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WT/BFA/168  
 
20 November  2017 
(17-6303) Page: 1/7 
Committee on Budget, Finance and Administration    
 
 
REPORT OF THE MEETIN G HELD ON 6 NOVEMBER  2017  
The Committee on Budget, Finance and Administration (CBFA) met on 6 November  2017 under the 
Chairmanship of Ambassador Peter BRŇO (Slovak Republic). The Terms of Reference and 
composition of the Committee are set out in document WT/L/44/REV.1. The Agenda is contained in 
document WTO/AIR/BFA/ 22. The agenda was formally adopted .  
1  INTERNATIONAL TRADE CENTRE UNCTAD/WTO  – (ITC) BUDGET PROPOSAL FOR 
2018 -2019 JOB/BFA/23  
1.1.  The ITC Executive Director presented the ITC bud get proposal for 201 8-2019. She stated 
that the proposed level of resources for the biennium 2018 -2019 has been formulated on the basis 
of the approved strategic framework for the biennium.  The ITC budget  for 2018 -19 is CHF 
75,501,700, including estimated miscellaneous income of CHF 400,000.  
1.2.  The WTO 's contribution ITC's budget represents CHF 18,775,400 for each year of the 
biennium.  This is a decrease of CHF 532,300  per year compared to the 2017 budget .  
1.3.  The Executive Director informed the Committee that  ITC is focused on building the 
competitiveness of micro, small and medium -sized enterprises (MSMEs).  
1.4.  The Committee was informed that more than 85% of ITC's interventions are in sub -Saharan 
Africa, Least Developed countries (LDCs), small vulnerabl e economies , land -locked developing 
countries and post -conflict and fragile states and that particular attention is paid to women's 
economic empowerment including through SheTrades and youth entrepreneurship.  
1.5.  The Committee was informed about two organization -wide in dependent evaluations: one 
delivered on behalf of extra -budgetary donors, and a second one by the Office for Internal 
Oversight Services. ITC implemented 94% of the 48 accepted recommendations from those 
evaluations. Both evaluations found ITC to be fit fo r purpose, relevant, technically competent and 
delivering valuable services to its members.  
1.6.  The Executive Director stated that ITC had also enhanced outreach to key stakeholders, and 
worked hard on becoming more visible and accessible , in particular regard ing its global public 
goods.  
1.7.  The number of registered users of ITC’s market intelligence tools exceed s 600,000 and this 
number is expected to increase. It was indicated that ITC strengthened and expanded its 
partnerships with other UN agencies, with multi lateral development banks, regional organizations, 
national partner  institutions  and the private sector.  
1.8.  It was indicated that savings on travel for the first 19 months of the biennium (1 January 
2016 until 31 July 2017) approximated CHF 650K , over a net a ir spending of CHF 4.9 million (i.e. 
13.30%). Savings of over CHF 250K were achieved by staff voluntarily downgrading from business 
to economy class travel over the same period.  
1.9.  The Executive Director indicated that while ITC has managed to cope with the situation of 
decreasing regular budgets , through efficiencies in processes, it would be  difficult to absorb any 
future decreases without impacting on the ability to deliver on the requests from clients.  WT/BFA/168  
 
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  1.10.   Members thanked ITC for its budget proposal . 
1.11.   The Comm ittee endorsed the following recommendation:  
1.12.   The Committee recommends to the General Council that the budget for 2018 -19 of 
the International Trade Centre UNCTAD/WTO be approved in the amount of 
CHF 36,486,250.   The amount to be provided by the WTO to the International Trade 
Centre UNCTAD/WTO budget for 2018 and 2019, respectively, shall be CHF  18,243,125 . 
2  BIENNAL TECHNICAL AS SISTANCE AND TRAININ G PLAN FOR 2018 -2019 
WT/COMTD/W/227/REV.1  
2.1.  The Secretariat presented the T echnical Assistance and Training Plan fo r 2018 -2019 ("TA 
Plan") . The Committee was informed  that the TA Plan wa s to be considered by the Committee on 
Trade and Development  during its meeting scheduled for 15th November 2017 .  
2.2.  The Committee was informed that  the TA Plan is essentially a policy fr amework presenting 
the strategy which will guide the TA provided by the Secretariat . The Secretariat stated that , 
taking account of  the challenging economic environment , the budget for 2018 -19 was prepared 
considering zero nominal growth.  
2.3.  It was indicated that t he funding provided by the R egular Budget  has traditionally been 
complemented by very generous voluntary contributions received from  some d eveloped and 
developing countries , in particular through the Doha Development Agenda Global Trust Fund  ("the 
GTF"). The Secretariat reported that the carry for ward of voluntary contributions facilitated the 
implement ation of activities with a lot of ea se and highlighted that  the carry forward was  
diminishing . It was stated that t here are sufficient funds for 2018 a ctivities with a funding gap of 
CHF 13 million for 2019.  
2.4.  It was indicated that the main purpose of the technical assistance  provided wa s to enhance 
the human and institutional capacities of beneficiaries to take full advantage of the rules -based 
Multilater al Trading System , deal with emerging challenges and enforce their rights and obligations 
as Members. The Secretariat identified four key results t o fulfil this objective . These four key 
results are: 1) Government officials are implementing WTO Agreements and making full use of 
Members' rights and obligations; 2) acceding governments are participating in accession 
negotiations; 3) academic institutions and other stakeholders are analysing WTO issues and 
reaching out to policy makers; and  4) non-governmental  stakeholders and legislators are aware of 
and knowledgeable about WTO 's work and related issues.  
2.5.  The Secretariat recalled  that two years ago the Committee had accepted the request to 
introduce flexibility into the regular budget dedicated to technical ass istance in order  to facilitate 
its full  utilization. It was stated that , whereas only 75% of this Budget had been used between 
2009 and 2015, in 2016 the utilisat ion rate increased to 88% . Furthermore, expect ations are that 
the utilisation rate for 2017 wi ll be close to 100% . 
2.6.  The Secretariat propos ed allocating 94% of the 2018 -19 regular budget to the first key result 
(Government officials are implementing WTO Agreements and fully realising Members' rights and 
obligations ) and 3% for the remaining 3 key res ults (i.e. Acceding Governments are participating 
in accession negotiations ; Academic institutions and other stakeholders are analysing WTO issues 
and reaching out to policy makers; and Non -governmental stakeholders and legislators are aware 
of and knowled geable about WTO work and issues). The  remaining 3% is geared towards 
developing E -Learning courses and for Monitoring and Evaluation activities.  
2.7.  The Secretariat express ed appreciation and gratitude to the Members for their generosity and 
the consistency o f their  financial support to WTO TA .  
2.8.  The Secretariat stated that although o n average the GTF year -end balance represented 
approximately 130% of the following year target amount since 2013; this is most probabl y just a 
transitory situation. It was indicate d that TA expenses in the GTF exceeded contributions in two of 
the past three years (2014 and 2016) and, on the basis of current projections, this may again  be 
the case  in 2017.  WT/BFA/168  
 
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  2.9.  It was noted that the overall level of the voluntary contributions received an nually by the 
WTO has more than halved between 2009 and 2016, as the pool of contributors also halved and 
several of the remaining contributors have reduced the level of their annual contribution . As a 
consequence, the Secretariat had to reduce technical a ssistance  expenses , in order  to be prudent,  
without adversely affecting the level of technical assistance  provided to Members.  
2.10.   A Member thanked the Secretariat for the positive results despite the difficult situation, 
which includes working with zero nomi nal growth. The Member renewed his delegation's  trust in 
technical assistance  and supported the current structure of the technical assistance  budget.  
2.11.   A Member  thanked the Secretariat for the work done and expressed satisfaction with the 
final report. The Member expressed support  for the budget and said his delegation appreciat es the 
focus on Results Based Management. The Member posed a question regarding the reference made 
in paragraph 159 related to the cost-sharing arrangement with WTO partners. The Member 
requested  an example in order to facilitate his understanding . 
2.12.   A Member thanked the Secretariat for the report. On a broad level the Member agreed with 
the report. The Member was interested i n knowing whether the trade agenda dimension in the 
relevant t raining module will be funded through the regular budget of the GTF.  
2.13.   The Secretariat  stated that joint projects are usually funded 50% :50% by the WTO and a 
partner. One of the long term partners is WIPO. It was mentioned that Singapore usually funds 
almost  100% of the activities that the  countr y host s. Regarding the reference centres, the 
Secretariat stated  that a more efficient way would be found to utilise the resources. Regarding the 
trade agenda, the Secretariat stated that the first step is to introduc e a relevant module. It was 
indicated that regional courses ( in 7 regions) will be funded through  the GTF, and advanced trade 
policy courses will be funded through the regular budget.  
2.14.   A Member  thanked the Secretariat for its work and supported the report. The Member 
emphasized the importance of the training activities for the developing countries.  
2.15.   A Member supported the report and the strategy of the  TA Plan. The Member agreed with 
the external consultants' suggestion regarding the fact that training should  respond to the 
particular needs of the various groups. The M ember  also stated that access to WTO courses for the 
external public should not be fee-based. Regarding the internship program , the Member thanked 
the donors for their contributions.  
2.16.   The Chairman  informed the CBFA Members that the Committee would only be able to make 
a recommendation to the General Council, on 16th November 2016, after the Committee on Trade 
and Development ha d approved the content of the planned activities in the TA Plan.   
2.17.   The C ommittee took note of the report.  
3  PROPOSED NEW METHODO LOGY FOR THE DETERMI NATION OF WTO DEPEND ENCY 
ALLOWANCES  
3.1.  The Secretariat presented its proposal and some alternatives to establishing revised 
dependency allowances as well as a new methodology for adjust ing these allowances.  
3.2.  A Member stated that the paper indicates  that there are many ways to set up a new 
methodology for base rates  and that  the key consideration that should underpin a new 
methodology is the WTO 's competitiveness with other Geneva -based in ternational organizations 
and the WTO fiscal circumstances, which are currently very challenging. With respect to the 
Secretariat's proposal, he said that he was  grappling with the advisability of increasing dependency 
allowances by more than 20% while inf lation has been very low and often negative since 2009 and 
considering the  budget proposal that projects CHF 2.5 million of needs that were not budgeted for 
in 2018 and 2019 . The Member also stated that it was un advisab le to link future adjustments  of 
the dependency allowances  to the WTO salary scale. He said that for this option to be seriously 
considered , it would be important to get information regarding how th e salary scales moved 
historically as well projections of future move ments.  He then said that there may be merit in 
considering the adoption of the UN spouse and child allowances  that are applicable in Switzerland WT/BFA/168  
 
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  given that these had already been agreed by members at the UN and presuming that the WTO  
would  remain competitive among international organizations in Geneva.  
3.3.  A Member sought clarification  whether the proposed  threshold of 2%  was cumulative and 
whether the 2% would also apply in the event of a reduction. With reference to Alternative 1, the 
Member asked if the rent and school fees are alre ady included in  the salaries of members of staff. 
Recalling that the 201 6 and 2017 dependency allowances were a one -time payment, t he Member 
stated that A lternative 2 was the best way  forward since the amount is not far from the amount 
paid between 2009 an d 2015. He further said  that child allowances should not depend on the 
grade of the parent in the organization.  
3.4.  A Member said that it would be interesting to know the difference between the salary that 
would be actually paid in 2018 and what the associated  salaries would be had there not been a 
salary freeze. He stated that the last thing that the organization should face would be that it can 
no longer function at high quality because of budget constraints. The Member asked whether the 
amount in the budget for dependency allowances is an amount that was calculated on the basis on 
the allowances that were paid this year. He said that i t would be highly unlikely for the allowances 
paid in 2018 to be at  the same level  as those paid for 2016 and 2017 . As a resul t there will be 
certain savings and postulated that these  can be used to finance some of the  unfunded projects 
described in the budget proposal.  The Member stated that in principl e his delegation  has no 
problem accepting the budget as it is at zero nominal  growth. The Member suggested that the 
Secretariat provid e the Committee with a clear idea of how much money will be spen t on 
dependency allowances  in January 2018. The Member cautioned that a situation where in the 
beginning of the year a substantial amou nt is paid to employees only for some portion of that to 
be returned later on should be avoided . 
4  FOLLOW UP ON THE 2018 -2019 BUDGET PROPOSAL  
4.1.  The Secretariat presented the changes that it had made in the document 
WT/BFA/W/427/Rev.1.  Several Members expressed  their appreciation of the changes made to the 
tone.  
4.2.  A Member  stated that the revision reflects the willingness of the Secretariat to continue to 
look for savings, which is an important signal to the capital s. The Member noted his concerns with 
respect to problems related to the dispute settlement  area, that are discussed in the budget 
proposal.  
4.3.  A Member expressed the view that zero nominal growth has not yet reached its limit and that 
there are other ways to cut expenses. The Member stated that the Secret ariat could prepare 
suggestions for using the surpluses which have been accumulated .  
4.4.  A Member stated that their delegation is ready to support the budget proposal as presented.  
4.5.  A Member said that he  appreciated the changes made and that this reflect ed tha t the 
Secretariat had intently  listen ed to the questions, comments and concerns that were raised at the 
previous meeting . The Member  stated that his delegation was  in a position to approve  the budget 
proposal  by the next CBFA meeting on 16 November 2017 , at the latest . The Member stated that it 
would be desirable for his delegation to avoid explaining to their capital that the budget proposal 
was not approved because of a lingering item from previous discussions . 
4.6.  Another  Member stated that his delegation wa s in a position to approve the budget proposal. 
The Member indicated that their delegation  support s the reduction of the documentation and 
postal expenses. The Member informed the Committee that a proposal in this regard would be 
tabled at the next CBFA me eting.  
4.7.  A Member  stated that useful amendments had been made to the document and expressed 
hope that all Members w ould be in position to adopt the budget proposal , without linking it to any 
other issue , by 16th November . 
4.8.  Another Member endorsed the revised budget proposal and appreciated that his comments 
were reflected in the revised proposal. The Member expressed his hope that the Secretariat will WT/BFA/168  
 
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  continue to improve budget impl ementa tion and deliver high -level performance to the Members in 
the coming bien nium. The Member also supported the views  about  reducing costs in  
documentation and post.  
4.9.  A Member  supported the budget proposal and expressed appreciat ion for  the efforts of the 
Secretariat to deal with the zero nominal growth  budget,  considering the curr ent situation that 
affects all inside the WTO and beyond. The Member agreed with one of the interveners about the 
importance of  avoid ing to  pay a given level of allowances to the employees if it is likely that it will 
be necessary to reclaim that money.  
4.10.   Several Members  emphasized that th e subject of Dependency Allowances  should not be 
linked to the  approval of  budget proposal.  
5  REPORT ON  THE RECOMMENDATION OF TH E WORKING GROUP ON A N ASHI FUND  
5.1.  The Chairwoman of the Working Group on the ASHI Fund introduced t he report . She 
reminded the Committee that the Working Group had started its work in February 2017  and that i t 
had examine d how ASHI liabilities could be addressed under the WTO’s budget, including by 
considering whether the accumulated budgetary surplus c ould be used in that context. She stated 
that the Working Group had met 14 times . She expressed  gratitude to  the Working Group 's 
participants who actively contributed to the discussions .  
5.2.  The Chairwoman then stated the goals of the W orking Group. She brief ly mentioned the 
working groups on ASHI , and their mandates,  that had preceded the ASHI Fund Working Group.  
5.3.  Regarding the question on the "pay as you go " funding model , she said the Working Group 
felt that given the budgetary constraints faced domesticall y by Members, any pre -funding of the 
ASHI financial liability should remain limited, and the current pay as you go model should remain 
the basis for WTOMP funding. She then stated that the  more pressing concern identified was to 
find ways to meet the antic ipated budgetary increases in ASHI  costs in the medium term. She 
further stated that Working Group participants felt that resources should not be diverted from the 
core functions of the WTO just to finance  rising ASHI costs . Rather , a more sustainable approach 
of meeting these cost increases  ought to  be found .  
5.4.  The Chairwoman noted that the Working Group had  generally agreed that it would be 
prudent to start with a simple structure with low  administrative costs.  
5.5.  The Chairwoman informed  the Committee that  three possible funding models had emerged  
during the Working Group 's deliberations : The first model would be to  take the current WTOMP 
budget line out of the regular WTO budget and shift it to a special account  whilst the rest of the 
regular budget would co ntinue to be subject to zero nominal growth . Members could agree not to 
apply the zero nominal growth principle to the special account. An inflation rate would then be 
conditionally applied to the special account to ensure a prudent budgetary solution thro ugh a 
package of measures, which would include savings generated from cost reduction measures 
undertaken so far, untapped budgetary surpluses, WTO staff contribution s, and surpluses from the 
regular budget ; The second model would be  the creation of an ASHI  reserve fund comprising solely 
of WTO Members’ contributions  in order  to fund Members’ share of the ASHI liabilities . A principle 
would have to be established that WTO Members and staff would continue to proportionately 
shoulder the burden of increasing A SHI costs, based on the current average cost sharing ratio of 
approximately 60% for the Members and 40% for the staff . Members would have full control of 
and governance of the funds. The accumulated surplus could be used to finance the Reserve Fund. 
The Ch airwoman stated that some Members urged that there be prudence and that only part of 
the surplus could be transferred to the Fund .  They noted that the accumulated surplus should also 
be used for other core activities of the organization. It was acknowledg ed that an audit 
observation could arise  if the surplus was used for certain areas, given that the organization had a 
financial deficit.  The third model would see the creation of a Fund with the current accumulated 
budgetary surpluses, where the savings fr om the WTOMP could also be included, without deciding 
now on its possible future uses and letting that decision be taken by the CBFA at a later stage.  
This drew comments that the aspect of how the Surplus should be used was outside the scope of 
the Working  Group and could be taken up by the CBFA.   WT/BFA/168  
 
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  5.6.  The Chairwoman informed the Committee that, in the final analysis , the Working Group had 
been unable to reach  a consensus on recommending any one particular funding model to the 
CBFA.  
5.7.  The Chair highlighted the po ints on which the Working Group had converged.  These include 
the merits of using savings from the WTOMP budget line to finance an ASHI vehicle, were one to 
be created.  
5.8.  The Working Group , then made  two recommendations to the CBFA:  
a. One, for the establishme nt of a Special Reserve Account (SRA) to capture and ring -fence 
savings from the WTOMP line in the WTO budget which have accrued as a result of cost 
reduction and containment measures. The Working Group proposed guidelines for the 
SRA.  
 
b. Two, as consensus was not reached in the Working Group on the three proposed funding 
models, that the discussion be further taken up in the CBFA. In closing, the Chairwoman 
stated that her  understanding is that the intention was that CBFA should  revisit this 
discussion in 2 018.  
 
5.9.  The Working Group took note of the report  and decided as follows:  
5.10.   The Committee decides that a Special Reserve Account (SRA) be established  and 
governed according to the guidelines set out in Annex V to document WT/BFA/W/431.   
6  WTO BUDGET AND FINAN CE REPORT  – 3RD QUARTER WT/BFA/W/434  
6.1.  An official  from the Secretariat presented the budget and finance report for the third quarter 
of 2017. The receipts of contributions from Membe rs as at the end of September 2017 were  
slightly lower than  the receipts as at the end of  September  2016. At the end of September 2017 , 
70% of the assessed amount of CHF 195 .5 million  was received. For the third quarter of 201 7, the 
receipts of contributions from Observers amounted to CHF 422,915  representing 66% of the 
assessed am ount. 
6.2.  The Secretariat indicated that  the cash situation at the end of September  2017 was 
satisfactory and pointed out, though, that  contributions of some main contributors had not yet 
been received . It was stated that the cash balance included  funds receiv ed for the Doha 
Development Agenda Global Trust Fund (DDAGTF) and the Enhanced Integrated Fram ework.  
6.3.  The Secretariat  informed the Committee that a s of end of October 2017, seven Members 
were subject to Category I of the Administrative Measures ; no Mem bers were subject to 
Category  II: and seven  Members were subject to Category  III.  
6.4.  Since September  2017, Democratic Republic of the Congo came out of Category I . Two 
Observers were subject to Category III (and were therefore considered inactive ).  
6.5.  The Secretari at presented the Consolidated Statement of Budgetary Expenditures as at 
30 September  2017. The Secretariat indicated that the rate of expenditure as at 30 September  
2017 was on track with an overall expenditure rate of 77% amounting to CHF 152 million . 
6.6.  The high level of expenditure under  Chapter A, Temporary Assistance , arises from the 
replacement of staff on Leave Without Pay and long-term sick leave. The expenditure under 
Staffing Resources, was 47% of the amount budgeted for the year.  
6.7.  Under the Section for Financial Expenditure, the Secretariat alerted the Committee that 
previously  negotiated  cash thresholds for which negative interest was not chargeable had been 
reduced by the banks.  Therefore , the negative interest expense would significantly  increase .  
6.8.  The Committee took note of the report.  WT/BFA/168  
 
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  7  EXTRA -BUDGETARY FUNDS REPO RT – 3RD QUARTER WT/BFA/W/433  
7.1.  An Official from the Secretariat present ed the financial situation for the third quarter of the 
Doha Development Agenda Global Trust Fund (DDAGTF) and other tr ust funds. Then, the 
Secretariat thanked the following delegations for their contributions to the Fund , since June 2017: 
Australia, China, European Union, France,  Germany,  Ireland, Japan, Korea, New Zealand, Sweden, 
Switzerland and the United States of Ame rica.  
7.2.  It was indicated that the opening balance of the DDAGTF at the beginning of the year was 
CHF 16.9 million. Contributions as at the end of the third quarter amounted to CHF 4.7 million  
whilst expenditures and commitments totalled CHF 8.8 million.  
7.3.  The Secretariat indicated that the Standards and Trade Development Facility (STDF) needed 
additional contributions to be able to continue approving and contracting new projects.  
7.4.  Concerning the other trust funds , the Secretariat stated that they are generally  in a stable 
position.  
7.5.  The Committee took note of the report.  
8  OTHER BUSINESS  
8.1.  A Member called upon the Secretariat to finalize a paper on the revised methodology for 
Dependency Allowances.  
9  CLOSING  
9.1.  The Chairman informed the Committee that the next formal CB FA meeting would take place 
on 16 November 2017 and closed the meeting. However, given the time-based need to discuss the 
subjects of a revised methodology for dependency allowances as well as the 2018 -19 Budget, the 
Chair proposed that the Committee have informal meetings on 7th and 8th November.  
9.2.  The Chair closed the meeting.  
Point s of decisions: 1.12 and 5.10.  
 
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