RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/BFA/71 
15 March 2004 
 (04-1166) 
Committee on Budget, Finance and Administration  
  
REPORTS OF THE MEETINGS HELD ON 6,  11, 17, 19, 20, 26 AND 27 NOVEMBER, 
AND 4 AND 5 DECEMBER 2003
1 
 
 1. The WTO Committee on Budget, Finance and Admi nistration met formally  and informally on 
11, 17, 19, 20, 26 and 27 November, 4 and 5 December 2003 under the chairmanship of 
Mr. Joshua C. K. Law from Hong Kong, China.  The terms of reference and composition of the 
Committee are set out in document WT/L/44/Rev.1.  The Agenda contained in documents 
WTO/AIR/2206, and WTO/AIR/2206/Corr.1 were adopted. 
I. WTO SECRETARIAT AND THE APPELLA TE BODY AND ITS SECRETARIAT 
A. P
ERFORMANCE AGAINST BUDGET FOR 2003  AS AT 31 OCTOBER  2003. 
1. A member of the Secretariat presented the Performance Against Budget Report as at 
31 October 2003 (CRP(03)45).  He drew the atte ntion of the Members to the overall projected 
budgetary surplus of CHF 549,020.  Over-expend itures occurred mainly under (i) Temporary 
Assistance, (ii) maintenance and insurance of buildi ng facilities, (iii) office automation, (iv) insurance 
and joint services, and (v) Ministerial Operating Fu nd.  Under-expenditures occurred mainly under (i) 
salary and pension, and the Trade Policy Course.  There would be savings under the International 
Trade Centre as the anticipated salary increase in the United Nations Common System had not 
occurred.  Further, the Secretariat informed the Me mbers that (i) saving in the salary was due to the 
vacancy factor, and (ii) saving in the Trade Polic y Course was mainly due to the cancellation of one 
course which could not be held as foreseen 
2. With regard to the expenditures of the Minist erial Conference, the Secretariat recalled the 
general principle that the host government would assume  all costs that the Secretariat would not have 
to cover if the Conference was held in Geneva.  The Secretariat recalled that an operating fund for 
Ministerial Conferences, following the same principle as the Appellate Body Operating Fund was set up, so that the exact and overall expenditures could be shown. 
3. The Committee took note of the report. 
B. 
DOHA DEVELOPMENT AGENDA GLOBAL TRUST FUND 2004 
4. A member of the Secretariat presented doc ument CRP(03)58, which provided the cost 
estimates for the WTO Technical Assistance and Trai ning Plan for 2004, namely: (i) the cost of 
Geneva-based Training, (ii) Regi onal Technical Assistance and Trai ning activities, (iii) Geneva-based 
workshops and symposia, and (iv) Other Partners hip Arrangements.  He also highlighted the 
methodology used in calculating the cost estimat es.  The implementation of the WTO Technical 
Assistance and Training Plan for 2004 would be fi nanced by the regular budget (CHF 5.4 million) and 
by the Doha Development Agenda Global Trus t Fund (DDAGTF - CHF 24 million).  Further, he 
presented document WT/BFA/W/107, th e draft recommendation on DDAGTF 2004. 
                                                      
1 This report should be read in conjunction with document WT/BFA/70, which contains the 
recommendations to this report, and was approved by the Genera l Council on 16 December 2003. WT/BFA/71 
Page 2  
 
5. In reply to query, the Secret ariat informed the Members that  the projected balance of the 
DDAGTF of CHF 7 million at the end 2003 was based mainly on the anticipation of: (i) delay in implementation of the certain activities planned, and (ii) savings made due to lower rate of 
participation in some activities. 
6. See Recommendation II, paragraph 3 of document WT/BFA/70. 
C. 2004
 AND 2005  BUDGET ESTIMATES  
7. A member of the Secretariat introduced th e Budget Estimates for 2004 and 2005, document 
WT/BFA/SPEC/100.  He informed the Committee that it was the first time that  the Director-General 
presented a biennial budget proposal, consisting of two annual financial periods, in accordance with 
the guidelines for biennial budgeting (WT/BFA/W/105/ Rev.1).  The primary concerns of the budget 
proposals were: (i) to have the necessary resources to  be able to respond in the best possible manner 
to the pace of negotiations, (ii) to have necessary r esources to deal effectively and efficiently with the 
Dispute Settlement Process, both at the Panel and Appeal levels, (iii) to assure a predictable and 
reasonable level of resources for the Appellate B ody Operating Fund and the Ministerial Conference, 
and (iv) to continue reasonable and modest effort s to move closer to a situation where temporary 
assistance resources reflect what in reality  are temporary or variable needs. 
8. The Secretariat then provided an overview of the proposals,  highlighting (i) the increased 
allocation in statutory elements, (ii) the need to re plenish the Appellate Body Operating Fund, (iii) the 
requirements for the Ministerial Conference, (iv) the increased needs in temporary assistance, and (v) the need for 14 new posts in 2004.  The 2004 budge t estimates showed an overall increase of some 6.9 
per cent over the 2003 budget.  The 2005 budget proposals showed an overall increase of 4.85 per 
cent over the proposed 2004 appropriations, which took into consideration of (i) statutory elements, 
(ii) possibility of inflation, (iii) additional f unding for language services (document translation and 
production, and meetings), (iv) an increase in the ITC budget, and (v) nine and one-half new posts. 
9. The Secretariat informed Members that some restructuring of the Secretariat had been 
achieved along the lines envisaged by the human r esources consultant’s report.  The number of 
Divisions had been reduced from 24 to 21 through  merging divisions.  Senior Management had 
adopted a policy of encouraging early retirement in  selective cases.  Further, the Secretariat drew 
attention of the Committee to two problems in the area of promotion: (i) the limited number of annual 
regardings, and (ii) promotion to  grade 11 for non-director posts. 
10. Members considered that the pr oposed increase in the budget proposals was high, and that it 
would be difficult for them to consider sympat hetically the proposal of 14 new posts for 2004 and 
queried the necessity of some of them.  They su ggested that the possibilit y of absorbing these needs 
by the existing staff or through re-deployment should be further pursued.  They emphasized the 
financial constraints which many governments were facing and felt that the uncertainty of the work 
programme in 2004 made it difficult to agree to the proposed increase in resources.  Some Members 
requested information on the (i) justifications for proposed new posts, (ii) savings made through 
efficiency measures, (iii) expenditures by sectors on the previous Ministerial Conference, (iv) data 
used for calculation of salary increase, and (v) data  used for calculation of resources for temporary 
assistance. 
11. As requested, the Secretariat prepared and distributed documents CRP(03)47 and its 
corrigendum 1, and CRP(03)48, providing information on proposed new posts for 2004 and 2005 and on containment of costs and efficiency measures respectively.  Members considered document 
CRP(03)48 useful and requested that similar info rmation, accompanied where possible with savings 
figures, be provided in future presentations of b udget proposals.  Some Members suggested that 
efforts to be undertaken on savings/cost efficiency  should be systematic and be institutionalised.  WT/BFA/71 
 Page 3 
 
 
Others proposed that a review exercise of documents  provided in hard copy should be undertaken by 
the Secretariat. 
12. The Secretariat informed th e Committee that the six approved new posts in 2003 were 
allocated in (i) Administration and General Resour ces Division, (ii) Development Division, (iii) 
Intellectual Property Division, (iv) Legal Affairs Di vision,(v) Market Access Division, and (iv) Trade 
and Finance Division.  In addition, the Secretariat would propose to the Director-General to create a 
Steering Committee to examine and monitor efforts for cost savings and efficiency measures.  
Subsequently, informal meetings were organized in  the course of which divisional Directors presented 
their respective requests for the new posts contained in document CRP(03)47/Rev.1. 
13. The Committee then undertook a detailed line-by-line examination of the 2004 and 2005 
budget estimates.  The Secretariat informed the Memb ers that (i) the proposed allocation for medical 
insurance costs was based on inform ation that a 12 per cent increase in medical premiums could be 
anticipated, (ii) as in 2003, a total of 25 regrad ings were foreseen for 2004, (iii) the proposed 
consolidation of temporary assistance was based on the number of persons who has been serving for 4 
consecutive years, (iv) over the p ast years, a re-evaluation of the staff profile had been applied, 
leading to decreases in the proposed allocations, (v ) the financial implications of the Performance 
Award System were included in the proposals fo r 2004, and (vi) the salary adjustment in 2004 was 
based on the salary methodology adopted in 2003. 
14. Subsequently, the Secretariat provided more in formation on: (i) estimates of regular budget 
resources devoted to technical assistance (CRP(03)49), as well as percentage of staff time on a divisional basis devoted to technical assistance (CRP(03)57), (ii) comparison of expenditures on the 
Ministerial Conferences (CRP(03)51), (iii) usage statistics for the WTO library (CRP(03)52), 
(iv) temporary assistance, (v) Appellate Body Members Fees (CRP(03)54), (vi) proposed new posts 2004-2005 (CRP(03)55), and (vii) schedule of temporary assistance (CRP(03)56). 
15. Following the discussions, the Secretariat provi ded a revised 2004-2005 Budget Estimates, 
documents CRP(03)59 and its A dd.1 and 2 and CRP(03)61.  The revised 2004 budget estimates 
showed an overall increase of 4.9 per cent over th e approved budget for 2003.  The increases would 
be for: (i) statutory increases, (ii) replenishment of the Appellate Body Operating Fund, (iii) 2 new 
posts and the consolidation of 6 pos ts which had originally been included in the new posts, (iv) the 
Ministerial Conference, (v) other increases, and (vi)  the ITC.  The revised 2005 proposals, which were 
re-based on the revised 2004 budget estimates, showed  an increase of 4.6 per cent and took into 
account of the deletion of the inflation factor. 
16. Members stressed the importance of re-deploym ent of existing resources to priority areas 
rather than seeking new resources even in case of an increased workload.  Members, though 
acknowledging the prerogative of the Director-Gener al in the allocation of two new proposed posts, 
requested that they should be informed of the allocation of these posts.   
17. The Secretariat subsequently submitted a second revised proposal, document CRP(03)63, 
limiting the overall increase in 2004 to 4.4 per cent over the approved budget for 2003 and a 3.11 per 
cent increase in 2005 over the second revised 2004 budget estimates. The second revision of 2004 
budget estimates was based on a further reduction in: (i ) vacancy factor, and (ii) a postponement of 
replacement of computer equipment. 
18. Members accepted the second revised 2004-2005 budget proposals.  Two Members requested 
their statements be put on the formal record and th eir statements are attached hereto as Annexes I and 
II. 
19. In concluding, the Chairman highlighted that Me mbers (i) felt that the uncertainty with regard 
to the up-coming workload and pace of negotiatio ns, the 2005 budget would c onsequently require an WT/BFA/71 
Page 4  
 
in-depth re-examination in the context of the mid-te rm review referred to in the guidelines for biennial 
budgeting, (ii) brought up the problem concerning their Governments’ own resources, which were 
becoming more limited than in the past, and (iii)  felt that further efforts at efficiency, cost-
effectiveness and rationalization in the WTO were necessary. 
20. The Committee welcomed the papers prepared by  the Secretariat on containment of costs and 
efficiency measures in the WTO, a nd requested that the same information with greater details in terms 
of actual figures on savings, would become an integral part of the budget proposal document.  It also looked forward to having information on the establishment of a Steering Committee within the WTO Secretariat which would be charged with examin ing possibilities for cost savings on an on-going 
basis.  In addition, it also would follow the development of a programme to lessen reliance on 
hard/paper copies of documents. 
21. With regard to staff resources, the Committee not ed that the Director-General would bear in 
mind the views expressed by the Members particularly  with regard to the proposed post for the Rules 
Division, and would inform the Committee on his decision on the allocation of the two new posts for 2004 as soon as he had made up his mind.  Also, the Committee would welcome further initiatives on 
the Director-General’s efforts in the area of redeployment of resources, out-sourcing and structural 
rationalization, as well as the question of contro l of long-term temporary assistance posts.  The 
Committee noted that the Director-General would report on the issue in early 2004. 
22. See Recommendation IV, paragraphs 5 and 6 of document WT/BFA/70. 
II. INTERNATIONAL TRADE CENTRE UNCTAD/WTO 
A. 
PERFORMANCE AGAINST BUDGET AS AT 30 SEPTEMBER  2003 
23. The Deputy Executive Director of the International Trade Centre UNCTAD/WTO (ITC) 
introduced the document ITC/BUD/46.  He drew the attention of the Members that the projected overall balance at the end of the year was CHF 748,523, which was 97.56 per cent of the approved 
2003 budget estimates.  The savings resulted from the im pact of currency fluctuations of the US dollar 
versus the Swiss franc which le d to lower expenditure in CHF for the US dollar portion of ITC 
expenditures (mainly related to pensions).  In a ddition, lower expenditure in common staff costs and 
posts were incurred due to savings arising from hiri ng short term staff pending the filling of the posts.  
The above savings are partially offset by higher expenditures under Contributions to joint activities 
due to higher than budgeted charges from United Nations Geneva for costs relating to the 
implementation of IMIS. 
24. In reply to queries, the Deputy Executive Dir ector informed the Committee that the temporary 
assistance mainly covered the worklo ad in the following arrears: (i) peak periods, (ii) sickness and 
(iii) maternity leave. 
25. The Committee took note of the report. 
B. 
PROPOSED REGULAR PROGRAMME BUDGET OF THE ITC FOR 2004  AND 2005 
26. The Deputy Executive Director of the ITC introduced the document ITC/BUD/47.  He 
highlighted the fact that the impact of the expande d activities called for in the Doha Declaration had 
not been programmed into ITC’s 2002-2003 budget which had been approved by the United Nations 
prior to the Doha Ministerial Conference.  The ITC proposed budget for 2004 was estimated at CHF 32,486,000, and for 2005 was CHF 32,848,400 re flecting a total increase of CHF 3,963,700 over 
the biennium 2002-2003.  For 2004, the WTO share of the proposed budget would amount to CHF 16,125,250, a nominal increase of 5.9 per cent ove r 2003.  Further, he highlighted that the 
proposed  increase was mainly related to: (i) creation of six professional posts: three P-4, two P-3 and  WT/BFA/71 
 Page 5 
 
 
one P-2 level posts; and five Gene ral Service (GS) posts, and (ii) three reclassifications: two posts 
from P-4 to P-5 level and one from P-2 to P-3 level.  In this respect, he drew the attention of the 
Members to the United Nations Advisory Comm ittee on Administrative and Budgetary Questions’ 
recommendation to the General Assembly of the acceptance of: (i) the creation of four professional new posts instead of six as requested, (ii) the crea tion of three GS posts instead of five as requested, 
and (iii) reclassification of the three posts.  The General Assembly had yet to decide on the issue. 
27. The Committee undertook a line-by-line examin ation of the budget estimates.  The ITC 
informed that, since the Doha Declaration, the workload had substantially grown and that ITC’s 
resources were stretched to the  limit.  At the request of the Memb ers, the ITC subsequently submitted 
the following documents: (i) ITC.CRP(03)01 on the containment of costs and efficiency measures in 
the ITC, and (ii) ITC.CRP(03)02 on additional information provided to the United Nations  ACABQ 
and the Fifth Committee with regard to the ITC proposed budget for 2004-2005. 
28. In a subsequent informal meeting, the respec tive ITC Directors who had requested new posts 
and reclassification of posts provided furthe r information regarding their requests. 
29. See Recommendation I, paragraphs 1 and 2 document WT/BFA/70. 
III. OTHER ITEMS 
A. 
ADMINISTRATIVE UP -DATES AND PROGRESS REPORTS  
30. A member of the Secretariat presented the cash  situation, the statement of outstanding 
contributions as at 31 October 2003, the progress repor t of instalments for countries in arrears, the 
contributions of Observer countries towards the co st of services provided by the Secretariat, and 
report on the scheme to facilitate the payment of pr e-1988 arrears.  As at 31 October 2003, the total 
contributions received from Members amounted to  CHF 120,566,878.  One Member had made a 
payment since 31October 2003.  With regard to the contributions received from the Observers to the 
WTO towards the cost of services provided by the Secretariat, it stood at CHF 550,434 as at 
31 October 2003.  The Working Capital Fund stood at  CHF 9,009,577.  He drew the attention of the 
Members to the cash situation as of end October, wh ich would only be sufficient to cover expenses of 
the Organization for the month of November.  The WTO was in serious need of payment of 
contributions from Members for its operation for the coming months.  Members with outstanding contributions were urged to ma ke payments as soon as possible. 
31. One Delegation observed that some Members listed in the category IV had not made 
payments for the past few years and requested th at the Secretariat drew their attention on the 
obligations to liquidate arrears.  The Secretariat informed that reminders letters on arrears were sent 
out twice annually to the Members concerned. 
32. Another member of the Secretariat presented the document CRP(03)42.  The services of an 
outside consultant had been retain ed in order to assist Human Resources Section in the preparation of 
a training programme for 2004 and 2005.  The Mana gement Board of the Pension Plan would be 
meeting on 12 November 2003 to finalize its annual re port for 2002 and to approve the draft contract 
with the investment analyst/consultant.  Further th e Secretariat was considering an on-line recruitment 
tool in order to facilitate the processing of job application. 
33. Some Members expressed the wish to receive more information on the situation of the WTO 
Pension Plan and also on the Performance Award Sy stem.  Some Members recalled the deliberations 
on the salary methodology earlier this year and stressed the importance of developing the 
Performance Award System. WT/BFA/71 
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34. A member of the Secretariat presented documents CRP(03)43 and 46, and 
WT/BFA/SPEC/103.  He drew the attention of  the Members to the Programme Support Fund 
(document WT/BFA/SPEC/103), which recorded a defi cit and informed that the Secretariat would 
monitor the situation.  The expenditures indicat ed in the document WT/BFA/SPEC/103 included both 
paid and committed expenditures for activities pla nned until the end of the year.  The additional 
activities that could still be undertaken in Novemb er and December 2003 would be mainly national 
activities and should not involve any significant additional costs compared to the figures presented in the above-mentioned documents.   With regard to  the Doha Development Agenda Global Trust Fund 
(DDAGTF), one Member made a payment since the finalization of the document CRP(03)43.  Taking into account the balance available at the end of 2002,  the pledges initially made for 2002 to be cashed 
in 2003, as well as the pledges fo r 2003, the DDAGTF registered a total pledges of CHF 23.8 million 
in 2003.  Cash wise, the DDAGTF showed an  uncommitted cash balance of CHF 3.2 as at 
31 October 2003. 
35. The Committee took note of the repor ts and the various comments. 
B. 
DRAFT /TENTATIVE BUDGET COMMITTEE WORKPLAN FOR 2004 
36. The Chairman referred to document CRP(03) 44 which proposed a list of items to be 
discussed in 2004.  No dates were scheduled, as the date of the General Council had not yet been 
fixed.  He indicated that if in the course of the y ear more meetings were required, or additional issues 
necessitated discussion or review, they would be ad ded to the proposed schedule.  The work plan 
would be reviewed again early next year with proposed dates. 
37. The Committee took note of the draft work plan for 2004.  
C. LETTER FROM THE CHAIRMAN OF THE APPELLATE BODY  
38. The document CRP(03)50 containing a copy of a letter addressed to the Chairman of the 
Committee from the Chairman of the Appellate Body  on the proposal of adjusting the compensation 
package to the Appellate Body Members was distributed  to the Members.  However, in view of time 
constraints, the issue would be taken up in 2004. 
D. REVIEW OF THE GUIDELINES ON VOLUNTARY CONTRIBUTIONS FROM NON -GOVERNMENTAL 
DONORS  
39. The Chairman recalled that the Committee had discussed the issue in September 2003.  At 
that time, Some Members suggested that the pro cess of accepting voluntary contributions could be 
streamlined and that the Committee could look into the criteria for accepting voluntary donations.  It 
was decided that the question would be further examined in 2004. 
E. WTO ANNEXE  
40. The Chairman recalled that the Genera l Council approved on 19 December 2001, the 
recommendation of the Committee to authorize the Di rector-General to launch, in cooperation with 
the Swiss authorities, a draft project study aimed at  producing a building plan and putting together the 
financial package needed for its implementation.   The Secretariat presented document CRP(03)62, 
which was subsequently redistributed as docum ent WT/BFA/SPEC/104 and highlighted that the 
project “Golden Eye”, which cost could be accomm odated within CHF 50 million was retained for the 
construction of the WTO Annexe. 
41. See Recommendation III, paragraph 4 of document WT/BFA/70. 
_________________   WT/BFA/71 
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ANNEX I 
UK STATEMENT ON 2004 BUDGET 
The UK can confirm its agreement to an in crease in the WTO budget of 4.4% for 2004 and 
3.11 % for 2005. 
We note that these increases follow a rise of 8% in 2003 and an increase of resources 
provided to the WTO since 1998 of some 30%. In th e same period, most Geneva-based international 
bodies were subject to zero real or zero nominal gr ants. We recognise the incr eased workload of the 
WTO, but regret that more has not  been done by the organisation to  meet these additional demands by 
re-deploying existing resources to priority areas.  This is a daily necessity for most of the 
administrations - not least those from developing countries – whose contributions fund the 
organisation. 
The UK requests the Secretariat to take seriously the comments from a large number of 
delegations on the need for real efforts in the next year to re-deploy resources,  rather than every year 
seek new resources from members, whose capacity to provide them is increasingly limited. 
 WT/BFA/71 
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ANNEX II 
 
Statement on Biennial Budget by Delegati on of China At WTO Committee on Budget, 
Finance and Administration 
(5 December 2003) 
 
Mr. Chairman, 
The Delegation of China reported what we discus sed and the sentiment of the house yesterday 
back to my capital. The Governme nt of China, however, still has serious concern over the issue of 
addition and consolidation of ne w posts, and the successive conversion for years of temporary 
assistance service staff. (TASS) into regular staff, wh ich is in fact also some hidden way of increasing 
new posts. This will certainly have  long-term implications on the budget of the secretariat and the 
financial burden of Members. 
The Government of China believes that it is no t appropriate for the WTO secretariat to have 
great increase of its staff, either in one way or the other, while many Member governments and 
intergovernmental organizations have  been cutting the numbers of their staff.  The prevailing state of 
affairs of the WTO in this connection should be effectively corrected. 
To address this concern of my Delegation and other Members, the secretariat promised to 
provide some specific proposals and ideas for the c onsideration by Members at the first Committee 
meeting in the year 2004. With that understanding,  Mr. Chairman, my capital advised this delegation 
to join the consensus on the revised budget prop osal of the secretariat for the year of 2004. 
With regard to the revised budget proposal fo r the year 2005, our understanding is that it 
needs further consideration by delegations so as to see whether there is a need for further adjustment 
at the mid-term review of the biennial budget.  This will take place at the latter part of 2004.  It is only 
by then can a final decision be made in light of th e developments and evolutions of the organization. 
Please put my statement in the record of the meeting. Thank you, Mr. Chairman. 
 
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