RESTRICTED  
  
WT/BFA/213  
 
 
5 September  2023 
(23-5940) Page: 1/18 
Committee on Budget, Finance and Administration    
 
REPORT OF THE MEETING HELD ON 27 JUNE  2023  
The Committee on Budget, Finance and Administration (CBFA) met on 27 June 2023. Her  Excellency 
Ambassador Dr. Bettina Waldmann, German Ambassador to the WTO , welcomed Members to the 
meeting.  
1  ADOPTION OF THE AGENDA  
1.1.  The Chair stated that  the agenda for the meeting was released on 16 June , with the reference 
WTO/AIR/BFA/ 60, together with an annotated agenda bearing the reference JOB/BFA/ 80. The 
agenda , as set out in document WTO/AIR/BFA/ 60, was adopted.  
2  ORAL REPORT FROM THE CHAIR ON ONGOING WORK  
2.1.  The Chair began  by thanking the Secretariat for the comprehensive and helpful responses  
provided to questions raised by a Member at the CBFA meeting on 16 May. The chair recalled that 
the Secretariat's responses are contained in document WT/BFA/INF/19, dated 15 June.  
2.2.  The Chair then summarize d the process of the Pension Reform . The Chair said the Pension Plan 
Management Board carried out extensive work through much of 2022 and in 2023 to address the 
Pension Plan's current funding gap. This work included consultations with Members and stakeholders.  
2.3.  She recalled that a  draft reform proposal was c irculated to delegations on 3 November 2022. 
Members were encouraged to contribute their thoughts and feedback already at that initial stage of 
the process. The Management Board finalized its proposal on 1 May 2023, following a further informal 
process and  regular updates provided to the CBFA by the Chairman of the Board,       Mr. Jean-
Marc van Dril, as well as Mr.  Darryl  Leong (Singapore DPR), who served as Facilitator for the 
process.  
2.4.  The Chair recalled that t he aim of the Management Board's proposal (con tained in document 
WT/BFA/W/633) was to bring the Pension Plan back to a long -term sustainable financial position 
while ensuring burden sharing among stakeholders and respecting acquired rights. The main 
elements  of the reform proposal were communicated to  staff on 5 May 2023.  
2.5.  The Chair further recalled  that CBFA  members  had an extensive  discussion of Pension Plan 
reform at the meeting held on 16 May. Members broadly considered  that the proposal goes a long 
way in the right direction, and some supported it in its current form. However, several Members 
emphasized that it might be useful to consider what the options are for a modest shift in burden 
sharing in order to resolve the immediate question of the funding gap. Moreover, support was 
expressed for the id ea of conducting exploratory work regarding whether and how a more 
fundamental redesign of the WTO Pension Plan could serve the interests of the Organization.  
2.6.  The Chair recalled  she held informal consultations with interested delegations – on 25 and 
31 May, as well as on 1, 7 , and 15 June – to help identify a landing zone that would enable the 
Committee to take a timely decision on how to address the current funding gap.  In this regard,  the 
Chair pointed to a note circulated  by the Secretariat regarding the Working Capital Fund (contained 
in document WT/BFA/INF/18 ). 
2.7.  The Chair then stated that on the basis of various consultations with Members, she understood 
that: WT/BFA/213  
 
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  a. Some Members consider that more burden should be placed on current staff. The 
EU 27 proposal (contained in document JOB/BFA/81, dated 9 June) recommends that the 
Board considers an incremental increase of the pensionable age for current officials  (in 
other words , delaying retir ement, for instance, one month for every  remaining year of 
service , with a cap of a certain number of months)  or equivalent measures leading to 
increasing the burden on current staff. The EU further  consider s that long -term 
sustainability may require "deep er reforms" and additional measures . To this end, the EU 
has stated  its wish to invite the CBFA to establish a working group  "supported by" the 
Pension Board and the Secretariat, with a mandate to thoroughly examine  the pension 
plan and, if appropriate, pr opose further structural reforms.  
b. Other Members support the Management Board's recommendation and proposed reform 
measures in their  current form . However, they may be willing to support a modest shift in 
the burden sharing, as long as the package  does not put the Organisation in a situation 
where it risks losing legal challenges arising from this reform. While some of these 
Members do not see a need for a more fundamental redesign of the WTO Pension Plan  on 
a longer -term basis , they might be willing to supp ort further discussions on an exploratory 
mandate once the immediate question of the funding gap has been resolved . 
c. There are also Members who consider it more important to focus on a more fundamental 
redesign of the Pension Plan than on the details of Management Board's proposal as such.  
d. In addition, there are Members who focus on the impact that a reform proposal would 
have on assessed contributions in the context of the upcoming 2024 -2025 budget 
proposal.  
e. Regarding timing, many delegations consider th at the aim should be to finish this process 
on pensions before the summer break. However, they also believe that the WTO Pension 
Plan reform and the 2024 -25 budget will have to come as a package for Members to be 
able to give their final approval.  
2.8.  In concl usion , the Chair urged  all delegations to actively participate and share their views 
regarding the Management Board's proposal in the discussion of item J  of the Agenda . The Chair 
encouraged Members  to have a constructive discussion  and to  focus on any new  developments, 
ideas, and fresh insights.  This will help ensure a helpful basis for the Board to consider what, if any, 
further actions are required in support of the shared goal putting the pension plan back on a 
sustainable path , she said . 
2.9.  Regarding the process going forward, the Chair emphasize d two elements. First, there is no 
longer need to return to technical elements of the Management Board's proposal. Instead, there will 
be a possibility  to reach an agreement (in principle) on the proposal, or any r evised proposal that 
the Management Board may make, preferably at the next  regular meeting of the CBFA on 18 July . 
This will enable the CBFA  to focus on the separate question of ensuring the timely passage of the 
WTO 2024 -2025 budget proposal.  
2.10.   Second, the question s of pension rights and employment conditions are  of fundamental 
importance to current staff  and retirees . The Chair stated the importance  of ensuring  that all 
stakeholder s, and staff in particular, are kept informed of developments and that the exercise 
continues to be transparent . 
2.11.   To that end, the Chair proposed to communicate the information shared with the CBFA by 
way of letter to the Staff Council. The Chair encouraged  the Chair of the Management Boa rd to meet 
with the Staff Council to provide them with an update as well as an opportunity to express views 
and ask questions regarding the process.  
2.12.   The Chair added that the D irector -General  shared  with her  that she is concern ed that the 
current budget env ironment , including zero nominal growth, has reduced staff satisfaction. The DG 
has seen  first signs that the Secretariat's ability to retain the best staff  is under threat , including in 
the results of a recent  staff satisfaction survey  conducted by the St aff Council . She said that although 
the participation rate was low  (25%) , it is quite concerning that t he results of th e survey  show that 
promotion opportunities remain a concern for staff, with over 50% of respondents agreeing or WT/BFA/213  
 
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  strongly agreeing that th e lack of promotion opportunities m ay push them to leave the WTO. The 
DG shared with the CBFA Chair that numerous staff have expressed to her that they believe that 
they are not being recognized for their work, skills, and experience.  The Chair said that she discussed 
the budget environment  with the DG , and the Chair  advised the DG  to keep the budget request clear 
and logical , and to anticipate likely Member questions. The Chair noted that the CBFA will receive 
the DG's proposal on 3 July.  
2.13.   Finally, the Chair expressed hope that the  informal technical briefing held by the Secretariat 
on 23 June to provide background information regarding the utilization of  the Building Renovation 
Fund with respect to th e need to replace conference equipment in  several WTO meeting room s, as 
well as technical aspects of various IT -related issues , was helpful to  answer questions  posed in past 
meetings and consultations . 
3  WTO 2022 FINANCIAL PERFORMANCE REPORT  – WT/BFA/W/63 2 
3.1.  The Chair  welcome d the External Auditor, Mr Bellin,  from the French Cour des comptes , to the 
meeting and thanked him for the reports produced. With respect to the Financial Performance 
Report , she noted that the budgetary result obtained in 2022 is CHF 67,000, which is marke dly lower 
than the 2020 budgetary surplus of CHF 11.8 million, and the surplus of CHF 6 million for 2021. The 
Chair also noted that an increasing level of long -term arrears has a negative effect on the financial 
health of the Organization.  
3.2.  An Official of t he Secretariat took the floor to present the budget part of the Financial 
Performance Report.  First, she explained that t he budgetary result of approximately CHF 67,000 is 
the consequence of a positive difference between budget and actual expenditure of CH F 980,000, 
the difference between budgeted and actual miscellaneous income of CHF 796,000, and a year -on-
year variation of CHF 1.709 million in the provision for contributions in arrears.  She recalled that the 
WTO income consists of two elements: Member co ntributions (99%) and miscellaneous income 
(1%). She noted that the positive balance of miscellaneous income of almost 800,000 was mostly 
due to positive interest on investments , reimbursements from the loss of earnings insurance for staff 
on long -term sic k leave for prior years, and refund of air tickets . She further noted that the savings 
under staff remuneration, which resulted from not filling some vacant posts, were offset by 
overspending on such items as short -term staff, including interpreters. She a dded that the 
expenditure on consultants, including HR, IT, and transformation consultants, was high. In addition, 
she said the overspending on General Services was due to the expenditures on the  United Nations 
International Computing Centre  (UNICC) and an  overspending on building maintenance, linked to 
legal proceedings against a contractor. Furthermore, u nder Documentation & Publications, the 
overspending on library subscriptions was due to the increase in the cost of subscriptions and was  
partly compensa ted by savings under Publications . The savings under Travel and Hospitality of 
CHF 2.8 million were a result of lingering Covid -related restrictions. The overspending on 
Implementing Partners includes legal expenses related to several confidential legal ca ses, and an 
amount of CHF 0.8 million allocated for legal and arbitration fees related to the process pertaining 
to the E M building . Finally, she noted that a saving was realized on bank charges due to the federal 
reduction of negative interest . 
3.3.  Another Of ficial of the Secretariat added that the Financial Report includes information on trust 
funds and voluntary contributions, and that trust funds were also subject to the recent performance 
audit.  
3.4.  Another Official of the Secretariat took the floor to present  key aspects of the annual financial 
statements in 2022. He noted that they have been prepared in accordance with International Public 
Sector Accounting Standards (IPSAS) , in compliance with the relevant audit recommendations, and 
have been audited by the external auditor. He further noted that the budgetary result of CHF 67,000  
should not be confused with the financial result after applying IPSAS adjustments, which shows 
substantial deficit of almost CHF 69 million. He explained that this is because IPSAS requirements 
make the disclosure of long -term assets and liabilities obligatory. Hence, the WTO Pension Plan 
(WTOPP) and After Service Health Insurance (ASHI) assets and liabilities are reflected in the financial 
statements , which has a considerable effect  on the financial result. Finally, he emphasized that that 
the report contains a note on environmental, social, and corporate  governance  (ESG) and non -
financial reporting disclosure. In this regard, he said that  although  IPSAS  does not require any 
mandatory disclosure, the Secretariat is  taking a proactive approach, which has been welcomed by 
the external auditor.  WT/BFA/213  
 
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  3.5.  A Member expressed its appreciation for the Secretariat's prudent use of Member contributions 
despite a difficult ec onomic situation and zero nominal growth budget. With respect to expenses on 
short-term staff, the Member said it recognized the efforts aimed to address the overspending. At 
the same time, the Member noted that the situation seems to have worsened and tha t the 
overspending on short -term staff could no longer be compensated from the budget line on regular 
staff. The Member said it hoped to see some improvement in this situation. With respect to the 
"Outreach" output chapter, the Member asked what kind of ac tivities and costs are covered by this 
category. The Member further asked why the expenses on monitoring trade policies have gone up 
given that there is a backlog in trade policy reviews (TPRs). With respect to Table 17 on p. 29, the 
Member asked for a cla rification of the line " Provision for Right of Use – Centre William Rappard " 
and asked whether the WTO owns the CWR building. With respect to IT costs, the Member asked 
what the major expenditures on hardware  are. 
3.6.  A Member stressed the importance of respon sible and judicious use of resources in light of the 
zero nominal growth budget. He added that, in light of a 100% overspend on short -term resources, 
more accurate allocation for this budget line is needed. Noting that there is an underspending under 
"Capi tal expenditure", the Member asked why the resources allocated under this line have not been 
fully utilized given that some IT equipment has become obsolete. With respect to output reporting, 
the Member noted that the Secretariat has allocated C HF 26 milli on on monitoring trade policies and 
called on Members to discuss whether this is the optimal use of resources. The Member also asked 
what portion of the spending on "Administering Agreed WTO Rules" concerned ministerial -related 
activities. The Member expre ssed surprise that the Secretariat spent almost the same amount on 
time on accessions as on negotiations given that the pool of acceding Members is small. In addition, 
the Member asked the Secretariat to explain the overspending on research. The Member not ed that 
the expenses on research amount to 10% of the budget, and wondered what is the return on these 
projects. Finally, the Member noted that 20% of the earmarked funds go exclusively to the WTO 
Chairs Programme. The Member noted the lack of transparency  and called on the Secretariat to 
indicate in the future which programs are earmarked.  
3.7.  A Member asked what the benchmark or standard is used for ESG reporting.  
3.8.  A Member asked for more information on Capacity Building and Research categories of the 
output r eporting. The Member also asked under which category work on Joint Statement Initiatives 
falls. In addition, the Member asked for a breakdown of meetings per committee and noted that 
such information used to be provided by the Secretariat in the past. The Member also asked for a 
clarification of the amount for pension in Table 55.  
3.9.  A Member expressed regret for not seeing a more strategic approach to budgeting. The Member 
asked for a clarification of the concept of short -term and long -term staff. The Member also asked 
for a breakdown of the costs on consulting. In addition, the Member asked how much resources on 
short-term staff are needed to replace sick leave and other long -term leave. With respect to the 
effect of the IPSAS adjustment on the final financia l result, the Member asked if there is any reason 
to worry about ASHI and other liabilities.  
3.10.   A Member said it had the same question with respect to TPRs as the Member whose views are 
reflected in para. 3.5.  The Member also noted that although travel has started picking up only in 
the second half of 2022, 60% of the travel budget was spent. The Member reiterated the question 
posed by Member in para. 3.6.  about the expenses on research activities. Finally, the Member 
reiterated the question about long term liabilities asked by the Member whose views are reflected in 
para. 3.9.  above. Nothing that medical costs have been increasing each year, the Member asked if 
anything can be done to keep them stable.  
3.11.   A Member expressed its support for t he WTO and its Secretariat and noted that the 
Organization needs a stable budget to function effectively. The Member said he was surprised by 
the lack of reference to the effects of Covid in the report because since it was clear that the pandemic 
affected the expenditure. The Member noted the need to improve the process of collection of arrears 
and imposing stricter penalties on Member who do not pay their dues. With respect to the LDC 
Participation in Ministerial Conferences reflected in Table 15, the Memb er wondered why the 
adjustments related to the negative banking interest were so substantial. The Member also 
questioned whether the Secretariat staff should travel in business class whereas government officials 
of many Members travel in economy and noted that major savings could be made if the travel policy 
were revised.  WT/BFA/213  
 
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  3.12.   A Member asked for a breakdown of travel cost per activity (such as capacity building, TPRs, 
etc). The Member noted that the EU bureaucracy is of the same size as the WTO, but its travel 
budget is only 1/3 of that of the WTO.  
3.13.   A Secretariat official took the floor to address Member questions. First, the official confirmed 
the overspend with respect to short -term contracts. She said DDG Ellard would address the 
measures that have been taken by the Administration to improve the si tuation. With respect to the 
Member question about Outreach category of output reporting in para. 3.5.  , she explained that it 
includes the Public Forum, the WTO ope n day, general outreach to Members and other international 
organizations, hospitality, and staff time spent on organizing such events. With respect to TPRs, she 
said that in 2022, TPRs were more or less back to normal, and the TPR Division was one of the f irst 
to resume post -pandemic travel. She said that the TPR Division travels a lot, but within the allocated 
budget. She added that in 2024, fewer TPR -related missions are envisaged due to the projected lack 
of staff as a result of several retirements. The official further clarified that expenses on IT hardware 
include expenses on computers and screens, and noted that such expenses have been reduced by 
extending the useful life of laptops from 4 to 5 years. With respect to the output category 
"Administering Agreed WTO Rules", she noted that the expenses on this category usually go up in 
the ministerial years. With respect to the output category "Accessions", she noted that the 
expenditure has remained stable for the past couple of years. She further noted tha t the expenses 
on research have gone up due to an increased number of research projects that are being 
undertaken.  
3.14.   With respect to the Member's questions in para. 3.8.  , she noted that the budget on 
interpreters has been overspent by approximately CHF 1.4 million, and that the Secretariat does not 
have a detailed breakdown of meetings at the moment. With respect to Capacity Building, the official 
clarified that this category includes not only technical assistance, but also expenses regarding the 
ITC. In response to Member's question in para. 3.9.  about consultants, the officia l clarified that the 
largest expenditure are HR consultants, IT consultants, consultants working on transformation, and 
actuarial consultants. She further noted that the reason for overspending on staff expenditure is an 
increased number of retirements and  other separations from service. The official further clarified 
that there have been replacements due to sick leave and other long -term leave. She noted that the 
sick leave ratio in the Organization is around 10%.  
3.15.   In response to a Member's comments in para . 3.11.   , the official noted that there is a broad 
reference to Covid in the report, and that the Covid situation has helped the Secretariat to stay 
within the budget. She acknowledged the high expenditure on travel, even though travel resumed 
only in the second h alf of the year. She said the reason was a significant increase in the price of 
tickets as a result of inflation. With respect to collecting arrears, she said that Members in arrears 
are subject to administrative measures. In response to a Member's questio n in para. 3.12.  , she 
explained that the total travel budget is around CHF 7 million, of which around 4 million is allocated 
to technical assistance, CHF 0.5 millio n to TPRs, CHF 0.5 million to training, CHF 730,000 to pane llist 
travel, and around CHF 200,000 to recruitment.  
3.16.   Another official of the Secretariat took the floor and explained, in response to a Member ’s 
question in para. 3.5.  , that the CWR building is not owned by the WTO and must be returned to 
the Swiss Government after 99 years of use. In response to the Member's question in para. 3.7.  , 
the official explained that the WTO and WIPO are the only international organizations that have 
included a note on ESG in their financial statements , as described in para. 3.4.   He noted that there 
is a White Paper on ESG, and that the Secretariat has taken the initiative to provide this information 
in anticipation of disclosure requirements that are being implemented in several jurisdictions.  
3.17.   Another official of the Secretariat took the floor and clarified that, within the Global Trust 
Fund, only contributions to the  WTO Chairs Programme have been earmarked, but that the Chairs 
Programme itself has ne ver been a separate trust fund. The official said the Secretariat would explore 
ways to improve the reporting. With respect to the LDC Ministerial Conference trust fund, the official 
noted that the negative interest rate has ended. In addition, he noted th at some contributors 
demand that the unspent amount be returned to them after a Ministerial Conference is over. Finally, 
he noted that that there is a difference between IPSAS reporting and the actuarial work done on 
pensions. He explained that the pension  plan is managed on an open -group basis, and that the 
accounting exercise mandated by IPSAS is different in nature, which may lead to differences in data.  WT/BFA/213  
 
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  3.18.   DDG Ellard took the floor to supplement some of the answers provided by the Secretariat. 
First, with respect to spending on short -term staff, she explained that the Secretariat has established 
a Short -Term Needs Committee, composed of the four DDGs and the Chief of Staff, which reviews 
all short -term contracts requests and makes recommendations to the Dir ector-General. She noted 
that these efforts have already borne fruit – in December 2022, out of 60 short -term requests 
only 38 were approved. At the same time, she emphasized that short -term staff are an essential 
part of the Secretariat's resources as the y help fill in the gaps as a result of sick leave and parental 
leave, and are indispensable for areas of work where permanent staff is not appropriate. She further 
noted that the cost of a short -term contract is lower than that of a fixed -term one. She ack nowledged 
that the issue of overspending has to be addressed in the long term. In this regard, she noted that 
the HR Division has been developing a competency framework to determine gaps and needs in 
human resources.  
3.19.   With respect to output reporting, DDG E llard said that, together with the budget team, she 
held a meeting with divisional coordinators and spoke to Directors to provide guidance on output 
reporting so that this tool is as meaningful as possible. She explained that all staff members are 
required  to allocate 100% of their time to various outputs, and heavy workloads are not taken into 
account.  Therefore, DDG Ellard said, output reporting is a useful tool, but it cannot cover all the 
indicators and has its limitations.  
3.20.   Finally, with respect to Memb er's observation regarding arrears in para. 3.11.   , she said that 
the Secretariat would have been in a difficult situation had it not maintained a small sum to cove r 
the arrears. She said the Secretariat is regularly in contact with the Members in arrears in an effort 
to develop payment plans.  
3.21.   The Member whose views are reflected in para. 3.7.  took the floor to ask for further 
clarifications regarding ESG. He noted that IPSAS is a private company and questioned why an 
international organization would follow its standards. He emphasized the need to have a discussion 
about why the WTO is following private standards and cautioned against doing so without a proper 
reflection.  
3.22.   The Member whose views are reflected in para. 3.8.  asked whether more granular detail 
could be provided about various output categories. The Member further noted that it used to be 
regular practice to provide details about various committee meetings that take place in the WTO and 
asked why this practice has been  discontinued.  
3.23.   The Member whose views are reflected in para. 3.12.  asked for a breakdown of travel costs 
in writing. He further suggested that instead of flying in  business class, Secretariat staff could get a 
day or two of recovery when the time of travel exceeds a certain number of hours.  
3.24.   The Member whose views are reflected in para. 3.11.  requested a copy of the WTO Travel 
Policy.  
3.25.   An official of the Secretariat took the floor to address Member remarks in para. 3.21.  He 
noted that Me mbers have agreed to follow IPSAS. He reiterated that, while IPSAS does not mandate 
ESG reporting, the Secretariat took a proactive approach in anticipation of such reporting becoming 
mandatory in the next couple of years.  
3.26.   The External Auditor took the flo or and clarified that IPSAS is a private body, which includes 
representatives of public sector, and that it sets standards for the public sector.  
3.27.   The Member whose views are reflected in paras. 3.7.  and 3.21.  took the floor and said that 
the question he was raising is whether WTO Members are ready to adhere to an ESG standard 
developed by a private body.  
3.28.   DDG Ellard said, in response to a Member's question in para. 3.22.  , that an informal technical 
briefing was held recently on output repo rting and that the relevant documents will be shared with 
Members. As to the breakdown of committee meetings, DDG Ellard said she would look into the 
matter. With respect to Members' suggestions as to how to save money on travel, DDG Ellard 
expressed appre ciation for Members' ideas. At the same time, she emphasized that it is important 
to make sure that, in referring to their own travel policies, Members are not trying to compare apples WT/BFA/213  
 
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  and oranges. In this regard, she said that the WTO travel policy is con sistent with those of other 
international organizations. Finally, with respect to the request to provide a breakdown of travel 
expenses, DDG Ellard noted that such a breakdown will be provided in writing.  
3.29.   The Committee took note of the discussions.  
4  REPORT OF THE INDEPENDENT EXTERNAL AUDITOR ON THE AUDIT OF THE FINANCIAL 
STATEMENTS OF THE WORLD TRADE ORGANIZATION FOR 2022  – WT/BFA/W/639  
4.1.  The Chair welcomed the Independent External Auditor and invited him to present the audit 
report circulated  as document WT/BFA/W/639.  
4.2.  The Auditor began by pointing out that the Report included an analysis of the current status of 
the WTO accounts and the follow -up on outstanding recommendations.  In this regard, the Auditor 
expressed satisfaction with the status of the imple mentation of recommendations. Of the 
26 recommendations under consideration, 14 have been implemented, representing 54%.  The 
Auditor added that the  status of the financial audit recommendations is particularly good. Out of 
the 12 active recommendations at the date of the previous Report, nine have been fully 
implemented, and three are being implemented.  He further noted that t he status of the performance 
audit recommendations had improved , as all 5 recommendations issued by the former External 
Auditor have been implemented. The Auditor mentioned that there are currently 9 ongoing 
recommendations, but 6 were just issued in March 2023 when the Trust Funds Performance Audit 
was presented.  
4.3.  Concerning the financial Audit, the Auditor confirmed that, for 2022, the  Report reflected an 
unqualified opinion on the WTO's financial statements for the financial year. The Auditor noted that 
the WTO has a negative net asset of minus CHF 834.5 million. Moreover, the long -term pension 
liabilities related to staff amount to CH F 1.6 billion. Th ese figures are a result of application of  the 
accounting methods  based on IPSAS, which ha ve been applied since 2012. The Auditor said the 
situation is non -alarming as the liability is "virtual" , based on several hypotheses , and will have to 
be paid over time. Still, as the WTO has an operating deficit every year because the equity position 
continues to deteriorate, the financial burden will need to be paid by the Organization's Members in 
the long term.  
4.4.  The Auditor emphasized the importance of internal controls and that IT system governance is 
extremely important for the Organization's security. In this regard, he said, the access granted to 
staff in the accounting application is in line with their functions, but it requires be tter documentation. 
Given the volume of the long -term staff liabilities , such as pension and ASHI, the Auditor said that 
the team  focused on  this area  and issued  three recommendations to improve  the information 
provided in the related notes.  
4.5.  A few Members took the floor to thank the Auditor for his dedication, excellent work, and 
presentation. In particular, a Member commented on paragraph 21 of the audit report mentioning 
that the language used to describe the tax reimbursement system was not in line with past decisions 
of the CBFA. The Member recalled that there was an agreement on the type of language to be used, 
which should be reflected in the Report.  
4.6.  The Member also made an observation  on the status of the various audit recommendations. 
The Member requ ested the External Auditor to clarify the difference in the status of items marked 
as "Open" as opposed to  "Ongoing" , and whether this is an  internationally recognized categorization. 
The Member expressed its confusion about this aspect as, at least for tw o recommendations, the 
implementation phase was in a very early stage.  
4.7.  A Member thanked the Auditor and congratulated the Secretariat for achieving the unqualified 
opinion. Referring to  para. 21 on page 12 of the Report , the Member said t he language used t o 
describe the finding on tax reimbursement was not in line with previous decisions taken at the CBFA. 
The Member said that the WTO Secretariat continues to provide incorrect information on the tax 
reimbursement system applied at the WTO  and questioned whe ther the use of the term "liability" is 
in line with international accounting standards. The Member further suggested that  the Secretariat's 
response s to the recommendations and explanations need to be revised, a s the status ( "Ongoing " 
or "Open") might be misleading and create confusion . As an example, the Member referred to the WT/BFA/213  
 
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  recommendation on the TFAF. Furthermore, the Member asked what kind of work is being 
undertaken to implement the recommendation on Crisis Management.  
4.8.  A Member joined the other Members in thanking the Auditor and then posed a specific question 
on the recommendations on Staff Benefits.  The Member also echoed the question about the 
implementation of the recommendation on Crisis Management . 
4.9.  Concerning the comments made in para . 21 of the Report, the Auditor highlighted that this 
refers to a past recommendation , and not to a curre nt one. On the questions on the implementation 
category, the Auditor said that using the term " Ongoing" is appropriate , even though there is no 
international standard. A recommendation should fall into the ongoing status as soon as it is 
accepted. The Audi tor mentioned that the Members  may abandon a recommendation if they wish 
so. With respect to the questions concerning the status of the implementation of the 
recommendation on Crisis Management, the Auditor noted the Secretariat is currently recruiting a 
Risk Officer, who will be in charge of implementing this recommendation, which is an appropriate 
step. 
4.10.   An official of the Secretariat intervened to answer the remaining questions. Concerning the 
comments on the recommendation on the consolidation of debts, the official  clarified that this 
recommendation referred to the specific case of the pending receivable related to MC11, not the 
taxation reimbursement system. The recommendation is considered as implemented as the 
Secretariat ascertained that based on the  Financial Regulations, the WTO cannot consolidate 
payments and receivables due from Members.  
4.11.   Concerning the questions on implementation categor ies, the official explained that  whenever 
there is no opposition from  the Governing Body , i.e. , the CBFA , the Se cretariat marks  the 
recommendation as "Ongoing ", which means that the Secretariat begins assessing and working on 
the recommendation.  
4.12.   Concerning the long -term employee benefits recommendations, the official of  the Secretariat 
explained that t hose recommend ations are related to IPSAS  39, which requires that all hypotheses 
and assumptions (such as the sensitivity analysis of the actuarial variables) should be disclosed in 
the notes of the financial statements. He added that n ext year, those assumptions will b e fully 
disclosed in the note. Alternatively, in the case of immateriality, a clear explanation for the non -
disclosure will be described in the notes.  
4.13.   A Member question ed the role of Members in accepting or not the recommendations issued 
by the Auditor. The Member stated that accepting the Report does not automatically mean that 
Members must accept whatever comes from these recommendations . For example, the Member said 
it did not agree with the recommendation on the TFAF, but it did not block the report. The Member 
also criticized the comments column for lack of specificity.  As an example, he referred to the 
recommendation on the consolidation of debt and the lack of payment by Argentina  of the MC11 
debt. The Member expressed his frustration that the same information is being reproduced despite 
his efforts to obtain clarity.  
4.14.   The Auditor replied to the comments of the Member  reflected in para. 4.13.   above , saying 
that the recommendation related to the consolidation of debt after a careful assessment was 
considered not feasible in light of  the Financial Regulations; therefore, it was closed as not 
implementable.  
4.15.   The Chair thanked Members for  the comments and the Secretariat for the answers provided. 
The Chair  then read the following recommendation for approval by the CBFA:  
4.16.   The Committee recommends that the General Council approve the transfers 
between budgetary sections as outlined in paragraph 2.30 of document WT/BFA/W/632. 
The Committee further recommends that the General Council approve the WTO Audited 
Financial Statements for the year ended 31 December 2022.  
4.17.   The CBFA approved the recommendation.  WT/BFA/213  
 
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  5  SECRETARIAT'S RESPONSES TO  EXTERNAL AUDITOR'S RECOMMENDATIONS ON THE 
AUDIT OF THE  FINANCIAL STATEMENTS OF THE WTO FOR THE FINANCIAL YEAR ENDED 
31 DECEMBER 2022 – WT/BFA/W/640  AND SECRETARIAT'S RESPONSES TO THE FOLLOW -
UP TO OUTSTANDING RECOMMENDATIONS OF THE EXTERNAL AUDITORS - 
WT/BFA/W/641  
5.1.  An official of the Secretariat thanked the Chair and presented a brief overview of the status of 
recommendations.  
5.2.  He said there are four newly -issued recommendations, i ncluding  one related to the IT 
environment and control system, which is, in practice, a continuation of the work initiated in the 
previous year. In particular, the recommendation aims to improve the controls over the activities 
related to finance, such as the access system or the segregation of duties within the E nterprise 
Resource Planning . The remaining three recommendations relate to  employee benefit s and aim to 
assess and improve full compliance in terms of disclosure  of information related to actuarial  
functions.  
5.3.  The official of  the Secretariat said that the actuarial service provider will start working on these 
three recommendations to provide  an updated version of the financial statements.  
5.4.  Concerning the past audit recommendations related to financial  matters, the official  stated that 
75% of the past audit recommendations ha ve been closed in one year.  
5.5.  Concerning past audit recommendations related to performance audit, the official  of the 
Secretariat stated that all recommendations issued by the German Auditors had been implemented. 
At the same time, there are still nine pending recommendations by the current French Auditors. 
However, six of them  have been issued only in March 2023, so the implementation rate can be 
considered normal . 
5.6.  A Member expressed satisfaction that some long-standing issues , such as home leave 
calculation , have finally been resolved. Regarding  the recommendation on trust funds, which is now 
considered closed, the Member asked what was done to implement it. Moreover, the Me mber did 
not see the basis for merging this recommendation with the newly issued  one in the area of trust 
funds. The Member also asked for further clarifications with respect to  the recommendation on HR 
digitalization. The Member encouraged  the Secretariat  to provide more information in the column 
with the status of recommendations . 
5.7.  A Member ask ed whether the recommendations related to IPSAS 39 and assumptions for the 
employee benefits might affect the ongoing discussion s regarding  the Pension Plan.  
5.8.  With re spect to  the implementation of the HR -related recommendations , the official of  the 
Secretariat recalled  that the need for digitalization of HR -related processes was a requirement of the 
former Auditor. Implementation was achieved by implementing the Workday platform, which  
transferred m uch paper -based data into a digital  format . Regarding home leave, he said a new 
calculation methodology  will take place as of 1 of July. He further noted that t here are some overlaps  
between the old and new recommendations on trust funds. In particular, b oth German and French 
Auditors suggested merging  inactive trust funds into other funds.  He acknowledged that the ultimate 
decision on this recommendation rests with Members who own  the fu nds. 
5.9.  Concerning the question on the IPSAS 39 -related recommendations  in para.  5.7.  5.9.  , he 
clarified that  those recommendations do not affect the ongoing discussion on pension  reform  
because  the recommendations aim to fully disclose the hypothesis used by the Actuary in its 
calculation. For example, the sensitivity analysis of all variables is disclosed instead of only one of 
the key assumptions.  
5.10.   The Member whose views are reflected in para. 5.6.  , said, with respect to the 
recommendations on trust funds, that merging and rationalization could be done as part of 
establishing a steering body. He said merg ing one recommendation with another should not be 
labelled as "Implemented" unless the Secretariat can specify what exactly has been done . WT/BFA/213  
 
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  5.11.   The official of the  Secretariat said that the recommendation on rationalization of trust funds 
by the German Auditors  referred to the fact that some trust funds did not have any transactions for 
many years , and  therefore they recommended closing such "inactive" funds. The French Auditors 
made a similar recommendation, and for this reason, the comment noted that a new 
recommendation superseded the previous one. The official  of the Secretariat, however, took note of 
the suggestion of including a  sub-item in the new recommendation.  
5.12.   The External Auditor took the floor to complement the  discussion on the  rationalization of 
trust funds. He stated that in issuing the 6 recommendations related to trust funds, the French 
Auditors considered what was previously done by the German Auditors. Concerning the reporting, 
the External Auditor said that if Members require more elaboration o n the implementation and status 
of the audit recommendation, this information can certainly be provided . 
5.13.   The Committee took note of the discussions.  
6  WTO PENSION PLAN - ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR 
ENDED 31 DECEMBER  2022 - WT/BFA/W/636  WT/L/1167  
6.1.  The Chair of the WTOPP noted the unqualified audit opinion for the year and the fact that no 
new recommendations were made for 2022.  
6.2.  He then highlighted a few elements presented in detail in the Annual Report and Financial 
Statements. First, he acknowledged that 2022 was a difficult year for financial markets overall and 
for the WTOPP portfolio as the Plan is obligated to report a substantial drop in the value of the Plan's 
assets. He noted that volatility is n ot unexpected in long -term investing and represents changes in 
market valuations and not a permanent impairment of capital. The portfolio loss is reported in 
Statement 1 of the report. Next , the WTOPP Chair mentioned that the IPSAS accounting net liability  
of the WTO pension plan is around CHF 764 million and reported in the WTO financial statements 
and in the notes of the WTOPP financial statements, but not directly in the WTOPP statements 
themselves. Finally, he noted that with the increasing number of re tirees, the WTOPP has turned 
cashflow negative in the past couple of years. While this is normal in a mature pension plan, it is too 
soon for the WTOPP and is an indicator that the Plan is not in actuarial balance. However, the 
situation will restabilise w hen the proposed reforms are implemented.  
6.3.  A Member took the floor to point out that the attribution of inflationary pressures and poor 
performance of financial markets should not be represented as caused by the conflict in Ukraine. 
She pointed out that man y recent geopolitical factors , including the COVID -19 pandemic, surging 
demand, supply chain problems , and policy choices of certain countries  to impose unilateral 
sanctions  are important elements of a bigger and complex picture.  
6.4.  A Member commented that fr om the point of view of his country , the war in Ukraine has had a 
significant impact on international markets. He then asked the WTOPP Chair to comment on any 
trends in the performance of the WTOPP investments beyond the poor performance in 2022 and if 
there are any lessons to be drawn from those experiences.  
6.5.  The WTOPP Chair responded by drawing  Members'  attention to the long -term perspective taken 
when investing pension assets , noting that 2021 had been an unusually positive year for portfolio 
returns and that it is not  representative of the expected long -term performance. He reiterated that 
volatility in market valuations is normal, and that the portfolio is invested based on a solid 
investment strategy and strategic asset allocation , such that it can tole rate and sometimes even 
benefit from short -term volatility. Therefore, while it is preferable to not have years like 2022 in the 
longer term , they are not a major concern.  
6.6.  The Committee t ook note of the report and the comments made.  
7  REPORT OF THE INDEPENDE NT EXTERNAL AUDITOR ON THE AUDIT OF THE FINANCIAL 
STATEMENTS OF THE WTO PENSION PLAN FOR 2022  - WT/BFA/W/637 , WT/L/1168  
7.1.  The External Auditor introduced his report by stating that the WTOPP received an unqualified 
opinion for the year ended 31 December 2022. The External Auditor briefly recalled that the statute 
of the WTOPP required having separate and specific financial statements of the WTOPP.  He further WT/BFA/213  
 
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  confirmed th at the auditors were making no new recommendations in their report on the 2022 
accounts.  
7.2.  As of 31 December 2022, the WTOPP has assets amounting to CHF 639 million. The auditor 
noted the deterioration in the financial situation of the Pension Plan in terms of net assets , which 
decreased by CHF 97 million compared to 2021 due to the negative performance of financial markets 
as reported at 31 December 2022. However, he observed that the strong performance  in the 
previous  year shows the cyclical nature of inves tment returns. The more important point , in the 
Auditor's view, is the long -term actuarial imbalance as measured by the theoretical contribution 
rate, which should be 10.5% higher than the real current contribution rate.  
7.3.  He noted that the WTOPP Management Board was still working on a reform proposal when the 
audit took place , and it was  understood that the reform proposal would recommend action on 
different aspects of the Plan , such as  changing  the retirement age, lowering benefits for staff , and 
recommendi ng a capital infusion from Members. He said the auditors would not comment on what 
the CBFA might choose to do in terms of reform but emphasized that the issue needs to be discussed 
so that the structural funding gap can be solved in the long term.  
7.4.  A Membe r thanked the Auditor and noted that there are different pension systems. Therefore, 
he asked the Auditor if the Auditor  perceived any special strengths or weakness es as to the kind of 
pension the WTO has or should have in the future.  
7.5.  The Auditor replied that it is not for the Auditor to state which is the best pension system  for 
an organization . The WTO financial statements separate the WTOPP, which is an advantage as it 
allows to isolate it and understand which aspects  to correct or s upport. The main issue  is the long -
term actuarial  balance , which is not assured  and at this point requires reforms . 
7.6.  He thanked the Members for their attention and said he was available to provide further 
information should the Members request it.  
7.7.  The Commi ttee took  note of the report  and the comments made . 
8  WTO PENSION PLAN 2022 INTERIM ACTUARIAL VALUATION – WT/BFA/W/638  
8.1.  The consulting actuary of the WTOPP presented the 2022 interim actuarial valuation. He 
explained that an interim valuation is limited in sc ope in that it maintains the same assumptions as 
from the previous full valuation but updates certain key elements , such as population data and asset 
values, including the expected future returns on those assets.  
8.2.  The actuary noted the decrease in the value of the Pension Plan's assets and the fact that the 
Plan is now cash -flow negative in the sense that the benefits b eing paid out of the plan exceed the 
contributions coming into the plan. While the real return on assets in 2022 was a negative 15.6%, 
this outcome was consistent with global financial markets in general and comparable international 
organization pension pl ans, such as the United Nations Joint Staff Pension Plan.  
8.3.  Turning to the actuarial results of the interim report, the consulting actuary reported that the 
required contribution rate to maintain the Plan in actuarial balance had increased from 33.1 % to 
35.1%. The primary reasons for the increase in the required contribution rate are the previously 
identified funding gap , which  he called "the cost of waiting" ( -0.3%) , and the negative investment 
performance ( -3.2%). He noted that each year that reforms are no t implemented will increase the 
costs of the Plan as measured by the required contribution rate by approximately 0.3 %. Conversely, 
the fact that the expected returns on Plan assets was now higher had an offsetting positive impact 
of 0.9 %. In summary, he ob served that the 2020 full actuarial valuation showed a gap of 10.5 % in 
the required contribution rate and the 2021 interim valuation saw the gap fall to 9.4 %. In 2022 , the 
gap increased again to 12.0 %. This kind of fluctuation in the required contribution rate is not 
unusual, particularly during periods of high volatility in market valuations. The key point to focus on 
is that the gap needs to be closed and it is the recommendation of the actuaries to continue to target 
the 10.5 % gap on which the current pa ckage of reforms has been based.  
8.4.  A Member expressed concern about the negative investment returns of the pension fund but 
voiced support for the importance of addressing the very real challenges the Pension Fund is facing. WT/BFA/213  
 
- 12 - 
 
  Just as many national schemes are  managing to adjust, he expressed confidence that the WTO 
would also find a way.  
8.5.  A Member asked for clarification on the change in expected return on investments that had a 
favourable impact on the actuarial valuation. He also asked for clarification on th e adjustment in 
spot rates reported in table 40 of document WT/BFA/W/632.  
8.6.  Another Member joined the expression of concern about the negative investment returns in 
2022 and asked if there was a "plan B " in the event the global economic outlook remains chall enging 
and it is not possible to achieve the expected returns. He also expressed the view that having 
information on how the WTO Pension Fund is performing relative to comparator pension funds is 
helpful. Finally, he asked for clarification as to why the r equired contribution rate is now suddenly 
so much higher than was reported a few years ago when the rates seemed quite stable.  
8.7.  In responding to the questions raised about apparent sudden increase in the required 
contribution rate, the consulting actuary re called that the assumptions about longevity had been 
updated in 2020 to factor in expected future increases in life expectancy. Additionally, the prolonged 
period of low and even negative interest rates had also been a contributing factor. Therefore, it wa s 
changes in assumptions rather than some fundamental change in the situation of the Pension Plan 
see that drove the higher estimated required contribution rate. He concluded by recalling his earlier 
point that if the actuarial funding gap persists, the co st of waiting will increase the required 
contribution rate by 0.3 -0.4% each year. As to the other questions , he said he was not best placed  
to respond.  
8.8.  A representative of the Secretariat took the floor to respond to the other questions. Regarding 
the impr oved expectations for investment return, he explained that these estimates were based on 
fundamental analysis of the economic potential of the underlying assets to generate returns. These 
are different from swings in market valuation that are not reflectiv e of the economic fundamentals. 
Market volatility does not substantially change the expected yields on assets. However, when the 
value of an asset declines as happened in 2022, the expected yield on those assets increases. This 
is a mathematical truism, bu t as the higher yields are now on lower value assets, the net impact is 
limited in terms of the overall outlook for the financial position of the Plan. Regarding the reference 
in Table 40 of docu ment WT/BFA/W/632, the representative of the Secretariat said  that the 
adjustment was  agreed with the Auditors as  a methodological adaptation to realign with IPSAS  
norms now that reference interest rates were again positive. He explained that the prescribed 
methodology produced non -sensical results when interest rat es on bonds had been negative and so 
had been modified in agreement with the previous auditors.  
8.9.  The Committee t ook note of the report and comments made.  
9  ORAL UPDATE ON THE REFORM PROPOSAL FOR ADDRESSING THE PENSION PLAN'S 
FUNDING GAP  
9.1.  The Chair noted she had commented extensively on this matter in her report on ongoing 
activities th at morning, and again noted the document circulated by the Secretariat on the Working 
Capital Fund (WT/BFA/INF/18). She invited the Chair of the WTOPP to provide an update.  
9.2.  The WTOPP Chair thanked the CBFA Chair for her work  in conducting consultations with 
Members and agreed with her assessment of the situation. He said he would like to share three 
observations to compl ement her report. First , on the substance of the feedback pr ovided by 
Members, he reported that the Management Board appreciated the support expressed by several 
Members for the current proposal and acknowledged that the European Union had raised some 
specific points in its communication circulated on 9 June. He th anked the Members for the mutually 
beneficial informal exchanges that had taken place in recent days regarding expectations of some 
Members and the parameters within which the Board has framed its proposal. Second, in terms of 
process, he reported that tec hnical work at the level of the WTOPP Secretariat and Actuarial Working 
Group of the Board had already started to assess how the reform proposal could be adapted in 
response to the feedback of Members since the May CBFA. He said the Board would next have t he 
opportunity to consider the issues formally at its meeting in two days , on 29 June. There they would 
take up , in particular , the expectation that the burden be tilted more towards current staff , while 
taking due consideration of acquired rights. Third, he observed that there was an extremely narrow WT/BFA/213  
 
- 13 - 
 
  window within which to work if the Board was going to deliver a recommendation to the CBFA in 
time for a decision in principle at its meeting of 18 July. He reiterated that while he and the Board, 
composed of both representatives of Members elected by the General Council and staff appointed 
by the Director -General, were committed to trying to deliver a recommendation in time for the July 
meeting, it will require effort on all sides and focused engagement over t he coming days to meet 
this target.  
9.3.  Several Members took the floor to express appreciation for the continuing work on the reforms 
and the Information Note prepared by the Secretariat on the Working Capital Fund  (WCF) , which 
had been shared with Members. Several Members  acknowledg ed the need to address the issue of 
the funding gap and signalled their intention to be cooperative and constructive in deciding how to 
proceed.  
9.4.  Most Members who expressed views supported doing someth ing sooner rather than later while 
also calling for a clear additional process to consider deeper, more structural, reforms. A few 
Members indicated they needed more time to consider the implications of using the WCF. Several 
Members reiterated their suppo rt for a working group process to look at structural reforms to help 
ensure the long -term sustainability of the Plan. 
9.5.  A Member expressed concern over what it perceived to be changes being proposed late in the 
process. While the Member said it was  not entir ely satisfied with the proposal, it also  noted that it 
was the product of a carefully considered process that included all stakeholders in a way that 
reasonably balanced their interests.  The Member cautioned that re -opening the proposal could 
exacerbate th e gap and  encouraged Members to move forward with the current proposal.  
9.6.  Another Member agreed that something needs to be done but expressed the view that the 
study of deeper structural reforms should come before committing Members to further contributions 
to the Plan. In the meantime, the Member  suggested that adjustments to benefits , such as staff 
contribution rate and the accumulation rate , would help to mitigate the funding gap until deeper 
reforms could ensure the resilience of the Pension Plan against future shocks. The Member  also 
expressed frustration that the WTO Pension Plan seemed to compare unfavourably to the UN Joint 
Staff Pension Fund , which currently has no funding problem. In his view , the poor investment 
performance of 2022 highlighted the n eed for structural reforms. He suggested moving toward a 
defined contribution or hybrid pension model or perhaps re -joining the UN pension plan. He 
reiterated his view that structural reforms should come before deciding on any other measures.  
9.7.  A Member enco uraged others to carefully read document WT/ JOB/BFA/81 , in which the EU and 
its Member States provide their input on the current reform proposal. He noted that collectively , 
EU Members contribute more than 30% of the WTO budget , so it is important for them to have a 
sustainable and solid pension fund in the fu ture. He said the EU was acting constructively with the 
view to addressing the acute funding problem before the summer break and the understanding that 
a working group would be established to look into deeper reforms.  
9.8.  More Members took the floor to express  their support for the proposal and moving ahead 
quickly (including  for the use of the WCF for the capital infusion). At the same time , they 
acknowledged that it was an imperfect, but reasonable solution, bearing in mind the various 
stakeholders and legal constraints. These Members also confirmed their support for a subsequent 
process for exploring more structural reforms.  
9.9.  A few Members exchanged views on their understanding of the roles and responsibilities of 
members of the Management Board elected by the  General Council.  
9.10.   A Member, in response to an earlier comment about trying to change the proposal at a late 
stage in the process, defended the legitimacy of expressing the view that there should be further 
modest but meaningful adjustments in terms of burd en sharing. However, reiterating his 
commitment to agreeing on a proposal, including a mandate for considering structural reforms, he 
asked another Member if that was in fact a shared objective. He expressed the view that the 
objective should be an agreeme nt in principle on the approach to pension reform that can be folded 
into the overall budget process that will start in September.  WT/BFA/213  
 
- 14 - 
 
  9.11.   The Member  whose views are reflected in para. 9.5.  took the floor again to say that in his 
view, what was on the table was already a negotiated outcome and that to expect the inclusion of 
additional elements at this stage risked unravelling a carefully and thoughtfully assembled package. 
If given the chance, he too might want to change things, but in his view that would not be in the 
best interests of the overall process and desired outcome.  
9.12.   A Member , in responding to the question whether there  was a shared objective of reaching 
an agreeme nt in principle to incorporate in the regular budget process , said he recognized that there 
would need to be reforms to resolve the issue and would prioritize a focus on structural reforms 
even if it takes more time. In his view, there are measure s that co uld be taken by the Board to 
reduce the costs of the plan by adjusting benefits pending Member  decisions on structural reforms.  
9.13.   A Member, intervening for the first time on the issue , acknowledged the importance of 
ensuring adequate pension benefits for emp loyees and that the pension systems should be well -
funded to provide security and peace of mind to staff. However, he expressed concern that the 
reforms might need to be structural, and that Members should prioritize what will be best for all 
parties and n ot rush to what looks like an easy fix. He said that an increase in yearly contributions 
may not be the most suitable approach at this time given the extra burden it will place on most 
Members. Nonetheless, his delegation remains open to constructive dialo g to find a solution.  
9.14.   A Member took the floor again to express optimism that the necessary small but meaningful 
adjustments could be made to the proposal in the time Members have before the summer break. He 
said his delegation understands the outcome Membe rs are working towards is an agreement on 
closing the actuarial gap along with a mandate to look at deeper reforms, but that those are separate 
elements. He expressed the view that the focus in the coming days should be on working first with 
the Members ad vocating a focus on structural reforms to see if they can find common ground.  
9.15.   A Member said he was unclear if the current reform proposal was being rejected or not. He 
did not see how a new proposal could be put on the table between now and the next meetin g with 
the expectation that Members would agree, noting that staff may not have seen it. In his view, it 
was ambiguous what the way forward is meant to be.  
9.16.   A Member took the floor for the first time to say that there seemed to be several elements 
still on the table and it was not clear where things stood if the objective is to reach some agreement 
in principle on the reform that can be folded into the budget discussions. She said she understood 
that staff seemed to be accepting of the proposal, but she was still uncertain  as to how various 
elements might interact and where Members stand, for example, on using the Working Capital Fund 
and what the next steps for deeper reform might be. As there is not much time before the summer 
break, she asked Members  for a clearer idea of how the elements add up and what expectations are 
in the coming two weeks to allow better communication with capitals.  
9.17.   A Member who had expressed the view that structural reforms should come first wanted to 
reiterate that his delegation ha d been clear in consultations as to what its expectations are. In his 
view, the discussions are on -going. If the proposal that is on the table is being presented as a fait 
accompli  to be decided in the next 15 days, then that is not a discussion and would make things 
very difficult. He encouraged Members to understand what kind of flexibilities there are and asked 
if the Committee is looking for a correct solution or just any solution.  
9.18.   The Chairperson of the WTOPP thanked Members for their interventions and  comments and 
said he had two observations he would like to share. His first observation was on expectations about 
what the WTOPP Board might be able to do in the coming days. He said that if the Board can produce 
a revised proposal, it will not be fundame ntally different from what is on the table. He would work 
with the Board to look at the parameter on the capital infusion given the feedback from both 
Members and the Administration on what is possible with the Working Capital Fund. In addition, he 
took note of the requests from some Members  who believe it is necessary to put a higher  burden  on 
staff. If a revision can be agreed at the Board in time for the next meeting, it will not be something 
surprising. Then it will be up to the Members to see if an agreement in principle can be reached at 
the July CBFA meeting, he emphasized . His second observation related to the current reform 
proposal and possible deeper reforms. He reiterated that the existing mandate of the Board is to 
make a proposal for how to address an actuarial deficit when one is identified , which they have done. 
If Members also  want to look more fundamentally at the system , this is perfectly legitimate. WT/BFA/213  
 
- 15 - 
 
  However, he would not recommend doing one and not the other. Even if Members decide in  2-
3 years to shift to a different model that in their view will better meet the needs of th e WTO going 
forward, it will not make the current deficit go away , and the costs of addressing it will only have 
increased. He strongly recommend ed addressing the two issues in parallel on separate tracks : 
deciding on a mandate for studying deeper reforms and approving the current recommendations for 
reform. D elivering on one  issue will not make the other one go away , he concluded . 
9.19.   The Chairperson of the CBFA thanked Members for their comments and engagement in an 
open discussion. She recognized the hard wo rk that has gone into finding a pragmatic solution on 
the question of pension reform. At the same time, she summarized her understanding of the 
discussion in the meeting that there remains hard work ahead and Members will have to use the 
time in the next d ays and weeks efficiently to address the questions of pension reform, deeper 
reforms and the use of the WCF. However, she remains optimistic that the Committee will be able 
to take an agreement in principle, ideally before the summer break, but in any case , in time to allow 
Members to turn their attention to the upcoming WTO biennial budget proposal. And she reassured 
Members that they would be provided  with enough time to consider any adaptations to the current 
proposal the Management Board may recommend i n the coming days.  
9.20.   The Chairperson closed the item by again thanking Members for their on -going engagement.  
The committee took note of the discussion and the comments made.  
10  WTO SECRETARIAT TRANSFORMATION EXERCISE AS OF 12 JUNE 2023 – 
WT/BFA/W/642  
10.1.   DDG Ellar d delivered the statement contained in JOB/BFA/82, as follows:  
10.2.   I am pleased to provide you with an update on the progress of the Secretariat's transformation 
exercise. I will keep my remarks brief given the relatively short period of time since our last me eting. 
A more comprehensive written update on the status of the transformation work as of 12 June can 
be found in document WT/BFA/W/642, which was circulated in advance of this meeting.  
10.3.   I will be pleased to hear your comments, if any, and will provide my s peaking notes to you in 
writing after this meeting. The transformation work will remain on the agenda for discussion at our 
meetings , and I will provide additional updates if needed . 
10.4.   As you are aware, the work on Vision and Strategy for the Secretariat beg an in late March. 
The work to date has benefited greatly from your input, the collection of which has been facilitated 
by Ambassador Dacio Castillo of Honduras, as well as inputs from many other stakeholders including 
Secretariat staff. Many thanks to Amba ssador Castillo and to all of you for your active participation.  
10.5.   The Director -General expects to share with Members in the near future the initial results of 
this work, namely a Secretariat vision statement and strategic focus pillars. Willy Alfaro, our ne w 
Director for Secretariat Vision and Strategy will lead the further development of a Secretariat 
strategy and efforts to align our planning and operations with that strategy. This next part of the 
work will also involve engagement across the Secretariat a nd with Members.  
10.6.   In addition to the work on Vision and Strategy, we continue to make steady progress on 
implementation of the outcomes approved by the Transformation Steering Committee across all 
workstreams . I will touch on just a few recent developments.  
10.7.   On Recognition and Rewards a new intranet page for staff should go live later this week. On 
external mobility, a two -year staff exchange has been agreed with the World Bank, involving one 
staff member from each institution. A revised promotions policy has  been finalised and will be 
submitted to the Joint Advisory Committee (JAC) later this week. The JAC will review the policy and 
make recommendations to the Director -General. Some of the improvements to be codified in the 
revised policy were already applied  in the most recent promotions exercise.  
10.8.   Work is progressing on multiple digital transformation initiatives, alongside ongoing efforts to 
enhance  IT governance mechanisms . Review of the sequencing, scope, prioritization, and timing of 
initiatives is ongoing, with adjustments possible in light of available budget, other existing or planned 
work, and ongoing Member discussions on improving the deliberative function.  Recent developments WT/BFA/213  
 
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  include: the roll -out of the new Trade Data Portal, w hich includes new real time data on wheat 
shipments; the launch of work to develop a single notifications portal; preparations to further extend 
the use of e -Agenda for committee meetings where approved by Members; and preparations to 
begin work on an inte lligent search engine. The improvement of our digital tools is a longer -term 
effort, and we are also working to ensure the reflection of planned initiatives in the Secretariat's 
2024-2025 budget request.  
10.9.   Thank you for your continuing interest in and suppor t for our transformation work.  
10.10.   I now invite any comments or questions that you would like to share.  
10.11.   With respect to the Director vacancies, DDG Ellard reported that the selection process for 
the position of Director of the Legal Affairs Division has been c ompleted, and that the Director -
General appointed to this position Mr. Jorge Castro, who is currently Chief of Training Section at the 
ITTC. She added that the position of Director of the Trade Policy Review Division has been advertised 
internally, and tha t a selection process is ongoing for the position of Development Division Director, 
which has been advertised externally and internally. In addition, she said that the departure of 
Ms. Nthisana Phi llips has led to an opening of a vacancy of Director of Adm inistration and General 
Services Division. DDG Ellard said that until the vacancy is filled, in addition to her role as DDG in 
charge of Finance, she would serve as an interim Director of AGSD, and that key functions would be 
divided between several senior  staff members of the Division.  
10.12.   A Member said the updates on digital tools, including the informal technical briefing that 
took place on 23 June, have been particularly useful, especially as Members are engaging in 
discussions on WTO reform. The Member ask ed about the status of risk officer recruitment.  
10.13.   Several Members asked about the relationship between a vision statement and strategic 
pillars for the future of the Secretariat and a vision and strategy for the Organization, and the 
timelines of the two pr ocesses.  
10.14.   A Member stated that, in his delegation's view, some elements of the draft vision statement 
for the Secretariat are not focused only on the Secretariat, but also on the Organization.  
10.15.   A Member asked how many staff members would work on strategy -related issues. He said 
he was under the impression that work on strategy was at a final stage, but the recent recruitment 
of Director for Strategy and Vision seems to demonstrate the opposite.  
10.16.   A Member said it agreed with the Member whose views are reflected  in para. 10.14.   above 
that the draft vision statement relates to not only the Secretariat, but also the Organization. The 
Member also asked about the implications  of the creation of a vision and strategy unit on the budget. 
She noted, in this regard, that in the mid -term budget proposal, the Director -General requested 
18 new posts, including posts for strategy -related work. She also noted that some new units were 
created in the past, such as the Delivery Unit, which has since been dismantled. With respect to the 
results of the staff satisfaction survey, the Member noted that promotions are not the only way to 
motivate staff and encouraged the Secretariat to continue  exploring other ways to recognize and 
reward staff. With respect to short -terms, the Member said the financial performance report reflects 
the worsening of the situation compared to the previous year, and expressed concern that 
overspending on short -term staff may no longer be compensated from the budget line for regular 
staff. 
10.17.   A Member said that if there is not enough money for promotions, the headcount should be 
reduced and there should be no new hires. The Member also stressed the importance of explorin g 
mobility opportunities for senior staff who have been in the same position for more than 10 years.  
10.18.   A Member asked about how the staff satisfaction survey is related to the work on 
transformation.  
10.19.   DDG Ellard thanked the Member whose comments are reflected  in para. 10.12.   for the 
appreciation of the Secretariat's work on digital transformation, which is a necessary element of 
WTO reform. She said the Secretariat is committed to being transparent about what tools are 
needed, and encouraged Members to be clear as to what tools they are seeking. In response to the WT/BFA/213  
 
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  question about the Risk Officer recruitment, DDG Ellard said the timeline has changed slightly and 
that the  Secretariat is hoping to be able to conduct interviews in July. With respect to the vision and 
strategy work, DDG Ellard clarified that the current work on the vision statement and strategic pillars 
is focused on the Secretariat. She said the Secretariat would share the result of this work with 
Members soon. She said the vision would inform everything the Secretariat does and identify areas 
of focus. She further noted that there is more work to be done because the vision and strategic 
pillars are formulate d in general terms, and they would have to be fleshed out into a more detailed 
strategy. With respect to transformation more broadly, DDG Ellard said that there are several 
workstreams, including implementing the initiatives and the HR work on developing a  competency 
framework and mapping out the existing resources and gaps, as requested by Members.  
10.20.   In response to Member comments in paras. 10.14.   and 10.16.   , DDG Ellard said that some 
of the elements the Member referred to, such as convening the global community and 
communicating externally, are relevant for both the Secretariat  and the Organization. With respect 
to the structure of the strategy and vision unit, she noted that the Director for Strategy and Vision 
has already been appointed, and that this had no impact on the budget or headcount because an 
existing post had been r e-purposed. She said that currently the unit consists of one person who is 
working closely with the Transformation Office and that Members would be informed of any further 
changes that would have an impact on the headcount. She further confirmed that in th e past, the 
Secretariat had successfully re -deployed staff to the Delivery Unit, which was dismantled after MC12. 
The Delivery Unit staff has been since re -deployed to other active areas of work, including to the 
Transformation Office. She noted that staff  redeployment raises issues not only in terms of budget, 
but also staff ceiling, which is currently set at 645.5 posts.  
10.21.   With respect to the Staff Satisfaction Survey, DDG Ellard explained that the survey is neither 
designed nor executed by the Administrati on, but by staff members themselves, through the 
Staff Council. She said it was alarming to see that half of the respondents indicated that the lack of 
promotion opportunities may push them to leave the Organization. She added that, while there are 
differe nt ways to deal with this issue, the Secretariat raised it in the context of budget to demonstrate 
to the Members the root causes of this problem and to arrive at a commonly agreed solution. She 
noted that while it is possible to simply have a smaller Orga nization, the Secretariat is already 
struggling to meet Member demands with the resources it currently has, which is creating other 
problems, such as an overspending on short -term staff. She said that to have the best possible staff 
to deal with Member nee ds, it is important to have clear pathways for professional development, 
and promotions are a key element of it. She said a lot has been done in the context of the 
transformation exercise to improve career pathways, including improving the promotion proces s 
without increasing the number of promotions. She stressed, however, that despite all these efforts, 
promotions remain an important factor that needs to be addressed because, unlike some national 
administrations, the WTO does not have a system of automati c promotions after a certain number 
of years of service.  
10.22.   DDG Ellard agreed with the Member whose comments are reflected in para. 10.17.   about 
the need for mobility opportunities for senior staff. In this regard, she noted that staff have an 
opportunity to move within the Organization and that there are also external mobility opportunities 
to other organizations.  
10.23.   A Member asked for how long units dealing with vision a nd strategy and transformation will 
have to be maintained given that the transformation work appears to be by large completed.  
10.24.   The Member whose views are reflected in para. 10.14.   reiterated that some elements of the 
vision statement were relevant to Members, and not the Secretariat, such as, for example "making 
the rules -based system work for global prosperity and sustainable development". He said that such 
statemen ts should be discussed by Members in an appropriate forum before they are adopted.  
10.25.   The Member whose comments are reflected in para. 10.17.   said his delegation welcomes a 
bottom -up approach to re -considering career pathways. He also said his delegation is looking 
forward to guidelines on senior staff mobility to make sure that senior staff does not stay in the 
same position for more than a certain numb er of years.  
10.26.   A Member asked what areas would constitute the building blocks referred to in the context 
of the strategy work, and whether human resources will be part of them.  WT/BFA/213  
 
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  10.27.   In response to the question in paragraph 10.23.   , DDG Ellard noted that transformation and 
vision and strategy are closely related but different exercises. She said that the Transformation 
Office has been undertaking the work that has been descri bed in her updates to the CBFA, and that 
the strategic workstream is the second phase of work, which necessarily involves certain aspects of 
transformation. She noted that there is still much work to be done on the transformation, such as, 
for example, dig ital transformation, which is taking longer than staff -related issues. She said, at this 
stage it is difficult to say with precision when the Transformation Office will be dismantled and where 
the current extremely capable staff of the office will be re -allocated.  
10.28.   In response to Member's comment in para. 10.24.   , DDG Ellard said that the document the 
Member was quoting from was intended to provide options to stimulate  a discussion. She said that 
the Secretariat is very cognizant of the distinction between the roles of Members and the Secretariat. 
She noted that, in the course of the discussions on vision and strategy, there have been discussions 
on the role of the Marr akesh Agreement and how it should be reflected. She said the Secretariat's 
task is to determine what its role is with respect to that Agreement and the vision laid out by 
Members in it.  
10.29.   With respect to the question about senior staff mobility in para. 10.25.   , DDG Ellard said 
that currently there are no specific guidelines for senior staff. She noted that the current pilot on 
mobility is targeting staff members who ha ve joined in the past 7 years. She said that it is important 
to develop ways to manage the backfill of posts as a result of incumbent's mobility or long -term 
leave, and this is more difficult at a senior level.  
10.30.   In response to Member's question in para. 10.26.   , DDG Ellard said that the work on strategy 
and vision was still at an early stage and that an actual strategy would have to be developed to 
implement the build ing blocks referred to by the Member. She noted that human resources -related 
issues are part of this exercise, and are also being considered separately because this is a big part 
of the Organization. In this regard, she noted that 75% of the Organization's  budget is dedicated to 
staff. She emphasized the importance of making sure the Organization has staff to meet Members' 
needs as well as the urgency of addressing pressing challenges related to staff motivation. She noted 
that the competency framework and staff mapping exercises have been aimed at ensuring the 
optimal allocation of human resources. She said that while output reporting is a helpful tool, it is not 
perfect, so there is scope for deploying resources better.  
10.31.   A Member suggested the Transformatio n Office could help draft guidelines for mobility of 
senior staff and hiring for Director positions.  
10.32.   The Member whose views are reflected in paras. 10.17.    and 10.25.   said that while some 
functions require very specific skills, it should be possible to rotate staff, especially senior staff, and 
encouraged the Secretariat to loo k into this possibility.  
10.33.   DDG Ellard noted that while automatic rotation can be a very good practice, it is easier to 
implement it in a relatively large organization, in which senior staff is supported by a "deep bench" 
of staff to step up as the new senior  staff is becoming acclimated. But the WTO, she noted, is 
medium -sized. As an example, she noted that the WTO has only one Chief Economist and one 
economic modeller, so it would be difficult to rotate those posts. By contrast, she noted that there 
is more scope for rotating, for example, dispute settlement lawyers, who can perform a broader 
range of functions within the Organization.  
10.34.   The Committee took note of the update and the comments made.  
11  CLOSING REMARKS  
11.1.   The Chair thanked Members for their active participation and their constructive engagement  
and closed the meeting. She said that th e regular next C BFA meeting will take place on 18 July . 
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