RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/26
16 March 1998
(98-1043)
General Council
19 February 1998
MINUTES OF MEETING
Held in the Centre William Rappard
on 19 February 1998
Chairman:  Mr. C. Lafer (Brazil)
Subjects discussed: Page
1. Cape Verde - Request fo r observer status ..................................................................... 2
2. Accession of Laos ......................................................................................................... 2
- Communication fr om Laos ............................................................................... 2
3. Committee on Balance-of-Pay ments Restrictions ......................................................... 3
(a) Consultation with  Pakistan ............................................................................... 3
(b) Consultation with th e Slovak Republic ............................................................ 4
4. Preparations for the 1998 Ministerial Conference and the commemoration of the
50th Anniversary of the multi lateral tradin g system ..................................................... 4
(a) Organizationa l matter s ..................................................................................... 4
(b) Attendance of non-govern mental organizations ............................................... 7
5. Global electron ic commerce ......................................................................................... 8
- Proposal by the Un ited States ........................................................................... 8
6. Ecuador - Commitments under th e Protocol of Accession ........................................... 14
- Communication from th e United States ........................................................... 14
7. Transparency and derestriction ..................................................................................... 16
- Communication from th e United States ........................................................... 16
8. Notification obligations  and procedures ....................................................................... 18
- Communication from the Chairman ................................................................. 18
9. Appointment of officers to WTO bodies ...................................................................... 18
10. Outcome of the major review of the implementation of the Agreement on Textiles and
Clothing ...................................................................................................................... ... 19
11. Comments being directed to individual cases brought before the dispute settlement
system......................................................................................................................... .... 19WT/GC/M/26
Page 2
12. Accreditation of Permanent Re presentatives to the WTO ............................................. 20
13. Observer status for international intergovernmental organizations ............................... 20
14. Election of Chairperson ................................................................................................. 20
Prior to adoption of the agenda, the General Council heard statements by the representative of
the Staff Council and by the Director-General regarding conditions of service of WTO staff.
Also prior to adoption of the agenda, the General Council agreed to a proposal by the
Chairman that the meeting of 14 November 1997, held to examine the question of conditions ofservice of WTO staff and subsequently suspended to allow for further consultations on the matter, be
considered closed, and that the question of conditions of service be taken up at a future meeting of theGeneral Council as and when it became ready for consideration.
1. Cape Verde - Request for observer status (WT/L/258)
The Chairman drew attention to the communication from Cape Verde requesting observer
status in the General Council and its subsidiary bodies (WT/L/258), in which Cape Verde had
indicated its intention to apply for accession to the WTO Agreement and had provided a brief
description of its economy and foreign trade regime, in accordance with the guidelines for observerstatus for governments in the WTO (WT/L/161, Annex 2).  He proposed that Cape Verde's request be
granted.
The General Council so agreed.
2. Accession of Laos
- Communication from Laos (WT/ACC/LAO/1)
The Chairman drew attention to the communication from Laos requesting accession to the
WTO Agreement (WT/ACC/LAO/1).
The representative of Laos, speaking as an observer, said that his country's application to the
WTO was important not only to promote Laos's foreign trade but also for the general development of
its economy.  His Government was willing to prov ide all the information required and, if admitted to
the WTO, was prepared to carry out its responsibilities under the charter of the Organization.  Since
1986, Laos had decided to follow a market economy orientation in its general policy of liberalization.
The gradual liberalization of state enterprises to the benefit of the private sector had had encouragingresults.  The country's domestic trade, transport and exchange rates were now under market
competition.  Its national currency, the Kip, was still floating and had suffered considerably from the
financial crisis that had struck Asia.  With the as sistance of the IMF representative in Vientiane, the
Government had taken a series of measures designed to limit the damages.  These measures were
beginning to bear fruit and inflation had gone from 30 per cent to 16 per cent and economic growthfrom 6 per cent to 7 per cent between 1996 and 1997.  The per capita income of US$370 was expected
to increase to US$540 by the year 2000.  The Government intended to hold firmly to the objectives set
in its long-term economic and social development strategy.  Laos had become a member of ASEAN
in July 1997 and was at present preparing its admission to the Asean Free Trade Area.  TheWT/GC/M/26
Page 3
Government had signed a cooperation agreement with the European Union that covered a number of
social and economic development sectors designed in particular to develop the remote rural areas of
Laos.
The representatives of Brunei on behalf of the ASEAN Members and Australia  expressed
support for Laos's request.
The representatives of Brunei on behalf of the ASEAN Members and Japan  supported the
establishment of a working party to examine Laos's request.
The representative of Brunei, speaking on behalf of the ASEAN Members , said that the
ASEAN countries had had long and good relations  with Laos and that its accession would be
beneficial to the organization and further enhance trade in the region.
The representative of Japan said that his country had a close relationship with Laos and
welcomed the latter's efforts in its preparations for accession to the WTO Agreement.
The representative of Australia said that his country had a comprehensive and substantial
economic relationship with Laos, and his delegation intended to work closely with Laos to ensure that
its accession took place as expeditiously as possible.
The Chairman proposed that the General Council take note of the statements and agree to
establish a working party with the follow ing terms of reference and composition:
Terms of reference:
"To examine the application of the Government of Laos to accede to the WTO Agreement
under Article XII, and to submit to the General Council recommendations which may include a draft
Protocol of Accession."
Membership:
Membership would be open to all WTO Members indicating their wish to serve on the
Working Party.
Chairmanship:
The General Council would authorize its Chairman to designate the Chairman of the Working
Party in consultation with representatives of Members and with the representative of Laos.
The General Council so agreed.
The Chairman invited the representative of Laos to consult with the Secretariat as to further
procedures, in particular regarding the basic documentation to be considered by the Working Party.
He also invited Laos, on behalf of the General Co uncil, to attend meetings of the General Council
and, as appropriate, meetings of other WTO bodies as an observer during the period in which the
Working Party was carrying out its work.WT/GC/M/26
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3. Committee on Balance-of-Payments Restrictions
(a) Consultation with Pakistan (WT/BOP/R/39)
(b) Consultation with the Slovak Republic (WT/BOP/R/40)
(a) Consultation with Pakistan (WT/BOP/R/39)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that at the resumed consultation with Pakistan on 10 November 1997, Committee
members had welcomed the fact that Pakistan had clearly identified the items restricted for balance-
of-payments (BOP) reasons and that the number of such items had been considerably reduced.
Members had recognized Pakistan's continuing BOP difficulties, and had commended it for its wide
array of reform efforts.  Some Members had believed that Pakistan should be deemed in compliance
with its obligations.  Others had expressed concern regarding the WTO conformity of the measures,
and an unreadiness to conclude the consultations in the absence of a time-schedule for their removal,
which could be modified as appropriate.  The Co mmittee had agreed that the consultations would be
deemed to be concluded provided Pakistan publicly announced, within twelve months, a schedule,
taking account of macroeconomic developments and the interests of trading partners, for the removal
of the measures within a reasonable period of time.
The General Council took note of the statement and adopted  the report in WT/BOP/R/39.
(b) Consultation with the Slovak Republic (WT/BOP/R/40)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that at the consultation with the Slovak Republic on 9 October and 17 December,
the Committee had recognized that the Slovak Republic was facing balance-of-payments (BOP)
difficulties, with a low level of reserves, as noted by the IMF.  The Committee had welcomed the
prompt notification of the import surcharge and the accompanying schedule for its phase-out.Members had also welcomed that the measure was price-based and generally applied.  Some
Members had questioned whether the measure was an appropriate response to the BOP problem
confronting the Slovak Republic, and had suggested that structural reform and macroeconomic
adjustment were more likely to bring lasting relief.  They had called for fiscal tightening and an
acceleration of the phase-out plan.  After a short suspension of the consultation, the Slovak Republichad reported that its Parliament had adopted a budget for 1998 which provided for a reduction in the
fiscal deficit.  Also, the bankruptcy law had be en amended, and a modification to the phase-out plan
which would result in the elimination of the measure by 1 October 1998 would be notified formally.
On that basis, the Committee had agreed to reco mmend that, pursuant to paragraph 13 of the BOP
Understanding, the Slovak Republic should be deemed in compliance with its obligations underGATT 1994, provided it adhered to its modified time-schedule.  It had been understood that any
departure from the time-schedule would be notified promptly so that the Committee could meet.
The General Council took note of the statement and adopted
 the report in WT/BOP/R/40.WT/GC/M/26
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4. Preparations for the 1998 Ministerial Conference and the commemoration of the
50th Anniversary of the multilateral trading system
(a) Organizational matters
(b) Attendance of non-governmental organizations
(a) Organizational matters
The Chairman said that at an informal meeting of the General Council on 16 February,
Members had had a discussion on a paper by the Chairman containing points on which consensus
appeared to be emerging and matters on which further discussion was required.  The paper had been
slightly amended in the light of the discussion and was available in the Room.  He read the points out
for the record, as follows:
"A. Points on which consensus appears to be emerging
1. In accordance with the decision already taken by the General Council on 22 October 1997,
the Ministerial Conference will begin on the morning of 18 May and will last through the afternoon of19 May, followed by the commemoration of the 50th Anniversary on 20 May with the participation of
Heads of State or Governments.  It is understood that these are two distinct events.
2. The substantive agenda for the Ministerial Conference will consist of two broad areas for
discussion:  implementation of the WTO work programme and future activities of the WTO.
3. There will be a short formal opening of the Conference on the morning of 18 May, followed
by two sessions for discussions among Ministers.  The first session would cover issues relating to
implementation of the work programme;  a second session would cover future activities of the WTO.
Discussions would begin on the morning of 18 May and continue through the afternoon of that day
and the morning of 19 May.
4. The formal closing session of the Conference would be held in the afternoon of 19 May
where the relevant decisions would be taken, including election of officers, venue and date of the next
Ministerial Conference.
5. Ministers so wishing could provide a general statement to the Secretariat for distribution to
other delegations and to the press.  These statements would cover two items:  implementation and
future activities.
6. The commemoration of the 50th Anniversary to be held on 20 May would be open to the
participation of all Members of the WTO.
Matters on which further discussion is required
1. Whether discussion by Ministers on the two substantive items of the agenda should be
recorded in minutes of the Conference or should be totally informal, and the amount of time and thepriorities to be attributed to the discussions in these two areas.
2. The nature of any action by Ministers concerning these discussions, i.e. the preparation of a
Chairman's summing-up, or of a short declaration, and/or of a decision on preparations for the next
Ministerial Conference.
3. The scenario for the commemoration of the 50th Anniversary with the participation of Heads
of State or Government."WT/GC/M/26
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He proposed that delegations take note of the statement on the understanding that the second
set of points would be subject to further informal consultations.
The representative of Egypt said there was some confusion as to what the agenda item
concerning future activities might include, particularly as regards the possibility of introducing new
topics or to accelerate dealing with the built-in agenda earlier than the previously agreed time-frames,
which Egypt could not agree to.  Implementation should be the main focus of discussion at theMinisterial Conference, and in particular the shortcomings in the areas of agriculture, textiles, anti-
dumping, and special and differential treatment for developing countries, especially the least-
developed.  A decision at the Ministerial Conference to overcome these shortcomings was of utmost
importance.  Regarding the matters on which further discussion was required, Egypt believed it was
important for Ministers to engage in a constructive dialogue, which should be recorded in the minutes
of the meetings.  Furthermore, a document reflecting the results of the two-day meeting was essential,
and all delegations should be allowed to participate in its drafting to facilitate its adoption.  On the50th Anniversary, the Heads of State or Government that expressed the wish to participate would be
welcome, but delegations headed by Ministers should also be allowed to address the occasion.  The
format of the event would undoubtedly depend on the number of Heads of State or Government that
would actually participate.
The representative of Pakistan said his delegation noted that on some points a certain degree
of convergence had developed.  However, Members were at an early stage of the consultations, and it
was his understanding that whatever convergence appeared would become part of the overall
consensus once consensus had been reached on all the issues.  There were a number of sub-issues that
required further discussion and agreement.  On the agenda, for example, there was a need to clarify
what would be the specific nature of the discussion, the time allotted, and the mode of the discussion.Thereafter, the possible outcome would have to be agreed, and Pakistan believed that the three
possibilities mentioned by the Chairman were not necessarily mutually exclusive.  The session of the
Ministerial Conference would be a formal event, a nd the decisions it adopted, particularly with regard
to follow-up action, the work to be done before th e next Ministerial Conference, and the dates and
venue of the next meeting, would all have to be formal decisions, appropriately negotiated before theiradoption.  The modality for negotiating these matters prior to their approval would have to be found.
Regarding the 50th Anniversary, Members had to consult on what its theme should be and how a
balanced participation could be ensured.  Consideration also had to be given to whether the 50th
Anniversary commemoration event should have an outcome, and if so, the modality by which a
declaration or document be drawn up and adopted.
The representative of Korea said that his delegation was satisfied with the Chairman's
statement and that its views had been adequately reflected therein.
The representative of Jamaica said that the views expressed by her delegation at the General
Council meeting in December 1997 had been revised in the light of the ongoing consultations among
delegations.  Jamaica understood that under the Rules of Procedure (WT/L/161), the Director-General
was required to draw up the agenda for the Ministerial Conference in consultation with delegations.
In a revised proposal for an agenda, Jamaica had added some further ideas as to the likelyorganization of work that the Ministerial Conference might pursue.  Jamaica would prefer firm
decisions to be taken at the present meeting regarding the Ministerial Conference and the 50th
Anniversary commemoration.
The representative of Nigeria urged Members to consider a non-paper that had been presented
by Pakistan at a recent meeting of the informal group of developing countries, as well as Jamaica's
proposal, which were both useful and could facilitate consensus on the points raised by the Chairman.
Nigeria believed that discussions on the proposed agenda items of implementation and future work
should be properly reflected and recorded, so as to guide negotiators in Geneva ahead of the thirdWT/GC/M/26
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Ministerial Conference.  Participation of Ministers was always meant to reinforce the political
momentum in the WTO's activities.  However, with a meeting of Heads of State or Government also
envisaged, it might be desirable to use it to send a higher political message.  This would raise the
WTO's profile in the domestic policy agendas of many countries and strengthen initiatives regarding
the future work programme.
The representative of India said that there should be a meaningful and effective discussion at
the Ministerial Conference under the agenda item regarding implementation, and that the details on
how to achieve this could be worked out in informal consultations.  As regards future activities of the
WTO, he appreciated that there were differing perceptions on this, and that the item had been framed
in a broad and general way to give scope for different views.  However, India would expect thediscussion on future activities to arise from two broad themes:  the inequities in some of the WTO
Agreements and in their implementation that would be identified in the discussion to be held on
implementation, and the built-in agenda.  Regarding the outcome of the Ministerial Conference,
whether it was a declaration, communiqué or Chairman's summing-up, India believed that it should be
based on consensus.
The representative of Bangladesh said that while his delegation supported the proposal that
the Ministerial Conference's agenda should be based on the twin issues of implementation and future
activities, it believed implementation should receive priority.  Bangladesh also preferred the issuance
of a formal declaration at the conclusion of th e meeting.  Although informal discussions might be
held, they should lead to a recorded document.  Furthermore, the momentum built on LDC issues
should be carried forward at this Ministerial Conference.  Much remained to be done in the area of
implementation of the decisions taken at Singapore and at the High-Level Meeting on LDCs held in
Geneva in October 1997.  Bangladesh asked for meaningful and tangible progress towards substantive
results without delay.  Finally, the Ministerial Conference and the 50th Anniversary were distinctevents, and therefore deserving of separate observance.  However, while many would have reasons to
cheer, the fact that the majority of the world's population still remained in poverty and outside the
scope of the benefits of the trading system, and that the recent financial crisis had affected the lives of
millions more, should give all cause for pensive pause and sober reflection.
The representative of Madagascar said that, given the importance of the Ministerial
Conference, his delegation would have preferred formal discussions on the two proposed agenda
items.  Admittedly, however, it would not be possible to organize formal discussions on these matters
over a day and a half.  As regards the outcome of the Ministerial Conference, Madagascar would
prefer this to be formal and contained in the official records.
The representative of Brunei, speaking on behalf of the ASEAN Members , reiterated their
wish that the Ministerial Conference focus on stocktaking and on developments and directions from
the present to the year 2000.  They wished also to see a successful outcome to the Ministerial
Conference, and emphasized the importance of a balanced approach in addressing the two agendaitems.  On implementation, the ASEAN Members wished to see a comprehensive review of the
Uruguay Round Agreements, in particular the status of implementation of the built-in agenda and the
work programme agreed at Singapore.  The timely and successful implementation of the built-in
agenda was the key to bringing about a strengthened multilateral trading system and moving the trade
liberalization process forward.  To facilitate the discussion on implementation, the ASEAN Membersproposed that the Secretariat prepare a factual report on the status of implementation of all items in
the built-in agenda and the work programme agreed in Singapore.  The ASEAN Members were open
to discussing and analysing informally the future  activities of the WTO, bearing in mind the work
already in place under the built-in agenda.  As all were aware, some negotiations were envisaged
under the built-in agenda, such as in agriculture and services.  The Ministerial Conference in May
could task the General Council to carry out this work.  The ASEAN Members wished the GeneralWT/GC/M/26
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Council also to address the issues of scope and modalities and the balance and benefits that could be
derived from the multilateral trading system.  As regards the informal discussion on the future work
and activities of the WTO, it should not prejudge the decision to be made at the third Ministerial
Conference.  Regarding the outcome of the discussions on both agenda items, the ASEAN Members
stressed that any formal conclusion or decision should be negotiated and adopted by consensus.
The General Council took note of the statements1 and that the points raised by delegations
would be discussed further in informal consultations.
(b) Attendance of non-governmental organizations
The Chairman recalled that, in preparing for the 1996 Ministerial Conference, the General
Council had agreed on the following procedures regarding the attendance of NGOs:  (i) NGOs would
be allowed to attend only the Plenary Sessions of the Conference (without the right to speak);
(ii) applications from NGOs to be registered would be accepted on the basis of Article V, paragraph 2
of the WTO Agreement, i.e. such NGOs "concerned with matters related to those of the WTO";  and
(iii) a deadline would be established for the registration of NGOs that wished to attend the
Conference.  In order to proceed with the requests from NGOs wishing to attend the next Ministerial
Conference in May, and the 50th Anniversary commemoration, he proposed that the same criteria as
used for the Singapore Ministerial Conference be applied.  In order to allow for the processing of the
list of the NGOs having requested registration and its circulation for the information of the Members,
the deadline for registration would be 31 March 1998.  Confirmation of registration would then besent subsequently to the NGOs.
The representative of Egypt  said that if a debate were opened on this issue, it would not be
easy to reach an agreement.  His delegation theref ore agreed to maintaining the process followed at
Singapore in this regard.
The representative of Nigeria said that the WTO could not afford to be one of the least
understood organizations in a world made more complex by globalization and the marginalization of
the majority.  The participation of NGOs would contribute to a better understanding of the WTO's
functions, and its vital role in facilitating trade in goods and services.  The number of NGOs invited
should not be so unwieldy, however, to turn the tw o events into a dialogue between governments and
NGOs.
The General Council took note of the statements and agreed  to apply the criteria enumerated
by the Chairman regarding the attendance of NGOs.
5. Global electronic commerce
- Proposal by the United States (WT/GC/W/78)
The Chairman drew attention to the communication from the United States in WT/GC/W/78.
The representative of the United States said he r delegation wished to discuss the idea that the
Information Age was upon all and that electronic commerce would continue to dramatically affect the
way all lived and conducted business.  The United States proposed that Members respond to theInformation Age by agreeing in the WTO to continue the current practice of each Member concerning
customs duty treatment of electronic transmissions.  No Member at present considered electronic
transmissions to be importations for customs purposes, and no Member therefore imposed customs
                                                     
1The Chairman's statement was subsequently circulated as WT/GC/11.WT/GC/M/26
Page 9
duties on electronic transmissions.  The United States' proposal was to codify this practice in the
WTO.  A careful look at the proposal in WT/GC/W/78 would reveal that it was straightforward,
simple and direct.  The WTO could welcome, and be a part of, these events.  Members should discuss
how electronic commerce should relate to the WTO system.  Clearly, electronic commerce covered a
wide range of issues.  However, the United States was not discussing tax policies of any country.  It
was not suggesting that Members discuss or take decisions on any measure that would affect the wayin which their tax authorities treated electronic transmissions;  its proposal was solely focused on
customs duties.  Second, the United States was not discussing reducing tariffs on goods imported
through normal commercial channels.  Third, the United States was not discussing how one defined
what an electronic transmission was, i.e., whether it was a good, a service, or something in between;
it was proposing a debate at the present time on the nature of electronic transmissions.  There should
be WTO work in this area, and the United States wished to work with others on ideas.  The United
States proposed that Members send a message that they intended to maintain the current practiceunder which no country considered electronic transmissions to be importations for customs duty
purposes.  Such transmissions could not even be gi ven a tariff classification in the Harmonized Tariff
Schedule.  Not a single Member imposed customs duties on electronic transmissions.  Furthermore,
there were no customs duties on telephone calls across borders, on fax messages, and when computers
accessed data bases.  Telephone calls, faxes and computers shared a common element:  they relied onelectronic transmissions that might travel across borders.  The growth of this environment had brought
all into the Information Age;  part of this environment had been that these electronic transmissions
were not considered as importations for customs duty purposes.
Her delegation had often been asked how the WTO could take the proposed decision to
declare a continuation of Members' current practices not to impose duties on electronic transmissions.How the consensus was recorded was a matter that could be discussed.  The United States was not
asking the General Council to decide anything at the present meeting.  Rather, it was asking the
General Council to begin exploring the issue and to focus first on the concept.  One could then focus
on how to formalize the agreement.  Some said that  it was premature to discuss the United States' idea
of codifying existing practice for electronic transmissions because too little was known about theintersection between the WTO and global electronic commerce, and that there were too many bigger
issues related to electronic commerce and the WTO including its impact on the General Agreement on
Trade in Services (GATS).  The United States, like many of its trading partners, was studying those
issues.  However, it did not agree that its suggested approach was premature in the context of the
WTO.  It was important and timely for Members to discuss this proposal at the present time.  First,electronic commerce would only increase in importance in the next few years and certainly in the next
century.  One could start agreeing on points that did not require any particular concession by any
country.  Preserving current practice was the best place to begin.  Agreeing on this under the WTO
would send the right message to the business community -- that the WTO wanted to promote the
expansion of electronic commerce.  Second, an ag reement regarding Members' customs duty practices
did not set a precedent for their practices in other areas in this sector, such as taxes or regulation.
Third, this was but a first and important step of what would be an important journey for the WTO.  Anagreement on duty-free electronic transmissions did not prevent Members from studying, analysing,
and reviewing all of the other aspects of electronic commerce.  Indeed, the Secretariat's Research and
Analysis Division would be issuing a report in the coming weeks that all would want to study
carefully.  She reiterated that the idea being proposed was simple, namely to agree to maintain
Members' current practices whereby no country considered electronic transmissions as importationsfor customs duty purposes.  The United States proposal did not require a sacrifice or concession from
any Member.  Agreement on this narrow approach would allow Members to place the WTO boldly in
the forefront of work on global electronic commerce and squarely facing the demands of the next
century.
The representative of Egypt  said that his Government recognized the importance of
electronic commerce, and that one had to respond to the Information Age.  For this reason, Egypt had
raised this issue in the Committee on Trade and Development in November 1997.  His delegation hadWT/GC/M/26
Page 10
also requested that an item regarding electronic commerce in goods and services be placed on the
agenda of the forthcoming meeting of the Committee, at which it would present a paper on this
subject.  Electronic commerce was not only a new area, but was also complicated.  The US proposal
was ambitious in its reach, and was based on the assumption that no WTO Member considered
electronic transmissions as importations for customs duty purposes, and that no Member imposed
customs duties on them.  His delegation did not believe this to be entirely logical or valid.  If, forexample, someone reported to the customs authorities in his place of residence that he had imported
some goods and services electronically, and assuming that some of these items were subject to
customs duties, would the customs authorities say that since they were delivered electronically they
were exempt from customs duty?  In Egypt, at least, customs duties were not dependent on the means
of delivery of a good or service.  Customs duties remained the same, whether a product arrived by air,
land or sea.  Customs duties on electronic commerce should be guided by the principle of neutrality,
and transactions should be dealt with equally regardless of the means of delivery.  The US proposalargued that electronic delivery should be treated differently.  He asked how the US customs
authorities would react if someone in the US reported the electronic import of products and services
that were subject to customs duty?  If customs dut ies were not collected in this case, what would be
the legal basis for this decision?
The US proposal raised a fundamental question:  should one artificially give an advantage to
electronic commerce over comparable traditional commerce?  If this were to be the case, an importerfaced with choosing among supply sources would pr efer electronic commerce if customs duties were
levied only on traditional trade.  Furthermore, since the concentration of the capability to conduct
electronic commerce was in the developed countries, th is approach might be biased against and to the
detriment of developing countries which did not have similar electronic export capability.  Electronic
commerce might ultimately become the preferred choice of trade.  However, this should be achievedthrough the expected high efficiency of electronic commerce and not because it had a customs
preference.  Egypt was conscious of the benefits that developing countries might reap from electronic
commerce when they would be in a position to do s o, and if they followed the right approach.  For
this reason, it had proposed addressing this issue in the WTO.  Egypt's objective was not to unduly
restrict electronic commerce, but to deepen the understanding of this complex issue and deal with in a
coherent and balanced manner, bearing in mind developing countries' interests.  Moreover, financial,
technological, technical and other forms of assistance in addition to the developing countries'infrastructure needs should be provided to enab le them to participate effectively in electronic
commerce.  Otherwise, one might witness the furthe r marginalization of developing countries in the
multilateral trading system.  If customs authorities were not to impose a duty on products or services
imported electronically, a person or a firm importing the same products or services through traditional
means would nonetheless have to pay duty.  He asked if this would not be discriminatory.  It wouldalso most likely give an advantage and a competitive edge to firms not paying customs duties because
they imported goods electronically, and would create  a problem of discrimination against those who
were not able, for whatever reason, to obtain a product electronically.  These, he believed, would
mainly be the poor.  The problem was much more pronounced in developing countries where
numerous problems associated with access to electronic commerce existed.  Moreover, those whocould afford access to electronic commerce in devel oping countries were usually the rich, while those
without access were the poorer members in society.  An obligation not to collect customs duties from
electronic commerce might result in a price discrimination to the advantage of the rich, and could
even be considered a subsidy to the rich.  He was confident that this would not be the social message
that his government would condone.  Furthermore, one had also to examine whether this could beconsidered discrimination against like products.  It was worth mentioning that the Agreement on
Customs Valuation gave Members the option to tax the value of the carrier media only or to include
the value of the content in the customs valuation.
The US proposal addressed electronic commerce from a single perspective, namely,
introducing an obligation not to impose any restrictions on electronic commerce.  However, this wasWT/GC/M/26
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an extremely narrow approach to a very complicated issue.  It implicitly assumed a level playing field
in electronic commerce and that not imposing restrictions would be equally beneficial to all Members.
These issues needed to be studied and analyzed carefully, which would not be easy on an issue that
had yet to unleash its true potential and whose scope and implications were yet to be determined.
Egypt was aware that owing to the digital nature of the content involved, it was relatively easy to
circumvent many controls.  However, this did not mean that the US proposal was the solution to thiscomplicated issue.  Egypt believed that consultations should be held to clarify further the raison d'être
and the implications of the US proposal, taking into consideration the development perspective.
The representative of Japan said that, like Egypt, Japan wished to have further clarification
and study on this question.  Japan did not impose any customs duties on electronic transmissions at
present, and agreed that in order to promote electronic commerce globally it would be desirable that
no WTO Members imposed duties in this area, and maintained their current practice in this regard as
suggested by the United States.  In order to proceed further, Japan looked forward to receiving moredetailed information on the US proposal.  It woul d be important, for example, to elaborate the legal
definitions and the scope of the terms used in this exercise.  Japan understood that the US proposal
envisaged the future formulation of legally-binding multilateral disciplines in the WTO, and was
prepared to participate in a joint undertaking on this proposal.
The representative of Australia said he understood the US proposal to refer to goods ordered
and delivered electronically, and that in this respect it was consistent with Australia's stated policy.  In
1997, Australia's Prime Minister had announced that in order to boost electronic commerce and
provide greater certainty to the industries involved, the Government would ensure that goods ordered
and delivered electronically, such as books, music and software, would continue to enter duty free.  At
the same time, Australia believed there was a n eed to examine all the issues arising from the
emergence of electronic commerce, and not just a narrow sub-set.  For example, consideration should
be given to whether there was a need to develop modified or new rules to deal with the impact of
electronic commerce on trade.  Australia therefore wished to see further work undertaken on
electronic commerce in relevant WTO bodies.
The representative of the European Commun ities welcomed the US initiative to address
electronic commerce issues in the WTO.  The emergence of the information society and, in particular,
the increasing use of global information networks  required a predictable framework for the future
development of electronic commerce.  Various international fora were currently considering different
aspects of electronic commerce.  In order to coordinate and strengthen these activities, the European
Commission had recently proposed the establishment of an international charter on globalcommunications.  Given that electronic commerce embraced international trade, the WTO should play
a significant role in providing this framework, and might become the leading forum to address
barriers to electronic trading in a global way.  The Community had noted the specific US proposal
regarding import duties, and looked forward to pursuing discussions.  There were, however, various
aspects related to electronic commerce that needed to be addressed in the WTO.  These included
intellectual property rights, government procurement, import duties on information technology
products, financial services, telecommunications and other services areas.  These different aspectssuggested a need to reflect on the appropriate forum or  fora for WTO's further work in this area.  The
Community looked forward to discussing these matte rs with others as soon as possible, and intended
to present an initiative of its own at a future date.
The representative of Canada  said that electronic commerce had the potential to become
perhaps the single most important factor in expanding trade in the next century.  There was clearly a
need for Members to reflect on the WTO's role in the development of electronic commerce.  The US
statement, as well as those of others at the present meeting, contained a number of ideas which should
be the subject of further reflection and discussion.  Canada looked forward to participating in these
discussions.WT/GC/M/26
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The representative of New Zealand said that electronic commerce clearly had great
implications for New Zealand and for others.  A recent survey in New Zealand, for example, had
indicated that nearly one-third of its largest businesses expected to generate up to 10 per cent of their
annual revenues over the next two years from Internet-based electronic commerce.  It was therefore
timely to address this issue, and New Zealand welcomed the opportunity for the WTO to do so.  The
US proposal was interesting and had practical appeal.  The use of electronic commerce did raisesignificant international trade policy and trade facilitation considerations, and might also offer
significant benefits to a wide range of countries.  While it would appear virtually impossible to levy
customs duties on electronic commerce, New Zealand welcomed the opportunity to work through the
implications of the US proposal, and looked forward to participating actively in future discussions.
The representative of Nigeria said that his delegation had noted the statements by the United
States and others, and welcomed and supported Egypt' s statements.  A number of issues needed to be
clarified regarding the US proposal, in particular its ultimate objective and purpose, the potential
benefits for countries still grappling with the task of implementing the provisions of the Final Act, its
implementation given that the Internet was yet to be established on a solid footing in many Membercountries, and the reason for the haste on the eve of the Ministerial Conference, when the WTO could
adequately address this matter in the context of the on-going discussion on trade facilitation.  In the
course of the Uruguay Round, despite their concerns regarding inadequate and weak provisions on
special and differential treatment, developing countries had been told that there had to be a single
undertaking and no more an "á la carte" approach.  However, one was presently facing a refined "á la
carte" approach to multilateral negotiations and discussions, and had to ask if this approach was
justified.  Further consultations were needed on this subject after the 1998 Ministerial Conferencewithout prejudging their outcome.  Nigeria believed  it was important to proceed cautiously and in a
balanced manner taking into account the interests and concerns of all.  In voicing its concerns, Nigeria
was in no way belittling the proposal or doubting its significance.
The representative of Hong Kong, China sa id that his delegation would study the US
statement carefully.  Electronic commerce had the potential to revolutionize business and trade, and
Hong Kong, China had a strong interest in many of the areas in which electronic commerce was likely
to have a significant impact.  It was therefore very  interested in electronic commerce and in the rules
that governed it.  Hong Kong, China therefore firmly supported the WTO beginning exploratory work
to prepare Members for more in-depth discussion on the subject, and looked forward to reading the
Secretariat's information paper on this subject.
The representative of Switzerland said that his delegation agreed with the general approach
proposed by the United States, although a number of elements would need to be clarified.
Switzerland had noted from the US statement that the intention was to codify an existing practice in
regard to customs duties, that the proposal was limited to electronic commerce and not physical trade,
and that issues such as domestic taxes and intellectual property rights were not involved.  In the work
to be undertaken, trade facilitation aspects of electronic transmissions would need to be taken into
account.  Switzerland would participate positively in any work that was begun on the US proposal.
The representative of India  said that his delegation shared the questions and concerns raised
by Egypt.  The United States appeared to be making certain assumptions about its proposal that
caused India some concern.  The United States was assuming, for example, that all knew what"electronic commerce" meant.  He believed, however, that there was no clear and universal definition
of the term at present, and that "electronic commerce" and "electronic transmissions" might not be
exactly identical terms.  The second assumption behind the United States proposal seemed to be that it
was a simple one.  However, as some delegations had indicated, there were many interfaces between
this proposal and other issues, and this assumption was perhaps incorrect.  Regarding the third
assumption, that the proposal tracked with current practice, he said that the current practice in IndiaWT/GC/M/26
Page 13
did not distinguish tariffs based on the mode of delivery, and that electronic delivery was not an
important mode of delivery in India.  His custom s authorities defined importation so broadly that it
would cover goods delivered electronically.  Thus, the assumption that no nation was currently
levying any customs duty on this type of importation was questionable.  The fact that a country like
India might not at present levy duties on electronically imported goods was based on the limited
means of doing so, and did not mean that, in a legal sense, goods so delivered were not dutiable.  Thefourth assumption, that no concessions would be required of Members because it was simply a matter
of binding current practice, was not correct, as binding a current practice in the WTO involved
making a concession.  The last assumption, that there was a level playing field in this area and that not
imposing duties on electronic commerce would benefit all Members equally, had to be tested.
Therefore, India wished to study further the US proposal, along with the forthcoming paper by the
Secretariat.  This was a complex area of trade which required careful study and should be phased-in
slowly.
The representative of Pakistan expressed appreciation for the US initiative.  Cyberspace was
clearly the future direction of trade, and countries would have to grapple with the issues of electronic
commerce sooner or later.  However, it was important to be clear about the parameters within which
this issue would be addressed.  The first of these had to be that, at present, there was insufficient
knowledge of the implications of the issues invo lved, and that much more study and knowledge was
required in order to understand all the aspects of these issues.  Work was under way on these issues in
the WTO, UNCTAD and other institutions, and this information had to be studied before conclusive
decisions could be reached.  Secondly, it had to be made clear that for the present, Members were not
embarking on a formal or structural negotiation or  discussion of a new issue, but rather were
beginning a process of analysis and study informally amongst themselves.  Until the stage had beenreached where Members' knowledge and understanding was sufficient to enable them to develop
considered governmental positions and thereafter to decide how to deal with these issues, no formal
work should be pursued.  He suggested that Members agree to take note of the proposal, to hold
informal consultations, and to receive as much information as possible from the WTO and other
sources on the issues involved.
The representative of Brunei Darussalam, speaking on behalf of the ASEAN Members
, said
that with the rapid advances in the Internet indust ry in the last few years, electronic commerce was
becoming critical to modernization and economic development.  Electronic commerce was known to
reduce costs, foster competitiveness and provide solutions that required speed, accuracy and business
intelligence.  It was a tool that was expected to re-engineer business practices to make them moreattuned to the demands of the next millennium.  From any viewpoint, electronic commerce would
become a strategic necessity for both the government and private sectors in both developed and
developing countries.  The Internet had become an important tool in commercial transactions and had
profound effects on almost all aspects of economic and social life.  There was no doubt that one was
at the beginning of a new era of communication and trade.  Electronic trade was unique in that it had
no physical and geographical boundaries and negated differences in distance and time.  The
accessibility it had spawned had generated a new global marketplace with a greater number ofsuppliers and buyers.  The Internet had brought developing countries, including ASEAN countries, to
new frontiers of technology.  However, these countries were still lagging behind many advanced
countries that were presently taking the lead in developing and commercializing the necessary
technology.  Developing countries were still in the process of learning and trying to keep pace with
this fast-growing technology.  There was a need to establish guiding principles to elucidate the role ofthe private vis-à-vis public sector, to recognize the opportunities of the Internet and to reach a
consensus on issues such as customs, taxation and electronic payments systems.  Related issues
included intellectual property protection, privacy and security and market issues pertaining to
information infrastructure and content development as well as the need to define technical standards.
The US proposal regarding duty-free electronic transmission needed clarification on legal, technicaland economic issues related to multimedia technology.  The proposal had an impact on legal issuesWT/GC/M/26
Page 14
such as contracts, payments, jurisdiction in the enforceability of decisions and consumer protection.
There were a myriad other legal issues coupled with the relevant acts governing multi-media, frauds,
computer misuse, etc.  Since electronic commerce cut across borders, a common ground approach
should be sought and a legal framework formulated to address these issues.  Furthermore, due to the
different levels of information technology development in the ASEAN region, electronic commerce
development was still in the learning process and required a lot of study and research before a policyor regulatory framework could be formulated.  The ASEAN Members believed there was a need to
broaden the understanding about this mode of transaction and trade and its implications on economic
and social life before contemplating the next move, and that this matter should be examined
comprehensively.
The representative of Norway  said his delegation welcomed the US initiative because it
addressed the fact that electronic commerce was a reality of present-day life.  If the WTO wished to
stay relevant to present-day realities, it should find ways to tackle this issue through consultations.Norway would participate actively in this process.
The representative of Turkey welcomed the US proposal.  Turkey believed that the WTO was
the relevant body to discuss all the aspects of this issue, and it would participate actively in and
contribute to any discussions.
The representative of Hungary welcomed the US initiative, the main merit of which was to
call attention to a specific category of trade which had tremendous potential for the future.  Hungary
was convinced that the WTO, as the main rule-making body in the field of trade, had an important
role to play in this field.  He wished to assure th e United States that his authorities would examine the
US proposal objectively.
The representative of the United States ex pressed appreciation to delegations for their
comments on the US proposal.  She believed that the present discussion was the first of many that
would be had on this subject, and that a lot of k nowledge and insight would be gained from the paper
that the Secretariat would issue and from further discussions.  This issue was very important to all
Members, and further discussion and study would be needed on a lot of the issues that had been raised
at the present meeting.  A lot of the issues that had been raised, however, were issues that the UnitedStates had not intended to address, and its own proposal had intended to be very narrow, relating only
to duty-free treatment of electronic commerce.  The United States looked forward to further
discussion and dialogue with others on this issue, and hoped that Members would be able to achieve
something under the WTO in this area that would be acceptable to all.
The Chairman said he believed that Members had had a substantive initial analysis of a
complex and at the same time critical issue.
The General Council took note of the statements.
6. Ecuador - Commitments under the Protocol of Accession
- Communication from the United States (WT/GC/W/76)
The Chairman drew attention to the communication from the United States in WT/GC/W/76.
The representative of the United States said that although her delegation did not typically
bring to the General Council's attention instances of a Member's failure to meet its WTO obligations,
in the case of Ecuador there appeared to be a pattern of failure to meet a number of the obligations it
had undertaken upon accession.  One of Ecuador's commitments was to report each January on
progress in meeting its commitments.  While the United States had not seen Ecuador's report for 1998,WT/GC/M/26
Page 15
it had conducted its own assessment, which had been  laid out in WT/GC/W/76.  As mentioned in that
document, Ecuador's commitment to apply the TRIPS Agreement provisions had not been fulfilled.
Furthermore, it had not eliminated the discriminatory application of the Special Consumption Tax to
certain products, had failed to implement tariff quotas on certain agricultural products, and had yet to
eliminate import bans on used tyres, clothing and automobiles.  Moreover, Ecuador's standards
regime, "prior authorization" system for certain agricultural imports, and preshipment inspectionpractices all appeared to be WTO inconsistent.  There also remained discrimination under the
"Dealers' Act" against foreign companies.  A measure the United States had not listed in its
communication because it had been removed at the end of 1997 was a tariff surcharge designed to
raise revenue which violated a number of Ecuador's tariff bindings.  However, the United States had
since learned that Ecuador had reinstated the tariff surcharges due to a budget shortfall.  The United
States welcomed having Ecuador as a Member, but believed that it would undermine the WTO if any
Member were to enjoy all the benefits of membersh ip while so significantly failing to fulfil the
obligations that came with such membership.  The United States encouraged Ecuador to show
substantial progress in eliminating these deficiencies, and called on other Members to join in sending
such a message as well.
The representative of Ecuador presented Ecuador's second annual report on its accession
commitments, providing details of the progress made by Ecuador in the implementation of the
commitments referred to in paragraphs 9, 19, 34, 48, 59, 75, 77 and 78 of the report of the Working
Party on its accession (WT/L/77 and Co rr.l, Add.1, Add.1/Corr.1 and Add.2).2  On its exchange
policy commitment in paragraph 9 of the report, he said that Ecuador's exchange policy remained
entirely consistent with GATT Article XV.  Re garding its commitment in respect of the Special
Consumption Tax (paragraph 19 of the report), Ecuador had made further reforms in its domestic tax
system concerning the application of this tax.  Regarding the commitment to administer imports of
used clothing, tyres and automobiles in accordance with the relevant WTO provisions (paragraph 34
of the report), Ecuador was continuing to make efforts to supplement the regime for imports of used
automobiles set out in decisions taken in 1997.  As regards the imports of used goods, Ecuador hopedto obtain the necessary technical assistance from the Secretariat in order to define non-restrictive
controls so as to establish an import regime consis tent with WTO rules that at the same time fulfilled
Ecuador's interests in protecting consumer health and safety.  Regarding the commitment in paragraph
48, Ecuador had terminated the application of the Tariff Adjustment Mechanism or national price
band for agricultural products.  Ecuador had already fulfilled the commitments regarding exportsubsidies and TRIMS as set-out in paragraphs 59 and 75 of the report.  On the TRIPS commitments
(paragraphs 77 and 78 of the report), he recalled that in June 1997, Ecuador had informed the TRIPS
Council that the TRIPS Agreement had been published in the Official Register in June 1996 and that
the legal provisions were therefore in force.  In order to ensure the full implementation of the TRIPS
Agreement, his Government had submitted a new intellectual property law for approval by the
Congress in December 1997.  The law was currently under consideration and, when approved, would
update Ecuador's legislation in a manner fully consistent with its WTO obligations.  With regard to
the other concerns expressed by the United States, he informed the General Council that Ecuador had
not opened tariff-rate quotas because it had applied the general tariff levels for imports of certain
agricultural products, which had been more advantageous than the tariff rates established for quotas,and that its legislation on preshipment inspection was in conformity with the multilateral rules of the
agreement governing the subject.  Ecuador would continue to publish promptly all the laws and
regulations applicable to preshipment activities and would also notify them to the WTO so that
Members received the appropriate information.  Ecuador, furthermore, did not apply a standards
regime or an import licensing system as erroneously suggested by exporters.  Finally, the legal
instruments termed the "Dealers' Act" by the United States had been revoked by a Congressional
Decision dated 11 September 1997.  This instrument came into force upon publication in the OfficialRegister, and as a specific law took precedence over  any conflicting general or special legal provision.
                                                     
2The full text of Ecuador's statement was subsequently circulated as WT/GC/COM/4.WT/GC/M/26
Page 16
In Ecuador, the principle of non-retroactivity of law applied, and it was therefore impossible to follow
up suggestions to apply the new law to exclusivity contracts with Ecuadorian agents signed prior to
the enactment of the new law.
The representative of the European Communities expressed concern regarding the delays
incurred by Ecuador in implementing a number of its WTO commitments.  The Community had a
particular concern regarding the TRIPS Agreement.  However, he understood from Ecuador's
statement that since December 1997 its Congress had been considering a new law on intellectual
property, and suggested that Ecuador inform the TRIPS Council of the latest state of play as soon as
possible.
The General Council took note of the statements.
7. Transparency and derestriction
- Communication from the United States (WT/GC/W/76)
The Chairman drew attention to the communication from the United States in WT/GC/W/77.
The representative of the United States said  that her Government was committed to pursuing
greater transparency and openness in the operation of the WTO.  It believed that the General Council
would need to focus on this matter, and that a logical place to begin was with respect to the question
of derestriction.  The United States believed that the time had come to evaluate the General Council's
decision of July 1996 regarding procedures for the circulation and derestriction of WTO documents(WT/L/160/Rev.1).  Under the terms of paragraph 7 of that Decision, the General Council should
review and possibly modify these procedures not later than July 1998.  It was not too early to start
thinking about some possible modifications to the Decision in the light of Members' collective
practical experience.  Too many documents were still being treated as restricted.  The July 1996
Decision called for working papers to be treated as restricted unless delegations specifically requestedthat particular submissions be treated as unrestricted.  Thus far, however, all of the national
submissions made in the Singapore working groups had been restricted.  The United States believed
this should not be the case.  To take the working group on trade and competition policy as an
example, the United States saw no reason why the dozens of interesting and useful submissions
should be restricted.  Currently, minutes of WTO meetings remained restricted for six months aftercirculation of the documents.  He asked why this should be the case when both the Secretariat and
delegations routinely -- but selectively-- spoke to the press after all significant meetings.  The
United States saw no reason to keep these minutes restricted.  The current procedures in respect of
restriction of documents addressing protocol issu es in working parties on accession had seriously
complicated the United States' ability to consu lt on accession developments with members of the
private sector, and it wished to revisit this rule.  There were also other areas, notably in connection
with dispute settlement, where the United States believed current rules on restriction of documents
might be improved.  In order to permit the General Council to effectively carry out its responsibilities
in relation to the required review of the July 1996 Decision, the United States proposed that the
General Council agree to organize informal open-ended consultations amongst interested delegations
with the aim of considering possible modifications to these procedures.
The representative of Canada said his delegation welcomed the United States' suggestion of
open-ended informal meetings to review the WTO's current derestriction policy.  As his delegation
had noted at the General Council meeting in December 1997, the importance of an informed audienceto generating domestic support for further liberalization and rule-making was critical.  Canada
believed that the current derestriction policy was untenable, given the reality that most WTO material
reached the public through newspaper and other outlets well before the formal derestriction date.
Trade policy was public policy.  What Members were doing in Geneva was of increased interest to a
wide range of civil society.  Many Members had developed extensive consultative processes to meetWT/GC/M/26
Page 17
this interest, and a more liberal derestriction policy would facilitate obtaining input, at the national
level, and thus facilitate domestic deliberations of Members.  Canada had suggested in December that
a first step would be to issue proposed agendas as derestricted documents.  In order for civil society to
provide input, they needed to know what was to be discussed.  Canada had also made similar
suggestions in several WTO bodies.  It also found merit in a number of the suggestions made by the
United States.  Canada had issued a number of its national submissions to various WTO bodies asunrestricted and wished to encourage other delegations to consider likewise.  The Secretariat, rather
than assuming a national submission was restricted, should check with the delegation concerned to
remind delegations that they had a choice.  Canada also supported earlier derestriction of minutes of
WTO bodies.  Six months after circulation was clearly excessive, given the degree to which
dissemination was already occurring.  Delegations already had the opportunity to review draft minutes
prior to circulation and thus derestriction after a month or so appeared to be a more reasonable
approach.  Canada was also willing to look at any other proposals with respect to derestriction ofother documents.  Its aim was not derestriction for derestriction's sake but rather to ensure that
domestic constituencies were better informed about the WTO's activities and thus supportive of
Members' collective efforts to secure and enhance market access for all.
The representative of the European Communities said that his delegation was in favour of
working with others to promote greater transpar ency in the WTO's work.  The Community had noted
the General Council's obligation to review the docum ent derestriction procedures as set out in the
July 1996 Decision.  The Community supported the proposal for informal open-ended consultations to
be carried out under the auspices of the General Council.
The representative of Mexico said that the question of whether documents should be restricted
or not was somewhat sensitive in that it could have an effect on the contractual nature of Members'
work.  Mexico could not see, for example, why draft agendas for meetings should be circulated
unrestricted.  The WTO dealt with relations among Member governments, not the relationship
between Member governments and civil society.  To provide information to the public was the task of
individual governments themselves.  Mexico recognized that under the July 1996 Decision the
General Council was to undertake a review of the procedures for circulation and derestriction ofdocuments two years after their adoption and, if necessary, modify the procedures.  While Mexico
accepted that Members should carry out this commitment, they should not prejudge in any way the
actual outcome and whether it would result in increased transparency.
The representative of Norway said that in keeping with his delegation's oft-stated views
regarding transparency and derestriction, it supported the US proposal, which it hoped would help to
get the WTO's activities more widely known.  As Nigeria had stated under item 4(b) of the agenda,
the WTO could not afford to be one of the least understood international organizations.
The representative of India said that his delegation's views were similar to those of Mexico.
India wished to be associated with the consulta tions proposed by the United States, without any
commitment to any position at the present time.
The representative of Egypt said that his delegation was not against any further procedures for
ensuring transparency and openness in the WTO's work.  He associated his delegation with Mexico's
statement, in particular that this work should be undertaken carefully in accordance with current
procedures and rules, and without prejudging the results of the consultations.  The issue of openness
and transparency should be examined in accord ance with the documentation that Members would
wish to derestrict.
The Chairman proposed that the General Council take note of the statements and agree that its
Chairman consider ways and means to advance the proposal by the United States that the GeneralWT/GC/M/26
Page 18
Council organize informal open-ended consultations to consider possible modifications to the
procedures for circulation and derestriction of WTO documents agreed in July 1996.
The representative of Mexico said he was not clear as to whether the General Council
Chairman was to hold consultations on the proposal by the United States or to undertake the process
of the review itself that was called for in paragraph 7 of the July 1996 Decision.
The Chairman, responding to Mexico's query, said that many delegations had expressed their
views on the US proposal and that he had accordingly proposed in his earlier statement that the next
General Council Chairman take up this matter and examine with Members how to proceed on it.
The General Council took note of the statements and agreed  to the Chairman's proposal.
8. Notification obligations and procedures
- Communication from the Chairman (WT/GC/W/75)
The Chairman drew attention to his communication in document WT/GC/W/75 and to the
two recommendations therein regarding notification obligations and procedures, which had been
made to the General Council by the Council for Trade in Goods in November 1996 (G/L/134,
Section II).  He proposed that the General Council take action on this matter along the lines suggested
in his communication, as follows:  (i) that, on the basis of discussions held by the former Chairman of
the Working Group on Notification Obligations and Procedures, the recommendation of the Council
for Trade in Goods in sub-paragraph (b) be kept under review, and reverted to at a future date asappropriate;  and  (ii) that, in pursuance of the recommendation in sub-paragraph (a), the General
Council adopt the draft decision in the Annex to WT/GC/W/75 in order to eliminate the notification
obligations relating to import licensing procedures in the relevant Decision of the CONTRACTING
PARTIES to the GATT 1947.
The representative of the United States said that transparency was a fundamental part of this
organization and of the world trading system, and that notifications were vital to transparency.  The
United States agreed that consideration of further work by WTO Members in this area, specifically in
undertaking a further comprehensive review of notification obligations and procedures throughout the
WTO Agreement, would be more appropriate at a later date.  That said, her delegation believed that
some steps could be taken at the present, with the Se cretariat's assistance, to add to transparency in the
system and to help WTO Members keep better track of notifications in the organization.
The General Council took note of the statements and agreed  to the Chairman's proposals.
9. Appointment of officers to WTO bodies
The Chairman said that in accordance with th e guidelines for appointment of officers to WTO
bodies approved by the General Council in January 1995 (WT/L/31), he had held informal
consultations on this matter.  On the basis of these consultations, he considered that there was a
consensus on the following slate of names:
General Council Mr. John Weekes (Canada)
Dispute Settlement Body Mr. Kamel Morjane (Tunisia)Trade Policy Review Body Mr. Ali Said Mchumo (Tanzania)
Council for Trade in Goods Mr. Ronald Saborio Soto (Costa Rica)
Council for TRIPS Mr. Istvan Major (Hungary)WT/GC/M/26
Page 19
Council for Trade in Services Mr. Nobutoshi Akao (Japan)
Committee on Trade and Environment Mr. Chak Mun See (Singapore)
Committee on Trade and Development Mr. Iftekhar Ahmed Chowdhury
(Bangladesh)
Committee on Budget, Finance and Administration Mr. Wilhelm Meier (Switzerland)
Committee on Balance-of-Payments Restrictions Mr. Peter R. Jenkins (United Kingdom)Committee on Regional Trade Agreements Mr. Jean-Marie Noirfalisse (Belgium)
Working Group on the Relationship between Mr. Krirk-Krai Jirapaet (Thailand)
Trade and Investment
Working Group on the Interaction between Mr. Frédéric Jenny (France)
Trade and Competition Policy
Working Group on Transparency in Mr. Werner Corrales Leal (Venezuela)
Government Procurement
The representative of Norway  said that alt hough his delegation did not have any objection to
any of the names read out by the Chairman, and therefore joined in the consensus, it would have been
pleased if Members had not deviated from the prin ciple of rotation between developed and developing
countries, as they had done in the case of the Trade Policy Review Body.  The TPRB was one of the
three major bodies of the WTO, and the principle of rotation was of paramount importance for it.
The General Council took note of the statements and of the consensus on the above slate of
names.10. Outcome of the major review of the implementation of the Agreement on Textiles and
Clothing
Mr. Johannessen (Norway), Chairman of the Council for Trade in Goods, speaking under
"Other Business", recalled that he had inform ed the General Council in December 1997 that the
Goods Council had conducted the major review of the implementation of the Agreement on Textiles
and Clothing in six meetings from October to December, and that in spite of determined efforts by
many, it had not been possible to arrive at sufficient common ground on the summary of the
discussions and on a set of conclusions to the review that would attract consensus.  In January 1998,consultations had been held with a number of delegations since it was apparent that many Members
felt that the progress achieved had certain positive elements to it, and that the matter should not
remain without a positive conclusion.  As a result of the spirit of compromise and flexibility shown by
the Members that had participated actively in the subsequent informal consultations, it had been
possible to reach substantive agreement on a text containing a detailed summary of the discussionsand conclusions.  This text had been adopted by the Goods Council on 16 February, and circulated as
document G/L/224.
The General Council took note of the statement.
11. Comments being directed to individual cases  brought before the dispute settlement system
The Director-General, speaking under "Other Business", said that he had noted with concern
over the past few months a number of comments that had been directed to individual cases brought
before the dispute settlement system.  While these comments had no doubt been made in good faith, itwould be remiss of him not to point out that in some cases they had not been made on the basis of all
the relevant facts.  The dispute settlement procedure was complex and, as had been agreed by all
Members, the facts considered by any panel were not made public until it had completed its work.
This was also the reason why the Secretariat was not in a position to make available factual material
which could provide balance in public debate until the entire procedure was completed.  It wasimportant to recall that findings under the dispute settlement system were based on the existing rulesWT/GC/M/26
Page 20
of the WTO -- rules that had been negotiated and agreed by all Members and ratified by all of their
Parliaments.  Moreover, these rules were trade rules, because this was the World Trade Organization.
It was not in the WTO's power to make determinations on policy issues that fell outside its
responsibility.  It was his duty to point out that comments based on a less than complete knowledge of
a particular case, or made while it was still in progress, were an unfair challenge to the integrity of the
dispute settlement process, to the WTO's rule-based procedures, and to the multilateral tradingsystem.  He wished to increase the awareness of this problem among all Members, and he would call
it to the attention of the appropriate WTO bodies in the context of the review of the dispute settlement
system that had to be undertaken before the end of 1998.
The General Council took note of the statement.
12. Accreditation of Permanent Representatives to the WTO
The Chairman, speaking under "Other Business", recalled that draft procedures for the
accreditation of Permanent Representatives to the WTO had been discussed in informal consultations
over the past year, and at the formal meetings of the General Council in July and October.  In
October, the General Council had agreed to revert to this matter at a future meeting, and had taken
note that the Secretariat had been requested to circulate a note on the existing accreditation practices
with regard to international organizations.  The note by the Secretariat had subsequently been
circulated on 4 December as document WT/GC/W/72.  He had been very encouraged to note that anumber of Members had adjusted their WTO accreditation practices to the international practice in
respect of accreditation of representation to international organizations -- outlined in the note by the
Secretariat -- and hoped that more Members would begin to move in this direction.
The General Council took note of the statement.
13. Observer status for international intergovernmental organizations
The Chairman, speaking under "Other Business", recalled that at the General Council meeting
in December 1997, he had reported that consultations had recently been held on the pending requests
from international organizations for observer status in the General Council, and that further
consultations would need to be held early in 1998. He urged delegations to give further thought to this
matter so that it could be settled rapidly.
The General Council took note of the statement.
14. Election of Chairperson
As the outgoing presiding officer of the General Council, the Chairman made a statement
(WT/GC(98)/ST/1).
The General Council then unanimously elected Mr. J. Weekes (Canada) to the Chair.
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