RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/GC/M/109 
24 October 2007 
 (07-4594) 
General Council 
27 July 2007  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 27 July 2007  
 
Chairman:  Mr Muhamad Noor (Malaysia) 
 
 Prior to the adoption of the Agenda, the Chairm an, on behalf of all de legations, welcomed the 
Kingdom of Tonga as the 151st Member of the WTO, and the Council heard a statement on this 
occasion from the representative of the Solomon Islands on behalf the Kingdom of T onga in the 
latter's absence.  Subjects discussed
; Page  
1. Report by the Chairman of th e Trade Negotiati ons Committee...........................................2  
2. Work Programme on Special and Differential Treatment....................................................5  
(a) Report by the Chairman of the Speci al Session of the Committee on Trade and 
Development .................................................................................................................... ...........5  
(b) Reports by Chairpersons of other WTO bodies to whom special and differential 
treatment proposals ha ve been referred.......................................................................................5  
3. Work Programme on Small Economies – Report by the Chairman of the 
Dedicated Session of the Committ ee on Trade and Development ........................................9  
4. Non-recognition of rights under Article XXIV:6 and Article XXVIII of GATT 
1994 – Communications from Honduras and Guatemala...................................................10  
5. Article 27.4 of the Agreement on Subsidies and Countervailing Measures – Draft Decision ....................................................................................................................... .............13
 
6. Rules of Origin – Harmonization Work Programme –  Statement by the 
Chairperson of the Committee on Rules of Origin ..............................................................19  
7. Transparency for Preferential Trade Ag reements – Statement by the Chairman 
of the Committee on Tr ade and Development......................................................................25  
8. Committee on Budget, Finan ce and Administration ...........................................................26  
(a) Report of the Committee on its meeting of May 2007..............................................................26  
(b) Recommendations of the Committee following its meeting of July 2007................................26  
9. Waivers under Article IX  of  the WTO Agreement.............................................................27  
(a) Introduction of Harmonized System 1996 changes into WTO schedules of tariff 
concessions – Requests for ex tensions of waivers ....................................................................27  
(i) Argentina ...................................................................................................................... ............27  
(ii) Panama ......................................................................................................................... ............27  WT/GC/M/109 
Page 2  
 
  (b)
 United States – Former Trust Territory of the Pacific Islands – Request for extension 
of waiver ...................................................................................................................... .............27  
(c) Mongolia – Accession commitment on export of raw cashmere – Request for waiver............28  
(d) Review of waivers pursuant to Article IX:4 of the WTO Agreement.......................................28  
(i) Preferential tariff treatment for least-d eveloped countries, granted on 15 June 1999 
until 30 June 2009............................................................................................................. ........28  
(ii) LDCs – Article 70.9 of the TRIPS Ag reement with respect to pharmaceutical 
products, granted on 8 July 2002 until 1 January 2016 ...........................................................28  
(iii) Albania - Implementation of specific concessions, granted on 26 May 2005 until 1 January 2009 ................................................................................................................. ........28
 
(iv) European Communities - European Communiti es' Preferences for Albania, Bosnia 
and Herzegovina, Croatia, Serbia and Montenegro, and the Former Yugoslav 
Republic of Macedonia, granted on 28 July 2006 until 31 December 2011.............................28  
10. Regional reviews on Aid for Trade – Statement by the Director-General.........................29  
11. Administrative Measures fo r Members in arrears ..............................................................30  
ANNEX I :  Statements by delegations at the informal meeting of the Committee on 
Agriculture in Special Session during the week of 23 July 2007 ...................................................... 32 
ANNEX II :  Statements by delegations at the informal meeting of the Negotiating Group 
on NAMA during the week of 23 July 2007 ....................................................................................... 36 
 
 1. Report by the Chairman of the Trade Negotiations Committee 
1. The Chairman
 invited the Director-General, as Chairman of the TNC, to report on the TNC's 
activities since his last report to the Council. 
2. The Director-General, Chairman of the TNC , noted that since his last report to the Council in 
May, the TNC had held two informal meetings, on 6 and 22 June, and a formal meeting the previous 
day.  While his remarks at the formal meeting had been circulated in document JOB(07)/130, he 
wished to highlight a few appoints.  The major recent development in the negotiations had been the circulation of draft modalities texts by the Chai rs of the Agriculture and NAMA negotiating groups, 
as he had foreshadowed in his report in May.  As  the Chairs had underlined, these were draft texts, 
and not negotiated or agreed texts.   The negotiation was up to the par ticipants, who were now able to 
negotiate at a more concrete, intense and specific le vel.  Both Chairs had made it very clear from the 
start that their draft modalities papers were only another step in the process and would have to be 
revised in light of the views expressed by particip ants.  The draft texts identified possible areas of 
convergence as well as areas where gaps needed to be bridged.  That was now up to the participants to 
undertake in the process the Chairs were undertaki ng with his full support.  Many views had been 
expressed on the texts in informal sessions of th e negotiating groups earlier in the week and in the 
TNC the previous day.  He was sure all had take n careful note of them.  Delegations now had the 
month of August to reflect fully, and should then be  in a position to return to  the process prepared to 
engage in an intensive negotiation as from 3 September, starting with agriculture, to be followed later 
in the month by NAMA.  Over the past month, de legations had responded to his call at the informal 
TNC meeting on 22 June to step up their level of  substantive engagement in the multilateral process 
run by the negotiating group Chairs.  He now urged them to step up their engagement once again.  
Such engagement remained the key to further progress.  Intensive negotiations lay ahead, and 
everyone would need to be fit and ready when th ey returned after the summer break.  Participants 
needed to keep in mind that the immediate aim wa s not only to establish full modalities in Agriculture  WT/GC/M/109 
 Page 3 
 
 
  and NAMA, but also to make commensurate progress in other negotiating areas in line with the full 
Doha mandates, the July 2004 Decision and the Hong Kong Ministerial Declaration.  This was the 
only possible path to an ambitious, balanced a nd development-oriented outcome to the Round. 
3. At its meeting the previous day, the TNC ha d received reports from all of the negotiating 
group Chairs which had indicated some good progress across the board over the past few months.  
They had also outlined the pro cesses the Chairs intended to follow to build on this progress 
immediately after the summer break, notably on servi ces and rules.  Delegations at the TNC meeting 
had indicated they supported moving in the direction the Chairs had suggested.  Their statements had underlined that there continued to be a high level of  commitment to concluding the Round.   However, 
it was also clear there were some significant differen ces that remained to be resolved.  Nevertheless, 
convergence was within reach if Members were all ready to show the necessary will and flexibility to 
close the gaps.  Members had come a long way since th e start of this Round.  What they now had in 
sight represented a very significant package of trade- opening and rule-making, and a strong collective 
commitment to work for a more development-friendl y world trading system.  The distance left to go 
to achieve all of this was not so great, but it would require a good dose of extra effort by all 
participants.  All in all, and havi ng listened carefully to all the statements at the TNC meeting, he 
remained of the view that it could be done. 
4. The Chairman
, in response to requests from delegations, said that all statements made at the 
formal meeting of the TNC the previous day, as well as, where requested, statements made at the 
meetings of the Committee on Agriculture Special Session and the Negotiating Group on NAMA held that week would be reflected in the records of the present meeting.
1 
5. The representative of Chinese Taipei  said he wished to add the following sentence to the 
beginning of his delegation's statement at the TNC meeting the previous day which would be reflected 
in the records of the present meeting:  "My dele gation associates itself with the statement made by 
Ambassador Wasescha of Switzerland on behalf of the  G-10." 
6. The representative of Ecuador  said his delegation supported the statement made by Brazil for 
the G-20 at the TNC meeting.  His delegation had many comments on the texts proposed by the 
Chairs of the two negotiating groups, but appreciated the efforts that had been made, and considered 
the greatest merit of these documents to be that th ey kept the negotiating process in Geneva alive.  
The challenge for participants in September would be  to balance out the texts and incorporate most of 
the interests of all the Members.  His delegation w ould continue to give the utmost importance to the 
scope of paragraph 24 of the Hong Kong Ministeria l Declaration.  The negotiations on agriculture, 
particularly on the pillar of market access, were at the pinnacle of the negotiation pyramid.  Ecuador 
awaited with anticipation the texts promised by the Chair of the Negotiating Group on Rules, in 
particular those relating to fisheries subsidies, a nd hoped that the question of the relationship between 
the TRIPS Agreement and the Convention on Biological Diversity would finally be resolved.  These and other areas of the negotiations formed part of th e Single Undertaking and would have to be agreed 
as a single package.  His delegation could not  accept any artificial dates and deadlines, and 
transparency and inclusion had to guide the negotia tions in September.  His delegation also believed 
that the banana issue had to be resolved once and for all during this period, and remained open to a 
negotiated settlement in this respect.  In this c onnection, other Members concerned would have to 
abandon extreme positions and find the pragmatism th at would enable all to reach a definitive 
settlement of this long-running dispute.  
                                                     
 
1 Statements by all delegations at the meeting of the TNC on 26 July, which are reflected in records of 
that meeting in document TN/C/M/27, are incorporated by  reference into the present records.  Statements by 
delegations at the meetings of the Special Session of the Committee on Agriculture and the Negotiating Group on NAMA held during the week of 23 July, and who re quested their inclusion in the present records, are 
reproduced in Annexes I and II, respectively.   WT/GC/M/109 
Page 4  
 
  7. The representative of Lesotho
, on behalf of the LDCs , said they wished to acknowledge the 
efforts the Director-General had devoted to reigniting and re-energ ising the negotiations through the 
initiation of texts by the chairs of the various ne gotiating groups.  The Director-General's skills and 
determination had been instrumental in preserving the multilateral nature of the negotiations, which 
had been subject to severe centrifugal forces. The LDCs were convinced that the multilateral process 
was the best modus operandi  for advancing the negotiations in a truly transparent, bottom-up and 
inclusive manner. It was against this background that the LDCs wished to commend the TNC Chair, 
together with the Chairs of the other bodies, for their diligence and remarkable courage.  On the 
proposed draft modalities for Agriculture and NAMA,  while there still remained the challenge of 
greater clarity on many of the specificities, to va rying degrees, at a minimum, the drafts provided a 
baseline that would allow Members to at least be gin engaging constructively on a multilateral basis 
and to get set on the path towards the success of this crucial Round.  The LDCs had started, and 
would continue, to study and analyse the proposed draft modalities in depth. They would certainly 
come back with detailed responses when the negotia tions resumed after the summer break.  Regarding 
Lesotho's statements for the LDCs at the meetings  of the TNC, the Agriculture Special Session and 
the Negotiating Group on NAMA, it should be unders tood that these were only preliminary, as the 
LDCs were still scrutinising the draft modalities te xts submitted by the Chairs of the Agriculture 
Special Session and the NAMA Negotiating Group,  and were also awaiting advice from their 
respective capitals. 
8. He recalled that on 1 August 2004, the General Council, when providing guidance on how to 
pursue the services negotiations, noted that for atta inment of a substantive outcome, a high quality of 
offers in modes and sectors of interest to developing  countries should be ensured.  In this regard, it 
had been noted that special attention should be gi ven to LDCs.  Despite this, the LDCs' negotiating 
partners were continuing to eschew the challenge of  engaging with LDCs on  its proposal regarding 
Mode IV.  The LDCs were raising this matter in the General Council w ith serious concern, since they 
were in Geneva to negotiate and not to shy away  from tackling issues on the table.  Paragraph 25 of 
the Hong Kong Declaration clearly recognized the ro le of trade in services in promoting economic 
growth and development.  In maintaining this sta nd-off, the LDCs' negotiating partners were denying 
them development opportunities.  This was contrary to  the letter and spirit of the Development Round.  
There were many other areas of the negotiations in  which LDCs had an interest and where further 
work was required.  The LDCs remained ready to e ngage further in all those areas, reiterated their 
commitment to full engagement in the negotiations  and to the achievement of the objectives of the 
Doha Development Round, and firmly and empha tically underscored the centrality of the 
developmental dimension of the Round. 
9. The representative of Benin , on behalf of the co-sponsors of the Cotton Initiative , thanked the 
Director-General for his report, and requested that the statement by Benin at the meeting of the TNC 
the previous day be reflected in the records of the present meeting.2 
10. The General Council took note  of the Director-General's report and of the statements, 
including those made at the formal meeting of  the TNC on 26 July as reflected in document 
TN/C/M/27, and, where requested, at the meeti ngs of the Special Session of the Committee on 
Agriculture and the Negotiating Group on NAMA during the week of 23 July.  
                                                      
2The statement by Benin at the meeting of the TNC on 26 July, which is reflected in the records of that 
meeting in document TN/C/M/27, is also incorp orated by reference into the present records.   WT/GC/M/109 
 Page 5 
 
 
  2. Work Programme on Special and Differential Treatment 
(a) Report by the Chairman of the Special Sessi on of the Committee on Trade and Development 
(b) Reports by Chairpersons of other WTO bodies to whom special and differential treatment 
proposals have been referred 
11. The Chairman  proposed that the Council take up the tw o sub-items together.  He recalled that 
Ministers at Hong Kong had instructed the Comm ittee on Trade and Development in Special Session 
to expeditiously complete the review of all th e outstanding Agreement-specific proposals and to 
report to the General Council – with clear recomme ndations for a decision – by December 2006.  
Regarding the Category II proposals that had b een referred to other WTO bodies and negotiating 
groups, Ministers at Hong Kong had instructed th at these bodies also expeditiously complete the 
consideration of these proposals and report periodica lly to the General Council, with the objective of 
ensuring that clear recommendations for a decisi on were made no later than December 2006.  
Ministers had further instructed the Special Session to  coordinate its efforts with these bodies, so as to 
ensure that this work was completed on time.  Furt hermore, the Special Session had been mandated to 
resume work on all other outstanding issues – in cluding on the cross-cutti ng issues, the monitoring 
mechanism, and the incorporation of S&D treatment  into the architecture of WTO rules – and to 
report on a regular basis to the General Council.  In December 2006, it was agreed that Members 
would continue their consideration of the outsta nding Agreement-specific proposals in the Special 
Session of the CTD as well as in the other WTO bodies to which the Category II proposals had been 
referred. 
12. Mr Gafoor (Singapore), Chairman of the CTD in Special Session , said that in the light of his 
detailed statement on this matter at the meeting of the TNC the previous day and his written report to 
the TNC and General Council in document TN/CTD/20,  he had nothing further to add at the present 
meeting. 
13. The Chairman , before inviting the Chairs of the other WTO bodies to update Members on the 
work carried out in their respective areas, recalle d the statement by the TRIPS Council Chair at 
the May 2006 meeting of the General Council, in which the latter had indicated that the TRIPS 
Council had authorized him to report (i) that the situation in regard to the Category II proposals 
referred to that Council remained as reported in July 2005 in document IP/C/36;  (ii) that the TRIPS 
Council reiterated its earlier recomme ndation as reproduced in that document;  and (iii) that no further 
action was otherwise needed on the proposals referred to  that Council.  In the light of this report, he 
would not be inviting the TRIPS Council Chair to report further at the present meeting. 
14. Mr Falconer (New Zealand), Chairman of the Special Session of the Committee on 
Agriculture , said he would shortly circulate a more deta iled report, but wished to make a few key 
points regarding the proposals being considered in  the Special Session.  Regarding the Article 6.2 
proposal by the African Group, he considered th at the revised draft modalities document he had 
circulated responded to that particular proposal, as it confirmed an understanding on Article 6.2.  
Regarding the Article 15.1 and Article 15.2 proposals, throughout the revised draft modalities 
document there were a number of proposals that would be, to a greater or lesser extent, responsive to 
the points raised by the African Group.  Obviously, as all were aware, the revised draft modalities were clearly to be subject to continuing negotiation.  However, he believed that the orientation in the 
document on those specific points was apparent for all to see. 
15. Mr de Mateo (Mexico), Chairman of the Special  Session of the Council for Trade in Services
, 
said that since his last report to the Council in May, the Special Session had addressed the issue of 
S&D treatment at two formal meetings.  Members ha d reiterated the importance of this issue and had 
called for further progress.  At the formal mee ting of the Special Session on 13 July, the African WT/GC/M/109 
Page 6  
 
  Group – the main proponents of proposals relati ng to S&D treatment in services – had said they 
would submit a revised proposal on this issue at the next formal meeting of the Special Session, which 
was scheduled for 28 September.  He would continue  to hold informal consultations in this regard. 
16. Mr Valles Galmés (Uruguay), Chairman  of the Negotiating Group on Rules
, said that as he 
had previously reported to the C ouncil, while the proposals on S&D treatment had been placed on the 
agenda of the Negotiating Group at a number of me etings, there had been little discussion.  He had 
repeatedly indicated that the Group would be prep ared to resume discussion of any of these issues on 
the request of the proponents.  However, no delega tion had requested that he place these proposals on 
the agenda of the Group's meetings.  He wished to  mention that while these specific proposals had not 
been the subject of significant discussion, this did not mean that the interests of developing-country 
Members had not been receiving attention.  Devel oping countries had been very active in the Group 
and had sponsored numerous proposals in all areas of its  work.  In addition, much of the Group's work 
in 2007 had been focused on a range of issues rela ting to S&D treatment in the area of fisheries 
subsidies.  He intended to continue to gi ve priority to these issues in the Group. 
17. Mr Saborío Soto (Costa Rica), Chairman of the Dispute Settlement Body in Special Session , 
said that as he had anticipated in his report to the General Council in May, progress had continued to 
be made in reviewing Me mbers' revised contributions, including that of the "Like-Minded Group", the 
proponents of which had indicated that some of its elements took into account the review of the 
Category II proposals carried out by the DSB Specia l Session.   The Group would also receive the 
revised contribution promised by the African Group, and possibly one from the LDCs. 
18. Mrs Csukasi (Uruguay), Chairperson of the Committee on Agriculture , said that as the 
Committee did not usually meet between March and September, she did not have anything new to 
communicate since the Committee's most recent report to the Council in May.  The status of the 
African Group's proposal remained exactly as describ ed by her predecessor in his oral report to the 
Council in May 2006.  She could only add that th e Committee's next meeting, to be held on 
26 September, would once again give the proponents and other Members the opportunity to take up 
this issue with a view to resolvi ng the current deadlock.  She remain ed at Members' disposal to hold 
consultations if it was felt this might contribute to such a solution. 
19. Mr Bogaert (Belgium), Chairman of the Committee on TRIMs , said that pursuant to the 
August 2004 Decision of the Gene ral Council and paragr aph 37 of the Hong Kong Ministerial 
Declaration, the Committee had considered two S&D treatment proposals submitted by the African 
Group relating to Articles 4 and 5.3 of the TRIMs Agreement.  Since his most recent oral report to the Council in May, the proponents had submitted a fu rther revised version of their proposal.  The 
revisions concerned both the country coverage a nd the time scale of the flexibilities in the TRIMs 
Agreement that were being sought.  He had held informal consultations on 20 June concerning this 
revised proposal.  Some Members had expressed s upport and interest for the new formulations.  
Others had repeated their opposition, in spite of  the new wording.  Therefore, the informal 
consultations had not led Members closer to a con sensus.  The proponents had indicated that they 
would discuss further the concerns raised on the revised language and had suggested that other 
Members join in redrafting a suitable text to a ddress the concerns raised, which would then be 
submitted to the TRIMs Committee.  In this respect and for transparency reasons, he intended to hold 
an open-ended informal meeting of the TRIMs Comm ittee, and would keep the Chairman of the CTD 
in Special Session fully informed of any progress. 
20. Mr Huige (Netherlands), Chairman of the Committee on SPS Measures
, recalled that in April 
he had provided a substantive wr itten report (G/SPS/44) on the SPS Committee's work on the issues 
relating to the implementation of S&D treatment.  At the present meeting he would report only on 
what had happened since that time, i.e. at the most recent meeting of the SPS Committee during the 
last week of June.  The Committee had consider ed S&D treatment proposals both at an informal  WT/GC/M/109 
 Page 7 
 
 
  meeting and at its regular meeting.  At the in formal meeting, two proposals had been tabled 
informally by Egypt.  The first of these contained a revision of earlier proposals on Article 10.1 of the 
SPS Agreement, suggesting the inclusion of a new, fi rst paragraph in the Article, and further revisions 
to the existing first paragraph.  This proposal c ould be found in document JOB(07)/99.  Although a 
number of Members had supported the proposal, many had indicated they had not had the opportunity 
to consider the proposal prior to the meeting, a nd hence were not in a position to comment.  It had 
been noteworthy, however, that while several Me mbers had indicated they could not support any 
change to the legal text of the SPS Agreement, they  were prepared to consider the possibility of a 
binding interpretation by the General Council.  The other proposal submitted by Egypt (JOB(07)/104) 
had suggested revisions to the procedures for transp arency of S&D treatment adopted previously by 
the Committee (G/SPS/33).  Although preliminary comments on the second proposal had been quite 
positive in general, most delegations had seen the propo sal for the first time only at the meeting, and 
hence it had not been possible to have a substa ntive discussion on the text.  The Committee had 
agreed to consider both of these proposals at an inform al meeting just prior to its next regular meeting 
in mid-October.  He had encouraged all Members – and wished to do so again – to submit, in advance 
of the October meeting, any other proposals or  suggestions they had with respect to the 
implementation of S&D treatment provisions.  He w ould keep the General Council informed of any 
progress made on this matter in the SPS Committee. 
21. The Chairman  informed delegations that, in the absence of the Chair of the Safeguards 
Committee, the latter's report to the General Council ha d been circulated in document G/SG/83.  He 
then expressed his gratitude to all the Chairs for their reports. 
22. Delegations thanked the Chair of the CTD in Sp ecial Session for his work in trying to bridge 
the gaps on the proposals before the Special Sess ion, and wished him all the best in his new 
assignment.  They also thanked the other Chairpersons for their reports. 
23. The representative of Bangladesh  said his delegation took note of the progress made 
regarding the 16 outstanding Category II proposals in the CTD Special Session.  In this respect, LDCs 
wished to be assured that S&D treatment provisions  were both effective and operational, as mandated 
by Ministers at Doha.  They did not wish to see an y interpretative ambiguities in the texts that could 
undermine the effectiveness of S&D treatment pr ovisions.  With respect to the monitoring 
mechanism, the LDCs demanded an effective mech anism for monitoring the implementation of S&D 
treatment provisions in all respects.  Duty-free qu ota-free (DFQF) market access for LDCs was one of 
the key S&D treatment decisions taken in Hong Kong.  The LDCs demanded the earliest 
implementation and operationalization of this Decision.  In this respect, they also wished to be assured 
that rules of origin were treated as an integral pa rt of the modalities in the implementation of the Hong 
Kong Decision on DFQF market access.  They ur ged the Chairman to facilitate the constructive 
engagement of Members to this end.  Since H ong Kong, only one developed country, namely Japan, 
had granted enhanced DFQF market access to LDCs covering 99 per cent of the value of their 
exports.  It was only this type of initiative that would make the Hong Kong Decision on DFQF 
commercially meaningful for the LDCs.  The LDCs expected other developed countries who were in 
the process of implementing the Hong Kong Decision to  follow Japan's example.  It was encouraging 
to note that some developing-country Members had st arted to take initiatives to provide DFQF market 
access to the LDCs in line with the Hong Kong Decisi on.  The LDCs urged these countries to inform 
them in further detail about the progress they had ma de in this regard, and to provide them with some 
indicative timetable as to when the LDCs could e xpect the much-awaited preferential market access in 
those countries.  The LDCs looked forward to si milar initiatives on the part of other developing 
countries in a position to do so. 
24. The representative of Lesotho , on behalf of the LDCs , underscored their concern  at the slow 
pace of progress on the implementation of the DFQF ma rket access for LDCs.  While they noted with 
appreciation the efforts made by some Members for the effective implementation of the DFQF market WT/GC/M/109 
Page 8  
 
  access package for LDCs, they wished to stress th e need for Members to give due attention to 
fulfilling the accompanying mandate on simplified and transparent rules of orig in.  The mere removal 
of tariffs, in most cases, would not necessarily result in tangible and commercially meaningful benefits for LDCs.  It was with this understandi ng that the LDC Group had outlined the appropriate 
rules of origin to complement DFQF market access.  Unless this complementary aspect was 
sufficiently and effectively addressed, DFQF market access would remain a mere mirage.  Therefore, 
the LDCs wished to reiterate that both aspects of DFQF market access had to be part and parcel of the modalities in NAMA and Agriculture, as well as the fi nal package of the Doha Development Round.  
The LDCs also wished to stress that the ultimat e goal was to reach 100 per cent product coverage, and 
as such, both developed countries which had not yet d one so, and developing countries in a position to 
do so, should strive towards achieving this end, at th e latest by the end of the implementation period.  
All S&D treatment proposals formed an integral part of  this, and in this regard , all should be given the 
attention they deserved in order to realize th e development objectives of the Round.  The LDCs 
wished to thank the Chairman of the CTD Special  Session, a Committee that was very important to 
LDCs, for so ably and tirelessly dea ling with issues of interest to th em.  He would be sorely missed, 
and it was hoped that his successor would pay as much attention to issues of interest to LDCs. 
25. The representative of Uganda
, on behalf of the African Group , said that S&D treatment was a 
vital development instrument for providing th e necessary policy space for developing and least-
developed Members, thus allowing them to be effe ctively and fully integrated into the multilateral 
trading system.  In this regard, the African Group wished to emphasize that in the coming period of 
intensified negotiations, in tensified work and effective engagement by all Members was needed on 
S&D treatment in all areas of the DDA negotiations. 
26. The representative of Kenya  said that although his country took note of the marginal progress 
made on this issue, it remained concerned about the slow progress and the lack of political will to 
resolve expeditiously all outstanding S&D issues within the CTD Special Session and in other WTO 
bodies.  Kenya urged Members collectively to intensif y their work in this ar ea, in accordance with the 
Hong Kong mandate, when they resumed work in Se ptember, and supported the statement by Uganda 
for the African Group. 
27. The representative of Jamaica , on behalf of the ACP Group , said she wished to thank the 
Chairs for their reports and to support fully the statement by Uganda for the African Group. 
28. The representative of Zambia  said his delegation strongly supported the statements by 
Lesotho for the LDCs, Uganda for the African Group, and Jamaica for the ACP Group.  Zambia 
trusted that all delegations would come back in September ready to ensure that the term 
“Development Round” lived up to developing countries ' expectations and that all would be serious in 
helping developing countries, especially the LDCs, to  be effectively integrated  into the world trading 
system. 
29. The representative of China  welcomed the progress made on S&D treatment, although much 
work remained to be done in the limited time ahead.  It was a sh ared aspiration of all developing-
country Members that such fundamental issues as SPs, SSM, cotton, specific concerns of the LDCs, 
SVEs and RAMs, together with other proposals put forward by developing-country Members in 
different bodies, would be addressed in an earnest  and meaningful manner.  Without this, what 
Members might achieve would be far less than what they had committed to on development 
objectives five years earlier.  China reaffirmed its readiness to work with the incoming Chair of the 
CTD in Special Session, together with all other Chairs  and Members in this important area, in order to 
achieve the development objectives of the Round. 
30. The General Council took note  of the reports by the Chairpersons and of the statements.  WT/GC/M/109 
 Page 9 
 
 
  3. Work Programme on Small Economies – Report by the Chairman of the Dedicated 
Session of the Committee on Trade and Development 
31. The Chairman  recalled that at its meeting in Febr uary and March 2002, the General Council 
had taken note of a framework and procedures fo r the conduct of the Work Programme on Small 
Economies, under which this Work Programme w ould be a standing item on the General Council's 
agenda.  The framework and procedures also pr ovided that the Committee on Trade and Development 
shall report regularly to the General Council on the pr ogress of work in its Dedicated Sessions on this 
subject.  Furthermore, Ministers at Hong Kong had instructed the CTD, under the overall responsibility of the General Council,  to continue the work in the Dedicated Session and to monitor 
progress of the small economies' proposals in the ne gotiating and other bodies.  In December 2006, on 
the basis of a report by the Chair of the CTD in Dedicated Session, the General Council had taken 
note that Members in that body would be pursui ng the substantive work under the Small Economies 
Work Programme in 2007.   
32. In the absence of the Chairman of the Dedicat ed Session of the CTD, and on his request and 
behalf, Mr. Ismail (South Africa), the previous Chair of the CTD
, read out his report, as follows, on 
the progress of work in this area:  " Since my last  report to you in early May, the CTD in Dedicated 
Session has held one informal meeting on 24 Ma y.  The meeting was convened to continue 
monitoring the progress of the various proposals made by the proponents of small economies in the negotiating groups and other WTO bodies.  At that meeting the Secretariat presented a compilation paper to assist the Dedicated Session with its monito ring role.  The Secretariat's paper is based on a 
compilation paper that was prepared by a group of small economies.  However, the Secretariat paper 
goes a bit further and incorporates the reports by th e various Chairs of the negotiating groups, as well 
as the counter-proposals on issues of interest to small economies made by other Members.  The document was circulated as WT/COMTD/SE/W/22 and reflects the current state-of-play of the small 
economies' issues as discussed in the negotiating gro ups and other bodies.  The Secretariat intends to 
keep updating this document to reflect any future proposals or developments." 
33. The representative of Barbados
, on behalf of the small, vulnerable economies , said the report 
by the Chair of the CTD Dedicat ed Session captured the discussions which had been held in the 
informal meetings of the Dedicated Session on 24 Ma y, as well as the ongoing work by the Secretariat 
regarding the compilation paper.  Even though it w as well recognized that over the past few months 
the SVEs had been more active in the negotiatin g and other bodies of the WTO, the Dedicated 
Session remained of great importance to the propone nts.  He noted that the matter upcoming under 
Item 5 of the present Council's agenda, regardi ng Article 27.4 of the Agreement on Subsidies and 
Countervailing Measures, was of primary importance to the majority of the proponents of the small 
economies work programme, as 15 of the latter had also  been the leading proponents on this issue.  
The SVEs looked forward to positive action on this matter. 
34. The representative of Nicaragua  thanked the Secretariat for the compilation paper concerning 
the Work Programme on Small Economies.  Her dele gation agreed it was important that the rhythm 
and progress of the work of the Dedicated Session be similar to the rhythm and progress in other areas of the negotiations.  This was because, as all knew, the Dedicated Session was required to contribute in a global sense, in such a way as to keep develo pment at the core of the negotiations.  Nicaragua 
reiterated its commitment to work actively towa rds enhancing the understanding of the issues that 
remained outstanding.  With regard to the Secret ariat's compilation paper, in which reference was 
made to the lack of consensus in some areas, sh e wished to recall the explicit expressions of support 
the small economies had received from the G-20, the G-33, the ACP Group, the African Group, the LDCs and the NAMA-11 at the recent meetings  of the Negotiating Group on NAMA, the Committee 
on Agriculture in Special Session.  At the formal TNC meeting the previous day, Barbados, speaking 
for the SVEs, had expressed the latter's apprecia tion to these groups.  Her delegation thanked the WT/GC/M/109 
Page 10  
 
  Chair of the Dedicated Session of the CTD for his excellent work and wished him the greatest success 
in the future. 
35. The General Council took note
 of the report by the Chairman of the Dedicated Session of the 
Committee on Trade and Development and of the statements. 
4. Non-recognition of rights under Article XXIV:6 and Article XXVIII of GATT 1994 – 
Communications from Honduras and Guatem ala (WT/GC/85, WT/GC/90 and Corr.1, 
WT/GC/100, WT/MIN(05)/9) 
36. The Chairman  recalled that this matter had first been  raised by the delegations of Honduras 
and Guatemala at the Council meeting in December 2004 .  It had subsequently been considered by the 
General Council at each of its regular meetings sin ce then, without resolution.  In the light of the 
views expressed at these meetings, and the re quests for consultations made by Honduras and 
Guatemala, his predecessors as Chair had held regular  consultations to see if they could facilitate a 
satisfactory resolution to the concerns that had been  expressed regarding this matter.  He recalled that 
the matter referred to the General Council in 2004 concerned the non-recognition of claims of 
substantial interest in the very specific context of  the EC's modification of its concessions as a result 
of enlargement from 15 to 25 members, and the modification of its concession on bananas in its move 
to a new tariff-only regime as from 1 January 2006.   This matter had been brought to the General 
Council in keeping with Paragraph 4 of the 1980 Procedures for Negotiations under Article XXVIII, 
under which, when a Member renegotiating its Sche dule does not recognize a claim of principal or 
substantial supplying interest, the Member making the claim "may refer the matter to the Council."  
While the 1980 Procedures remained silent on the ex act role to be played by the General Council in 
such situations, any action by the Council on this  matter would have to be taken by Members 
collectively, in keeping with the practice of deci sion-making by consensus.  Obviously, the Council 
would not be in a position to take action if the par ties directly concerned were still in disagreement.  
At the May Council meeting, he had indicated that, like his predecessors, he was willing to facilitate a 
resolution in every way possible, and to offer his good offices in this process to the parties directly 
concerned and explore with them further the possib ilities of a resolution in the near future.  In the 
light of the statements made at that meeting, he had proposed that the General Council revert to this 
matter at the present meeting, and that he hold consu ltations in the meantime as far as he judged to be 
useful. 
37. He informed the Council that on 20 July he had he ld consultations to a llow delegations to be 
updated on the contacts that had taken place among th e parties directly concerned since May and on 
any developments that could provide a possible so lution to the non-recognition issue raised in the 
Council.  He had invited to the consultations all the delegations who had spoken on this issue at 
previous meetings of the Council, and had made clea r that the consultations were without prejudice to 
any Member's rights under the WTO.  The discussion had been brief, but positive and constructive in 
tone.  It had indicated that encouraging contacts had taken place in recent weeks on the overall banana 
issue, as well as on Guatemala's systemic concern regarding rights of small and medium-sized 
exporting countries under Article XXVIII.  While it re mained to be seen what result would emerge 
from these contacts, he believed they were a necessary step and a sign of progress towards a 
satisfactory resolution to the concerns that had been brought to the Council. 
38. The representative of Guatemala , speaking also on behalf of Honduras , expressed these 
delegations' appreciation for the cons ultations held on this agenda item and the steps taken to resolve 
this matter – one of great interest to both countries.  Without prejudice to the rights of Honduras and 
Guatemala under the WTO Agreements, and so as not  to repeat the alread y extensively discussed 
legal basis of these countries' claim, they would limit  themselves simply to giving a brief report of the 
progress made in the discussions with the EC, from bot h the systemic and the trade points of view.  
With respect to the systemic in terest of Honduras and Guatemala wh ich, as all knew, consisted of  WT/GC/M/109 
 Page 11 
 
 
  ensuring the equitable distribution of negotiating rights under Article XXVIII for small and medium-
sized exporters, there had been a welcome narrowing of differences with the EC, which had permitted 
the parties to identify an approach that could enable them to work constructively on this matter within 
the WTO.  The solution identified would naturally be discussed in due course with other Members, 
especially those who had systematically voiced thei r interest and support in respect of the concerns 
expressed under this agenda item.  With regard to th e trade interests, which extended to various export 
products from Honduras and Guatemala, negotiations with  the EC in the area of bananas were still 
ongoing.  That week, the EC had outlined a prelim inary offer, which Guatemala and Honduras trusted 
would shortly be formalized.  This  offer could provide the necessary platform for a solution to this 
matter, and Guatemala and Honduras therefore urged th e EC to redouble it efforts so as to meet this 
objective.  As these two delegations had said on pr evious occasions, they were ready and willing to 
reach an agreement with the EC. 
39. Speaking on behalf of Guatemala , he said that as a final point his delegation wished again to 
invoke its rights as a Member with a substantial in terest in sugar in the negotiating process deriving 
from the accession to the EC of Bulgaria and Romani a.  In invoking these rights, Guatemala had been 
careful to follow and comply with the proce dures and formalities established in Articles XXIV and 
XXVIII of the GATT and other related rules.  Guatem ala had fulfilled its duty.  It had respected the 
deadlines and offered extensive and reliable evidence to support its ri ghts.  Moreover, Guatemala was 
not asking for anything to which it was not entitled.  Its exporters had made an enormous effort to 
position themselves in the market, and Guatemala was merely asking that this be respected and taken 
into consideration.  It therefore looked forward to a positive response to its claims. 
40. The representative of Jamaica  recalled that at past Counc il meetings, her delegation had 
stressed the importance of the banana indus try to Jamaica's economy as well as to some 
ACP countries and other countries in the CARICOM re gion in terms of both employment and exports.  
It was with this in mind that Jamaica wished to see predictability, stability and equity in this industry, 
and continued to support c onstructive consultations leading to a solution that took fully into account 
the interests of all parties, including ACP and CARICOM countries. 
41. The representative of Nicaragua  said that as was already known, her country had a systemic 
and structural interest in this matter.  Her dele gation therefore hoped that the parties concerned would 
reach a balanced and satisfactory settlement in the near future. 
42. The representative of the European Communities  said his delegation had listened very 
carefully, as always, to the statements by Member s, and wished to respond to these comments and 
present the EC's own assessment of the state of pl ay in the negotiations it had been conducting with 
all MFN suppliers on bananas.  He would not, at the present meeting, go into detail on the legal 
arguments advanced in the past , as these were well known, but would focus on two specific issues 
raised by Members, and by Guatemala in particular.  The first was that, irrespective of the differing 
views on the specific case of the EC's non-rec ognition of rights on bananas, the Community did 
accept that Guatemala was raising what might be a legitimate systemic issue.  His delegation had 
noted that Guatemala and Honduras had, in addition to seeking recognition of rights in this specific case, sought to start a broader review of the questi on of whether – and if so, how – to rebalance the 
rules of Article XXVIII of the GATT and the Unde rstanding on the Interpretation of Article XXVIII 
to provide recognition for small countries who were  very dependent on a particular product and 
market, but who did not meet the current criteria for recognition or compensation.  The EC was open 
to engaging in such a review in the General C ouncil or under the Council for Trade in Goods, but 
would encourage Guatemala or others to present c oncrete ideas, on which the Community knew they 
were working. 
43. The second point was that this agenda item ha d again provided the opportunity for several 
other Members with an export interest in bananas to  express their continued concerns with aspects of WT/GC/M/109 
Page 12  
 
  the EC's current banana regime.  Since they had don e so, he also wished to indicate before the wider 
membership where the Community stood on this matte r.  As the Chairman had noted, consultations 
and negotiations had been started with all MFN bana na suppliers, regardless of their legal rights under 
Article XXVIII of the GATT.  Current discussi ons on a negotiated solu tion involved all those 
suppliers with the exception of Ecuador because the latter was currently engaged in dispute settlement 
proceedings against the EC.  These discussions had b een constructive and serious, in the Community's 
view.  The EC had orally presented to its MFN pa rtners a detailed proposal for a comprehensive, 
once-and-for-all solution on bananas, based in ma ny respects on the framework developed by the 
process conducted by Minister Store of Norway in  2006.  The EC's detailed proposal had received 
mixed reactions.   Some partners had been very pos itive, while others had been more cautious.  One or 
two MFN exporters still seemed to think – wrongly, in the EC's view – that they might get a better 
result through litigation.  In the course of negotia tions earlier that week the EC had sought to 
overcome some of the remaining objections by maki ng further proposals as to how its banana regime 
might be further adjusted to take all concerns into  account.  An outline of the EC's proposals had been 
sent in writing to the MFN exporters that day, and the EC hoped that on resumption of work in early 
September, there could be a positive reaction to thos e proposals so that negotiations could be rapidly 
concluded.  That remained the EC's  aim, and it encouraged all MFN e xporters to take the high road of 
negotiation and to avoid the low road of litigation, as this would be the only way to reach a mutually 
satisfactory solution on bananas. 
44. The representative of Ecuador
 said that the statement by the EC had compelled his delegation 
to provide the following clarification with regard to the issue of the banana negotiations.  Ecuador 
regretted that despite its openness to reaching a negotiated settlement to this dispute – which had 
meant freezing its legal proceedings for almost th ree months while awaiting a serious and concrete 
proposal from the European Communities – the EC had made the decision to exclude Ecuador from the negotiations it was currently engaged in with all MFN banana-supplying countries.  The EC had 
based this decision on the fact that Ecuador had ex ercised a legitimate legal right recognized by the 
WTO Agreements.  The EC's attitude set a bad preced ent for any future dispute, as it disregarded the 
DSU provisions themselves, which encouraged parti es to find a negotiated solution at any stage of a 
dispute.  This precedent was even more contradi ctory as it concerned a dispute between a developed 
and a developing-country Member.  Despite the ab ove, Ecuador reiterated its willingness to find a 
negotiated solution that would end this long-runnin g dispute once and for all.  His country, as the 
world's leading banana exporter a nd principal supplier to the European market, would be unable to 
accept any agreement negotiated without its participation. 
45. The representative of Paraguay
 expressed his delegation's satis faction over the progress being 
made on this matter which had been on the Counc il's agenda for a long time and for which any 
solution had to take into account the interests of all parties concerned in a positive and fair manner.  
Paraguay especially hoped there would be no discrimin ation against any developing country, as this 
could be a  source of new conflict and woul d not ensure a solid and lasting solution. 
46. The representative of the Philippines  thanked the Chairman for his efforts in undertaking 
consultations on this matter.  The latter was th e third General Council Chair to do this, and his 
delegation hoped that under his leader ship this matter would be resolved.  The Philippines appreciated 
being included in these consultations along with ma ny other countries who had systemic concerns 
about these issues.  His delegation was hopeful, based on the reports by the Community and other 
delegations, that a rules-based and constructive effort  by the Community and others might lead to an  
actual rule being formulated that could prevent futu re problems of this nature having to be brought to 
the General Council.  There was already an opport unity for review provided under the current rules, 
and perhaps some sort of solution in that area coul d be formulated.  On the banana matter, which was 
not directly part of this issue, his delegation c ontinued to observe with keen interest the ongoing 
negotiations and wished all the parties concerne d the best luck in resolving this matter.  WT/GC/M/109 
 Page 13 
 
 
  47. The representative of Colombia  said her delegation wished to invite the Community to 
include Ecuador in its negotiations regarding a co mprehensive solution on bana nas.  As Ecuador had 
said, it was the leading banana exporter in the worl d and the principal supplier of bananas to the EC 
market, and without its inclusion in these negotiati ons no agreement could be successful.  Colombia 
and several other countries remained enthusiastic that these negotiations – which would finally bring 
together all the geopolitical difficulties surrounding the banana issue in this organization – could be 
successfully concluded. 
48. The General Council took note  of the statements, and agreed  to revert to this matter at its next 
meeting, and that the Chairman would make himself available for further consultations if Members so 
wished. 
5. Article 27.4 of the Agreement on Subsid ies and Countervailing Measures – Draft 
Decision (G/SCM/120) 
49. The Chairman  drew attention to the draft decision forwarded to the General Council in 
document G/SCM/120 from the Committee on Subsidies and Countervailing Measures.   
50. Mr Klein (Mexico), Chairman of the Committee on Subsidies and Countervailing Measures , 
said that the draft decision in document G/SC M/120 granted annual extensions, for certain 
programmes of a number of developing-country Member s, of the transition period for the elimination 
of export subsidies provided for in Article 27.2(b)  of the Agreement on Subsidies and Countervailing 
Measures.  It provided for the continuation for six more years, though in an amended form and with 
more disciplines, of the procedures adopted at the D oha Ministerial Conference, which were set out in 
document G/SCM/39.  The draft decision contai ned an express commitment by the developing-
country Members referred to in the document, to eliminate export subsidies by 31 December 2015 and 
not to request further extensions.  Additional disci plines introduced by the draft were a mid-period 
assessment in 2010 by the Comm ittee on Subsidies and Counterv ailing Measures, of detailed 
information on the manner in which each of the de veloping-country Members would eliminate export 
subsidies by 31 December 2015, and the notification of this termination date to all beneficiaries of the 
programmes listed in the Annex to the draft decision.   The draft decision furthermore specified that it 
did not prejudge rights of Members included in  Annex VII of the Agreement on Subsidies and 
Countervailing Measures.  Moreover, the Members listed in Annex VII(b) who had reserved rights 
under the previous decision, in document G/SCM/39 , and who achieved product graduation before 
2015, would have the option of re questing annual extensions in accordance with the procedures set 
forth in the draft decision within the time-limit set  out.  At the Committee's meeting in April, the 
"certain developing-country Members" referred to in  the draft decision had submitted a proposal that 
already contained many of the elements making up th e equilibrium or final balance reflected in the 
draft decision.  That proposal, contained in docum ent JOB(07)/50, was the outcome of consultations 
held by his predecessor as Chair of the SCM Co mmittee, and served as a basis for the Committee to 
reach agreement on launching the final drafting stag e in order to conclude the process and submit a 
draft decision to the General Council for adoption at  the present meeting.  The Committee had worked 
intensively since May to achieve this objective,  and he wished to thank all Members for the 
constructive part they had played, which had en abled the Committee to reach a consensus on this 
difficult and important issue within the deadline set.  On behalf of the SCM Committee, he requested 
that the General Council give favourable consideration to the draft decision. 
51. The Chairman  said that, in the light of the statem ent by the Chairman of the Subsidies 
Committee and the agreement that ha d been reached in the Committee regarding this draft decision, 
he would propose that the General Council adop t the draft decision contained in document 
G/SCM/120. WT/GC/M/109 
Page 14  
 
  52. Delegations thanked the Chairman of the S ubsidies Committee for his report, and both the 
present and former Chairmen of the Committee for thei r efforts leading up to the adoption of the draft 
decision by the Committee, as well as the Secretariat for its advi ce and assistance throughout this 
process. 
53. The representative of Bolivia
 said her delegation wished to apologize for the delay in the 
Council's consideration of this age nda item which had arisen as a result of the fact that the Spanish 
text of the draft decision had been changed fro m the version initially circulated in document 
G/SCM/120, paragraph 5(a).  This change had been  made without consultations.  However, in a 
constructive spirit and because the decision was so  important for the developing countries, the 
Annex VII Spanish-speaking countries had reached an  agreement that paragraph 5(a) of the Spanish 
version of the draft decision should read as follows :  "La presente Decisión no prejuzga derechos de 
los Miembros enumerados en el Anexo VII".  She wished to add that, as would be expected in any 
multilateral forum, all changes to negotiated texts ha d to be made by and between Members, in order 
to avoid further confusing negotiati ons that were already difficult. 
54. The representative of Barbados , also on behalf of the Dominican Republic, El Salvador, 
Guatemala, Jamaica, Mauritius, Antigua and Bar buda, Belize, Dominica, Fiji, Grenada, Papua New 
Guinea, St. Lucia, St. Kitts and Nevi s, and St. Vincent and the Grenadines , expressed great 
satisfaction at the expected  adoption at the present meeting of the recommendation from the SCM 
Committee to extend the transition period for the u se of certain export subsidies until 2015.  This 
decision also applied to Costa Rica, Jordan, Panama  and Uruguay, and he wished to acknowledge the 
successful working relationship the SVEs had had w ith those Members over the past year, which had 
led to this positive outcome.  These countries co mmended the Chairs of the SCM Committee, who 
had worked earnestly and intensely with delega tions during the 18-month period of negotiations – 
Mr Iida (Japan) and Mr Klein (Mexico).  Their commitment had been instrumental to this positive 
outcome.  Thanks were also due to the Secretariat fo r its extremely dedicated role in this process.  The 
adoption of this recommendation would have a posi tive effect on all of these countries, from both an 
economic and social perspective.  The programmes concerned were currently an integral component 
of their countries' investment regi mes and also helped to employ, in some cases, millions of people, 
particularly women.  These countries hoped to use th e period between the present and 2015 to adjust 
their economies adequately so that the loss of these programmes as polic y instruments could be 
managed with minimal dislocation.  This decision wa s not just an achievement for the proponents, but 
rather another illustration that the WTO system could indeed work for its smallest and most vulnerable 
members.  The recommendation of the SCM Committee showed that both developed and developing 
countries could work together to achieve a satisfactory outcome.  In this regard, these countries wished to commend the negotiating spirit of all Members in  the SCM Committee, particularly those who had 
engaged with their colleagues informally and inte nsively over the preceding 18 months – Australia, 
Canada, Chile, Colombia, Ecuador, the European Co mmunities, Japan, Peru and the United States.  
They also wished to thank partic ularly Bolivia and Honduras for the flexibility they had shown at the 
present meeting regarding the Spanish translation of the draft decision. 
55. As had been said, this recommendation, which was to become a decision of the General Council 
at the present meeting, was a victory for all.  It recognized the development needs of the SVEs and other proponents and allowed th em additional time to bring their incentive programmes into 
conformity with the SCM Agreement.  It also pr ovided for a number of wide-ranging transparency 
provisions, including agreement to notify beneficiaries of the decision and to prepare an action plan to 
illustrate what was being done to bring the progra mmes into conformity.  It also provided for the 
possibility of the provision of technical assistance, and provided predictability to the membership that 
these programmes would be in conformity wi th Article 3.1 of the SCM Agreement by 
31 December 2015.  This provided certainty to th e governments involved and, particularly, to the 
governments and investors of all Members.  The decision also recognized rights of the four countries 
listed in Annex VII(b) of the SCM Agreement that had reserved their rights under the procedures in  WT/GC/M/109 
 Page 15 
 
 
  document G/SCM/39 and sought to maintain those ri ghts.  As fellow developing countries, these 
countries were pleased that this recommendation had been able to reflect the core concerns of those Members.  These had not been easy negotiations.  However, what had led to the present successful 
conclusion had been the common commitment the proponents and their negotiating partners had 
brought to the process.  It was hoped that th is could provide additional impetus to the DDA 
negotiations and that this recognition of the legiti mate development concerns  of developing countries 
could be broadened and integrated into the wider DDA discussion. 
56. The representative of Nicaragua
 said that while her delegation supported adoption of the draft 
decision, it wished to place a reservation on record and asked if this should be done before or after 
adoption of the decision. 
57. The Chairman , in response to Nicaragua, said that the general practice was to place 
reservations on the record following adoption of the decision concerned. 
58. The representative of Panama , also on behalf of Jordan and Uruguay , thanked Barbados for 
its statement on behalf of the SVEs and for the ex ceptional way it had coordinated the SVEs' work for 
more than a year.  The very satisfactory result be fore Members at the present meeting would not have 
been possible without the joint efforts of the 18 pr oponent developing countries.  Thanks were due 
also to the two Chairmen of the SCM Committee who had dealt with this issue.  Together with the 
Secretariat, they had always been committed to an inclusive, transparent and coherent process, taking 
into consideration all existing positio ns in order to reach a fair decision that was technically viable 
and balanced.  He also wished to mention the very  professional and constructi ve participation of the 
non-proponent delegations, from bot h developed and developing count ries, without which it would 
not have been possible to achieve this result.  He was equally pleased to see the inclusion in this 
decision of the recognition of rights of the countri es in Annex VII(b) of the SCM Agreement that had 
reserved their rights under the procedures in docum ent G/SCM/39.  He was pleased that the latter 
countries' situation had been covered with the legal certainty that they required and needed to have 
guaranteed in this decision.  As stated by Barbados , this decision was a victory for all.  It not only 
provided the security that developing countries'  programs would be in conformity with the 
SCM Agreement, but also provided the beneficiar y countries the time needed to undertake the 
necessary internal adjustments affo rding additional guarantees and lega l security for the Members, as 
well as for governments, investors and workers.  The road to this decision had been long and 
sometimes very complex.  However, the outcome wa s unquestionably tangible proof of what could be 
achieved in the multilateral trading system, and reco gnition that there was support in this organization 
for countries that had important economic and development needs. 
59. The representative of Japan  said that from the beginning, Japan had believed that Members 
should reach, in a timely fashion, an agreement that  was satisfactory for all concerned with regard to 
the matter of the continuation of extensions of the transition period.  To this end, his delegation had 
participated actively in the work of the SCM Commi ttee to prepare this draft decision.  The decision 
was important not only from the systemic viewpoint , but because of its importance in respect of the 
political implications for developing-country Member s.  It was also important for maintaining a 
balance between the rights of Members under the Ag reement.  Once adopted by the General Council, 
the draft decision would grant even more extensions  of the transition period.  At the same time, 
however, a mechanism would be established to cl arify a limit to the programmes for which the 
continuation of the extensions might be requested , and also to oblige Members to establish action 
plans for the elimination of the subsidies.  In th is way, the decision would help foster structural 
reform.  His delegation wished to thank all th e Members concerned for their efforts to reach 
agreement, especially the proponent Members le d by Barbados and the Members included in 
Annex VII(b) of the SCM Agreement.  Japan al so wished to thank the Chairmen of the 
SCM Committee for their leadership and the Secretariat for its technical support.  This draft decision 
was the fruit of intensive and constructive consulta tions held over the past 16 months among all of WT/GC/M/109 
Page 16  
 
  these Members.  It was a good example of how this organization could reach an agreement even when 
the matter concerned was complicated.  If the Council could not adopt the draft decision, all these efforts would have been in vain.  His delegation strongly supported the draft decision and was pleased 
that the Council was able to adopt it in its entirety at the present meeting. 
60. The representative of Chile
 said his delegation wished to re iterate the support it had expressed 
for this decision in the Subsidi es Committee, and to congratulate the Committee and its Members, as 
well as the Secretariat, on a decision which, in th e words of Barbados, showed once again that the 
system could prevail and that this was a victory not  just for the proponents but also for the system.  
That being said, he wished to express support for th e statement by Bolivia in regard to the differing 
versions of the Spanish-language text of the draft decision.  This was an important point, and he was 
very concerned over the fact that the version circ ulated some ten days earlier on the Internet and 
through the WTO mail was different from the one circulated to delegations that morning.  Furthermore, the second version had not been labe lled a "Rev.1" to indicate that there had been a 
change in the Spanish-language ve rsion of the English text.  His capital and his Mission in Geneva 
had therefore analysed a text which was not the one  on which Members were taking a decision at that 
meeting.  This did generate a systemic concern.  
61. The representative of Sri Lanka
, also on behalf of Bolivia, Honduras and Kenya , said that 
they were countries under Annex VII(b) of th e SCM Agreement who had reserved their right, 
pursuant to the procedures in document G/SCM/39 , under the Doha Decision on Implementation-
Related Issues and Concerns (WT/MIN(01)/17), and specifically the section on the Agreement on Subsidies and Countervailing Measures.  These co untries thanked the Committee for the support it 
had provided, and in particular the Chairman fo r his untiring effort that had made possible the 
adoption of this decision.  This decision maintain ed the spirit and understanding of the texts of the 
above-mentioned documents.  These countries also wished to state that they would be able to resort to 
any of the mechanisms granted pur suant to their rights at the time  the data was available to all 
Members. Since that information had a two-year dela y, these countries reserved their rights.  None of 
these countries had given their consent to any inte rpretation that might diminish the rights that 
Annex VII(b) countries had under the Subsidies Agreement. 
62. Speaking on behalf of Sri Lanka
, he said that the adoption of this decision indicated that the 
multilateral process could deliver.  In Sri Lanka, forei gn direct investment played an important role in 
generating employment and achieving sustained ec onomic growth.  Sri Lanka also hoped that the 
adoption of this decision would lead to Members ar riving at more important decisions relating to the 
DDA when they resumed their work after the summer break. 
63. The representative of the United States  congratulated the beneficiaries of this decision, as 
well as all those who had participated in putting to gether this solution – especially the Chairman of 
the Subsidies Committee – which was the result of more  than a year of consultations and negotiations.  
Throughout the process, the proponents had been willing to engage seriously and to address the 
concerns of other Members to obtain these results.  The United States was particularly pleased that 
this decision would lead to the elimination of e xport subsidies no later than the end of 2015 for all 
Members other than those remaining in Annex VII(b). 
64. The representative of the Dominican Republic  expressed his delegation's satisfaction at the 
General Council's adoption of this important deci sion under which certain export subsidies could 
continue to be applied until 20 15.  The Dominican Republic also wished to express its appreciation 
for the commendable work carried out in the SCM Committee throughout the process by its two 
Chairs, by the Secretariat and by the various Memb ers which had participated actively alongside the 
proponents with a view to moving this decision fo rward.  The decision being adopted at the present 
meeting was a significant event for the Dominican Republic and was, without doubt, a cause for much celebration for his Government.  It provided a great boost for the sectors benefiting from these  WT/GC/M/109 
 Page 17 
 
 
  programmes, which had suffered in the past year w ith the loss of foreign direct investment and 
thousands of jobs.  The outcome of this decision would therefore help to stimulate his country's 
economy without delay and would have a positive imp act in all areas.  His delegation endorsed the 
statement by Barbados for the SVEs and th anked each of the proponents of documents 
G/SCM/W/535/Add.1 and G/SCM/W/537 for their exce llent teamwork, in particular the group's 
coordinator, Barbados, for carrying out such exce llent and efficient work throughout this arduous 
process. 
65. The representative of El Salvador  joined Barbados and Panama  in thanking the Members for 
the approval of the draft decision.  Her delegati on saw this conclusion as the end of a process of 
consultations that had begun in early 2006 and that  had been placed on a formal footing with the 
submission of its request in April 2006 in docum ent G/SCM/W/535.  She wished to emphasize that 
the result reached at the present meeting would not ha ve been possible had there not been transparent, 
open and continuing consultations, both formal a nd informal, with Members in the SCM Committee 
with the various players in this pr ocess.  She wished to draw atten tion to the participation in those 
consultations of various Members, other than the proponents, who had shown an interest in learning 
about the proposal, such as Australia, Canada, Ch ile, Colombia, Ecuador, the European Communities, 
Japan, Peru and the United States.  She also wished to express her delegation's appreciation to all the 
non-proponent delegations for havi ng given timely consideration to the request, and to thank the 
current Chair of the Committee and his predecessor, as well as the Secretariat, for their participation 
in this process.  El Salvador wished to draw Memb ers' attention once again to the importance of this 
type of programme for developing-country Members su ch as El Salvador, as they provided them with 
the certainty needed to address the legitimate develo pment needs they had rai sed in this organization 
and, in the case of El Salvador, enabled it to maintain  up to 80,000 jobs in the country.  El Salvador 
remained convinced that the only way out of povert y was to generate wealth through employment.  
By extending these procedures, the WTO was provi ding job stability for tens of thousands of 
Salvadoran families.  El Salvador faced the challenge of achieving equitable and sustainable 
economic growth, and to meet that challenge it needed  the efforts both of the private sector and of the 
workers themselves, together with clear and pred ictable rules and the Government's commitment to 
generating employment.  For El Salvador, the pro cedures in the draft decision would end in 2015, 
which would give it time to work on adapting its programmes in accordance with its rights and 
obligations under WTO rules, while maintaining th e development objective underlying the WTO.  El 
Salvador's responsibility now was to focus its effo rts on securing conditions that would enable it to 
maintain and promote investment in the country, so  that it could continue to guarantee a source of 
jobs for those thousands of Salvadoran families.  Like other delegations, El  Salvador was confident 
that the General Council's adoption of this decision and the consideration given to concerns of the 
developing countries covered would ha ve a very positive outcome for the system in the context of the 
present Round of negotiations. 
66. The representative of Guatemala  expressed his delegation's appreciation for the statements by 
Barbados and Panama.  It also wished to than k the current Chair of the SCM Committee and his 
predecessor for their efficient handling of the di scussions which had led to this positive outcome.  
Guatemala also wished to thank the non-proponents for the time they had devoted to its development 
needs and for the understanding they had shown in th is regard.  Last, but not least, his delegation 
wished to give special thanks to the Secretariat,  whose invaluable support had greatly facilitated the 
work of delegations.  He did not intend to reiterate how important this decision was for his country, as 
his delegation had made this clear throughout th e negotiating process and was very pleased with the 
outcome.  It should be noted that the decision being adopted was a clear indication that the WTO had the ability to reach agreements which took into cons ideration the specific needs of all its Members.  
First, consideration was being given to the devel opment concerns of the proponent countries;  second, 
Members had been able to ensure a level of system ic and trade security for non-proponent countries;  
and finally, they had managed to ensure that the d ecision did not affect the rights of other Members.  
Guatemala sincerely wished that in the near future, Members woul d also be able to celebrate a WT/GC/M/109 
Page 18  
 
  positive outcome to the development Round.  It reite rated its confidence in the multilateral system and 
its belief in the S&D treatment provisions that enab led countries with lower le vels of development to 
adapt to WTO disciplines in an orderly manner.  
67. The representative of Jamaica
 said her delegation endorsed th e statements by Barbados and 
Panama for the proponents.  Jama ica was pleased that Members were  about to adopt this decision, 
given the importance of its export subsidy programme to its economy, which played an important role 
in Jamaica's national export strategy and contri buted to employment, increased exports and foreign 
exchange earnings, as well as increased investment.  The decision would provide legal certainty for 
the Government and for local and foreign investor s benefiting from these programmes, regarding the 
status of these programmes.  The decision was al so evidence of the high level of constructive 
engagement between the proponents and non-proponents, a nd of the high level of concessions made 
by both sides since the original  proposals had been submitted.  The decision also reflected a 
reasonable balance between the positions of the pr oponents and the non-proponents.  As had been 
noted by others, the decision related not only to Jama ica and other proponents, but also applied to the 
Members in Annex VII(b) of the SCM Agreement.  The decision contained language that would allow 
the Members who had reserved their rights under doc ument G/SCM/39 to continue to do so under this 
decision, thereby continuing to provide legal certa inty for these countries.  Jamaica wished to thank 
the Annex VII(b) countries for their engagement in  the process, which had greatly facilitated the 
adoption of the decision in the SCM Committee.  Ja maica also wished to thank Members, including 
those with whom her delegation had had intensive contacts as we ll as others, both developed and 
developing, whose engagement and understanding of the importance of these programmes had 
contributed to the present positive outcome.  Jama ica looked forward to similar outcomes in the 
broader DDA negotiations.  Her dele gation wished to thank publicly th e delegation of Barbados for its 
coordination and leadership of the proponents. 
68. The representative of Mauritius  associated his delegation with the statements by Barbados 
and Panama for the proponents, a nd thanked all the Members involved in the consultative process, as 
well as the Secretariat, with special thanks to Ba rbados for having spearheaded the process leading up 
to this decision. 
69. The representative of the European Communities  said his delegation supported the adoption 
of the draft decision granting a further extension of certain export subsidy programmes until the end 
of 2015.  Like others, the Community welcomed the commitment by the requesting countries not to request a further extension.  It noted with satisf action that this decision was the successful result of 
two years' intensive negotiation.  It was noteworth y that Members had been pragmatic and prudent in 
finding a balanced compromise on this issue, which underlined their commitment vis-à-vis  developing 
and least-developed countries. 
70. The representative of Jordan
 said his delegation wished especially to thank the non-proponent 
Members for their serious engagement in the negotia tions on this decision, namely, the United States, 
the European Communities, Australia, Canada, Chile , Japan, Peru, Ecuador and others, and for their 
understanding of the need for such a decision.  Th e negotiation of this decision set a good example for 
all countries participating in the Round.  All aspects of negotiation had been used – request and offer, 
plurilateral and multilateral consu ltations, flexibilities, understanding,  collaboration, cooperation and 
compromise.  In addition, there had been political will.  There was no need to dwell on the importance 
of such a decision to a country li ke Jordan, which was also an SVE.  One very important element of 
the decision for Jordan was that it would provide the needed stable economic environment for both 
local and foreign investors in his country.  This would also help Jordan's small and medium-sized 
enterprises to better plan their bus inesses and improve their production.  
71. The representative of Costa Rica  expressed his delegation's satisfaction with the decision the 
Council was in the process of taking.  It also wish ed to thank the Chair of the SCM Committee for his  WT/GC/M/109 
 Page 19 
 
 
  efforts to have this text adopted, as well as Pa nama for having coordinated the small group of 
proponents, which had also included Uruguay and Jordan.  Cost Rica wished to highlight once again the importance of this decision.  Even more impor tant, Costa Rica was aware that the decision about 
to be adopted provided for an extension that was limi ted in time and that stipulated that all beneficiary 
Members had to move towards eliminating export subsidies prohibited under Article 3.1(a) of the 
SCM Agreement not later than 31 December 2015. 
72. The Chairman
 proposed that the General Council adopt the draft Decision in document 
G/SCM/120, on the understanding that paragraph 5( a) in the Spanish-language version of the 
document would read as follows:  "La presente D ecisión no prejuzga derechos de los Miembros 
enumerados en el Anexo VII". 
73. The representative of Chile  said he wished to reiterate the systemic issue his delegation had 
raised earlier concerning the circulation of a docum ent for that meeting that was different from one 
circulated earlier on the Internet without the change  being indicated in its labelling.  He wished to 
know the conclusions on this point, i.e. whether there would be an investigation or something of that 
kind into this matter, given the danger posed by such an occurrence. 
74. The Chairman  said he would endeavour to ensure, together with the Secretariat, that this did 
not happen again.     
75. The General Council took note  of the statements and agreed  to the Chairman's proposal.3 
76. The representative of Nicaragua  said that her country was the second-least-developed 
economy in the western hemisphere, with a gross national income per capita in 2004 of just over 
US$500 in 1990 dollars.  Half of Nicaragua's populati on lived on less than $2 a day, and a quarter 
lived on less than $1 a day.  Nicaragua's exports accounted for an extremely small fraction of global 
trade – less than 0.01 per cent.  Despite the diffi cult economic situation in her country, it hoped to 
exceed the threshold of $1,000 gross national inco me per capita in the not-too-distant future.  
Nicaragua would then be in the same position as some of the lesser-developed Members who were affected by the extensions under this decision.  The importance of export subsidies in the economic 
programmes of lesser-developed Members was recogni zed in Articles 27.2 and 27.4 and Annex VII of 
the SCM Agreement, and in paragraphs 10.1, 10. 4, 10.5 and 10.6 of the Ministerial Decision on 
Implementation-Related Issues and Concerns of  14 November 2001.  For the above reasons, 
Nicaragua was in favour of the General Council adop ting the procedures for the extension of certain 
programmes in certain developing-country Members pursuant to Article 27.4 of the Agreement on 
Subsidies and Countervailing Measures.  The decisi on in question reinforced the development aspect 
of international trade rules.  Nevertheless, it was vital that Nicaragua express the following 
reservation so that this could be recorded in the mi nutes of the present meeting:  Nicaragua had to be 
involved in any decision that was adopted in the fu ture to maintain export subsidies under Article 27.4 
of the Agreement on Subsidies and Countervailing Measures, even though it had not requested a 
reservation pursuant to the procedures in document G/SCM/39. 
77. The General Council took note
 of the statement. 
6. Rules of Origin – Harmonization Work Programme –  Statement by the Chairperson of 
the Committee on Rules of Origin 
78. The Chairman  recalled that the Harmonization Work Programme for non-preferential rules of 
origin had been launched in July 1995 in the Comm ittee on Rules of Origin (CRO), and that due to 
the sheer number and complexity of the techni cal issues involved Memb ers had been unable to 
                                                      
3 The Decision was subsequently circulated in document WT/L/691. WT/GC/M/109 
Page 20  
 
  conclude this work even though the deadline for its  completion had been extended several times.  He 
also recalled that since July 2002, when the CRO had forwarded 94 core policy issues to the General 
Council for discussion and decision, this matter had b een taken up at the General Council level.  The 
substantive work had, since then, been pursued in informal consultations conducted by the Chair of 
the CRO at the request and on behalf o, the Chair of the General Council.  In July 2006, the General 
Council had agreed that the deadline for completi on of negotiations on the core policy issues be 
extended to July 2007, and also that the CRO w ould complete its remaining work concerning the 
overall architecture and other technical issues by 31 December 2007.   
79. Ms. Thorstensen (Brazil), Chairperson of the Committee on Rues of Origin
, recalled that 
since July 2002, when the CRO had forwarded 94  core policy issues to the General Council for 
discussion and decision, this matter had been taken up at the General Council level.  Substantive work 
had been pursued in informal consultations conducte d by the Chair of the CRO at the request and on 
behalf of the Chair of the General Council.  Re porting, on her own responsibility, on the progress in 
the consultations that she had held with Members since July 2006, she said that the work had been 
focused on machinery.  While she ha d been working hard with the delegations concerned, in light of 
trade volumes and sensitivity of trade policies in this  sector, machinery appeared to be one of the most 
difficult issues for the Harmonization Work Programme.  Some Members had argued that value-added rules should be applied for this sector wh ile other Members had argued the opposite.  In this 
situation, it seemed to her that the only possible re maining option was that all Members accept this 
reality and be allowed to adopt either tariff-shift rules or value-added rules and notify their decisions 
to the WTO.  Her proposals on 607 tariff lines fo r machinery (HS Chapters 84-90), based on the 
optional double approach, had been circulated to Members in May 2007 in document JOB(07)/73.  A 
number of delegations had supported the Chair's pr oposal as a pragmatic second-best solution.  The 
negotiations over the past year had been very positive .  It appeared to her that the technical work on 
tariff-shifting rules for machinery chapters had been almost completed, since no delegation had 
identified a specific problem concerning her proposals for product-specific rules of origin.  However, 
some delegations had opposed the use of dual rul es of origin.  They had also expressed serious 
concern over the unjustifiable costs involved with the dual-rule system, and complex and costly origin-tracking mechanisms under the value- added rule, as well as costs surrounding the 
establishment of new non-preferential rules of orig in in comparison with its benefits.  They had 
further stated that without resolution of the impli cations issue – which concerned mainly whether the 
harmonized rules of origin should be applied to trad e remedies – the conclusion of this work would be 
difficult, and that the resolution of the implications  issue had appeared impossible at the present stage 
unless and until there was an outcome in the ru les negotiations, including a decision on anti-
circumvention.  These delegations had also expr essed concern that, overall, the outcome of the 
negotiations on the Harmonization Work Programme to date had not yet produced rules of origin that 
would reflect the objectives set out in Article 9.1 of  the Agreement on Rules of Origin, in that the 
harmonized rules of origin that had emerged di d not seem to be objective, understandable and 
predictable.  They had further noted that so me important issues remained unresolved.  Other 
delegations, however, had strongly be lieved that the outcome of the 12 years of effort had been a great 
achievement, and that the main technical work for a ll products from Chapters 1 to 96 of more than 
6,000 tariff lines had now been completed as a result of  this hard work, although further fine-tuning of 
the results of the technical work would be need ed in order to enhance the overall coherence. 
80. Following these discussions and reflecting the ag reed view, she recommended to the General 
Council as follows:  (i) that recognizing the insurm ountable difficulties concerning the implications 
issue and the dual-rule approach for machiner y, the CRO Chair seek guidance from the General 
Council with regard to these two issues;  (ii) th at the work on these two issues be suspended until the 
General Council provided guidance to the CRO Chair;  and (iii) that the CRO continue its work with a 
view to resolving all technical questions, including the technical aspects of the overall architecture, as 
soon as possible.  In terms of next steps, delegati ons had requested her, in her capacity as CRO Chair, 
to continue the technical and architecture discussions  in the regular business of the CRO.  Delegations  WT/GC/M/109 
 Page 21 
 
 
  had recognized that the voluntary discussions on rules of origin for semiconductors in the World 
Semiconductor Council had been very positive, and ha d expressed an interest in beginning a private-
sector-driven consultation process among industries to attempt to reach consensus on tariff shift rules 
in three product categories of machinery:  (i) c onsumer electronics, (ii) white goods, and (iii) heavy 
machinery.   She wished to start these consultati ons with industries soon after the summer break.  In 
concluding, she said that delegations in the CRO  looked forward to receiving an input from the 
General Council on the two issues she had referred to  earlier, namely, the implications issue and the 
question of the dual-rule approach for machinery. 
81. The Chairman  said he wished, on behalf of all Memb ers, to thank the Chair of the CRO for 
her report and for the energy and hard work she had put into this effort, as well as for her commitment 
and dedication to guiding Members towards the conclu sion of this long-overdue work programme in a 
timely fashion.  In the light of her report, Memb ers had to recognize that although important progress 
had been made over the past year, delegations in  the Committee felt that the difficulties they had 
encountered on the implications issue and in the sect or of machinery were such that guidance from the 
General Council was now warranted on how to take  these issues forward.  The recommendation of 
delegations in the CRO was that work on these issues be suspended until such guidance from the 
General Council was forthcoming.  Clearly, in the light of this situation, Members had to recognize 
that the deadline of July 2007 for completion of the negotiations on the 94 core policy issues could 
not be met, and the question of taking the Ha rmonization Work Programme  forward now required 
serious reflection on the part of Members in the Ge neral Council.  He was in the hands of Members 
on this matter and would welcome their views at th e present meeting.  He did not expect that this 
would be resolved at the present meeting, and hope d that all delegations would use the summer break 
to give some thought to how they might overcome this  impasse, before they reverted to this matter at 
a future Council meeting.  He would, of course, be  prepared to consult with Members as appropriate.  
In the meantime, he proposed, as suggested by the Ch air of the CRO in consultation with delegations 
in that Committee, that the Committee on Rules of Orig in continue its work with a view to resolving 
all technical issues, including the technical aspects of  the overall architecture, as soon as possible.  He 
noted that, in terms of next steps, delegations ha d requested the CRO Chair to continue the technical 
and architecture discussions in the regular business of the CRO.   
82. Delegations who spoke thanked the CRO Chair fo r her report and her efforts in advancing the 
work of the Harmonization Work Programme. 
83. The representative of Mexico  welcomed the invaluable work carried out by the CRO Chair 
and the Secretariat in the negotiations on rules of  origin.  Mexico supported the CRO Chair in the 
decision to seek guidance from the General Council on the scope of application and the dual-rule 
approach for machinery.  Mexico understood that th is would mean suspending the discussion of these 
issues in the Committee, with only the so-called tec hnical questions remaining, and wished to make 
some comments in this regard.  First, the scope of  application was a key issue in the negotiations on 
rules of origin.  Until this matter was resolved, it would be difficult to convince Members of the 
usefulness of completing the harmonization exercise.   Second, it was difficult for Mexico to accept 
that it was the importing country which would decide which of the two rules for machinery it would 
accept.  Origin had to be granted when either of  the rules were complied with.  Although significant 
progress had been made in the discussion of tariff-shi ft rules for machinery, there were some specific 
cases that needed to be discussed.  Finally, the tec hnical work had to cover the other 94 relevant 
issues, with a view to finding solutions that  were not necessarily currently covered in the 
Chairperson's compromise texts. 
84. The representative of Australia  said he wished to make a few remarks about this matter, 
which deserved deeper reflection.  The Harmonizatio n Work Programme was now in its 13th year and 
its 9th missed deadline in the negotiations.  The CRO Chair had made various references to progress 
and fine-tuning, and Australia wished to give Memb ers its perspective on some of these.  Work on the WT/GC/M/109 
Page 22  
 
  outstanding 94 core policy issues had continued unde r the auspices of the General Council since 2002.  
These 94 core policy issues included significant issues, such as the so-called implications issue – i.e. 
how the harmonized rules would apply to other polic y instruments, such as trade remedy agreements, 
SPS and labeling – harmonized rules on machinery, where some 607 tariff lines remained outstanding 
and so-called dual-rules had been proposed, a nd 92 other tariff lines on important commercial 
products.  Unfortunately, these 94 core policy issu es did not represent the totality of outstanding 
work.  There were also the so-called technical issu es that remained unresolved.  The Secretariat had 
usefully identified some of these, which include d the overall architecture issues, the 84 technical 
issues discussed at the recent June meeting of th e CRO, chapter notes for textiles and Chapters 1-24 
of the HS Code, and the primary rules on fish fro m the EEZ.  The Secretariat had recently informed 
Members that these technical issues would cover some 1600 pages of current WTO documents.  
Finally, should all these issues be finalized, Members w ould then need to tackle two final steps:  first, 
they would have to engage in rectifications of harmonized rules on the basis of the HS 2007;  and 
second, the CRO would have to complete remaining work on the overall coherence exercise referred 
to in Article 9.3(b) of the Agreement on Rules of Origin.  Both these final two stages had been noted 
by the then-Council Chair at the July 2006 meeting of  the General Council.  In other words, Australia 
and other Members should be under no illusions as to the progress that was being made or the 
enormity of the outstanding issues in the work programme. 
85. His delegation wondered where this left Member s in 2007, and what had changed since the 
Council had discussed this issue a year earlier.  Refl ecting the history of missed deadlines of the work 
programme, he recalled the words of the CRO Chai r at the 2004, 2005 and 2006 General Council 
meetings, namely that "we are all aware that we do not have boundless freedom to continue our work 
into the future".  In 2006, the CRO Chair had a dded that she believed the upcoming year would be 
different.  Unfortunately, the difficult trends in this  work programme appeared to have continued over 
the past year, the main reason being that Member s were now operating well outside the objectives of 
the Harmonized Work Programme.  Australia was one  of the Members keenly focused on an outcome 
that met the agreed principles and objectives of th e Agreement on Rules of Origin.  His delegation 
feared that many of the rules formulated to date  had departed from those objectives, such as, for 
example, dual rules on machinery as part of supposed ly harmonized rules of origin, or suggestions 
that work be partially harvested and applied in a li mited fashion, such as for accounting and statistical 
purposes.  It seemed counter-intuitive to Australia as a negotiator, and to its industry as stakeholders, 
to continue work on harmonized rules of origin in the absence of any clarification of the implications 
issue, and in a manner inconsistent with the origin al intent of Members.  For these reasons, Australia 
could support the CRO Chair's recommendation that work on these two issues – implications and 
machinery – be suspended until further guidance was forthcoming from the General Council.  In fact, 
it was difficult for his delegation to see any other ap proach at the present time.  Australia remained 
ready and willing to engage in consultations on these issues. 
86. With respect to the ongoing technical work on the Harmonized Work Programme, Australia  
recognized the appetite of some Members to engage  on technical issues in the regular business of the 
CRO, and could accept the CRO Chair's statement on th is matter.  Some thought would need to be 
given to the scope of this work, given the broad ra nge of issues that would fall under this umbrella 
and the enormous resources required of Members to address this range of issues.  His delegation could 
support the Chair's suggestion that ongoing work take  place as part of the regular business of the 
CRO.  Capital-based attendance was particularly valu able on these technical issues, and this would be 
easier to achieve with ongoing work taking place at the annual meeting of the CRO.  Australia 
believed that Members' ability to engage on technical  or other issues relied on input from industry.  
Australia's industry remained confused about its input on technical or product-specific rules in the absence of any guidance on how these rules would be used.  Unfortunately, given the current 
circumstances, he was unable to answer these ques tions.  Therefore, his delegation asked that the 
CRO Chair bear these pressures in mind in ongoing work.   Australia thanked all stakeholders for 
their efforts on the work programme.  While it w as disappointing that the major issues in these  WT/GC/M/109 
 Page 23 
 
 
  negotiations seemed intractable, his delegation agr eed with the CRO Chair's statement in previous 
years that Members should not have boundless freedom  to continue their work.  Nevertheless, one 
could continue on distinct techni cal areas of the Harmonized Work Programme, within the confines of 
the Committee. 
87. The representative of Hong Kong, China  said his delegation shared the CRO Chair's concern 
on the implications issue, as it fully recognized the im portance of resolution of this issue to the overall 
progress of the Harmonization Work Programme.  It was clear from the Agreement on Rules of Origin that whenever origin determinations were required, harmonized rules of origin should apply.  
According to Article 1.2 of the Agreement, rules of origin included all those used in non-preferential 
commercial policy instruments.  Specifically, anti- dumping and countervailing duties, and safeguard 
measures were quoted as examples of such instruments.   Article 9.1 further s tipulated that harmonized 
rules of origin should be applied equally for a ll purposes as set out in Article 1.  Regarding anti-
circumvention, his delegation noted that th e Committee on Anti-Dumping Practices had been 
discussing what constituted circumvention and whether there was a need for new multilateral rules.  
In the absence of any common understanding, and gi ven the fact that Members were already having 
difficulty in agreeing on the relevance of the harm onized rules of origin to those trade remedy 
agreements set out in Article 1.2 of the Agreement on Rules of Origin, it did seem premature to take a 
decision on this matter at the present stage.  Hi s delegation could go along with the way forward 
outlined in the CRO Chair's statement.  However,  it had specific positions on some of the issues 
raised by other Members, and wished to participat e in any relevant consultations.  Hong Kong, China 
wished to reiterate its strong support for the continue d work in this area, and that it would participate 
constructively towards the successful completion of the Harmonization Work Programme. 
88. The representative of the Philippines
 supported the CRO Chair’s recommendations, as his 
country believed the CRO Chair’s proposal was the most pragmatic solution to enable the Committee 
to move forward in completing the long-delaye d Harmonization Work Programme exercise.  The 
Philippines welcomed the initiative taken by the World Semiconductor Council to discuss rules of 
origin for semiconductors, as it beli eved the outcome of these discussions might contribute to the 
ongoing discussions by the CRO on this sensitive and important sector. 
89. The representative of India  said his delegation agreed with the CRO Chair's statement and her 
assessment of the current status of the negotiations .  India had in the past shown flexibility, as had 
other Members, in accepting the package proposed by the CRO Chair, even though it had been to the 
disadvantage of sectors of vital interest to its econom y.  Similarly, India had been willing to accept the 
dual-rule approach for machinery.  However, India recognized that it was not possible to move further 
unless the issues of the rules for machinery and the implications issue were resolved.  On the two 
issues on which guidance from the General Council w as sought, India suggested that this process be 
expedited through consultations with Members, so th at these could be resolved early.  His delegation 
would be ready to participate in such consultations .  In the meantime, India agreed with the proposal 
of the CRO Chair to continue technical and architecture discussions. 
90. The representative of New Zealand  said the CRO Chair had identified at least three issues in 
the work programme that were of substantial con cern to many delegations, including New Zealand:  
first, the Harmonized Work Programme was not head ing in a direction that would fulfill the mandate, 
i.e. be harmonizing, objective, cohe rent, trade facilitative, and so on;  sec ond, the inability to resolve 
questions of implications/scope;  and third, the dual-rule approach on machinery as a solution to 
conflicting entrenched positions.  As Australia ha d said, there was also an enormous number of 
outstanding technical issues that remained unresolved , despite 13 years of work.  The two substantial 
issues identified in the CRO Chair's report represent ed insurmountable roadblocks, at least at the 
present time, to the completion of the Harmonizatio n Work Programme.  They were not technical 
issues.  Therefore, his delegation could not see how further intensive work by  the CRO could resolve 
them.  While New Zealand was very disappointed with  this result, it should not lead Members to hide WT/GC/M/109 
Page 24  
 
  from the reality.  His delegation therefore supporte d the CRO Chair's recommendation that work on 
the implications issues and dual-rule approach be su spended.  New Zealand was prepared to continue 
working in the regular CRO annual meeting on any t echnical issues that could be usefully discussed, 
in the absence of progress on the roadblocks identif ied, and looked forward to working at the General 
Council level on these questions as well. 
91. The representative of Japan
 said that as the Chairman had said in his introduction to this item, 
Members had been working on the harmonization of rules of origin for over ten years.  Throughout this time, many Members had participated in and de dicated a lot of effort to this task.  Members 
should continue their work in areas where they  could make progress, so as to conclude the 
Harmonization Work Programme as soon as possible.  In this respect, Japan supported the 
recommendations made by the CRO Chair.  His de legation understood that once instructions were 
received from the General Council, the Committ ee would continue its consultations on the 
implications issue and the proposed dual-rule appr oach for machinery.  Therefore, it would be 
appropriate if the General Council Chair could orga nize consultations with Members with a view to 
preparing guidelines and recommendations.  Japan  stood ready to participate actively in these 
consultations. 
92. The representative of Korea
 said that during the past 12 years, Members had made a great 
deal of progress in technical work on more than  6,000 tariff lines from Chapters 1 to 96.  This 
achievement was sufficiently  valuable to continue efforts to bridge the gap among Members despite 
the difficulties ahead.  Korea fully recognized the reality that solutions to the implications and dual-
rule issues could not be reached through simple tec hnical discussion.  Nevertheless, it shared the view 
of many other Members that at least the technical  discussions should be continued.  Accordingly, 
Korea strongly supported the CRO Chair's recommend ation that the Committee continue to work to 
resolve remaining technical issues while seeking solu tions to the two outstanding issues.  Korea also 
welcomed the CRO Chair's recommendations to start private-sector-driven consultations, and that the 
consultations with industry would be implemented in an inclusive and transparent manner, enabling as 
many interested companies from relevant Members as possible to attend. 
93. The representative of Switzerland  thanked the CRO Chair for her commitment and 
dynamism, which heralded progress in the near fu ture.  Switzerland supported her proposals for the 
continuation of the work.  Although his delegatio n acknowledged the difficulties involved in this 
matter, this was not the time to give up.  He ask ed where Members would be – in agriculture, for 
instance, where the situation was also difficult – if they followed Australia's and New Zealand's 
recommendation not to keep going, which was what th ey had suggested.  Australia had referred to the 
high costs of meetings and further negotiations.  Th e lack of a result would leave economic operators, 
who had to face more than a hundred  different non-preferential rules of origin regimes, with even 
higher expenses.  Switzerland supported the idea of holding consultations and would participate in 
these with an open mind and a constructive spirit. 
94. The Chairman  said that in the light of the discussion and the views expressed, he would 
propose that Members take some time to reflect on th is matter and consider wa ys to take forward the 
work on the two core policy issues referred to the Council, and that in the meantime the Committee on 
Rules of Origin continue its work with a view to resolving all technical issues, including the technical 
aspects of the overall architecture, as soon as possible.  He noted in this connection that, in terms of 
next steps, delegations had requested the CRO Ch air to continue the technical and architecture 
discussions in the regular business of the CRO.  He also proposed that the Council revert to this 
matter at a future meeting.  As he had mentioned ear lier, he was prepared to consult with Members, as 
had been suggested by some.     
95. The General Council took note  of the statement by the CRO Chair and of other statements, 
and agreed  to the Chairman's proposals.  WT/GC/M/109 
 Page 25 
 
 
  7. Transparency for Preferential Trade Agreemen ts – Statement by the Chairman of the 
Committee on Trade and Development 
96. The Chairman  recalled that in December 2006, the Council had adopted a Decision with 
regard to Transparency for Pr eferential Trade Arrangements (WT/ L/672), under which the Committee 
on Trade and Development was asked to consider transparency for preferential arrangements under 
paragraph 2 of the Enabling Clause – other than RT As – and to report back within six months for 
appropriate action by the General Council.  The De cision had been adopted without prejudice to the 
results of the deliberations the CTD would be called upon to undertake. 
97. In the absence of the Chairman of the Dedicat ed Session of the CTD, and on his request and 
behalf, Mr. Ismail (South Africa), the previous Chair of the CTD , read out his report, as follows, on 
the status of the CTD's consideration of this ma tter:  "The CTD had a preliminary discussion on the 
General Council Decision at its firs t meeting of 2007.  My predecessor as Chair deemed this a useful 
and positive initial discussion, and the Committee had agreed with his suggestion that I as his successor would continue to work with Members and the Secretariat on this matter.   I have been 
engaging in informal consultations with Members.  The consultations have brought out the point that 
there is a need to identify in more detail the para meters within which Members would like to work in 
"considering transparency" for preferential trade a rrangements notified under the Enabling Clause.  In 
this regard, the proponents – Brazil and India – have informed me that they have been working on a 
paper which would contain the elements of what they believe should be contained in Members' 
notifications of preferential trade arrangements.  I have  been told that this paper is now in final, or 
near-final, form.  As I informed the CTD at its me eting on 10 July, I intend to continue to work 
informally with Members on the basis of the draft te xt, and to eventually have the matter discussed in 
an open-ended format.  While important progress has been made, it is clear that the CTD will need 
more time to consider the Brazil/India draft text and to eventually come to a decision.  At the CTD's 
10 July meeting, it was agreed that a request for more  time to deal with this matter should be made to 
the General Council.  I therefore wish to requ est that the General Council allow the CTD until 
December 2007 to consider the matter and report back for appropriate action."  
98. The representative of Brazil
 said he wished to thank the CTD Chair for his report and for the 
consultations and discussions he  had sponsored regarding this  matter, following the mandate 
contained in the Council's Decision of 14 December 2006.  As indicated by the CTD Chair, Brazil had 
been working on a draft paper on the new Transpar ency Mechanism in coordination with India and 
with other Members, and would send this to the Chairman of the CTD once it was finalized.  Brazil 
looked forward to contributing to the debate on this  issue in further consultations, with a view to 
achieving the goals set out in the mandate. 
99. The representative of India  fully supported the CTD Chair's report and the request for 
extension of the deadline for work on this issue to December 2007.  India, as a proponent of this 
proposal, attached great importance to it and had b een working closely with Brazil and with other 
Members in informal consultations and in the Committee.  The non-pa per was close to being finalized 
and submitted to the Committee for consideration.  India was constructively engaged, along with 
other Members, to achieve progress on this proposal.  He associated his delegation with the statement 
by Brazil. 
100. The Council took note  of the report of the Chairman of the CTD and of the statements, and 
agreed  that the deadline for the CTD to consider this  matter and to report back for appropriate action 
be extended to December 2007. WT/GC/M/109 
Page 26  
 
  8. Committee on Budget, Finance and Administration  
(a) Report of the Committee on its meeting of May 2007 (WT/BFA/96) 
101. The Chairman
 drew attention to the report of the Budget Committee on its meeting of  
May 2007 in document WT/BFA/96.   
102. Mr Lynch (New Zealand), Chairman of the Committee , said the report in WT/BFA/96 
included progress reports on (i) Trust Funds, (ii)  the future building needs of the WTO, and 
(iii) Secretariat Version 3.  With respect to Trus t Funds, Members had been informed that the funding 
situation of the DDA Global Trust Fund had improved si nce the last report and that the Secretariat had 
been able to make commitments fo r activities through the end of June.  Second, on the future building 
needs, a member of the Secretariat had addressed the Committee and had explained that, with respect 
to the IUHEI library, it had been the understanding of the Secretariat that the cost of the alterations 
would be financed in the same way as other altera tions made to the South Wing at the time of the 
handover of those premises to the WTO in 1995.  Furthermore, additional space had still been 
required, and the Secretariat had outlined that it had informed the Swiss authorities that it would 
expect the host government to cover the cost of ad ditional office space.  Third, on the issue of the 
reform programme, called Secretariat Version.3, the Secretariat had informed the Committee on 
several ongoing projects such as the new grading structure and the introduction of Activity-Based Budgeting.  Finally, under Other Business, the Ch airman had indicated that the WTO Staff Council 
had made a request to attend meetings of the Committee as an observer and had explained that, on 
rare occasions in the past, members of the Staff Council had been permitted to address the Committee, 
but that it had been the opinion of the Members of  the Committee that the appropriate contacts with 
the Staff Council should remain within the Administration. 
103. The General Council took note
 of the statement and adopted  the Budget Committee's report in 
document WT/BFA/96. 
(b) Recommendations of the Committee following its meeting of July 2007 (WT/BFA/97) 
104. The Chairman  drew attention to the recommendations  of the Budget Committee following its 
meeting of July 2007 in document WT/BFA/97.     
105. Mr Lynch (New Zealand), Chairman of the Committee , said that document WT/BFA/97 
related to a recommendation regarding the WTO's exte rnal auditor.  The recommendation stated that:  
"(a) the General Council appoint the French Cour d es Comptes as External Auditor of the accounts of 
the WTO and the WTO Pension Plan effective as from the audit of the accounts for 2008 for a period of six years, subject to the condition that either party, i.e. the French Cour des Comptes or the WTO 
General Council, may terminate the arrangement with  one year's notice";  and "(b) the Secretariat 
express the gratitude of the General Council to all national audit offices which had submitted offers."  
He wished also to inform the Council of a st atement made at the meeting by the Permanent 
Representative of Switzerland, that on 4 July, and af ter consideration of three options to meet the 
future office space needs of the WT O – i.e. the construction on a site near the International Labour 
Organization, the construction at the "Champ du Ch âteau" site near Bellevue, and the densification 
and extension of the present site of the WTO – the Swiss Federal Council had concluded that the 
densification of the current site, the Centre Willia m Rappard, had been the most promising, quickest 
and least expensive solution.  He had added that the cost of densification and extension of the current 
site had been estimated at 150 million Swiss fran cs, as opposed to between 255 and 275 million Swiss 
francs for the other two options.  He had explai ned that the proposed solution had included the 
renovation and densification of the current headquarter s, i.e. an intra-mural extension with renovation 
of the entire building, and extra-mural construction on an adjacent plot.  The extra-mural extension 
met the organization's need for office space and meeting rooms beyond the new capacity resulting  WT/GC/M/109 
 Page 27 
 
 
  from the intra-mural extension.  He had further indicated that, among the possibilities for an interim 
solution, the Swiss authorities had been proposing th e rental of office space in the former Serono 
building on the Chemin des Mines, in close proximi ty to the Centre William Rappard, until such time 
as the expansion and renovation work on the Centre  William Rappard was complete.  This solution 
would allow space for WTO staff to be moved fro m the rue Rothschild annexe, would create the 
necessary additional office space cu rrently lacking, and would pr ovide office space for WTO staff 
when the CWR was being renovated and undergoi ng densification.  The Swiss Permanent 
Representative had pointed out that the WTO now need ed to move forward with the identification of 
clear preferences for the overall solution to the organiza tion's future building need s.  In this context, 
the Budget Committee would undoubtedly  revert to this important ques tion, but he had thought it both 
useful and necessary to bring this recent inform ation to the attention of the General Council. 
106. The General Council took note  of the statement and approved  the Budget Committee's 
recommendations in document WT/BFA/97. 
9. Waivers under Article IX  of the WTO Agreement 
(a) Introduction of Harmonized System 1996 changes into WTO schedules of tariff concessions – 
Requests for extensions of waivers 
(i) Argentina (G/L/815, G/C/W/576) 
(ii) Panama (G/L/816, G/C/W/575) 
107. The Chairman  drew attention to the draft decisi ons in documents G/C/W/575 and 576 which 
provided for a waiver from the provisions of Artic le II of GATT 1994 until 30 April 2008 for Panama 
and Argentina, respectively, to enable them to im plement the HS 1996 changes into their Schedules of 
Concessions, subject to certain conditions. 
108. Mr Nielsen (Denmark), Chairman of the Council for Trade in Goods , said that at its meeting 
on 21 May, the Council for Trade in Goods had appr oved the draft waiver extensions in connection 
with the introduction of HS 1996 changes into WTO schedules of tariff concessions for Argentina and 
Panama (C/G/W/576 and C/G/W/575 respectively), and had recommended that these draft Decisions 
be forwarded to the General Council for adoption.  
109. The Chairman  proposed that in accordance with  the Decision-Making Procedures under 
Articles IX and XII of the WTO Agreement ag reed in November 1995 (WT/L/93), the General 
Council adopt the draft Decisions in G/C/W/575 and 576. 
110. The General Council took note  of the statements and so agreed .4 
(b) United States – Former Trust Territory of th e Pacific Islands – Request for extension of 
waiver (G/C/W/570/Rev.1) 
111. The Chairman  drew attention to the draft decision in document G/C/W/570/Rev.1, which 
provided for the extension of a waiver for the Un ited States from the provisions of paragraph 1 of 
Article 1 of the GATT 1994 until 31 December 2016. 
112. Mr Nielsen (Denmark), Chairman of the Council for Trade in Goods , said that at its meeting 
of 9 July, the Council for Trade in Goods had appr oved the draft waiver decision in G/C/W/570/Rev.1 
relating to a  request by the United States for an exte nsion of its waiver for the Former Trust Territory 
                                                      
4 The Decisions were subsequen tly circulated in documents WT/L/692 and 693, respectively. WT/GC/M/109 
Page 28  
 
  of the Pacific Islands, and had recommended that th is draft decision be forwarded to the General 
Council for adoption.  
113. The Chairman
 proposed that in accordance with  the Decision-Making Procedures under 
Articles IX and XII of the WTO Agreement ag reed in November 1995 (WT/L/93), the General 
Council adopt the draft decision in document G/C/W/570/Rev.1. 
114. The General Council took note  of the statements and so agreed .5 
(c) Mongolia – Accession commitment on export of  raw cashmere – Request for waiver 
(G/C/W/571 and 580) 
115. The Chairman  drew attention to the draft decision in document G/C/W/580 on the extension 
of a waiver from the obligation in paragraph 2 of  the Protocol of Accession of Mongolia to the WTO 
Agreement – to phase out and eliminate export duties on raw cashmere within ten years of the date of 
its accession – for a period of an additi onal five years until 29 January 2012. 
116. Mr Nielsen (Denmark), Chairman of the Council for Trade in Goods , said that at its meeting 
on 9 July, the Council for Trade in Goods had ap proved the draft waiver decision in G/C/W/580 
which had been made in connection with Mong olia's accession commitment on raw cashmere, and 
had recommended that this draft decision be fo rwarded to the General Council for adoption. 
117. The Chairman  proposed that in accordance with  the Decision-Making Procedures under 
Articles IX and XII of the WTO Agreement ag reed in November 1995 (WT/L/93), the General 
Council adopt the draft decision in document G/C/W/580. 
118. The General Council took note  of the statements and so agreed .6 
(d) Review of waivers pursuant to Ar ticle IX:4 of the WTO Agreement 
(i) Preferential tariff treatment for least-devel oped countries, granted on 15 June 1999 until 
30 June 2009 (WT/L/304) 
(ii) LDCs – Article 70.9 of the TRIPS Agreement with respect to pharmaceutical products, 
granted on 8 July 2002 until 1 January 2016 (WT/L/478) 
(iii) Albania - Implementation of specific concessions, granted on 26 May 2005 until 
1 January 2009 (WT/L/610) 
(iv) European Communities - European Communities'  Preferences for Albania, Bosnia and 
Herzegovina, Croatia, Serbia and Monteneg ro, and the Former Yugoslav Republic of 
Macedonia, granted on 28 July 2006 until 31 December 2011 (WT/L/654, WT/L/688) 
119. The Chairman  recalled that, in accordance with para graph 4 of Article IX of the WTO 
Agreement, "any waiver granted for a period of mo re than one year shall be reviewed by the 
Ministerial Conference not later than one year af ter it is granted, and thereafter annually until the 
waiver terminates."  In keeping with this provisi on, there were four waiv ers before the General 
Council for review.  With regard to the waiver in  sub-item (ii) for LDCs under the TRIPS Agreement, 
he wished to note that in connection with the approva l of the draft waiver at the meeting of the TRIPS 
Council in June 2002, the Chairman of the Council ha d noted that it was understood, in regard to the 
                                                      
5 The Decision was subsequently circulated in document WT/L/694. 
6 The Decision was subsequently circulated in document WT/L/695.  WT/GC/M/109 
 Page 29 
 
 
  review foreseen in paragraph 2 of  that waiver, that the exceptional circumstances justifying the waiver 
would continue to exist for least-developed country Me mbers until its expiry date of 2016.  As regards 
the waiver in sub-item (iv), he noted that it provi ded for an annual report to be submitted by the 
European Communities on the operation or implementa tion of the waiver, with a view to facilitating 
its annual review by the General Council under Article  IX:4.  The report from the EC regarding this 
waiver had been circulated in document WT/L/688. 
120. The representative of Lesotho , on behalf of the LDCs , expressed gratitude to the membership 
for the grant of the waivers regarding preferential tariff treatment for LDCs and Article 70.9 of the 
TRIPS Agreement with respect to pharmaceutical products.  The first waiver provided an enabling 
environment for developing countries to provide pref erential tariff treatment to  products of LDCs, and 
created an environment necessary to facilitate meaningful  participation of LDCs in international trade.  
This important decision was very much acknowledged and appreciated.  Prefer ential tariff treatment 
for LDCs allowed by this waiver decision enhanced  market access for beneficiary countries.  Such 
market access provided incentives for LDCs to go into increased production, induced and boosted 
investment, and thus contributed to addressing une mployment and diversification challenges faced by 
LDCs.  The need to promote trade among developing countries had been noted in many fora, 
including the WTO, and this waiver was viewed  by LDCs as one of the possibilities for enabling 
South–South trade.  Some developing countries were  already providing preferential market access to 
LDCs, and their noble gesture in this regard w as noticeable and highly appreciated.  The LDCs 
wished to encourage other developing countries in a position to provide similar access to products 
from LDCs to utilize this important facility.  They  also wished to once again encourage developed 
countries to expeditiously implement the Hong K ong decision on duty free quota free market access.  
Furthermore, they wished to encourage improvement of preferential rules of origin, which could result 
in commercially meaningful market access and thus  contribute towards improved integration of LDCs 
into the multilateral trading system.  He noted that the reasons that had led to the request, 
consideration and approval of this waiver rema ined valid, and that LDCs needed an enabling 
international environment in order to expand their tr ade and reap its benefits, direct and indirect.  
With regard to TRIPS, some LDCs were already taking advantage of the provisions of the waiver, 
which was an important flexibility for LDCs.  This demonstrated what LDCs could do when 
presented with an opportunity.  He wished once ag ain to thank the General Council for having taken 
these decisions that had proven very beneficial to LDCs. 
121. The General Council took note  of the statements and of the report in document WT/L/688, 
and agreed  to revert to the review of multi-year waiv ers under Article IX:4 of the WTO Agreement at 
its meeting in December. 
10. Regional reviews on Aid for Trade – Statement by the Director-General 
122. The Director-General , speaking under "Other Business", said he wished to take this 
opportunity – before the August break – to provide an up-date on where the Aid-for-Trade roadmap 
stood, and to ask Members to ensure that capitals were  kept fully informed.  First, he believed that 
good progress had been made in a relatively shor t time.  The OECD had presented a preliminary 
picture of Aid-for-Trade flows to the CTD in Ap ril which – based on the feedback it had received – 
would be refined for the Global Review in the General Council on 20-21 November 2007. 
Questionnaires, in cooperation with the OECD, had b een circulated to help countries prepare their 
self-assessments of Aid for Trade – both from the donor and partner country perspectives – which 
would provide key inputs into the Global Review sess ion in November.  In order to give Members an 
opportunity to discuss the various aspects of Aid for Trade, such as Trade Financing, Trade 
Facilitation or Infrastructure, and to express their views, the CTD had been holding a series of periodic reviews.  The organization of the three re gional reviews was well advanced – in Lima, Peru 
on 13-14 September for the Latin America and Caribb ean region;  in Manila, Philippines for the Asia 
and Pacific region on 19-20 September;  and in Da r Es Salaam, Tanzania for the Africa region on WT/GC/M/109 
Page 30  
 
  1-2 October.  Invitation letters we re now being sent to Ministers, officials, the private sector and 
relevant international organizati ons in all three regions, and so far the response had been very 
encouraging.  He also wished to mention that copi es of all relevant invitations were now being sent to 
delegations, and again strongly urge d delegations to communicate with the relevant ministries, to 
ensure that they were aware of the role they were  being asked to play, and to encourage their active 
participation in these important events.  The focal point for all of these activities would be the annual 
Global Review session of Aid for Trade in the Ge neral Council on 20-21 November where, hopefully, 
the various pieces of the picture would begin to come  together and be brought  into sharper focus.  
Invitations to this event were now being distributed, and he again asked delegati ons to ensure that this 
event was clearly marked on their calendars. 
123. By now, all were clear about the purpose of this  exercise – it was not to undertake monitoring 
for monitoring's sake, but rather to raise awareness,  to share information and to create incentives, by 
shining a brighter spotlight on Aid for Trade, in order to honour commitments, meet needs, improve 
effectiveness, and reinforce mutual  accountability.  The end goal was more and better Aid for Trade.  
That was the basic benchmark against which Member s' success, or failure, would be measured.  He 
wished again to point out that what Members were undertaking was very  ambitious.  However, 
because the agenda was ambitious, Members could not  expect perfection from the outset, or to have 
all of their questions and concerns addressed th e first time around.  Members needed to keep 
reminding themselves that Aid for Trade was a work in  progress, and that they were at the beginning 
of what would be a long road.  The important th ing was to get the process launched, which Members 
were doing. 
124. The representative of Haiti
 thanked the Director-General for the information he had just 
provided, and inquired about the invitation letters th at had been sent out to WTO Missions in Geneva 
as his delegation had not yet received one.   
125. The Director-General , in response to Haiti, said that if that delegation had not received the 
invitation letter as yet there may have been a mailing glitch and the situa tion would be rectified 
forthwith.   
126. The representative of Tanzania  thanked the Director General for his tireless efforts and 
devotion to advancing the process of Aid for Trade.   Tanzania, like many other developing countries, 
and particularly LDCs, was yearning for the realiza tion of Aid for Trade, along with its complete set 
of development promises, as soon as possible. 
127. The General Council took note  of the statements. 
11. Administrative Measures for Members in arrears 
128. The Chairman , speaking under "Other Business", recalled that at its meeting in May 2006, the 
General Council had approved a recommendati on from the Committee on Budget, Finance and 
Administration regarding revised Administrative Measures for Members in arrears (WT/BFA/86).  
Among these Administrative Measures was a requirement that at each meeting of the General C ouncil, 
the Chairman of the Committee on Budget, Fina nce and Administration s hould provide information 
with regard to which Members were under Administra tive Measures in Categories II through IV.   
129. Mr Lynch (New Zealand), Chairman of  the Committee on Budget, Finance and 
Administration , said that this was a serious responsibility at the end of the Council meeting.  While 
the Council Chair had set out the background to th e Budget Committee's decision, he would also add 
that the General Council had also authorized the Bu dget Committee to waive the application of the 
Measures for Members in Category IV who agreed to, and abided by, a schedule of instalment 
payments aimed at liquidating all arrears.  He wish ed to emphasize this balance in what had been set  WT/GC/M/109 
 Page 31 
 
 
  in place.  In this context, he was pleased to be able to report that Paraguay – which currently was a 
Category IV Member – had undertaken discussions with  the Secretariat on this question, and he was 
hoping to be able to advise Members of a resolution shortly.  He wished to encourage other Members 
in this situation – whom he was about to list – to  contact the Secretariat to discuss the modalities for 
establishing such an instalment plan.  Finally, in  pursuance of the revised  Administrative Measures, 
he wished to inform the Council that as at 23 Ju ly, the Members under Categories II through IV of the 
Administrative Measures were as follows:  Burkin a Faso and Senegal – Category II;  Cameroon – 
Category III;  and the following Members in Categor y IV:  Burundi, Central African Republic, Chad, 
Cote d'Ivoire, Democratic Republic of Congo, D jibouti, Dominica, Gabon, Gambia, Guinea, Guinea-
Bissau, Malawi, Mauritania, Niger, Paraguay, Republic of Congo, Sie rra Leona and Togo. 
130. The Chairman  recalled that under the revised Administ rative Measures, he was also required 
at each Council meeting to request Members in Cate gories III and IV of the Measures to inform him, 
before the next meeting of the General Council, as to when their payment of arrears might be 
expected.  In keeping with the Administrative Meas ures, he would report on Members' replies to the 
next meeting of the General Council.  Since the May General Council meeting, he had not received 
any replies from the Members concerned. 
131. The General Council took note  of the statements.   WT/GC/M/109 
Page 32  
 
  ANNEX I 
 
Statements by delegations at the informal meeting of the Committee 
 
on Agriculture in Special Session during the week of 23 July 2007  
 
1. European Communities  
 
 Let me first recognize and thank our Chair for th e considerable efforts he put into producing 
this paper.  We in the Commission have some e xperience in producing such documents and therefore 
know what they entail in terms of time and personal commitment. 
  
 Up to now, the EU has shown substantial flex ibilities compared to its initial position. It is 
ready to continue in this direction in coherence w ith its mandate, given by its 27 Member States.  But 
having listened to some interventions, representi ng important groups (G20,  Cairns Group), I am 
wondering if we are in a real negotiation.  On th e differences of the EU and others, I don't see real 
signs of movement compared to their well know n initial positions.  The EU good will to negotiate 
depends on the equally go od will of these important partners to  negotiate.  We will see in September 
if these conditions will be met.  The EC can accep t this text as a working basis for continuing 
negotiations but at the same time we have seen con cerns on some elements.  And our  willingness to 
work on this text takes it as a given that all of yo u will be prepared to take  the same approach.  And 
this, clearly, extends to the Chair's text on NAMA,  in full coherence with paragraph 24 of Hong Kong 
Declaration.  This is clearly a single undertak ing and while we are focussing today and tomorrow on 
agriculture and NAMA, we must not lose sight of the other negotiating areas: services and rules.  At the same time, it needs to be recognized that we cannot  subscribe to all the elements in the paper;  in 
some cases even, the proposals in the paper could result in overstepping some of our fundamental red 
lines.  Turning to specifics, it is not by chance that I start by raising the arrangements on TRQ 
expansion for sensitive products, proposed in the te xt. There are certainly positive elements: in 
particular we are pleased to note that it is now generally accepted that the upper level of deviation 
should be fixed at 2/3rds, and that the lower end ca n be 1/3rd.  But there is a serious problem of 
proportionality.  We have consis tently argued, based on sound econom ics, that TRQ expansion must 
reflect the degree of deviation.  This is what the formula that we had proposed was capable of doing.  
If we are to live with an alternative to this fo rmula, its basic underlying precepts must remain on the 
table.  This means that TRQ expansion at the lower level of deviation (1/3rd) must be in proportion to 
the higher level (2/3rds).  As things stand now in  the text , the price for declaring a sensitive product 
with 1/3rd deviation might be just to o high in terms of TRQ expansion.   
  A second issue of critical importance to us is  the question of the designation of sensitive 
products.  This is not covered in the Chair's text, we presume as a result of an oversight.  The 
Framework Agreement clearly foresees designation of individual tariff line.  It follows that TRQ expansion must also be related to these individual tari ff lines.  This is what we  mean when we say that 
designation, and consequently TRQ expansion, must be  possible at the individual 8-digit level.  To 
give an example, if we were to designate a partic ular type of cheese as sensitive, for example a cheese 
used for processing, we should not be required to  designate the whole sector as sensitive and 
consequently to open a TRQ based on consumption fo r the whole cheese sector.  This is simply not 
doable, nor does it make economic or commercial sen se.  We also need SSG for a very limited 
number of products.  We welcome that one of the Chai r's text options opens this road.  These issues 
are of fundamental importance for us, as they w ill dictate what we can do on market access as a 
whole.  Let me now address some other issues in more  general terms, recognising that we will need to 
come back at a later stage with specific more de tailed comments and proposals.  First let me address 
the question of the ranges proposed in the paper:  we are prepared to work on such an approach, to the 
extent that the ranges are realistic.  For market access the upper parts of the ranges are out of the 
question, and this is also the case for the OTDS cut in the top tier.  In this respect, we note that the  WT/GC/M/109 
 Page 33 
 
 
  proposed upper figure of 85% is not reflected in any of the formal proposals on the table.  Here again 
we make a link with NAMA and our attitude here will be dictated by the attitude of others on NAMA.  
Concerning Cotton, the EU is very ambitious in te rms of reduction of Domestic Support, but has to 
check the compatibility of the Chair's te xt with its constitutional constraints. 
 
 Another fundamental issue for us continues to be the need to ensure that policies falling under 
the Green Box can be maintained, and that this box continues to serve the purpose of allowing and 
facilitating a move from trade distorting policies to non- trade distorting policies.  This is why we need 
to leave sufficient flexibility to  allow for newcomers to benef it from Green Box payments under 
paragraph 6.  This is not in cont radiction with the spirit of the Green Box and I therefore consider the 
omission as an oversight.  We also have reservati ons on the changes proposed to paragraphs 11 and 
13 in the existing Green Box where the change could have perverse effects.  Text pronounced in French  
 On export competition, we continue to insist on the need to achieve full parallelism in respect 
of the disciplines on the various export competition meas ures.  The text takes a step in this direction 
but further work is still necessary.  Regarding phasing,  we take note of the standstill option in the text 
and are willing to work further on this basis.  We are pleased to note that the elimination of the 
monopoly powers of STEs has been addressed in the text.  This is clearly one of the issues which will 
allow us to achieve full parallelism.  Equally on f ood aid, the text reflects recent progress in achieving 
appropriate disciplines.  At the same time we ne ed further work on food aid outside the safe box in 
order to ensure that we do not create a sort of "s ub" safe box.  This would clearly be unacceptable.  
On export credits, while we can accept an exception fo r the least developed countries, and for the so-
called "technical" exceptions for breeding cattle a nd seeds in terms of duration beyond 180 days, any 
other exceptions risk creating serious loopholes, and w ould therefore be unacceptable.  At this point in 
time, I will not raise any further specific issues, but as I said earlier, we do have other comments to 
make, including of a substantial nature, and we will re vert to these at a later meeting.  Chair, you have 
done a very good job in producing a text which will allow us to progress in our negotiations.  But you 
yourself recognize that all issues have not be covered at  this point in time and in this respect I would 
like to underline the question of Geographical Indicati ons.  There is a place for GIs in the agricultural 
negotiations and we therefore reserve the right to raise GIs in this context.  We also recognize that this 
issue will also need to be taken up in parallel negotia tions.  But let me make it clear that there will be 
no agreement on agricultural and NAMA modalities if there is no agreement on the two principles of 
extension and negotiation of a register.  Chair, we have an enormous amount of work still to do if we 
are to conclude our work and achieve full modalities in the autumn.  We are fully committed to doing 
this and will come in September to Geneva, refresh ed from our summer holidays, fully prepared to do 
what is necessary to contribute to achieving full moda lities.  But this must be matched by efforts on 
all sides and at the end of the day, this will onl y be achieved in the context of a comprehensive 
package including successful outcomes in all areas under negotiation.  
2. Ecuador  
 Your text has the virtue of keeping the negotia ting process in Geneva alive;  this is important 
and deserves to be acknowledged by all the Member s.  We would like to express our support for the 
statements made by the Ambassador of Brazil on be half of the G-20, and the Ambassador of Panama 
on behalf of the RAMs group.  As the Ambassador  of Brazil reminded us this morning, there are 
many lessons to be learnt from history, one of whic h is not to repeat the mistakes made in the past.  I 
therefore wish to recall a statement made some weeks ago by the Ambassador of Argentina on the 
flexibilities that some developed countries hope to r eceive in these agriculture negotiations.  The list 
is extensive, but I will name a few of them, main ly those in the market access pillar, where the 
imbalance of the document is most marked:  (1) pr eservation of the Article 5 agricultural safeguard;  WT/GC/M/109 
Page 34  
 
  (2) lesser reductions of their tariffs;  (3) less emph asis on the issue of tariff escalation;  (4) lack of 
tariff limitation or tariff caps:  (5) flexible treat ment in respect of all aspects relating to sensitive 
products;  (6) lack of tariff simplification;  (7) ma intaining of in-quota tariffs;  and (8) incorporation 
of issues with no mandate, such as geographical indications, etc.  Add to this the possibility of receiving longer implementation periods because of preference erosion, a nd we can understand how 
some of these developed Members have f ound their "comfort zone" in this text. 
  Mr Chairman, we welcome your proposal for the total fulfilment of the mandate on tropical and alternative products and support the statements made by Peru and Costa Rica in this respect.  The 
statement by Costa Rica, which we fully endorse, w as also clear as to the matter of preference 
erosion.  Trade solutions in this area cannot result in  further flexibility for the developed countries.  In 
this regard, I recall that in 2006 my country had to  pay more than US$200 million in additional tariffs 
for its banana exports to the European Union, wh ich equals almost the entire amount of the domestic 
support received by European producers.  This is a complete paradox – a developing country 
financing the subsidies of a developed Member.  Fi nally, we request that, in addition to the annex 
incorporated on the impact of preference erosion, yo ur text also include an annex on the impact of the 
non-opening up of markets, a document that our mutu al friend Mr. Low prepared several weeks ago.  
Mr Chairman, we encourage you to continue c ontributing to these negotiations and hope that the 
process awaiting us in September maintains the amb ition of the Round and its "development" aspect. 
 
3. Lesotho for the LDCs 
  The LDCs Group would like to thank you for c onvening this very important meeting at this 
stage of the negotiations.  We would like to acknow ledge the efforts which the Chair and devoted to 
putting together this document c ontaining proposals on draft modalities for Agriculture.  That task, 
which resulted in this package before us today, in volved an attempt at conso lidating diverse interests 
of Members.  That, one can surmise, should not ha ve been an easy task. The LDC Group, therefore, 
appreciates and commends your efforts.  The LDC Group would like to reiterate its commitment 
towards the achievement of the objectives of the Doha Development Round and wish to firmly and 
even emphatically underscore the centrality of its de velopmental dimension.  Allow the LDC at this 
stage to make some initial comments on some of the areas that are of interest to the LDCs as well as 
to the rest of the membership.  On Process, the LD Cs continue to support the view that it should be 
multilateral and should seek a balanced package of re sults.  The Group continues to fully subscribe to 
the principles of text based, bottom up, inclusiv e/participatory and transparent process based in 
Geneva.  These noble principles should be fully adhe red to.  They should not amount to mere pious 
words or catch phrases meant to simply pacify the sceptics or to placate those on the verge of 
disillusionment.  The LDC Group has noted that th ere are some important issues that have been 
deferred to September.  The hope is that they will be sufficiently and adequately addressed when that 
time comes.  On the substance of the paper, our Group would like to present its preliminary comments 
on some of key issues of concern and of particular interest to it, as the paper is still being studied. 
  With regard to Duty Free Quota Free Market  Access, the Group notes that you have just 
reiterated the contents of proposal 36, contained in  Annex F of Hong Kong Ministerial Declaration.  
The Group expected to have a la nguage on how to opera tionalize this facility.  The LDC Group would 
like to see effective and commercially meaningful  implementation of the Hong Kong decision on 
DFQF market access for LDCs.  In this regard, deve loped countries shall, and developing countries in 
a position to do so, should provide DFQF Market A ccess for all products originating from all LDCs 
by 2008, and apply simple and transparent rules of  origin in the process.  For developed countries 
facing difficulties in providing DFQF Market A ccess, a specific deadline for extending DFQF 
treatment to 100 % of the tariff lines should be the end of the implementation period as mentioned in 
paragraph 32 of your previous ch allenges paper dated 25th May 2007.  The LDC Group would like to 
refer you to its letter, which clearly stipulated th e adequate approach to this matter.  The Special 
Safeguard Mechanism is an important facility fo r developing countries including LDCs.  SSM should  WT/GC/M/109 
 Page 35 
 
 
  not be linked to trade liberalization.  This is b ecause it is a measure intended to address import surges, 
which are not only caused by liberalization, but coul d be consequences of other factors.  To this 
effect, facility for developing countries including LD Cs should remain part of the outcome of the 
round.  As regards Domestic Support, the LDC Group is  of the view that the cuts in trade-distorting 
support (Overall Trade Distorting Support) must be su fficiently substantial in order to be effective, 
and thus meet the objectives of the Round set in the Doha Ministerial Declaration, the July 
Framework Agreement and the Hong Kong Minister ial Declaration.  The LDC Group welcomes the 
S&D proposals made with respect to  the cut in OTDS by the developing countries, particularly the 
exemption of Net Food Importing Developing Count ries (NFIDCs) from reduction commitments.  In 
the Export competition pillar, progress made is not ed, however, as it is the case with other pillars, 
particularly market access, there is room for impr ovement.  With regard to Food Aid, the LDC Group 
appreciates the spirit of the text contained in Annex F on Food Aid, particularly because it enables prompt response in emergency situations and that  the safe box food aid will not be subjected to any 
disciplines.  It is important to note that LDCs are among those that are frequently hit by these emergencies.  We know that the priority is for the fo od to get to those in most need expeditiously.  It 
is also recognized that your paper realizes the key role to be played by the recipient government in 
declarations and appeals, the importance of loca l/regional sourcing and monetization of food aid in 
cases of need.  We would wish to reiterate the im portance of recipient governments' involvement in 
needs assessment exercises.   With regard to export enterprises and export credits, LDCs welcome provisions allowing the 
use of monopoly power and flexibilities for use of ex port credits.  These are important to developing 
countries, particularly LDCs.  We have identifie d a need for further work on S&D provisions for 
LDCs.  As regards export credit, there is an unders tanding that LDCs will not be required to undertake 
any reduction commitment in ail elements of expor t competition.  However, attempt to develop a 
discipline from export credit with some flexibility  to LDCs appears to be a requirement for 
undertaking commitment.  In this context, we require  some time to discuss the issue in our Capitals.  
On Cotton , the Group welcomes the proposals initiated by  the Chair on the three pillars of 
Agriculture, which in the view of the Group, could enable appropriate and effective delivery that 
would bear tangible results for those concerned.  The Group would like to emphasize the need to take 
into consideration, the developmental aspect of co tton in line with the mandate contained in Annex A 
of the July Framework Agreement and Hong Kong Ministerial Declaration.   Coherence between 
development and trade should be maintained.  The synoptic table of contributions of the donors for 
the support of cotton sector should be kept outstandi ng and updated on a regular basis.  Similarly, the 
Group stresses the importance of setting up a mechan ism for dealing with losses of revenue that 
cotton producing LDCs are facing as a result of declines in cotton prices.  The LDC Group welcomes your text on commodities that has accommodated its interest.  It is a tremendous improvement from 
the last challenges paper.  I wish to reiterate that these are just preliminary comments.  The LDC 
Group will continue to study the document and remain committed to engage further in the 
negotiations under your guidance.  We would like to  reassure you of its readiness to work towards a 
successful conclusion of the Round and towards realiz ations of its development oriented objectives. 
 WT/GC/M/109 
Page 36  
 
  ANNEX II 
Statements by delegations at the informal meeting of the
 
Negotiating Group on NAMA during the week of 23 July 2007  
 
 
1. European Communities  
 We are now at a crucial moment of our work. Over the coming weeks we must seek to build 
an agreement on modalities.  Your paper takes us forward by having the courage to propose numbers 
and ranges, rather than simply recording the well k nown positions of each of us round this table. So I 
thank you for those efforts.  Of course by taking  such a position you were bound to make us all 
unhappy. In detailing the EU's unhappiness, let me reassure you that the EU remains fully committed 
to this process and believes it is po ssible to arrive in September with solutions that can bridge the - 
sometimes substantial – gaps that remain.  As you yourself say all Members will be required to adapt 
their positions if we are to build those bridges.  To  succeed in this, we must take account not only of 
these NAMA discussions, but also the wider progress and compromises in all areas of the 
negotiations.  All of us will make a read acr oss between AG + NAMA.  We need simultaneous 
agreement on the two, and therefore we have so me concerns about opening up a gap in the two 
negotiations as you suggest.  You also listened to t hose voices that insist the efforts made must match 
level of development and specific situation of particular Members. Your proposals address that 
challenge.  I must however take issue with some who seem to imply that NAMA is hostile to 
development objectives.  Less than full reciprocity  is well woven into the NAMA Chapter, starting 
with the fact that many members will not apply the formula, we have different coefficients, we have Para 8 flexibilities, LDCs are abso lved from any cuts, and so on.  But South-South trade is also very 
important.    
 Let me highlight our main concerns:   
  Coefficients in the formula: there is a f undamental imbalance as the landing zones they 
potentially point toward are very different – quasi elimination of tariffs for Developed Countries with 
no peaks and no tariff escalation, and a potentiall y bindings-only outcome for advanced, competitive 
developing countries.   While I recognise your efforts to square the circle, I have to say that, as they 
stand, both the figures and the potential spread between them pose serious problems to our 
constituencies.  The EU cannot accep t results that are mainly binding (with water remaining) of 
current market access in advanced developing Members. This goes to the whole balance of the negotiations – and is compounded by the figures propo sed for market access in  agriculture.  We are 
also disturbed by your choice to eliminate brackets in flexibilities of paragraph 8 of the July 
framework.  While we understand the reasons behi nd your choice, this raises both substantive and 
procedural concerns. In particular, we are also very unhappy that you chose to discard, for the time 
being at least, any discussion of the limits on paragraph 8 flexibilities.  We would find it very difficult to accept that practically whole sectors could be excl uded from any liberalisation.  At the same time, 
precisely because of our serious concerns on how flexibilities might be used, we welcome your 
suggestion that DCs who choose not to use them might benefit from a higher co-efficient.  At the 
same time, it is premature to have un-bracketed figur es for the size of that "top-up". That depends on 
the final choice of DC coefficient.   On unbound you have opted for a very high figur e (mark-up of 20). This may create problems 
for those DCs that had fully bound their schedules  in the Uruguay Round. However, we are also 
aware that the base rates obtained will be cut th rough the formula, and so the problem could be 
resolved by a good coefficient.   On the implementation period you have also opted for no brackets: 5 years for developed and 9 for DCs.  This is an is sue not just for the NAMA negotiations, but also for 
other areas of the DDA, and these figures may need to  be revisited in the light of the overall  WT/GC/M/109 
 Page 37 
 
 
  modalities deal.  In each of these ar eas we will need to work hard in September to convert these points 
into modalities. And as you rightly point out we will need in shaping modalities to find ways to take account of the different levels of contribution, pa rticularly for those Developing Countries that are 
quasi LDCs or whose participation in the world tr ade system is unfortunately very limited today and 
whose economic situations are vulnerable
7. We will need to discuss your detailed proposals, but we 
certainly appreciate the efforts you have made to a ddress this key issue. We will of course have to 
listen closely to the views of the Members most concerned.   Let me touch on three final issues:  
 On sectors, we recognise this is both important  and a potentially difficult issue, and are ready 
to work with you and others. Your approach builds on the HK understanding, identifies various 
sectors currently discussed, including the three proposed  by the EU (textiles, clothing and footwear) 
and you have included a timetable wh ich shows that sectors will be agreed after the formula.  We 
understand the reasons for such an approach, even if  we are aware of the problems some delegations 
may have compounded by the limited ambition of the Developing Countries' coefficient.  On NTBs 
we are frankly very disappointed. You have opted for merely procedural language, despite the hard 
work of many delegations to come up with negotiated texts. This is especially true of the proposed 
horizontal mechanism, which is supported by the clear majority of the membership. This must be reflected in your revised version, which should att ach all the textual proposals. Moreover, your text 
fails to meet the basic objective for the EU of dr awing a link between scheduling and the conclusion 
of negotiations on NTBs.  Finally, on environmen tal goods your simple reference to on-going work 
does not take us much further. It even appears to condition our success on the conclusion of discussions in the Committee on Trade and Enviro nment, Special Session (CTESS). This is a major 
concern for the EU. This is an important part of  the NAMA output, and putting it on one side in this 
way is not in line with either the Doha ma ndate or the 2004 July Framework Agreement.  
 
 Let me reiterate that these c oncerns must be viewed against the full commitment from the EU 
to finalise both NAMA and AG modalities after the summer break. We are ready to engage and will 
show flexibility where others do the same. We are working for a successful outcome and, where we 
are critical it is with the aim of being constructive. We are keen to shape the best possible outcome for 
trade, but also for development.  This is your text  but the modalities are for us Member to negotiate.  
The EU will be here in September ready to do just that. 
 
2. Ecuador 
 
 The main objective guiding our work is the conclusion of the Doha Development Round and 
to this end it will be necessary to adopt negotia ting modalities which allow for the undertaking of 
important outstanding commitments in the multilatera l system and which remain closely linked to 
development.  In this regard, the delegation of Ecuador believes that the intention of your draft 
modalities text, Mr Chairman, is to approximate po sitions, thus preventing the polarization of the 
negotiations, and to propose the levels of contribut ion to be made by all the Members in order to 
continue the negotiations, within the framework  of the instruments adopted in NAMA.  These 
instruments include elements of ambition and fl exibility for the developing countries, which have 
been supported by my country throughout these negotia tions.  For the above reasons, my country is in 
favour of continuing the work on NAMA, on the basis of your draft modalities text and within the 
framework of the single undertaking, with a view to  creating the right atmosphere for the Members to 
pursue the negotiations.  Nevertheless, as Ec uador has said on previous occasions, the NAMA 
negotiations are, for my country, the "lever" needed to achieve results in the agriculture negotiations, 
                                                     
 
7 Countries included under paragraph 6 of Annex B, are expected to bind 90% of their tariff lines at an 
average of 28.5 percent. SVEs (defined as <0.1% of world NAMA trade) have been divided in three groups 
which should achieve target averages commensurate with their current bindings. WT/GC/M/109 
Page 38  
 
  which is where the contribution made by the deve loped countries should be greater than at present, 
especially in the market access pilla r, the draft text of which rema ins ambiguous and unbalanced in 
relation to agriculture and does not yet allow levels  of ambition to be established.  My delegation 
therefore believes that from September onwards the negotiating process s hould be stepped up and 
intensified, primarily in the area of agriculture, given its complexity and breadth.  My country's 
interpretation regarding the scope of paragraph 24 of the Hong Kong Mi nisterial Declaration is that 
the results in market access for agriculture and NAMA should be of a comparably high level.  
Ecuador would not be able to seek a balance in the level of ambition in other areas of negotiation, as it 
has already made ambitious commitments since joining the WTO.  Moreover, credibility must 
urgently be given to the work we carry out at the WTO, with long outstanding issues, such as those in 
agriculture, being resolved in favour of the deve loping countries.  Finally, Ecuador supports the 
statement made by the Ambassador of Panama on behalf of the RAMs and wishes only to mention 
that some adjustments will need to be made in resp ect of the alternative forms of treatment referred to 
in his draft modalities.  Ecuador is, at the mome nt, studying these options, on the understanding that 
the results thereof will balance out the commitment s undertaken by my country in relation to other 
developing countries, without this undermining the co mmitments that all of us must fulfil as Members 
of this Organization.  More detailed comments on th e negotiating elements referred to in your draft 
text will be made by my delegation when we r esume these negotiations after the summer break and 
will take into account the statements we have lis tened to on the implementa tion periods now linked to 
the issue of preference erosion.  3. Lesotho for the LDCs  
 Mr. Chairman, we join others in thanking you  for coming with this paper which, in brief 
contains both your introductory remarks as well as the modalities.  The LDC Group is of the view that 
while there remains still the challenge for clarifica tions around many of its specificities, at a minimum 
the paper provides a baseline for Members to begi n engaging on multilateral basis for the success of 
this Round.  Mr. Chair, allow me to provide a sn apshot of the initial reactions by the LDCs Group to 
your proposed draft modalities, as we are conti nuing to study and the modalities that you have 
proposed to Members, and we will certainly come back with detailed responses when the negotiations 
on different issues resume.  Allow me also to co mmence by addressing the content of the Chairman's 
introduction to the proposed draft Modalities.  We trus t that are all one in regarding the introductory 
remarks as informal and as having no legal status, and that they represent the Chair's personal views 
and that no Member will refer to as a basis in th e current and future negotiations.  For LDCs, the 
substance is in the proposed Modalities.  If we ar e to consider anything from any other document, 
even from the Chair's introductory re marks of this text, they must be brought into the proposed Draft 
Modalities before there can be any form of discussion on them.  Mr. Chair, we all aware of demand of 
the LDCs for duty-free free access for their products into the markets of the developed Members as 
well as the developing Members that declare them selves in a position to pr ovide such access.  The 
Hong Kong Ministerial Declaration reflects the una nimous decision of all WTO Members on this 
issue.  A number of developed Members have alread y fulfilled their commitments in this regard.  We 
are awaiting with great anticipation the implemen tation of this commitment by the still remaining 
countries.  The language that you have proposed in this regard in the proposed draft Modalities, Mr. 
Chair, does not, in our view, reflect the commitment , the mandate and the way clearly laid out by our 
Ministers in Hong Kong.  It is the expectation of the LDCs that you will remain on with the Mandate 
of the Ministerial Decision in Annex F of the HK Declaration in proposing the method of duty-free 
quota-free market access to the LDCs.    
 Needless to harp on the point that operationaliz ing market access would result in real trade 
creation and facilitation.  It is be ing reiterated for emphasis.  If LDCs  are able to expand their exports, 
they would receive an excellent opportunity to benefit from the process for smooth and effective 
integration into, and full participation in, the multilate ral trading system that the WTO is striving for.  
We would therefore, continue to urge the re maining developed Members, and the developing  WT/GC/M/109 
 Page 39 
 
 
  Members that are so able, to extend duty free quo ta free entry to all products from all LDCs.  Mr. 
Chairman, Members will recall that at Hong Kong,  Ministers stressed that for the LDCs to 
meaningfully utilize any preferential market access, there is a need to ensure that rules of origin are 
simple and transparent.  It is, therefore, of deep c oncern to us that this issue of high importance to the 
LDCs has been omitted from your  proposed draft modalities.  Omitti ng it is tantamount to changing 
the Ministers' decision  ultra vires .  That, of course is unacceptabl e.  LDCs and others, therefore, 
strongly urge the Chair to reinstate this key elemen t in order to be fully in tune with the HKMD.  
There can be no doubt that improving rules of origin for LDCs is an integral part of the multilateral 
effort in the NAMA modalities.  Let us be fully HKMD-compliant.  Chair, the LDC Group has put forward a proposal that could serve as a concrete basis for addressing this issue that has yet to be 
discussed to our satisfaction.  Let us re-emphasize that improving rules of origin is the second key 
needed for LDCs to enter the international market s and is part of the commitments undertaken by 
Members in their Decision on measures in favour of LD Cs.  They are, therefore, part and parcel of 
NAMA and part of the package to be  offered.  It is onl y with both DFQF and improved rules of origin 
that the market access package for LDCs will have fu ll meaning.  On the issue of flexibilities for the 
LDCs, you have rightly pointed out that, despite thei r exemption in participating in the tariff reduction 
formula, the LDCs are expected to substantially in crease their level of tariff bindings, and also that 
individual LDCs shall determine the extent and leve l of their tariff bindings in accordance with their 
individual development objectives.  It is well known th at LDCs have already lowered their tariffs to a 
degree, in some cases to the severe detriment of th eir domestic industries.  On this we would like to 
reiterate that LDCs will make their contribution to  this Round in accordance with their development 
needs.  Mr. Chair, at this stage, we must pain t out that the manner in which you have dealt with 
preferences has raised considerab le concern in our Group.  The coverage of the preferences, the 
manner in which the erosion of preferences will be dealt with, and the time period within which this 
will be implemented, are all issues that will require  intense scrutiny in our countries.  Each LDC will 
be adversely affected by the approach whic h you suggest, in some cases quite severely.  
 
 Mr. Chairman, the Group would like to rai se another point that is of concern for our 
constituency, and that is the impact tariff cuts on the LDCs belonging to the same Customs Unions as 
some developing countries.  This issue to be assessed  and dealt with in an appropriate manner so that 
the LDCs are not affected.  Finally, Mr. Chairm an, once again we are continuing study and analyze 
the draft modalities that you have proposed to Memb ers, and we will certainly come back with 
detailed responses when the negotiations on different issues resume.  Let me reassure you that the 
LDC Group will continue to engage in the negotiati ons constructively and on the understanding that 
Members are prepared to consider measures that will bring meaningful benefit to the LDCs, and thereby help us integrate into the gl obal economy successfully and meaningfully.  
 4. Sri Lanka  
 Thank you for convening this meeting.  We appreciate your efforts in producing draft 
modalities for the negotiations on non-agricultural ma rket access which is an important pillar for 
delivering the development content of the Doha Round of negotiations.  Mr. Chairman, although you 
described the draft modalities contained in JOB(07)/128 as representing a compromise text, our 
assessment is that they appear to be far from the balance that we expect when closely examining your 
text, at least on certain market access issues of interest  to my country.  Our capital is in the process of 
studying your draft modalities and we are waiting for guidance.  Thus, at this stage, Chair, my 
comments are very brief and of a preliminary nature, with 3Ds.  The first D, (here D is referred to as Disappointment) relates to paragraph 28 on the issue of non-reciprocal preferences.  We are somewhat 
disappointed, as the way this paragraph is currently  crafted does not offer a compromise solution for 
our concerns even though you have recognized that  there is a compelling need to address the case 
presented by disproportionately affected countries.  The empirical work done by the Secretariat focuses on the scope of the problem, and clearly iden tifies a few disproportionately affected countries 
including Sri Lanka.  While we share the legitimate  concerns of preference receiving countries, we WT/GC/M/109 
Page 40  
 
  find that countries like mine are faced with a system ic imbalance here.  A specific problem we face in 
one particular market for a few tariff lines as set out in Annex 3 of your text.  Our exports are too heavily concentrated on those tariff line in this part icular market and therefore it is legitimate on our 
part to seek a compromise solution in the context of NAMA negotiations.  This compromise could be if a longer implementation period is to be given, th en preferential access should be given to countries 
which would be disproportionately affected by the longer implementation period.   
  My second D is yet again another disappointme nt, and relates to the solution you have 
provided for developing countries with low bindi ng coverage, popularly known as paragraph 6 
flexibilities, although this is now reflected in para. 8 of your draft modalities text.  We are disturbed 
with your proposal.  We consider that increa sing the binding coverage up to 90 per cent does not 
represent a compromise.  Rather, the proposed coverage  is too high compared to our initial position of 
70 per cent.  In this regard, my delegation wish es to thank the Ambassador of Uganda, who spoke on 
behalf of the African Group, and also the NAMA 11 for their support.  We are of the view that the 
proposed bound coverage of 90 per cent is an arbitr arily set number.  You call on Members to change 
positions to reach an agreement but this change s hould match the individual level of capacity of our 
group, the level of development a nd development need because this is a development round.  In this 
regard, we recall para 16 of the Doha Mandate that clearly spelt out that full account was to be taken 
of the special needs and interests of Developing Coun tries and LDCs.  We consider that your text on 
this issue disregards the individual needs and specific conditions of paragraph 6 countries.   
 
 My third D is the Discomfort relating to paragr aph 3 on page 10:  the rules that you have set 
out for implementation where you state that compre hensive draft schedules shall be submitted no later 
than three months after the establishment of modalities.   This is a daunting task for para 6 countries 
(now para 8 countries in the draft modalities text) w ho are required to complete the task of scheduling 
within three months.  In other words, we are requi red to indicate our tariff needs for 9 years within 
three months.  Para 8(d) requires th at tariff reductions shall be implemen ted in 9 equal rate reductions.  
We have serious doubts as to whether capitals of our  group of countries have the capacity to complete 
this exercise within such a short period.  We hope in  your revised draft this concern is addressed.  To 
conclude, Mr. Chairman, Sri Lanka as a small vul nerable economy greatly values the MTS, and we 
are committed to working with you and other Memb ers for a successful completion of the modalities 
in this area of the negotiations and assure you that  we will engage ourselves constructively in these 
negotiations with the aim of finding a solution. 
 
__________