RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/32
9 February 1999
(99-0472)
General Council
9-11 and 18 December 1998
MINUTES OF MEETING
Held in the Centre William Rappard
on 9-11 and 18 December 1998
Chairman:  Mr. John M. Weekes (Canada)
1. Lebanon – Request for observer status...............................................................................2
2. Committee on Balance-of -Payments Restrictions..............................................................2
(a) Consultations with Bulgaria................................................................................................. ...2
3. Waivers under Article IX of the WTO Agreement............................................................3
(a) EC/France - Trading arrang ements with Morocco .................................................................3
(i) Request for extension of waiver ............................................................................................. .3
(b) Review of waivers pursuant to Ar ticle IX:4 of the WTO Agreement ....................................3
i) Canada – CARIBCAN, granted on 14 Oc tober 1996 until 31 December 2006......................3
ii) Cuba – Article XV:6, granted on 14 October 1996 until 31 December 2001.........................3iii) EC – the Fourth ACP-EC Convention of Lomé, granted on 14 October 1996 until
29 February 2000 ............................................................................................................... ....3
iv) Hungary – agricultural export subsidies, granted on 22 October 1997 until
31 December 2001............................................................................................................... ...3
v) United States – Andean Trade Preference Act, granted on 14 October 1996 until
4 December 2001................................................................................................................ ....3
vi) United States – Caribbean Basin Economic Recovery Act, granted on 15 November 1995
until 31 December 2005......................................................................................................... .4
vii) United States – former Trust Territory of the Pacific Islands, granted on 14 October 1996
until 31 December 2006......................................................................................................... .4
4. Appointment of the next Director-General ........................................................................5
(a) Statement by  the Chairman................................................................................................... ..5
5. Agreements between the WTO and the IMF and the World Bank................................23
(a) IMF, World Bank and WTO:  Report of the Managing Director, President and Director-
General on Coherence........................................................................................................... 23
6. Work Programme on Electronic Commerce....................................................................31
7. Conditions of Service of WTO staff ..................................................................................32
(a) Statement by  the Chairman................................................................................................... 32
8. High-level meeting on trade and development.................................................................33
(a) Communication from Egypt .................................................................................................33
and
9. High-level meeting on trade and environment.................................................................33
10. Review of procedures for the circulation and derestriction of WTO documents .........34
(a) Statement by  the Chairman................................................................................................... 34
11. State of play in accessi on working parties ........................................................................35
(a) Statements by E gypt and Jamaica.........................................................................................35
12. Date of the Third Session of  the Ministeria l Conference ................................................41
13. Agreement on Preshipment Inspection - Review under Article 6 of the Agreement....42
(a) Report of the Working Party................................................................................................. 42WT/GC/M/32
Page 2
14. Recommendations of the Committee on Budget, Finance and Administration ............42
15. Review of WTO activities.  Reports of:.............................................................................45
(a) General Council, Dispute Settlement Body, Trade Policy Review Body, Sectoral Councils,
Committees on Trade and Development, Balance- of-Payments Restrictions, Budget, Finance
and Administration, and Regi onal Trade Agreements,.........................................................45
(b) Committee on Trade and Environment ................................................................................45
(c) Working Groups on the Relationship between Trade and Investment the Interaction between
Trade and Competition Policy, and Transparency in Government Procurement .................45
(d) Councils and Committees under the Plurilateral Trad e Agreements....................................45
16. Guidelines for sche duling of me etings...............................................................................55
17. United States export rest rictions vis-à-vis India ..............................................................56
18. Decision of APEC meeting in Kuala Lumpur ..................................................................5719. Chairmanship of the Working Party on the Accession of Uzbekistan...........................58
(a) Announcement by the Chairman ..........................................................................................58
20. Appointment of office rs of WTO bodies...........................................................................58
1. Lebanon – Request for observer status  (WT/L/283)
The Chairman proposed that the General Council agree to defer consideration of this item
until its next meeting.
1
The General Council so agreed.
2. Committee on Balance-of-Payments Restrictions
(a) Consultations with Bulgaria (WT/BOP/R/43)
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said the Committee had held consultations with Bulgaria on 28 and 29 September, had
commended Bulgaria for sustaining its commitment to reform and liberalization, and had welcomed
Bulgaria's recent decision to eliminate the measure notified under Article XII of GATT 1994 18
months earlier than envisaged, all the more so given recent evidence of a deterioration in Bulgaria's
trade balance.  The Committee had renewed its appreciation for the fact that the measure was the least
disruptive to trade.  The Committee recognized th at Bulgaria's external trading environment had
become more difficult in recent months and understood Bulgaria's concerns about the sharp decline inits exports.  The Committee noted that in responding to these difficulties Bulgaria intended to give
continued priority to fiscal and structural reform measures although it would also rely on timely
disbursement of official external assistance.  Finally, the Committee had decided that Bulgaria was in
conformity with its obligations under Article XII of GATT 1994
The representative of Bulgaria said that the measure in question had been introduced after
consultations with the IMF and before Bulgaria's accession to the WTO.  It had been subject to
negotiations during Bulgaria's accession process.  After the introduction of the measure Bulgaria had
experienced the most severe financial and economic crisis since the start of its economic reforms in
1991.  Despite this it had carried out the planned reductions in its import surcharge, which wastransparent, non-discriminatory and price-based, and in August 1998 had decided to eliminate the
surcharge as from 1 January 1999, 18 months ahead of the date foreseen.  This decision had been
taken in spite of a deterioration in the current account and the merchandise trade balance.  As a small
                                                     
1 Subsequently, Lebanon made a request for accession (WT/ACC/LBN/1) which supersedes its request
for observer status.WT/GC/M/32
Page 3
and open economy, Bulgaria depended heavily on export growth.  Its export-to-GDP ratio amounted
to about 50 per cent.  The decline in exports raised concerns about the negative impact on output,
incomes and employment, which in turn were important for the expectations of economic operators
and for the sustainability of Bulgaria's economic reforms and open trade policy.  The import surcharge
had been eliminated because Bulgaria believed the key to overcoming economic difficulties shouldnot be sought in the restriction of trade.  Bulgar ia hoped that this demonstration of its commitment to
trade liberalization would be taken into consideration and that other Members would seek solutions to
their economic difficulties through the expansion rather than restriction of trade.
The General Council took note of the statements and adopted
 the report on the consultations
with Bulgaria (WT/BOP/R/43).
3. Waivers under Article IX of the WTO Agreement
(a) EC/France - Trading arrangements with Morocco
(i) Request for extension of waiver (G/L/275, G/C/W/130)
The Chairman drew attention to the request from EC/France for an extension of a waiver
previously granted in connection with France's trad ing arrangements with Morocco, and to the related
draft decision in document G/C/W/130.
Mr. Saborío Soto (Costa Rica), Chairman of th e Council for Trade in Goods, said that at its
meeting on 30 November 1998, the Council for Trade in Goods had considered the request for a
waiver extension by EC/France concerning France' s trading arrangements with Morocco (G/L/275),
had approved the request and had agreed to forward the draft decision granting the waiver extension
(G/C/W/130) to the General Council for adoption.
The Chairman proposed that the General Council take note  of the statement and, in
accordance with the Decision-Making Procedures under Articles IX and XII of the WTO Agreement
agreed in November 1995, adopt the draft decision in G/C/W/130.2
The General Council so agreed.
(b) Review of waivers pursuant to Article IX:4 of the WTO Agreement
i) Canada – CARIBCAN, granted on 14 Octobe r 1996 until 31 December 2006 (WT/L/185,
WT/L/285)
ii) Cuba – Article XV:6, granted on 14 Oct ober 1996 until 31 December 2001 (WT/L/182,
WT/L/284)
iii) EC – the Fourth ACP-EC Convention of Lomé, granted on 14 October 1996 until
29 February 2000 (WT/L/186, WT/L/286)
iv) Hungary – agricultural export subsidies, granted on 22 October 1997 until
31 December 2001 (WT/L/238, WT/L/290)
v) United States – Andean Trade Preference Act, granted on 14 October 1996 until
4 December 2001 (WT/L/184, WT/L/289)
                                                     
2 The Decision was subsequently circulated in document WT/L/294.WT/GC/M/32
Page 4
vi) United States – Caribbean Basin Economic Recovery Act, granted on 15 November 1995
until 31 December 2005 (WT/L/104, WT/L/288)
vii) United States – former Trust Territory of the Pacific Islands, granted on 14 October 1996
until 31 December 2006 (WT/L/183, WT/L/287)
The Chairman recalled that in accordance with paragraph 4 of Article IX of the WTO
Agreement, any waiver granted for a period of more than one year shall be reviewed by the
Ministerial Conference not later than one year after it is granted, and thereafter annually until the
waiver terminates, and that paragraph 3 of the respective decisions provides that an annual report shall
be submitted by the Member to whom the waiver is granted, on the operation or implementation of
the waiver, with a view to facilitating the annual review provided for in paragraph 4 of Article IX.
Reports on the following waivers were before the General Council for review:  Canada – CARIBCAN
(WT/L/285), Cuba – Article XV:6 (WT/L/284), EC – Fourth ACP-EC Convention of Lomé(WT/L/286), Hungary – agricultural export subsid ies (WT/L/290), United States – Andean Trade
Preference Act (WT/L/289), United States – Caribbean Basin Economic Recovery Act (WT/L/288),
United States – former Trust Territory of the Pacific Islands (WT/L/287).
The representative of Australia said that his delegation was pleased to see that Hungary was
within the terms of its waiver, but was concerned that export subsidy quantities for wheat for the first
half of 1998 were higher than for the whole of 1997, and that quantities and outlays for other products
were also higher for 1998 than for 1997.  Australia urged Hungary to minimize the use of export
subsidies and to keep to the objective of the Agreement on Agriculture for substantial progressive
reductions in support and protection.  He reiterated Australia's continued concerns about theincreasing use of export subsidies in commercial agricultural trade, and its commitment to the
complete and early elimination of all export subsidies in the next round of WTO agricultural
negotiations.
The representative of  New Zealand welcomed the fact that Hungary had kept within the
terms of the waiver but shared Australia's concerns about the apparent increases in export subsidies in
some areas.  While Hungary remained within its waiver commitment levels, these increases were of
concern because they ran counter to the objective of the Agreement on Agriculture to progressively
reduce and eliminate such subsidies.  New Zealand expected Hungary to make a full notification of all
its subsidized exports to the Committee on Agriculture, including those products covered in the
waiver.
The representative of Hungary said that it was the firm intention of his government to
continue to respect the limits set in the waiver, as it had done during the first 18 months of the
application of the waiver.  It also intended to meet all notification requirements under the Agreement
on Agriculture.  Regarding the concerns expressed by Australia and New Zealand, he said that in the
first half of 1998, Hungary had exported about 200,000 tons of wheat with export subsidies, whichrepresented one-tenth of the entitlement under the waiver, and thus was considerably underusing the
conditions stated in the waiver.
The General Council took note of the statements and of the reports in documents WT/L/284
through 290.WT/GC/M/32
Page 5
4. Appointment of the next Director-General
(a) Statement by the Chairman
The Chairman recalled that on 25 May 1998 the Director-General had sent a letter to all
Members indicating his intention to leave office not later than 30 April 1999.   On 5 June he had
convened an initial informal meeting to discuss how  to proceed with the appointment process.  That
had been followed by a further meeting on 8 July.  The General Council had then discussed the matter
at its meeting on 15-16 July.  He read from the Minutes of that meeting to the effect that the Director-
General had recommended in his letter that Members agree on his successor
"… as soon as possible and certainly before the end of this year.  Accordingly, the
Chairman suggested that Members aim to have identified the new Director-General by
consensus by the end of  November.  One could then use the December meeting of theGeneral Council to confirm the appointment.  The Chairman further suggested that Members
that wished to nominate candidates for the position of Director-General should do so by
communicating such names to him in his capacity as Chairman of the General Council  by
1 October at the latest ….  The Chairman wished to emphasize that Members would appoint
the new Director-General on the basis of consensus.  The Chairman urged Members to bearthis important reality in mind over the coming months.  One was not planning an election
campaign and there would be no votes.  One needed to operate in a way that would facilitate
consensus rather than make it more difficult."
At the July meeting of the General Council there had been an indication of broad support for
the possibility of organizing an opportunity for the candidates to meet with the General Council  in
Geneva.  At that meeting he had also noted that there was a possibility of a conflict of interest arising
from the fact that as Chairman of the General Council he was responsible for managing the
appointment process, but that there was a Canadian candidate for the post.   In the light of that and in
order to ensure that this important process was conducted in an atmosphere free of any question aboutits integrity, he had asked Mr. Rossier to consult with Members to consider how one might best
proceed in the circumstances and to make any recommendations he felt appropriate in the light of
those consultations.  He further recalled that Mr. Rossier subsequently reported to the General
Council first at an informal Heads of Delegation meeting on 29 September and then formally on
14 October, and that Members had agreed to accept his recommendation that two individuals be
identified who would take on the task of consulting with Members with a view to determining where
consensus lay.  He had undertaken a series of consultations in October in order to try to identify whatMembers' wishes were as to who should take on this task, and when the General Council  had
resumed its session on 23 October he had been able to propose that Messrs. Lafer and Rossier take on
this task.  It had been clear from his consultations that these individuals enjoyed the broad support and
confidence of the Members for carrying out this task.  He recalled that when these two individuals had
been given their mandate, Members had agreed to aim to have identified the new Director-General byconsensus by the end of November and to use the year-end General Council meeting to confirm the
appointment.  He had also noted that he had conducted consultations following up on the decision
taken at the 14 October meeting to convene meetings with the candidates in informal sessions of the
General Council during the period 10-12 November.  He had then concluded that the intensive
consultations with Members to arrive at consensus on the appointment of the next Director-Generalshould begin as soon as possible after those meetings.  At that time, Members had agreed that the two
individuals should report regularly to the General Council on the progress in their consultations and
he had proposed one such meeting before the end of November.  That meeting had not taken place
until 2 December, at which time Mr. Rossier had made a report
3, on behalf of Mr. Lafer and himself,
at an informal meeting of the General Council.
                                                     
3 The text of the report was circulated in document WT/GC/W/125.WT/GC/M/32
Page 6
Mr. Lafer (Brazil) recalled that one of the points raised at the time he and Mr. Rossier had
been given their mandate was that this task that would be conducted jointly to the greatest extent
possible.  This included the drafting of their reports.  On 2 December he and Mr. Rossier had made a
report to the General Council on their activities aimed at determining Members' choice of the nextDirector-General.  He described the state of affairs as he and Mr. Rossier saw it.
4
The representative of Jamaica said that as Mr. Lafer's report had been made at an informal
meeting on 2 December, it was not contained in any record.  He proposed that the report be tabled and
included in the records of the present meeting.
The representative of Chile, speaking on behalf  of GRULAC, said that all efforts should be
made to select the next Director-General by consensus, and that this selection should be made on the
basis of the four candidatures already submitted and as soon as possible.  The lack of a defined
position by certain Members had hindered those conducting the consultations from reaching a point
where it would be possible to identify those candidates enjoying the greatest support in the run-up to
the culmination of the process.  GRULAC hoped that Members not yet having done so would maketheir preferences known so that the General Council would have complete information.  They
regretted that this process could not be completed before the end of 1998.
The representative of Egypt, speaking on behalf of the African group,
 recalled that at the end
of the informal meeting on 2 December statements had been made by Egypt and Pakistan.  As there
were no records of that meeting, it was important that the General Council reflect these statements, as
well as the joint statement by Messrs. Rossier and La fer.  Egypt maintained the position that the next
Director-General should be selected by consensus, but if that consensus could not be attained by a
certain date, and that date was the end of November, the General Council would have to resort to
voting.  Article IX of the WTO Agreement provided for voting where consensus could not be reached.Members had to abide by the laws of the organization.  Having heard the final report of Messrs. Lafer
and Rossier the General Council had to resort to voting.  This was the democratic and transparent next
step.  The credibility of the system was at issue.
The representative of Pakistan said that his delegation, too, favoured a decision on the next
Director-General through a process of consultation re sulting in consensus.  However, the requirement
for consultations should not become an excuse for delay, nor should consensus become an instrumentby which a minority sought to subvert the wishes of the majority or to impose its own positions on
that majority.  The consultations being conducted were in the nature of what he understood to be a
refined straw poll, designed to give an indication to the membership of the scope and depth of support
enjoyed by the four candidates.  It had been reported that over 90 delegations had been consulted.  He
trusted that by this time all delegations so wishing would have been consulted.  It was clear that thevast majority of Members had made their positions known in the process of consultations.  Thus, it
should be possible to receive an indication of the relative support enjoyed by the four candidates.  He
was aware that certain important delegations might not have made up their minds, but that should not
prevent advising the membership about the position of the majority of Members who had made up
their minds.  It was only through that process that  Members could review their own positions in the
light of the results of the consultations thus far, and thus could be pushed towards a consensus.  He
urged the General Council to act in the spirit of its rules of procedure and in the spirit of transparency
and democracy, and urged the two individuals conducting the consultations to consider providing the
General Council with an indication, based on their consultations, of the relative support enjoyed by
the four candidates.  Further, the General Council should set a cut-off date for the consultations of thedate of the first meeting of the General Council in 1999.  At that stage, if no consensus had been
achieved, there should be a vote.  He asked that his statement at the 2 December informal meeting of
                                                     
4 The text of the statement was subsequently circulated in document Job No. 6888.WT/GC/M/32
Page 7
the General Council be included in the record of the present meeting.  The process he had outlined
should not in any way intimate that the General Council had taken a decision to suspend its rules of
procedure, which provided for a vote where no consensus was reached.
The Chairman suggested that the three statemen ts referred to be circulated as working
documents of the General Council.5
The representative of Norway recalled that his delegation had repeatedly said that the date set
for the nomination of the next Director-General should be respected.  That date was the end of
November.  Norway strongly urged those delegations which had not yet made up their minds do so as
quickly as possible.  Whatever delay there had been could only be blamed on the Members
themselves.  It was nothing less than a matter of administrative propriety that the General Councilrespect its own deadlines.  Some had suggested a vote .  Norway would consider  this a break with the
tradition and basic philosophy of the WTO.  The present situation should encourage Members to
intensify their work towards a consensus.
The representative of Mexico reiterated the point made earlier by GRULAC that Members
which had not as yet done so should take a decision and communicate it to the General Council in
order that the latter would have available full information and thus be able to proceed to designate by
consensus the next Director-General before the end of 1998.
The representative of Indonesia, speaking on behalf of the ASEAN Members , recalled that the
General Council had agreed in July to identify the next Director-General by consensus by the end of
November and had agreed to use the year-end meeting of the General Council to confirm the
appointment.  In view of this, ASEAN was concerned that the time-frames be respected, and appealed
to those Members who had not made their positions known to do so as soon as possible so that the
process could be concluded by the agreed deadli ne.  Given that some 90 Members had made their
positions known, a report should be made which indicated the level of support enjoyed by each
candidate.  ASEAN was convinced that the process would remain transparent, accurate and non-
controversial.
The representative of Hong Kong, China said  that his delegation acknowledged the force of
some of the arguments put forward by Egypt and Pa kistan with regard to how to make progress from
the present position.  However, as the Chairman had said, the substantive consultations had not beenin progress for long.  There had not been much time, since the presentations by the candidates, in
which to reach a decision, and Messrs. Lafer and Rossier had not had sufficient time to be able to
report substantive progress.  One should not rush into trying new modalities to solve this question.  A
decision on the basis of consensus would be far preferable to any other, as it was stronger and more
inclusive, avoided divisions between Members and facilitated the task of the incoming Director-General.  Members should try harder to reach consensus.  He suggested that the General Council re-
authorise Messrs. Lafer and Rossier to continue and to redouble their efforts to find a speedy
conclusion to this exercise through consensus.
The representative of Hungary said that the lack of progress in this area showed the lack of
effort on the part of Members.  Hungary encouraged Messrs. Lafer and Rossier to continue their
efforts to achieve a consensus in a reasonable time, and added its voice to that of Norway and Hong
Kong, China.  His delegation vehemently opposed vo ting as a way of proceeding.  It would be a
dangerous precedent if Members started to vote on important questions.  Decision by consensus was
the only approach appropriate to this organization.
                                                     
5 Report of 2 December 1998 by Messrs. Lafer and Rossier (WT/GC/W/125), statement by Pakistan
(WT/GC/W/126), statement by Egypt (WT/GC/W/127).WT/GC/M/32
Page 8
The representative of Jamaica asked the Chairman to indicate a way forward which would
lead towards a decision based on consensus.  He recalled that the present process was not one he had
supported.  However, the process was underway, and Members should proceed with all due haste to
complete it on the basis of consensus.  Jamaica supported the statement by Chile and agreed with the
principles embodied in the statements by Egypt, Pakistan and others.  His delegation was wedded tothe rules of procedure and to the democratic principle, and in the present circumstances consensus
was the fullest expression of democracy.  He called on the Chairman to indicate a time-frame and
methodology that would secure success.
The representative of Australia said that Messrs. Lafer and Rossier had clearly done their
best.  Unfortunately, the situation they had reported was very disappointing.  While Australia could
understand the frustration of Members and the very real concerns that underlay calls for a vote, it wasnot the time to take that step.  However, it was necessary to respect the vast majority of Members that
had spoken and had revealed their preferences.  It was time for Messrs. Lafer and  Rossier to reveal
two things:  first, the trends in support for the ca ndidates that had been revealed thus far, and second,
their sense of the geographic or regional spread of support for the candidates.  Moreover, the General
Council should ask Messrs. Lafer and Rossier to encourage the candidates with the least support towithdraw in order to restore momentum to the process.
The representative of Japan said it had been reported that almost all of the delegations
interviewed had agreed that the next Director-General should be selected from among the four
candidates. It was regrettable that this process could not be completed within the agreed time-frame.It had to be completed as soon as possible.  Those delegations who had not expressed a preference
should not derange the process.  He agreed that a cut-off date of the first meeting of the General
Council in 1999 should be set.  Another possibility would be for the General Council to agree to
waive the ten-day rule for the convening of a meetin g, or to suspend the present meeting so that the
General Council could reconvene when necessary.  He fully understood the frustrations expressed byEgypt, Pakistan and others with the slow progress on this matter, and was aware of Article IX.
However, it was important to keep in mind that from the very beginning of the GATT even difficult
questions had been resolved by consensus, and it would be unfortunate to depart from this long-
standing practice, particularly on such an important matter as the selection of a Director-General.  It
was clear that consensus should not be used to delay the decision-making process on any matter.  He
hoped that Messrs. Lafer and Rossier would step up their efforts to make progress and suggested that
thought be given to how to narrow the field of candidates.
The representative of India said that the decisi on on the next Director-General had to be based
on consensus.  Consensus was an inclusive principle and had long been the practice in the
GATT/WTO.  India regretted the delay in the decision and the fact that a disproportionate amount of
time had been spent on it.  This was particularly important for a small delegation like his own.Continued delay would be unfair to the four can didates.  Those Members who had not made their
positions known had not even indicated when they would do so.  This created an inequitable situation,
as many other delegations had hurried to meet the deadline.  India recognized that major delegations
which had not made up their minds yet might have major problems.  However, major delegations had
major responsibilities and should pave the way for an early consensus on this matter.
The representative of Colombia said that this was an important discussion because it was well
known that the Members of this organization were devoted to consensus-building.  For the future of
the organization, this effort could not be abandoned.  He agreed with those who had appealed to those
delegations who had not made their positions known to do so in order that a decision could be reachedbefore the end of the year.  He endorsed the proposal by Hong Kong, China that Messrs. Lafer and
Rossier be entrusted to immediately proceed to a new round of consultations in order to reach a
consensus.  It was hoped that the following week, after the renewed consultations, a report could beWT/GC/M/32
Page 9
made indicating the trends that had emerged in the consultations so that Members would have a
clearer picture of the candidates' possibilities.
The representative of the European Communities supported the proposal before Members that
Messrs. Lafer and Rossier be permitted if not encouraged to continue their consultations.  The
Community was strongly in favour of consensus as  a method of taking decisions. Both consensus and
voting were democratic procedures.  The fact was that Members in this organization had always
proceeded by way of consensus.  This was particularly important when choosing the person to lead
the organization over the next four or five years.  The procedures as he understood them said that if it
was not possible to arrive at a consensus other met hods could be considered.  That point had not been
reached, as Members had not yet failed to reach a consensus.  It was not possible at this juncture even
to indicate accurately where the support lay for which candidate, so one was a long way from failingto reach a consensus.  Before notions like cut-o ff dates or further deadlines were added to the
procedures one should reflect on what this meant.  Deadlines had not always been successful.  While
this was a well-known technique for encouraging people to make up their minds, it was not
necessarily a technique for ensuring success.  The Community was trying to find a consensus among
the Member states on one candidate, and for the time being, for good reasons, had been able to do so.The Community was discussing this matter regularly and had made good progress, but was not yet
there. While this was perhaps frustrating for others, the process in the WTO was only in its early days,
not at its end.
The representative of Egypt said that the selection of the Director-General was not a day-to-
day business of the organization, nor was it a trade dispute or a misunderstanding about any trade
issue.  A Member-driven organization reflected what the mainstream of the membership wanted.
Efforts had been made to seek consensus.  The rule in Article IX was clear.  The present situation was
one in which only part of that rule was being enforced.  A cut-off date had been established.  The
report on the consultations made at the present meeting indicated there was no consensus on any ofthe candidates.  Thus, the way was clear that there had to be a vote.  In the event that more time was
given to achieve a consensus, it had to be made clear that the new date would be respected, and that
should no consensus be reached by that date, there would be a vote.  A date should be fixed and that
date should be final.  Some had suggested "at an early date" or "as soon as possible", but this was not
sufficient, as experience with nuclear disarmament treaties showed.
The representative of the Czech Republic said that his delegation was not ready to go in the
direction of voting, and was in favour of solving this issue by consensus as soon as possible.
Consensus was one of the pillars of this institution and had been successful in the past in solving
highly sensitive issues.  It would also be in the interest of the new Director-General if the decision
were taken by consensus, as this would assure him that he represented all of the WTO Members.
The representative of Pakistan said that his delegation shared the basic principle that a
consensus was the preferred way to achieve the result desired.  However, to be consistent with the
democratic principles to which all subscribed, that consensus had to reflect the view of the vast
majority and could not be used to frustrate that vi ew in any way or to impose the view of a minority.
More than one hundred Members had expressed their views.  It should thus be possible for the rest ofthe membership to be informed of the relative support for the four candidates.  This would help those
who had not made up their minds, to do so.  If one did not proceed on that basis, the impression could
be created that the views of one or two Members were so important that they had to be communicated
to the facilitators before the Membership could be informed of the general picture. Justice not only
had to be done, but had to be seen to be done.  If Members were informed of the trend only later, therewas bound to be a presumption that the trend had been influenced by the position of these major
players.  This would not be good for the system.  One now had to review the process and decide how
to proceed in a quick and equitable manner. He suggested the following components of a possible
course of action:  to urge that the two consultants, after reflection for 24 hours, advise the GeneralWT/GC/M/32
Page 10
Council of the trends of relative support for the four candidates, with or without an indication from
those who had been unable to communicate their positions so far;  once these trends were made
known, those candidates who were the weakest should reconsider their candidacies;  the rest of the
membership would need to review their positions in the light of the trends indicated.  Once the report
was received, the General Council should be adjourned and reconvened on 18 December, by whichtime it was hoped that the consultants would be in a position to provide more definitive answers
regarding the candidacies remaining in the field.  At that stage, a final decision could be taken on
whether this matter could be concluded by the end of the year or whether a short period for reflection
was needed.  Pakistan maintained the position that the rules of procedure could not be suspended or
overturned, and that they provided for a voting process should a consensus not be achieved within a
reasonable period of time. Pakistan hoped that with the twin impulses of the rules of procedure and a
definitive short time-frame, an early, fair and transparent consensus would be reached.
The representative of the United States said that all of the delegations who had talked about
recourse to a vote had indicated they would prefer to decide this matter on the basis of consensus, but
that their frustration at the length of the consultation process had led them to fall back on WTO
Article IX's reference to decision-making by majority vote where a consensus was impossible.  Thishad been suggested as the appropriate rule to foll ow.  Her delegation had a different interpretation.  It
was by no means clear that consensus could not be achieved if Members agreed to work on this
problem longer.  She understood that most delegations that had expressed a preference for one or the
other of the candidates had also expressed some flexibility.  It was true that paragraph 1 of Article IX
provided for a fall-back to voting where no consensus was possible.  However, Article XVI paragraph1 obliged Members to "be guided by the decisions, procedures and customary practices followed by
the CONTRACTING PARTIES to GATT 1947".  The only procedures providing guidance on the
selection of the next Director-General were those agreed for GATT purposes in 1986 in document
L/6099.  Those  procedures had guided Members in the selection of the previous and current
Directors-General.  The choice of the Director-General of the WTO had never been decided byrecourse to voting.  The Chairman of the CONTRACTING PARTIES in 1993 had reported that his
consultations on the appointment of the next Director-General had "resulted in a consensus"
(5SS/SR/1).  In 1995, when the current Director-General had been selected, the Chairman of the
General Council had said that,  "Following the consensus reached in consultations held over the past
nine months, he proposed that Members agree to formally appoint Mr. Renato Ruggiero as the
Director-General of the WTO" (WT/GC/M/2).  The rule which should guide Members in how to
decide on the selection of the next Director-Gener al was the customary practice of GATT 1947 as set
out in Article XVI paragraph 1.  The process of consultations had been open and transparent, and
every delegation had had the opportunity to participate.  The process needed to move forward toward
a consensus very soon, and Messrs. Lafer and Rossier should be trusted to proceed in the right
direction in order to achieve that result.  Trust in the process would build the necessary consensus, and
there should be no rush to abandon this approach.
The Chairman said that the interventions indicated considerable frustration at Members'
inability to move this process forward, and there were a range of views as to how to proceed.  The
comment had been made that it was the input from Members that was needed to animate the process.
He emphasized that the responsibility was with the Members, and as one delegation had said, therewas a relationship between consensus and responsibility.  He urged any delegation which had not yet
made its views known to Messrs. Lafer and Rossier to do so  as soon as possible.  He also urged the
facilitators to continue their consultations on the basis of urgency.  It was his intention to suspend
discussion of this item after Messrs. Lafer and Rossier had indicated how they intended to proceed, so
that the General Council would be on call and able to meet as necessary and as appropriate to carrythe process forward.
The representative of Egypt said that Mr. Ruggiero had been elected under the previous rules
of GATT 1947;  he had not been elected as Director-G eneral of the WTO.  At the time he was elected,WT/GC/M/32
Page 11
the Uruguay Round negotiations were underway.  Ev en Article XVI stated "except as otherwise
provided under this agreement or the multilateral trade agreements";  it did not cancel or abolish
Article IX, which existed on its own merits.  Egypt ha d never challenged the need to provide time for
consultations and to reach a decision on the basis of consensus.  However, Members had to establish a
time-bound frame for reaching consensus.  If consensus could not be reached, the entirety of the ruleshad to be respected and not merely part of them.  Where a decision could not be reached by
consensus, the matter at issue had to be decided by voting, according to Article IX.
Mr. Lafer said that he and Mr.Rossier wanted to hear the views of Members as to the
continuation of the process.  The discussion had been very useful and had shown that there was a
plurality of views among Members.  Some delegations  had shared the view that the situation could not
be maintained much longer.  He and Mr. Rossier would continue to consult on what to do before theend-of-year break in order to move the process forward through greater transparency.  This would
require consultation and reflection.  They would be in close contact with the Chairman of the General
Council so as to decide with him on organizational measures which might be necessary, such as
another meeting of Heads of Delegation.
The representative of Pakistan underlined that the General Council had envisaged a procedure
by which it was supposed to reach a decision on the appointment of the next Director-General by
December 1998.  Whatever process was adopted to move forward had to remain within the
framework of reaching a conclusion by December 1998.  His delegation had suggested that the
present meeting be suspended with a view to reconven ing it within a week's time.  For there to be any
hope of reaching a conclusion of this matter within the next few days, it was vital that the membership
be provided with an indication of the relative support of the various candidates, either the next day or
at the present meeting.   The fact that some delegations had not yet made their positions known should
not be a bar to providing the General Council with an indication of the relative strength of the
candidates at present.  There was no agreement to proceed beyond 1998.  That was the decision of theGeneral Council that had been read into the records, and the General Council should proceed on that
basis.  Regarding procedural matters, Articles XVI and IX were clear.
The Chairman said there had been a number of proposals on how to proceed with this item.
He suggested that the General Council take note of the statements and suspend discussion of this item.
It was clear that a sense of frustration had been expressed in the statements. One of the themes that
had arisen was about transparency and the indication of the relative level of support enjoyed by thecandidates.  Mr. Lafer had said that he and Mr. Rossier intended to address this issue in their
reflections and in their discussions in the coming days.  While there were differences of view about
how to proceed, it was clear that Members wanted to proceed with and to conclude this process as
quickly as possible.  It was in no one's interest to delay the process, and he believed that all Members
would operate in pursuit of that objective.
The representative of Norway said there should  be an indication of when the meeting would
be resumed.
The Chairman said it would be his intention to call a meeting of Heads of Delegation, if it was
thought appropriate, or to reconvene the General Council in order to address whatever matter might
come out of the facilitators' consultations.
The representative of Pakistan said that in his earlier intervention he had argued a central
point but had not received an answer.  He had asked why it was not possible for the two consultants to
share the information they had available regarding the relative strength of the four candidates.  He
understand that some delegations had not made up their minds, including some of the important
players in the WTO, but that was not enough reason for not sharing what had been communicated by
over 100 Members of the organization.  This indicated a lack of transparency in the process, which hisWT/GC/M/32
Page 12
delegation could not subscribe to.  It was only fair that by the latest the following day, Members be
given an indication of the relative support of the various candidates.  He urged Messrs. Lafer and
Rossier to share the information which had been comm unicated to them in light of the decision of the
General Council.
The representative of Egypt said that the level of support which each candidate had received
should be made known to all Members.  This was the kind of transparency envisioned at the outset of
this process.  A final date had to be fixed.  The date of 18 December was a reasonable one.  If by that
date  there was no consensus on any of the candidates, the rules had to be applied in full.  The time-
frame earlier envisaged had allowed for a transitional period for the new Director-General to assume
his duties so that he could be fully operational by May 1999.  This was extremely important.  He
proposed that 18 December be declared the time-limit for taking a decision on this matter.
Mr. Lafer said that the representative of Pakistan was not the only one who had not received
answers to his questions.  He and Mr. Rossier had cl early said that they both would work and consult
and would give full weight to the fundamental principle of transparency.  He recalled that in their
earlier statement they had  mentioned the human factor and the political factor linked to theengagement of the four candidates and to the support each had publicly received.  That was an issue
of sensitivity and respect for the four candidates.  While he and Mr. Rossier were aware of the sense
of frustration that existed, he recalled that there had been a plurality of views that time was needed for
consultation and reflection before they could say whatever they felt it their responsibility to say.  They
were trying to fulfill the mandate given them, and would do so as long as the Members of theorganization entrusted them to do so.
Mr. Rossier said that he and Mr. Lafer were fully aware of the feelings of frustration.  No one
more than they wanted this process to finish as soon as possible.  In all of their initiatives they had
been guided by a single principle and guideline, which was to preserve the optimum possibilities ofreaching a consensus on the choice of a Director-General.  At the same time they took into account
the sensitivities involved.  He assured Pakistan and Egypt that he and Mr. Lafer would do their utmost
but could not do the impossible.  Certain precautions had to be taken.
The representative of Pakistan said that the General Council, if not the WTO, was faced with
an important political point, which was whether this was a democratic organization.  He believed that
it was the general desire in the General Council to know what the situation was regarding theconsultations held, and he did not understand why that information could not be shared.  It was not in
the interests of the process or the organization that transparency, democracy and equity be lacking.
The Chairman said that the entire membership ha d an interest in seeing this mater dealt with
expeditiously, and again suggested that the General Council take note of the statements and proceed
on the basis outlined by Messrs. Lafer and Rossier together with his earlier remarks.
The representative of Pakistan asked for greater precision regarding the further action to be
pursued.  His delegation had proposed that the two consultants share certain information with the
General Council the following day, or at the latest in a few days.  He suggested that the GeneralCouncil be kept in session with a view to reconvening as soon as possible within 1998.  If there were
still difficulties in a week's time, there was a choice of voting or deciding not to vote.
The Chairman said that what had been decided in July was that the General Council would
aim to complete the process by December.  That had always been an objective.  It was the Members
who had given this task to Messrs. Lafer and Rossier.  They had said that the discussion at the present
meeting had been very useful to them, and they had registered the frustration expressed by many
delegations.  They had indicated that their activities in terms of follow-up would begin within hours.
Also, they were sensitized to the notion that we were approaching the point where more informationWT/GC/M/32
Page 13
about their consultations would have to be provided.  It was a question of the mandate which had been
given to these two individuals and of how they saw fit to discharge it to the best of their abilities.
The representative of Egypt said that in order to have predictability in knowing what would
take place in the days to come, he had suggested that the General Council return to this item on
18 December.  This should be put to the General Council.
The representative of the European Communities suggested that discussion of this item be
suspended until the end of the present meeting, and that Members reflect and return to this matter
within the next two days.  The lack of informat ion was troublesome to many but was not due to the
fact that major players had not indicated their positions, but rather to the inherent difficulty of
knowing exactly what a given position was, in terms of first, second and third preferences.  The taskentrusted to the facilitators was not an easy one and any information they gave at this stage might be
very confusing.  He urged Members to give them  time to think about what information they could
provide.  The decision the General Council was taking was already time-bound in the sense that if a
consensus could not be reached, there was an alternative procedure.  Members were not yet at the
point where they had failed to reach a consensus, but rather at the beginning of the process of buildingone.
The representative of Pakistan said that an important and critical point had been reached.  He
agreed with the Community's suggestion to suspend the discussion and to return to it in a few days'
time when, it was hoped, the facilitators might be in a better position to share the information theyhad.  At that point a time-frame could be set for a final decision on this matter.
The representative of Japan, speaking on a point of order, suggested that discussion of this
item be suspended and returned to at the end of the present meeting.
The General Council took note of the report and of the statements and agreed  to suspend
discussion of this matter and to revert to it at a reconvened meeting of the General Council on
18 December.
The representative of Morocco asked whether there would be a report by the consultants
before the meeting on 18 December.
Mr. Lafer recalled that he had said earlier that he and Mr. Rossier would be in close contact
with the Chairman of the General Council with a view to deciding on the measures necessary for
convening a possible further meeting of Heads of Delegation.  He had also said that they were
convinced of the need for transparency and had asked for a further period of consultation and
reflection.  He and Mr. Rossier would certainly report to the General Council  before 18 December onwhat they had achieved.  This input would be available to all Members on equal terms.  He reassured
Members that neither he nor Mr. Rossier had shared information with anyone that was not public
information shared with all.  This was one of the points that had been stressed to each of the
delegations with which they had consulted, namely, that these consultations were secret and
confidential, and that it was up to each Member to decide whether to disclose its position regardingthe candidates.
The General Council took note of the statements.
At the resumed meeting of the General Council on 18 December 1998, the Chairman recalled
that at an informal meeting of Heads of Delegation on 14 December, and on the request of a number
of delegations at the 10 December General Council meeting, Messrs. Lafer and Rossier had made a
further report on their consultations (document Job No. 6948), and there had been a further discussion
of this item.  He invited Mr. Lafer to make a statement.WT/GC/M/32
Page 14
Mr. Lafer recalled that on 14 December he and Mr. Rossier had made a report on the status of
consultations which had been held in order to try to develop a consensus on the appointment of the
next Director-General.  Since that date additional information had been provided to them, including
clarification on some of the positions.  There wa s thus a certain element of movement which they
hoped would amplify in the near future.  At present, there was not sufficient information to make
possible a new report to Members.  As indicated in the report of 14 December, he and Mr, Rossier
hoped that further information would be available from Members based on their reflections on the
report of that date.  He reiterated that on the basis of this information, they would in turn reflect on the
best way to continue the search for a consensus as quickly as possible within the framework of the
mandate given them by the General Council.  Within that mandate, they felt that a new general
consultation would have to be organized at the beginning of January.  They intended to do this duringthe week of 11 January.
The representative of Egypt, speaking on behalf of the African Group
, said that these
countries appreciated the results of the consultations that had been conveyed to Members on
14 December.  They had taken note of the latest results and of the frustration expressed by many overthe delay in the process.  Dates had been agreed which had not been met, and various proposals had
been made to accelerate the process.  The African Group had expressed the view that without a fixed
date that would be respected, the process would continue without a definite position being expressed
by those Members who had not yet made up their minds.  There was now a new element - that new
consultations were needed.  Members now had to agree on a date by which Members would have tomake up their minds, and a deadline for the completion of this process.   He reiterated the African
Group's proposal for a straw ballot, as this would accelerate the process and would help the facilitators
in their further consultations.  A decision could thus be reached on the next Director-General before
the end of January.  A date had to be fixed, in the interests of the credibility of the system.
The representative of Mexico, speaking on behalf of the Informal Group of Developing
Countries, said these countries were prepared to do whatever was necessary to fulfil the objective set
out in the decision of the General Council of 15 December 1998.  If the designation of the next
Director-General was not possible at the present meeting, these countries considered that:  (1) a
deadline should be established for those Members who had not yet expressed their preference to the
facilitators to do so, on the understanding that Members who did not do so were indifferent as to
which candidate was selected;  and (2) a date would have to be set on which the General Councilwould meet to consider this issue.  Members would ha ve to hold consultations with the facilitators and
among themselves with a view to reaching an early decision on the appointment of the next Director-
General.  The objective was to select one of the four candidates, and Members should agree not to
oppose a consensus on any of those four candidates.
The representative of Chile, speaking on behalf of GRULAC
, made a statement (document
WT/GC/W/134).
The representative of Argentina said that the facilitators had been given a very difficult and
complex task, and a broad mandate to seek out a consensus on the next Director-General within the
dates initially set.  The results of the two rounds of  consultations they had held had not been decisive,
as the facilitators lacked elements indispensable to carrying their mandate any further, because certain
Members had not made their position known.   It was difficult if not impossible to build a consensus
when some of the key players of the organization had not yet taken a clear position.  Subsequently, a
small number of delegations had insisted on knowing what tendencies the results thus far indicated.That information had been provided and discussed in the General Council.  It was not healthy to
continue along the same line of debate which would lead to pointless divisions and confrontations,
and which did not help meet the objective and could jeopardize the stability and credibility of the
system.  It was not wise to change the rules used up to the present or to initiate a process ofWT/GC/M/32
Page 15
interpretation of written rules which were not clear and unequivocal.  Argentina could support the
statements by Mexico and Chile.  The latter had stressed three elements:  the need to maintain the
principle of consensus, which was fundamental to the WTO, the need to continue efforts in this
direction within the dates initially set, and that Members which had not stated their position should do
so as soon as possible.  Argentina proposed the following:  (1) that the confidence in Messrs. Laferand Rossier be reaffirmed and that they be requested to continue their efforts to build a consensus;  (2)
that Members which had not yet stated their position do so with flexibility and as soon as possible;
and (3) that the Chairman keep open the present session of the General Council and resume it when
considered appropriate in January 1999.  For the good of the organization, the next Director-General
and the Members,  the facilitators should be allowed time to continue their efforts.
The representative of Hong Kong, China sa id that his delegation shared the sense of
frustration that the target date for selecting the next Director-General had not been not met.  However,
in considering whether the situation warranted any significant change in direction, due weight had to
be given to a number of factors.  First, the target date was not an absolute deadline, and was nowhere
near Mr. Ruggiero's date of departure.  Second, owing to the delay in arranging presentations by
candidates, the two facilitators had had limited time in which to pursue their activities.  Third, forreasons beyond the facilitators' control, in particular the fact that some delegations had not yet been
able to indicate their preference, their consultations had not been completed.  Fourth, there were
indications that the process was fluid and moving.  Therefore the situation was not deadlocked.
Suggestions had been made that progress should be sought through a straw ballot, or even by voting.
This procedure would not be appropriate for a variety of reasons:  First, the two facilitators weredoing an excellent job in what was a highly delicate task, in accordance with the agreed parameters,
and should continue their efforts to help Members reach consensus; a straw ballot would undermine
those efforts.  Second, there were no ground rules for a straw ballot, which could thus be very difficult
and time-consuming. Third, his delegation preferred to stick to the time-honoured practice of
consensus, particularly since the new Director-General had to represent all Members.  Fourth,Members had not arrived at a situation in which a decision could not be reached by consensus.  All
delegations had to cooperate in the search for a consensus as early as possible, especially those who
had not yet stated their positions.  The latter should recognize the serious systemic dangers their
indecision posed.  The mandate of the facilitators should be extended up to the end of January 1999,
and those delegations which had yet to make up their minds should do so as a matter of urgency.  The
General Council should be reconvened at an appropriate time or times in January to hear further
reports from the facilitators and to discuss matters further.
The representative of Jamaica said that to ensure consistency in the process underway it was
necessary to be precise about each of the steps taken and the sequence of understandings and
decisions.  The process the facilitators had been undertaking was an analogue process and not a digital
one.  He agreed with the statements by Mexico and Chile.  Jamaica stressed the need for clearguidance that the facilitators would work along the lines indicated on 23 October 1998, which
provided for an open process of consultation in  which all Members would have an opportunity to
express their views within the same time-frame.  The process had been launched, an indication of
density of support had been given, and one was awaiting a minority of Members to indicate their
position.  That complicated the process.  In any third round of consultations, it should be clearwhether the facilitators would be asking all Members to give their views or only those who had not
yet done so.  He drew attention to the statement by Jamaica at the General Council meeting on
23 October to the effect that this process had in it the seeds of creating difficulties.  He hoped that the
process, having been launched, would be followed through quickly so as to avoid the necessity of
making interpretations of the decision-making process in the WTO.  He stressed that the guidelinesand the date for the next round of consultations should be clear, the date of the next General Council
meeting should be set, and a new target date should be set for the completion of this process.WT/GC/M/32
Page 16
The representative of Norway associated his delegation with the statement by Hong Kong,
China.  The facilitators had been entrusted with a difficult and complex task on behalf of all Members.
Norway had complete confidence in the way the facilitators carried out that task.  It was important not
to mix a potential dislike of the assessment made by the facilitators with a dislike of their working
methods.  It had been repeatedly stressed that the WTO was a consensus-based organization.  Votingwas not part of its way of doing business, its tradition or its mentality.  Norway thus opposed a vote
and could not understand that some Members were calling for one, given what had been decided and
the statements that had been made at previous meetings.  Consensus-building was a time-consuming
process, and the time available had been quite short.  Norway could not support any way of
proceeding other than the one engaged in at present.
The representative of the Czech Republic, speaking also on behalf of Bulgaria, Hungary,
Poland, Slovakia and Slovenia, highlighted those aspects on which there was a common
understanding or which showed a high degree of conv ergence of views.  First, all four candidates
were strong and competent and met the high standards expected of the post.  Second, all Members
seemed to be flexible and ready to join an emerging consensus, whatever their preference might be.
The principle of consensus was crucial.  For over 50 years, that principle had been the foundation ofthe success of the multilateral trading system.  All WTO Members remained determined to strive to
reach a decision on the sensitive issue of the appoint ment of the next Director-General by consensus
and to preserve this important way of working and decision-making in this institution.  Third, the
pragmatism inherited from the GATT and which had served Members so well in difficult times should
be used in order to find a solution to this important issue.  Fourth, Members were grateful to Messrs.Lafer and Rossier for their impartiality,  professionalism and endless effort in facilitating the selection
process through a series of intensive consultations.  The only major issues which divided Members
appeared to be related to timing.  This process should be completed as soon possible but should not be
subordinated to the time factor.  Recourse to voting on this sensitive issue was not acceptable because
such a course of action could have negative effects on the system and could undermine the credibilityof the decision-making process in this institution.  This would be an unfortunate development in a
situation when all possibilities of reaching consensus had not yet been explored.  Members' efforts to
find a consensus should continue.
The representative of Australia reaffirmed his delegation's confidence in the process being
conducted.  However, it was disappointing that the General Council had not yet found a consensus on
the next Director-General and would not be able to do so before the end of the year as targeted.Australia understood the reasons behind the calls for a vote or for a straw poll, but believed that these
would be unwise precedents which could do lasting damage to the consensus-based WTO system. He
urged Members that had not yet expressed their preferences to move quickly to do so, as their delay
was imposing significant strains on the system.  Those Members should take due account of the
results of the consultative process undertaken by the facilitators.  The WTO needed to resolve thisissue quickly so that it could concentrate on the preparatory process for next year's Ministerial
Conference.
The representative of Pakistan endorsed the statement by Mexico.  Useful suggestions had
also been made by Egypt, Argentina and Hong K ong, China.  The frustration manifest at earlier
meetings was not a function of the process but had arisen because some Members were not playing
the game according to the rules.  A large number of  Members had insisted on being informed of the
trends of opinion on the four candidates.  The report received on 12 December had moved the process
forward and had crystallized some ideas and trends which would be helpful in achieving an early
decision.  The difficulties encountered were in no way related to the faciltators' competence orintegrity, but were inherent in the process itself.  He identified some of the points raised in the
discussion:  (1) it was necessary to fix a deadline for the conclusion of the process;  Pakistan
suggested the end of January 1999;  (2) the mandate of the facilitators should be extended consistent
with this deadline;  (3) those who were undecided should convey their positions not later than theWT/GC/M/32
Page 17
second week of January;  (4) the facilitators should include all Members in the next round of
consultations, and not just those whom they had not yet consulted.  The question to be posed might be
more acute in order to elicit a clearer response;  (5) another meeting of the General Council had to be
scheduled;  he suggested one in the second week and another towards the last week of January, with a
view to concluding by the end of the month;  (6) Mexico had raised an important point that no
Member would block any candidate around whom consensus was converging;  (7) at an appropriate
time the entire WTO membership would have to hold discussions with the facilitators and amongst
themselves in order to achieve a consensus.  Consensus was the preference of every Member, but the
possibility had to be considered that the minority might seek to block the wishes of the vast majority.
The rules of procedure provided clearly for a vote, and this could be seen as a deterrence against
irresponsible behaviour.  However, the preference for consensus should not allow the minority to
thwart the will of the majority.
The representative of India said that the Members had the task of facilitating the task of the
facilitators.  India wanted the facilitators to continue their efforts to find a consensus as soon as
possible, and the process they chose to use was up to them.  The difficulty and frustration being
experienced at present was due partly to the fact that some delegations had not indicated theirpreferences, and it was necessary to have a deadline for this to be done.  Pragmatism demanded this,
as the facilitators had to have this information in order to move the process forward.  The fact that the
target date had not been met was not the fault of the facilitators but was due to the failure of some
Members to state their positions.  Another target date should be set, and 31 January seemed
reasonable.  All Members had to act in a manner to promote consensus-building, and it was theresponsibility of the major countries not to block any candidate.
The representative of Côte d'Ivoire said that Members should do their utmost to reach a
consensus decision on this matter, but that if the difficulties continued, consideration should be given
to the proposal by Egypt to proceed to a sounding out which would give clear figures on the trends insupport for each of the four candidates.  A decision had to be reached within a determined time-limit.
The representative of Haiti associated his delegation with the statements by Mexico, Chile
and Egypt.  The enigmatic nature of certain parts of the facilitators' report was due only to the strict
respect of principles they had chosen.  The report of 12 December indicated a change in orientation
from 2 December which concerned Haiti, as it suggested there were scant possibilities of reaching a
consensus by 18 December.  Those Members who had the key to unblocking this situation byinforming the facilitators of their positions shou ld do so as soon as possible.  The commitments
adopted to organize the Third Ministerial Conference were an important element in the time factor in
the process of the selection of the next Director-General.  He supported the continuation of the
process of consultations starting on 11 January.  This was a serious situation which involved the
credibility of the organization.
The representative of Switzerland said that his delegation did not share the view that the
designation of the next Director-General could re sult from a method other than consensus, and firmly
opposed any departure from the traditional practice of GATT and the WTO which was consensus.  It
was hoped that the new Director-General could be appointed as soon as possible and on the basis ofconsensus.  Members had to do their utmost as of 11 January, and it was premature to conclude that
there had been a failure to reach consensus.  The history of GATT and WTO included a whole series
of missed or postponed deadlines, but consensus had always been reached.
The representative of Senegal supported the statement by Egypt.  His delegation had full trust
and confidence in the two facilitators and encouraged them to continue with the delicate mission
entrusted to them.  Consensus was a collective endeavour, and it was crucial that all Members state
their preferences as soon as possible.  The concerns about transparency expressed by a large number
of Members had to be born in mind.  He agreed that a specific deadline should be set for theWT/GC/M/32
Page 18
completion of the process.  The next round of consultations should be based on well-known criteria
accepted by all.
The representative of Romania said that his delegation was convinced of the need to continue
working as long as was needed, and in a climate of serenity and without panic, to reach a consensus.
Romania supported the statements by Norway and the Czech Republic, and joined other delegations
in expressing its full trust in the work of the facilitators.
The representative of Iceland said that his delegation subscribed to the statements by Norway
and Switzerland and supported the extension of the facilitators' mandate.  He recalled that in July, the
General Council had unanimously agreed to select th e next Director-General by consensus.  It would
be a grave mistake and would jeopardize the future of the multilateral trading system to resort to othermethods, such as voting.  The WTO was a consensus-based organization and consensus was the
cornerstone of its work.  A Director-General should  not be chosen who would not have the support of
a full 30 per cent of the WTO membership.  He urged the General Council not to give up its efforts to
reach a consensus decision on the next Director-General.  These efforts were far from being at the
final stage, and the means available to reach a consensus had not been exhausted.
The representative of Bangladesh said that his delegation agreed with the views expressed by
Mexico.  Egypt, India and Pakistan had also made very cogent points.  The facilitators were working
within their mandate and were making progress.  Ba ngladesh joined the emerging consensus that the
facilitators be given more time.  The new Director-General should be installed with a sufficienttransition period to prepare himself for the work ahead.  Bangladesh would cooperate with whomever
that person might be.  In this Member-driven or ganization the selection of a new Director-General
should be a routine event.  The main task remained the creation of a fair and equitable trading system
from which all could benefit, and this was the substantive work to which Members' attention should
revert as soon as possible.  Bangladesh could accept the time-frame of end-January, provided theconfirmation came at the first General C ouncil meeting following the consultations.
The representative of Indonesia, speaking on behalf of ASEAN Members
, said these countries
regretted that no new significant information had been obtained since the report on 14 December
because of the inability of some Members to state their positions.  It was in the best interest of the
organization to allow the consensus-building process an opportunity to work unfettered.  Members
should act collectively and responsibly to ensure that a consensus on the new Director-General couldbe reached as planned.  While it was unlikely that this process could be concluded by mid-December,
it should not drag on indefinitely, and a new time-frame of mid-January had to be set
The representative of Tunisia associated his delegation with the statements by Egypt and
Mexico.  The extension of the mandate of the two facilitators was the wisest course of action.  Tunisia
reiterated its full confidence in the two facilitators , and supported the suggestion that a new target date
be set both for the convening of the next General Council by end-January and for completing the
consultations by mid-January.  Those Members who had not expressed their preferences should do so
before the new target date.
The representative of Zambia supported the statements by Egypt and Mexico.  His delegation
looked forward to participating in the next round of consultations.  The process in which Members
were engaged had to be dynamic and not rigid..  One could not say that consensus was the only way
and all other possibilities were excluded.  Members clearly preferred a decision by consensus, but it
was possible that this could not be achieved.  Even if another method were applied, there was acritical need for transparency and for all to participate.  The entire membership should be included in
the next round of consultations.  Serious consultations could begin only once the major trading
partners had stated their positions.WT/GC/M/32
Page 19
The representative of Turkey supported the statement by Chile.  Turkey had full confidence in
the ability of the two facilitators and thus saw no need to have a straw ballot to verify whether they
were right in their appraisal of the situation.  Consensus-building was a difficult process and was one
of the three pillars of the organization together with transparency and the dispute settlement system.
In consensus-building, partners were aiming at a common objective and thus cooperating, but noconsensus could be reached while some Members failed to state their positions.  More work was
necessary, and the matter should be left in the hands of the facilitators.  This was not a dramatic
situation, and hopefully would be resolved before th e end of January.  Voting was not a remedy, and
states could not be forced to express their preferences when they were not able to do so.  He called on
all Members to make known their positions as soon as possible.
The representative of Mauritania supported the statement by Egypt.  Consensus was a
tradition of the organization but was not a principle engraved in stone that could not be waived or
changed.  While consensus was the best way, if there was indefinite blockage it might be legitimate to
ask to have the rules applied.  In the forthcoming round of consultations the facilitators should try to
assess on a clear basis the density of support for each of the four candidates.  This process had to be
time-limited and a target date or deadline should be set, so that the decision could be taken before theend of January.
The representative of Colombia supported the statement by Chile.  There was a need for a
new round of consultations which should be as si mple and clear as possible so as to avoid any
misunderstandings and to ensure that positions were communicated in the clearest way possible.  Theconsultations should involve all delegations, and their results should be clear and should not be
subjective in any way.  The month of January should be devoted to this process.
The representative of Japan agreed with the target dates suggested.  The atmosphere in the
present meeting was better than in the past, as no delegation had insisted on a vote and all had said
that consensus should be sought.  The facilitators' report on 14 December had shown the intensity of
support but was based on the information available to them which was limited.  If the facilitators were
given the necessary raw material, they could report figures and each delegation could make its own
assessment of the relative support for each candidate.
The representative of Egypt, speaking on behalf of the African Group,  clarified that the
African Group supported the statement by Mexico.  A straw ballot had not been proposed because it
was felt that the stage of voting had been reached.  The rules were clear, and should not be taken out
of context.  The proposal for a straw ballot had been aimed at accelerating and facilitating the
decision-making process, and as a means of going farther in this dynamic process of choosing the next
Director-General.  It was not a question of verifi cation.  Ample time should be given for consensus-
building, but the search for a consensus should not lead to a paralysis of the system.  If consensuscould not be reached one would have to refer back to the rules in Articles IX and XVI of the WTO
Agreement and Article XXV of the GATT.  A consen sus had to be sought within a certain time-bound
frame, which was the end of January.
The representative of Venezuela supported the statements by Mexico and Chile.  His
delegation supported the work done by the facilitators in a very difficult task.  The flexibility
requested by them should be granted so that a conclusion to this process could be reached in the
coming weeks.
The Chairman said that some main lines had emerged in the discussion around which a
consensus might be built on how to proceed.  He suggested the following:
(1) The General Council take note of the statements.WT/GC/M/32
Page 20
(2) Recalling the General Council decision of 15 July 1998 on the appointment of the
next Director-General, the General Council expresses regret that it has not proved possible to
appoint the next Director-General within the time-frames envisaged in that Decision.
(3) The General Council expresses its appreciation and support for the work
undertaken in this matter by Ambassadors Lafer and Rossier at the request of the General
Council.  The General Council invites them to continue their efforts and supports their
intention of holding a new round of general consultations in the week of 11 January.  It is
understood that they will once again invite all WTO Members to present their views and that
once again arrangements will be made for Members without resident representatives in
Geneva, to do so as well.
(4) The General Council expresses its regret that a significant number of Members
have not yet conveyed the position of their governments to Ambassadors Lafer and Rossier.
The General Council invites those Member which have not established positions, and which
intend to do so, to do so now so that they can inform Ambassadors Lafer and Rossier of their
positions during the week of 11 January.  It is the expectation of the General Council thatthese consultations will establish a much clearer picture of the situation.  It is therefore
imperative that the Members communicate their views.
(5) The General Council agrees to further adjourn its current meeting and to resume
no later than the week of 18 January to hear a report on the consultations to be conducted bythe two facilitators during the week of 11 January.
(6) The General Council agrees to establish a target date/deadline of … for agreeing
on the appointment of the next Director-General.  It is understood that reaching agreement
may require a process of intensive consultation to which all Members agree to committhemselves.
He invited further comment on the issue of the ta rget date in point 6 and proposed that the
meeting be concluded on this basis.
The representative of Pakistan said that his delegation broadly shared the Chairman's
concluding remarks.  He suggested that in the ne w round of consultations the question to be posed to
delegations should be put in a very clear way and should be communicated to Members in advance of
the consultations, so that precise instructions could be obtained as to how to respond.
The representative of Colombia asked for clarification concerning points 4 and 5 and
supported the suggestion by Pakistan.
 Mr. Rossier agreed on the need to put a more acute question in the next round of
consultations.  This was what he and Mr. Lafer intended to do, but would like to reflect further before
communicating the question.
The representative of Egypt supported the Chairman's summing up grosso modo , but said that
a deadline had to be set.  It would not be helpful to continue to miss target dates and would erode the
credibility of the system.
The representative of Venezuela asked for clarification of the nature of the questions to be put
and suggested that questions similar to those addressed to Members in the past be put to Members
who had not already replied, and that these same questions then be put to all Members.WT/GC/M/32
Page 21
The Chairman said that it was his understanding that the facilitators would invite all of the
Members to meet with them.  It would be difficult to go much further than that at the present meeting.
The representative of Jamaica said that the Chairman's summary captured the feeling of those
who had spoken on this matter.  His delegation would have liked to have heard from those delegations
who had not stated their preference.  Regarding point  6, Jamaica would prefer a deadline rather than a
target date, and that deadline should be 27 January.  The question or questions to be put should be
indicated at the present meeting.  One question should be "Who do you support as the consensus
candidate for the appointment of the next Director-General?"  After this question had been answered,
it was up to Members to have consultations among themselves to arrive at a conclusion.
The Chairman welcomed Jamaica's suggestion regarding the question to be put, but suggested
that the decision on this be the facilitators'.
The representative of Hong Kong, China supported the Chairman's summing up which he said
struck exactly the right note.  Having the questions in advance would be helpful but the facilitators
should be given a modicum of time to formulate t hose questions themselves.  His delegation could not
accept the notion of a deadline if this led to a presumption that failure to agree on the next Director-
General by that date would mean that consensus could not be reached and that a vote would be
necessary.  For this reason, the word "target date"  was a better and non-prejudicial term.
The representative of Norway shared the views expressed by Hong Kong, China.  The term
"target date" provided the flexibility necessary in the process.
The representative of Pakistan said that his delegation would prefer to have some idea of the
nature of the question, rather than questions, that would be posed.  He supported the formulation
proposed by Jamaica which was simple and straightforward and would yield the clearest answers.Pakistan preferred the term "deadline" because the process should not be open-ended.  He appreciated
Hong Kong, China's concern on this matter but said that the option of voting could not be completely
excluded.  A more neutral phraseology might be "time-bound framework".  Mexico had raised two
points to which no objection had been made and which he suggested be reflected in the summing up:
that the selection would be made from among the four candidates and that there would be no
presumption that any Member  would block any candidate.
The representative of the United States recalled that her delegation had expressed its views at
the informal General Council meeting on 14 December.  Regarding the target date terminology, she
said that most delegations would be leaving Ge neva soon and that many would not be back much
before the next General Council meeting.  Thus, it would be better to have a target date or a targeted
time-frame rather than a deadline.  She associated her delegation with the statement by Hong Kong,China.
The representative of Jamaica said that his delegation had consistently asked for time-certain
indications of when meetings would be convened.  The more flexible and moveable the target, the
more uncertain and unpredictable the situation became for small delegations which had limitedresources.  The decision on the next Director-General was critical to all Members and all should be
given an equal chance to participate in any intensive consultations and in any outcome.  A date had to
be set after which the process was over and the General Council began intensive consultations.
The representative of Romania said that it would be easier to have a target date rather than a
deadline for the reasons given by Norway, the United States and Hong Kong, China.  One should be
realistic and take stock of the situation at the end of the week of 11 January.  If those consultations did
not lead to consensus, intensive consultations could be undertaken by the General Council, but it was
difficult to know how much time this would require.  Flexibility was thus necessary.WT/GC/M/32
Page 22
The representative of Uruguay supported the Chairman's summing up.  Renewed confidence
had been expressed in the facilitators, an exhortation had been made to those Members who had not
yet made their positions known and a new round of consultations had been initiated.  It was clear that
the General Council would meet on 18 January to hear a report from the facilitators.  The deadlinewas for those countries who had not yet pronounced themselves to do so during the week of
11 January.  In the week following 18 January Members could work on the basis of a reduced list,
until a single consensus was reached on a single candidate.  The real deadline was for countries to
express their preferences, and not for the subsequent consultations.
The representative of Jamaica suggested that the summing up should include the statement
that the decision regarding the appointment of the next Director-General shall be taken at a formal
meeting of the General Council.  The reason was to avoid having adjourned General Council meetings
reconvened on short notice, which would not allow time for delegations to prepare for the meeting.
The representative of Egypt said that the word "target" was prejudicial to some of the
concerns expressed.  His delegation preferred to refer to the end of January without any qualification
as a deadline or a target date.
The representative of Mexico said that one might introduce the sense of urgency by saying "a
non-stop process of intensive consultations".  This would avoid referring to any date.
The representative of Jamaica said that where there was good will in seeking a positive
consensus, the words were indifferent.  His delegation was concerned that non-stop intensive
consultations that did not provide a target date to shoot at would not provide the assurance that the
formal process followed set rules of procedure that enabled his delegation to participate.  It had to be
clear that the formal decision would be taken at a regular meeting of the General Council, and thatdate should be set.
The Chairman then made the following amended summing up which he said was intended to
take account of the points made:
First, the General Council takes note of all the statements which have been made.
Second, recalling the General Council Decisi on of 15 July on the appointment of the
next Director-General, the General Council expresses regret that it has not proved possible to
appoint the next Director-General within the time-frame envisaged in that Decision.
Third, the General Council expresses its appreciation and support for the work
undertaken in this matter by Ambassadors Lafer and Rossier at the request of the General
Council.  The General Council invites them to continue their efforts and supports their
intention of holding a new round of general consultations in the week of 11 January.  It is
understood that they will once again invite all WTO Members to present their views, and that
once again arrangements will be made for Members without resident representatives inGeneva to do so as well.
Fourth, the General Council expresses its regret that a significant number of Members
have not yet conveyed the positions of their governments to Ambassadors Rossier and Lafer.
The General Council invites those members which have not established positions, and whichintend to do so, to do so now, so that they can inform Ambassadors Lafer and Rossier of their
positions during the week of 11 January.  It is the expectation of the General Council that
these consultations will establish a much clearer picture of the situation.  It is therefore
imperative that the Members communicate their views.  The General Council notes the viewsWT/GC/M/32
Page 23
expressed by certain delegations that the question or questions to be addressed by the
facilitators to Members in their next round of consultations should be put in a very clear way
so as to elicit clear answers, and that one fo rmulation might be the following:  "Who do you
support as the consensus candidate for the next Director-General to be reported to the General
Council?"  The question or questions should be sent well in advance of the meeting.
Fifth, the General Council agrees to further adjourn its current meeting and to resume
not later than during the week of 18 January to hear a report on the consultations to be
conducted by the two facilitators during the week of 11 January.
Sixth, the General Council agrees to establish a new time-frame of the end of January
for agreeing on the appointment of the next Director-General.  It is understood that reachingagreement may require a process of intensive consultations to which all Members agree to
commit themselves.  The decision to appoint the next Director-General shall be taken at a
regular meeting of the General Council.
The General Council took note of the statements and agreed
 to the Chairman's summing up.6
5. Agreements between the WTO and the IMF and the World Bank
(a) IMF, World Bank and WTO:  Report of the Managing Director, President and Director-
General on Coherence (WT/GC/13)
The Chairman recalled the Marrakesh Declaration on the contribution of the WTO to
achieving greater coherence in global economic policy-making, and the General Council's Decision
on Agreements between the WTO and the IMF and the World Bank (WT/L/194), and drew attention
to the report of the Managing Director of the IMF, the President of the World Bank and the Director-
General of the WTO on Coherence contained in document WT/GC/13.  He also recalled Jamaica'srequest at the October 1998 meeting of the General Council for more information on the Integrated
Framework, and noted that this information was contained in document WT/COMTD/LDC/W/12.
The Director-General recalled that in a statement circulated in October 1998 the heads of the
IMF, the World Bank and himself had announced their intention to convene the High-Level Working
Group they had established to help coordinate the activities they were undertaking together pursuant
to the Marrakesh Ministerial Declaration on the Contribution of the WTO to Achieving GreaterCoherence in Global Economic Policymaking.  The joint report on the coherence mandate had been
issued as WT/GC/13.  It described, in paragraphs 12 to 25, areas in which the three institutions
attached high priority to a cooperative approach a nd to relevant joint work.  The High-Level Working
Group had met in Washington on 17 November.  Mr. Lavorel had represented the WTO.  The
following were the main points discussed at that meeting:  (i) trade developments in the wake of thefinancial crisis;  (ii) the Third Ministerial Conference;  (iii) the Integrated Framework for Least-
Developed Countries;  (iv) small states;  (v) seminar on Regional Trade Agreements;  and (vi) WTO
credit for autonomous trade liberalization initiatives.  Regarding the first point, the risk of a
deterioration in the trade policy climate in the wake of the financial crisis had been viewed with
concern by all three institutions, and they had agreed to continue monitoring the situation closely.Member countries had to continue to resist the temptation to resort to trade restrictions as a means of
dampening or offsetting the effects on internatio nal trade flows of the macroeconomic and financial
adjustment measures being taken by the crisis-hit and crisis-threatened countries.  Any slippage would
have damaging consequences on efforts to restore international financial stability, on prospects for
                                                     
6 The summing up was subsequently circulated in document WT/GC/W/130.WT/GC/M/32
Page 24
more robust trade and economic growth in 1999, and on efforts to halt and reverse falling living
standards, as well as on preparations for the Thir d Ministerial Conference.  Regarding the latter, the
IMF and the World Bank had agreed to help respond to Members' requests for an improved
understanding of issues that arose in the course of these preparations.  Their resources could be
particularly useful in providing analysis to help developing country Members prepare for andparticipate in multilateral negotiations on agricultur e and services, and in providing analysis of the
macroeconomic setting in which the Conference would take place.  He would actively pursue with the
Bank and the Fund these and all other possibilities for co-operation which could help Members
prepare for the Conference.  He would remain in cl ose contact with both organizations with a view to
exploring whether these two topics warranted special attention in the meetings of the Interim and
Development Committees in 1999, or the Annual IMF/World Bank meetings which would take place
a few weeks before the Ministerial Conference.
Regarding the Integrated Framework for Least- Developed Countries, both the IMF and World
Bank had expressed satisfaction at the cooperation th at had developed through the joint exercise being
conducted with them and with UNCTAD, UNDP and ITC under the Integrated Framework for Trade-
Related Technical Assistance to Least-Developed Countries.  Both organizations attachedconsiderable importance to the exercise yielding concrete results as soon as possible.  Following
Jamaica's request, a document had been circulated describing latest developments under the Integrated
Framework (WT/COMTD/LDC/W/12).  The first country  roundtable under the Integrated Framework
was being held that week in Uganda, and Members would receive full information on the result
through normal channels.  On the subject of small states, the WTO had been invited by the WorldBank and the Commonwealth Secretariat to participate, along with the IMF and others, on the
Advisory Board of the joint World Bank/Commonwealth Secretariat Task Force on Small States.  He
recalled that the problems of small and vulnerable economies had been addressed in the May
Ministerial Declaration and had also been raised by a number of delegations in the Committee on
Trade and Development and in the General Council.  The WTO's participation on the Advisory Boardto the Task Force would allow it to provide info rmation to the Task Force on trade aspects of this
issue, and to follow the Task Force's work and re port back to Members on its results.  On regional
trade agreements, he said that from among the areas listed in WT/GC/13 where there was scope for
technical level work with the IMF and World Bank, it had been decided as a first step to organize a
joint seminar in Geneva in June 1999 on regional trade agreements and arrangements.  The
conference would be an opportunity for the World Bank to present in Europe the results of a major
research project that it had been undertaking, and analytical contributions from the IMF and the WTOwere envisaged.  He would keep delegations informed as preparations for the seminar proceeded.
Regarding WTO credit for autonomous liberalization initiatives, he said that the IMF and the World
Bank frequently heard doubts voiced by their members that these initiatives would receive recognition
in a negotiating context in the WTO, either in a multilateral trade negotiation or in an accession
proceeding.  They felt it would be helpful if the WTO could clarify this issue.  He was aware that thisissue had been raised during the Uruguay Round negotiations, and felt that it might be appropriate to
address it again as Members prepared for the Third Ministerial Conference, and perhaps consider a
collective statement.  From a mechanical point of view, it seemed clear that negotiating credit should
be available to countries which expressed their willingness to formally bind their autonomous
liberalization initiatives in the course of a WTO negotiation, no matter how long ago thatliberalization had taken place.  He wanted to hear Members' views on this matter.  In concluding, he
assured delegations that the steps being taken under the Marrakesh Declaration on Coherence to
increase cooperation with the IMF and the World Bank were not taking anything away from the
WTO's cooperation with UNCTAD or ITC, or other in tergovernmental organisations.  The example of
the Integrated Framework for the Least-Developed C ountries demonstrated the intention that the two
should be mutually reinforcing.
The representative of Jamaica said that this was a very complex subject covering many
different issues.  It was a challenge to try to define what the key issues were in this rules-basedWT/GC/M/32
Page 25
organization when addressing the trade and finance issues that affected both rights and obligations,
and to determine the framework of issues that fell outside of the WTO but which had an important
consequence for Members' trading opportunities.  For instance, exchange rates had dramatic effects on
the terms of trade of developing countries, perhaps even more so than marginal and incremental tariff
reductions.  He had not been able to find a section in the analytical part of the WTO Annual Reportthat dealt with terms of trade, and the report on coherence did not specifically address this central
question.  Any future work with the Bretton Woods institutions should pay particular attention to the
terms of trade - its analytical underpinnings and how globalization changed the understanding of the
impact of the changing terms under which trade was conducted.  Turning to document WT/GC/13, he
addressed some of the issues identified there which he believed might need further clarification.  The
first was credit for autonomous trade liberalization.  He assumed that arising from the advice given by
the Bretton Woods institutions and the negotiating framework of the WTO, that the WTO mightprepare a short technical note indicating the distinction between de-facto tariff levels and tariff
bindings, and drew attention to paragraph 23 of the document. The next point mentioned by the
Director-General was the seminar on regional trade agreements.  This had been the result of a major
study.  What was reasonably clear was the dichotomy between the practical benefits of regional
proximity trade agreements and regional trade agreements that banished proximity.  It would be usefulto try to minimize the dichotomy between the practical effects of regional trade agreements which
countries entered into because they saw real benefits but which extended beyond the traditional
GATT and into the WTO, such as trade in intellectual property, services etc.  It would be useful to
determine what the practical results of the two approaches were in terms of their contribution to an
open multilateral trading system.
In respect of small economies, the WTO was engaged in a task force that had emerged from
the Second Ministerial Conference.  It was important to identify the kinds of measures which might be
considered to be special and differential, how they could be tailored specifically to meet the unique
characteristics of small economies where economies of scale did not exist and where the vagaries ofnatural disasters could affect both the macro-economic and the sector interests of the individual
countries.  It should be possible to formulate practical responses to the rules, as it was a question not
just of abstract principles of free or open trade, but rather of how trade contributed to improved
standards of living.  He hoped the task force would be able to make a contribution in the form of
specific measures based on its experience over the years in dealing with special and differential
treatment – measures which would not be seen as blatant exceptions to a rules-based system.  The
analysis being conducted in the framework of the high-level working group on coherence wouldprovide information on which participating countries, in particular WTO developing country
Members, could rely in any negotiations that had financial, monetary or exchange rate implications.
The IMF and the World Bank could also contribute to an understanding of the implications of those
issues in framing any mandates for further negotiations.  The challenge to the IMF and the World
Bank was to instil greater coherence in their policy advice to members in areas where their expertisewas less than that of the WTO, such as technical experience in trade liberalization and related
commitments, including trade in services where some sectors were of particular importance to the
IMF and the World Bank.  In any future expansion of negotiations in areas of particular importance to
the IMF and the World Bank, the issues should be analysed and made available in technical notes by
the WTO Secretariat.  He recalled that during the Uruguay Round there had been a significant effortto expunge the protection required for balance-of-payments measures.  Balance-of-payments
disequilibrium still existed and in any future negotiations the impact of short term capital movements
on the real economy, as much as on the balance of payments, should form part of the understanding.
In the area of trade policy surveillance of the world economy and individual countries, the IMF
reports were more instructive on the trade policy stances of some of the industrialized countries thanwere the WTO Trade Policy Reviews of those countries.  The IMF and the WTO should work more
closely in harmonizing a systematic framework for trade policy surveillance which reflected a
constructive use of resources and was aimed at encouraging the removal of trade barriers.  Regarding
human and institutional capacity-building, until the smaller WTO trading partners developed a certainWT/GC/M/32
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critical mass of expertise to formulate, respond to, negotiate and manage trade policy, there would
remain an artificial divide between the interests of developing countries and those of developed
countries.  A way should be found to ensure that the human and institutional capacity in developing
countries reached a certain minimum level that could respond to the challenges of the permanent
negotiating forum which the WTO was.
The representative of Mexico shared the Director-General's view that the issue of recognition
and credit for autonomous trade liberalization measures was very important.  He recalled that Mexico,
together with some 20 other countries in the course of the Uruguay Round, had strongly promoted this
issue, and had been able to obtain certain operativ e decisions regarding credit.  Regarding the concept
of recognition, a hybrid decision had been sought but  nothing specific had been concluded.  It was
thus highly important to take up these aspects once again.  The dilemma faced by many countriessome years ago had been whether they would continue to liberalize, which they knew from the
economic point of view was beneficial, or whether it was better to wait and see whether something
would be received in exchange for these measures.  For some countries, the structural reforms were so
urgent and of such magnitude that it was not possible to wait for a negotiating phase to try to bargain
for something in exchange.  Therefore, it was im portant to see how these countries could tie down
these concepts and within the multilateral trading sy stem create a positive incentive to foster further
liberalization. It was also important to try to increase the certainty of market access, since credit
through tariff bindings as well as recognition through a certain form of hybrid and innovative
mechanism would give greater certainty for economic agents as to what the conditions of market
access would be.  Therefore, Mexico shared the points made by the Director-General and welcomedthe initiative.
The representative of Japan said it was very important that the three organizations cooperated
closely, and welcomed that the report spoke about the organization of regular meetings of the High
Level Working Group on Coherence at the level of senior officials, as well as the closer workingrelationship at the more technical level among the three secretariats.  This cooperation should be
conducted so as to contribute to the fulfilment of the respective mandates of the three organizations,
had to respect their mandates and their independent decision-making, and should not result in the
imposition of cross-conditionality or extra conditions on their members.  Japan appreciated the
initiative on the Integrated Framework and the joint seminar on Regional Trade Arrangements.  It
welcomed the proposal for credit to be accorded to autonomous liberalization efforts and would
consider it carefully.  Japan also welcomed the periodic reporting on this matter.
The representative of Canada welcomed the report on coherence submitted by the heads of
the WTO, IMF and World Bank.  Coherence had been endorsed by Ministers at each of the last three
Ministerial meetings.  In an increasingly inter- dependent world economy, international institutions
could not work in isolation from one another.  WTO Members had a collective responsibility toensure that the activities of the respective institutions were mutually supportive, avoided conflict or
duplication, and contributed to improved world economic governance.  Many issues raised in the
report were important to the WTO and it was clear that close cooperation between the three
institutions in addressing areas of overlap would lead to gains in the efficiency and the quality of
programmes.  While Canada welcomed the report as an excellent reference for the institutionallinkages that existed and that helped to address the issue of coherence, this work should be carried
forward by examining in more depth the substantive issues in play.  A better understanding was
needed of how these linkages and the consultations th ey implied were contributing, in concrete terms,
to mutual support and the avoidance of duplication.  Further reports of this nature would allow WTO
Members to monitor progress on this issue and to inject the impetus necessary to ensure that commonobjectives of achieving greater coherence in global policy-making were met.
The representative of Egypt said that the statement by the three organizations was particularly
important in light of developments in the wake of the financial crisis and the repercussions of thisWT/GC/M/32
Page 27
crisis on certain trading partners.  He encouraged the Director-General to continue monitoring the
situation.  Members had to be vigilant about what was taking place and about the reform that was
being discussed in order to minimize the negative impact on their economies.  There was a need to co-
ordinate with the IMF on certain issues, but not on each and every issue.  Further liberalization in the
fields of agriculture and industry was within the built-in agenda and Members had to preparethemselves for these future negotiations.  Particularly in the field of agriculture, there should be
greater co-ordination with the FAO and other relevant organizations, and not only with the IMF and
the World Bank.   He did not see in the report any follow-up to the Marrakesh decision on the
negative repercussions of the reform on agriculture and on the least-developed and net food-importing
developing countries. The Director-General and his staff should consult with the IMF on how to
implement that decision, which provided for technical and financial assistance to the least-developed
and net food-importing developing countries to improve their agricultural productivity andinfrastructure.  This subject should be a permanent item on the agenda of consultations with the IMF
and the World Bank  He said that certain developing countries which might experience short-term
difficulties in financing normal levels of commercial imports could be eligible to draw on the
resources of international financial institutions under existing facilities or such facilities as might be
established in the context of adjustment programmes.  Egypt was concerned over the trend of adecrease in the level of food aid since the adoption of the decision at Marrakesh.  Regarding waivers,
he said that some WTO Members requested a waiver or an extension of a waiver as a result of
negotiations with the IMF and the World Bank.  The WTO should be more involved in this area.  He
suggested that before consultations took place among the three institutions, WTO Members should be
consulted so that their concerns could be taken into consideration in those consultations.  As Jamaicahad said, the questions of the terms of trade and fluctuations in interest and exchange rates were very
important because they had an effect on trade, and these questions should be taken up in future.
Egypt would raise this subject in the context of pr eparations for the Third Ministerial meeting.  This
matter should be the subject of consultations with the IMF and the World Bank, as the tendency that
the terms of trade were not going in favour of developing countries was one of the most importantissues for the future.  Analytical work should be done by the IMF in co-ordination with the WTO.
The representative of Korea said that the sudden fluctuations in the global economy had
underlined the need for more consistency in policy -making among the three institutions and for more
flexible responses.  Consistency could be enhanced by sharing knowledge and expertise among the
three institutions.  Korea commended the initiatives taken in that direction.  Another matter that
deserved attention was the interrelationship between trade liberalization resulting from WTO-basednegotiations and unilateral trade reforms in the context of programmes supported by the IMF or the
World Bank.  As mentioned in paragraph 15 of the report, the question arose whether reductions in
trade barriers as part of IMF or World Bank programmes had to be permanent.  Ideally, liberalization
under these programs should be permanent and there should be no back-stepping on the path to freer
trade.  However, one had to consider that the IMF conditionality imposed on a country wasperiodically reviewed so that it could be adjusted and even relaxed according to prevailing domestic
economic conditions.  If the initial trade-related IMF conditionality was automatically considered as
binding commitments in the WTO framework, IMF reviews would have little leeway to readjust the
conditionality.  Future discussions on coherence should consider such issues given their implications
for the countries concerned.  His delegation hoped that, through greater cooperation among the threeinstitutions, the development of a better understanding of the intimate links between the different
levels of economic policies would help these institutions to deal better with the strains on the world
economy.
The representative of Bangladesh welcomed the Director-General's report and his initiatives.
Regarding the Integrated Framework, his authorities would examine this document carefully.
Coherence among the different agencies should not  compound the complexities of conditionalities.
Since least-developed countries confronted interlinked issues such as debt, exchange-rate fluctuations
and speculation, any co-operation between the WTO and the Bretton Woods institutions should focusWT/GC/M/32
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on this macro-economic reality with even greater emphasis.  While it was true that the WTO dealt
largely with trade, the crippling debt burden of ma ny least-developed countries, particularly in Africa,
structurally handicapped their performance in trade and was an impediment to their integration into
the multilateral trading system.  Bangladesh welcomed the announcement of the round table in
Uganda, a country which had made praiseworthy pr ogress among least-developed countries and from
which others had much to learn.  His delegation was pleased to hear that the WTO would continue to
consult with UNCTAD and other relevant agencies in this important area.
The representative of Norway expressed his delegation's satisfaction with the joint report.  A
close and continuous collaboration between the th ree institutions was of fundamental importance to
smooth cooperation in the areas of trade, finance a nd development.  Norway looked forward to future
reports from the three bodies, and asked what the criteria would be for when the three would "meetand exchange communications" as stated in paragraph 7 on page 4.  He asked the Director-General to
comment on the problem he had referred to at the December 1997 meeting of the General Council
regarding the human resources the Secretariat could ma ke available for this work compared to the two
other organizations.
The representative of India suggested that in future, statements such as those just made by the
Director-General should be distributed in advance of the meeting.  He would examine the Director-
General's statement and come back to it at a fu ture meeting.  Regarding the report in document
WT/GC/13, his delegation shared most of the points made by Jamaica.   He recalled that the General
Council had taken an important decision as to how to implement greater coherence with the BrettonWoods institutions.  One component of that decision was that the Director-General should inform
Members and consult with them as to matters rela ting to the implementation of the agreement.  The
other component was that any confusion resulting from such consultations should be submitted to the
General Council for approval.  He took it that the report in WT/GC/13 was in the nature of the
Director-General informing the General Council a bout the discussions he had had with his two
counterparts in the other two organizations, and that  no approval of any component of this document
was being sought.   Regarding paragraph 14, his delegation had some concern as to what was intended
by the text.   India shared Korea's views on this paragraph.  It was difficult to say that all the elements
of the reform process undertaken by a country at the behest of IMF or the World Bank were
necessarily autonomous.  It was not fair to expect a country to bind in the WTO all the tariff
reductions and other liberalization measures it might have undertaken in a particular situation.
Regarding paragraph 17, he said that the way the Committee on Balance-of-Payments Restrictionshad been looking at the balance-of-payments cover available for a country had been somewhat
elementary in that the number of months of export cover afforded a country was the sole determinant
of its balance-of-payments cover.  He said that in the annual report of the WTO which had been
discussed the previous day there was a reference to the fact that the daily currency flows across
borders was more than 80 per cent of all the foreign exchange resources of all countries put together.However, the Balance-of-Payments Committee continued to have a traditional historic approach to
measuring a country's balance-of-payments results.  Future consultations which the WTO might have
with the IMF should include discussing the volatility of interest and exchange rates, and the
methodology currently used by the Balance-of-Payments Committee to measure a country's results.
While Egypt appreciated the efforts undertaken by the Director-General and his interaction with theWorld Bank and the IMF to promote a better understanding of the issues facing this organization, it
was necessary that the identity of the WTO be maintained.
The representative of Uganda said that his delegation had emphasized the need to implement
in a practical and effective manner the Marrakesh Declaration, which aimed to address problems the
origin of which lay outside the multilateral trad ing system, and the need for coherence between the
Bretton Woods institutions and the WTO.  It was hoped that the high-level meetings between the
heads of the three institutions would lead to a cult ure of co-ordination.  The Director-General's report
indicated a pragmatic and a practical co-ordination between the institutions and provision for furtherWT/GC/M/32
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work.  As indicated in paragraph 11, pressure should not be created for cross-conditionalities or
additional conditions as a result of enhanced cooperation.  Regarding paragraph 13, his delegation
agreed with the remarks by India and Hong Kong.  Capacity-building was important and Uganda
welcomed what was in paragraph 21 and the follow-up to the High-level Meeting for Least-
Developed Countries.  In this regard there had been a round table in Kampala which had been heldback-to-back with the consul general meeting.  He  reiterated that co-ordination and coherence would
mean nothing if the institutions within the policy framework did not take into account trade concerns
and the need to avoid conflicting advice.  The Director-General had indicated that the World Bank
would readily assist delegations in preparing analytical papers for the forthcoming Ministerial
meeting.  In moving into the next negotiations, it was essential for a country or a group of countries to
begin with a clear analysis and understanding of each country's trade and development interests.  This
was one of the critical challenges facing Members, particularly the African and least-developedcountries.  If these countries were to be effectivel y integrated into the international trading system,
they had to meaningfully participate in defining th e rules of the game.  It was critical to develop
capacity-building at the national level.
The representative of Switzerland said that his delegation had always stressed the need to
ensure the compatability of trade policy recommendations of the Bretton Woods institutions with
WTO rules, and had supported an exchange of expertise among the three institutions.  The report in
WT/GC/13 indicated that that cooperation was underway.  This should be pursued and developed
further along the lines established.  The need for coherence in global economic policy was greater
than ever, and Switzerland encouraged the Director-General to do everything in his power to enhancecollaboration among the three institutions.
The representative of Australia commended the work that had been done on this important
issue.  The IMF and the World Bank could help WTO Members to understand the issues that would
arise in the course of preparations for the Third Ministerial Conference.  The World Bank in particularcould help developing countries to prepare for the negotiations in agriculture and services, and already
had an active work programme underway in preparing papers for the agriculture negotiations.  The
issue of agricultural market access for developing countries was directly related to the World Bank's
development mandate.  It would also be useful for the IMF and the World Bank to provide analysis of
the global macro-economic setting for what Australia hoped would be the launch of a comprehensive
round of multilateral trade negotiations.  Australia hoped that both the Fund and the Bank would be
able to provide expeditious answers to questions arising from this process and hoped that reportscould be made by these two institutions to the General Council on the results of their work.  He
agreed with Egypt that the issue of the effect of the agricultural reform programme on net food-
importing and developing countries was an important one and could usefully be included on the
agenda for discussions between the three institutions.  While the World Bank reported annually to the
Committee on Agriculture on this issue, it would also be useful to hear from the IMF whether anycountry had taken advantage of the compensatory finance facility made available for those least-
developed countries affected by the reform programme.
The representative of Ghana said that his delegation welcomed the cooperation between the
WTO and the Bretton Woods institutions to ensure coherence in policy-making and to avoid the
inclusion of WTO-inconsistent measures in policy advice from the Fund and the Bank.  It was very
confusing and frustrating for the country concerned to find that measures permitted by the WTO were
not allowed under structural adjustment programm es with the Fund and the Bank.  It was hoped that
the High-Level Working Group would take problems like this into account, and that as the
cooperation deepened there would be more coherence and consistency between the policy signals ofthe three institutions.
The representative of the United States supported adoption of the report in WT/GC/13.
Positive steps had been taken to deepen and broa den the exchange of information among the threeWT/GC/M/32
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institutions and a number of topics had been identified on which the three could and should usefully
turn their collective attention.  The report provid ed a framework of coordination necessary to bring
these important institutions together.  This should reduce the likelihood of inconsistency in advice or
conditionality among the three institutions.
The representative of Jamaica said that the trade-related aspects of the financial crisis were
concentrated in developments in capital markets.  The point made by Bangladesh on the structural
impact of debt should not to be overlooked.  Cons equently, he hoped that as part of the continuing
programme of collaboration, this serious impediment to increased production and increased export
trade for a large number of countries affected by debt would be considered.  A related point was the
impact of changes in relative prices on primary commodities and the impact this had on trade.  A
review of the WTO Annual Report and the latest world economic outlook indicated some very seriousconsequences for primary commodity exporters.  As such countries comprised a significant
percentage of the membership of the WTO, those issues should be on the agenda.
The representative of Bolivia said that the recognition of autonomous reductions in trade
barriers was particularly important to his country.  The Bolivian economy was a very open one.  Its
main problem was the lack of human and institutional capacity to apply the WTO agreements.  In this
regard, he highlighted the importance for Bolivia of paragraph 21 in the report.
The Director-General said that the relationship between the WTO, the IMF and the World
Bank was a complex one due to the fact that the WTO's identity was different from the identity and
the mechanism of the IMF and the World Bank.  In spite of a maximum of good will, it had taken
almost three years to achieve a common document on coherence, because each institution had to
safeguard its own identity.  The text on coherence was a good beginning, and there had already been a
first meeting of the high-level working group in order to give impetus and substance to the agreement
on coherence.  Regarding his introductory remarks on this issue, he said that the question of theexchange-rate effect and the problem of indebtedness had been discussed in the framework of the
high-level meeting, and on both of these issues the IMF and the World Bank had expressed their
readiness to produce a document analyzing these issues  On net food-importing countries, as a follow-
up of the decision and related recommendations adopted in Singapore, food aid negotiations had been
initiated as part of the renegotiation of the Food Aid Convention in November 1998, and the Food Aid
Committee in London which conducted these negotiations had had a further dialogue with
representatives of net food-importing countries to review the main elements of the new Convention.
The aim was to conclude the substantive negotiations by the end of 1998 so that the new Food Aid
Convention could come into effect on 1 July 1999.   The question of financial support in this area had
been raised at the November 1998 meeting where th e IMF and the World Bank had made a report on
the use of financial support.  This question would continue to be kept under close scrutiny.  There had
been much interest in the question of discussions with the IMF and the World Bank about credit forautonomous liberalization measures.  It was now up to the WTO to clarify how it wished to deal with
this issue.  Regarding the timing of meetings with the Fund and the Bank, this was determined by the
annual meetings of the two, to which he was regularly invited, and by the biannual ECOSOC
meetings in Geneva.  Each of the three institutions knew the institutional limits of its collaboration
and that each had a different responsibility.  He would ask the director of the Trade and FinanceDivision to follow up the present discussion in order to address more fully each of the points raised.
He said that this should be seen as a beginning of a strong collaboration both within the WTO and
with the other two Bretton Woods institutions.
The Chairman proposed that the Secretariat be asked to do a checklist of the key points raised
in the discussion and that the General Council revert to this item at its next meeting in order to
consider how to organize the follow-up to the discussion on this matter.WT/GC/M/32
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The General Council took note of the statements and of the report in document WT/GC/13,
and agreed to the Chairman's proposal.
6. Work Programme on Electronic Commerce (WT/L/274)
The Chairman recalled that this matter had been discussed at the Special Session of the
General Council on 24 and 25 September, at which a work programme had been established.
Paragraph 1.2 of the work programme provided that the General Council "shall play a central role in
the whole process and keep the work programme under continuous review through a standing item on
its agenda".  The item was on the agenda for consideration at the present meeting for this reason.
The representative of the United States said that her delegation took note with satisfaction of
the progress in the Council for Trade in Goods, th e Council for Trade in Services, the Council for
Trade-Related Aspects of Intellectual Property Rights and the Committee on Trade and Development
on the work programme on electronic commerce.  The goal of the work programme was to develop a
trade-liberalizing outcome, rather than to resolve all of the issues created by addressing electronic
commerce in existing trade regimes.  As such, that goal should be to determine how best to embraceelectronic commerce in existing disciplines, and where new disciplines or interpretations might be
required, to make them as simple and trade-liberalizing as possible.  She noted the widespread view
expressed at the 25 November meeting of the Council on Trade in Services that services delivered
electronically were basically covered by existing se rvices commitments.  She reiterated the need for
the General Council to oversee the work programme, to resolve any conflicting mandates and to focuson cross-cutting issues which the subsidiary bodies might not have the ability to resolve.  The General
Council had the role of examining the overall scope of electronic commerce and how particular
electronic commerce products whose nature might be in question should be classified, and needed
input from these bodies to make a determination where such questions might arise.  At the appropriate
time the General Council should examine whether the customization of products, one of the leadingcharacteristics of electronic commerce, provided an avenue for treating electronic commerce products
in a trade-enhancing manner not subject to certain existing restrictions.  Important work was being
done at the OECD in this regard.  In both cases, the General Council should be guided by the goal of
developing recommendations which provided for the most trade-liberalizing outcome possible, and
should support the unique nature of electronic commerce.  Expanded commitments in basic
telecommunications would be key to many economies' ability to develop electronic commerce, both
by providing the market environment in which electronic commerce best thrived and by attracting theinvestment in infrastructure it required.  Her Government had recognized the need for additional
assistance on infrastructure and training for many developing countries in a recently announced new
initiative in this area.  Every day there were re ports of the benefits of internet-based electronic
commerce for developing countries.  India's tremendous success in the area of software was a good
example of how the current liberal trade environment had fostered growth for a developing country.That environment had to be maintained so that ot her developing countries could also benefit.  All
economies were wrestling with the difficult issue of taxation and electronic commerce, but these were
ultimately domestic internal issues and should not detract from the WTO's efforts to address the trade-
related aspects of electronic commerce, including understandings that facilitated growth in trade.
The General Council took note of the statements.WT/GC/M/32
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7. Conditions of Service of WTO staff
(a) Statement by the Chairman
The Chairman recalled that on 16 October 1998 the General Council had adopted a Decision
concerning the Conditions of Service Applicable to the Staff of the WTO Secretariat.  As part of that
Decision, the General Council had authorized the Direct or-General to inform the United Nations Joint
Staff Pension Fund (UNJSPF) that ICITO wished to apply for termination of its membership in the
Fund on 31 December 1998, subject to the conclusion of satisfactory transfer arrangements with the
Fund.  The General Council had also decided that the WTO Secretariat would be established on
1 January 1999, subject to such satisfactory transfer arrangements with the Fund and to acceptance of
the proposed Plan by the staff.  He had been informed by the Director-General that the staff, in a
referendum held on 3 November 1998, had expressed their acceptance of the proposed conditions of
service, and also that the WTO had hosted a special session of the UNJSPF on 12 and 13 November1998, at which the Board had considered the application by ICITO for termination of its membership
in the Fund and had made a series of recommendations to the United Nations General Assembly
concerning the method and process for determining the proportionate share of assets to be returned to
ICITO.  The Board had also decided to recommend the termination of ICITO's membership in the
Fund and had submitted to the General Assembly a draft resolution for its consideration.  Thatresolution was currently being considered by the Fifth Committee of the General Assembly and was
expected to be recommended for adoption shortly.  Thus, good progress was being made towards the
full implementation of the General Council's D ecision of 16 October 1998.  Concerning the WTO
Pension Plan, he would soon be starting consu ltations on the designation of General Council
representatives for election to the Management Board.  Under Article 4 of the Plan Regulations, theGeneral Council was to elect a Chairman, four members and four alternates.  It would be important to
constitute the Management Board early in 1999 in order that it might deal promptly with a number of
important issues, including in particular the determination of the investment policy of the Plan.
The representative of Jamaica said that managing a WTO with its own conditions of service
and its own pension fund would be a great challenge to WTO Members.  He asked for information on
the specific decisions that Members were called upon to take at the present meeting and whether this
item would be included on the agenda of the General Council's first meeting in 1999.  The General
Council should be fully aware of the bodies that were to be established and the composition of those
bodies.
The Chairman said that Members were not being asked to take any decisions at the present
meeting.  The item was on the agenda for information purposes only.  He agreed that this item should
be on the agenda of the first meeting of the General Council in 1999.
The representative of Norway expressed his delegation's appreciation that this issue had been
brought to a happy conclusion.
The representative of Japan said that his delegation welcomed the move towards an
independent Secretariat.  Japan hoped that once the WTO was independent it would continue as in the
past to improve the efficiency of its operations and that it would be less dependent on the volatility of
currency rates.  He recalled that at the Pension Board meeting in November the Director-General hadbeen requested to notify in written form the WTO's decision to withdraw, in order to formalize the
process before 15 January 1999.  Japan hoped that this procedure would be completed as soon as
possible.
The Chairman said that it was with particular pleasure that he had been able to make this
status report.  Members could take considerable satisfaction that they were on course to establish anWT/GC/M/32
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independent Secretariat by 1 January.  On behalf of the General Council he thanked the individuals
who had been instrumental in moving this matter forward.
The General Council took note of the statements.
8. High-level meeting on trade and development
(a) Communication from Egypt  (WT/GC/W/109)
and
9. High-level meeting on trade and environment
The Chairman recalled that at the October 1998 meeting of the General Council the
delegation of Egypt had raised the matter of a high-level meeting on trade and development and had
indicated that it would submit a joint paper for circulation to Members.  That paper was contained in
document WT/GC/W/109.  This matter was on the Agenda of the present meeting at the request of
Egypt.  He recalled that at the same meeting the representative of the European Communities had
raised the matter of a high-level meeting on trade and environment and the General Council had held
an extensive discussion of it.  On the basis of this discussion and subsequent consultations, theSecretariat had prepared a background note with proposals for the organization of both meetings.
This background note had been discussed at the informal Heads of Delegation meeting on
18 November.  He understood that the Director-General wished to make a brief statement on the
organization of these two high-level meetings.
The Director-General recalled that a revised version of the information note discussed at the
18 November meeting of Heads of Delegation had been circulated which took into account the main
points and suggestions made by Members at that meeting. That note ensured that both high-level
meetings could be conducted in a constructive and flexible manner.  Regarding the structure of the
two meetings, he was aware that this issue had been of great importance to several Members and hebelieved a formula had been found which would allow constructive and positive discussions of any of
the issues that might be of concern to delegations.  Each of the meetings would be structured around
an opening plenary session with keynote speakers from intergovernmental organizations.  These
plenary meetings would be followed by three pane l sessions with one or two keynote speakers and
approximately four discussants from government s, non-governmental organizations and academia.
All sessions had been organized in a manner which would allow sufficient time for discussion and
intervention from the floor.  He emphasized that the Secretariat was doing its best to ensure theparticipation of a representative and geographically balanced group of NGOs, academics and
representatives of the private sector. He strongly believed that such an inclusive approach would
benefit the discussions and at the same time demonstrate that the WTO remained responsive to the
diversity of interests found within the environmen t and development communities.  As in the past, he
would keep Members informed on a regular basis about the progress of the preparations for theseevents.
The representative of Indonesia, speaking on behalf of the ASEAN Members
, said that a
high-level symposium on trade and environment w ould help Members to deepen their understanding
of the issues at the nexus of trade, finance and development, and would provide a betterconceptualization of what was meant by the term  "development dimension".  ASEAN looked forward
to two elements in particular:  (1)  the role of the WTO in supporting the development objectives
identified in the Marrakesh Agreement, including is sues such as how, and the extent to which, the
development dimension should be a key parameter of negotiations in the WTO, and questions as to
whether the development dimension was sufficiently given effect through concepts such as transitionWT/GC/M/32
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periods and extended time-frames for implementation ;  and (2)  coherence, as policy formulation
clearly could not be on the premise of artificial distinctions between trade, development and finance
matters.  The WTO could work closely with the World Bank and the IMF in understanding and giving
full effect to the development dimension.  On procedural, organizational and administrative matters,
ASEAN was flexible and could accept the Secretariat's proposal.  Regarding the high-levelsymposium on trade and environment, ASEAN did not have any problems with the revised proposal,
but did have doubts about the usefulness of the third theme of the meeting, namely the "interaction
between the trade and environment communities".  These communities were already integral
participants in the symposium, and the subject coul d be dealt with sufficiently within the context of
the two other themes.  ASEAN preferred having only two broad themes, "Interaction between trade
and environmental policies" and "Synergies between trade liberalization , environmental protection
and sustainable development".  However, if other Members saw the usefulness of having the thirdtheme, ASEAN was flexible, on the understanding that the word "communities" included policy
makers, academicians and other members of the communities.
The Chairman said that in the light of the Director-General's statement and the revised
information note which had been circulated, he proposed that the General Council take note of the
statements.
The General Council so agreed.
10. Review of procedures for the circulation and derestriction of WTO documents
(WT/L/160/Rev.1)
(a) Statement by the Chairman
The Chairman recalled that at the General Council meeting on 14 October Members had had
an extensive exchange of views on the proposals by delegations.  He had then informed the General
Council that he had requested Mr. Hoda, Deputy Director-General, to carry out further informal
consultations with Members in this regard.  Since then, Members had received one more proposal
from Mexico, in addition to the earlier ones from the European Communities and the US and Canada.
Mr. Hoda had reported to him that consultations with the Members which had made proposals and
those which had expressed a different view had revealed that there were still disagreements on several
aspects.  However, on the basis of Mr. Hoda's report, he believed that at this stage it might be useful
for him to attempt to bridge the differences through a Chairman's proposal. Document Job No. 6871
was the result of this attempt.  The proposal was a reasonable basis for concluding the review of the
procedures for derestriction and circulation of WTO documents.  It was being circulated for the
reflection of delegations with the intention that the General Council would revert to it at its next
meeting.
The representative of Mexico said that his delegation would analyse the Chairman's proposal;
in the meantime Mexico's position on the issue was reflected in document WT/GC/W/113.
The representative of Indonesia, speaking on behalf of ASEAN Members , said that ASEAN
had presented its views in various formal as well as informal meetings of the General Council on this
issue, in particular on 25 October.  With respect to the Secretariat Note in document WT/GC/W/117,other delegations had made proposals which were not reflected in the Note.  In order to have a full
discussion of the various views of delegations, the Note should be further revised to capture the oral
as well as written proposals of Members, so that one would have a clearer picture of what delegations
had proposed, with the objective of coming to a decision that would ensure greater transparency and
that would benefit the WTO as an organizatio n.  ASEAN would study document Job No. 6871 and
would give its views at a later stage.WT/GC/M/32
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The Chairman informed the General Council that the Note in WT/GC/W/117 would be
revised so as to also include proposals from other delegations.
The representative of the United States said that her delegation would like to have seen more
progress on this issue but looked forward to examining the Chairman's proposal.  The minor
procedural changes proposed by the US/Canada would have contributed greatly to the openness of the
WTO globally and to the more equal treatment of Members.
The representative of Japan noted that Japan's views had not been included in document Job
No. 6871.  His delegation would nevertheless study it carefully.
The representative of India welcomed the Chairman's suggestion not to take any decision on
this issue at the present meeting.  His delega tion would study the proposal and would give its
reactions thereon at the appropriate time.
The representative of Canada recalled that his delegation attached considerable importance to
this issue.  Promoting greater transparency of WT O activities was central to building and reinforcing
public support for the multilateral trading system.  Updating the current derestriction procedures was
one practical way to move toward the shared goal of greater public support for trade liberalization in
general and the WTO in particular.  Canada believed that Members could move quickly in this area,
and to this end had proposed jointly with the US  in October a number of changes to the current
derestriction procedures.  In view of the considerable support the joint proposal had enjoyed, Canadahoped that Members would be able to reach agreement as soon as possible on revisions to the
document derestriction procedures.
The General Council took note of the statements and agreed
 to revert to this matter at its next
meeting.
11. State of play in accession working parties
(a) Statements by Egypt and Jamaica
The Chairman recalled that at the July 1998 meeting of the General Council Jamaica had
asked the Secretariat to prepare a factual note on the state of play in various accession working
parties.  At the October 1998 meeting he had informed the General Council that this note had beencirculated in document WT/GC/W/100.  The item was on the agenda of the present meeting at the
request of  Egypt and Jamaica.  A non-paper on this matter had been circulated in Job No. 6787 at the
request of  Jamaica.
The representative of Egypt said that his delegation had requested the inclusion of this item
on the agenda to address one of the issues which had recently witnessed some deviation from what
had been agreed upon in the Marrakesh Agreement.  Under the WTO, accession should be governed
by a non-discriminatory, transparent and predictable process.  However, Egypt's examination of the
current accession processes of 32 applicants, the majority of which were developing countries, led it
to conclude that the process was extremely difficult for most applicants, particularly for developingcountries.  Unreasonable conditions were being imposed.  Some developed country Members had
requested acceding countries to accept more stringent conditions and higher levels of commitments
than were required from current WTO Members, including adherence to certain plurilateral
agreements as a prior condition for accession.  Moreover, developing countries were being asked to
forego special and differential provisions they woul d normally have been entitled to.  Egypt stressed
that any applicant for WTO accession should be bound to accept only the multilateral agreements
resulting from the Uruguay Round within the fram ework of the single undertaking.  The onlyWT/GC/M/32
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departures from this should be limited to ma rket access commitments governed by bilateral
negotiations.  Moreover, applicants from developing countries should benefit from all the provisions
reserved for developing countries in the various WTO agreements, including transitional periods.  He
recalled that Article XII(3) of the Marrakesh Agreement stated that accession to a plurilateral trade
agreement shall be governed by the provisions of  that agreement.  This clearly indicated that
adherence to the plurilateral agreements within the WTO was not a precondition for WTO accession.
Delegations which continued to require this should refrain from doing so.  He referred to paragraph 8
of the Singapore Ministerial Declaration and paragr aph 7 of the Declaration of the Second Ministerial
Conference and said that WTO Members should assu me their responsibilities in proceeding with the
accession processes as rapidly as possible.  Standards should be the same in examining the trade
regimes of all applicant countries.  Excessive demands should not be imposed and difficulties should
not be created.  In a consistent, non-discriminatory and fair manner, the work of all the accessionworking parties should be accelerated, thus contribu ting to the universality of the multilateral trading
system and the enhancement of the credibility of the WTO.
The representative of Jamaica drew attention to the communication from Jamaica circulated
in document Job No. 6787.  The intent of the paper was to provide information which could serve as a
basis for an exchange of views, and thus assist the applicants and the working party members in an
important exercise which would lead to full participation in the WTO.  Additionally, it should engage
the wider membership of the WTO in the process, particularly the smaller trading partners, and thus
show how new Members could contribute to expanding benefits to the small trading partners by
access to their markets.  The table providing information on the exports and imports of countries inaccession to the WTO showed that the 30 countries, some of them with significantly large
populations, did not account for a very large percentage of market share in international trade.  This
would suggest that the more open and the more integrated countries were in the international trading
system, the larger their domestic markets and the larger their share in international trade.  These
figures should be an incentive for all to speed up the process for inclusion in the WTO.  Hesummarized the points made in the paper.  The WTO was now a permanent negotiating forum.  There
were new rules and disciplines and market access opportunities which could be achieved without the
launch of a traditional round of negotiations.  Applicant countries could participate in market access
negotiations, such as in the Information Technology Agreement, even though they were not members
of the WTO.  However, they had no such opportunity for participation in reviews of existing
agreements or negotiation of new rules.  As an encouragement for their participation in the
multilateral trading system, some way could be devised which would provide them with a degree ofsecurity but which fell short of a legally binding undertaking such as provisional accession.  A review
which was seen as an encouragement for early and equitable accession, if undertaken, should ensure
that the applicant's foreign trade regime remained consistent with its market access commitments and
the progress made in observing WTO rules and disciplines.  The paper also drew attention to the fact
that when the Uruguay Round was launched, all observers and acceding countries as well as interesteddelegations had been afforded the opportunity to participate on an equal footing as appropriate.  If the
Third Ministerial Conference resulted in an impetu s to launch further trade negotiations, this would
inevitably condition the pace of accession working party meetings.  It was important that thought be
given to how the matter of accession in the new negotiating phase of the WTO would be treated.  An
examination of the progress achieved thus far was necessary in order to ensure that the accedinggovernments' trade policies were consistent with WTO rules and disciplines.  Ways should be found
to encourage acceding governments to participate in future WTO negotiations as effectively as
possible.  The proposal in the paper was for the General Council, on the basis of a technical note
prepared by the WTO Secretariat on the accession process, to review that process, taking into account
the agreed procedures and modalities and the issues raised in Jamaica's paper.  It might also be usefulto hold an informal meeting of all of the accedin g countries and the chairmen of the working parties,
where they could share and enrich the experience of the accession process.WT/GC/M/32
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The representative of Japan said that accession procedures seemed to be taking longer than in
the past.  Only six countries had completed such procedures since the WTO's establishment in 1995.
If the current accession negotiations were not completed by the beginning of the next round of
negotiations, these procedures would be further prolonged.  The effect of the strong demands by
current Members and the prolonged negotiations would cause acceding countries to lose momentumin pursuing accession.  He suggested the possibility of granting a transition period for some acceding
countries, especially small-country applicants, to implement particular parts of the agreements.  This
should be done on condition that at least the minimum requirements were fulfilled.  Such a flexible
approach was necessary to promote and facilitate the general movement towards WTO membership.
When granting flexible arrangements such as a transition period, it would be necessary to lay down
the relevant action plan for each country.  In addition, it would be desirable for current Members to
give technical assistance to these countries.  Japan was willing to extend such support based onindividual requests, as it had already done for several countries such as Russia, Vietnam and Georgia.
The representative of Pakistan said that the WTO could not live up to its name as long as
some of the major economies, such as China and Saudi Arabia, remained outside its membership.  In
earlier years GATT readily welcomed adherence to the principles of the free-market trading systemwhich it embodied.  It was therefore unfortunate that since the establishment of the WTO the ethos for
the admission of new members had been reversed, with the emphasis on conditionalities and
qualifications that were becoming increasingly difficult to live up to for many developing countries.
It was unacceptable that an important country such as China, which was one of the most dynamic
economies and a growing market, be kept in limbo by the WTO, while its accession negotiations wereprolonged for over 12 years.  Likewise, it was inexplicable that developing countries, such as Saudi
Arabia, should be asked to accept trade comm itments which went far beyond the commitments
accepted by the vast majority of existing WTO Members.  A multi-speed WTO, with those entering
last being required to move towards liberalization even faster than those which were older members,
was not consistent with the principles of fair trade and MFN on which the multilateral trading systemwas based.  Not even the culture of reciprocity in trade negotiations could justify some of the blatantly
discriminatory demands for liberalization which had been made in the accession negotiations of
China, Saudi Arabia and other developing countries.  Pakistan joined in urging the General Council to
make a recommendation that Members should review their demands made bilaterally or multilaterally
for trade concessions on countries engaged in accession negotiations.  The WTO had to become a
truly world organization at the start of the new millennium.
The representative of Australia said that the accession of least-developed countries to the
WTO was an area in which Australia had considerable interest given its close links with the small
island states of the South Pacific, three of which - Vanuatu, Samoa and Tonga – were negotiating their
accession to the WTO.  It was important that these small fragile economies became members of the
WTO in order to assist their integration into the global trading system and to avoid furthermarginalization.  The accession of such countries, as of all least-developed countries, had to be on a
basis that recognized the level of their economic development.  Accession should, in fact and in
principle, reflect special and differential treatment provisions for developing countries.  Australia
could also accept the possibility of short transitional arrangements where these were clearly justified
for the implementation of  WTO provisions, but special accession rules did not seem necessary giventhe distinctions already made in WTO agreements for least-developed countries to take a lower level
of commitment than other Members.  However, it  would be useful for the General Council to hold
discussions with the aim of clarifying how existing rules on special and differential treatment should
be applied in practice in accession negotiations.  Members had to be mindful of the basic expectation
that all new WTO Members, without exception, had to be able to demonstrate that they could meetWTO rules and that they could commit to an appropriate degree of trade liberalization, which would
vary according to the level of economic development.  This was a demanding task for all countries
that sought to accede to the WTO, whether least-developed or at the highest stage of economic
development.  Consequently, the pace of accessions was determined solely by the willingness ofWT/GC/M/32
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acceding countries to make commitments acceptable to WTO Members.  The time required for
accession negotiations often represented an opportunity for acceding countries to prepare themselves
for membership and to make necessary adjustments, and should not be seen as a negative factor.  It
was important that all countries seeking to accede to the WTO understood clearly what was expected
of them.  One of the most significant reasons for delay in accessions was that acceding countries wereoften unaware of the full implications of some of the very technical areas in which they were expected
to make commitments.  For this reason Australia had been active in providing technical assistance to
acceding countries.  Experience in this area underlin ed the need for considerable amounts of technical
assistance to ensure that countries seeking WTO accession were realistically aware of what would be
expected of them.
The representative of the United States said that his delegation was an active participant in
accession negotiations, and fully recognized their importance for the health and well-being of the
multilateral trading system as well as for the succ essful integration of new members into the WTO.
Accession negotiations offered a unique opportunity to acquaint applicants with the scope and
importance of the obligations and benefits associated with WTO membership, as well as to address
aspects of their trade regimes inconsistent with WTO provisions.  Without this process, new memberscould find adjustment as full members difficult, thus delaying the benefits of membership both for the
applicant and for other WTO Members.  In the real world no transitions were granted from economic
and trading realities.  The adoption of WTO provisions, with or without an accession process, built
stable, predictable and liberal trade regimes, and was a proven method of optimizing the economic
growth gains from trade.  Article XII of the WTO Agreement, like Article XXXIII of the GATT 1947,made it clear that the terms of accession were developed through negotiation with current Members.
There was no provision for automatic granting of the transition periods included in WTO Agreements,
a situation confirmed in all six of the WTO accession protocols approved to date. This allowed
maximum flexibility in determining how acceding countries could bring their trade regimes into line
with WTO rules.  Protocols of accession had traditionally addressed issues where movement to fullcompliance during the accession negotiations was not possible, and the flexibility of the system had
permitted transitions in areas where WTO agreements themselves were silent.  In contrast, the
transition periods provided for in the Uruguay Round agreements were intended to allow the
negotiators time to become accustomed to the new rules and to move to address in legislation their
new responsibilities.  Thus time was provided for full implementation.  Acceding countries were in a
different position.  Many had been observers for many years, and would have the benefit of the period
during the accession process itself to become acquainted with WTO provisions.  They were dealingnot with new rules, but with established rules, in  place when the decision to accede to the WTO was
made.  Thus, neither logic nor the WTO Agreement itself supported the concept of acceding countries
having automatic recourse to the flexibilities included during the Uruguay Round negotiations.  In
addition, WTO Members had a right to expect that acceding countries would observe a standstill on
the implementation of WTO-inconsistent measures during accession, and would not wait untilcompletion of the negotiations to take steps to enact WTO-consistent legislation.  Increases in the
level of protection allowed during the negotiations would only complicate the accession process.  The
current accession process offered sufficient real flexibility to address the needs of applicants at all
levels of development and experience in the global economy.  This could be seen in accomplishments
to date:  since the implementation of the WTO, 36 countries had applied for accession, and in lessthan four years, six protocol packages had been completed and approved.  Another 20 applications
were fully under negotiation, with a number of these likely to be completed prior to the end of 1999.
The remaining countries were new applicants or had declined, to date, to initiate the process.  In sum,
the accession process was working and countries were moving through it.
The representative of the European Communities said the fact that few accessions had been
completed recently was not a sign that the system was not working.  The pace of such negotiations
was not solely determined by WTO Members.  The major factor seemed to be the readiness and
willingness of the acceding countries to take on and implement the obligations already accepted byWT/GC/M/32
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WTO Members and to subscribe to a number of specific commitments.  As the Secretariat report said,
the pace of each accession depended in large measure on the capacity of the acceding government to
negotiate actively at the bilateral and multilateral level.  His authorities estimated that roughly ten
countries could accede before the end of 1999, including countries in different parts of the world and
with different levels of development.  The commitments asked of acceding countries at present weredifferent, both quantitatively and qualitatively than those undertaken by countries which had joined
before the end of the Uruguay Round, as the organi zation was different and had continued to expand
and improve.  The WTO was not the GATT.  The Community took into serious consideration the
differences among countries.  Most of the transitional periods foreseen in WTO agreements were
about to end.  These agreements had been known to the acceding countries for a number of years.
They were thus aware of the obligations which lay before them.  The Community was not opposed, a
priori , to the granting of transitional periods to different categories of developing countries, but
expected these countries to help the Members understand the nature of their problems.  Another issue
that needed to be addressed was how to handle those accessions which would not have been
completed by the end of 1999, and how those nego tiations would be continued in the light of
comprehensive negotiations which would likely be launched at the end of 1999.  The Community was
considering as a matter of urgency the relationship of the accession process to the launch of newmultilateral negotiations, and hoped to be able to offer suggestions shortly.  Ways had to be found to
accommodate acceding countries while not changing the text of the WTO Agreement.
The representative of Canada said that valid observations had been made by Egypt and
Jamaica about the pace and nature of the accession process.  These issues had to be taken seriously for
the good of the world trading system.  His delegation was reflecting in particular on Jamaica's
suggestions designed to focus attention on how to ar ticulate suggestions and any agreed negotiations.
However, the full picture had not been presented yet.  The WTO was a contractual relationship that
governed or shaped most of world trade, both through its direct application and through the model it
set for regional agreements.  Accordingly, Canada approached accession negotiations with a view notonly to achieving a mutually beneficial agreement with the acceding country, but also to upholding
the general structure of rules and obligations that was so crucial to all.  The WTO did no favours for
acceding countries by taking shortcuts that undermined the very benefits they sought to reap.  On the
bilateral side, Canada sought an outcome in all accession negotiations that provided increased
transparency as well as more open, secure and non-discriminatory market access for Canadian goods
and service providers.  Security of access also meant compliance with a number of WTO disciplines
affecting trade, including both border measures and legal frameworks such as those for standards-setting or for intellectual property protection.  These objectives naturally raised the issue flagged by
some delegations, which was whether acceding countries were being asked to give more, or faster,
than current Members – in other words, WTO-plus.  There was no easy answer.  New Members
benefited from the state of market access and other obligations as they existed when they acceded.
Because Members were still phasing in commitments, those benefits were getting progressivelyricher.  To the extent that reciprocity of some order was applicable, this might appear to be a raising
of the bar.  Accessions entailed detailed and comprehensive work for all concerned.  The negotiators
had to act with care, realism and due dispatch so that countries seeking membership could draw
benefits from and add their strength to the multilateral trading system.
The representative of the Czech Republic, speaking also on behalf of Bulgaria, Hungary,
Poland, Slovakia and Slovenia, said that the early accession of as many countries as possible to the
WTO on the basis of full adherence to existing rules and disciplines and mutually satisfactory
accession conditions remained a major priority.  The WTO would never be a truly global organization
unless the present membership was significantly increa sed.  The need to bring new countries into the
rule-based trading system was dictated by the globalization challenges and the present financial crisis,
and also by the prospect of a new round of comprehensive multilateral negotiation that would further
raise the admission bar through new rules and market access commitments.  While wanting to
accommodate the accession ambitions of some 30 countries where possible, it would be premature toWT/GC/M/32
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consider any new approach to the accession process before concluding proper analysis of the matter at
hand.  However, his delegation did not oppose reflecting on how to bring acceding countries on board
as soon as possible, and would consider any reasonable proposal to make the process more
manageable and efficient.  The interests of all parties involved and the necessity to preserve the
integrity of the system had to be taken into account.  There should be no double standard, and hisdelegation was not advocating any relaxation of existing WTO rules or disciplines or requesting
acceding countries to assume obligations going beyond the framework of present agreements and
decisions.  His delegation had an open and flexible position on WTO enlargement, on the
understanding that the basic rules of the game were fully respected.
The representative of Bangladesh shared the concerns expressed over the slow pace of the
WTO accession process.  The special needs of the acceding least-developed countries and the
favourable consideration of their applications demanded priority review by the General Council.
Their requirement for technical assistance, both from the Secretariat and from developed country
Members, was universally recognized and had been reiterated by Japan and Australia at the present
meeting.  Bangladesh believed in the principles of universality and equity in all global transactions,
including WTO accession procedures.
The representative of Cuba supported the statements by Jamaica and Egypt.  One of the
obstacles which had impeded the accession process was that certain candidates had to comply with
requirements which went beyond those stipulated in WTO agreements.  Cuba deplored this practice,
which had been carried out by some countries abusing their economic power.  For example, anacceding country could not be forced to accede to a plurilateral agreement, as this was not a
requirement for any WTO Member.
The representative of Norway said that there was an economic and a political need for
winding up the accession process expeditiously.  In  so doing, however, one had to be careful not to
introduce any element that might lead to two classes of members, which might be characterized as
"accession on the basis of the normal criteria" and "accession at any price".
The representative of the People's Republic of China, speaking as an observer , expressed his
delegation's appreciation to Egypt, Jamaica, Pakistan and other delegations for their concern over the
WTO accession issue and for their arguments.  This issue was becoming more and more urgent as the
WTO faced the millennium round of trade negotiations.  As a developing country applicant, Chinahad been in the process of accession for an unexpected 12 years.  Accession of all the applicants,
including China, before 2000 was of utmost importance as this would facilitate their full participation
in the new round of trade negotiations and would further strengthen the multilateral trading system by
achieving the universality of the WTO.  China was the tenth largest trading nation and the second
largest receiver of foreign direct investment in the world.  During the past 12 years it had madetremendous concessions in its accession negotiations, including the reduction of average tariff levels
and non-tariff measures, the intention to join the ITA, the commitment not to use agricultural export
subsidies, and market opening measures in the service sectors.  China would continue its efforts in
contributing to the stabilization of the world economy and the further strengthening of the multilateral
trading system, and would continue to be flexible and pragmatic in its accession negotiations.  Ithoped that its trading partners would reciprocate.  Only in this way could the accession process of
China and others be accelerated and concluded before 2000, thus allowing them to become WTO
members before the start of the new round of trade negotiations.
The representative of the Russian Federation, speaking as an observer
, welcomed the paper
circulated by Jamaica.  His delegation hoped that its negotiating partners would refrain from
requesting the acceding countries to assume excessive and unjustified commitments.  This issue had
been raised by a number of delegations at the Second Ministerial Conference.  The terms and
conditions of accession of any country, including the most recent accessions, were the result ofWT/GC/M/32
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negotiations between the applicant and WTO Members;  therefore, they could not create a precedent
for, and should not be imposed on, other acceding countries.  The WTO was actively preparing for a
new round of multilateral trade negotiations;  however, roughly 30 countries, including several major
trading countries, were not yet WTO members.  Therefore, the time was ripe to start exploring the
possible terms and conditions for those countries to participate in the new round as effectively aspossible, since this was in the interests of all.  The General Council should consider ways for the
countries in accession to take part in the preparatory stage for the new round.  The accession of the
Russian Federation to the WTO continued to be one of the priorities of his Government, and it was
hoped that the current economic and financial difficulties being experienced would not delay the
process.
The Director-General said that this discussion was extremely important because it pointed up
one of the most important challenges to the WTO, which was to build a world, rules-based trading
system.  This goal could not be reached unless the present accession negotiations were satisfactorily
completed.  The discussion was also very timely as it came just as the WTO was entering an intensive
preparatory process for new multilateral negotiations.  The WTO's goal had to be to complete the
maximum number of accession negotiations before  the next round.  To do this, WTO Members would
need to come up with constructive and creative solutions.  He shared the sentiment that special
attention had to be given the least-developed countries.  For all the candidates, the right balance had to
be found between the need to ensure against weakening the WTO system and the capacity of the
individual acceding governments.  Individual acces sions were at different stages of advancement,
ranging from the very initial stage to the very ad vanced.  For governments who would not be able to
conclude their accession by the time the WTO started its new negotiations, a way would have to be
found to enable them to participate as actively as possible.
The Chairman proposed that the General Council take note of the statements and agree to
revert to this item at a future meeting.
The representative of Jamaica recalled that he had made two proposals.  One was for the
WTO Secretariat to continue its review of the accession process and to build on the points that had
been made at the present meeting so that when the General Council next met it could have a more
substantive discussion.  He hoped that notwithstanding the statements of principle that had been made
by some of the major trading partners, Members could be more practical.  He again asked if the
Secretariat could be asked to prepare a technical note that would enable a more substantive nextdiscussion, and whether those countries in accession could meet with the chairpersons of the
accession working parties.
The Chairman said that the Secretariat could provide a note along the lines of what had been
suggested, which would be available before the next discussion of this matter.  As he himself was
Chairman of an accession working party, he would leave the suggestion of a meeting of acceding
countries and chairpersons of accession working parties with the Director-General.
The General Council took note of the statements, agreed  to ask the Secretariat to prepare a
technical note on the accession process, and agreed to revert to this matter at a subsequent meeting.
12. Date of the Third Session of the Ministerial Conference
The Chairman recalled that at the September 1998 meeting of the General Council, the United
States had proposed the dates of 30 November – 3 December 1999 for the Third Ministerial
Conference, and that the General Council had agreed  to revert to this matter at an early opportunity
with a view to finalizing agreement on it.  He pr oposed that the General Council agree on these dates.WT/GC/M/32
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The General Council took note of the statement and so agreed .
13. Agreement on Preshipment Inspection - Review under Article 6 of the Agreement
(a) Report of the Working Party (G/L/273)
The Chairman recalled that at its meeting on 7, 8 and 13 November 1996, the General
Council, on the basis of a recommendation by the Counc il for Trade in Goods, had agreed to establish
a working party under the Goods Council to conduct the review provided for under Article 6 of the
Agreement on Preshipment Inspection.  At its December 1997 meeting the General Council had
agreed that the life of the Working Party on Preshipment Inspection be extended for one year for the
purposes described in paragraph 8 of Section B of th e report in G/L/214.  The most recent report of
the Working Party was before the General Council in document G/L/273.
Mr. Brown (United Kingdom), Chairman of the Working Party on Preshipment Inspection,
said that the life of the Working Party had been extended for another year to exchange views on a
Code of Conduct/Practice for PSI entities;  a standa rd inspection format;  selective examination of
shipments;  auditing of PSI entities;  the promotion of competition among PSI entities;  fee structures for
PSI entities; and the use, to user Members, of buildin g price databases.    Other future work included an
assessment of technical assistance activities in accordan ce with Article 3 of the Agreement.  In a series
of formal meetings held during 1998 the Working Party had exchanged views on issues in its work
programme.  At several informal meetings the Working Party had heard presentations from a number of
inter-governmental and non-governmental organizati ons.  These discussions had been very useful in
furthering the Working Party's understanding of the issu es in its work programme, as well as the practice
of preshipment inspection in general.   The Work ing Party recommended that its life be extended until
31 March 1999 in order to conclude the discussions on its work programme and on the matter of trade
facilitation, which had been referred to it  recently by the Council for Trade in Goods.
The General Council took note of the statements and agreed  that the life of the Working Party
be extended until 31 March 1999 in order to conclude its work.
14. Recommendations of the Committee on Budget, Finance and Administration
The Chairman recalled that the report of the Committee on Budget, Finance and
Administration had been on the agenda of the October 1998 meeting of the General Council and that
the work of the Committee had not been finished in time for that meeting.  The Committee had
completed consideration of its own agenda only on 8 December.  In view of this fact, the General
Council was being asked to deal with the Committee's recommendations at the present meeting.  A
full report would be submitted to the General Council early in 1999.  There were precedents for this
procedure whereby the General Council examined only the Budget Committee's recommendations.This procedure had been followed in meetings on 3 April 1995 (WT/GC/M/3) and 11 July 1995
(WT/GC/M/5).  In the absence of the Budget Committee Chairman, Mr. Wilhelm Meier (Switzerland),
established practice was to have a senior member of the Secretariat fill in for the Chairman.  He asked
Mr. Warren Lavorel, Deputy Director-General, to present the Committee's recommendations contained in
document WT/BFA/38.
Mr. Lavorel, Deputy Director-General, said that the Committee on Budget, Finance and
Administration had met in late September and again on 8 December, and had dealt with a lengthy
agenda.  Document WT/BFA/38 concerned the Committee's recommendations on deliberations.  The
Committee's full report would be submitted to the General Council early in 1999.  Recommendationone concerned the Director-General's Financial Report on the 1997 Accounts of the WTO and ReportWT/GC/M/32
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of the External Auditor Thereon.  The Committee had examined the accounts for 1997, the detailed
points raised by the External Auditor and clarifications provided by the Secretariat.  This was the first
report by the Netherland's Court of Audit which had been named external auditor by the General
Council in July 1996.  The Committee recommended that the General Council approve the audited
accounts for 1997 and convey to the external auditor their thanks for the valuable assistance providedin the audit of these accounts.  Recommendation two concerned the Designation of Member and
Alternate Member Representing the WTO Members on the ICITO Staff Pension Committee.  As the
member and alternate member representing the WTO Members on the ICITO Staff Pension
Committee were no longer available to serve on that Committee, it was necessary to designate a
member and alternate member for the balance of the three-year term of office remaining until
31 December 1998.  Following consultations, the Committee recommended that the General Council
designate Mr. Michael Stone (Hong Kong, China) and Mr. Sándor Simon (Hungary) as the memberand alternate member, respectively, to represent the WTO Members on the ICITO Staff Pension
Committee for the period until 31 December 1998.
Recommendation three concerned the Assessmen t of Additional Contribution to the 1998
Budget and Advance to the Working Capital Fund: A ccession of the Kyrgyz Republic.  In view of the
accession to the WTO of the Kyrgyz Republic (WT/BFA/W/28), the Committee recommended to the
General Council that a pro rata  contribution to the 1998 budget amounting to Sw F 1,034 be assessed on
this Government.  This assessment, calculated as from 20 December 1998, was based on an annual
contribution of 0.03 per cent, taking into account the in ternational trade figures (imports plus exports in
goods, services and intellectual property rights) of the Kyrgyz Republic for the years 1994-1996.Furthermore, on the basis of the level of the Working Capital Fund of Sw F 7,394,252 on
20 December 1998, the Committee recommended to the General Council to assess an amount of
Sw F 36,971 on the Government of the Kyrgyz Republic as an advance to the Fund.   Recommendation
four concerned the Establishment of a Programme Support Fund.  The question of establishing a
Programme Support Fund had been under consideration for some time in the Committee.  Onemember of the Committee, while not supporting the establishment of the fund, had nevertheless
indicated that his delegation would not oppose the recommendation on this question.  The Committee
therefore recommended to the General Council that, as from 1 January 1999, overhead costs on trust
funds be channelled into a Programme Support Fund  which would augment resources in support areas
where a demonstrable relationship exists between the supporting activity concerned and the trust fund
activities which generated the revenue.   Recommendation five concerned the Utilisation of the
Balance Under the 1996 Surplus.  The Committee recalled that the discussions on the budgetproposals for 1999 were based on the assumption that the uncovered balance of the accumulated
deficit in the previous year's Surplus Account would be met from the balance remaining available
under the 1996 Surplus Account.   The Committee therefore recommended to the General Council that
the uncovered balance of the accumulated deficit in the 1997 Surplus Account (WT/BFA/W/25,
paragraph 51) amounting to Sw F 5,979,141 be met from the balance available under the 1996 Surplusamounting to Sw F 5,979,141 (WT/BFA/36, paragraph 29 (c)).  Recommendation six concerned the
1999 Budget.  The Committee had been able to come to a common position with regard to the 1999
budget for the WTO before the end of the year.  He thanked all the delegations who had shown a real
understanding of the needs of the organization and had demonstrated a pragmatic approach to difficult
questions where there was a diversity of views.  The original proposals for 1999 amounted to anoverall increase of some ten per cent.  After numerous discussions in the Committee, revised
proposals corresponding to an increase of 5.4 per cent had been presented.  One delegation, while
joining the consensus, had requested that its views be recorded that it was concerned about growth of
5.4 per cent and would not be in a position to join a consensus on the budget for the WTO in the year
2000 which would exceed zero nominal growth.  The Recommendation read "The Committee submitsto the General Council for consideration and ap proval the following draft resolution on the
expenditure of the World Trade Organization in 1999 and the ways and means to meet such
expenditure."  This resolution included:  Schedule I-A, the proposed 1999 revised budget for the
WTO Secretariat;  Schedule I-B, the proposed 1999 revised budget for the Appellate Body and itsWT/GC/M/32
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Secretariat;  Schedule II, the proposed revised Scale of Contributions for 1999;  and Schedule III, the
revised estimates of miscellaneous income for 1999.  In the context of the examination of the 1999
Budget Proposals, consideration had been given to the level of the minimum contribution.  There had
been considerable support for reducing the minimum contribution, but it was evident that more time
was required to formulate a recommendation that would command a consensus.  As a consequence,the Committee would examine this issue early in 1999, on a priority basis, with a view to reducing the
minimum below the present level of 0.03 per cent.
The representative of Jamaica referred to document WT/BFA/W/27 which indicated that the
1999 budget for Secretariat staffing amounted to Sw F 124.6 million, and asked how the Secretariat
reconciled this figure with the figure of Sw F 122,125,450 in the Committee's recommendations.  He
asked if Mr. Lavorel could confirm that the increa se of 1999 over 1998 was  5.4 per cent, and whether
that was a nominal increase or a real increase.  He recalled that in discussions on the conditions of
service some delegations had conditioned their agreement on the understanding that there would be no
increases in the budget.  He then went through the recommendations point by point.  He agreed with
Recommendation one.  With respect to Recommenda tion two, he understood that the appointment of
these two members would be until 31 December 1998 and did not prejudge the election of members tothe new management structure in the event that a Pension Committee different from the ICITO staff
pension plan committee was established.  He agreed with Recommendation three.  Regarding
Recommendation 4 and the establishment of a programme support fund, he asked what the areas of
support were, whether they were equivalent to thos e divisions in the WTO Secretariat which provided
technical assistance, and what the methodology wa s for augmenting the resources.  Regarding the
under-utilization of the balance under the 1996 surplus, he accepted that recommendation but said that
it was not clear how these surplus accounts were disposed.  Regarding the minimum contribution, he
said it was his understanding that early in 1999 the Committee on Budget, Finance and
Administration would review this issue, with a view to reducing the minimum below 0.03 per cent.
This might be expanded to read "to reflect actual trade flows".   Every due consideration should begiven the equity consideration of actual trade flows measured for those at the minimum level.
The representative of Egypt said that his delegation had no problem with the
recommendations.  Egypt had said that it would not be in a position to adopt any future budget
without resolving the issue of the assessment of contributions of Members.  This should also be
reflected in the Budget Committee's report.
The representative of Haiti associated his delegation with the statement by Jamaica regarding
the minimum contribution.  The basis for the calculation proposed was that each Member's
contribution should be based on its real share in the international trade of all Members.  Fairness
dictated that each Member should make a contribution accordingly.  Members having a share lower
than 0.01 per cent of world trade would be requested to pay a minimum contribution of 0.01 per cent,in order to contribute equitably to the cost of services provided by the organization.  At the beginning
of 1999 Members should work towards a solution to this problem  At present some 45 Members paid
more than they actually should.  When Members returned to this matter, Haiti hoped that a solution
could be found.
The representative of Bolivia endorsed the statements by Jamaica and Haiti and agreed that
contributions should be based on Members' actual participation in world trade.  Bolivia welcomed the
fact that this issue would be taken up on a priority basis as of January 1999, and would follow it
closely.
Mr. Lavorel, responding to some of Jamaica's questions, said that the figure of Sw F 122
million was the correct figure.  On the question of the increase of 5.4 per cent, that was a nominal
increase.  The real increase was probably less than one per cent.  From the current level of activity in
the WTO it was probably a very marginal real increase in activities, and the increase in the budgetWT/GC/M/32
Page 45
was focused mainly in the areas of legal matters, translation and technical cooperation.  All
overspending in 1998 was due to the requirements put upon the WTO by the Members.  With respect
to the designation of Members for the ICITO Staf f Pension Committee, that was only for the duration
of 1998, and it was up to the Members to decide who would represent them in the new management
committee of the pension fund under the WTO Agreement.  Regarding the recommendation forsetting up a programme support fund, what the Members had discussed was that under the existing
donations to the Trust Fund 13 per cent was put aside but went into miscellaneous income.  That
reflected a departure from past GATT practice when the trust funds were very small.  Other
organizations that managed sizeable trust funds put this 13 per cent, which was supposed to cover
administrative and overhead costs of managing the funds, into a support fund.  That was what this
recommendation in effect did.  During the discussion in the Budget Committee, it had been made
clear by the Members of the Committee that they wanted detailed accounting of how that 13 per centsupport fund was used, and the Secretariat had promised to undertake to do that.  With respect to the
operation of the surplus accounts, the reason that these accounts bounced around from year to year
depended a great deal on when contributions for the year were made.  Particularly if certain large
contributions came in after 1 January, the WTO would run a deficit one year and a surplus the next.
Another factor related to the donations and the financial rules which required the WTO to do certainthings in such a situation.
The General Council took note of the statements, approved
 the specific Recommendations
one through six contained in document WT/BFA/38, and approved the draft Resolution referred to in
the Recommendation six.
The representative of Jamaica said that in the Committee's report the financing of the
Appellate Body had been set at Sw F 800,000.  In the Annual Report it was Sw F 800,000;  the
present recommendation was Sw F 1.9 million, which exceeded the budget of Sw F 1.5 million for
trade policy training courses.  Mr. Lavorel had indicated that part of the increases had to do withtechnical assistance and other claims by Members.  It was necessary to understand the limits between
the so-called Member-driven approach and the responsibilities of the Director-General.  The budget
should be seen as a strategic instrument for managing the various programmes, and the policy
objective document of the Director-General should be a far more important element in the process.
The General Council took note of the statement.
15. Review of WTO activities.  Reports of:
(a) General Council (WT/GC/W/110), Dispute Sett lement Body (WT/DSB/14 and Add.1), Trade
Policy Review Body (WT/TPR/59), Sectoral Councils (G/L/285, S/C/6, IP/C/15), Committees
on Trade and Development, Balance-of-Pay ments Restrictions, Budget, Finance and
Administration, and Regional Trade Agr eements (WT/COMTD/15, WT/BOP/R/44,
WT/BFA/37, WT/REG/7)
(b) Committee on Trade and Environment (WT/CTE/3)
(c) Working Groups on the Relationship between Trade and Investment (WT/GTI/2) the
Interaction between Trade and Competition Policy (WT/WGTCP/2), and Transparency inGovernment Procurement (WT/WGTGP/2)
(d) Councils and Committees under the Plurilateral Trade Agreements (GPA/25, WT/L/291)
The Chairman recalled that under this item the General Council would be conducting a
review of WTO activities in pursuance of the Decision concerning procedures for an annual overviewWT/GC/M/32
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of WTO activities and for reporting under the WTO (WT/L/105).  He drew attention to the annual
reports of the various Committees and Councils in the documents referred to under this item, and
invited the Chairpersons of the respective WTO bodies to introduce the reports from these bodies that
were before the General Council before turning to the Report of the General Council.
Mr. Morjane (Tunisia), Chairman of the Dispute Settlement Body, said that during the period
under review, the Dispute Settlement Body, (DSB) had held 13 meetings .  Compared to the report for
1997, 47 new cases had been notified thus far to the DSB.  In discharging its administrative functions
pursuant to Article 2.1 of the Dispute Settlement Understanding (DSU), the DSB had established 15
panels.  Eight Appellate Body reports had been adopted during the period under consideration.  In
seven cases the Appellate Body reports had modified the findings of panel reports, and in one case the
findings of the panel had been reversed.  Three panel reports had been adopted by the DSB withoutrecourse to the appeal procedures.  In most cases which required implementation of the DSB's
recommendations, countries had stated their readiness to meet their WTO obligations and had been in
a position to agree on a reasonable period of time for implementation.  In two cases, however, the
parties had been unable to agree on a period of time for implementation and had requested that such a
period be determined through binding arbitration. In 1998, the DSB had received status reports onprogress in implementation of adopted recommendations with regard to three different cases. During
the period covered by the report, the Secretariat had received nine notifications of mutually agreed
solutions to matters formally raised under th e dispute settlement provisions. Regarding the
administration of the Indicative List of Government al and Non-Governmental Panelists, in October
1998 a new consolidated version of the list had been circulated in document WT/DSB/13.  Animportant part of the DSB's activities had been carried out pursuant to the Ministerial Decision on the
Application and Review of the Understanding on Ru les and Procedures Governing the Settlement of
Disputes.  So far the Dispute Settlement Body had held some ten informal meetings, half of which had
been devoted to discussing the issues on the basis of informal suggestions submitted by delegations.
This exercise required a considerable amount of time and effort and, in particular, willingness andgood will by all Members.  This was why at its special meeting on 8 December 1998, the DSB had
agreed to the following:
"In the light of the requirement that a full review of the dispute settlement rules and
procedures take place within four years after the entry into force of the Agreement
Establishing the World Trade Organization, the Dispute Settlement Body has conducted
extensive discussions in informal meetings.  However, as the discussions have not beencompleted and there remain a number of suggestions by Members that have yet to be
considered, there is a consensus to continue discussions beyond the end of this year.  The
DSB therefore has agreed to propose to the Gene ral Council that it decide to continue and to
complete the review process including the preparation of the report by the end of July 1999."
Mr. Ali Said Mchumo (Tanzania), Chairman of the Trade Policy Review Body, said the
report provided the Trade Policy Review Body's (T PRB) annual assessment of the extent and manner
in which the Trade Policy Review Mechanism (TPRM) was fulfilling its objectives, and concluded
that the trade policy review had continued to fulfil its role as an effective exercise in transparency.
During the year, the TPRB had conducted 15 reviews covering 20 Members.  The procedures for thereviews had in general been smooth and the quality, content and style of the reviews had been
maintained.  The report noted that the process in 1998 had generally been satisfactory, although a
number of reviews had been delayed and there had been a bunching of reviews towards the end of the
year.  The 1999 programme, reflecting both the availability of resources and the increased workload
on delegations implied by the 1999 Ministerial meeting and its preparations, envisaged the review of12 countries.  Meeting this schedule should allow a more evenly spread programme of reviews in the
future.WT/GC/M/32
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Mr. Soto Saborio (Cost Rica), Chairman of th e Council for Trade in Goods, said that during
the period under review, the Council for Trade in Go ods had met 11 times.  Much of its time had been
taken up with work related to the "major review of the first stage of the integration process pursuant to
paragraph 11 of Article 8 of the Agreement on Textiles and Clothing."  The Council had also been
working on trade facilitation, pursuant to the directive of Ministers at Singapore, and more recently itsattention had been focussed on the work programme on electronic commerce as mandated by that
body.   On textiles, in February 1998 the Council had adopted a text containing a detailed summary of
the discussions and  the conclusions of its major review which had been conducted pursuant to
paragraph 11 of Article 8 of the Agreement on Textiles and Clothing.  He recalled that the major
review had been carried out by the Council between October and December 1997.  Following this
formal review process, several informal consultations had been undertaken by the previous Council
Chairman in late 1997 and early 1998 in order to prod uce a summary of the main points raised in the
review and an agreed set of conclusions flowing from it.  This process had been successful and the
results were reflected in document G/L/224.  On trade facilitation, the Council had agreed in late 1997
that a Symposium on Trade Facilitation should be held to further contribute to Members'
understanding of the subject and to assist them in moving to the phase of analytical work.  On 9 and
10 March 1998, such a Symposium had been held, which Members had considered informative andvery useful.  Discussions had been pursued in th e Council on how to move the process forward, and
on 8 July 1998, the Council had agreed on a work schedule which was contained in paragraphs 6.6 to
6.7 of G/C/M/34.  It was agreed that the Council would convene in regular informal sessions to take
up the items set out in the work schedule. The first such meeting had been held on 28-29 September
1998 where import and export procedures and requirements, including customs and border-crossingproblems, had been examined.  An overview of the Kyoto Convention and its current revisions
process had also been provided.  The second meeting had taken place on 7-8 December 1998, where
physical movement of consignments (transport and transit), payments, insurance and other financial
requirements which affected the cross-border movement of goods in international trade had been
addressed.  A third meeting was scheduled for 1 and 2 March 1999 and would examine issues relatedto electronic facilities and their importance for fa cilitating international trade; technical cooperation
and development issues relating to simplification of trade procedures; and the relationship of other
WTO Agreements to trade facilitation.  On electronic commerce, the Council had begun the work
mandated in the work programme as set out in document WT/L/274.  At an informal meeting of the
Council on 8 October 1998, it had been agreed to hold three informal meetings to discuss matters in
the work programme. At the first of these meetings, on 9 November 1998, the Council had dealt with
the question of market access for and access to products related to electronic commerce, customsduties and other duties and charges as defined under Article II of GATT 1994 and classification
issues.  The second meeting, scheduled for 26 January 1999, would address valuation issues arising
from the application of the Customs Valuation Agreement and rules-of-origin issues.  The third
meeting, scheduled for 8 March 1999, would examine standards in relation to electronic commerce
and issues arising from the application of the Import Licensing Agreement.  The Council hadexamined and approved recommendations forwarded by the Committee on Rules of Origin on the
continuation of the Harmonization Work Programme on non-preferential rules of origin.  Similar
action had been taken with respect to the recommendations submitted by the Committee on Regional
Trade Agreements on how the required reporting on the operation of regional trade agreements should
be carried out, and on the revised Questionnaire on State Trading forwarded by the Working Party onState Trading Enterprises.
Mr. Akao (Japan), Chairman of the Council for Trade in Services, said that in 1988 the
Council had continued its work on the exchange of information programme endorsed by Ministers in
Singapore in December 1996.  In this context, a series of discussions had been held on specificservices sectors, with a focus on the manner in which the service in question was defined, traded and
regulated.  The aim had been to enable Members to  identify issues and priorities for the upcoming
negotiations.  The Council had agreed on five questions to be addressed in discussing each of the
sectors.  This constituted a useful but not exhaustive framework for the discussions.  The Council hadWT/GC/M/32
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also begun implementing the work programme on electronic commerce adopted by the General
Council on 25 September 1998.  A schedule of discussions on the elements of the work programme
had been established and detailed substantive discussions had started on how those elements related to
the GATS.  The question of a cooperation agreement between the ITU and the WTO had been
addressed at several meetings.  While Members felt that some form of cooperation would bedesirable, especially in the field of technical cooperation and exchange of information, a final decision
had not yet been taken on the form and content of such an agreement.  Other activities of the Council
during the period under review included matters rela ting to the entry into force of the Fourth Protocol
on Basic Telecommunications, the verification of the Schedules of Commitments in Financial
Services resulting from the negotiations concluded on 12 December 1997, and the review of
notifications by Members.  Annexed to the Council's report were the reports of three of the four
subsidiary bodies:  the Committee on Specific Commitments (S/SCS/3), the Working Party on
Professional Services (S/WPPS/3) and the Working Party on GATS Rules (S/WPGR/3).  The
Committee on Trade in Financial Services, which had thus far not met in 1998, was scheduled to meet
on 17 December.
Mr. Major (Hungary), Chairman of the Council for Trade-Related Aspects of Intellectual
Property Rights, highlighted three aspects of the work carried out by the Council as summarized in the
report:  (1) the Council had continued the review of national implementing legislation.  It had also
started to make practical arrangements for the reviews of the TRIPS implementing legislation of
developing country Members who would have to comply by 1 January 2000 with most of their TRIPS
obligations;  (2)  regarding technical cooperation, a joint initiative had been launched in July 1998 by
the WTO and WIPO Secretariats to enhance their existing cooperation in the field of technical
cooperation based on the Agreement entered into between the two organizations on 1 January 1996;
(3) regarding the built-in agenda of the TRI PS Agreement, intensive work had continued on
geographical indications in the context of Articles 24.2 and 23.4.  The Council had started work in
relation to Article 27.3(b) concerning the protection of plant and animal inventions and in relation toArticle 64.3 concerning "non-violati on" disputes.  The report showed that the Council had continued
to make useful progress in carrying out the tasks before it.
Mr. Jenkins (United Kingdom), Chairman of the Committee on Balance-of-Payments
Restrictions, said that the Committee's report broadly spoke for itself.  He drew attention to the fact
that the Committee had held only two consultations in 1998 compared to 11 in 1995, five in 1996 and
eight in 1997.  Only five Members were currently consulting in the Committee:  Bulgaria, Tunisia,Pakistan, Bangladesh and Romania.
Mr. Lavorel (Deputy Director-General), sp eaking on behalf Mr. Meier (Switzerland),
Chairman of the Committee on Budget, Finance and Administration, said that the Committee's report
covered its work until September 1998.  The meeting of the Committee which had begun on
17 September had ended only on 8 December.  Consequently, the report should be read in conjunction
with the Committee's recommendations to the General Council in document WT/BFA/38.  Regarding
point C of the report in document WT/BFA/3 7, which dealt with the UN/WTO cooperation with
regard to the International Trade Centre's budgetary arrangements, he reported that there had been
recent developments in New York, and particularly in the Fifth Committee, which indicated that aresolution had virtually been reached of this long outstanding question.  A full report would be made
in the Budget Committee and would be include d in the Committee's annual report for 1999.
Mr. Noirfalisse (Belgium), Chairman of the Committee on Regional Trade Agreements, said
that 1998 had been a busy year for the Committee on Regional Trade Agreements (CRTA).  The
Committee had held five formal sessions and a large number of informal meetings.  The Committee
had devoted great attention to two issues:  the examination of regional trade agreements (RTAs) and
the systemic implications of agreements and initiatives for the multilateral trading system, and the
relationship between them.  The Committee had conducted reviews of ten RTAs.  However, whileWT/GC/M/32
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there were draft reports on the examination of 28 RTAs, the Committee had not been able to agree to
forward any report to its superior body.  This was a matter of concern for him and for many Members.
On the systemic implications of RTAs, the report reflected the current situation the Committee was
facing.  Much work had been done by both the Members and the Secretariat, and he hoped that in
1999 the Committee would be in a position to move discussions a step further and to consider whatrecommendations could be transmitted to the General Council.  It had become clear that these two
issues were closely linked, and he drew attenti on to paragraph 15 of the Committee's report which
stated that "the need to move forward in the process of examination pursuant to WTO rules was
recognized;  however, progress in this regard was slowed, inter alia , by a lack of consensus on the
interpretation of certain elements of those rules relating to RTAs".    This lack of consensus was a
challenge the Committee had to tackle in 1999 and throughout the course of its mandate.  With regard
to reporting on the operation of RTAs, the Council for Trade in Goods, the Council for Trade inServices and the Committee on Trade and Development had recently adopted the procedures
recommended by the CRTA on how information on RTAs should be presented to the WTO.  The
Committee had recently agreed on a calendar for 1999 for the submission of biennial reports on RTAs
notified under Article XXIV.  It was expected that 24 RTAs would be reporting in 1999.  This would
increase transparency in this area.  Since the adoption of the report, the Committee had agreed to grantad hoc  observer status to the Latin American Integrat ion Association, and to continue consultations on
requests for observership from a number of other inter-governmental organizations.  He recalled that
at the July General Council meeting he had called on Members to re-evaluate and, where necessary, to
strengthen their contribution to the work of the Co mmittee, and he repeated that appeal, so that the
Committee would be able to present meaningful achie vements to the General Council in time for the
Third Ministerial Conference.
Mr. Chowdury (Bangladesh), Chairman of the Committee on Trade and Development said
that discussion in both the Committee on Trade and Development (CTD) and in the Sub-Committee
on Least-Developed Countries had been rich and full, and progress had been made in several areas oftheir work.  Due to the need to complete the report by a certain date, it did not cover the most recent
meetings of the Sub-Committee on 25 November and of the CTD on 7 December.  He would bring
the General Council up to date on developments at these meetings.  The CTD had met five times, and
the Sub-Committee four times, during 1998.  The main themes of the CTD's agenda had been:  review
of the application of special provisions in the Multilateral Trading Agreements and related Ministerial
Decisions in favour of developing Members, in particular least-developed countries; technical
cooperation and training activities for developing country Members; evaluation of such technicalcooperation and training programmes;  developmental implications of electronic commerce;  concerns
and problems of small economies; and trade facilitation.  The Committee had been aided by a number
of important contributions from delegations and by significant papers from the Secretariat, inter alia
on implementation questions, the developmental implications of electronic commerce, and technical
cooperation and training activities.  At its December meeting, the Committee had heard a presentationby UNCTAD on the outcome of the Lyon "Partners for Development" Summit meeting.  The
Committee had taken note of decisions forwarded from the Committee on Regional Trade
Agreements on reporting procedures and guidelines for regional trade agreements.  The Sub-
Committee on Least-Developed Countries had review ed progress on the Integrated Framework for
Technical Assistance, initiated at the 1997 High-Level Meeting, and had invited the ITC, the WorldBank, and UNCTAD to make presentations on their activities under the Framework.  In addition, the
Sub-Committee had focused on two main issues of importance to least-developed countries:  market
access for their exports of goods and services, and difficulties faced by them in implementing WTO
agreements.  The Sub-Committee had agreed that the papers prepared by the Secretariat on these two
topics should be forwarded, through the CTD, to the Intersessional Meeting of the General Council asinputs for its discussion under Paragraph 9 (c) of the May 1998 Ministerial Declaration..
During the year, the Committee had received several applications for observer status from
International Intergovernmental Organizations, but no consensus had been reached, and he had askedWT/GC/M/32
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the Secretariat to convene informal consultations in order to seek a solution.  In 1999, the Committee
would pursue its work in the areas of WTO im plementation, concerns and problems of small
economies, the developmental implications of electr onic commerce, trade facilitation in the context of
the CTG Work Programme, and the monitoring and evaluation of the WTO's technical assistance and
training programmes.   The Sub-Committee would continue to monitor work under the IntegratedFramework, including invitations to relevant international organizations.  The Secretariat had been
requested to produce follow-up material on trade-related issues relating to small economies, trade
facilitation and electronic commerce.  In addition, a one-day seminar on developmental aspects of
electronic commerce, comprising private and public -sector participation, was planned for 19 February
1999.  Members of the Committee had emphasised the importance of the forthcoming High-Level
Symposium on Trade and Development planned for March 1999.
The Chairman, speaking on behalf of Mr. See (Singapore), Chairman of the Committee on
Trade and Environment, said that during 1998 the Committee had made progress in analysing all
items on its work programme and advancing its understanding of the issues involved.  Included in the
report was the Committee's work programme and schedule of meetings for 1999.  Members'
contributions and national experiences on all the items of the work programme should enrich the
Committee's discussions and move forward the process of fulfilling the tasks mandated in its terms ofreference.
Mr. Krirk-Krai Jirapaet (Thailand), Chairman of the Working Group on the Relationship
between Trade and Investment, said that the Working Group's report was submitted to the General
Council in the light of the provision in paragraph 20 of the Singapore Ministerial Declaration that the
General Council would keep the work of this Wo rking Group under review and would determine after
two years how its work should proceed.  The report provided an overview of the work done in the
Working Group since its establishment.  Section B contained procedural information on the activities
of the Working Group, and Section C summarized the substantive discussions which had taken place
in the Working Group.  In addition, the report contained in paragraph 227 a recommendation for adecision by the General Council to extend its mandate.  He hoped that the General Council could
agree to adopt this decision so as to enable the Working Group to continue its work.
The Chairman, speaking on behalf of Prof. Jenny (France), Chairman of the Working Group
on the Interaction between Trade and Competition Policy, said that the Working Group had continued
the rich and wide-ranging discussion it had engaged in since its inception, pursuant to the mandate in
paragraph 20 of the Singapore Ministerial Declaration.  The work continued to be structured on thebasis of the Checklist of Issues Suggested for Study which the Group had taken note of at its first
meeting, in July 1997.  Issues considered in the Group's four meetings in 1998 included the impact of
anti-competitive practices of enterprises and associations on international trade;  the impact of state
monopolies, exclusive rights and regulatory policies on competition and international trade;  the
relationship between the trade-related aspects of intellectual property rights and competition policy;the relationship between investment and competition policy;  and the impact of trade policy on
competition.  In addition, consideration had been given to the relationship of trade and competition
policy to development and economic growth.  Paragraph 20 of the Singapore Ministerial Declaration
provided that the General Council would keep the work of the Working Group under review, and
would determine after two years how the work of the Group should proceed.  To facilitate this
determination, the report provided an overview of the work done to date in the Group.  In addition, it
contained a recommendation (in paragraph 154 of the report) that the Group continue its educative
work in 1999.
Mr. Corrales Leal (Venezuela), Chairman of the Working Group on Transparency in
Government Procurement, recalled that the Working Group was mandated "to conduct a study on
transparency in government procurement practices, taking into account national policies, and, based
on this study, to develop elements for inclusion in an appropriate agreement".  In the three meetingsWT/GC/M/32
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held in 1998, the Working Group had proceeded in the following way:  the Group conducted its work
by taking up in turn each of the twelve headings of an informal note by the Chair listing the issues that
had been raised, and points made on these issues since the Group's November 1997 meeting.  The
latest version of this note, entitled "List of the Issues Raised and Points Made", was attached to the
report.  Factual contributions had been presented by Members describing their national proceduresand practices relating to transparency in government procurement.  Written and oral submissions had
been made by Members expressing their views on the issues before the Group relating to elements of
transparency in government procurement.  The Secretariat had prepared an informal factual note, in
response to a request at the Group's June meeting, reflecting the written and oral proposals made
under items III-VII of the topics before the Working Group.  At the Group's next meeting it would
revert to the issues contained in the revised version of the Chairman's informal note, "List of the
Issues Raised and Points Made", using this note as the basis for its discussion.  As an auxiliaryinformal paper, Members would also have available to them a revision of the Secretariat informal note
on items III-VII.
The Chairman, introducing the report of the General Council for 1998, said that 1998 had
seen considerable and important work done by the General Council on a number of significant issues.
First there were the preparations for the Ministerial Conference held in Geneva in May together with
the event commemorating the 50th Anniversary of the world trading system, with attendance by Heads
of State and Government.  These preparations had included dealing with matters ranging from the
organization of the two events and an agreed appro ach to the attendance of governments, international
organizations and NGOs as observers at the meeting, to the preparation of a possible text of thesubstantive outcome of the Ministerial Conference – a draft Ministerial Declaration, as well as a draft
Declaration on Global Electronic Commerce.  Both texts had been adopted by the Second Ministerial
Conference.  Foremost among its activities since May had been, as mandated by Ministers, the
initiation in July of a process to ensure the full and faithful implementation of existing WTO
agreements, and to prepare for the Third Session of the Ministerial Conference to be held in theUnited States in 1999.  The General Council had met in Special Session in September 1998 to begin
work on its recommendations concerning the implementation of existing agreements and decisions
and to ensure that the negotiations mandated in Marrakesh in April 1994 began on schedule.  The
General Council had subsequently met in informal intersessional meetings in both October and
November, with further meetings scheduled for December and on into 1999, to continue discussion of
these matters.  The culmination of this work would be the General Council's submission in 1999 of
recommendations to Ministers regarding the WTO's work programme.  The General Council hadconducted lengthy discussions, both formal and informal, throughout the year on global electronic
commerce.  In September it had adopted a comprehensive work programme to examine all trade-
related issues regarding global electronic commerce, which would help to guide future deliberations
on this important new area of trade.
As a follow-up to the 1998 Ministerial Declaration's recognition of the importance of
enhancing public understanding of the benefits of the multilateral trading system, and in consideration
of Members' wishes to improve transparency in WTO operations, the General Council had intensified
its work in this area, especially in regard to the derestriction of WTO documents.  In undertaking this
task, the Council was also in the process of carrying out the review as mandated in the July 1996decision of the General Council on the procedures for the circulation and derestriction of WTO
documents.  The General Council had established three working parties on accession and had adopted
decisions authorizing the accession of two new Members, thus taking a further step towards
universality.  Several other working parties were considered to be close to completing their work.  A
major breakthrough had been achieved with regard to conditions of service of WTO staff and theestablishment of an independent WTO Secretariat.  This had allowed the General Council to take
some long-awaited decisions on these matters in October and thus to resolve an important issue that
had remained on its agenda for some time.  Duri ng the period under review, the General Council had
granted nine waivers to Members on various WTO obligations and had considered reports on sevenWT/GC/M/32
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waivers which had been granted for a period exceeding one year.  The General Council had also
overseen extensive efforts related to the appointment of the next Director-General, a matter which was
still going on. The records gave ample evidence of the attention being given to this important matter.
He expressed gratitude to the Chairpersons of the WTO working bodies for their effort, their
determination and their competence, and also to the Members for the spirit of cooperation they hadshown in the work undertaken.  This, together with a firm commitment to the tradition of consensus in
the WTO, had enabled Members to move ahead with a multifaceted agenda of trade liberalization that
was more important now than at any time in the past.
The General Council adopted the report of the Committee on Trade and Development, took
note of the reports of the other WTO bodies, including the reports from the bodies under the
Plurilateral Trade Agreements, took note of the intr oductory statements by the Chairpersons and took
the following action:
(1) Concerning the continuing review of the Dispute Settlement Understanding,
the General Council decides to continue and to complete the review process including the
preparation of the report by the end of July 1999.
(2) The General Council decides that the Working Group on the Relationship
between Trade and Investment shall continue the educational work that it has been
undertaking on the basis of the mandate contained in paragraph 20 of the Singapore
Ministerial Declaration.  The work of the Working Group, which shall be reviewed by theGeneral Council, shall continue to be based on issues raised by Members with respect to the
subjects identified in the Checklist of Issues Suggested for Study.  It is understood that this
decision is without prejudice to any future decision that might be taken by the General
Council, including in the context of its existing work programme.
(3) The General Council decides that the Working Group on the Interaction
between Trade and Competition Policy shall continue the educative work that it has been
undertaking pursuant to paragraph 20 of the Singapore Ministerial Declaration.  In the light of
the limited number of meetings that the Group will be able to hold in 1999, the Working
Group, while continuing at each meeting to base its work on the study of issues raised by
Members relating to the interaction between trade and competition policy, including anti-
competitive practices, would benefit from a focused discussion on:  (i) the relevance offundamental WTO principles of national treat ment, transparency, and most-favoured-nation
treatment to competition policy and vice versa;  (ii) approaches to promoting cooperation and
communication among Members, including in the field of technical cooperation;  and (iii) the
contribution of competition policy to achieving the objectives of the WTO, including the
promotion of international trade.  The Working Group will continue to ensure that thedevelopment dimension and the relationship with investment are fully taken into account.  It
is understood that this decision is without prejudice to any future decision that might be taken
by the General Council, including in the context of its existing work programme.
The General Council adopted the report of the General Council, on the understanding that the
Secretariat would make the necessary adjustments to the draft report in document WT/GC/W/110 so
as to include matters which had been considered at the present meeting.
The representative of Honduras said that regarding the Dispute Settlement Body (DSB),
Honduras had shown its confidence in the dispute settle ment system by turning to it to resolve a trade
dispute that profoundly affected its economy.  It had hoped that before the end of 1998 it would be
able to obtain full satisfaction from the Euro pean Communities regarding its import regime for
bananas.  He said that the effectiveness of a dispute settlement system did not lie solely in its capacity
to review the compatability of a Member's policies, nor was it sufficient to adopt reports.  TheWT/GC/M/32
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efficiency of the system could not remain subject to the willingness of a Member which had an
obligation to bring its measures into conformity w ith the covered agreements.  Theoretically, the rules
contained provisions intended to achieve the implementation of what had been adopted, if not
promptly, at least within the reasonable period of time set by the arbitrator.  The rules also provided
that if the complaining Member so desired, it could request that the panel be reconvened in order tomake a ruling on implementation.  Unfortunately, this review might only be theoretical, because if
there was no willingness to comply with adopted reports, there was no guarantee that the report of the
reconvened panel would be faithfully implemented.  In other words, for countries such as Honduras,
there was a wide gulf between theory and practice.  He invited Members to look at his comments in a
wider context.  For developing country delegations it would not be hard to imagine that there were no
realistic and effective alternatives for a report to be implemented as it should be.  One had to imagine
the risks to the system that this situation represented.  He asked whether irreparable damage had notalready been done to the credibility of the system, given that a way had been demonstrated to evade
prompt and full compliance with resolutions in future cases.  This should be of concern to all
Members, because any dispute settlement system where implementation was left to the vicissitudes of
political realities alien to the WTO environment involved a fundamental weakness that would
undermine the very basis of that system.   Nevertheless, Honduras reiterated its confidence in thedispute settlement system and its willingness to comply with obligations flowing from the
agreements.  He appealed to those who could cont ribute to the credibility of the system to do so.
Regarding textiles, he referred to the report of the Textiles Monitoring Board (TMB) to the
General Council, specifically paragraphs 23 and 24 regarding the restraints imposed by a WTOMember on Honduran exports of cotton and synthetic underwear.  In 1995 safeguard action had been
taken against Honduras on the allegation of serious prejudice or the threat thereof to the producing
industry of the country in question.  Restraints had been imposed on other countries, some of whom
had reached a mutual agreement on the restraints.  When the restraints agreed to were brought before
the TMB for revision, that body did not in any of the cases make a determination as to whether therestraint agreements were justified under Article 6 of the Agreement on Textiles and Clothing.  It had
recorded only that when it examined the cases at the imposition of the restraints, it had found that
serious prejudice had not been demonstrated, but it had not been able to reach a consensus as to the
existence of the threat of serious prejudice.  One of the countries concerned had brought the case to
the DSB, and the panel as well as the Appellate B ody had found that the restraints imposed on the
country affected were in violation of several provisions of the Agreement on Textiles and Clothing.
In the light of the unequivocal ruling of the panel, Honduras had expected that the TMB wouldreverse its previous decision.  At the request of Honduras, the TMB had examined the measure.
Despite the clearcut ruling of the panel, the TMB had merely invited the party to reconsider the need
for maintaining the restraints until the stated expiry  date.  Article 8 of the Agreement on Textiles and
Clothing set out the mandate of the TMB in detail;  paragraph 8:8 stated that "[w]henever the TMB is
called upon to make recommendations or findings, it shall do so, preferably within a period of 30 days…."  The working procedures of the TMB were also specifically set out.  Furthermore, in the
Singapore Ministerial Declaration, Ministers had set out instructions regarding the review process of
the TMB.  In the case mentioned, the TMB had not fully carried out its task, which was a matter of
grave concern to Honduras, as this substantially weakened the trading system established by the
Agreement on Textiles and Clothing.  It was necessary for the TMB's review process to be effective inorder to ensure that protectionist measures did not remain in effect if they did not meet the criteria of
the Agreement.  The continued restraint referred  to was prejudicial to the trading interests of
Honduras under the Agreement and put it in a position of inequality vis-à-vis  other trading partners,
thus leading to an additional burden on the Honduran industry.
The representative of Jamaica said that the representative of Honduras had spoken from a
deep well of frustration about trade interests and the impact that decisions or lack of decisions had on
the well-being of the Honduran people.  He too spoke from a deep well of frustration that Members
had not done justice to the rights and obligations of a rules-based organization. The Chairman of theWT/GC/M/32
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DSB had reported 13 meetings, one of which had been adjourned and could be resumed before the
end of the year.  The agenda of that adjourned meeting contained an item of some importance to
Jamaica, but his delegation was not fully aware of the outcome and the implications that would follow
from the adjournment of that meeting.  Despite Jamaica's request for consultations there had been no
willingness to hold them.  A number of important decisions had been taken in other areas, for exampleregarding disciplines in the field of professional services.  Unfortunately, his delegation, which had an
interest in this, had not been able to attend the meeting in question, although it had tried to follow the
documentation.  Other decisions had been taken, for example to extend the educative work in the area
of trade and investment and trade and competition policy, which was to have been reviewed in the
General Council.  The latter had not reviewed it, but merely taken note of reports.  Many important
issues were covered in the pages of the General Council's report and there were still reports that were
not to be found there.  He asked how it was possible that the General Council, which was the ultimatedecision-making body apart from the Ministerial meetings and which was the forum and the
opportunity for the single undertaking, had come to the end of a year and still had issues ahead like
the GATS.  He hoped that there would be a revolution in the WTO in its working practices, in the way
time was used, and in the way information was made available, so that small delegations would be on
equal terms with large delegations and could feel that the WTO justified the commitment they gave it.Many countries had gone along with decisions which they did not believe to be in the interest of full
equality and transparency, such as on the Integrated Database.  High claims were made in the WTO,
but it had been found wanting in some of the elementary principles of equity and efficiency.
The representative of India said that in point 27 of the General Council's report (GC/W/110)
regarding the WTO Secretariat and senior management structure, it was stated that the General
Council had agreed to take up this issue at a future  meeting.  He hoped that the General Council could
come back to this important subject as soon as possible.  In point 4 of the Dispute Settlement Body's
report (WT/DSB/14) there was a brief reference to the review of the Rules of Conduct.  His
delegation had taken an active part in the framing of those Rules of Conduct, and experience hadshown that certain aspects of them required review .  India looked forward to the review which might
take place early in 1999.  Regarding the report of the Committee on Market Access to the Council for
Trade in Goods (G/L/284), paragraphs 1 and 10 reflected the agreement reached by Members of that
Committee for its Chairman to hold open-ended informal consultations to address the serious
concerns of India and other Members on the procedural and substantive aspects underpinning the
consideration of the proposal earlier in the year to limit access to the Integrated Database to certain
WTO Members.  Point 7 of the report of the Council for Trade in Goods (G/L/285) set out that theChairman of the Council on Trade in Goods would await the results of the open-ended consultations
conducted by the Chairman of the Committee on Market Access before continuing his own
consultations.  India looked forward to the early conclusion of these informal consultations.  The
penultimate sentence of paragraph 12 of the repo rt of the Committee on Customs Valuation (G/L/277)
noted that the Committee adopted its report for 1998 and adopted, ad referendum, the Fourth AnnualReview of the Implementation a nd Operation of the Customs Valu ation Agreement (G/VAL/W/29).
With reference to the matter referr ed to in paragraph 1(b)(iii) of the latter document, the discussions
between the Secretariat and India on its factual aspect s were still underway in respect of four specific
documents:  G/VAL/W/3, G/VAL/ 6, G/VAL/W/13 and G/VAL/W/22.
He strongly endorsed the point made by Hondur as concerning the TMB.  He had understood
that after there was a report of a panel or the Appe llate Body regarding a particular restriction, the TMB
had a responsibility to take into account that particul ar report and to review the restriction if this was
called for under the Agreement on Textiles and Clothi ng (ATC).  He also understood that the TMB had
not discharged its responsibility.  He trusted and hoped that it would be possible for the TMB in futureto take on board the decisions and rulings containe d in panel and Appellate Body reports.  The TMB
report which was annexed to the report of the Counc il for Trade in Goods indicated that the TMB had
not considered all of the measures taken under the AT C, as it was required to do under Article 8.1 of that
Agreement.  The TMB should ensure that it applied the standards applied in panel reports and AppellateWT/GC/M/32
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Body reports, and that all of the measures take n under the ATC were taken into consideration and
appropriately reviewed as  required in Article 8.1.
The representative of the Dominican Republic supported the statement by Honduras on
textiles.  This sector was of the greatest importance to many developing countries and it was the
responsibility of the TMB, as indicated by Ministers in Singapore, to reach recommendations as
required by the ATC, for example of ensuring transparency in drawing up its conclusions and
recommendations.  It was hoped that this type of situation would not be repeated and that the TMB
would fully comply with its mandate in such a wa y that developing countries would not feel their
interests were prejudiced because of the lack of transparency in that body's work.  Her delegation fully
associated with the feelings of frustration expressed by Jamaica.
The representative of Brazil said that, regarding the impact of panel reports and decisions, it
was the well-known position of Brazil that decisions relating to specific dispute settlement cases
applied only to those cases.
The Chairman said that some very important statements had been made, in particular by
Honduras and Jamaica, which were in a sense cries from the heart.  He asked delegations to reflect on
those statements with particular care and thoughtfulness.
The General Council took note of the statements.
16. Guidelines for scheduling of meetings
The representative of Mexico, speaking under Other Business and on behalf of the Informal
Group of Developing Countries, said that for more than three years the developing country Members
had expressed their serious concern over the number of formal and informal meetings in the WTO.
For many developing country delegations it was impossible to attend, let alone to participate
meaningfully in, all of these meetings.  For this reason, in 1995 an attempt had been made to find a
solution to this problem in such a way as to ensure  the participation of each Member in each meeting.
This had resulted in the General Council's adoption in November 1995 of Guidelines on the
Arrangements for Scheduling of Meetings of WTO Bodies (WT/L/106).  While these Guidelines had
mitigated the situation for a while, developing countries still had problems attending meetings and
thus ensuring that their interests were brought to bear in this organization.  For example, a decisionhad recently been adopted in the course of a meeting which a delegation with a reservation to that
decision had not been able to attend.  This was a matter of utmost importance which demanded an
urgent solution.  For this reason and as one first step towards a satisfactory solution, he suggested the
following:  (1) that the review called for in paragr aph 9 of the Guidelines be undertaken as urgently as
possible;  and (2) that this item be included on the agenda of the next regular meeting of the GeneralCouncil.
The representative of Egypt, speaking on behalf of the African Group
, said that smaller WTO
delegations were experiencing great difficulty in covering the increasing number of meetings in the
WTO.  This put some delegations, especially those with limited human resources, under considerablestrain.  These difficulties had been raised on numerous occasions in the past.  As early as November
1995 the General Council had adopted guidelines in th is area.  Consideration of this matter during the
preparation of the First Ministerial Conference had led to the inclusion of a reference to it in
paragraph 22 of the Singapore Declaration.  Neither those guidelines nor the recognition by the
Singapore Ministerial Declaration of the need to minimize the burden on delegations had beenenforced.  Both should be strictly enforced, a nd the number of both formal and informal meetings
kept to a minimum.   Most WTO delegations had to participate also in other organizations in Geneva.
The proliferation of meetings added to the further marginalization of the developing countries, and inWT/GC/M/32
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particular the African countries, in the multilateral trading system, at a time when ways were being
sought to ensure the increased participation of those countries in that system.  This issue had been
considered in different fora, including the General C ouncil, but to no avail.  It was now time for the
General Council to take a decision.  The calendar of meetings for 1999 should strictly adhere to the
agreed guidelines and to paragraph 22 of the Singapore Ministerial Declaration.  The African Groupwas ready to cooperate in finding a practical solution to this problem.
The representative of India associated his delegation with the statement by Mexico and
endorsed the statement by Egypt.  This issue should  not be viewed as merely a procedural one.  The
first step for achieving the integration of the deve loping countries into the multilateral trading system
was to ensure that these countries were able to attend WTO meetings in a meaningful way.  There was
perhaps a better way of organizing WTO meetings so that all interested Members could attend them.India strongly endorsed the suggestion by Mexico.
The representative of Pakistan said that his delegation viewed this issue as very important.
There could be no universal organization without representation.  Pakistan strongly supported the
statement by Mexico.  It was not merely a question of the number of formal, but also informal,meetings.  His delegation looked forward to meaningful solutions to negate the increasing burden of
meetings on developing countries.
The General Council took note of the statements and agreed
 to revert to this item at its next
regular meeting.
The representative of Jamaica suggested that consultations would be necessary in order to
find a practical solution to this problem.
The Chairman said that if delegations so desired he would undertake consultations in advance
of the next meeting of the General Council.
The General Council so agreed and took note  of the statements.
17. United States export restrictions vis-à-vis India
The representative of India, speaking under "Other Business ", said that the Bureau of Export
Administration of the United States Department  of Commerce had notified, on 19 November 1998,
that forty Indian entities and two hundred subordinate entities would not be eligible to receive exports
or re-exports of items subject to the Export Administration Regulations without a licence.  In India's
view, the restrictions were not justified and represented an attempt to deny technology and products to
Indian companies and educational and research institutions.  The imposition of export restrictions wasnot only unjustified, but also was a violation of US obligations under the WTO, particularly Articles I,
XI and XIII of GATT 1994.  India was deeply concer ned by this development.  Unilateral action by
Members cut at the very root of the multilateral trading system.  India noted with regret that some
developed countries had been taking recourse to unilateral action in various situations thus making
multilateral trade disciplines and rules increasingly irrelevant.  It was important that the entiremembership of the WTO took cognizance of this unfortunate trend and devised measures to combat it
before the organization itself was threatened.  In the interests of disciplined and orderly global trade,
Members should refrain from taking such unilater al actions.  The time had come for the General
Council and the Ministerial Conference to act with determination against all unilateral actions.
The representative of the United States said her Government had imposed economic sanctions
on India and Pakistan in May 1998 in accordance with pre-existing US law, as a result of both
countries' testing of nuclear weapons.  Some of these sanctions had been lifted in November inWT/GC/M/32
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recognition of progress by both countries;  others remained in effect.  Also in November the United
States had made more precise and less trade-restrictive its hold on the export of dual-use items by
publishing a list of the entities in both countries to which shipment was prohibited.  Additional
positive steps would be necessary by both India and Pakistan if the sanctions were to be lifted
completely.  In imposing these nuclear testing-related sanctions, the United States had taken care tominimize the impact upon the Indian and Pakistani people by continuing to support lending by
international financial institutions for human n eeds and by maintaining their bilateral assistance
programmes for basic human needs.  The United States considered that all of the actions taken in this
connection were fully consistent with its obligations under the WTO Agreement.
The representative of Pakistan said that his Government had expressed regret and
disappointment at the US decision to publish a list  of Pakistani companies and institutions against
which export restrictions would be applied in pursuance of the Glenn amendment.  Pakistan
considered the US decision as unjustified and an infringement of the free-trade norms which were
being promoted under the WTO.  In addition to the defence-related companies, the list included many
firms and institutions of the industrial, agricultural, research, education, health economic and trade
sectors whose activities were designed to promote social, economic and technological development.Pakistan hoped that the US would review its action and avoid steps harmful to its development
objectives.  It remained firmly opposed to all discriminatory US sanctions and called for their
removal.  Pakistan hoped that in the context of the close and friendly relations between the two
countries, this matter would be resolved expeditiously and amicably.
The General Council took note of the statements.
18. Decision of APEC meeting in Kuala Lumpur
The representative of Malaysia, speaking under "Other Business ", informed the General
Council that at the APEC meeting held in Kuala Lumpur recently, Ministers of 16 participating
economies had agreed that the APEC initiative on tariff liberalization be brought to the WTO.  The
APEC initiative represented an important milestone and a concrete manifestation of years of work.  It
was hoped that the initiative would benefit all.  AP EC members recognized that more information and
cooperation would be needed in this regard, and New Zealand as the next host country would provide
additional information as it became available.  The shared objectives of APEC were universal in
character and could contribute to further strengthening of the multilateral trading system.  Hesummarized the APEC Declarati on as follows:  (i) commitment to pursuing cooperative growth
strategy;  (ii) expansion of trade and investment which remained essential elements of APEC
economic recovery, the need for liberal and op en markets, and an enabling environment for
investment; and (iii) reaffirmation of the comm itment to uphold and strengthen the multilateral
trading system.
The representative of New Zealand said that in its capacity as host country of APEC as from 1
January 1999, New Zealand would provide further information to the WTO on the APEC tariff
liberalization initiative.  APEC senior officials had agreed that an information paper should be
circulated to WTO Members by New Zealand in January 1999.  Broadening participation in the tariffelements of the initiative was a high priority fo r participating APEC economies over the years ahead.
The General Council took note of the statements.WT/GC/M/32
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19. Chairmanship of the Working Party on the Accession of Uzbekistan
(a) Announcement by the Chairman
The Chairman, speaking under "Other Business ", informed the General Council that,
following consultations, Mr. A. de la Peña (Mexico)  had agreed to serve as Chairman of the Working
Party on the accession of Uzbekistan.
The General Council took note of this information.
20. Appointment of officers of WTO bodies
The Chairman reported that he had begun consultations with delegations on this matter.  He
hoped to be able to identify with Members th e delegates who would assume responsibilities as
officers of WTO bodies as soon as possible so that they could begin to prepare for their duties in the
coming year.  He hoped to have identified a list as soon as possible in January.  He would be looking
for individuals of high quality and would also be reflecting the traditions of balance and rotation
which had become very  important in the way the General Council appointed the chairpersons of the
subsidiary bodies.  He asked each delegation to be willing to have its members serve in this capacity,and welcomed input from any delegation as to candidates.  He asked the General Council to authorize
suspension of the ten-day rule for convening meetin gs with respect to this item, to allow him the
possibility of convening a meeting on short notice during the course of January.
The General Council took note of the statement and so agreed
.
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