RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/GC/M/110 
15 November 2007 
 (07-4968) 
General Council 
9 October 2007  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 9 October 2007  
 
Chairman:  Mr Muhamad Noor (Malaysia) 
 
 Subjects discussed
: Page  
1. Comoros – Request for Accession ...........................................................................................2  
2. Report by the Chairman of th e Trade Negotiati ons Committee ..........................................5  
3. Work Programme on Small Economies – Report by the Chairman of the 
Dedicated Session of the Committee on Trade and Development ......................................19  
4. Non-recognition of rights under Article XXIV:6 and Article XXVIII of GATT 1994 – Communications from Honduras and Guatemala – Statement by the 
Chairman....................................................................................................................... ..........19
 
5. United States' proposed measures affecting the importation of cigars – 
Statement by the Dominican Republic, Honduras and Nicaragua.....................................21  
6. Committee on Budget, Finan ce and Administration ...........................................................23  
(a) Report of the Committee on its meeting of June 2007 .............................................................23  
(b) Report of the Committee on its meeting of July 2007 ..............................................................23  
7. Statement by Paraguay on behalf of the Informal Group of Developing 
Countries...................................................................................................................... ............23  
8. Seventh Session of the Ministerial Conference.....................................................................24  
9. Administrative Measures fo r Members in arrears ..............................................................24  
 
 WT/GC/M/110 
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  1. Comoros – Request for Accession (WT/ACC/COM/1) 
1. The Chairman
 drew attention to the communication from the Comoros requesting accession 
to the WTO Agreement pursuant to Article XII (WT/ ACC/COM/1), and said that if delegations were 
agreeable to considering this request positively, he would propose that the General Council agree to 
establish a working party to examine the request, wi th the following standard terms of reference and 
composition: 
Terms of Reference : 
 "To examine the application of the Govern ment of the Comoros to accede to the WTO 
Agreement under Article XII, and to submit to the General Council recommendations which 
may include a draft Protocol of Accession." 
 Membership
: 
 Membership would be open to all Members i ndicating their wish to serve on the Working 
Party.   
 Chairmanship
: 
 In keeping with customary practice, the Genera l Council would authorize him as Chairman to 
designate the Chairperson of the Working Pa rty in consultation with representatives of 
Members and with the representative of the Comoros. 
 2. The General Council agreed
 to establish a Working Party w ith the terms of reference and 
composition as proposed by the Chairman. 
3. The Chairman  then invited the delegation of the Co moros to consult with the Accessions 
Division of the Secretariat as to the further procedur es, and in particular with regard to the basic 
documentation to be considered by the Working Party.   He also invited the Comoros, on behalf of the 
General Council, to attend meetings of the Gene ral Council and, as appropria te, meetings of other 
WTO bodies as an observer during the period when the Working Party was carrying out its work. 
4. The representative of the Comoros , speaking as an observer , said it was an honour to address 
the General Council on this occasion on behalf of hi s Government, and a great pleasure to advocate 
his country's accession to the WTO.  He wished also  to convey the greetings of the President of the 
Comoros, as well as those of the Minister responsib le for Trade.  The Comoros followed the WTO's 
activities with great attention and interest.  He wish ed to pay tribute to the organization, which had 
enabled his country to participate regularly in  Ministerial Conferences as an occasional observer 
under its special fund for LDCs.  The same assistance  facility had enabled his country to have access 
to a WTO Reference Centre, and to all the trai ning programmes carried out by the WTO.  His 
Government's application for accession was evidence of its firm will to become more effectively 
integrated in the organization's activities.  It was al so evidence of the Government's desire, and of its 
acute awareness of the need, to avoid incapacitating marginalization and to seek to further strengthen 
its overall strategy of dynamic involvement in the world economy.  From this standpoint, the 
Comoros' participation in the regional integra tion process in the framework of COMESA and the 
Indian Ocean Commission constituted an eloquent testimony to that awareness and political will.  
Likewise, his country's involvement in the nego tiations for an Economic Partnership Agreement 
between the European Union and the geographical  grouping known as Eastern and Southern Africa 
confirmed the strategic vision with which his Govern ment was imbued.  As th e framework of regional 
economic integration and the trading arrangements inherent therein, in which the Comoros was 
involved, sought compatibility with the rules of the multilateral framework of international trade  WT/GC/M/110 
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  enshrined in the WTO Agreements, his country coul d not but join the WTO sooner or later, as the 
culminating stage in its journey towards fuller integr ation in the world economy, to the benefit of its 
social and economic development. 
5. As a former French colony which had gained independence on 6 July 1975, Comoros had 
been marked for a long time by political and institu tional instability, until things had come to a head 
with the separatist crisis on the Island of Anjouan,  which had led to a process of reconciliation under 
the auspices of the international community.  At present, the Comoros was a country reconciled with 
itself, with a new, more consensual and democr atic political and institutional framework, and was 
engaged in a process of reconstruction in accord ance with a development agenda centred on a 
strategic framework of growth and the fight agai nst poverty.  His Government was convinced that 
trade policy was an essential component of developmen t strategies.  For that reason, in the framework 
of the multilateral programme of assistance to LDCs known as the Integrated Framework, the Comoros had reached the phase of conducting a diagnos tic study on the incorporation of trade in the 
development strategy.  The result would be a matr ix of actions and interventions to assist in 
accomplishing specific development objectives.  The full study would be validated by mid-
November 2007 at a national workshop.  Thereafter, his country would endeavour to incorporate the 
main elements of the trade policy highlighted by the diagnostic study in the growth strategy and poverty-reduction document, which was now undergoi ng its third revision in an ongoing effort to 
update the reference document.  Following the su ccessful conclusion of its process of national 
reconciliation, the Comoros had received the support of  the international communi ty in its efforts to 
mobilize more resources for its social and economic  development.  The meeting of donors for his 
country had been held in Mauritius on 8 December 2005.  On that occasion, its development partners 
had undertaken financial commitments in an amount  of more than US$200 million in the framework 
of an Action Plan 2006-2009, comprising seven strategic priorities and 35 programmes.  The 
objective of the Comoros was to strengthen the supp ort provided at the Mauritius Conference of the 
Partners of the Comoros, as part of an effort  to mobilize resources to promote trade policy as a 
component of the strategy for development.  From  this standpoint, resources under the Enhanced IF 
and the Aid-for-Trade programme currently being mobilized within the WTO constituted 
opportunities the Comoros intended to seize. 
6. The Government was also looki ng at the resources that c ould be mobilized within the 
development matrix of the Economic Partnershi p Agreement between the European Union and 
Eastern and Southern African countries.  Setting a co untry on a path to strong and sustainable growth 
required fundamental reforms and clear, firm strategi c guidelines.  Starting from this basic principle, 
the Government had undertaken the following structur al reforms in the context of its cooperation with 
the IMF and the World Bank:  (i) Enactment of a Government Procurement Code, the text of which 
had entered the implementation phase with the help of a grant from the World Bank.  (ii) Adoption, 
by Parliament in September 2006, of a new Investme nt Code in line with the development objectives, 
offering more guarantees and sureties for investors wh en targeting them, as an  incentive to achieving 
balanced territorial development.  In the refere nce programme of the Comoros with the IMF, the 
Government was making every effort to ensure th at the country's cooperation culminated in the 
signing of a programme by the end of the year.  At the same time, the Government was undertaking 
the task of seeking to obtain a reduction in the debt burden, or its cancellation in toto .  Economic 
liberalization and the reduction of government in volvement in certain activities continued.  For 
instance, the Government had recently granted, by presidential decree, the first telephony licences to 
Kuwaiti private interests.  The public monopoly of Co moros Télécom had thus come to an end.  The 
next area for liberalization and state withdrawal  was the hydrocarbons sector.  The public company 
that held the monopoly had been severely weakened by chaotic management over the past five years.  
It was thus undergoing an overhaul of its manageme nt in order to regain a sounder and more viable 
basis from which privatization could proceed in the best conditions possible.  The tariff reform begun 
in the 1990s continued through a simplification and reduction of tariff categor ies, which had been 
reduced to four.  Tariff peaks were being progressi vely reduced, falling from 70 to 20 per cent.  The WT/GC/M/110 
Page 4  
 
  highest rates of protection had been reduced from 300 per cent and 600 per cent, for tobacco and 
alcohol respectively, to 180 per cent and 200 per cent.   Currently, average tari ffs were between 0 and 
20 per cent, as compared to 15 to 20 per cent in th e past.  The objective was to achieve a tariff binding 
of about 20 per cent maximum, from the moment Comoros entered the COMESA customs union, probably in 2008.  At that time, Comoros would apply the COMESA common external tariff which 
would also be the basis for its trade relations with the European Union.  The Government was 
continuing its efforts to modernize the customs service through a computerization programme, with 
the assistance from UNDP and COMESA in its instal lation, which was under way.  As a net importer 
of goods and services, on which the bulk of its tax revenue was based, the Comoros had undertaken to 
meet the challenge of the necessary tax reform, which was currently at the stage of broadening the tax 
base.  Accordingly, a consumption tax had been in troduced with two rates of 5 and 10 per cent as a 
prelude to the implementation of a va lue-added tax between now and 2009. 
7. The accession of Comoros to the COMESA Free Trade Area in 2006, together with the 
notification of a 100 per cent tariff reduction on pro ducts certified as of regional origin, had resulted 
in the conversion of duties and taxes into exci se duties, whose effect on tax revenue was more 
sensitive.  Comorian exports were characterized by their weak base.  This essentially rested on three 
unprocessed and semi-processed agricu ltural products:  vanilla, cloves a nd ylang-ylang oil.  Between 
them, these three products accounted for nearly a ll exports.  Furthermore, the first two of these, 
vanilla and cloves, were encountering fierce intern ational competition, which reduced their value and 
tended to discourage their production.  Faced with th is situation, his country had no choice but to 
diversify.  A regional breakdown of trade with the world placed the European Union in the front rank, 
accounting for more than 50 per cent, just under 30 per cent of which represented trade with France.  
The European Union's share was falling significantly in  parallel with a very marked diversification of 
countries of origin.  It was followed by the United Arab Emirates, accounting for about 25 per cent.  
Trade with the Emirates was proceeding at a phenomen al pace, a veritable explosion.  South Africa 
ranked third, accounting for about 10 per cent, while  Kenya, Tanzania and Madagascar followed hard 
on its heels.  The countries of South East Asia were making their appearance as trade partners with 
Comoros.  China, notably, was launching a verita ble charm offensive on the country's operators, 
through an intensive promotional campaign and facilitation of access to the Chinese market.  The 
PRSP and the Action Plan 2006-2009 derived from it singled out the tourism, fishing and agri-food sectors as the driving forces behind an annual rate of  growth of between 5 and 7 per cent.  In the 
context of the Government's efforts to attract investment in these strategic development sectors, 
tourism was the subject of two investment agr eements with Gulf Arab interests, amounting 
respectively to US$150 and 70 million for two large- scale hotel projects.  Following an Iranian offer 
of three fishing vessels through bilateral coope ration arrangements, the Government envisaged 
creating a joint venture with the participation of pr ivate and public interests.  This initiative was a 
pilot scheme, with the objective of arousing the in terest of the domestic and international private 
sector, so as to reduce progressively government pa rticipation in the capital.  The Government was 
counting on the support of the General Council a nd called on WTO Members to support it in its 
process of accession. 
8. The representatives of Mauritius
, Lesotho for the LDCs , Jamaica for the ACP Group , 
Paraguay for the Informal Group of Developing Countries , India , Switzerland , Norway , United States , 
Côte d'Ivoire , Mexico , Congo , Benin , Zambia , Argentina , and Burkina Faso  welcomed and 
congratulated the Comoros on the decision just taken by the General Council. 
9. The representative of Mauritius  recalled that the Comoros was a member of the Indian Ocean 
Commission and of the COMESA, and hoped that its accession process would be expeditious, taking into consideration the very special circumstance s of the Comoros as a small and vulnerable small 
island developing country in the Indian Ocean.  Ma uritius looked forward to participating in the 
Working Party.  WT/GC/M/110 
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  10. The representative of Lesotho , on behalf of the LDCs , said these countries were elated to see 
the first step of the accession process of the Comoros.  With the Comoros, ten other LDCs were in the 
accession process.  The acceding LDCs hoped that the work in their respective Working Parties, 
which were guiding them towards full accession, w ould be undertaken expeditiously so they could 
become full Members as soon as possible. 
11. The representative of Jamaica , on behalf of the ACP Group , said these countries trusted that 
the accession process would respect Comoros' LDC status. 
12. The representative of Paraguay , on behalf of the Informal Group of Developing Countries , 
said the Group hoped the accession process would be  speedy and assured the Comoros of its 
willingness to work with it in this process. 
13. The representative of the United States  said his delegation looked forward to working with 
the delegation of Comoros and the Working Part y to achieve Comoros' accession to the WTO. 
14. The representative of Côte d'Ivoire  said that Comoros had requested WTO accession after 
having benefited from technical assistance and carried  out many reforms.  Côte d'Ivoire looked 
forward to being able to welcome the Comoros, another French-speaking country, into the WTO. 
15. The Chairman  said he was confident that he spoke for all delegations in echoing the 
sentiments of the previous speakers in welcom ing and supporting the accession process of the 
Comoros. 
16. The General Council took note  of the statements. 
2. Report by the Chairman of the Trade Negotiations Committee 
17. 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. 
18. The Director-General, Chairman of  the Trade Negotiations Committee , said he was pleased to 
report that since his last report to the Council in Ju ly, the negotiations had started again to move ahead 
in earnest.  Delegations had come back from the summer break with a businesslike attitude.  They had 
done their homework, and had heeded the call to be fit and ready to engage in intensive negotiations 
from the beginning of September.  Starting with  the work on agriculture, participants were 
demonstrating the kind of engagement and readiness  to look for compromises that the Chair and he 
had been urging for some time.  He thought it shou ld be clear to all that completing the Round was 
now not only technically possible, but also a polit ical must.  Over the past few weeks, one had 
continued to hear this message from the highest le vels, reflecting a strong commitment to a successful 
and ambitious outcome to the Round.  In particul ar, APEC leaders at their meeting in Sydney had 
underlined the urgent need to make progress and had pledged the political will, flexibility and 
ambition to ensure that the negotiations entered th eir final phase in 2007, calling on all Members to 
join them in this respect.  There had also been  similar calls from other leaders, including at the 
previous week's Public Forum at the WTO.  He reit erated that the only possible path to an ambitious, 
balanced and development-oriented outcome to the Round was not only to establish full modalities in 
Agriculture and NAMA, which were needed to start the scheduling phase, but also to make 
commensurate progress in other areas of the negotiati ons in line with the full Doha mandates, the 
July 2004 Decision and the Hong Kong Ministerial Declaration.  The work in Agriculture and NAMA in the coming days was aimed at developing en ough common ground to allow the Chairs to prepare 
revisions of the texts they had issued in July.  Both Chairs had made clear their plans in this regard in 
their respective negotiating groups.  He was pleased to be able to report that Members now had more 
clarity also in the areas of services and rules.  As  he had informed delegations, the Chair of the WT/GC/M/110 
Page 6  
 
  services negotiations would be conducti ng consultations on the content of a text in this area.  Clearly, 
existing agreed texts – in particular Annex C of  the Hong Kong Declaration – had to govern the 
content of any such document as well as future work in  this area.  In rules, as he had announced at the 
July meeting of the TNC, the Chair expected to  circulate texts on anti-dumping and subsidies and 
countervailing measures, including fisheries subsidies,  at around the same time the revised papers on 
agriculture and NAMA were circulated.  In the other areas of the negotiations, the Chairs were 
sparing no effort to move the work ahead, and w ould also be developing texts as they judged the 
issues to be ripe.  He wished to express his a ppreciation for the hard wo rk the negotiating group 
Chairs were putting in.  Their leadership and judgement in each area of the negotiations were 
invaluable. 
19. Members had regained a good level of momentum  in their work, and the challenge now was 
to accelerate it in the days and weeks ahead, so that the necessary compromises could be found.  
However, as all knew, time was running against them.  As he had stated before, progress was now 
being made, but Members had to increase the pace at  which they moved ahead in agriculture and 
NAMA, so that all elements of the Round could be brought together, as had to be done under the 
single undertaking.  He recalled that Members had to  keep firmly in mind the need to reflect the 
development dimension of this Ro und, including S&D treatment, in all their work.  At the present 
stage, he did not think it would useful to try to fix deadlines or negotiate a detailed roadmap.  
Members could not afford to let themselves be distra cted from the main tasks at hand.  All knew what 
had to be done to conclude the Round, and Members had to maintain their focus fully on substance.  
There was an active process going on in the negotia ting groups, and this deserved all of Members' 
attention.  This process was now text-driven, and the texts were substance-driven.  Getting into a 
process debate now would risk impeding that progress.  He assured Members that as TNC Chair, he was giving his full attention to the need for a coherent  approach to this final phase of the negotiations.  
He had intensified his meetings with the Genera l Council Chairman and the negotiating group Chairs, 
and would work closely with the other Chairs to en sure that their individual processes were mutually 
supportive.  He also stood ready to undertake any m eetings of a cross-cutting nature which might help 
Members move towards agreement across the board.  In this respect, direct Ministerial involvement 
might also be necessary at some point.  However, it was premature to speculate on when that might 
be.  He would also continue his contacts with Memb ers, both in Geneva and at meetings elsewhere.  
Since the summer, all had put much  effort into the negotiating pro cess.  Members should enable it to 
achieve its full potential in order to conclude th e Round successfully and ambitiously.  He remained 
convinced that this deal was as doable as it was essentia l.  Regarding Aid for Trade, in the past month 
he had attended the three Aid-for-Trade Regiona l Reviews in Lima, Manila and Dar es Salaam, 
organized in cooperation with the relevant development banks.  Th ese meetings had helped raise 
awareness over these issues in dome stic constituencies as well as w ithin the donor community.  The 
next step was to build on the progress made ther e at the annual Global Review session in the General 
Council on 20-21 November, so that Members could m ove to specifics.  He also wished to mention 
the recent pledging conference on the Enhanced Inte grated Framework (EIF) for the least-developed 
countries in Stockholm, which had been successful.  This was also an area were progress was being 
made.  The Executive Secretariat of the EIF was being set up and work was already on-going to strengthen the capacity of LDCs and put them in a better position to mainstream trade into their 
development strategies. 
20. All representatives who spoke thanked the Director-General for his report. 
21. The representative of South Africa
, on behalf of the ACP Group, the African Group, the 
NAMA-11 Group, and the small, vulnerable economies , said he wished to thank the Chair of the 
NAMA Negotiating Group for his consolatory remarks at  the Group's end-of-July meeting.  He also 
wished to point out that the Chair in his fax to de legations of 13 September had stated that the current 
text was "his", and that only limited parts of it as yet reflected a consensus or convergence on the 
issues or had any standing in the negotiation proc ess.  In response to the Chair's exhortations for  WT/GC/M/110 
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  written proposals and as a contribution towards the drafting of NAMA modalities, the ACP Group, 
the African Group, the NAMA-11 Group and the SVEs wished to submit a statement that reflected the 
letter and the spirit of the Doha mandate, the July  2004 Framework and the Hong Kong Declaration.  
He would only read selectively from this text, the fu ll version of which was available in the meeting 
room.  The main points were the following:  on the issue of ambition, the Doha Round was about 
development of developing countries, especially LD Cs.  The centrality of agriculture in the Doha 
Declaration could not be wished away.  Agricultu re determined the ambition of the Round.  NAMA 
modalities had to be built around and lead to a result comparable to what was achievable in 
agriculture.  On the issue of formula and tariff-re duction modalities, the crucial aspect of the formula 
or the tariff-reduction modality was that it had to require from developing countries "less-than-full 
reciprocity in reduction commitments".  This created a hierarchy in the reduction commitments to be 
undertaken by Members.  Developed-country Members should offer greater reductions than 
developing countries.  Among developing countri es, the small, vulnerable economies were to 
undertake lesser reduction commitments.  Following from the above, proposals that sought to impose reduction commitments on developing countries, in cluding SVEs, that were higher than those for 
developed countries, could not be accepted. 
22. As regards flexibilities for developing-country  Members, this was a crucial element 
addressing the development dimension of this Round.   Developing countries had demonstrated their 
diverse needs for flexibilities, for both tariff lines and trade covered.  Some had suggested there 
should not be limits to the trade covered, as was the case in agriculture.  Some had submitted that 
there was a need for additional fl exibilities to preserve the common external tariff in customs unions, 
to address social, economic and labour concerns, and those arising from a large number of low 
applied and unbound tariffs.  The final outcome of  this development Round had to capture this 
diversity in development needs by making availa ble flexibility provisions to the appropriate and 
adequate extent.  On the issue of supplementary  modalities, voluntary sectoral negotiations and the 
request-offer process covering all negotiating areas c ould be important to address the diverse needs 
and negotiating objectives of various Members.  Adequate time for supplementary modalities had to 
be factored into the timelines.  Although the sect oral negotiations were non-mandatory in respect of 
participation, the process needed to be sensitive to the significant adverse impact these negotiations 
could have on some sectors in non-signatory pref erence-dependent countries.  Regarding SVEs, the 
recognized economic vulnerability of  this group of developing countr ies demanded that the modalities 
finally agreed for them impose lower reduction ob ligations than on develo ped and other developing-
country Members.  In this regard, the co-sponsors of  this statement supported the SVEs' approach of a 
banded solution outside the formula.  Regardi ng LDCs, the co-sponsors reiterated the Decision 
allowing the LDCs to undertake tariff-binding commitmen ts they were comfortable with and that met 
their developmental objectives.  They also rec ognized the importance of improvement in LDCs' 
market access.  Accordingly, time-bound, full and faithful implementation of the Decision on 
Measures in Favour of Least-Developed Countries in Annex F of the Hong Kong Declaration, with 
information on the schedule for providing duty-free a nd quota-free treatment, had to be provided.  
Simplification and transparency of applicable rul es of origin and commitme nts on capacity building 
and technical assistance were crucial for the LDCs and had to be included in the modalities package. 
23. Regarding the "Paragraph 6" countries, the co sponsors reaffirmed the relationship between 
the scope of binding coverage and the overall av erage bound tariff rate.  They supported the proposal 
of the Paragraph 6 countries that they be require d to increase their binding coverage to up to 70 per 
cent at an overall average tariff of 28.5 per cent.  Re garding non-tariff barriers, they reiterated that the 
mandate on NTBs was to remove them, particularly  those that affected the export interests of 
developing countries.  All of the proposals that had gathered support and consensus in this area should 
be mentioned in the revised text for further di scussion.  Regarding preference erosion, recognizing 
that the core issue here was to ensure that pr eference-dependant industries in certain long-term 
preference-receiving countries retained their compet itiveness after the MFN liberalization of tariffs, 
and that the main concern was to have preference erosion effectively managed in order to smooth the WT/GC/M/110 
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  transition, the co-sponsors stressed the need for an implementation period of at least 10 years for the 
reductions affecting such tariff lines.  They furthe r called for the inclusion of commitments from the 
preference-giving developed countries to simplify the applicable rules of origin and to provide aid, 
including technical assistance.  There had to be a comprehensive package of  measures to address the 
concerns expressed, in addition to longer implementation periods. 
24. The representative of Lesotho
, on behalf of the LDCs , thanked the chairpersons of various 
negotiating groups for the consultative meetings th ey had been organizing, as reported on by the TNC 
Chair.  Those meetings had been helpful in clar ifying issues and, to some degree, in enhancing 
understanding of other Members' positions, and hence moving the process forward.  As had been 
promised at the most recent meeting of the C ouncil, the LDCs had proposed some written text for 
incorporation into the revised draft modalities for NAMA and agriculture.  They were hopeful that 
this would assist the Chairs in coming up with revisions of these draft modalities.  They commended the chairpersons of the Negotiating Group on NAMA and the Special Session of the Committee on Agriculture for not having convened meetings at th e same time, but wished to recommend that they 
coordinate with the Chairs of other negotiating groups to ensure that meetings were not held 
concurrently.  It was difficult for group coordinators and focal points of small delegations to attend all 
of these meetings, but all of them were of param ount importance to these delegations.  Regarding the 
services negotiations, the General Council had deci ded on how to pursue th e negotiations in its 
decision of 1
 August 2004, which indicated that Members should strive to ensure a high quality of 
offers, particularly in sectors and modes of export  interest to developing countries, with special 
attention given to LDCs.  Despite this, negotiati ng partners were continuing to shy away from 
engaging with the LDCs on defining appropriate mechan isms to give special priority to LDCs and the 
proposal on Mode 4.  It was with great concern that  the LDCs were once again bringing this matter to 
the General Council.  Paragraph 25 of the Hong Kong Declaration clearly recognized the role of trade 
in services in economic growth and development.  By  this disquieting silen ce, negotiating partners 
were frustrating dialogue and progress in the DDA , and thus denying LDCs the development 
opportunities that should accrue at the end of these ne gotiations.  It should be remembered that this 
was a development Round.  Developm ent had to be at the centre of the DDA.  The LDCs also wished 
to reiterate that Annex C of the Hong Kong Declar ation should be adhered to  and should remain the 
basis for the services negotiations.  The LDCs wished  once again to firmly underscore the centrality 
of the developmental dimension of this Round.  Th e Doha Declaration was clear that this Round was 
for development of developing countries, especially  LDCs.  The LDCs remained ready to engage 
constructively and fully in all areas of the negotiatio ns, and to contribute to the speedy attainment of 
the objectives of the DDA.  They supported in pr inciple the submission by South Africa for the 
ACP Group, the African Group, NAMA-11 and the SVEs. 
25. The representative of the Bolivarian Republic of Venezuela  said his delegation wished to 
make clear that while it was certain that the best  way of proceeding with the negotiations was on the 
basis of texts, it was rather less certain that this was the state of affairs Members currently faced.  On 
the one hand, the draft text on agriculture, wh ile not perfect, offered an acceptable basis for 
discussions.  However, this was not the case with the NAMA text, which suffered from fundamental 
problems.  For this reason, his delegation did not wi sh to see a revision of that text, but instead an 
entirely new text that adhered to the Doha mandate.  In the area of services, his delegation did not see 
any need for another text, as even Annex C of the Hong Kong Declaration gave rise to reservations.  
In the area of Rules, there were fundamental issues that had to be  taken into account, and here too 
there was no basic text.  The negotiation of the basi s of a text had only started in agriculture, and it 
would be premature to embark on a horizontal negotiation when the bases for embarking upon it had 
not even been defined in the negotiating groups.  Re garding the Director-General's report, he wished 
to make two points:  First, the Director-General  had spoken of text-based negotiations.  While his 
delegation believed this was the way to proceed, on e did not have the texts – there was a text in 
Agriculture which was the result of a very good pr ocess, but one could not say there was a text in 
NAMA because there were fundamental problems there.  Venezuela did not want a revision of the  WT/GC/M/110 
 Page 9 
 
 
  NAMA text, as it had already said in July.  His dele gation wanted a text that was compatible with 
Members' mandate, so that one could really get on  with the negotiations.  Regarding services, as his 
delegation had said in that negotiating group, it saw no need for any text other than Annex C, which 
itself was subject to reservations, and wondered why it was felt another text was needed in this area.  
In rules, where his delegation gave its full sup port to the process the Chair was undertaking, there 
were some fundamental i ssues which had to be taken into consid eration, and there was still no text 
that could serve as a basis for negotiations.  The po int Venezuela wished to make was that a text-
based negotiation had only really kicked off in one area of the negotiations, a nd it would be premature 
therefore to begin horizontal negotiations in the n ear future if the individual negotiating groups had 
still not determined the basis for a text-based negotiation. 
26. The representative of Jamaica , on behalf of the ACP Group , said the present meeting 
provided an important opportunity to take stock of work in light of the intensive negotiations under 
way, especially on the draft modalities texts on agri culture and NAMA.  The ACP Group continued to 
view these texts as important contributions and inputs to help advance work in the Round.  It therefore 
wished to reiterate some fundamental principl es which had to continue to guide Members' 
deliberations – transparency, inclusiveness, a botto m-up approach and the primacy of the multilateral 
process.  These were critical.  All had to be invol ved in the process if there was to be a successful 
outcome.  All had to take ownership of this process and ensure that the interests of all Members were 
addressed, particularly those of developing countri es, including the ACP Group.  S&D treatment was 
central to the development dimension as well as to a successful outcome of the Round.  It was 
important as a crosscutting issue in the various sector s of the negotiations, and as a mandate to make 
S&D treatment more precise, e ffective and operational.  The ACP Group was concerned over the 
limited progress that had been made on S&D treatment in  the Round thus far.  It seemed at times that 
development issues were perceived as being periphera l and could easily be solved.  The centrality of 
development in the Round had to be reclaimed, pa rticularly in the agreement of concrete proposals 
and flexibilities to address the concerns of de veloping countries.  The ACP Group would find it 
difficult to accept an approach that could potentially relegate to the sidelines issues of interest to 
developing countries.  All issues had to be addressed  in order to arrive at a balanced and equitable 
agreement that fully reflected the development dimension.   
27. The development imperatives, which had to rema in at the heart of the Round, had to be met 
through a number of elements:  In agriculture, the ACP Group continued to call for substantial 
reductions in domestic support, an d for an effective solution for ACP Members with tariff ceilings 
and homogenous low bindings.  The proposals in the draft modalities text in respect of LDCs, SVEs 
and other ACP countries on the supplementary list w as a good basis, and the relevant brackets should 
be removed.  Meaningful modalities to secure si mple and effective SPs and SSM instruments to 
address food security, livelihood security and rural de velopment were an important part of the 
agriculture modalities.  Members also had to work  on modalities to ensure the elimination of NTBs 
and the reduction of tariff escalation in order to improve market access conditions for and 
diversification efforts of commodity-dependent AC P countries.  The ACP Group continued to call for 
duty-free and quota-free market access for LDCs by 2008, and for appropriate trade and non-trade 
solutions to address the issue of preference erosi on.  Without this, it was unlikely that the Group 
would be able to sign on to a final package of m odalities.  There should be ambitious, expeditious and 
specific treatment of cotton, which was a major cash crop for African small-scale farmers, and in this 
connection the Group supported the position of th e co-sponsors of the Cotton Initiative.  The 
modalities on food aid should not restrict the delivery of  such aid, particularly to needy countries and 
communities.  The ACP Group continued to support the need for flexibilities for LDCs and NFIDCs 
in relation to export credit and STEs. 
28. Regarding NAMA, the ACP Group fully associated with the statement by South Africa for 
several developing-country groups.  They wished to  reiterate that the principle of less-than-full 
reciprocity should be upheld and respected in the modalities and the outcome of the negotiations in WT/GC/M/110 
Page 10  
 
  this area.  Regarding services, development components had to be found in the following:  improved 
and commercially meaningful revised offers in mo des and sectors of export interest to developing 
countries, and domestic regulation disciplines that allowed for flexibilities for developing countries.  
The Group was aware that that a new services text was likely to be prepared soon.  This text had to 
fully respect the existing negotiating modalities fo r the services negotiations and Annex C of the 
Hong Kong Declaration.  Regarding rules, the Gr oup continued to place great importance on the need 
to agree on flexibilities in the context of GATT Arti cle XXIV.  A text on fisheries subsidies had to 
take into account the importance of that sector to developing countries such as SVEs and the 
ACP Group.  Regarding trade facilitation, techni cal assistance and capacity building, as well as 
S&D treatment, were integral parts of any outcome , consistent with the mandate in the July 2004 
Framework.  There was also a need to make specific progress on implementation and S&D issues.  
The ACP Group therefore wished to  emphasize that in the consideration of draft modalities, a Round 
committed to development should place the specific needs and interests of developing countries at the core of the outcomes.  The Group therefore expected  that these and other issues of interest in the 
negotiations would be satisfactorily addressed.  The Group continued to insist that the need to get 
agreement on content had to guide the work.  In th is regard, it reiterated its appeal to the various 
Chairs to take account of the limited capacity of cer tain delegations, especially the smaller ones, in the 
scheduling of meetings.  The Group noted the comments of the TNC Chairman on process, and in general supported his approach.  However, there might  be a need to have a more concrete collective 
understanding of the process, especially if there was a possibility of the involvement of Ministers at 
some stage. 
29. The representative of Benin
, on behalf of the co-sponsors of th e Sectoral Initiative in Favour 
of Cotton , said the reports tabled by the Chairs of th e negotiating groups showed the need to speed up 
Members' work, bearing in mind that it was im perative to take into account the development 
dimension in the discussions, and ultimately to achieve a balanced outcome that accommodated the 
needs and priorities of developing countries, and of the least-developed countries in particular.  
Cotton was a critical matter on the negotiating agenda , and he emphasized the urgency and the duty of 
the membership to seek appropriate solutions to  this problem.  The co-sponsors of the Cotton 
Initiative wished to take this opportunity to endorse the proposals on cotton put forward on 
17 July 2007 by the Chair of the Committee on Agri culture in Special Session.  These proposals were 
a useful and suitable basis for addressing the issue w ith the level of ambition decided by Ministers in 
Hong Kong.  He urged Members to work together to achieve that goal, collectively and in a spirit of 
consensus, and underscored the need to establish an appropriate mechanism to manage loss of revenue 
due to the decline in cotton prices on the global market.  The countries for which he was speaking 
supported the statement by South Africa regarding th e different elements of the NAMA modalities.  
As this was the last meeting of the General Council in which he woul d take part as the representative 
of Benin, he wished to thank Members for the suppo rt they had spontaneously given to the Sectoral 
Initiative in Favour of Cotton, which was a majo r development issue for certain cotton-producing 
African countries.  He would continue to count on their support in this matter, the solution of which 
would testify to the fact that this was a developm ent Round.  He wished to particularly thank the 
Director-General for the energy he was de voting to a successful outcome of this Round. 
30. The representative of Barbados , on behalf of the small, vulnerable economies , said that for 
these countries, the key feature of the Director-Gener al's report related to the draft modalities texts 
prepared by the Chairs of the NAMA and agriculture negotiating groups.  The end of July had been 
the time for initial reactions to these texts.  August had been the time for reflection on the comparative ambition in the two texts.  September had brought the opportunity to start intensive discussion on all 
areas under the Doha mandate, particularly NAMA and agriculture.  The SVEs appreciated that both 
Chairs continued to urge speed in the delibera tions, but it seemed clear to many that differing 
interpretations of the mandate, especially as it rela ted to a "development" Round, continued to sit as a 
low cloud hanging under the higher cloud of political uncertainty.  The former US President, Bill 
Clinton, had delivered a speech in London in D ecember 2001 in which he had called for "a truly  WT/GC/M/110 
 Page 11 
 
 
  global consciousness" to spread the benefits of the 21st century around the world.  President Clinton 
had said that such a hope was unlikely to be reali zed before the year 2030, no matter what one did 
now.  However, he had gone on to say that "if eff ective social and economic reform can be started 
now, we could see a peaceful and productive transition to a new society."  One month earlier Members had launched the Doha Development R ound with the stated commitment to place the 
interests of developing countries at the heart of th e negotiations, and also to frame responses to the 
concerns of small vulnerable economies.  Some ha d long ago come to the conclusion that the 2001 
commitments had been lost along the way, especially  in NAMA, and had to be restored.  The SVEs 
attached great importance to the various mandates and principles that were supposed to guide these 
negotiations, including the principle of less-than-fu ll reciprocity, which was so often mentioned, the 
requirement for contributions to be measured fro m current bound rates, and the mandate to provide 
further flexibilities for SVEs.  The average reductions  required from SVEs shoul d thus be consistent 
with these principles.  The aforementioned core princi ples were shared by SVEs and the vast majority 
of developing countries that had jointly sponsored the paper just introduced by South Africa.  The 
SVEs felt that no Member could object to the princi ples outlined in this paper, and urged that these 
principles guide the revision of the draft NAMA modalities text. 
31. In 2006, Barbados had supported India's call fo r a development audit of the proposals then on 
the table in all areas of the negotiations.  That ca ll had not been heeded.  The current draft text on 
NAMA modalities had increased the level of concer n among developing countries.  The SVEs could 
not accept modalities that ignored or diluted the clear instruction of Ministers in Hong Kong "to establish ways to provide flexibilities for these Memb ers."  Members were being called upon to move 
faster, and that call was appreciated.  However, all knew the consequences of speed without careful 
attention to direction.  The SVEs' capacity constraints in capitals and in Geneva were real, especially 
as the agriculture and NAMA negotiations overlapped.  In agriculture, the treatment proposed for the 
SVEs in the market access pillar was appropriate, and the SVEs looke d forward to the removal of the 
brackets in paragraph 52 of document JOB(07)/128.  Ne vertheless, they recognized that to fully take 
account of the priorities of SVEs a nd other developing countries, there also needed to be a satisfactory 
solution in the area of SPs and on the SSM.  In NAMA, the picture was very different.  The SVEs 
welcomed the small-group meeting the Chair had c onvened on SVEs' issues – even though they had 
only been able to outline their concerns with the Ch air's text.  They nevertheless noted that there 
appeared to be some degree of willingness to ensure that the SVEs  were appropriately treated, and 
wished to thank those Members.  The SVEs had st ated their specific concerns about the NAMA text 
on earlier occasions and would hence simply reiterate  that the numbers proposed for SVEs were 
unacceptable and did not adequately take into account what the SVEs  believed were broadly held 
tenets of the negotiations – that SV Es should not be asked to make tariff cuts that were deeper than 
those asked of any other Members, excluding LDCs and RAMS, because of their special circumstances.  Nevertheless, the SVEs were pres sing on with a revised proposal in response to the 
draft modalities text and could only ask the Chair to be more patient. 
32. On services, any text should be tabled within  an overall Doha package, and its timing should 
correspond to real progress in the other market-acces s areas.  Any such text should be based on the 
reaffirmation of Annex C of the Hong Kong Declar ation as guidance for the outcomes in this area, 
and should update relevant timelines and reflect th e status of work on domestic regulation and other 
rules.  The SVEs also reiterated the importance they attached to ensuring a development-oriented 
outcome in these negotiations in line with the provisi ons of GATS Articles IV and XIX.2.  On rules, 
the SVEs were particularly involved in the area of fisheries subsidies, and noted with interest the 
Chair's intention to provide a text around the time when revised texts on NAMA and agriculture were 
tabled.  Any text on fisheries subsidies had to take into account the importance of  that sector to SVEs, 
specifically the small coastal states, to ensure that  their concerns were appropriately addressed in the 
new disciplines.  On trade facilitation, the SVEs c ontinued to welcome the Member-driven nature of 
the negotiations, but believed there wa s an urgent need to solve the issue of the provision of technical 
assistance and capacity building in a manner consistent  with the mandate.  In all of these areas, it was WT/GC/M/110 
Page 12  
 
  essential that appropriate development-oriented solu tions were found for all developing countries.  
The advice of President Clinton in 2001 was that economic reform should be started now.  He must 
have been thinking of the WTO. 
33. The representative of China
 said his delegation supported the Director-General's proposed 
process for the next stage in the ne gotiations.  China was glad to see the intensification of negotiations 
both on agriculture and NAMA in recent weeks.  Un fortunately, real progress had been limited.  The 
fundamental problem lay in the lack of progress on some  key issues, in particular in the reduction of 
domestic support as well as the need to meet the de velopment dimension.  China urged the major 
players to demonstrate political will and flexibilit y with a sense of urgency, so as to lead the 
negotiations to a successful conclusion as soon as possi ble.  His delegation wished to explain China's 
support for the proposal presented by South Afri ca on behalf of various groupings of developing 
countries.  China greatly appreciated that the pa per tried to address many development issues, 
recognized the extensive commitments undertaken by  RAMs, and supported more flexible treatment 
for RAMs in the modalities.  The NAMA negotiations were an important part of the Doha Round.  
China hoped the NAMA Chair would give full consider ation to the proposal when he prepared his 
revised draft of the modalities. 
34. The representative of Nicaragua  said her delegation fully suppor ted the proposal submitted by 
South Africa and the statement by Barbados for the SVEs.  Her delegation considered the proposal to 
be an important contribution to Members' work, and one that contained elements that were crucial to 
ensuring that the Doha Work Programme could res pond to the development dimension contained in 
its mandate.  The proposal was based on the principles of less-than-full reciprocity and of 
contributions in accordance with levels of deve lopment, which Members had been developing over 
many years and which currently constituted pillars of the organization.  The proposal also included 
the central element justifying the current Round – namely, the need to make progress on agricultural 
reform and to strike a balance between the results  of the negotiations in agriculture and NAMA.  
However, the proposal also indicated that the deve loping countries needed a successful conclusion of 
the Round and that they were ready to contribute constructively and to make the sacrifices necessary 
to accommodate the interests of all concerned. 
35. The representative of Brazil  said his delegation agreed with the Director-General that now 
was not the moment to divert discussions to process, but  also felt that at some  point, if things went 
well and if Members made further progress in prep aring revised versions of the draft texts on 
agriculture and NAMA, it would be extremely important to have a clear view on the process up to the 
end of 2007.  He associated his delegation with the statement by South Africa on behalf of the 
NAMA-11 and others, and stressed the importance Braz il attached to the situation of customs unions 
and the need to take this on board when discussi ng the issue of flexibility in NAMA.  Brazil also 
attached importance to having a text on rules on the table by the time revised draft texts on agriculture and NAMA were circulated.  Not only Brazil, but the G-20, supported fully the demands of the co-
sponsors of the Cotton Initiative regarding the treat ment of cotton in the modalities on agriculture.   
36. The representative of Chinese Taipei
 said it was only by making parallel progress across all 
the negotiating areas that the Round would finally produce an outcome that was truly balanced and 
acceptable to all.  Most would agree that all th e negotiating issues should be considered equally, 
especially those where clear guidance and direction had already been given in the mandates for the 
negotiations.  In this context, he wished to re mind delegations that the RAMs had engaged in the 
NAMA negotiations in good faith and in a very cons tructive manner.  In fact, on their own initiative 
and in an attempt to find a practical solution, th ey had recently put forward alternative ideas.  His 
delegation sincerely hoped and expected that other Members would give careful consideration to these 
proposals and would respond positively, with  a view to advancing the negotiations.  WT/GC/M/110 
 Page 13 
 
 
  37. The representative of Bolivia  recalled that the present Round  had begun in 2001 with the 
word "Development" in its title.  Now, six years on, some developing countries were asking themselves what had become of the word that had st arted off these negotiations.  It would appear that 
it had survived only in pronouncements intended for the press and the outside world, and bore little or 
no relation to the current discussions.  For example, a ccording to the most recent draft texts circulated 
to Members a few months earlier, in NAMA Bolivia was to make cuts twice as high as those of some 
of the most developed economies.  She asked if this  was what this forum called development, and said 
her country had a very different conception of develo pment.  In Bolivia one did not speak of "living 
better", but of "living well", because living better alwa ys implied that one was better off than another 
neighbouring country – in other words, that one could live better by exploiting nature, failing to 
respect human rights within or beyo nd one's frontiers, creati ng dependency, and so forth.  In that case, 
one was not living well, but living better, and at a co st to others.  This was the so-called development 
that some in the WTO seemed to wish to preserve, not a constructive form of development entailing 
true association, equality, justice, solidarity a nd reciprocity, based on each country's individual 
capacity.  Instead, what was proposed was for some to live better, while the great majority faced 
difficult circumstances which had now become even more difficult as a result of the potential 
reductions in policy space – removing the same pol icy space the developed countries had themselves 
used in their own industrialization processes.  One example of living badly had been imposed on her country by the Bretton Woods institutions through liberalization measures described as autonomous, 
although in reality they were conditionalities attach ed to so-called "support  for development".  
Needless to say, no mention had been made of w ho was to benefit from this development, because it 
was soon realized that the beneficiary was not inte nded to be the Bolivian people.  During the 1990s a 
programme of autonomous liberalization had been  carried out, which had resulted in domestic 
liberalization of essential services, including water.  The resultant hiving off of services to foreign 
companies had led to increases in charges of up to 100 per cent, and in some cases 200 per cent, 
sometimes amounting to two-thirds of the minimum living wage.  The ensuing upheavals, in one case 
involving an entire city, had led to government repression of the population, resulting in loss of life 
and violations of a number of fundamental human ri ghts, not least the right to life.  Her Government 
did not wish to see these scenes re peated with the current Development Round which, as things 
currently stood, had the potential to spark advers e consequences similar to those to which she had 
referred, unless it was appropriately offset by ge nuine measures to support the development of the 
majority, rather than of the few.  Against this background, not only did Bolivia welcome document 
WT/L/687 of the G-90+, in which support was expressed for excluding water services and other 
essential services from the rules and undertakings u nder the GATS, but it also hoped to continue 
working along these lines in the coming months. 
38. Regarding the process Bolivia was currently e xperiencing, her delegation considered that 
some of the negotiations were directed towards ensu ring that people "live badly".  In this regard, the 
central theme driving this Round was agriculture, and to date, it was still not clear that the discussions 
had corrected the imbalances between the negotiating pillars and within each pillar, particularly the 
one relating to market access.  Agriculture was on e of the few areas in which, depending on the 
results of the negotiations, there was some likelihood  of benefits accruing to the developing countries.  
As for the NAMA negotiations, at present the imbalan ce seemed truly unbridgeable.  In order to have 
a Development Round that met its objective – namely , to benefit developing countries – there had to 
be a clear hierarchy of undertakings, reflected in  higher and effective contributions by developed 
countries and much lower contributions by devel oping countries.  The level of ambition resulting 
from the agriculture negotiations would have to be  reflected in the NAMA negotiations, respecting the 
principle of less-than-full reciprocity which, in the pr oposed text, had to be modified in order to make 
it once again clear that the reductions on the part of  developed countries would really be greater than 
those of developing countries, and that the sma ll and vulnerable economies would contribute less and 
in accordance with their capacities.  Furthermore, Members s hould not consider that they were 
revising the NAMA text, which had been opposed by some Members, including Bolivia, but that an 
entirely new text was needed, rather than a revision of  the existing text.  Bolivia also considered that WT/GC/M/110 
Page 14  
 
  insufficient attention had been acco rded to the contributions made by autonomous liberalizations, 
which had sometimes had disastrous consequences of  the sort to which she had referred, including 
loss of human life and grave violations of human rights.  On account of these earlier negative experiences, Bolivia regarded the figures proposed  in the draft modalities text of July to be 
unacceptable, and fully supported the statement by Sout h Africa on behalf of a substantial majority of 
Members.  Bolivia also associated itself with  the statement by Barbados for the SVEs. 
39. Furthermore, her country considered it wholly unacceptable that, under the proposed figures, 
a country such as Bolivia, more than 60 per cent of whose population lived below the poverty line, should have to make cuts more than twice as high  as those of some of the most highly developed 
countries.  She asked once again whether this was what this forum regarded as development.  She 
wished to make clear that Bolivia could not go al ong with an outcome that entailed it having to make 
cuts that on average were substantially higher than or equal to those made by developed countries in 
this Round, which had been hammered out in discussions in restricted groups.  This was a 
Development Round, and it would be unacceptable for the developing countries to pay more for scant, 
or in some cases almost non-existent results.  She was referring not only to the figures submitted by 
the NAMA Chairman, but to small-group discussions that jeopardized the spirit of transparency, 
multilateralism, inclusiveness and the bottom-up appro ach that should guide a ll the negotiations.  The 
recent proliferation of small-group meetings was th erefore a matter of concern for a small delegation 
like hers, since it prevented it from having an overvie w of the negotiations as a whole, and of matters 
of particular interest to it.  To this opacity had to be added the uncertainty brought about by 
negotiating with one of the world's largest economie s which seemed not to have any clear negotiating 
mandate endorsed by its Congress.  As a result, a ll the valuable efforts made up to the present could 
simply evaporate, without any certainty of a definite outcome.  Thus, the process Bolivia was experiencing seemed to be headed in the wrong di rection, because it was becoming watered down and 
was sidelining the multilateral process, and also beca use it was replete with uncertainties.  Bolivia did 
not think Members should continue like this inde finitely without greater certainty and genuine 
participation. 
40. The representative of th e European Communities
 said his delegation shared the Director-
General's sense of urgency and therefore welcomed that texts on services, rules, trade facilitation and 
other areas of the single undertaking would be subm itted soon.  The Community fully supported those 
who had spoken in favour of the importance of th e development objective of this Round.  His 
delegation noted with interest the statement by So uth Africa.  The Community remained committed to 
the full and faithful implementation of the NAMA mandates, including the numerous provisions for 
less-than-full reciprocity.  The Chair's draft  te xt provided a basis for this, and the Community 
expected, both in NAMA and agriculture, that Member s would show readiness to work on the basis of 
these texts, which determined ranges for the level of  ambition.  South Africa had said that agriculture 
determined the ambition of the Round, but this wa s not quite true. The Round in its entirety would 
determine the overall ambition, including in agriculture. The Community’s commitments in 
agriculture were, and would remain, conditional on ambition elsewhere, and on NAMA this meant 
some real market access on the part of those Member s with the capacity to contribute.  His delegation 
therefore invited the NAMA-11 countries and othe r proponents to engage with the Community in 
achieving an ambitious and genui nely pro-development outcome on NAMA.  The Community was 
ready to look into specific well-defined exceptions and the need to solve some specific problems, but 
this should not lead to emptying NAMA of all its economic and trade content. 
41. The representative of Cuba  said his delegation supported th e previous statements by 
developing countries, because these countries were cl oser to the problems to which this Round was 
dedicated.  Developments since the summer recess had not been such as to raise enthusiasm about the 
successful conclusion of the Round.  Despite what  was being said, leaked or published, positions 
remained so far apart that it would be difficult to complete the Round soon, even though it was said to 
be dedicated to development.  The various nego tiating groups had carried out intensive technical  WT/GC/M/110 
 Page 15 
 
 
  work, and the chairs of these bodies had made th e maximum effort.  Nevertheless, many issues 
remained to be settled, and now was not the time to be looking for better technical solutions or to draft 
more documents.  The time Members had had for refl ection had been used by the largest developed 
countries only to go back to their negative positi on of refusing to render justice to developing 
countries.  The developed countries feared the equ itable liberalization of trade more than those 
countries that had not yet developed but had compar ative advantages in some sectors and had decided 
to apply the rules of the game.  The developed c ountries were seeking to maintain their advantageous 
position in international trade through a system of ru les established to suit themselves.  They feared 
competition from any country, no matter how small.  This spectacle of disillusionment for some and 
false enthusiasm for others was simply the result of  a process which, contrary to what was being said, 
demonstrated a lack of willingness to focus on the development of those who needed it the most and 
with whom the developed countries had a historical de bt because of their lower level of development.  
Individual efforts could not lead to any result if  the multilateral process was not taken into account.  
Participation by all Members was essential, even though each had the right to explore those initiatives 
it deemed appropriate. 
42. Like many small countries, Cuba would not be one of the major beneficiaries of the new rules 
that might be agreed during the current negotiati ons.  Its small economy only hoped to be able to 
avoid the imposition of measures that would benefit some, but that might mean losing the possibility of elaborating economic and social development po licies.  Development was at the centre of these 
negotiations, and nothing could cha nge that mandate.  Agriculture w as the catalyst for this Round, and 
there were still doubts as to whether agreement could be reached on the major issues.  As for all the 
other questions, there were fragile threads linking possible consensus.  The essential elements of 
market access for non-agricultural products were not being resolved.  There was no progress in 
services, but it now appeared that a new text might provide a strong impetus.  What was certain was that almost all the issues of interest to developi ng countries were still pending.  With this in mind, it 
availed little to speak of rules and trade facilitation.  It was also of little use to reiterate Cuba's well-
known position regarding process.  Although all the criteria could be endorsed from the perspective 
under which they were expressed, his delegation asked Members to quantify the present discouragements and enthusiasms so that clear lines c ould be drawn to put paid to the expectations of 
the majority of Members for this Round. 
43. Cuba strongly supported the statement by Bo livia.  The world was increasingly divided 
between those who enjoyed all material privileg es and recognition, and those who had been and 
continued to be excluded.  Any technical explana tion would not allay the concerns of those seeing 
how things were developing in a globalized worl d in which everything was becoming interconnected, 
except for the well-being of those who had always reaped the benefits of wealth.  Regarding the 
document introduced by South Africa and co-spo nsored by a large number of countries which 
undoubtedly had a simple majority in the organization, this was a good compilation of elements 
considered in the mandates and other documents  governing these negotiations.  There was nothing 
imagined at the last minute.  The document was si mply a necessary exercise of recollection, because 
of the lengthy duration of this process.  The num ber of Members co-sponsoring the document was an 
indication that it should receive the attention of a ll parties involved in the Round in order to achieve 
the result hoped for by many, as it had the political support of many leaders. 
44. The representative of Zambia
 said his delegation endorsed the statements by Lesotho for the 
LDCs and Jamaica for the ACP Group.  Zambia was anxious for the Round to be concluded quickly.  
Members had talked for too long, and it was clear that as this was a development Round, development 
issues always had to be at the centre of the negotiatio ns.  He therefore wished to touch briefly on three 
issues – agriculture, NAMA and services.  In agricultur e, Zambia wished to see an early conclusion of 
the negotiations without sacrificing substance,  which was development issues for developing 
countries, because agriculture was the cornerstone of the triangle in the current negotiations.  Issues of 
interest to LDCs in agriculture included the n eed to effectively address trade-distorting domestic WT/GC/M/110 
Page 16  
 
  support and export subsidies, to uphold the commitments by developed countries – and those 
developing countries in a position to do so – to gr ant duty-free quota-free market access to products 
from LDCs, and to grant S&D treatment arising fro m the current negotiating process.  It was public 
knowledge that for LDCs and most developing coun tries, agriculture remained the main economic 
activity for livelihood, food security and rural deve lopment and, as such, effective cuts in trade-
distorting domestic support, disciplines on food aid a nd enhanced market access in the form of duty-
free quota-free access for all agriculture products – including cotton – were key to unlocking the 
development benefits of the Round for LDCs.  However, for enhanced  market access to be realized, 
there was a need to ensure that rul es of origin were simple and transpar ent, and this had to be part of 
the agreed modalities.  On NAMA, after six years of  negotiations, many issues of concern to LDCs 
were still unresolved.  As in agriculture, the i ssues of duty-free quota-free market access for LDCs, 
non-tariff barriers and rules of origin were still unresol ved and needed attention.  As for services, this 
area of trade was of growing importance to LDCs in terms of its contribution to gross domestic 
product, as well as enhancing efficiency in the pr oduction of goods and services.  It was therefore 
essential that targeted technical assistance to enable LDCs to unde rtake the necessary analyses and 
assessments to help them make decisions in services liberalization was a key area of interest to them, 
and was particularly important in helping them bu ild regulatory capacity.  The perception that if the 
Doha Round collapsed, developing countries would be  the ones to suffer most was wrong.  Statistics 
did not support this, as all countries would suff er.  Currently, as a result of the policies of 
liberalization and market economy imposed on many developing countries in the 1990s, these 
countries were seeing their economies grow, but not for the benefit of their people.  The economies 
were growing, but over 90 per cent of the benef its were going to the multinational companies which 
had been introduced through privatization or li beralization.  Morality demanded that these 
multinationals plough back into these countries a much la rger share of their profits.  Zambia wished to 
see international organizations like the World Bank, the IMF and other partners – which had helped 
these countries to integrate the multinationals into their economies – live up to their social 
responsibilities in these countries.  The successful conclusion of the Round was in the interest of all 
countries.  With regard to the paper introduced  by South Africa, his delegation found nothing wrong. 
45. The representative of Argentina
 said he wished to make two points.  The first concerned 
procedural matters – his delegation agreed with Br azil that the closer one came to a solution, the 
clearer Members needed to be about how the pr ocess would continue.  The second concerned the 
substance of the negotiations.  The present meeting had been useful in that a considerable number of 
Members – perhaps more than two-thirds of th e membership – had put forward a substantive 
complaint that sent a clear message of doubt as to whether development issues lay at the heart of the 
negotiations, and that it was becoming increasingly difficult to see benefits for the developing countries as a result of this exercise and how the ma ndates were to be fulfilled.  The WTO was a large 
and unwieldy institution, and as with any large a nd unwieldy object, it took time to put it back on 
course.  If the rudder needed to be turned, Me mbers should begin to do so as soon as possible.  
Current political times were what they were.  If the organization did not change course, it would 
inevitably hit an iceberg, with all the ensuing conse quences.  A leap of faith regarding the future of 
the negotiations was not enough.  Members had to ta ke serious stock of where they stood in these 
negotiations, because leaps of faith – such as that just  made by the representative of the EC – alone 
would not prevent the ship from sinking. 
46. The representative of India
 said his delegation agreed with th e Director-General that the need 
of the hour was to focus on the content of the ne gotiations and not to spe nd undue time at the present 
stage on issues of process.  However, once there wa s a corpus of progress, Members would need to 
have clarity on further process.  On the services ne gotiations, India agreed with the Director-General 
that Annex C had to govern the content of the delib erations and the future work programme.  India 
had an open mind on a possible services text, but such a text should limit itself to recording the 
progress made so far and to operationalizing Annex C.  For India, the real issues in the services negotiations were twofold.  First, it was still wa iting for firm and clear commitments from developed  WT/GC/M/110 
 Page 17 
 
 
  countries on the areas where developing countries had made requests.  The responses so far had been 
quite disappointing, and it was essential that this v ital part of the services mandate was fully addressed 
if there were to be an ambitious, balanced and sustainable outcome.  Second, significant progress was 
needed on disciplines on domestic regulations.  In this  connection, India hoped to see a revised text by 
the end of the month.  Similarly, it was important that serious negotiations resumed on rules, and his 
delegation hoped that the Chair of the negotiating gr oup would table his text at the latest by early 
November.  India associated itself with the statement by South Africa on NAMA, and hoped this submission would add balance and r ealism to the NAMA negotiations. 
47. The representative of Japan
 said that under the Government's new cabinet, Japan was 
committed to a positive and balanced outcome as soon as possible.  For this, it was ready to work on 
the basis of the two Chairs' texts.  The only wa y to progress was to seek compromise, narrow the gap 
and find the ground that all could live with, even if  not comfortably.  Now was not the time to nail 
down the current position of each group.  Members s hould recognize that this was the last chance for 
this six-year long effort.  The fate of the DDA was in Members' hands.  Japan, as one of the most ardent supporters of the Development Round, was read y to continue to work with all partners, both 
developed and developing. 
48. The representative of Switzerland
 said his delegation had taken due note of South Africa's 
statement on behalf of a great number of friends of flexibility in the NAMA negotiations.  Flexibility 
appeared to be a pillar of the Doha negotiations.  At  the institutional level, it was already incorporated 
in the GATS.  The fact was th at flexibility also seemed to be  necessary in both agriculture and 
NAMA.  These two areas were like communicating vessels – ambition in the one determined 
ambition in the other.  Switzerland stood ready to work on the basis of the two Chairmen's texts and to 
pursue the dialogue with all stakeholders so as to help move towards the conclusion of a balanced 
package, as a further asset for a multilateral system that was crucial for all.   
49. The representative of Burkina Faso  said his delegation endorsed the statements by Benin for 
the co-sponsors of the Cotton Initiative, Jamaica fo r the ACP countries, and Lesotho for the LDCs.  
The chief purpose of his delegation taking the fl oor was to encourage Members to show more 
flexibility, so as to enable the Round to be concl uded as soon as possible.  With strong political will 
on the part of the developed countries, Members could reach consensus and conclude the Round.  
Cotton was one of the subjects of negotiation of mo st concern to his country, as its farmers derived 
most of their income from that crop.  Consequent ly, Burkina Faso would persist in requesting those 
countries that granted subsidies leading to distortio ns in cotton trade to eliminate them once and for 
all, in accordance with the Hong Kong Declaration. 
50. The representative of Norway  said that at the start of this agenda item the Director-General 
had given his analysis of the situation in the DDA,  and Norway shared his sense of urgency and also 
took to heart his advice to focus now on substance rath er than divert attention to process.  That said, 
all should be listening to those de legations with capacity restrain ts.  His delegation had listened 
carefully to the very substantive and interesti ng intervention by South Africa.  Nevertheless, in 
Norway's view the level of ambition would be decided not only by what Members agreed in 
agriculture but on all issues under the single undertaking.  In that spirit, his delegation was also eagerly waiting the promised forthcoming text on ru les, at the same time as the revised texts on 
agriculture and NAMA, particularly since Members ha d agreed in Hong Kong that this text would be 
the basis for further negotiations on rules.  Norway had also maintained a clear position and point of 
view regarding the importance of S&D treatment.  Thus, it sufficed to say that his country had not 
changed its mind and attitude on that  very important part of the negotiations.  Like others, Norway 
invited all Members – not only the NAMA-11, but a ll Members – to engage in serious negotiations.  
This was the only way forward, in particular – and not the least – in the area of the NAMA 
negotiations. WT/GC/M/110 
Page 18  
 
  51. The representative of the United States
 said his country was committed to completing 
modalities in agriculture and NAMA and complementar y modalities in other areas in order to enable 
Members to move to the scheduling phase.  His delegation was disappointed by the statement by 
South Africa on behalf of several groups, as it  overlooked the record of the negotiations' 
responsiveness to the development dimension.  In particular, he would note the following points:  
there were two coefficients – initially proposed by  the United States;  Members had accepted long ago 
an hierarchy of developing countries, including  emerging developing count ries, SVEs, Paragraph 6 
countries, and LDCs;  long ago, the Unite d States had said it was not seeking new access 
commitments by LDCs in agriculture, NAMA or ser vices;  his delegation had accepted a structure for 
SVEs outside the formula and had sought to e ngage these countries on their specific problems with 
the Chair's text – and that offer still stood.  The United States had problems with the approach 
outlined in the statement by South Africa that concen trated on what countries would not do, instead of 
what they were willing to do.  In particular, it w as time for delegations to affirm that they would 
negotiate on the basis of Chairs’ texts in both agriculture and NAMA, including the market-access 
ranges and flexibilities contained in those drafts.  That said, his delegation had indicated repeatedly, 
and repeated now, its readiness to work with count ries such as SVEs, the ACP Group, and LDCs that 
had well-defined specific problems.   However, it would be a mistake, including in terms of 
development, to try to solve such specific pr oblems with sweeping gene ral measures that would 
eviscerate the new market access that was the point of  this exercise.  The United States could not let 
pass the calls for accommodating customs unions by granting additional flexibilities to members of 
such arrangements.  He recalled that the fundamental principle of the WTO was multilateral trade 
liberalization.  His delegation was concerned that  several countries seemed to be arguing that 
plurilateral arrangements should take precedence over that principle.  Finally, while the United States 
accepted the central importance of agriculture in the negotiations, it was not cons istent with either the 
single undertaking, to which all had subscribed, or  with the possibility of a successful Round, to 
negotiate as if the non-agriculture topics, including  NAMA and services, were simply residuals to be 
calculated after the dust had settled on agriculture .  That approach was a formula for failure. 
52. The representative of Côte d'Ivoire  said his delegation wished to echo the statements by South 
Africa on behalf of a number of count ry groups and by Jamaica on behalf  of the ACP.  In particular, 
he wished to flag the statement by Bolivia.  The concern that delegation had voiced very much 
resembled the concerns felt by his country, wh ich was going through an unprecedented crisis, the 
roots of which could be found in the same explanat ion set out by Bolivia.  His delegation wished to 
congratulate the representative of Benin on the remark able work he had done in the area of cotton.  
Côte d'Ivoire was particularly interested in this  subject, because as a major producer, it had chosen to 
make this a diversification crop both horizontally  and vertically.  His country wished to show 
solidarity with the co-sponsors of the Cotton Initia tive, which were all LDCs, and fully endorsed the 
statement by Lesotho for the LDCs. 
53. The representative of Mexico  said his delegation agreed with the Director-General's overall 
diagnosis and with his premises, and also agreed wi th the sense of urgency to which he had referred, 
calling for the conclusion of the negotiations.  As he had said, there was no need to set a date at the 
present time, and Members did not require a road  map for the conclusion of the negotiations.  
However, it was quite clear that the timetable was very tight, and that very little time was left if 
Members wanted to conclude the negotiations in the near future.  The alternative would be an 
extension, perhaps until who-knew-when.  Mexico was convinced of the need for flexibility that 
would enable Members to reach agreement as soon as po ssible.  While all had to show flexibility, the 
example had to be set by the developed countries.  Members had to maintain a spirit of commitment 
to these negotiations, as well as a spirit of compromise, in all the different areas of the negotiations, so 
that  the Doha Development Round could be concluded as soon as possible. 
54. The representative of Congo  supported and fully endorsed the statement by South Africa for a 
number of groups of countries.  WT/GC/M/110 
 Page 19 
 
 
  55. The General Council took note  of the Director-General's report and of the statements. 
3. Work Programme on Small Economies – Report by the Chairman of the Dedicated 
Session of the Committee on Trade and Development 
56. The Chairman  recalled that at its meeting in Februa ry and March 2002, the Council had taken 
note of a framework and procedures for the conduc t of the Work Programme on Small Economies, 
under which this Work Programme would be a sta nding item on the General Council's agenda.  The 
framework and procedures also provided that th e Committee on Trade and Development shall report 
regularly to the General Council on the progress 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 Dedi cated Session and to monitor progress of the small 
economies' proposals in the negotiating and other bodi es.  In December 2006, on the basis of a report 
by the Chair of the CTD in Dedicated Session, th e General Council had taken note that Members in 
that body would be pursuing the substantive wo rk under the Small Economies Work Programme. 
57. Mr Servansing (Mauritius), Chairman of the Dedicated Session of the CTD , recalling that the 
CTD had last met in Dedicated Session in July, said that the proponents of the Small Economies 
Work Programme had since then, like other delegations , been occupied with meetings on the two draft 
texts on agriculture and NAMA modalities.  The propone nts had also been pursuing issues of interest 
to the small, vulnerable economies in other areas of the DDA, such as rules,  trade facilitation and 
services.  Just before the Council's July meeting, some of the proponents had also been very active 
and ultimately successful in obtaining agreement on a decision in the Committee on Subsidies and 
Countervailing Measures regarding extension of the transition period for the elimination of export 
subsidies under Article 27.4 of the SCM Agreement.   This issue had been of great importance for 
many of the SVE proponents.  He recalled that all the proposals of interest to these countries, as well as proposals made by other Members, had been compiled by the Secretariat in document WT/COMTD/SE/W/22.  This document incorporated  the reports by the various negotiating group 
Chairs, as well as the counter-proposals made by ot her Members on issues of interest to small 
economies.  The document was being updated to reflect the current state of play and to monitor issues 
of concern to small economies as discussed in th e negotiating groups an d other bodies.  The 
Secretariat intended to keep updating this document to  reflect any future proposals or developments of 
interest to the proponents. 
58. The representative of Barbados
, on behalf of the small, vulnerable economies , thanked the 
Chair of the Dedicated Session of the CTD for his stat ement.   As the latter indicated, there had been 
no meetings of the Dedicated Session since the July Council.  The SVEs were, however, continuing to 
engage in the negotiating groups on issues of interest  to them.  The SVEs reaffirmed the importance 
of the Dedicated Session to the progress of the Sm all Economies Work Programme and welcomed the 
Chair's statement that the Secretariat's compilation do cument would continue to  be updated to reflect 
developments in the negotiations that impacted the SVEs. 
59. 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 statement. 
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) – Statement by the Chairman 
60. 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 those meetings, and the requests for consultations by Honduras and Guatemala, his WT/GC/M/110 
Page 20  
 
  predecessors as Chair had held regular consultations  to see if they could facilitate a satisfactory 
resolution to the concerns that had been expressed re garding 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 modifica tion of its concessions as a result of enlargement from 
15 to 25 members, and the modification of its con cession 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 Negotiati ons under Article XXVIII, under which, when a 
Member renegotiating its Schedule does not recognize a claim of principal or substantial supplying 
interest, the Member making the claim "may re fer the matter to the Council."  While the 
1980 Procedures remained silent on the exact 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 decision-making by consensus.  Obviously, the Council would not be in a position to take action if the parties directly  concerned were still in disagreement.  At the 
July Council meeting, in the light of the statements  made at the meeting, he had proposed that the 
General Council revert to this matter at the present meeting, and that he hol d consultations in the 
meantime as far as he judged to be useful. 
61. On 5 October, he had held c onsultations to allow delegations  to be updated on the contacts 
that had taken place among the parties directly con cerned since July and on any developments that 
could provide a possible solution to the non-recognition issue raised in the Council.  He had invited to 
the consultations all delegations w ho had spoken on this issue at pr evious meetings of the Council, 
and had made clear that the consultations were w ithout prejudice to any Member's rights under the 
WTO.  The discussion had been brief, but as before had been positive and constructive in tone.  It had 
indicated that encouraging contacts had continue d since the July Council meeting 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. 
62. The representative of Honduras
 said he wished to repeat that, after more than two years, this 
matter was still on the General Council's agenda, an d had been systematically supported by many 
developing countries.  This item was, and continued to be, a matter of high priority for his country.  
Accordingly, he wished to reiterate Honduras' legal arguments, as his delegation had been doing 
throughout this period of more than two years.  As  indicated in the Chairman's report, his delegation 
had held various meetings with the European Co mmunities in a search for a solution that would 
enable progress to be made on this matter, and w as currently engaged in sharing information with a 
view to coming to an understanding.  He wished to a dd that, in his report, the Chairman had stated an 
interpretation of the 1980 Procedures.  Honduras wish ed to place on record th at such interpretations 
could not be taken on an a priori  basis, because this could neutralize Members' rights in this 
organization.  Honduras wished to express once ag ain its gratitude for the support Members had 
provided at each of the meetings of the General C ouncil, and to indicate that the discussion with the 
EC  was also aimed at finding a solution to the systemic problems, a result of which would be of 
benefit to Members as a whole.  Honduras hoped that at  the next General Council, it would be able to 
report more concrete developments. 
63. The representative of Guatemala  thanked the Chairman for his e fforts to resolve this matter, 
which was of vital importance for the countries involv ed.  In just a few months, this matter would 
have been on the General Council's agenda for three years.  Guatemala had s till not given up all hope 
that the European Communities would recognize its rights under the WTO Agreements.  At least it 
could see that not only Guatemala and Honduras, but also the European Communities, had moved from a position of tirelessly repeating the same lega l arguments, in the hope of maintaining their 
respective positions, to a stage of constructive dial ogue and a search for comprehensive solutions.  
Accordingly, his statement had two purposes.  The fi rst was to inform Members that, in spite of the  WT/GC/M/110 
 Page 21 
 
 
  beginnings of a narrowing of differences with the EC, no progress had been made on this matter since 
the last meeting of the General Council.  Guatem ala hoped that this state of affairs was mainly 
attributable to the summer break and to the tight agendas with which all delegations had been faced 
over the past month.  In that regard, he wished to reiterate his country's readiness to continue with a 
frank and constructive dialogue with a view to co ming up with a solution mutually acceptable to the 
parties.  The second purpose of his statement was simp ly to insist that Guatemala had two sorts of 
interest:  a trade interest and a systemic one.  Bo th were of vital importa nce to it and neither was 
exclusively confined to bananas.  In the light of these considerations, his delegation hoped that it 
would be able to resume the discussions with the EC  and be able to report substantial progress in the 
discussions shortly. 
64. The representative of Paraguay  thanked the Chair for his report, which he said was very 
encouraging.  As was often said, consideration of im portant issues had to take the time required, and 
Paraguay hoped that through dialo gue and negotiation, it would be possible to reach a solution that 
would benefit not only small producers – Guatemal a and Honduras in this case – but also the system 
as a whole.  Any small producers could at any time face a similar situation.  In fact, Paraguay was 
confronted with similar situations in many differe nt fora where, due to economic or even political 
reasons, discriminatory treatment was applied.  All of these problems had to be solved by means of 
dialogue and negotiation, which Paraguay firmly encouraged. 
65. The representative of the European Communities  thanked the Chairman for his fair report on 
the situation.  His delegation shared in the regret  that this issue remained on the Council's agenda.  
The Community continued to believe that it had fo llowed both the spirit and the letter of WTO rules 
in concluding that it had had to reject the cl aims of Honduras and Guatemala.  This position was 
based on the Community's own good faith interpretation of the rules, which in its view ensured that 
the rights of Members were fairly protected.  The Co mmunity did not think it in the interests of the 
system or of Members to go for individual, ad hoc  solutions under pressure, as this would amount to a 
form of discrimination which the WTO system was designed precisely to prevent.  Having said this, 
the Community continued to be open to negotiating a structural solution to the systemic concern 
raised by small suppliers in the context of an  Article XXIV:6 and Article XXVIII exercise. This 
would involve some reinterpretation or modifica tion of the Understanding on the Interpretation of 
Article XXVIII to shift the balance more in favour of small suppliers who, while not the principal 
suppliers or holding 10 per cent market share, none theless were heavily dependent on a particular 
market.  His delegation awaited with interest Gu atemala's promised proposal on this issue, and 
reiterated its determination to r each a negotiated, comprehensive p ackage on bananas in the next few 
weeks that would put this issue definitively behind Members.  To this end, his delegation had been 
negotiating constructively and in good faith with all MFN exporters who had chosen not to pursue 
litigation. 
66. The General Council took note  of the statements and agreed  to revert to this matter at its next 
meeting. 
5. United States' proposed measures affecting th e importation of cigars – Statement by the 
Dominican Republic, Honduras and Nicaragua 
67. The Chairman  noted that this item was on the agenda of  the present meeting at the request of 
the delegations of the Dominican Republic, Honduras and Nicaragua.   
68. The representative of Nicaragua , also on behalf of the Dominican Republic and Honduras , 
said these countries had requested that this item be placed on the Council's agenda in order to express 
their deep concern over the fact that on 26 Sept ember, the US Congress had passed Bill H.R. 976, 
which would raise internal taxes on these countries'  exports of "puro" handmade long cigars, from 
20.72 to 52.988 per cent in ad valorem  terms, and in specific terms from US$0.05 to US$3.00 per WT/GC/M/110 
Page 22  
 
  cigar, meaning an increase of 155.8 and 5,900 per cent respectively.  This measure, if applied, would 
have devastating consequences for their economies.  In 2006, total exports from these countries to the 
United States amounted to 702.7 million cigar units , for a value of US$360 million, 78 per cent of 
which came from the Dominican Republic, 15 per cent from Honduras and 7 per cent from Nicaragua.  
Of these total exports, 320 million units had been  handmade long cigars, of which 55 per cent had 
come from the Dominican Republic, 26 per cent from Honduras and 19 per cent from Nicaragua.  The 
forty companies engaged in the growing, processi ng and manufacturing of cigars in the Dominican 
Republic provided direct employment for 100,00 0 breadwinners in the poorest and most vulnerable 
parts of the country.  The industry also generated 150, 000 indirect jobs, i.e. 250,000 jobs overall and 
1,300,000 family members who depended on the industry for their livelihood.  Sixty per cent of the 
jobs were held by women.  Nicaragua had 96 companies, including small-scale individual producers 
that provided direct employment for 15,000 breadwinners also living in poverty-stricken areas.  The industry generated 20,000 indirect jobs, i.e. employ ment for a total of 35,000 breadwinners, on whom 
192,500 family members depended.  Women represen ted 65 per cent of the labour employed in the 
industry.  Honduras had 60 companies generating di rect employment for 20,000 people and indirect 
employment for 30,000, in other words a total of 50,000 people, on whom 250,000 family members 
depended.  As in the Dominican Republic, 60 per cent of the jobs were held by women.  All three 
countries combined employed 335,000 breadwinners with 1,700,000 dependents, most of whom – 
over one million individuals – were children.  Because of its special nature, the handmade cigar 
industry, which was a cottage industry, was extremel y sensitive to price fluctuations.  Consequently, 
increased prices due to the extraord inary rise in internal taxes app licable under this measure would 
drastically reduce the demand for handmade ciga rs, affecting both the industry and related 
employment levels.  The social consequences fo r these countries would be truly devastating. 
69. These countries had recently learned of the US President's decision to veto H.R. 976.  
Accordingly, they wished to urge members of th e US Congress to reconsid er their positions and to 
exempt "puro" handmade cigars from the appli cation of these new measures.  The most telling 
example of successful US policy in Central Americ an countries and the Dominican Republic had been 
the expansion of trade among these countries.  The handmade cigar industry could be one of the best 
examples of successful trade, since its output was co mpetitive, it complied with international rules, 
created vast numbers of jobs and had helped stre ngthen these countries' agricultural sectors.  In the 
context of negotiations in a development Round, th ey considered that such measures undermined the 
credibility of the multilateral trading system and th e confidence of the developing countries in the 
positive outcomes that should emerge from these negotiations in terms of greater wellbeing and 
higher standards of living for their populations.  Th ey sincerely hoped that there was still time to 
remedy the situation and to prevent it from causi ng serious injury to their countries' economies. 
70. The representative of Brazil
 thanked the delegations of the Dominican Republic, Honduras 
and Nicaragua for bringing this situation and the pr ospects they were facing to the attention of the 
General Council.  There was no need to discuss the me rits of policies the United States wished to fund 
through these measures, but rather the measures that impacted on international trade.  In the Doha 
Round, Members were trying to strengthen tr ade support for development, and it would be 
unfortunate if some of the smallest and poorest countries in the Americas were to be victims of 
measures which, as indicated by Nicaragua, woul d have a substantial and negative economic and 
social impact.  Therefore, Brazil hoped there was ti me to correct the situation and to avoid further 
limiting the already limited possibilities of these countri es to actually benefit from international trade. 
71. The representative of the United States  said he wished to make absolutely clear that on 
4 October, President Bush had vetoed the legisla tion that included the provision to which Nicaragua 
had referred.  Therefore, there was no change in th e trading status of cigars coming into the United 
States. 
72. The General Council took note  of the statements.  WT/GC/M/110 
 Page 23 
 
 
  6. Committee on Budget, Finance and Administration 
(a) Report of the Committee on its meeting of June 2007 (WT/BFA/98) 
73. The Chairman  drew attention to the report of the Budget Committee on its meeting of 
June 2007 in document WT/BFA/98. 
74. Mr Lynch (New Zealand), Chairman of  the Committee on Budget, Finance and 
Administration , said the descriptive report in WT/BFA/98 included  progress reports on (i) various 
administrative up-dates and progress reports, (ii) the status of extra-budgetary activities, (iii) a report on the future building needs of the WTO; and (iv)  the proposed amendment to the staff rule on 
education grant. 
75. The General Council took note
 of the statement and adopted  the Budget Committee's report in 
document WT/BFA/98. 
(b) Report of the Committee on its meeting of July 2007 (WT/BFA/99 and Corr.1) 
76. The Chairman  drew attention to the report of the Budget Committee on its meeting of 
July 2007 in document WT/BFA/99 and Corr.1. 
77. Mr Lynch (New Zealand), Chairman of  the Committee on Budget, Finance and 
Administration , said he wished to highlight two points in the report.  Regarding the selection of the 
WTO External Auditor, the Committee had recomme nded to the General Council the appointment of 
the French Cour des Comptes which would take up its responsibilities from the Austrian Court of 
Audit, the present auditors, from 2008 for a period of six years.  This recommendation had been 
endorsed by the General Council at its July meeti ng.  Regarding the future building needs of the 
WTO, this issue was a high priority in the Commi ttee's work.  At the Committee's July meeting, 
Ambassador Godet of Switzerland had outlined in so me detail the proposals made by Switzerland, the 
host country.  The text of the Ambassador’s stat ement could be found in an attachment to the 
Committee’s report.  He recalled that he had reporte d briefly on this presentation at the July Council 
meeting.  Since that meeting, there had been a num ber of informal contacts with the Swiss authorities 
on this question.  There was clearly a sense of momentum building on this important issue.  He 
therefore hoped to be in a position to report in gr eater detail at the December General Council meeting 
on progress achieved. 
78. The General Council took note  of the statement and adopted  the report of the Budget 
Committee in document WT/BFA/99 and Corr.1. 
7. Statement by Paraguay on behalf of the Informal Group of Developing Countries 
79. The representative of Paraguay , on behalf of the Informal Group of Developing Countries , 
speaking under "Other Business ", said these countries wished to refer once again to the question of 
the accession of developing countries to the WTO.  As Members knew, the Informal Group was one 
of the few fora in the WTO in which developing countries in the process of accession or intending to 
accede participated together with Members.  For this reason, the Informal Group had become a channel for the concerns expressed by acceding countri es.  Accordingly, he wished to draw the 
General Council's attention to the developing coun tries' view that the process of accession to the 
WTO should be guided by the principles of less-than-full reciprocity, justice and equity.  It was thus extremely important that developing countries in the process of accession should not be required to 
undertake commitments that were inconsistent with their current and future development 
requirements, their finances and their trade.  More over, it was essential to take the time factor into 
account, so that the accession process was not unduly protr acted.  At the same time, the conduct of the WT/GC/M/110 
Page 24  
 
  accession process should be governed by commercial, technical and legal considerations, leaving 
aside political considerations or considerations unrel ated to their participation in world trade.  The 
Informal Group maintained its commitment to cont ribute to the strengthening and expansion of the 
multilateral trading system. 
80. The General Council took note
 of the statement. 
8. Seventh Session of the Ministerial Conference 
81. The Chairman , speaking under "Other Business ", recalled that at the December 2006 Council 
meeting, his predecessor had reported on the situa tion with respect to the next Session of the 
Ministerial Conference.  He wished to update th at report at the present meeting in the light of 
consultations he had had with a wide range of the membership.  In his statement in December 2006, 
his predecessor had recalled that Article IV.1 of the WTO Agreement provided that "the Ministerial 
Conference shall meet at least once every two years" .  He had added that since the Sixth Session of 
the Ministerial Conference had been held in Hong Kong in December 2005, this implied that the next 
session had to be held before the end of 2007.  Members also had to keep in mind that, in keeping with paragraph 45 of the Doha Declaration, when the results of the negotiations in all areas had been 
established, a Special Session of the Ministerial Conf erence should be held to take decisions regarding 
the adoption and implementation of those results.  From  his predecessor's consultations at that time, it 
had appeared that Members had not then been in a position to approach a decision on issues related to 
the next Ministerial.  Clearly, the current situati on in the DDA negotiations had been a relevant factor 
in this respect, and all had hoped this would be clar ified in a positive way before long.  The Chair had 
concluded that he remained availabl e, as always, to delegations wishing to discuss this issue, and had 
suggested that the Council return to it at an appropriate time in 2007. 
82. Since that statement had been noted by th e Council, there had been little evidence that 
Members' thinking had progressed on this issue, or indeed that the surrounding circumstances had changed significantly.  However, as time was moving on he had thought it appropriate, in the interests 
of transparency and proper procedure, to consult again and report to Members.  It was clear from his 
consultations that the factors which had prevente d Members from taking a decision on the timing and 
location of the next Ministerial Conference earlier, continued to apply at present.  All of the Members 
with whom he had spoken accepted that as a practic al consequence it would not be possible to hold 
the Conference before the end of 2007.  This in tu rn meant that it would not be possible to implement 
the provisions of Article IV.1 of the WTO Agreement in 2007.  This last point had been a matter of 
particular concern for some delegations in his consultations, and he knew that all shared a 
commitment to uphold all the legal agreements on which this rules-based organization was founded.  
No one wished to see them weaken ed or undermined.  It was important to underline that Members to 
whom he had spoken had agreed that while one had to  face the reality of the current situation, this 
should in no way be seen as calling into questio n the provisions of Article IV.1 of the WTO 
Agreement, or as establishing a precedent for the fu ture.  He suggested that the General Council 
return to this question as soon as the situation could be clarified.  In the meantime he remained at 
Members' disposal for any further consultations. 
83. The General Council took note
 of the statement. 
9. Administrative Measures for Members in arrears 
84. 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 Council, the Chairman of the Committee on Budg et, Finance and Administration should provide  WT/GC/M/110 
 Page 25 
 
 
  information with regard to which Members were  under Administrative Measures in Categories II 
through IV. 
85. Mr Lynch (New Zealand), Chairman of  the Committee on Budget, Finance and 
Administration , said that as the Chairman had just r ecalled, the Committee had formulated a 
recommendation regarding Members in arrears whic h had been approved by the General Council in 
May 2006.  The General Council had then approved the Committee’ s recommendation for a new set 
of administrative measures and had, at the same time,  authorized the Committee to waive the 
application of the Measures for Members in Category IV who agreed to, and ab ided by, a schedule of 
instalment payments aimed at liquidating all arrears.  This had been an important part of the balance 
in the administrative arrangements.  In this context,  he was pleased to be able to report that Paraguay 
– which currently was a Category IV Member – was presently engaged in discussions with the 
Secretariat on this question, and he hoped to be able  to advise of a resolution shortly, and certainly by 
the next General Council meeting.  He wished to encourage those other Members in this situation – 
whom he was about to list – to contact the Secret ariat to discuss the modalities for establishing such a 
schedule.  He was also pleased to advise that Cameroon, which he had listed as a Category III 
Member at the July Council meeting, had paid off its  arrears in full, and as a result of this contribution 
was no longer subject to the administrative m easures.  Finally, in pursuance of the revised 
Administrative Measures, he wished to inform  the Council that the Members under Categories II 
through IV of the Administrative Measures as at 8 October were as follows:  Burkina Faso and 
Senegal in Category II;  and the following Memb ers in Category IV:  Burundi, Central African 
Republic, Chad, Commonwealth of Dominica, Co te d'Ivoire, Democratic Republic of Congo, 
Djibouti, Gabon, Gambia, Guinea, Guinea-Bissau, Ma lawi, Mauritania, Niger, Paraguay, Republic of 
Congo, Sierra Leona and Togo. 
86. The Chairman  then recalled that under the revised Administrative Measures he was also 
required at each Council meeting to request Member s in Categories III and IV of the Measures to 
inform him, before the next meeting of the Gene ral Council, as to when their payment of arrears 
might be expected.  In keeping with the Admi nistrative Measures, he would report on Members' 
replies to the next meeting of the General Council.   Since the July General Council meeting, he had 
not received any replies from the Members concerned. 
87. The General Council took note  of the statements. 
 
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