the telecommunications sector, starting in 1997 Panama launched a programme of
corporatization and semi-privatization of the former state telephony monopoly.  As a result of thisprocess, 49 per cent of shares in the said corporation are in the hands of Cable and Wireless, which
maintains the rights of administration of the telephone company resulting from the process, and has
obtained temporary exclusive rights – until 1 January 2003 – on the supply of local, national
long-distance, and international long-distance basic telephone services, public and semi-public
terminals and the leasing of dedicated voice circuits.
112. As a result of privatization, the flat monthly telephone rate increased with the gradual
elimination of cross subsidies (from approximately $12 to $30).  However, in comparison to othercountries in the region, the prices of dial-up connection services have remained reasonable.  For
example, medium-income users have rapid and ef ficient access (average connection speed of 56K)
through digital exchanges set up at certain locations in the country.  Moreover, since 1997 the range
of different internet access technologies has been diversified via ADSL, cable modem, cable data or
frame relay.
113. As regards internet services providers, Panama  opted for a legal regime oriented towards the
maintenance of a market open to competition.  During my market research in connection with this
paper, I identified at least five local and internati onal providers.  Thus, the costs of unlimited internet
access service providers remain reasonable, depending on the user (residential or business) and the
technology used (dial-up, cable modem, cable data et c.).  For example, the monthly rate for unlimited
residential use with a minimum 56K dial-up ranges from $13-$20.WT/COMTD/M/36
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114. Although their high cost tends to make them prohibitive, mobile telephone internet services
have recently been introduced.  These services are clearly aimed at a limited segment of the
population.  Perhaps once the numerical restriction enjoyed by the two service suppliers, C&W and
Bell South, comes to an end in 2007, mobile telephone internet access will become more attractive to
the population in general.
115. Regarding the legal framework, a number of issues have yet to be properly addressed, such as
on-line consumer protection, privacy, computer crim es and tax treatment of internet transactions.
116. Concerning the different modes of on-line commerce, business to business (B2B) has not
undergone much growth in Panama, except in the fi nancial sector, where it has been in use for some
time.  In the private sector, certain supermarket ch ains have recently been exploring the possibility of
introducing B2B commerce and bringing their suppliers into the digital world.  However, as far as I
know, this has not been put into practice.
117. Where there has been growth in on-line business transactions in Panama is in business to
consumer (B2C) commerce aimed largely at such services suppliers as financial companies, law
firms, and maritime transport and educational services enterprises.  While some enterprises have set
up websites for the sale of local handicrafts and for local market sales, the impact and volume of these
transactions are not very significant.
118. As regards government to consumer transacti ons (G2C), the Government of Panama is also
seeking to fulfil its role as a model user.  Various State entities offer a number of online services and
facilitate their work through electronic media, the most significant of which are the Panama Canal
Authority, whose website offers detailed information on procurement of goods and services for the
Panama Canal, and the Ministry of the Econom y and Finance, whose website not only provides
information, but also enables taxpayers to send their tax returns by magnetic media (although physical
payment is still required).  It is also worth mentioning that March of this year, saw the introduction of
an Internet-based system called SICE (Integrated Foreign Trade System), which replaced SIDUNEA.
SICE connects institutions involved in foreign trad e, offering the possibility of preparing customs
declarations and obtaining, online, most of the documentation relating to import customs transactions(including licences) which previously had to be obtained from different institutions.  This system was
created only recently, so that it is still not possible to complete the entire process online.  For example,
the payment of import duties still requires physical presence at the bank.
119. While on this subject, I would also like to mention the recent introduction of a project
coordinated by the Vice-President of the Republic, H.E. Dominador Kaiser Bazán, to link the rest of
the Government, as the Panama Canal Authority already is in part, to an electronic government
procurement system.
120. Finally, as I stated at the beginning of this paper, while considerable progress has been made
in Panama in isolated cases, coordinated efforts have not shown the same progress.  Perhaps the only
exception is the work done towards developing the legal framework governing electronic signature,
which has involved the creation of a drafting committee in which the public and private sectors are
broadly represented.  Although the Committee completed its task with the recent adoption of the law,this is only a foundation on which it is hoped to build a more coherent and coordinated national policy
for the use of electronic commerce as a tool for development.
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