RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/69
26 October 2001
(01-5248)
General Council
10 October 2001
MINUTES OF MEETING
Held in the Centre William Rappard
on 10 October 2001
Chairman:  Mr. Stuart Harbinson (Hong Kong, China)
Subjects discussed: Page
1. Accession of Iran............................................................................................................ ...........2
(a) Communicati on from Iran..................................................................................................... ......2
2. Committee on Budget, Finance and Administration .............................................................3
(a) Report of the Comm ittee..................................................................................................... ........3
3. Committee on Balance-of -Payments Restrictions..................................................................3
(a) Report on the consultati ons with Bangladesh.............................................................................3
4. Participation of the Advisory Centre on WTO Law in the WTO Pension Plan .................3
(a) Communication from  the Netherlands........................................................................................3
5. Attendance of Observers at the Fourth Session of the Ministerial Conference ..................6
(a) International intergover nmental orga nizations ...........................................................................6
6. Review of Waivers Pursuant to Article IX:4 of the WTO Agreement.................................7
(a) Canada – CARIBCAN, granted on 14 October 1996 until 31 December 2006 .........................7
(b) Cuba – Article XV:6 of the GATT 1994, granted on 14 October 1996 until
31 December 2001............................................................................................................... .......7
(c) Hungary – Agricultural Export Subsidies, granted on 22 October 1997 until
31 December 2001............................................................................................................... .......7
(d) United States – ANDEAN Trade Preference Act, granted on 14 October 1996 until
4 December 2001................................................................................................................ ........7
(e) United States – Caribbean Basin Economic Recovery Act, granted on 15 November
1995 until 31 December 2005.................................................................................................... .7
(f) United States – Former Trust Territory of the Pacific Islands, granted on 14 October
1996 until 31 December 2006.................................................................................................... .7
7. Work Programme on Electronic Commerce..........................................................................9WT/GC/M/69
Page 2
8. Proposal to Amend Certain Provisions of the Understanding on Rules and
Procedures Governing the Settlement of Disputes Pursuant to Article X of the
Marrakesh Agreement Establishing the World Trade Organization ..................................9
(a) Submission by Bolivia, Canada, Chile, Co lombia, Costa Rica, Ecuador, Japan, Korea,
New Zealand, Norway, Peru, Switzerland, Uruguay and Venezuela for Examinationand Further Consideration by  the General Council ....................................................................9
9. Reports of the Special Sessions of the Committee on Agriculture and of the
Council  for Trade in Services ...............................................................................................12
10. Proposals to review and to amend the Understanding on Rules and Procedures
Governing the Settleme nt of Disputes...................................................................................12
(a) Statement by Thailand ....................................................................................................... .......12
11. Overview of Developments in the International Trading Environment............................13
(a) Announcement by the Chairman ..............................................................................................13
12. Accession of the People's Republic of China and the Separate Customs Territory
of Taiwan, Penghu, Kinmen and Matsu ...............................................................................13
(a) Announcement by the Chairman ..............................................................................................13
1. Accession of Iran
(a) Communication from Ir an (WT/ACC/IRN/1)
1. The Chairman drew attention to the communi cation from Iran in document WT/ACC/IRN/1
requesting accession to the WTO Agreement.  He recalled that this item had been on the agenda of the
General Council at its July 2001 meeting at the request of Malaysia, on behalf of the Informal Group
of Developing Countries, and that the General Council had agreed to revert to this matter at the
present meeting.
2. The representative of the United States said that his government expressed appreciation to
Members for their patience as it was continuing its comprehensive policy review regarding Iran.
However, his delegation was not in a position to discuss Iran's accession request at the present
meeting and expected to be able to make a determination on the merits of the issue in the near future.
3. The representative of Egypt, on behalf of the Informal Group of Developing Countries , took
note of the US statement.  She recalled that at the General Council meeting in July, the representative
of Malaysia, on behalf of the Informal Group of Developing Countries, had renewed hope that an
appropriate response would be forthcoming at the present meeting given the fact that this item had
been on the agenda since the beginning of 2001.  She regretted that a decision was still pending buthoped that a consensus on the establishment of the working party on the accession of Iran would be
reached at the next General Council meeting.
4. The General Council took note of the statements and agreed
 to revert to this matter at its next
meeting.WT/GC/M/69
Page 3
2. Committee on Budget, Finance and Administration
(a) Report of the Committee (WT/BFA/54)
5. The Chairman drew attention to the report of the Committee on Budget, Finance and
Administration contained in document WT/BFA/54.
6. Mr. Stoler, Deputy Director-General¸ on behalf  of Mr. Supperamanian (Malaysia), Chairman
of the Committee on Budget, Finance and Administration, introducing the Committee's report on its
meeting held on 16 July 2001, said that the Committee had examined, inter alia , various
administrative up-dates and progress reports;  a number of financial matters, including the Director-
General’s Budgetary and Financial Report for 2000 and the Report of the External Auditor thereon,
the Divisional Reporting on Objectives and Expendi tures for 2000 and the Report on Extra-Budgetary
Funds for 2000;  the WTO Performance Against Budg et as at 30 June 2001; and the assessment of
additional contributions to the 2001 budget and advance to the Working Capital Fund of new WTOMembers.  The Committee had also noted that a Working Group on the selection of the WTO
External Auditor had been established to examine the tenders received for the appointment of the
Auditor.  Consequent to the accessions to the WTO of the Republic of Lithuania on 31 May 2001 and
of the Republic of Moldova on 26 July 2001, the Committee had recommended contributions to the
2001 budget and advances to the Working Capital Fund to be assessed on these Governments(paragraphs 14 and 15 of the report respectively).
7. The General Council took note of the statements, approved
 the Budget Committee's specific
recommendations in paragraphs 14 and 15 of its report in WT/BFA/54, and adopted the report.
3. Committee on Balance-of-Payments Restrictions
(a) Report on the consultations with Bangladesh (WT/BOP/R/58)
8.  Mr. Gómez (Colombia), Chairman of the Co mmittee on Balance-of-Payments Restrictions,
said that on 24 July 2001 the Committee had resumed consultations with Bangladesh that had been
suspended on 15 December 2000, with the view to discussing the items listed in Annex II of
WT/BOP/N/54 for which Bangladesh would seek ot her justification.  Members had welcomed the
detailed report by the representative of Bangladesh, but had expressed some disappointment that thematter had not yet been settled.  The representative of Bangladesh had explained that the statements
made to the Committee in December had been preliminary and that internal discussions had not yet
been completed.  However, the study of the options available to Bangladesh would be completed
soon.  Given the existence, at that time, of a caretaker government and expected elections in early
October, the representative had explained that he would come back to the Committee in November
with a definitive plan.  Members had expressed support for this request and the Committee had agreed
to resume in November, at which time Bangladesh would communicate the option it had chosen.  Onthat basis, the Committee had agreed to suspend its discussion.
9. The General Council took note of the statement and adopted
 the report on the consultations
with Bangladesh (WT/BOP/R/58).
4. Participation of the Advisory Centre on WTO Law in the WTO Pension Plan
(a) Communication from the Netherlands (WT/GC/W/446)
10. The Chairman drew attention to the communication from the Netherlands submitted on behalf
of the 32 Members and Signatories of the Agreemen t Establishing the Advisory Centre on WTO LawWT/GC/M/69
Page 4
and the Least-Developed Countries in document WT/GC/W/446 proposing the participation of the
Advisory Centre on WTO Law in the WTO Pension Plan.
11. The representative of the Netherlands, speaking on behalf of the 32 Members and Signatories
of the Agreement Establishing the Advisory Cent re on WTO Law and the Least-Developed Countries,
recalled that the Centre was a new intergovernmental organization in Geneva established on
17 July 2001, and that its membership remained open to all WTO Members and those in accession.
The Centre provided legal training, support and advice on WTO law to developing-country and
economy-in-transition WTO Members, in particular to the least-developed among them.  Its founders
believed that a proper balance of rights and obligations under WTO law could only be maintained if
all WTO Members had a full understanding of their rights and obligations and an equal opportunity to
resort to the dispute settlement procedures.  The Centre was therefore expected to make a vital
contribution to the rule of law in international trade and to the credibility of the multilateral tradingsystem.  He noted that the annexes to the Communication by the Netherlands contained all the
necessary information on the functions of the Centre, and that Members had also had an opportunity
to become better acquainted with the Centre at its inauguration on 5 October 2001.  Although the
Centre was a small organization, competitive conditions of service were necessary to attract and retain
experienced professionals.  Thus, the General Assembly of the Centre had decided to apply conditionsof service similar to those of the WTO and in this context, a viable pension plan had been regarded as
a useful and necessary instrument to attract senior lawyers and enhance a certain continuity in the
Centre's staff.  However, actuarial experts had advised the Centre that the small number of staff
members was a serious obstacle for the establishment of a "defined benefit" pension plan similar to
that of the WTO.  After careful consideration of the options available, the Centre had decided topresent its proposal to the General Council with a view to allowing its staff to participate in the WTO
Pension Plan, and for this purpose a decision by the General Council was required to change the
current WTO Staff Regulations.  The Centre had commissioned its own study on the possible
financial and technical implications of its staff's admission to the WTO Pension Plan from the
perspective of both organizations.  This study, co ntained in Annex 3 of the Communication from the
Netherlands, had been prepared by the former actuarial consultant of the WTO Pension Plan and the
UN Joint Staff Pension Fund.  His conclusions were that the ideal solution for the Centre would be to
join the WTO Pension Plan.  Moreover, from the perspective of the WTO, the Centre's admission to
the Plan could be easily carried out technically without adversely affecting the actuarial balance of the
Plan.  It could even be of modest benefit to the WTO, as it would broaden the base of the WTO
scheme, and was also expected to result in a net transfer of resources from the Centre to the WTO.
12. While he understood that there could be a certain apprehension among WTO Members about
creating a dependency between the two organizations or setting an unwanted precedent, he noted that
the Members of the Centre attached great importance to establishing effective cooperation between
the Centre and the WTO as foreseen in Article V:1 of the Marrakesh Agreement, and fully recognized
the importance of respecting the competencies and independence of both organizations.  He recalled
that the main reason for which the Centre had been created as an independent organization was theneed to maintain the neutrality of the WTO Secr etariat in dispute settlement.  Therefore, the
relationship between the WTO and the Centre would have to be structured in a manner that would
preclude any financial transfer from the WTO to the Centre or any administrative dependency
between the two organizations.  The Centre would also refrain from seeking any influence or
representation in the management of the WTO Pension Plan.  The Centre's participation in the Planwould not create a functional relationship between the two organizations, nor would it give either
organization any influence over the policy of the other.  The situation would be similar to that which
prevailed until the end of 1998 when the GATT/WTO was participating in the UN Common System
and its Joint Staff Pension Fund.  He added that th ere was no risk that the WTO Pension Plan would
be flooded with requests from other international organizations in Geneva to join its pension scheme,since all United Nations organizations in Geneva were obliged to participate in the United Nations
Common System and Pension Fund, and since no other intergovernmental organization in Geneva hadWT/GC/M/69
Page 5
such a symbiotic relationship with the WTO as the Centre.  Moreover, there was no risk of setting an
unwanted precedent given that the Centre's admission to the Plan required a consensus decision of the
General Council.  He did not expect that a de cision on substance would be taken at the present
meeting and requested that the General Council commence a process of consideration in stages, by
first referring the matter to the Management Board of the WTO Pension Plan to study the technicaland financial aspects of the proposal and present a recommendation to the General Council in due
course.  Through their representatives on the Management Board, the staff members of the WTO
Secretariat would also have the opportunity to participate in the decision-making process.  He hoped
that all WTO Members regarded the Centre as an essential part of a credible legal system in the WTO
which could attract and retain competent legal officers for the benefit of its users and the WTO
membership as a whole.  In the context of the presentation of the draft Ministerial Declaration and the
implementation package, many Members had emphasized the need to place development at centrestage in a new round.  This proposal offered Members an opportunity to act constructively and
sensibly towards this end.  He invited WTO Members that were not yet members of the Centre to
consider this issue on the basis of the longer term and intangible benefits of furthering the credibility
of the rules-based multilateral trading system at no financial cost to them rather than on the basis of
any direct or tangible benefit, as there could be none for them in the short term.
13. The representative of the United States said that it was critically important that the Centre
remained an entirely separate entity from the WTO with no direct or indirect, financial or
administrative ties.  In his view, allowing the Centre to participate in the WTO Pension Plan would
undermine the WTO's ability to maintain an indepe ndent and impartial relationship with the Centre.
While his delegation did not question the Centre's role or value, it could not agree to the actionproposed.  The United States did not believe that initiating a process in stages for the consideration of
the proposal would bring Members closer to a consensus given that its concerns were not related to
the financial implications of the proposal.
14. The representatives of the Philippines, Colombia
, Chile , Kenya , Norway , Uruguay , Ecuador ,
India, Egypt , Honduras , Thailand , Senegal , Venezuela , Panama , Brazil , Côte d'Ivoire , Paraguay ,
Trinidad and Tobago, Canada , Pakistan  and Hong Kong, China  recalled that the members of the
Centre were simply asking at this stage to initiate a process for the consideration of the proposal's
technical and financial implications.  Once this initial process would be completed Members would be
in a better position to make an overall assessment of the proposal.  Furthermore, the proposal would
not cause any disruption in the operation of the WTO Pension Plan, and the General Council could
specify in a decision that it would not set a precedent.  Developing countries attached great
importance to the Centre and a decision by WTO Members to study the implications of the proposalwould show good will towards developing countries' needs.  They urged the United States to
reconsider its position and asked the Chairman to conduct consultations on the proposal.
15. The representative of Bulgaria said that the proposal raised a number of concerns regarding
the impartiality and independence of the WTO Secretariat and deserved further consideration.  In his
view, the creation of the Centre had resulted from the Secretariat's inability to fulfil its functions ofassisting Members in respect of dispute settlement and providing additional legal advice to
developing-country Members, as enshrined in Article 27.2 of the DSU.  This provision of the DSU
contained an in-built contradiction between the impartiality of the Secretariat and the provision of
legal assistance, and a future DSU review could provide Members with an opportunity to find a
solution of principle to this matter.
16. The Chairman noted that a number of delegations had expressed sympathy for the proposal,
but that one delegation had objected to the course of action proposed by the Netherlands.  Therefore
he would conduct informal consultations on this issue before reverting to the matter at a future
meeting.WT/GC/M/69
Page 6
17. The General Council so agreed.
5. Attendance of Observers at the Fourth Session of the Ministerial Conference
(a) International intergovernmental organizations
18. The Chairman recalled that at the July 2001 General Council meeting he had announced that
an objection had been received to granting observer status at the Fourth Ministerial Conference to the
Organization of Petroleum Exporting Countries (OPE C) and that consequently this organization had
not been granted observer status.  He informed Members that the objection to the request for observer
status by OPEC had now been withdrawn.  Theref ore this organization had been granted observer
status to the Fourth Ministerial Conference.  He then recalled that at the General Council July
meeting, he had drawn attention to three requests for observer status at the Fourth Ministerial
Conference by international intergovernmental organizations which had been neither observers in the
General Council nor in other WTO bodies.  These organizations were: the League of Arab States, theArab Monetary Fund and the Advisory Centre on WTO Law.  At that meeting the General Council
had agreed that unless any objection was received by the Secretariat from any Member by
25 July 2001, these organizations would be granted observer status to the Fourth Ministerial
Conference.  The Secretariat had received two objections before the agreed deadline concerning the
request for observer status by the League of Arab States.  Therefore, this organization had not beengranted observer status at the Fourth Ministerial Conference.  Since no objection had been received by
the Secretariat in relation to the requests by the Arab Monetary Fund and the Advisory Centre on
WTO Law, observer status at the Fourth Ministerial Conference had been granted to these two
organizations.
19. The representative of Egypt, on behalf of the Arab country Members
, said that she took note
of the withdrawal of the objection to the request for observer status by OPEC and the granting of
observer status to the Arab Monetary Fund and the Advisory Centre on WTO Law.  With regard to
the request by the League of Arab States (LAS), she expressed concern at the objection by two
Members to the granting of observer status at the Fourth Ministerial Conference in Doha to that
organization.  Rejecting the request of the League of Arab States was sending a negative signal topublic opinion in the Arab countries on the readiness of the multilateral trading system to have among
its ranks the regional institution responsible, among others, for overseeing their economic integration,
particularly the establishment of an Arab free-trade area.  It was difficult to explain to their
constituencies why the WTO, as an organization dealing with trade liberalization as well as
integration of developing countries in world trade, was denying to an intergovernmental regional
organization the right to attend the WTO Ministerial Conference, when that organization was
composed of a group of developing countries, half of which were already Members of the WTO andmany others were in the process of becoming Members.  The LAS had submitted its request with the
aim of seizing the opportunity of the Conference to build bridges between regional efforts and the
multilateral trading system, and to ensure better synergies and compatibility between the two levels.
The objections expressed were apparently based on political grounds.  Her delegation had always
endeavoured to avoid bringing political aspects to the work of this organization and had called onothers to follow suit.  Unfortunately, this had not been the case.  It was regrettable that the LAS had
been denied the right to attend the Fourth Ministerial Conference, which was hosted by an Arab
country and was attracting wide Arab attention.  It was also regrettable because it came at a time when
the Director-General, Mr. Mike Moore, had recognized the importance of establishing stronger ties
between the WTO and the Arab countries and had reiterated his firm willingness to work towards thisobjective.  However, these developments would only serve to strengthen the resolve of Arab country
Members to obtain what was rightly theirs and to redouble their efforts to achieve it sooner than later.
The Fourth Ministerial Conference was almost four weeks away and she hoped that this situation
would be revisited and the current objection lifted.WT/GC/M/69
Page 7
20. The General Council took note of the statement.
21. The Chairman then said that since the Genera l Council July meeting, the Secretariat had
received requests for observer status at the Fourth Ministerial Conference by the following
international organizations:  the United Nations In stitute for Training and Research, the Indian Ocean
Commission, the Indian Ocean Rim Associat ion for Regional Co-operation, the Economic
Community of West African States and the Inter-Parliamentary Union.  Members wishing to consult
the communications sent to the Secretariat by any of these organizations were invited to contact the
External Relations Division.  He proposed that unless any objection was received by the Secretariat
from any Member by 15 October 2001, these organizations be granted observer status to the Fourth
Ministerial Conference.
22. The General Council so agreed.
6. Review of Waivers Pursuant to Article IX:4 of the WTO Agreement
(a) Canada – CARIBCAN, granted on 14 October 1996 until 31 December 2006 (WT/L/185,
WT/L/414)
(b) Cuba – Article XV:6 of the GATT 1994, granted on 14 October 1996 until 31 December 2001
(WT/L/182, WT/L/415)
(c) Hungary – Agricultural Export Subsidies, granted on 22 October 1997 until
31 December 2001 (WT/L/238, WT/L/419)
(d) United States – ANDEAN Trade Preference Act, granted on 14 October 1996 until
4 December 2001 (WT/L/184, WT/L/416)
(e) United States – Caribbean Basin Economic Re covery Act, granted on 15 November 1995
until 31 December 2005 (WT/L/104, WT/L/417)
(f) United States – Former Trust Territory of the Pacific Islands, granted on 14 October 1996
until 31 December 2006 (WT/L/183, WT/L/418)
23. 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 should be reviewed by the
Ministerial Conference not later than one year after it is granted, and thereafter annually until thewaiver terminates" and that paragraph 3 of the respective waiver decisions provided that an annual
report should be submitted by the Member to whom the waiver was granted, on the operation or
implementation of the waiver, with a view to fa cilitating the annual review provided for in
Article IX:4.  Reports on the following waivers were before the General Council for review:
(a) Canada – CARIBCAN (WT/L/414); (b) Cuba – Article XV:6 of the GATT 1994 (WT/L/415);
(c) Hungary – Agricultural Export Subsidies (WT/L/419);  (d) United States – ANDEAN Trade
Preference Act (WT/L/416);  (e) United Stat es – Caribbean Basin Economic Recovery Act
(WT/L/417);  and (f) United States – Former Trust Territory of the Pacific Islands (WT/L/418).
24. The representative of Cuba drew attention to his country's fifth and final report on the waiver
granted on 14 October 1996 (WT/L/415) and noted her country's request for extension of the waiver
this year.  As indicated in the report, the Cuban economy had been able to grow in the midst of an
adverse economic situation due to the considerable increase in the price of oil which had caused22 per cent deterioration in terms of trade.  Economic growth in 2000 had nonetheless been
accompanied by an improvement in social conditions and social policy in Cuba remained one of the
priorities of her government.  In the labour market, over 140,000 new jobs had been created and theWT/GC/M/69
Page 8
unemployment rate had declined by 0.5 per cent to a rate of 5.5 per cent, as compared to the
preceeding year.  As to fiscal policy, Cuba continued to prioritize its strategy of maintaining a fiscal
deficit within a manageable range of 2.5 per cent of GDP in keeping with current economic
circumstances and avoiding fiscal adjustments prejudicial to social conditions.  Monetary policy had
been characterized by greater Central Bank use of measures to regulate money supply contributing toeconomic growth without inflation.  The money supply had been manageable and the unofficial
exchange rate in the domestic market for the population had remained stable at between 20 and
22 pesos.  The Cuban banking and financial system had strengthened and had continued to play an
important role of intermediary.  Despite its improved economic situation, Cuba continued to face
historical obstacles stemming from the economic blockade by the United States against Cuba since
1959, which had limited its opportunities for economic development, particularly in view of its
potential.  Economic recovery had taken place with virtually no external medium- and long-termfinancial support and at a high financial cost.  For these reasons and in order to preserve major
achievements gained in the economic and social fields, Cuba had been obliged to maintain an
exchange rate policy favourable to the economic growth that had commenced in 1994 and which
ensured the proper functioning of the economy under current circumstances.  Cuba's use of the waiver
had not had any adverse effects on the rights of other Members.  Cuba had thus complied with itscommitment to make use of the waiver without affecting the objectives of the WTO Agreement or
harming or impairing the rights of other Members.
25. The representative of Jamaica highlighted the importance of the CARIBCAN and the
Caribbean Basin Economic Recovery Act (CBERA) to the trade and economic prospects of Jamaica
and other beneficiary countries.  Jamaica's exports had continued to benefit substantially under theCARIBCAN programme.  As noted in document WT/L/414, during the period under review,  Jamaica
had consistently maintained a commendable export performance with exports to Canada outstripping
the level of imports from that country, despite its traditional trade deficit.  Up to 95 per cent of
Jamaica's exports entered the Canadian market duty free with only 5 per cent attracting varying duties.
With respect to the CBERA, Jamaica wished to state that this programme continued to serve as animportant mechanism facilitating product diversification in Jamaica and in many other countries of
the region.  The importance of this programme had been further emphasized in 2000 when, as
indicated in document WT/L/417, the CBERA ha d been further expanded to include products
previously excluded.  This had resulted in the Unit ed States – Caribbean Basin Trade Partnership Act,
which was currently being examined with a view to determining what kind of waivers would be
required for the additional preferences.  Jamaica welcomed the enhanced access provided in this Act.
The United States and Canada together, counted for 60 per cent of Jamaica's external trade, areflection of the vital importance of their markets to an open economy that was already more than
80 per cent trade dependant.  Jamaica took note of the report by the United States on the waiver
pertaining to the Andean Trade Preference Act in WT/L/416 and welcomed the fact that there
appeared to have been steady growth in exports cove red under the Act.  With regard to the waiver for
Cuba, Jamaica hoped that it would be renewed by the end of the year.
26. The representative of the United States expressed his appreciation to Jamaica for its statement
about the CBERA programme.  He noted Hungary's notification in relation to the waiver "Hungary –
Agricultural Export Subsidies", which was due to expire on 31 December 2001.  The United States
expected that in beginning of 2002, Hungary would fully abide by its original commitments on export
subsidies.
27. The General Council took note of the statements and of the reports in documents WT/L/414
to 419.WT/GC/M/69
Page 9
7. Work Programme on Electronic Commerce
28. The Chairman recalled that this was a standing item on the General Council's agenda.  He
noted that work was continuing in the subsidiary bodies pursuant to the 1998 Work Programme on
Electronic Commerce.  For instance, at its meeting on 8 October 2001, the Committee on Trade and
Development had continued consideration of a new work programme to pursue its educative role withregard to the development dimension of electronic commerce.  Moreover, at the last General Council
meeting in July 2001, Mr. Stoler, Deputy Director-General, had introduced a report by the Secretariat
on the dedicated discussion on cross-cutting issues held on 15 June 2001 under the auspices of the
General Council.  It had appeared from the discussion at that meeting that Members had appreciated
the dedicated discussion and were willing to continue to focus on e-commerce in a cross-cutting
manner.  He had therefore asked delegations to c ontinue to discuss among themselves and with him
the best way to carry their work forward in this  area, including the possibility of holding other
dedicated discussions on cross-cutting issues at some stage, as well as the link with the draft
Declaration for the Fourth Ministerial Conference.  With regard to the draft Declaration, the text
circulated on 26 September 2001 contained a propos al on electronic commerce.  He suggested that
any delegation having views on the electronic commerce section of the draft Declaration should
contact him or Mr. Stoler, Deputy Director-General, directly rather than raising the matter at thepresent meeting, and further informal consultations would be held if necessary.  He further suggested
that Members focussed at the present meeting on any views they had at this stage on future work on
electronic commerce in the General Council and the subsidiary bodies.
29. The General Council  agreed to revert to this matter at its next regular meeting.
8. Proposal to Amend Certain Provisions of the Understanding on Rules and Procedures
Governing the Settlement of Disputes Pu rsuant to Article X of the Marrakesh
Agreement Establishing the World Trade Organization
(a) Submission by Bolivia, Canada, Chile, Colomb ia, Costa Rica, Ecuador, Japan, Korea, New
Zealand, Norway, Peru, Switzerland, Uruguay and Venezuela for Examination and Further
Consideration by the General Council (WT/GC/W/410 and Add.1, 2 and 3)
30. The representative of Japan, on behalf of the co-sponsors of the proposal , said that the
proposal had been revised in light of the views expressed by Members and recent developments in the
dispute settlement system.  The revised proposal would be circulated shortly to all Members and
would also be forwarded to Ministers for action at the Fourth Ministerial Conference.  The sequencing
between Articles 21.5 and 22 of the DSU had long been  considered as one of the most pressing issues
in improving the dispute settlement proceedings.  In some disputes, the parties had had to resort to
bilateral ad hoc arrangements in order to cope with this shortcoming in the DSU, and finding amultilateral solution to this systemic issue would benefit all Members.  As noted in previous General
Council meetings, no objection had been voiced to finding a solution to the sequencing issue in
substance, and he urged Members to take necessary action so that a decision could be taken by
Ministers at the Fourth Ministerial Conference.  He appealed to Members favouring a more
comprehensive approach to the improvement of th e DSU to reconsider their position and recognize
the merit of taking action where possible.  With regard to the revision of the proposal, he noted that a
right of appeal, pursuant to Article 17 of the DSU had been introduced for the decisions of the
"compliance panel", which would oversee compliance with DSB recommendations and rulings.
Some further changes were being considered by the co-sponsors on the basis of the comments made
by Members.
31. The representative of Chile urged Members to set aside their more ambitious concerns and to
try to remain pragmatic and realistic by adopting the proposal at the Fourth Ministerial Conference,
thereby solving an issue which Members unanimously considered to be a shortcoming in the DSU.WT/GC/M/69
Page 10
Once the issue of sequencing was resolved, Chile would be prepared to undertake a broader and more
comprehensive review of the DSU.  Contributions had already been submitted by the Philippines and
Thailand and he hoped that more contributions would be submitted to delimit the scope of the review.
The proposals by Thailand and the Philippines1 deserved careful consideration, since they implied
significant changes to the dispute settlement mechanism and to the way work had been carried outuntil now.  Finally he wished to refer to the question of transparency, which had been the subject of
comments.  Chile had never stood in the way of a debate on this issue and although it had problems
with certain aspects, it remained open-minded about others.  However, this debate had to be part of a
wider process.  Members could not consider granting to the public greater access to dispute settlement
procedures while at the same time refusing the requests of various international intergovernmental
organizations to be granted observer status in the WTO, the requests by some observers to multilateral
environmental agreements for observer status in the TRIPS Council, or the requests for observerstatus by certain organizations at the Ministeria l Conference.  The WTO should remain coherent when
proclaiming that it was a transparent organization and should not show partiality.  Chile could not
accept that the public in general would have greater access to panels and special groups, while such
access would be denied to intergovernmental organizations of which many WTO Members were also
members.
32. The representative of Brazil said that he look ed forward to examining the revised proposal.  It
would be reasonable to expect that Ministers would deliberate on this matter at the Fourth Ministerial
Conference on the basis of the work done until now and his delegation hoped that Members could
reach a consensus on this matter.  However, the option of approving certain portions of the proposal
did not seem adequate as it could have the undesirable effect of delaying other important necessarychanges to the DSU.  Brazil would continue to support future endeavours to improve current DSU
provisions and to favour a balanced outcome that would strengthen their efficacy.  It would also
participate with interest in any future consultations on the matter.
33. The representative of Thailand said that the proposal was constructive and useful in that it
sought to address the important issue of sequencing.  Thailand welcomed the revision of the proposal
by the co-sponsors in light of the concerns expressed by Members and looked forward to its
consideration.
34. The representative of Singapore agreed that sequencing was an important issue that needed to
be addressed and was prepared to adopt the proposed amendments at the Fourth Ministerial
Conference.  Her delegation had taken note of the fact that the co-sponsors had revised the proposal
and looked forward to receiving it so that a decision could still be taken at the Fourth Ministerial
Conference.
35. The representative of Canada said that as noted in previous General Council meetings, the
proposal to amend the DSU was not intended as a "take it or leave it" offer and the co-sponsors
remained open to discuss modifications to broaden support for the proposal.  The co-sponsors had
consulted extensively with Members and had listened carefully to their concerns, and the proposal had
been modified taking into account evolving DSU practice.  Most Members strongly supported theprinciple that there should be a right of appeal from the decision of a "compliance panel", since a
number of DSU Article 21.5 panel decisions had been appealed with satisfactory results.  The revised
proposal would ensure that this practice was fully inst itutionalized in the text of the DSU.  In Canada's
view, the resolution of the sequencing issue would strengthen the integrity and the credibility of the
WTO dispute settlement system and would signifi cantly improve the functioning of the DSU.  For
this reason, he invited other Members to give serious consideration to the revised proposal.
                                                     
1 WT/MIN(01)/W/2 and Corr.1 and WT/MIN(01)/W/3 and Corr.1.WT/GC/M/69
Page 11
36. The representative of Bulgaria said that if Members rejected a comprehensive approach, they
should stick to the core of the problem.  If this was the issue of sequencing between Articles 21.5 and
22 of the DSU, an interpretation of the DSU would be the most appropriate way to deal with it.
However, he recalled that no agreement had been reached on the proposal at this stage and his
delegation could not accept it.  Moreover, it was not realistic to believe that this proposal could beadopted at the Fourth Ministerial Conference.
37. The representative of the United States said that his delegation continued to welcome the
opportunity provided by this agenda item to re-engage in a discussion of needed improvements to the
DSU and appreciated the efforts of the co-sponsors to keep this matter under continuous consideration
through informal consultations.  He hoped that in the coming months Members would be able to agree
on changes to the DSU that would improve its prov isions on implementation of panel and Appellate
Body reports and enhance the transparency of th e dispute settlement process along with other
technical changes.  The United States continued to stand ready to discuss improvements to the dispute
settlement mechanism in the DSB and would listen with interest to other delegations' views on this
proposal.
38. The representative of the European Communities noted with appreciation the work
undertaken by the group of co-sponsors and looked forward to examining the revised proposal.
However, it remained clear to his delegation that no consensus had been reached on this matter.  The
work should continue, but using also the work carried out prior to the Seattle Ministerial Conference.
In light of the systemic nature of the issues at stake, the Community supported a mandate in this area
with a specific deadline to be conducted independently of a new negotiating round, which it hoped
would be launched at the Fourth Ministerial Conference.  His delegation had a number of ideasregarding possible improvements of the DSU, not only on the sequencing issue but also with respect
to a new selection system for panelists and adaptations to the compensation mechanism, transparency
issues and the clarification of certain provisions of the DSU.  The Community welcomed the approach
taken in the draft Ministerial Declaration which would, if adopted, enable all Members to contribute
to a balanced and comprehensive improvement of the WTO dispute settlement system.
39. The representative of Norway said that his delegation supported the statement by Canada.  He
noted that the proposal had been promoted by a group of countries which were trying to solve a
systemic issue, not necessarily on the basis of national positions.  Thus he regretted the fact that some
Members had seen in this proposal an opportunity to promote national priorities in changing the DSU,
and pointed out the risk of sacrificing efforts to solve a systemic issue at the expense of national
interests which could be promoted in other settings.  He hoped that a solution to this problem could be
reached at the Fourth Ministerial Conference.
40. The representative of Hungary thanked the co-sponsors for their efforts in trying to find a
solution to some of the shortcomings of the DSU a nd said that his delegation would not stand in the
way of a consensus on the proposal.  However, in the present circumstances, his delegation was
sceptical as to the chances of reaching a consensu s prior to the Fourth Ministerial Conference and
supported the other option offered by the draft Ministerial Declaration, which he hoped would beacceptable to all Members.
41. The representative of Colombia emphasized the efforts made by the co-sponsors to carry out
an exercise that took into account the concerns of all Members.  As a result of that exercise, the co-
sponsors were now revising some elements of the proposal.  The issue dealt with in the proposal was
of a systemic nature and he hoped that the proposal would be evaluated in this light by all Members.Once a decision was taken on this issue, Members should engage in a broader review of the DSU that
could incorporate the topics mentioned by the European Communities, as well as the proposals
recently circulated by Thailand and by the Philippines and Thailand.WT/GC/M/69
Page 12
42. The representative of Ecuador said that the proposal represented the best result that could be
achieved over a long period of negotiation and with the participation of a great number of countries.
His delegation hoped that Members would give favourable consideration to the proposal so that a
decision could be taken on this at the Fourth Ministerial Conference.
43. The General Council took note of the statements and agreed  to revert to this matter at a future
meeting.
9. Reports of the Special Sessions of the Committee on Agriculture and of the Council  for
Trade in Services (G/AG/NG/8)
44. The Chairman recalled that at its meeting on 3 and 8 May 2000, the General Council had
agreed that the reports of the Special Sessions of the Committee on Agriculture and the Council for
Trade in Services would be a standing item on the General Council's agenda for the duration of the
mandated negotiations in question.  He noted that the Special Session held by the Council for Trade inServices on 7 and 8 October 2001, would be resumed on 12 October and therefore, there was no
report from the Council for Trade in Services to th e General Council at the present meeting.  He drew
attention to document G/AG/NG/8 containing the report by the Chairperson of the Committee on
Agriculture on the Eighth Special Session of the Committee.
45. The General Council took note of the report in G/AG/NG/8 and agreed
 to revert to this matter
at its next regular meeting.
10. Proposals to review and to amend the Understanding on Rules and Procedures
Governing the Settlement of Disputes
(a) Statement by Thailand
46. The representative of Thailand, speaking under "Other Business", also on behalf of the
Philippines, drew Members' attention to the tw o proposals concerning the Understanding on Rules
and Procedures Governing the Settlement of Disputes (DSU) circulated as official documents for the
Fourth Ministerial Conference in WT/MIN(01)/W /2 and Corr.1 and WT/MIN(01)/W/3 and Corr.1.
The first proposal by Thailand sought a mandate for a review of the DSU with a specific time-frame
to consider an amendment to Article 17.1 of the DSU in order to increase the number of Appellate
Body members.  This proposal had been designed to respond to concerns regarding the workload of
the Appellate Body, which was a current issue in view of recent practice and debate in the DSU.  In
Thailand's view, Members should seriously consider this issue, and begin work as soon as possible to
address these concerns.  Therefore, the mandate that Thailand was  seeking should preferably be
decided by the Ministers at the Fourth Ministerial Conference.
47. The second proposal by the Philippines and Thailand sought to amend Article 22.7 of the
DSU with a view to regulating the so-called "carousel " practice.  The aim was to ensure that the level
of any retaliatory action authorized under Article 22 of the DSU was equivalent, both in law and
practice, to the level of nullification or impairment.  For this purpose, the language of the proposal
had been designed following a "modular" approach, so that it could be readily inserted into the current
DSU, or if it was so decided by Members, complement the text of the proposal to amend the DSU
submitted by 14 Members.2  Thailand and the Philippines were prepared to consider how their
proposal could complement an updated version of the proposal by the 14 Members.  In either case, the
language proposed could be submitted to Ministers for decision at the Fourth Ministerial Conference.
The Philippines and Thailand would formally introduce these two proposals at the next General
                                                     
2 WT/GC/W/410 and Add.1 to 3.WT/GC/M/69
Page 13
Council meeting.  They hoped that Members would favourably consider these proposals in light of
systemic considerations and in the inte rest of the multilateral trading system.
48. The representative of Japan said that it was his understanding that the two proposals
circulated by Thailand and the Philippines were for information purpose at the present meeting and
not for decision.  With respect to the proposal concerning the increase in the number of AppellateBody members to cope with the increasing workload, Japan believed that Thailand's intention was to
raise this issue as part of a future DSU amendment exercise after the Fourth Ministerial Conference.
It had always been Japan's view that Members should consider increasing the number of Appellate
Body members by two to four and Japan would supp ort the idea once the opportunity arose to discuss
this issue.  The question of controlling the so-ca lled "carousel" practice in respect of suspension of
concessions and other obligations was a complex issue which required in-depth discussion.
Thailand's proposal contained issues that would affect the fundamental concept behind the disputesettlement system and thus required a lot of analysis and discussion.  Japan believed that if Thailand
wished to continue the discussion on this proposal it should be left to future work after the Fourth
Ministerial Conference.
49. The General Council took note of the statements.
11. Overview of Developments in the International Trading Environment
(a) Announcement by the Chairman
50. The Chairman, speaking under "Other Business", recalled that every year an overview of
developments in the international trading environment was undertaken by the General Council
convening as the Trade Policy Review Body.  This overview was assisted by an annual report by the
Director-General.  This year, the report by the Director-General would be made available at theFourth Ministerial Conference, and would serve as a background paper for Ministers under the
Agenda item on "Overview of Activities of the WTO".  However, in order to provide delegations in
Geneva with an opportunity to discuss this important theme on the evolution of the multilateral
trading system, he proposed that Members undertake the overview of developments in the
international trading environment after the Fourth Ministerial Conference, either at the GeneralCouncil meeting in December 2001 or at another meeting in January 2002, on the basis of the report
by the Director-General which would be made available at the Ministerial Conference.
51. The General Council so agreed.
12. Accession of the People's Republic of China and the Separate Customs Territory of
Taiwan, Penghu, Kinmen and Matsu
(a) Announcement by the Chairman
52. The Chairman, speaking under "Other Business", announced that he had received a
communication from the Chairman of the Working Party on the Accession of the People's Republic of
China to the WTO, forwarding the Report of the Working Party, together with a draft Decision for
Ministers and a Draft Protocol of Accession (W T/ACC/CHN/49 and Corr.1).  The Chairman of the
Working Party, Mr. Girard, had also forwarded China's Schedules of Concessions and Commitments
on Goods (WT/ACC/CHN/49/ Add.1) and Services (W T/ACC/CHN/49/Add.2).  The Chairman of the
Working Party had informed him that in forwar ding these documents to the General Council the
Working Party had completed its mandate.  Accordingly he would transmit these documents to
Ministers for appropriate action at the Fourth Ministerial Conference.WT/GC/M/69
Page 14
53. The Chairman also announced that he had received a communication from the Chairman of
the Working Party on the Accession of the Separate Customs Territory of Taiwan, Penghu, Kinmen
and Matsu, forwarding the Report of the Working Party, together with a Draft Decision for Ministers
and a Draft Protocol of Accession (WT/ACC/TPKM/18). The Chairman of the Working Party,
Mr. Morland, had also forwarded Chinese Taipei's Schedules of Concessions and Commitments onGoods (WT/ACC/TPKM/18/Add.1) and Services (WT/ ACC/TPKM/18/Add.2).  The Chairman of the
Working Party had informed him that in forwar ding these documents to the General Council the
Working Party had completed its mandate.  Accordingly he would transmit these documents to
Ministers for appropriate action at the Fourth Ministerial Conference.
54. The General Council took note of the information.
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