RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/GC/M/90 
10 February 2005 
 (05-0540) 
General Council 
13 December 2004  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 13 December 2004  
 
Chairman:  Mr. Shotaro Oshima (Japan) 
 
 Prior to the adoption of the agenda , the Director-General noted that the Textiles Monitoring 
Body had held its last meeting the previous w eek, and expressed gratitude  on behalf of all to 
Mr. Andras Szepesi for the invaluable work the la tter had done for the WTO as Chairman of the TMB 
throughout the entirety of its existence, and to all the individuals who had served on the TMB as 
members.  Subjects discussed
: Page  
 
1. Iran – Request for Accession ................................................................................................... 2 
2. Afghanistan – Request for Accession ......................................................................................5  
3. Iraq – Request for Accession ................................................................................................... 8 
4. China – Transitional Review Under Section 18.2 of the Protocol of Accession to 
the WTO Ag reement.............................................................................................................. .10 
5. Report by the Chairman of the Trade Negotiations Committee ........................................15  
6. Work Programme on Small Economies – Report by the Chairman of the 
Dedicated Session of the Committee on Trade and Development ......................................21  
7. Non-recognition of rights under Article XXIV:6 and Article XXVIII of GATT 1994 – Communication from Honduras and Guatemala ....................................................23
 
8. Follow-up to the July General Council D ecision on the Doha Work Programme 
– Report by the Director-General on the development assistance aspects of 
cotton......................................................................................................................... ...............29  
9. Committee on Budget, Finance and Admi nistration – Recommendations of the 
Committee following its meetings of October, November and December 2004 ................34  
10. Committee on Balance-of-Payments Restrictions................................................................36  
(a) Consultation with Bangladesh ..................................................................................................3 6 
(b) Note of the meeting of 29 November 2004...............................................................................36  
11. Waivers under Article IX of  the WTO Agreement..............................................................37  
(a) Introduction of Harmonized System 2002 changes into WTO schedules of tariff 
concessions – Draft decision................................................................................................... ..37 
(b) Review of waivers pursuant to Article IX:4 of the WTO Agreement ......................................37  WT/GC/M/90 
Page 2  
 
 12.
 Review under Paragraph 8 of the Decision on the Implementation of 
Paragraph 6 of the Doha Declaratio n on the TRIPS Agreement and Public 
Health  – Report of the Council for TRIPS ..........................................................................39  
13. Appointment of Officers to WTO Bodi es – Announcement by the Chairman 
pursuant to paragraph 7.1(a) of the Guidelines...................................................................40  
14. Review of WT O activities....................................................................................................... 41 
15. 10th Anniversary of the WTO – Statement by the Director-General .................................42  
16. Chairmanship of the Working Party on the Accession of Belarus – 
Announcement by the Chairman ..........................................................................................42  
 
 
1. Iran – Request for Accession (WT/ACC/IRN/1) 
1. The Chairman  drew attention to the communication from Iran in document WT/ACC/IRN/1, 
requesting accession to the WTO Agreement pursuant to Article XII.  He recalled that the General 
Council had last considered this matter at its meeti ng in October.  In the light of the views expressed 
at that meeting, he had said that he would conti nue to consult with delega tions, and the Council had 
agreed to revert to this item at the present m eeting.  On 1 December, he had held a further 
consultation in order to see if there were any m ovements in position that might allow Members to 
work towards a satisfactory resolution to Iran's access ion request.  He had invited to this consultation 
all delegations who had s poken on this subject at previous Counc il meetings.  It seemed clear from 
this consultation that a large part of the member ship continued to be supportive of an early and 
positive action on this request in the Council, on the basis of the provisions of Article XII of the WTO 
Agreement.  However, there still appeared to be  no consensus at the presen t stage to accept Iran's 
request and to set up a working party for this purpose. 
2. The representative of the United States  said that the issue of Iran's accession to the WTO 
continued to be under review by her authorities.  He r delegation had nothing to  add to the statement it 
had made at the October meeting of the General Council. 
3. The representative of Paraguay , speaking on behalf of the Informal Group of Developing 
Countries , thanked the Chairman for the consultations he had held on this subject.  These countries 
took note of the statement by the United States and trus ted that it would be able to complete its review 
rapidly, so as to be in a position to provide a positive reply to Iran's request for accession as soon as 
possible. 
4. The representatives of Egypt , China , Indonesia , India , Cuba , Malaysia , Singapore , Pakistan  
and Venezuela  supported the statement by Paraguay on beha lf of the Informal Group of Developing 
Countries. 
5. The representative of Turkey  noted that Iran's request for accession had been on the Council's 
agenda for some time.  His delegation fully suppor ted Iran's request, which had to be treated on its 
own merits, independent of  other considerations. 
6. The representative of Egypt  hoped that under the Chairman's leadership, the consultations on 
this matter would soon resolve the deadlock and pr ove her delegation's belief and deep conviction in 
the multilateral trading system and its universality , thus allowing Members to focus on the Doha 
Development Agenda and the huge technical work that awaited them leading up to the Hong Kong, 
China Ministerial Conference.  Egypt welcomed all requests for accession to the WTO submitted in 
accordance with the provisions of Article XII of th e WTO Agreement, and believed that such requests 
merited the encouragement of all Members.  She assured the Chairman of her delegation's willingness  WT/GC/M/90 
 Page 3 
 
 
 to participate constructively as a member of the accession working parties that Members might decide 
to establish at the present meeting. 
7. The representative of China  said that as a member of the Informal Group of Developing 
Countries, China fully supported the statements by  Paraguay, Turkey and Egypt.  His delegation once 
again wished to express serious concern about the way this request was being treated.  Iran's 
application for accession to the WTO had been on the Council's agenda for years, and China found it 
difficult to understand why it could not be dealt with by Members in accordance with the standards 
that had been applied to other similar requests.  Such non-action by the General Council was not in 
the interests of the multilateral trading system.  An early completion of the review of this matter by the Member concerned would help Members resolve this long-pending issue.  At the same time, 
China supported continued consultations by the Chairm an with a view to resolving this issue as soon 
as possible.  An early and positive consideration of Iran's request would definitely help Iran to 
become integrated into the multilateral tradi ng system, to the benefit of all Members. 
8. The representative of th e European Communities
 noted that this matter had now been on the 
Council's agenda more than 15 times.  The Community had always supported Iran's request, fully 
supported it now, and wished to see it approved.  The Community's position on WTO applicants had 
been to treat each application on its own merits, i ndependent of political cons iderations.  Iran fulfilled 
the accession criteria of Article XII, and any deci sion on a request for accession should be made on 
the basis of objective economic criteria.  Other count ries that were in a lesser  state of readiness than 
Iran already had accession negotiations under way, or would soon.  The Community expected all 
Members to treat all applications in the same way.  Moreover, starting discussions on WTO accession 
with Iran would help promote reform in that count ry.  The basic WTO principles of transparency and 
non-discrimination were at the heart of good governan ce, which the Community wi shed to encourage.  
WTO involvement would also be beneficial to other peoples in the region, as an element to encourage and drive the process of economic and political reform in their countries.  His delegation regretted to 
hear at the present meeting that the United States w as still not able to agree to grant Iran's request.  
The Chairman had again held consultations prior to  the present meeting, and he should continue this 
process in order to find a way out of the current deadlock. 
9. The representative of Indonesia
 fully supported the statements by  previous speakers that Iran's 
request should be resolved as soon as possible.  I ndonesia found it difficult to understand that Iran's 
request was still not acceptable to certain Members, even though the request itself met the standards 
that had been applied to other similar requests.  It was without doubt that Iran should be given the 
same kind of consideration as other countries that  had applied for accession.  Indonesia wished to 
stress that all countries applying to join the WTO had to be treated in th e same manner and be given 
an equal opportunity to become a member. 
10. The representative of India  reiterated India's strong support for Iran's accession to the WTO. 
11. The representative of Cuba  said that Iran's request should be given the same treatment as 
other requests for accession, and political matters should not in any way constitute an obstacle to 
dealing positively with this request, given th at it met the requirements of Article XII. 
12. The representative of Switzerland  said that his delegation had made known its position on this 
matter several times in the General Council.  He wi shed to confirm Switzerland's view that it would 
be normal for the Council to establish a working pa rty in response to Iran's request for accession.  
Switzerland was increasingly concerned by the t ype of concerns, mostly unknown, that were 
preventing a positive response to Iran's request.  His delegation commended the Chairman for the 
consultations he had been undertak ing and encouraged him to continue  and to intensify this process in 
order to reach a positive outcome.  This was all the more necessary, given that there were new requests for accession and given the continuing refu sal to establish a working party to examine Iran's WT/GC/M/90 
Page 4  
 
 request.  The credibility of the organization would be seriously affected, and this would not be a 
welcome development, especially at this important time in the organization's life. 
13. The representative of Norway
 said that Norway's point of departure was that any state or 
separate customs territory that fulfilled the criteri a for membership laid dow n in the WTO Agreement 
and that was willing and able to accept the obliga tions incumbent on members of this organization 
should be able to have its accession request referred to a working party.  This was a systemic issue 
independent from political issues per se .  His delegation noted that the Chairman had consulted on 
this issue as mandated by the General Council, but so  far without success.  Like others, Norway urged 
the Chairman to continue his consultations with in terested Members with a view to advancing this 
issue. 
14. The representative of Malaysia  said he wished to urge the dele gation concerned to expedite its 
consideration of this matter. 
15. The representative of Singapore  said that, as a matter of principle, Singapore strongly 
supported the objective of universal membership of th e WTO.  This principle was an important pillar 
of the current rule-based multilateral trading system.  Any applicant who qualified for WTO 
membership should, upon satisfactory completion of the accession requirements, be admitted.  It was 
important that this principle be app lied consistently to all applicants.  Otherwise, the credibility of the 
WTO would be affected.  Singapore urged the Chairm an to continue consultations with interested 
parties on Iran's request so that Member s could reach a consensus expeditiously. 
16. The representative of New Zealand  said that in view of the number of requests for accession 
on the present Council's agenda, his delegation wished to set out clearly its position that any country 
meeting the requirements of Article XII should have  the opportunity to begin the accession process.  
On this basis, New Zealand supported the establishm ent of an accession working party for Iran.  His 
delegation hoped that the present deadlock would be  broken in a timely way through consultations, 
and encouraged the Chairman in that work. 
17. The representative of Chile  said that when this matter had first been raised in the General 
Council, the response given had not been reasonable.  Over a long period, this situation had evolved 
into an absurd one.  First, it reflected very badl y on the organization, and second, the consequences 
affected not only the applicant, but also the inter ests of other countries – those who might wish their 
trade relations with Iran to be c onducted under the WTO.  Therefore, the situation was not neutral in 
its effects.  It was in the face of the absurdity of  this situation and its effects on the organization, 
including its effects on other countries' interests, that his delegation – whic h had never before taken 
the floor on this matter – wished to react and to urge  those who has been blocking this request to take 
all these elements into consideration. 
18. The representative of Pakistan  said his delegation strongly sup ported Iran's accession request.  
The General Council should treat all applications un der Article XII in a similar manner, without any 
discrimination and on the basis of economic criteria only.  Furthermore, transparency should be the 
hallmark of the multilateral system which should in culcate the practice of universal membership.  
Pakistan therefore urged the Chairman to continue consultations with a view to an early and positive 
response to Iran's request. 
19. The representative of Venezuela  reiterated his delegation's pos ition, expressed at previous 
Council meetings, that Iran's request should be gi ven a positive response.  Venezuela hoped that the 
Chairman would continue his consultations in order to resolve this situation, which threatened to 
jeopardize the credibility of the organization.  WT/GC/M/90 
 Page 5 
 
 
 20. The Chairman  said that all had heard the statements that had been made.  Unfortunately, there 
was still no consensus on this matter.  However, th ere had been a strong expression of the wish to 
have this issue resolved as quickly  as possible, and also that consultations be continued.  In the light 
of the views expressed, he proposed that he conti nue his consultations and that the General Council 
revert to this matter at its next meeting. 
21. The General Council took note  of the statements and so agreed . 
2. Afghanistan – Request for Accession (WT/ACC/AFG/1 and 2) 
22. The Chairman  drew attention to the communications from Afghanistan in documents 
WT/ACC/AFG/1 and 2, requesting accession to the WTO Agreement pursuant to Article XII.  This request was on the agenda of the present meeting on the basis of consultations he had held recently 
with a large number of delegati ons, including coordinators of re gional and other groupings.  If 
delegations were agreeable to considering this  request positively, he would propose for their 
consideration that the General Council agree to estab lish a working party to examine the request with 
the following standard terms of reference and composition: 
 Terms of Reference
: 
 
 "To examine the application of the Govern ment of Afghanistan 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 indicating their wish to serve on the Working 
Party.   
 
Chairmanship : 
 
 In keeping with customary practice, the General 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 Afghanistan. 
 23. The General Council General Council agreed
 to establish a Working Party with the terms of 
reference and composition as read out by the Chairman.  
24. The Chairman  then invited the delegation of Afghan istan 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 Part y.  He also wished to invite Afghanistan, on 
behalf of the General Council, to attend meeti ngs of the General Council and, as appropriate, 
meetings of other WTO bodies as an observer during the period when the Working Party was carrying 
out its work. 
25. The representative of Afghanistan , speaking as an observer , thanked all Members for their 
support and encouragement, which had resulted in th e consensus on Afghanistan's request.  After two 
decades of conflict and three years of relative peace, Afghanistan was leaving behind the war 
economy.  The total cost over the past two decades,  measured in terms of lost growth and cost of 
humanitarian assistance and military expenditure, amount ed to roughly US$240 billion.  In 2002 and 
2003 Afghanistan's GDP had grown by 29 and 18 per cent respectively.  The GDP for 2004 was expected to grow by 16 per cent.  Inflation had remained below 10 per cent, and despite significant 
inflows of foreign aid, the currency had remained stable.  Overall, the economy had expanded more WT/GC/M/90 
Page 6  
 
 than 40 per cent.  In 2003, Afghanistan's expor ts had amounted to US$170 million, while imports had 
been at a staggering US$2 billion.  Since 2002, the Government had significantly improved the economic climate.  The peaceful completion of the first direct presidential elections had marked the end of the transitional period set forth in the hist oric Bonn Agreement and had heralded a new era of 
political stability.  Security was expanding throughout the country, with the deployment of the newly 
trained national army and police forces.  The long-term commitment of international security forces 
underwrote the global commitment to Afghanistan's stability. 
26. Much had changed in Afghanistan over the p ast three years, and with these changes, the 
confidence of the Afghan people in the future of the country had increased.  This was evidenced by 
the massive participation of Afghans in the vot ing process of October 2004 and the unprecedented 
return of over three and a half million refugees who were now rebuilding their lives in their homeland.  
Families were sending their boys and girls to school, rebuilding their homes and setting up their small- and medium-sized businesses.  Being a land-locked developing country hampered 
Afghanistan's competitiveness in global trade.  This handicap could, however, be turned into an asset 
by the country becoming an efficient transit locati on between Central Asia, S outh Asia, and the Indian 
Ocean.  The Government would continue to focus on building roads to re-establish Afghanistan as the 
land bridge for trans-continental trade.  Upon co mpletion of Afghanistan's ring road, every major 
Central Asian capital would be less than 32 hours from the Persian Gulf and the port of Karachi, 
Pakistan.  His Government was committed to bui lding national productive capacities as well as 
efficient trading and transport infrastructures.  It was fully aware of the changes in the global 
economy over the past decade.  The twin processes of globalization and liberalization, combined with 
rapid advances in information and communication t echnologies, had opened up a new era in terms of 
government policies, enterprise organization and mu ltilateral disciplines.  The legislation, and in 
particular the Constitution, adopted by the C onstitutional Assembly early in 2004 enshrined the 
protection of property and committed the country to a market economy. 
27. The Government had significantly improved the in vestment climate.  The existing investment 
law allowed for 100 per cent direct foreign owners hip.  The Government had created a simplified one-
stop shop for investors.  Already, private investme nt in Afghanistan's telecommunications had proved 
profitable, and investors were actively exploring c onstruction, transport and light industries.  The 
Government was committed to an export-oriented economy that could take advantage of preferential 
access to international markets.  Afghanistan was ri ch in natural resources, including coal, copper and 
iron.  Preliminary exploration indicated that Afghani stan was highly likely to have sizeable deposits 
of oil and gas.  Traditionally, the country had also  had a strong agricultural sector and was the largest 
exporter of dried fruits and nuts in the region.  Fo reign direct investment had had an impact on the 
export of domestic enterprises.  This was par ticularly evident in the business linkages being 
established in the local economy.  These linkages coul d, in an appropriate time, allow local firms 
access to international markets, finan ce, technology and managerial skills. 
28. If Afghanistan was on the road to recovery, this was due to the fact that trade and investment 
had been identified within the National Devel opment Framework as the engine for growth and 
development.  Trade had been recognized as an integral component of economic revival of the 
country.  Imports could bring in essential goods and services, while exports could restore incomes and livelihoods.  This was why the formulation of tr ade policies, procedures, and the establishment of 
institutions had been recognized as immediate priorities.   These policies included decisions about 
import regimes, a regulatory framework, import and export controls, insurance, payments, customs 
and transit arrangements.  Reforms to the tari ff, customs and tax systems had greatly reduced 
transaction costs.  The central bank was aut onomous, international co mmercial banks had begun 
operations under new regulations, a nd the Government strictly implem ented no-deficit financing.  The 
Government was fully committed, with the support of  its development partners , to investing heavily 
in physical infrastructure and human capital.  A seven-year public investment programme amounting  WT/GC/M/90 
 Page 7 
 
 
 to US$27.5 billion had secured the first three years of international financing, helping Afghanistan 
address bottlenecks in transportation, irrigation, power, and urban services.  
29. The past three years had witnessed great achie vements.  However, establishing a stable, 
democratic and prosperous Afghanistan would re quire sustained and collaborative efforts by its 
people, its neighbours and the international community .  Working together for a stable and prosperous 
Afghanistan was not only a successful example of in ternational cooperation, but would also contribute 
to regional prosperity and global security.  Participat ion in the international trading system would lead 
to more trade, investment, technology transfer, employment and income growth throughout the economy.  In this respect, Afghanistan was convin ced that there was a need  for positive efforts to 
ensure its share of growth in international tr ade commensurate with th e needs of its economic 
development.  Afghanistan looked forward to part icipating in and taking advantage of technical 
cooperation and the flexibilities in the multilateral agreements on trade in goods, including the TBT, 
SPS and SCM Agreements, as well as GATS and TRIPS. 
30. The representatives of the United States
, Turkey , European Communities , Australia , 
Morocco , Japan , Paraguay , Canada , Kuwait  (also on behalf of Bahrain , United Arab Emirates , Qatar  
and Oman ) and Barbados  welcomed the establishment of th e Working Party on the accession of 
Afghanistan.1  
31. The representative of th e European Communities  said that his delegation looked forward to 
working closely and constructively with Afghanistan. 
32. The representative of Morocco  said that for his delegation, the decision of the Council with 
respect to the accession request of Afghanistan ha d great political symbolism insofar as the WTO was 
taking part in the efforts of the international community to make it possible for Afghanistan to 
reintegrate into the international community, and to adopt the reforms and measures necessary for its 
trade to increase and to make it possible for Afghanist an to return to the role it had to play in 
international trade.  His delegation would contribute to  this endeavour in participating in the work of 
the Working Party. 
33. The representative of Japan  said his delegation was convinced that the accession negotiations 
and full accession of Afghanistan would serve the reconstruction of Afghanistan's economy. 
34. The representative of Paraguay  said that the accession of Afghanistan would contribute to the 
strengthening of the world trading system – an end which all were seeking to further – and would also 
be very positive for Afghanistan's economy.  Afgha nistan was a developing land-locked country with 
no outlet to the sea, and this made it more vulnerabl e.  Afghanistan required the strong backing of the 
international community so that its trade could be  developed, and so that it could build the proper 
infrastructure systems in order to be able to ship its exports abroad.  Those exports would have to be 
shipped through other countries.  Paraguay was also  a land-locked country, and thus was sensitive to 
this condition.  His delegation wished to underscore the importance of making it possible for Afghanistan to join the organization very quickly, so as to be able to benefit as soon as possible from 
the standards that had been developed in the WTO, including those that would be put in place within 
the framework of trade facilitation. 
35. The General Council took note
 of the statements and of the expressions of welcome and 
support. 
                                                      
1 See also the statement by Egypt under Item 1. WT/GC/M/90 
Page 8  
 
 3. Iraq – Request for Accession (WT/ACC/IRQ/1) 
36. The Chairman
 drew attention to the communication from Iraq in document WT/ACC/IRQ/1, 
requesting accession to the WTO Agreement pursuant to Article XII.  This request was on the agenda 
of the present meeting on the basis of consultatio ns he had held recently with a large number of 
delegations, including the coordinato rs of regional and other groupings.  If delegations were agreeable 
to considering this request positively, he would propose for their consideration that the General 
Council agree to establish a working party to examin e the request with the following standard terms 
of reference and composition: 
 Terms of Reference : 
 
 "To examine the application of the Govern ment of Iraq to accede to the WTO Agreement 
under Article XII, and to submit to the Gene ral Council recommendations which may include 
a draft Protocol of Accession." 
  Membership
: 
 
 Membership would be open to all Members indicating their wish to serve on the Working 
Party.   
  Chairmanship
: 
 
 In keeping with customary practice, the General 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 Iraq. 
 37. The General Council agreed
 to establish a Working Party w ith the terms of reference and 
composition as proposed by the Chairman 
38. The Chairman  then invited the delegation of Iraq to consult with the Accessions Division of 
the Secretariat as to the further procedures, and in pa rticular with regard to the basic documentation to 
be considered by the Working Party.   
39. The representative of Iraq , speaking as an observer , said this was an important day for his 
country, as the international community, represente d by the WTO, had endorsed Iraq's request for 
accession to the WTO.  This decision was yet anothe r contribution of the WTO to Iraq's efforts to 
reform its economy, to which it was committed.  It  had taken major steps to re-align and reform 
existing policies, laws and practices.  Since 11 Fe bruary, when the General Council had granted Iraq 
observer status, Iraq had been diligently preparin g for the accession process.  His Government had 
drafted Iraq's Foreign Trade Regime Memorandum a nd was continuously working on refining it.  It 
had established a National Committee for WTO A ccession comprised of senior officials from 
15 Government ministries, in addition to represen tatives from the private sector.  Each of those 
ministries had formed its own specialized subc ommittees to look into issues related to WTO 
accession.  The Government was establishing an Ira qi representation in Geneva for the WTO and had 
been working hard on building the capacity of the Iraqis involved. 
40. The past 10 months had witnessed extensive diplomatic efforts on the part of Iraqi officials to 
mobilize support for the country's economic reform programmes.  The decision in November 2004 by 
the Paris Club to write off 80 per cent of Iraq's debt  was a significant signal of international support.  
Members' decision to accept Iraq's accession request was yet another sign of support.  These measures 
and other positive economic initiatives on the part of  the international community would help bring 
stability and security to Iraq, which had suffered a lot and still was.  Iraq was aware that transition in  WT/GC/M/90 
 Page 9 
 
 
 the country would need a great deal of internati onal assistance, both political and economic, but it was 
confident that after going through so much hardship  and having done so much to alleviate it, Iraq 
would not be let down.  One of the immediate steps along this path was the establishment of a 
working party to examine Iraq's accession request a nd to have accession negotiations start.  At the 
present time, the accession process was far more important to Iraq than accession itself.  His 
Government intended to use the accession process as an impulse for effecting economic reforms.  The 
new Iraq looked with great optimism toward ach ieving political stability, economic prosperity and 
social development, and reintegration into the worl d trading system was an essential element to fulfill 
those aims.  His Government was very grateful fo r the support and backing it had been receiving from 
the WTO and its Members.  He wished to thank each and every one who had stood by Iraq in its 
endeavor, and looked forward to closer coopera tion with all of Iraq's friends in the WTO. 
41. All representatives who spoke welcomed the establishment of the Working Party on the 
accession of Iraq.2 
42. The representative of the United States  said that the United States strongly welcomed the 
decision to initiate WTO accession negotiations for Ir aq, just as it had done regarding the decision on 
Afghanistan's request.  Iraq had made significant economic progress during the past year in clearing 
its national debt and signing an em ergency post-conflict assistance agreement.  It had also made a 
good start in taking the economic steps necessary to  become a WTO Member.  Her delegation looked 
forward to working with Iraq in these negotiations. 
43. The representative of Jordan  thanked Iraq for its statement.  The establishment of a working 
party on Iraq's accession meant that the WTO was pa rticipating in the efforts by the international 
community to help Iraq in its reform.  Jordan we lcomed all requests for accession from its region in 
the hope that the results of those accession pr ocesses would contribute significantly to economic 
growth in the region. 
44. The representative of Turkey  associated his delegation with the statements by the United 
States and Jordan regarding the decision just taken.  It was of vital importance that the international 
community help Iraq in all respects and contribute to  the gradual restoration of normal conditions in 
all fields in that country.  The present decision was an important contribution in this regard. 
45. The representative of th e European Communities  said that his delegation had listened with 
much interest to the statement by Iraq, and looked forward to working closely and constructively with 
Iraq. 
46. The representative of Bulgaria  supported Iraq's request for accession. 
47. The representative of Australia  said that Australia supported wi der membership of the WTO, 
as this would contribute to further strengthening global economic reform and trade liberalization. 
48. The representative of Morocco  said that the decision just taken had great political symbolism 
insofar as the WTO was taking part in the efforts of  the international community to make it possible 
for Iraq to reintegrate into the international co mmunity, and to adopt the reforms and measures 
necessary for its trade to increase and to make it possibl e for Iraq to return to the role it had to play in 
international trade.  His delegation would contribute  to this endeavour through its participation in the 
work of the Working Party. 
49. The representative of Japan  said his delegation was convinced that the accession negotiations 
and full accession of Iraq would serve th e reconstruction of Iraq's economy. 
                                                      
2 See also the statement by Egypt under Item 1. WT/GC/M/90 
Page 10  
 
 50. The representative of Paraguay
 said that the accession of Iraq would contribute to the 
strengthening of the world trading system – an end which all were seeking to further – and would also 
be very positive for Iraq's economy. 
51. The representative of Canada  welcomed the establishment of a Working Party on the 
accession of Iraq and said that the opportunity to have a request for WTO accession be examined 
should be open to all economies on the basis of the principle of universal membership and to all 
applicants who met the basic WTO criteria. 
52. The representative of Kuwait , speaking also on behalf of Bahrain and the United Arab 
Emirates, Qatar and Oman , said that these countries welcomed the request for accession from Iraq. 
53. The representative of Barbados  welcomed the establishment of the Working Party on the 
accession of Iraq. 
54. The General Council took note  of the statements and of the expressions of welcome and 
support. 
4. China – Transitional Review Under Section 18.2 of the Protocol of Accession to the 
WTO Agreement (WT/GC/84, G/L/722, S/C/23, IP/C/34, WT/BOP/R/75) 
55. The Chairman  recalled that Section 18.2 of the Pr otocol of Accession of China to the WTO 
Agreement provided that "The General Council sha ll, within one year after accession, and in 
accordance with paragraph 4 of Section 18, re view the implementation by China of the WTO 
Agreement and the provisions of this Protocol."  Section 18.2 also provided that "The General 
Council shall conduct such review in accordance with the framework set out in Annex 1B and in light 
of the results of any reviews held pursuant to para graph 1.  China can also raise issues relating to any 
reservations under Section 17 or to  any other specific commitments made by other Members in this 
Protocol.  The General Council may make recommenda tions to China and to other Members in these 
respects."  The General Council's first review had been conducted in Decembe r 2002.  Paragraph 4 of 
Section 18 further provided that this  review should take place subsequently in each of the eight years 
following the first review, with a final review in the tenth year, or at an earlier date decided by the 
General Council. 
56. The following issues were to be addressed by the General Council at the present meeting in 
accordance with Annex 1B of China's Protocol of Accession:  first , reports of subsidiary bodies on 
China's implementation of the WTO Agreement and of  the related provisions of the Protocol;  second , 
development of China's trade with WTO Memb ers and other trading partners;  and finally , recent 
developments and cross-sectoral issues regardi ng China's trade regime.  He proposed that, in 
addressing this agenda item, China as well as other de legations address all three of these points in a 
single intervention.  In connection with this revi ew, he drew attention to a communication from China 
recently circulated in document WT/GC/84, whic h provided information re quired under Sections I 
and III of Annex 1A of the Prot ocol of Accession.  The reports of subsidiary bodies on their 
respective reviews of China's implementation of th e WTO Agreement and of the related provisions of 
the Protocol of Accession were contained in WT/GC/84, G/L/722, S/C/23, IP/C/34 and 
WT/BOP/R/75. 
57. The representative of China  thanked Chairpersons of all the subsidiary bodies for their 
reports, and all Members for their active participati on in the TRM.  This mechanism helped provide 
an opportunity for Members to exchange informa tion and to improve mutual understanding in the 
field of China's implementation.  The previous weekend marked the third anniversary of China's 
accession to the WTO.  Three years earlier, many of the representatives present might have witnessed 
the process of China's accession.  As all knew, China's accession commitments were among the most  WT/GC/M/90 
 Page 11 
 
 
 profound and comprehensive ever undertaken by a new Member.  At the same time, the enormous 
difficulties faced by China were fully understood an d clearly acknowledged by most Members.  His 
Government had always taken a ser ious and responsible attitude to overcoming the difficulties and to 
fulfilling its commitments faithfully.  Implementati on itself was the very process that would enable 
China to carry forward its opening and reform polic y and to integrate further in the world economic 
community. 
58. He said that China had continued efforts in 2004  to amend laws and regulations and to make 
them WTO-consistent.  The principle of transp arency had been better observed through timely 
publication of all trade-related rul es and regulations.  Public heari ngs were being held to provide 
opportunities for the public to provide comments befo re enforcement was effected.  In 2004, China 
had further reduced its tariffs.  The average tariff level had been reduced to 10.4 per cent, with the 
average rate for industrial products reduced to  10.6 per cent from 11.5 per cent, and that for 
agricultural products reduced to 15.6 per cent from 16. 8 per cent.  Non-tariff measures such as import 
licenses and import quotas were being phased out accord ing to schedules.  As a result of the faithful 
implementation of its commitments, China's total imports had increased by 21 per cent in 2002, and 
by roughly 40 per cent in 2003.  In 2004, total impor ts would increase by more than 35 per cent.  It 
was safe to say that China's market was, as a resu lt, much more open than it had been three years 
earlier, which was a tangible result of Ch ina's implementation of its obligations. 
59. In the field of trade in services, there had been a continuation of the process of opening of the 
market in various sectors including telecoms, financ ial services, construction, distribution, tourism, 
transportation and so forth.  Up to the present, 204 branches of foreign banks had obtained a license to 
operate in China, out of which 105 had obtained the approval to conduct local currency business.  
According to the China Insurance Regulatory Commission, 39 foreign insurers had set up 
70 insurance operational entities in China, including 22 life insurers and 14 property insurers.  In 
2003, China's services trade had passed the US$100 b illion mark for the first time, making China the 
ninth largest trader in services in the world.  This growth momentum had continued into the first half 
of 2004, with imports increasing by 27 per cent, which reflected the positive result of China's full 
implementation of its commitments in services. 
60. His Government had always attached great importance to the protection of intellectual 
property rights.  It was well known that the legisl ation regarding China's IPR protection was well 
advanced and up to international standards.  Mo reover, China had particip ated and ratified major 
international treaties and conventio ns for IPR protection.  This remarkable process, which had taken 
some developed countries over 100 years to achieve , had been completed by China in merely two 
decades roughly.  At the same time, China was fully  aware that resolute and effective enforcement 
was an essential link for the legislation to exert its  protective functions.  China had worked hard to 
improve enforcement through both administrative and judicial channels.  The implementation of its 
commitments in all fields had not only improved the sustainable and rapid development of the 
national economy, but also provided opportunities fo r growth of the global economy and expansion of 
foreign enterprises in China.  During the first ten months of 2004, China's trade volume in goods had 
reached US$926 billion, a 36 per cent growth over the same period of 2003.  Imports, which amounted to US$457 billion, had increased by 37 per cent.  China's imports from other developing countries had increased by 44 per cent on average over th e past three years, and China was the third-
largest importer from the least-developed countri es.  Both the UNCTAD 2004 report and the WTO 
Director-General's annual report regarded China as one of the two growth engines for the world 
economy. 
61. 
As a result of China's implementation of its commitments and continued improvement of the 
business environment to attract foreign investment, fo reign direct investment had registered a record 
high of US$53 billion in 2003, and the momentum had continued into the first nine months of 2004, 
with a US$48 billion actual paid-in value.  Forei gn companies now produced 55 per cent of China's WT/GC/M/90 
Page 12  
 
 exports.  In industrial machinery this percenta ge had risen to almost 80 per cent.  Since 
20 September 2004, China had participated in 16 TRM reviews in all the relevant subsidiary bodies.  
To facilitate these reviews, the Government had devoted enormous human and other resources.  
Seventeen delegations from the capital had come to Geneva since September for the TRM reviews.  
This had involved officials and experts from more  than 20 different government agencies.  China 
approached the TRM in a constructive and coop erative spirit, and had submitted all relevant 
information, as required by paragraph 18 of the Prot ocol of the Accession.  The capital-based experts 
had taken an active part in the discussions and had provided explanations, clarifications and necessary 
information.  Many of the comments by Members woul d be taken back to the capital for further study 
and consideration, so as to help further improve th e work of the related government departments.  He 
wished once again to thank all Members for their pa rticipation and cooperation in the review process. 
62. The representative of the United States
 said that as Members wrapped up the 2004 TRM for 
China, her delegation wished to share its observa tions on how the current year’s reviews had gone.  
Her delegation also wished to discuss more broadl y China's WTO implementation record in its third 
year of membership in the WTO.  First, her de legation wished to express appreciation to the Chinese 
delegation and to the many Chinese officials from capital who had attended this year's meetings, for 
their hard work in making the TRM effective.  The United States recognized the enormous amount of 
time and effort the TRM required, particularly on the part of China's Ministry of Commerce, which 
oversaw China's TRM efforts.  Like the previous year's TRM, this year's  TRM had gone relatively 
smoothly.  Her delegation had noticed some improve ment, as China had provided responses that were 
more detailed and candid.  In large part, this ha d been due to the time and effort spent by China's 
Ministry of Commerce in organizing China's responses, along with the willingness of experts from 
capital to attend the TRM meetings.  Where possible, the United States had also made an effort to use 
regular Committee and Council meetin gs throughout the year to undertake preparatory work for the 
TRM.  In that setting, her delegation had raised a variety of implementation questions with China and 
generally had received informative responses, which ha d helped to clarify the matters that needed to 
be addressed during the TRM meetings.  The re ports of the various Committees and Councils 
conducted during the 2004 TRM were now before Members.  Procedur ally, these reports showed that 
many important questions had been raised, to wh ich China had often provided detailed responses.  
The TRM activities in several subsidiary bodies had been especially useful, including, for example, 
the TRIPS Council, the Council for Trade in Se rvices and the Committee on Trade in Financial 
Services.  However, in few of the subsidiary  bodies, such as the SPS Committee, the Committee on 
Subsidies and Countervailing Measures, and the Comm ittee on Agriculture, the results had been more 
uneven. 
63. As her delegation looked ahead to the following year, it still believed that the TRM exercise 
could be useful, positive and constructive, as the representative of China had described it.  She 
recalled that the TRM had been created largel y because China had been given WTO membership 
before it had revised all of its trade-related laws and regulations to make them WTO-compliant, and 
because China had been allowed a variety of transition periods before it took on certain WTO 
obligations.  The TRM helped Members to better unde rstand China's implementation efforts, and also 
allowed Members to convey their expectations to  China.  Through this process, China and other 
Members were able to clarify areas of both agreement and disagreement on important issues.  At the same time, the United States believed that there was still room for improvement in the handling of the 
TRM.  Her delegation looked forward to working wi th China and other delegations to improve this 
important exercise. 
64. Substantively, the reports from the subsidiary  bodies reflected the continued progress that 
China had made in implementing its WTO commitm ents, while also reflecting some areas where 
more progress was needed.  Overall, her delega tion welcomed the progress China had made, and 
continued to make, in implementing its WTO comm itments.  China deserved due recognition for the 
tremendous efforts it had made to re form its economy in order to comply with the requirements of the  WT/GC/M/90 
 Page 13 
 
 
 WTO.  Over the past year, China had taken many im portant steps.  It had implemented its important 
trading rights commitment in July, nearly six m onths ahead of schedule.  China had also issued 
regulations preparing for the opening of the various  distribution services sectors several months ahead 
of the scheduled implementation date of 11 Dece mber 2004.  Unfortunately, Members were still 
waiting for China to finalize the procedures that would actually permit foreign enterprises to begin 
providing these services.  China had announced and had begun to implement an extensive action plan 
intended to ensure that it developed and implemente d an effective system for IPR enforcement, as 
required by the TRIPS Agreement.  It had implem ented steps to improve the administration of its 
TRQ system for bulk agricultural commodities.  It ha d agreed to withdraw discriminatory value-added 
tax policies that had favoured Chinese-produced semiconductors over importe d semiconductors.  It 
had agreed to revise problematic industrial polic ies that had promoted unique Chinese standards for 
wireless encryption and third-gene ration wireless telephony.  China had achieved this progress even 
in the face of substantial continuing challenges, incl uding the need to confront a host of dislocations 
inherent in its transition from a planned economy to a more market-oriented economy. 
65. Her delegation also recognized and welcomed  the important contribution China's economic 
progress was making to global growth.  China's trad e with Members continued to be an important 
engine for global development.  The United States also noted and welcomed  China's report on its 
ever-increasing trade investment numbers.  Howe ver, as her delegation had made clear on previous 
occasions, expanding trade, no matter how impressive, was not the sole indicator of improvements in fairness, predictability, transparency or other system ic market reforms that were the true measure of 
WTO implementation.  China's implementation wo rk was still incomplete, and opportunities for 
selective intervention by Chinese govern ment officials in the market were still readily available.  
Indeed, just this type of intervention had made China's implementation efforts disappointing in some 
areas over the past year.  The agriculture sector provided a good example.  Imports by China had 
increased significantly in 2004, but trade in this sector continued to be plagued by uncertainty.  
Capricious practices by Chinese customs and quarantin e officials often delayed or halted shipments of 
agricultural products into China, while sanitary and phytosanitary standards with questionable 
scientific bases and a generally opaque regulatory re gime frequently bedeviled traders in agricultural 
commodities.  As a result, in the past year, the Un ited States' and other Members' trade officials had 
frequently had to engage China in order to contain the disruptive effects of various proposed or actual 
restrictions imposed by China's agricultural aut horities.  China's industrial policies were also 
problematic.  China had increasingly resorted to policies that limited market access by non-Chinese 
origin goods and that aimed to extract technol ogy and intellectual property from foreign rights-
holders.  China also continued to use export rest rictions on coke and other raw materials.  The 
situation had been further aggravat ed by China's apparently widesp read subsidization of industry, 
including programmes possibly prohibited  by the WTO Subsidies Agreement. 
66. The United States also had serious concerns in several sectors where China's regulatory 
authorities had adopted policies designed to limit market access to major foreign businesses.  For 
example, China's regulatory authorities had impo sed capital requirements on foreign businesses in a 
number of service sectors that were significantly hi gher than international averages or that China's 
market conditions would dictate.  With respect to  the cross-cutting issue of transparency, the United 
States recognized that China had made important stri des to improve transparency across a wide range 
of national and provincial authorities.  While Chinese colleagues from the Ministry of Commerce 
should be particularly recognized for their important achievements in this area, a number of ministries 
and agencies, had made less than impressive effort s to improve their transparency.  As a result, 
China's regulatory regimes continued to suffer fro m systemic opacity, frustrating efforts of both 
foreign and domestic businesses to achieve the poten tial benefits of China's WTO accession.  Finally, 
but perhaps of greatest priority to her Governme nt, was China's development and implementation of 
an effective system for IPR enforcement.  The Un ited States certainly welcomed China's action plan 
for improving enforcement.  However, China's effort s to enforce intellectual property rights were still 
hampered by lack of coordination among Chine se government ministries and agencies, local WT/GC/M/90 
Page 14  
 
 protectionism and corrupti on, high thresholds for criminal prosecution, lack of training and weak 
punishment.  The United States urged China to take immediate steps to achieve  substantial reductions 
in IPR infringement levels in the country.  In particular, China's establishment of criminal 
enforcement standards that genuinely deterre d IPR infringement was of great urgency. 
67. As the United States looked ahead to 2005, it woul d look for substantial improvement in all of 
these areas.  It would also clo sely monitor China's implementation of its key commitments on trading 
rights and distribution services.  At the same time, the United States was encouraged that China, at 
senior levels of government, had indicated its resolve to expand trade, intensify economic 
cooperation, implement its WTO commitments, and further open its markets.  In sum, the United States appreciated the efforts China had made in 2004 in implementing its WTO commitments and 
participating in the current year's TRM.  He r delegation looked forwar d to improvements on both 
fronts in 2005 and beyond, and w as committed to working with Chin a and other Members in this 
important undertaking. 
68. The representative of Zambia
 welcomed China's comprehensive statement.  There was no 
doubt that China had effected some serious reforms within a record time in order to conform to the 
requirements of the WTO.  His delegation therefor e wished to congratulate China and to commend it 
for a job well done.  It also wished China well and continued success. 
69. The representative of the European Communities  thanked China for its very comprehensive 
statement.  The Community attached great im portance to the TRM exercise as an important 
mechanism to ensure tran sparency.  For a key WTO Member such as China to participate positively in 
this periodic review was an important signal of its commitment to enforce a multilateral trading 
institution.  To ensure maximu m effectiveness of the exercise, the Community had focussed its 
submissions on a limited number of priorities and had raised only issues already discussed a number of times in WTO Committees or in bilateral meetings , and therefore well known to China.  However, 
the Community's assessment of the 2004 TRM exer cise was somewhat mixed.  Although there had 
been useful clarifications on several matters of co ncern, in particular in the Council for Trade in 
Services, the overall impression was that it had not al ways been possible to obtain satisfactory replies 
in terms of specificity, and his delegation wished to continue to encourage China to provide written 
replies as a signal of its commitment to this exerci se.  Earlier that morning, Members had received 
document WT/GC/84 with interesting information under Section 18 of China's Protocol of Accession.  
The Community had the impression that in some Co mmittees, the current year's exercise had been 
less fruitful than the previous year's exercise.  This was somewhat paradoxical, since it did not allow 
China to properly publicize its overall positive effo rts in implementing its WTO commitments.  As 
had been said by previous speakers,  those efforts had been very important.  This situation tended to 
create a perception of a lack of commitment to the proper functioning of these WTO mechanisms, 
even though his delegation was certain this was not the case. 
70. China had made substantial overall progress in the implementation of its WTO commitments, 
but the Community still had some concerns.  While  these were described in detail in its written 
submissions to the various Comm ittees and Councils involved in th e TRM exercise, he wished to 
mention a few.  First, the introduction of restrictions in the service sectors of major importance to the Community, specifically banking, telecommunications and construction.  Second, in some areas, the 
setting up of industrial policies which impacted negativ ely on the activity of foreign firms.  This was 
particularly the case in the automobile sector, and especially regarding legislation on the tariff 
reclassification of parts and vehicles.  Third, was the issue of export restrictions on raw materials;  
however, the Community welcomed the announcement of  the 2005 quota for coke carbon, but still felt 
that all export restrictions should be brought into  line with WTO rules and should be abolished.  
Fourth, the Community still had concerns with IPR enforcement.  In concl uding, he believed that 
China had made substantial progress in the im plementation of its WTO commitments.  The  WT/GC/M/90 
 Page 15 
 
 
 Community continued to attach importance to th e TRM process and hoped to conduct future reviews 
in the same spirit as for this and previous reviews. 
71. The representative of Kenya  thanked China for its important and comprehensive statement.  
The level of reforms undertaken by China was a clear reflection of China's deep commitment to 
meeting its WTO obligations.  Kenya was aware of the efforts involved in all that China had been 
doing.  Her delegation had been deeply impressed by China's continuous determination to ensure that 
it met all its obligations, and wished to join tho se that had congratulated China on its efforts and 
achievements. 
72. The representative of China  thanked Members for their objective and positive comments on 
China's implementation of its commitments.  His delegation had taken note of  the concerns and the 
improvements to be achieved.  All of these concerns  had been discussed in various subsidiary bodies 
among China's experts.  Quite a number of the con cerns could be addressed through the new round of 
negotiations rather than in the context of the im plementation of commitments.  He reiterated that 
China was open to bilateral discussions at any time on issues of interest to Members.  He once again 
thanked all the Chairs of the relevant bodies for th eir work and reports, the Secretariat for its efforts 
during the whole process, and all Members for their cooperation. 
73. The General Council took note  of the statements and of the reports submitted by China and by 
the subsidiary bodies on the conduct of their respective reviews, and agreed  that the third review by 
the General Council  of China's implementation of  the WTO Agreement and the provisions of its 
Protocol of Accession had been concluded. 
5. Report by the Chairman of the Trade Negotiations Committee 
74. The Chairman  recalled that at its first meeting in 2002, the Trade Negotiations Committee had 
agreed that it would report to each regular meeting of the General Council. 
75. The Director-General, Chairman of  the Trade Negotiations Committee , said that the TNC had 
held its fifteenth meeting on 9 December, which ha d been its second meeting since the adoption of the 
July General Council Decision on the Doha Work Pr ogramme.  In his introductory remarks to the 
meeting, he had suggested that it would be appropr iate to invite the TNC early in the new year to 
accelerate its collective consideration of the way forward for the Round as a whole.  Maintaining a 
holistic view of the Round and of its overall balance and pace was one of the prime roles of the TNC.  
Since July, the work in the negotiating bodies was being pursued seriously and in a spirit of shared commitment.  It was clear that major challenges lay ahead, and that there was no room for complacency.  Overall, however, he saw a degree of progress in Geneva and, possibly more 
importantly, sufficient collective will to make furthe r progress.  Furthermore, compared to what many 
had expected at the TNC's meeting in October, recent renewed expressions of commitment at the 
political level to the Round and its conclusion show ed that Members were not facing any significant 
hiatus following recent political events in some count ries.  Ministers he had met on his travels and in 
Geneva had expressed a clear commitm ent to press ahead with the Round. 
76. For these reasons, he had informed participants at the December TNC meeting that he 
intended to launch a process of collective reflection early in the new year, which he hoped would lead 
to an early common understanding on Members' obj ectives for 2005, looking to the Hong Kong, 
China Ministerial and beyond.  The latter was clear ly an exercise that required serious thought and 
preparation, and he had asked participants to co me back after the end-of-year break prepared to 
engage in consultations that he would conduct on these important questions.  He hoped that these 
consultations would provide a basis for a productive discussion at the next meeting of the TNC, which 
would take place on 14 February.  In  announcing this intention, he wi shed to underline that advancing 
Members' overall strategic thinking in this way was in no sense intended to diminish the importance WT/GC/M/90 
Page 16  
 
 of the so-called technical work in the negotiating b odies.  On the contrary, this work needed to be 
maintained and intensified.  It was simply that Members needed to operate on the micro and macro 
levels simultaneously and in a mutually reinforcing manner. 
77. The TNC had also heard oral reports by all th e Chairpersons of the bodies established by it.  
These reports clearly showed that, while good progress was being made in the technical work 
currently under way, Members had to intensify the negotiations.  A large number of participants had 
made statements, reacting to both the Chairpersons' reports and to his own introductory statement.  
From this useful discussion, he believed it was cl ear that, despite the positive atmosphere that had 
characterized the work since July, Members coul d not allow themselves to be complacent.  The 
discussion had centred around six main elements.  Firs t, a change of gear would be necessary in most 
areas sooner rather than later, and Members had to u se the first couple of months of 2005 to ensure 
that this happened smoothly.  Second, Members should  engage in an exercise of collective reflection, 
with the aim of reaching an early understanding on  their objectives for 2005, the Sixth Ministerial 
Conference and beyond.  Third, Members should look at how the involvement of Ministers could assist the negotiations, bearing in mind that the main  effort would have to be made in Geneva.  
Fourth, Members had to aim for balanced results ac ross the board.  Fifth, if Members were to reach 
the objectives they had set for themselves for Hong Kong, China, they had to achieve some 80 to 
90 per cent of these objectives by the summer, and n eeded an effective work programme in place to 
be able to do so.  Sixth, in the course of 2005, Members had to strive to replicate the way they had made progress in 2004, and by the summer would need serious results on all fronts. 
78. Finally, he had made an interim report to th e TNC on the work he had been undertaking on 
implementation in his capacity as Director-General , as he had foreshadowed at the October TNC 
meeting.  In line with the July Decision, he had continued with his consultative process on all 
outstanding implementation issues under paragraph 12( b) of the Doha Declaration, including on 
issues related to the extension of the protection of geographical indications (GIs) provided for in 
Article 23 of the TRIPS Agreement to products othe r than wines and spirits.  This process was being 
undertaken without prejudice to the positions of Memb ers, in accordance with the July Decision.  The 
work was progressing on two tracks.  The first track concerned all outstanding paragraph 12(b) 
implementation issues except the GI extension issue.  In the light of initial consultations he had 
undertaken in October, he had requested the Chai rpersons of the WTO bodies concerned to act as his 
Friends, as allowed for in the July Decision.  He had asked them to carry out consultations on his 
behalf on the scope for progress on the issues releva nt to the WTO body they chaired.  On the second 
track, which concerned the GI extension issue, in  the light of a number of consultations he had 
undertaken in October and November, he had re quested DDG Mr. Thompson-Flôres to conduct, on 
his behalf, a technical level process aimed at clarifying the issues related to GI extension, building on the work already undertaken.  Work was ongoing on both of these tracks, and he intended to report 
again to the TNC on an interim basis at its meeting in February. 
79. The representative of Switzerland
 thanked the Director-General for his comprehensive and 
substantive report.  That report reflected the fact that the most recent discussion in the TNC had been 
more substantive than the preceding one.  His delegation had the impression that Members were conscious that they had reached a stage where co mplacency was no longer an option, and that some 
kind of movement was essential if Members wished  to reach a satisfactory and positive outcome in 
Hong Kong, China.  What his delegation had also  gathered from the discussion in the TNC was the 
rather broad feeling that at some stage, and perh aps not too late, political input might be necessary for 
the work in Geneva to advance at the proper pace.   Switzerland had also taken note of and welcomed 
the various suggestions the Director-General had ma de in this matter.  In addition to what his 
delegation had said at the TNC meeting in December, Switzerland wished to thank the Director-General for the consultation he had carried out on GIs.  The outcome of this consultation was 
encouraging, and Switzerland looked forward to en gaging actively and constructively on this issue 
with all Members.  He drew attention to a commu nication on this issue which had been distributed  WT/GC/M/90 
 Page 17 
 
 
 that day from Bulgaria, Guinea, India, Kenya,  Liechtenstein, Madagascar, Moldova, Romania, 
Switzerland, Thailand and Turk ey in document WT/GC/W/540.3  Switzerland hoped that this 
communication would serve as a contribution to the upcoming consultations by DDG Mr. Thompson-
Flôres. 
80. The representative of Nigeria , speaking on behalf of the African Group , commended the 
Chairman and the Director General, as well as Chai rpersons of WTO bodies, for their hard work and 
the leadership demonstrated throu ghout the past year.  These efforts,  combined with the determination 
of the entire membership, had enabled the adoption of the July package that would guide the DDA 
negotiations.  This had been a major achievement for the WTO in 2004.  The African Group wished to assure the Director-General a nd the whole membership that it stood ready to engage constructively 
and positively in subsequent stages of this work.  The Group also hoped and expected that in this 
future work, the process would continue to be open,  transparent and inclusive.  The African Group 
welcomed the report by the TNC Chairman on th e work done under the TNC in 2004.  This report 
was a reflection of the current state of play in the DDA negotiations.  It was the African Group's expectation that the negotiating process would rema in open and be guided by the mandates in the 
Doha Declaration, and that Members would give mo re priority to development-related issues in the 
DDA.  The Doha Round was about development, and Members should work towards achieving an 
outcome that would lead to real development in  developing countries.  The African Group had high 
expectations of the negotiations on agriculture, NAMA, services, development issues and in other 
areas.  It remained committed to these negotiations a nd hoped they would result in a win-win situation 
for all. 
81. The representative of Zambia
, speaking on behalf of the LDCs , said that the LDCs would, as 
usual, play their part in ensuring that the Direct or-General succeeded in his onerous responsibilities, 
by giving him their full cooperation.  They also intende d to cooperate with all delegations and, in turn, 
had no doubt that the Director-General and all dele gations would continue to  give them a listening 
ear.  As the LDC Group had pointed out at the TNC meeting, it viewed the July package as an 
intermediate step in the negotiati ons only in selected areas.  In other areas not covered in the July 
package, work was to proceed as well.  As all we re aware, the members of the LDC Group had made 
it clear that they wished to contribute to the success of the Ministerial Conference in Hong Kong, 
China.  Failure of that Conference would not be in the interest of LDCs.  In this regard, the LDCs 
looked forward to a constructive phase of engagement in  each of the areas of interest to them and, as 
promised, would submit proposals for Members' consid eration and approval.  They looked forward to 
the usual understanding and cooperation of both thei r developing- and develope d-country partners in 
the WTO.  The LDCs hoped that in some areas, developed-country partners and those developing 
countries that were able to do so, would take some positive steps in favour of the LDCs. 
82. It was important that Members continue to remi nd themselves of the plight of the LDCs.  As 
the LDCs had continually pointed out, the Doha Round was about developmen t, and development was 
about developing countries, especially LDCs.  Theref ore, the issues that needed urgent attention and 
that were clearly mentioned in the Doha Decl aration could not be forgotten.  These included 
implementation issues.  Even in the negotiations, Members had always to remember that implementation issues took precedence in terms of priority.  One could not call this round a Development Round if one ignored the importance of issues such as:  (i) technical assistance for 
developing countries, especially LDCs;  (ii) cap acity building for LDCs, which meant much more 
than workshops and seminars;  (iii) addressing s upply-side constraints for LDCs, since for most 
LDCs, providing market access would not mean an ything if supply-side constraints were not 
addressed;  this was to help ensu re that these countries had the appropriate economic infrastructure, 
such as road and rail networks, ports and harbours, manufacturing pl ants, and so forth;  (iv) S&D 
issues – the LDCs noted that no agreement had yet been reached on S&D treatment;  every aspect of 
                                                     
 
3 Also circulated as TN/C/W/21. WT/GC/M/90 
Page 18  
 
 WTO decisions should include an element of S&D.  Other areas of serious concern to the LDCs, 
which they had always pointed out, included:  (i) preferences, on which many countries depended for 
their survival;  (ii) the non-requirement for LDCs  to take on commitments they could not fulfill;  
(iii) the provision of duty-free and quota-free access of LDC exports to deve loped-country markets 
and those markets in developing countries that were able to provide such access. 
83. In concluding, he wished to highlight a serious problem that Members had not properly 
addressed but which was of grave concern to the LDCs and was clearly mentioned in the Doha 
Declaration, namely foreign debt.  This problem was the least talked about at the WTO and yet was 
one that was stifling international trade for LDCs  and was responsible for ravaging the economies of 
most LDC countries.  This problem had to be brought  to the center stage of Members' activities.  The 
only way to deal with the foreign debt problem was to write it off completely.  Otherwise, whatever 
one tried to do to integrate the LDCs into the worl d trading system would be an exercise in futility for 
those LDCs that were heavily indebted.  One al so had to deal with the problem of cotton and 
vigorously pursue this matter, so that a solution coul d be found as defined in the July package.  This 
matter could not be relegated to a back burner.  It  had to be tackled head on, because for many LDCs, 
the problem of cotton was a matter of life and deat h.  As the end of the year approached, Members 
should resolve that 2005 would be a year of success, because they had talked for a long time and now needed to take action, so that people in both deve loped and developing countries would be able to 
celebrate.  The LDCs had to be taken seriously, b ecause for a long time they had been kept waiting. 
84. The representative of Kenya
 thanked the Director-General for his report and supported his 
proposal that the TNC meet early in 2005.  Kenya agreed that 2005 should be a year in which 
Members could and should build on the July packag e and aim for a balanced result – balanced in a 
manner that would ensure that the aim of the DDA  was preserved.  While involving Ministers was 
and always had been a good idea and a welcome one,  Geneva should remain the main theatre of 
activities, and Ministers should be involved when and if there was movement.  The focus had to be on 
development-related issues in order to fu lfil Members' hopes and the promises of Doha. 
85. The representative of Lesotho  congratulated the Director-General on his chairmanship of the 
TNC and for his presentation of the reports of the negotiating groups.  Lesotho supported the 
statements by Nigeria on behalf of the African Group and by Zambia on behalf of the LDCs.  All 
knew that the Doha Round was a development Round,  and as such one would expect development 
issues to be at the forefront of the negotiations.  On S&D treatment and implementation issues, which 
were the core development elements of the Doha  Declaration, Members had been instructed to 
continue the work under way since 2002 and to reitera te the earlier commitmen ts regarding technical 
assistance and the Work Programme for LDCs.  As  such, Lesotho hoped that S&D treatment would 
be incorporated into the architecture of WTO rul es.  His delegation was aware that differentiation 
among developing countries was one of the most conten tious issues of the review of S&D treatment, 
and hoped that a solution would be found soon.  Le sotho also hoped that th e difficulties in meeting 
negotiated obligations and per ceived imbalances in certain WTO rules in the context of 
implementation-related concer ns would soon be resolved. 
86. The July package confirmed that negotiations on trade facilitation had been agreed on the 
basis of explicit consensus, thus opening the way for negotiations to start in this area within the single 
undertaking.  While Lesotho appreciated that fl exibility could be included in the modalities for 
developing countries and LDCs – particularly re lating to their implementation capacity and the 
requirements of support for infrastructure developm ent – it was envisaged that implementation would 
have to be closely linked to the availability and e ffectiveness of technical and financial assistance for 
infrastructure and other supply-side constraints, whic h were not currently assured, consistent with an 
individual country's development and trade needs and administrative capabilities.  Given this, the 
negotiations on trade facilitation could be cons idered as a breakthrou gh and success under the 
Singapore issues.  However, ultimately, for coun tries like Lesotho which were actually benefiting  WT/GC/M/90 
 Page 19 
 
 
 from tariff preferences or attached importance to these in the context of the current negotiations, it 
was critical to assess the value of trade preferenc es in order to engage in negotiations with an 
informed background on the importance of trade in struments for economic and social development, 
given the impact of trade liberalization on these countr ies.  To this end, it had been found prudent to 
have an additional backup in the July package in order to support and give hope to the small 
economies that their preferences would be maintained consistent with the WTO mandate.  In addition, 
other things being equal, the cha llenge was that, given flexibility, other trading partners, such as 
developed countries, would pursue their negotiatio ns in a substantive manner, while developing 
countries, particularly the LDCs a nd small economies, would be left behind, but feeling safe under the 
assumption that the flexibility accorded to them covered their interests.  To this end, some vigilance 
had to be exercised in making a clear assessment of costs and benefits that would potentially be 
derived from the agreed trade facilitation negotiation s.  It was therefore important to commission a 
study that would look into the implications of this commitment, would advise on the possible ways of addressing it, and would take cognizance of the rele vant aspects of Articles V, VIII and X of the 
GATT 1994, in order to identify the trade f acilitation needs and priorities of Members. 
87. The representative of Chile
 commended the Director-General for an excellent report.  He had 
been prompted to take the floor by the statement by Switzerland, which had drawn attention to a very 
recent communication on GIs.  He did not wish to ma ke any substantive comments, but merely to say 
that this communication stated that Members had to  engage in a constructiv e manner in a substantive 
discussion and avoid moving in circles.  Chile welc omed a change of attitude on certain delegations' 
part, and was willing to engage on such a basis.  Ho wever, it was not helpful that in at least three 
places in document WT/GC/W/540, the concept of usur pation had been used.  Usurpation implied that 
there was a right being taken away from some party.  If such a right existed, one would have to resort 
to dispute settlement to try to remove it.  What cert ain Members in reality wanted was to create rights.  
However, unless these rights existed, there could be no usurpation.  It was not constructive to start a 
discussion using such language.  Also, paragraph 18 of WT/GC/W/540 seemed to set out some 
limitations for, or establish the parameters of, the consultations.  This would proscribe the discussion 
and limit it in a way that Chile did not agree with.  Therefore, Chile thanked the Members in question 
for their contribution, but wished to put  these preliminary comments on the record. 
88. The representative of Australia  said that in light of the comments by Chile and Switzerland, 
his delegation too wished to make a few co mments on the communication in WT/GC/W/540.  
Australia had agreed with the Director-General's suggestion that Members e ngage in consultations on 
GIs.  If Members were to have a proper discussion,  it would be best to discuss not only the proposals 
made to modify the rights and obligations in th e current TRIPS Agreement by extending the higher 
level of protection currently accorded to wines and sp irits to other GIs, but also the proposals made by 
some Members – not all of whom had co-sponsor ed WT/GC/W/540 – who wanted to extinguish the 
rights accorded under the TRIPS Agreement to a designa ted, but at the current stage quite unspecified, 
list of GIs.  Chile had just talked about usurpa tion.  A classic case of usurpation was where some 
Members now wished to extinguish the rights Memb ers currently had under the TRIPS Agreement, 
notwithstanding that there was no agreement in the Doha Declaration to re-e xamine, to review, or 
even to consider this particular issue.  However,  in the interests of having a constructive exchange on 
the whole question of GIs, Australia would be happ y to participate in the consultations that the 
Deputy Director-General would carry out in the coming week. 
89. The representative of Turkey  said that his delegation wished to pick up on the points made by 
Chile and Australia, and to associate itself with the statement by Switzerland presenting the communication on GI extension.  Turkey wished to assure the delegations concerned that it had taken 
note of the concerns expressed during the consulta tions held, and would continue to work in a 
constructive spirit in order to achieve a positive result on this important issue. WT/GC/M/90 
Page 20  
 
 90. The representative of Trinidad and Tobago
, speaking on behalf of the ACP Group , supported 
the Director-General's proposals for progress in th e deliberations in 2005.  In addition, the 
ACP Group also wished to associate itself with the st atements by Nigeria, Zambia and Lesotho.  He 
recalled that the ACP Group had made  a substantive statement at th e December TNC meeting, which 
outlined its initial thinking on the progress made in the negotiations since the adoption of the 
July package.  In addition, document WT/GC/ 82, which had been submitted by the ACP Group 
following the October General Council meeting, also provided an overview of some of the issues that 
were central to the Group within the context of the current technical, pre-modalities and subsequent-
modalities phases of the negotiations.  It was not the Group's intention to repeat its negotiating 
positions, but rather to provide a few complementar y perspectives that would assist in squaring the 
circle, as it were.  First, the ACP Group had not lost sight of the fact that Doha was intended to be a 
development Round.  For the ACP Group, what wa s paramount was the reform of the multilateral 
system, as well as the levelling of the playing field it represented, in a way that would make it more amenable to fostering the growth, economic recove ry, and sustainable development of ACP countries' 
economies.  This would undoubtedly require a genuine understanding among Members of the 
meaning of development, S&D and less-than-full reciprocity, within the context of global trade and 
multilateral trade rules.  There should also be a parallel recognition of the peculiar circumstances 
facing LDCs, NFIDCs and the weaker a nd more vulnerable developing countries. 
91. This fundamental approach to the current R ound was necessary, particularly since the 
experience of the ACP countries with the reform pr ocess thus far had invariably been characterized 
by:  (i) a somewhat distinct distribution of the benefits from growth in world trade in favour of 
developed countries and advanced de veloping countries;  (ii) declining opportunities for the flow of 
ACP countries' products into the markets of th e aforementioned two categories of countries;  
(iii) increasing non-competitiveness of domestic producti on systems and the subsequent displacement 
and declining market share in domestic and internationa l markets;  (iv) a slow rate of diversification 
of ACP economies;  and (v) worsening terms of tr ade and the widening of the welfare gap between 
rural and urban areas.  Second, regarding trade facilitation, the ACP Group was heartened by the 
positive start made to the negotiations in this area.   The first meeting had attempted to discuss issues 
of concern to many ACP countries, with regard to any eventual multilateral rules-based regime 
governing the movement, release and cleara nce of goods, including those in transit. 
92. However, as one proceeded it was imperative that  the negotiations in this area not stray from 
the mandate of clarifying and improving relevant aspects of Articles V, VIII and X of GATT 1994.  It 
was equally important for Members to ensure that the trade facilitation negotiations neither cast a 
shadow over, nor proceeded ahead of, other critical areas of the single undertaking, particularly the 
development dimensions.  The NAMA and Trad e Facilitation Negotiating Groups should make a 
collective effort to address the non-tariff barriers wh ich affected ACP exports.  Third, the Group also 
wished to highlight the need for the rules negotiations to move in to the subsequent or negotiating 
phase.  Fourth, the ACP Group looked forward to adde d impetus being provided to the work geared at 
implementing paragraph 11 of the July General Council Decision to implement paragraph 6 of the 
Doha Declaration on the TRIPS Agreement and Public  Health.  In this regard, the Group wished to 
note that the communication by Nigeria on behalf of the African Union, dated 30 November 2004 
(IP/C/W/437), provided a viable way forward.  The ACP Group also wished to provide its support to, 
and anticipated, a favourable consideration in resp ect of the review of the following waivers under 
Item 11 of the Agenda:  (i) the ACP-EC Partnershi p Agreement;  (ii) the Canada-CARIBCAN waiver;  
and (iii) the waiver granted to Cuba wi th regard to Article XV.6 of GATT 1994. 
93. The representative of Bulgaria
 thanked those who had spoken on GIs thus far for their 
readiness to engage constructively in the consulta tions initiated by the Chairman of the TNC, and 
which would be carried out on his behalf by DDG Mr. Thompson-Flôres.  It was no secret that 
Bulgaria wanted these consultations to lead to s ubstantive results, and this was why his delegation 
was taking the floor – because it had seen signs of  engagement and declarations of constructive  WT/GC/M/90 
 Page 21 
 
 
 participation in these consultations which led it to hope that these consultations would lead to 
something new on this matter, so that some results  could be expected.  This was Bulgaria's main 
preoccupation.  His delegation did not understand what some delegations meant when they stated, for 
example, that Members should discuss not only proposals that had been made to modify the rights and obligations in the current TRIPS Agreement by ex tending the higher level of protection currently 
accorded to wines and spirits to other GIs, but al so proposals made by some to extinguish certain 
rights accorded under the TRIPS Agreement.  There was no proposal to extinguish rights under the 
TRIPS Agreement.  On the contrary, there was a proposal to strengthen those rights, and his 
delegation disagreed with Chile's statement th at paragraph 18 of WT/GC/W/540 proscribed the 
subject matter of the consultations.  He wished to assure Chile that this was not the case.  In these 
consultations, Bulgaria wished to discuss substance in order to arrive at a result on the technical 
aspects of the additional protection of the extension of  GIs to products other than wines and spirits, so 
that at the end of the negotiations, Bulgaria would not be told that the issue was not ripe to be included in the basket of the final deal.  In order to arrive at such a situation, it was not necessary – 
and his delegation had been underlining this – for th e participants in the consultations to go back from 
their positions.  Bulgaria was not seeking that ot hers agree with the extension now, at these 
consultations, but also did not want a general discu ssion in which others would be trying to convince 
Bulgaria that they could not accept the extension.  Hi s delegation wished to deal with the concerns of 
others in a pragmatic and practical way, in order to see how they could be met, for example, under the 
exceptions of Article 24 of the TRIPS Agreement.  Mere statements of conf usion or of not being 
convinced would not be enough and would not lead Me mbers to a clarification of the issues in a way 
that would help formulate a result that could be in cluded in the final basket.  It went without saying 
that for Bulgaria, it would be very important to have this in the final basket. 
94. The representative of the European Communities
 said that he would not repeat what he had 
already said in the TNC in responding to the Dire ctor-General's report on work in the TNC.  He 
wished merely to make a few remarks following the previous discussion on GIs.  Regarding the 
statement by Chile concerning the term "usurpation", he noted that in Latin, the term was "usurpatio", 
which had been translated into E nglish as "usurpation" – a term that had a certain pejorative notion.  
However, if one looked into this term in Roman la w, one would not find any pejorative notion.  Thus, 
no offence had been intended by the use of this term .  He was certain that Chile would agree with him 
on this matter.  The Community agreed very much with what had been stated by Bulgaria.  Like 
Bulgaria, the Community also welcomed the fact, wh ich had become clear in the consultations held 
by the Director-General, that Members were apparen tly ready to engage in a substantive discussion on 
this issue, based on the arguments for and against it.  The Community looked forward to the first 
consultation to be organized, on behalf of the Di rector-General, by DDG Mr. Thompson-Flôres.  The 
Community had agreed in informal consultations  that the various parties would put forward 
documentation to assist the substantive discussion.  The communication presented earlier by 
Switzerland was one such document, to which th e Community fully subscribed.  His delegation 
looked forward to a similar document from other Me mbers, including those who had not been part of 
the group of Friends of GIs but who were always welcome to join that group at a later stage. 
95. The General Council took note  of the Director-General's report and of the statements. 
6. Work Programme on Small Economies – Report by the Chairman of the Dedicated 
Session of the Committee on Trade and Development 
96. The Chairman  recalled that at its meeting in Febr uary and March 2002, the General Council 
took note of a framework and procedures for the conduct of the Work Programme on Small Economies, under which this Work Programme sh all be a standing item on the General Council's 
agenda.  The framework and procedures also pr ovided that the Committee on Trade and Development 
shall report regularly to the General Council on the pr ogress of work in its Dedicated Sessions on this 
subject. WT/GC/M/90 
Page 22  
 
 97. Mr. Clarke (Barbados), Chairman of the Dedicated Session of the Committee on Trade and 
Development  reported on the most recent meeting of the Dedicated Session of the CTD which had 
addressed the Work Programme on Small Economies on 3 November.  The meeting had taken place 
during the Ninth "Geneva Week" programme for non-resi dent Members and observers so as to be able 
to take advantage of the presence of the non-resident  delegations who had a strong interest in this 
subject.   While he had hoped to be  able to convene another meeting of the Dedicated Session before 
the present Council meeting in order to advance this work, this had unfortunately not been possible.  
The plan now was to have an informal meeting in mid-January in order to focus on the proposals 
made thus far in the Dedicated Session and to address any outstanding issues that could provide a 
focus for future work.  Members had to accelerate thei r efforts in this forum in 2005 in order to have 
something meaningful to report to the Ministerial Conference in Hong Kong, China. 
98. All delegations who spoke thanked the Chairman  of the Dedicated Session of the CTD for his 
report. 
99. The representative of Paraguay  agreed with the Chairman of the Dedicated Session of the 
CTD that work in this forum need ed to accelerate in 2005, given that in 2004 various events had 
prevented Members from moving forward as they would have wished.  For Paraguay, it was 
fundamental to begin to examine the progra mme established under Paragraph 35 of the Doha 
Declaration, as the small economies aspired to reap ing benefits from the Doha Round, rather than 
simply being spectators.  As the Chairman of the Dedicated Session of the CTD had stated, it was 
necessary to have something quite substantial in th is area for the Ministerial Conference in Hong 
Kong, China.  For this reason, Paraguay hoped that ve ry early in 2005, Members would be able to re-
start their work and move more decisively with  the support of other delegations, principally the 
developed countries. 
100. The representative of Bolivia  said his delegation understood that due to the many end-of-year 
meetings, it had not been possible to hold a meeting of the Dedicated Session of the CTD the previous 
week.  It was now expected that efforts would ge t under way in January to comply with Paragraph 35 
of the Doha Declaration and to include this issu e in the balanced packag e Members should present to 
Ministers in Hong Kong, China. 
101. The representative of Guatemala  said his country was one of those interested in having the 
Dedicated Session of the CTD move forward on the Work Programme on Small Economies.  
Guatemala was optimistic about progress in 2005, with the objective of having concrete results for the 
Ministerial Conference in Hong Kong, China. 
102. The representative of Jamaica  said this was a subject of considerable interest to Jamaica and 
to other countries in the sub-region who were sma ll economies and who had put a lot of stock in the 
outcome of the work under Paragraph 35 of the Doha  Declaration.  His delegation joined Paraguay, 
Bolivia and Guatemala in looking forward to a conc rete and action-orientated outcome of this work 
during the course of 2005, that would allow Ministers in Hong Kong, China to act decisively in favour 
of the interests of small economies. 
103. The representative of Mauritius  said his delegation joined others who had supported the 
Chairman of the Dedicated Session of the CTD in intensifying the work during the course of 2005, in 
order to have meaningful progress by the time of  the Hong Kong, China Ministerial Conference. 
104. The General Council took note  of the report by the Chairman of the Dedicated Session of the 
Committee on Trade and Development and of the statements.  WT/GC/M/90 
 Page 23 
 
 
 7. Non-recognition of rights under Article XXIV:6 and Article XXVIII of GATT 1994 – 
Communication from Honduras and Guatemala (WT/GC/85) 
105. The Chairman  noted that this item was on the ag enda at the request of Honduras and 
Guatemala, and invited their delegations to introduce it. 
106. The representative of Honduras  said that this item had been placed on the agenda in 
pursuance of the Procedures for Negotiations unde r Article XXVIII adopted by the GATT Committee 
on Tariff Concessions on 10 November 1980 and circulated in document C/113 and Corr.1.  The matter concerned the non-recognition of rights by the European Communities in respect of the 
enlargement process under Article XXIV:6 and the m odification of the Schedule of tariff concessions 
under Article XXVIII as regards bananas.  With re gard to Article XXIV:6, Honduras had sent a note 
on 28 April 2004 to the European Communities in whic h it had stated its claim of interest and had 
reserved its rights in respect of the notification ci rculated by the European  Communities in documents 
G/SECRET/20 and G/SECRET/20/Add.1.  In that note, Honduras had clearly identified a list of products, presented in an annex to that document, and had invoked its right to participate in the 
proceedings under Articles XXIV and XXVIII of the GATT 1994, including the tariff negotiations or 
consultations to establish the compensatory adjust ment provided for under Article XXIV:6.  On 
7 July, the European Communities had replied to th at note, recognizing Honduras's principal supplier 
status and substantial interest for certain produc ts but not for others.  Honduras had then sent the 
European Communities a communication on 12 Ju ly 2004 explaining the reasons for which it 
considered that it had rights in respect of one of  the products for which it had been denied, namely, 
bananas.  Honduras had also requested a number of clarifications concerning the modification of the 
Community's banana import regime (EEC docum ent COM(2004)399).  As it had received no reply, 
Honduras had sent another note to the European Co mmunities on 1 October, requesting a meeting to 
discuss the above issues as well as a written reply to  its queries.  Despite Honduras's insistence, it had 
yet to receive a reply to its queries under Article  XXIV:6.  Subsequently, the EC had submitted its 
notification in document G/SECRET/22 concerning th e modification of its concessions in respect of 
item 08030019 (bananas), and Honduras had reserved its rights in that respect through a note dated 
1 October 2004. 
107. His delegation wished to explain briefly why Honduras had the right to participate in the 
proceedings currently being conducted by the Europ ean Communities in respect of bananas, a product 
which was of the utmost importance to Honduras.  Fi rst, Honduras had stated that it had a substantial 
interest in the context of the Article XXIV:6 proceedings, an interest Honduras believed to be 
genuine, since the Community, in its communication of 2 June, had clearly stated that the 
consequences of the enlargement could be "tak en into account" in the Article XXVIII tariff 
proceedings.  Second, it was clear that regardi ng bananas, the Community was trying to link the 
Article XXVIII discussions with the enlargement pro ceedings.  In order to protect its interests, 
Honduras had therefore notified the Community that it had the right to participate in both 
proceedings.  Unfortunately, not only had the Co mmunity refused to recognize Honduras's expression 
of interest in the enlargement proceedings unde r Article XXIV:6, but had once again rejected 
Honduras's declaration of substantial interest in th e Article XXVIII proceedings.  By failing to justify 
either of the refusals, the Community was adding in sult to injury.  The greatest source of concern was 
that the initial stages of the Co mmunity's proceedings to modify its Schedule of tariff concessions, 
including its refusal to accept Honduras's declaration of "substantial interest", already reflected the 
same injustices suffered by Honduras during the Ar ticle XXIV:6 proceedings, specifically as regards 
notification.  Indeed, as with the Community's en largement proceedings, the notification of 2 August 
under Article XXVIII:5 had not provided any clarif ication, but had merely indicated that the 
Community would be modifying the tariff applicab le to bananas, without explaining what that 
modification would be. WT/GC/M/90 
Page 24  
 
 108. Five weeks later, ignoring the usual discreti on allowed in Article XXVIII proceedings, the 
Community had decided to reveal the new tariff, but  rather than using the appropriate WTO channels 
to notify MFN suppliers, it had done  so through the international press.  Thus, Honduras had learned 
through the press that the Community intended to  increase yet again the already high tariff on 
bananas, from 75 euros per metric tonne, or 17 per cent ad valorem,  to 230 euros per metric tonne, or 
approximately 55 per cent ad valorem .  In order words, it had effectively tripled the tariff to be paid 
by Latin American developing countries.  In an effort to win over public opinion, the European 
Commission had made a point of revealing that it had had to impose a tariff of 230 euros in order to protect what it called "market distribution" on behalf of Community and ACP producers.  Two weeks following this revelation, the MFN suppliers had b een summoned to a simple information meeting in 
Brussels with the Trade and Agriculture Commissioners .  In the end, in a meeting that would go down 
in history as one of the shortest Honduras had ever attended, it had merely been informed of what it had already learned from the press, namely, that the EC was proposing a tariff of 230 euros. 
109. What his delegation wished to stress was that  before the new tariff proposal had been 
disclosed, Honduras had already fully established its "p rincipal supplying inte rest" in accordance with 
paragraph 7 of the Notes and Supplementary Provisions  concerning Article XXVIII.  As all knew, that 
paragraph authorized Members to invoke substantia l interest when, "in the absence of discriminatory 
quantitative restrictions affecting their exports [t hey] could reasonably be expected to have ... a 
significant share in the market of the contrac ting party seeking to modi fy or withdraw the 
concession."  In Honduras's communication of 1 Octobe r, it had provided information to demonstrate 
that prior to the imposition of the discriminatory banana import regime, H onduras had supplied almost 
10 per cent of the Community market, and sometim es even more.  In its communication, Honduras 
had stressed that it was a small developing country whose per capita income stood at only US$933 at current prices.  It had also stressed that bananas were one of the most important agricultural products 
for Honduras's economy, generating more than US $200 million per annum and providing more than 
10,000 direct jobs.  Honduras therefore trusted th at the Community would be more receptive and 
would recognize its rights under Article XXVIII. 
110. However difficult it might be to understand,  following his delegation's serious and well 
orchestrated effort, the Community had sent it a terse reply informing it, in a single sentence, that it 
did not recognize Honduras's expression of inter est.  Once again, as wh en the Community had 
rejected Honduras's expression of interest under Articl e XXIV:6 with respect to  seven tariff lines, the 
Community had not felt any need to explain or justify its outright rejection of Honduras's commercial 
interests.  This outright and unjustified re fusal to accept Honduras's participation in the 
Article XXVIII negotiations was all the more objec tionable in that it reflected unequal treatment.  
Two weeks earlier, an official from the European  Commission had stated before the numerous 
participants at a seminar in Ecuador  that, in addition to holding consultations with the Latin American 
countries that "qualified", it was also openly consu lting the ACP suppliers.  The stated reason for this 
was that although they had no negotiating rights, these supp liers were interested third parties.  In other 
words, the Community was ready to  triple the MFN tariff on banan as – which clearly affected any 
supplier that had to pay it – while openly excludi ng from the Article XXVIII negotiations developing 
countries that were historical MFN suppliers, su ch as Honduras.  This meant that the Community 
applied different criteria to the preferential supp liers and consulted with them as though they were 
interested parties. 
111. Under WTO rules of due process, any principal and substantial supplier had the right to 
participate in the Community's proceedings on en largement and on the adoption of a tariff-only 
regime.  Honduras should be participating in both proceedings, not only because it was an important 
supplier in the relatively recent past, but also b ecause it had lost its market position as a result of 
discrimination.  The multilateral trading system could not accept the Community depriving Honduras 
of its rights to compensation under Article XXVIII,  because such punishment would cap years of 
discrimination against Honduras.  For this reason,  Honduras was now asking for the support of the  WT/GC/M/90 
 Page 25 
 
 
 General Council as the highest body of the WTO, and respectfully requested th e Chairman to consult 
with the interested parties in order to obtain a re ply to Honduras's questions, and to ensure that the 
Community restored Honduras's rights.  His delegati on also requested that this item remain on the 
Council's agenda in order to enable the Chairman and the interested parties to keep other Members 
informed, in the interests of tran sparency, of developments regardi ng this matter, which was currently 
weighing on Honduras's small economy. 
112. The representative of Guatemala  said that on 30 January 2004, the European Communities 
had submitted document G/SECRET/20 notifying its inte ntion to enter into the procedures laid down 
in Articles XXIV and XXVIII of the GATT 1994, in cluding tariff negotiations or consultations to 
address compensatory adjustments provided for under Ar ticle XXIV:6, in view of the enlargement of 
the European Union.  In response to that docum ent, on 28 April Guatemala had submitted a note to 
the European Communities in which it had reserved th e right to participate in the Articles XXIV and 
XXVIII procedures, including tariff negotiations or  consultations to establish the compensatory 
adjustments provided for under Article XXIV:6 products for which the European Communities 
recognized negotiating rights, as well as on products for which Guatemala considered itself to have 
rights, even though such rights had not been recognized.  Such products included tuna, natural honey, 
"café oro", rum, vegetables, textile mate rials, fresh bananas and macadamia nuts. 
113. Five months later, on 22 September, his de legation had received a note from the European 
Communities informing it, without any justification or explanation, that the Community did not agree with the request submitted by Guatemala.  At the same time, and pursuant to EEC document 
COM(2004)399 of 2 June 2004, the European Commi ssion had provided inform ation regarding the 
European Communities' import regime for banan as during the following two stages:  negotiations 
under Article XXIV:6 (enlargement) and Article XXV III (tariff only) which, according to the above-
mentioned document, would run in parallel.  Therefore, on 2 August 2004, in document 
G/SECRET/22, the European Communities had notif ied, in accordance with the provisions and 
procedures of Article XXVIII:5, its intention to modify concessions on item 08030019 (bananas). 
114. Furthermore, in that same document, the Eu ropean Communities had expressed its intention 
to enter into negotiations and c onsultations with the appropriate  Members under Article XXVIII and 
with respect to the above-mentioned tariff line.  On  the basis of the above, and in accordance with the 
provisions of Articles XXIV and XXVIII, their interpretative notes, the 1980 Guidelines and other 
legal instruments applicable to these types of negotiations, on 29 October 2004 Guatemala, a Member 
with a substantial interest in the concession wh ich was to be the subject of negotiations and 
consultations under Article XXVIII, had communicat ed its claim of interest, in writing, to the 
European Communities, and had also  informed the Secretariat.  Gu atemala had based its substantial 
interest on the following points:  first, paragra ph 3 of the Understanding on the Interpretation of 
Article XXVIII of the GATT 1994 provided that in  determining whether there was substantial 
interest, only trade which had taken place on an MF N basis shall be taken into consideration.  
Accordingly, Guatemala had reminded the European  Communities that in establishing "substantial 
interest" on the basis of the import statistics attached  to its note, it could not take into account trade 
which had taken place under preferences.  Second,  paragraph 7 of the interpretative notes to 
paragraph 1 of Article XXVIII recognized that the expression "substantial interest" was not capable of 
precise definition and, accordingly, might present difficulties for Members.  The same paragraph 
nonetheless stated that this expression was, however , intended to be constr ued to cover only those 
contracting parties which had – or, in the absence of discriminatory quantitative restrictions affecting 
their exports, could reasonably be expected to have – a significant share in the market of the contracting party seeking to modify or withdraw the concession. 
115. In short, in the absence of the quantitative rest rictions applied under the Community's regime 
for bananas introduced under Commission Regulation (EC) No. 404/93 of 1 July 1993, banana 
imports from Guatemala on an MFN basis duri ng the period 2000-2002 could reasonably have had a WT/GC/M/90 
Page 26  
 
 significant share of the European market.  Howe ver, and in spite of the strong arguments and 
justification Guatemala had put forward to support its substantial interest in these negotiations, the 
European Communities had once agai n stated, in a letter of 22 November 2004, that Guatemala's 
claim of interest had not been accepted.  For th at reason, and pursuant to paragraph 4 of the 
1980 Guidelines, Guatemala had now decided, togeth er with Honduras, to raise this matter in the 
General Council and to inform Members that these countries reserved their rights in this matter and 
that this issue was one of importance to them.  Furthermore, it was fundamental for Guatemala to 
insist on the need to find a solution that addre ssed its interests.  Guatemala requested that the 
European Communities recognize negotiating rights on all those products on which Guatemala had 
proven that it had such rights. 
116. Like Honduras, Guatemala wished to propose th e following course of action:  First, this 
matter should be considered as a standing item on th e Council's agenda;  second, in order to obtain 
concrete results, the General Council Chairman should hold consultations with the Members 
concerned;  and third, as a result of these cons ultations, a report should be drawn up, presented and 
discussed in the Council.  His delegation wished to thank the Chairman in advance for the action he 
would be taking on a matter which was of interest not only to Guatemala, but to all Members.  His 
delegation also wished to convey to the Europ ean Communities its willingness to discuss or expand 
upon the information it had submitted in writing and had reiterated orally at the present meeting. 
117. The representative of Costa Rica
 expressed his delegation's support for the statements by 
Honduras and Guatemala.  Costa Rica considered th at the reasons put forward by those delegations 
duly justified their right under Article XXIV:6 to pa rticipate in the negotiations on the Community's 
enlargement, and under Article XXVIII and the waiver for the Cotonou Agreement granted in 
November 2001 to participate in the negotiations ai med at modifying the Community's banana import 
regime.  Costa Rica's only doubt in this c onnection was whether Honduras and Guatemala would 
obtain any more than they had obtained thus far from the Community, even if they were able participate in the negotiations.  Costa Rica was pa rticipating in these nego tiations, and had obtained 
nothing but absolute intransigence from the Commun ity.  As Honduras had explained, the Community 
was trying to link these two processes which, by their nature and in view of the rights of other Members, should be dealt with separately.  His de legation had insisted that the Community separate 
the two issues, but to no avail.  Costa Rica reitera ted once again that there was no practical or legal 
reason for linking these two processes, and that  the Community should therefore hold separate 
negotiations with each of the interest ed Members on each one of the issues. 
118. Costa Rica also shared the alarm expressed by  other Members at the information received 
through the press that the Community intended to in crease its tariff on MFN banana imports by more 
than 300 per cent.  The discriminatory gap was seriously widening, to the detriment of Latin 
American countries and other MFN banana exporters .  His delegation had drawn attention to the 
dangers and unforeseeable consequences of the Community's measures at a time when the WTO was 
in the midst of negotiating the current Round, wh ose mandate in the area of agriculture committed 
Members to the objective of establishing a fair and market-oriented trading system, substantial 
improvements in market access, and maximum liberalization for tropical products.  The mandate of the current Round and the arbitrariness of the Co mmunity regarding this matter constituted an 
explosive situation that could cause enormous damage  to the multilateral trading system.  Costa Rica 
trusted that the consultations requested by Hondur as and Guatemala would contribute to defusing this 
situation. 
119. The representative of Ecuador
 said that his delegation agreed with a number of the arguments 
and opinions expressed by the previous speakers, and wished to make a statement regarding this and 
other subjects when the Council addressed agenda ite ms 11(b)(v) and 11(b)(vi) regarding the review 
of the waivers granted to the EC for its Trans itional Regime for the EC Autonomous Tariff Rate  WT/GC/M/90 
 Page 27 
 
 
 Quotas on Imports of Bananas, and for the ACP-EC Pa rtnership Agreement, respectively, in order to 
provide a clearer picture of Ecuador's views. 
120. The representative of Colombia  said that Honduras and Guatemala had expressed their 
interest in two of the processes initiated by th e European Communities, namely, enlargement under 
Article XXIV:6 and the possible adoption of a single tariff rate for bananas in accordance with the 
waiver agreed in Doha on 14 November 2001.  Colo mbia, being a leading supplier of bananas to the 
European Communities, was participating in both negotiations and hoped to be compensated for the 
prejudice caused it by the enlargement of the Europe an Union.  Indeed, mark et access for bananas in 
the Community's ten new member States had been cons iderably restricted by their passage from a free 
import regime to a thoroughly restricted one, governed  by licensing, quotas, and a tariff which, in 
itself, was high at 75 euros per tonne.  Colombia ho ped it would be possible to  negotiate a rate that 
complied with the strict requirements set forth in th e waiver.  Indeed, it believed that the negotiations 
being conducted with the European Communities had th eir own particular legal framework, in that the 
waiver qualified the negotiations that could take place under Article XXVIII.  While according to that 
Article, there was no limit to the renegotiation of a tariff, the waiver provided that the single rate 
adopted should result in at least maintaining tota l market access for MFN suppliers.  In addition, it 
provided for a multilateral follow-up mechanism for the future.  The waiver also specified the 
interested parties in the process, not limiting them  to those provided for under Article XXVIII, but 
extending them to all those having an interest in the European banana market.  Consequently, the 
interests of countries such as Honduras and Guat emala should be taken into account.  Colombia 
reaffirmed that the rate of 230 euros per tonne a nnounced by the European Commission did not reflect 
the mandate of the waiver becau se the access conditions of the MFN countries were not maintained, 
raising the risk of a fourth banana dispute. 
121. The representative of Brazil  said that his delegation had taken note of the statements by 
Honduras and Guatemala and supported their request.  Much was said in the WTO about the participation of smaller countries.  Now that there was a very important issue dealing with one of the 
most important export products of interest to these two countries, it was only fitting that Members 
should recognize it.  His delegation hoped that a solution would be found as soon as possible. 
122. The representative of the European Communities
 thanked Honduras and Guatemala for their 
detailed statements.  Since those statements covered a lot of ground, he requested a copy of them to 
forward to his authorities.  He also wished to th ank other delegations for their interventions on this 
item.  He assured the Council th at the Community attached great importance to following the WTO 
agreements, and to ensuring that Members were able  to exercise their rights and obligations, and also 
with respect to carrying out the procedures for ma king a tariff schedule for the 25-member European 
Community.  Since its notifications under Articles XXIV and XXVIII, the Community had received claims from quite a number of Members.  These had been carefully examined with a view to 
establishing supplying rights, as provided by the WTO agreements.  The Community had returned the 
results of these examinations to Members directly , inviting them to discuss the matter further should 
they believe that the results of the Community's  examination were mistaken.  Accordingly, the 
Community had, upon request, looked further into  the claims of Honduras and Guatemala.  No 
mistakes had been found, and Honduras and Guatem ala had not submitted further information to 
support their case for supplying rights. 
123. In recognizing or rejecting claims, the Community had based itself on WTO law and well-
established practice.  Regarding Article XXVIII, his delegation was ready to meet again with 
Guatemala and Honduras to discuss their concerns  on the Article XXVIII process.  Regarding 
Article XXIV:6, in the determina tion of rights and calculations of debits and credits, the Community 
had based itself on WTO rules and procedures applied across the board to all tariff lines and to all Members.  Equally, the Community was ready to  have further meetings with Honduras and/or 
Guatemala, and if necessary to provide further e xplanations.  His delegation saw the processes of WT/GC/M/90 
Page 28  
 
 Articles XXIV:6 and XXVIII as essentially bilateral.   Nevertheless, the Community took note of 
Honduras's suggestion that the Chairman hold informal  consultations.  He reiterated the Community's 
willingness to meet bilaterally with Honduras, Guatem ala or any other delegation to explain in more 
detail where it was in this process and, where releva nt, to provide further in sight as to how negotiating 
rights had been established.  The Community w as equally open to participating in informal 
consultations with the Chairman, if the latter decide d to call them.  However, he wished to make it 
perfectly clear, and to insist, that such consultati ons or further bilateral c ontacts would be without 
prejudice to the Community's rights, in part icular under the two bilateral processes of 
Articles XXIV:6 and XXVIII, or the timetable within which the Community was working. 
124. The representative of Panama
 expressed his delegation's support for the statements by 
Honduras, Guatemala, Costa Rica, Ecuador and Colombia  on this matter.  The issue of the regime for 
imports of bananas into the European Union was a long-standing one, and went beyond the existence 
of the WTO.  The intention to further the discrim ination against Latin American countries and other 
exporters of bananas with MFN status could have  an effect on the current Round of negotiations.  
Panama shared the concerns voiced by various delega tions regarding the future of this issue and how 
it would unfold, and was ready to take an active part in crafting a solution. 
125. The representative of Jamaica  said that Jamaica had a considerable interest in the matter 
under discussion and had taken careful note of the st atements made.  He looked forward to receiving 
the full text of the statements by Honduras and Guatemala.  His delegation understood from 
Honduras's statement that consultations were bei ng held with ACP countries.  Although Jamaica was 
an ACP country and an exporter of bananas to the European Union, he wished to make clear that 
Jamaica had not been party to an y consultations in the framework of Article XXVIII as far as this 
issue was concerned. 
126. The representative of Honduras  expressed his delegation's appr eciation to all those who had 
spoken.  Honduras had taken note of the Community's statement, and once again wished to reaffirm 
its position on this matter and its hope that the necessar y action would be taken.  He added that in the 
consultations Honduras was requesting with the Eu ropean Communities to discuss this matter, the 
Chairman should be present.  Honduras also wished  to know on the basis of what rights these 
consultations would be held, since the communica tion sent to Honduras did not actually mention any 
rights. 
127. The representative of the Philippines  recalled that at the 20 October General Council meeting 
his delegation had made known its  concerns regarding the process the Community had undertaken in 
relation to the EU's enlargement.  Among others , his delegation had emphasized that the Community 
should not preclude Article XXIV:6 or Article  XXVIII negotiations with Members that the 
Community had itself already identified in its no tification as having a substantial or principal 
supplying interest regarding the countries joining th e enlarged EU market.  The Philippines had also 
noted that, in any case, the provisions of the rele vant WTO agreements and decisions, including the 
1980 Guidelines and Procedures, required the Commun ity to come up with an offer of adequate 
compensatory adjustments to take account of th e adverse consequences the modification of the 
schedules of the EU's new acceding members might  have on other WTO Members.  The offer of 
compensatory adjustments had so far not been unde rtaken by the Community.  These same concerns 
and reservations had in fact been raised at th e meeting of the Council for Trade in Goods on 
1 October 2004, and subsequently in the General Council on 20 October.  His delegation trusted that 
the minutes of both of these meetings reflected the points raised by the Philippines. 
128. Since the October General Council meeting, th e Community had, commendably, engaged the 
Philippines in substantive discussions, both in terms of trying to explain the procedure the Community 
was undertaking and the methodology it was using to  determine the trade effects of the EU's 
enlargement on other Members.  While no agreement had been reached, and there were disagreements  WT/GC/M/90 
 Page 29 
 
 
 on the methodologies and rights involved as well as the a pplicable rules, his delegation hoped that the 
Community would remain constructiv ely engaged with the Philippines in  this process, with a view to 
agreeing on a mutually acceptable solution to the adverse consequences the Philippines might suffer 
as a result of the EU's enlargement.  In this rega rd, his delegation encouraged the Community to have, 
or to continue, constructive engagement with othe r Members who were also affected by the EU's 
enlargement, and thus provide the kind of leadership  needed to maintain developing countries' belief 
in the multilateral trading system, and to preserve  the overall balance of commitments embodied in 
the WTO Schedules bound and agreed upon by all Members. 
129. The Chairman  said that he had listened carefully to the statements as well as the suggestions 
that had been made regarding this matter.  He pr oposed that, in the light of the views expressed, he 
reflect on how best to proceed on this matter and on possible ways forward in consultation with 
delegations, and that the General Council revert to this matter at its next meeting as appropriate. 
130. The General Council took note  of the statements and so agreed . 
8. Follow-up to the July General Council Decisi on on the Doha Work Programme – Report 
by the Director-General on the development assistance aspects of cotton (WT/GC/83 
and Add.1) 
131. The Chairman  recalled that in Paragraph 1.b of its July Decision on the Doha Work 
Programme (WT/L/579), the General Council, inter alia , had taken note of the bilateral and 
multilateral efforts to make progress on the devel opment assistance aspects of  the Cotton Initiative, 
and had instructed the Secretariat to continue to work with the development community and to 
provide the Council with periodic reports on relevant developments.  The Council had also instructed 
the Director-General to consult with the relevant  international organizati ons, including the Bretton 
Woods Institutions, the Food and Agriculture Orga nization and the International Trade Centre, to 
direct effectively existing programmes and any additional resources towards development of the 
economies where cotton had vital importance.  A repor t on this matter under the July General Council 
Decision had recently been submitted by the Di rector-General in WT/GC/83 and Add.1. 
132. The Director-General  said he was pleased to report to the membership on the implementation 
and follow-up to the decisions on the developmen t assistance aspects of cotton in accordance with 
paragraph 1.b of the July General Council Decisi on on the Doha Work Programme.  The compilation 
of the contributions and the outcomes from the S ecretariat-organized African Regional Workshop in 
Cotonou in March 2004 had been circulated earlier in document WT/L/587.  Implementation and follow up on the development assistance aspects ha d started well.  However, there was scope for 
further progress, because of the complex and challe nging situation in the pr oponent countries.  The 
initial report in WT/GC/83 and Add. 1 was comprehensive and substantiv e.  It laid the foundation for 
future reports, which would provide periodic updates, at appropriate in tervals, and might be somewhat 
shorter.  He wished to highlight  several key aspects in the report.   First, a key feature of follow-up 
action was the consultative framework bringing toge ther the cotton proponent countries, the bilateral 
donors and the relevant multilateral/r egional institutions and agenci es.  Within this consultative 
framework, all participants were systematically a ddressing specific questions in a structured format, 
exchanging information, and drawing attention to those critical areas where cotton-specific financial 
and technical assistance was most needed.  Two rou nds of consultations had been held thus far, on 
22 October and 18 November.  The information ex change had been very useful.  The process had 
enhanced coordination, focused follow-up action, encouraged continued commitment on the part of 
the three parties, and had provided the Secretariat w ith valuable information for appropriate periodic 
reports to the membership.  He attached great im portance to this exercise and urged the continued 
commitment of all participants. WT/GC/M/90 
Page 30  
 
 133. Second, the proponent countries had welcomed th e process and considered that the starting 
point was satisfactory.  They were contributing, in  response to the questions put to them on areas of 
need, project proposals, and the reflection of co tton sector priorities in their PRSPs and national 
strategy papers.  They had indicated that they would be providing more information as it became 
available from their national authorities.  Their c ontributions, including on their continuing domestic 
reform, were essential in ensuring that the assistance provided would have the desired effect.  Third, 
he was encouraged by the rapid action taken by  bilateral donor Members to reflect cotton sector 
priorities in their bilateral donor programmes.  D onor Members had underlined the sector as a priority 
in the support they provided to agencies and instituti ons.  As indicated in the contributions by these 
countries, in the Addendum to his report, the change  in gear by the European Communities, Japan and 
the United States was self-evident.  Their contri butions showed that substantial and increased 
resources were being set aside in implementation of the July Decision.  He wished to acknowledge the 
initial measures taken by donor Members.  At the sam e time, he continued to urge an up-scaling in 
assistance and support, in light of the complex challe nges that faced proponent countries.  In doing so, 
however, he was mindful that the continued pos itive evolution of implementation action would 
require corresponding and mutually supportive acti on, not just by donor Members, but by the 
proponents as well. 
134. Fourth, follow-up action had also been taken by relevant multilateral and regional agencies 
and institutions.  The participating institutions we re adjusting existing mechanisms and facilities, 
taking into account the concerns and priorities of  the cotton proponent countries.  Several were 
designing new programmes.  Others were consider ing new facilities for more precise and targeted 
follow up.  The World Bank and the IMF were in a close and strong partnership with the WTO 
Secretariat.  Their contributions were crucial, partic ularly in light of their country reach.  The African 
Development Bank had also responded to the challeng e, and was in the process of designing a project 
with broad regional and cross-country scope, based on the private sector.  Other institutions were also 
very actively engaged in direct follow up to the July Decision.  These included the Development 
Assistance Committee of the OECD, the FAO, IT C and UNIDO.  Fifth, as requested by the 
membership, he had also taken specific follow-up ac tion to provide impetus and ensure momentum.  
Of particular importance were the following:  his contacts with the Development Assistance Committee of the OECD;  the treatment of this item at the General Council meeting on Coherence 
with Mr. Wolfensohn of the World Bank and Mr. Rodr igo de Rato of the IMF;  the introduction of 
this issue at the Brussels Session of the Parliamentary Conference on the WTO;  and Secretariat 
contacts with the Secretariat of the UK Commission for Africa.  He would continue to vigorously 
pursue these lines of action in 2005 and in the pr ocess leading up to the next WTO Ministerial 
Conference. 
135. Sixth, implementation thus far strongly suggest ed that there was wide scope for improved 
coordination.  There was a real need for enhanced coordination, both in the requests that were being 
made and in the offers of financial and technical assistance.  The contributions, as reflected in the 
Addendum to WT/GC/83, showed, on the one hand, duplicated national requests, and on the other 
hand, a rush by providers to offer assistance in almost  identical areas.  This could be interpreted as a 
positive indication that one was focussing on the right ar eas.  However, there also had to be room for 
some rationalization of requests and enhanced coor dination by development assistance providers.  The 
process could be rationalised, and he believed th at the consultative framework that had been 
established could contribute to addressing these problems.   He also wished to recall that mechanisms 
such as the Integrated Framework and the JITAP we re designed to address the challenge of donor and 
beneficiary coordination.  The DAC/OECD Briefing scheduled for January, and which was in direct 
follow up to the July Council Decision, could also make an important contribution to coordination.  
He was confident that 2005 would provide fu rther opportunities for progress on the development 
assistance aspects.  Much of the confidence build ing currently established on the cotton issue was 
based on the positive treatment of the Sectoral In itiative on Cotton in the July Decision and the 
establishment of the Sub-Committee on Cotton on 19 November 2004.  C ontinued progress on the  WT/GC/M/90 
 Page 31 
 
 
 issue as a whole would be reflected by the extent  of coordination and complementarity on the two 
aspects of the issue. 
136. All delegations who spoke  thanked the Director-General for his report. 
137. The representative of the United States  said that the US Trade Representative's successful trip 
to Africa the previous week showed that the Unite d States remained an active and engaged participant 
in the multilateral effort related to the development aspects of cotton.  The Director-General's report 
was a fine compilation of development-related cott on assistance activities.  Obviously, there was a lot 
currently occurring, and coordination was going to be  key.  Her delegation looked forward to working 
with Members to figure out how to involve further the World Bank and others in the coordination process.  Since July, the United States had contin ued the full mobilization of its development and 
technical agencies to address obstacles that had been identified.  The Millennium Challenge 
Corporation (MCC), USAID, USDA, and the United States Trade and Development Agency were all working on complementary actions based on input received from the United States' African partners. 
138. The MCC continued to offer a significant opportunity for many key countries – Benin, Mali, 
Senegal as eligible, and Burkina Faso as a thres hold country – to address long-term development 
obstacles.  The United States also recognized that c oncrete steps in the near -term were important.  
This was why it had worked hard to bring Ministers of the four cotton-proponent countries and of Senegal to the United States in July, and why th e United States had sent an assessment team and a 
National Cotton Council representative to West Africa in October.  Her delegation looked forward to 
following up these steps with activities, includi ng a high-level reciprocal visit by USDA 
Undersecretary Mr. Penn, the National Cotton Coun cil and USAID officials to the region – who 
would discuss findings of the US team and proble ms and opportunities in the cotton sector.  The 
United States also supported a Ministerial Scien ce and Technology Conference in Mali in June 2005. 
139. The representative of Benin
 said that the Director-General's report on development-related 
aspects of the cotton issue descr ibed the first actions and initiatives undertaken by the WTO 
Secretariat and by the bilateral and multilateral pa rtners of the African co tton-producing and exporting 
countries in response to the July Decision on cotton and the recommendations of the Regional 
Workshop on Cotton held in Cotonou on 22 and 23 March 2004.  His delegation fully appreciated the 
Director-General's effort s to ensure the implementation of the measures adopted by Members to solve 
the problems facing the cotton sub-sector in Africa,  and hoped that the collective commitment of 
Members and the momentum they had developed in dealing with this issue ambitiously, rapidly and 
specifically, would yield concrete results very so on.  At the same time, his delegation strongly 
recommended that the implementation of the a nnounced measures and the initiatives taken, which 
were reflected in the Director-General's report, be  evaluated periodically so that Members could have 
a clear idea of what had been done and what remained to be done. 
140. The cotton price situation was extremely worrying, and called for vigorous measures to 
reverse the trends and to help the African cotton-producing countries and the rural communities 
concerned to overcome the current gloomy climate.  Hence, it was important to recall the coherence 
between trade and development aspects that Members had agreed was necessary in dealing with the 
cotton issue.  Benin nevertheless had welcomed  the establishment of the WTO Sub-Committee on 
Cotton on 19 November 2004, and hoped that when it began its work, it would take full account of the 
vital nature of this consideration for the economies of several African countries, as well as the need to 
find appropriate solutions to the problems encounter ed in the cotton sub-sector in those countries, 
particularly in the least-devel oped among them.  His delegation wished to thank the countries and 
institutions that had already notified the type of assistance they intended to provide in order to 
strengthen the cotton sub-sector, and urged the other bilateral and multilateral partners to support the 
cotton sub-sector in Africa.  In doing so, these countries would be contributing to the improvement of WT/GC/M/90 
Page 32  
 
 the economic and social situation of the African cotton-producing and exporting countries, and hence 
to poverty reduction. 
141. The representative of Nigeria
, speaking on behalf of the African Group , thanked the Director-
General for his report on the development assistance  aspect of cotton.  The African Group urged the 
bilateral and multilateral institutions to continue their efforts in providing assistance in order to find 
an early and expeditious solution under the Cotton Initiative.  The Group urged them to continue 
working more closely with African countries and ot her countries to properly address the development 
aspect of cotton.  The African Group also hoped that there would be periodic assessment of the results 
achieved, in order to determine specifically what  more remained to be done.  The African Group 
continued to attach importance to cotton, and co nsidered it a priority and a development issue, 
requiring action on both the trade and development asp ects.  It called on all Members, especially the 
major developed countries, to work with th e Sub-Committee on Cotton to find an early and 
satisfactory solution under the Cotton Initiative. 
142. The representative of Burkina Faso  said that while Benin spoke on behalf of Burkina Faso 
regarding cotton issues within the WTO, he wish ed to express his appreciation to the various 
countries and international organizations for the support provided recently to the cotton industry 
through initiatives and actions.  Burkina Faso was pleased with the recent establishment of the Sub-
Committee on Cotton within the Agri culture Committee, because at present the cotton industry was 
going through tremendous difficulties in the cotton- producing developing countries, and if nothing 
was done fairly rapidly, this industry would be b eset with serious difficulties.  Thus, his delegation 
viewed with satisfaction the action already being un dertaken to try to provide new momentum to the 
industry by the European Communities as well as by the World Bank and other b ilateral partners.  In 
this regard, Burkina Faso welcom ed with great satisfaction the announcement by the United States, 
and the fact that Burkina Faso would also be able to benefit in the near fu ture from the programmes of 
Millennium Challenge Corporation.  His delegation was very pleased to see that many actions were 
being undertaken that required follow up.  His country  would do everything it could to ensure that any 
useful information was made available to its partne rs in development, and particularly to friendly 
countries who were supporting it on this issue, in order to give new momentum to the cotton industry. 
143. The representative of Paraguay  said that this was a sector of great importance, not just for the 
African countries who had proposed the sectoral initiative, but also for Paraguay.  Cotton was Paraguay's second export product, and had a direct impact on its soci al and economic development.  
Paraguay hoped that the July General Council D ecision and the establishment of the Sub-Committee 
on Cotton would yield concrete results for the Ministerial Conference in Hong Kong China. 
144. The representative of Senegal
 said that the question of cotton was also of concern to his 
country.  Senegal was very pleased at the momentum under way at the bilateral as well as multilateral 
levels, and considered that the recent visit by the US Trade Representative to the West African region 
was testimony to this.  His delegation hoped that  this dynamic would be maintained, and even 
accelerated, because this question was vital for the economies involved.  Senegal therefore welcomed 
with great satisfaction the actions already undertaken  and encouraged their acceleration, because this 
sector was vital for the countries involved.  It was in  this spirit of hope that Senegal encouraged the 
Director-General to continue his efforts, and enco uraged all its partners to redouble their efforts to 
enable the African countries who depended on this co mmodity to be able to develop further and to 
participate in a way that was beneficial to international trade. 
145. The representative of Uganda  thanked those who had spoken pr eviously about this issue and 
the Director-General for his efforts.  Uganda  welcomed the Sub-Committee on Cotton which had 
recently been established.  The plig ht of the cotton-producing countri es continued to worsen.  At the 
very moment this issue was being discussed, cotton was being harvested in East Africa for which the 
price would be miserable, and it was not certain th at the populations currently growing cotton would  WT/GC/M/90 
 Page 33 
 
 
 be able to continue to do so in the coming years.   If the coordination the Director-General had spoken 
about was quickly realized, and if a solution to th e cotton problem could be found as soon as possible, 
this industry that was so important for the respec tive countries might be rescu ed.  Benin and the West 
African countries had highlighted these problems.   
146. The representative of Côte d'Ivoire  thanked the Director-General for his efforts to assist the 
cotton industry.  All agreed that cotton played an extremely important growth and development role in 
certain regions in West Africa, as well as in Central Africa.  Judging from the evolution of cotton production over recent years, which had gone from 50,000 tonnes at the beginning of the 1970s to 
more than 3 million tonnes, this was an impressive pe rformance to which tribute should be paid.  Côte 
d'Ivoire encouraged and was satisfied by the in itiatives taken by bilateral and multilateral partners, 
and hoped that these would serve to reinvigorate th e cotton industry.  His delegation also hoped that 
the promises made by these donors would be honoured and that this  would have an impact on the 
cotton industry.  Cote d'Ivoire was not a co-spons or of the Cotton Initiative but vigorously supported 
all action taken in this regard and the initiativ es proposed by the proponents.  His delegation 
supported the effort being led by the fo ur co-sponsors of the Cotton Initiative. 
147. The representative of th e European Communities
 said his delegation attached a high priority 
to the Cotton Initiative, and recalled the importan ce attached to the complementarity between the 
trade and development dimensions of this initiative, as reflected in the July General Council Decision.  
To make real progress on this issue, Members need ed to advance in an integrated manner on both 
tracks.  The Director-General's report focused on the development assistance aspects only.  On the 
development side, the Community had taken decisive action and had also steppe d up its financial and 
technical assistance on cotton.  However, for this  assistance to be effective, there was a shared 
responsibility.  The African countries also needed to undertake domestic reforms and actions.  These 
fell in three areas:  to continue cotton-sector re forms, as agreed in the EU/ACP Cotonou Agreement, 
and to improve competitiveness, through improveme nts in  production, distribution, buying and 
selling, and the legislative framework, inter alia ;  to develop cotton-specific project proposals;  and to 
include cotton-sector priorities in the PRSPS.  The European Commission had prioritized and 
encouraged "support to cotton" as one of the areas under the 2004 mid-term review of the national 
indicative programmes.  A total of €40 million ha d been proposed for the four cotton-producing 
countries.  In addition, an international cap acity programme on cotton for the ACP countries 
amounting to a total of €15 million was fo reseen, allowing for multi-donor cooperation. 
148. An EU-Africa Cotton Forum had been held in July 2004 which had agreed on a joint Cotton 
Action Plan.  This Action Plan covered a number of areas addressing both the development and trade 
angles – for example, national cotton strategies, risk  management, chain integration and international 
trade.  His delegation wished to underline again the importance of enhanced coordination of assistance between bilateral donors and multilateral ins titutions.  In terms of future orientations, 
Members might also wish to consider who should take  the lead in the coordination of this information 
exercise, and possibly seek a stronger role fo r the JITAP or the Integrated Framework. 
149. The representative of Mali
 said that the Director-General's report took account of all the 
various concerns of the cotton-producing countries, where there was currently a great need for poverty-alleviation efforts.  Mali supported the vari ous actions already undertaken and asked all its 
partners to make the cotton issue a priority.  Mali also wished to strongly emphasize the importance of 
implementation of projects that would be decided on in the context of the Integrated Framework and 
the JITAP. 
150. The General Council took note
 of the report by the Director-General and of the statements. WT/GC/M/90 
Page 34  
 
 9. Committee on Budget, Finance and Admini stration – Recommendations of the 
Committee following its meetings of October, November and December 2004 
(WT/BFA/75) 
151. The Chairman
 drew attention to the recommendations of the Committee on Budget, Finance 
and Administration in document WT/BFA/75. 
152. Mr. Iversern (Denmark), Chairman of the Co mmittee on Budget, Finance and Administration , 
said that document WT/BFA/75 contained the reco mmendations of the Committee's meetings held 
from October to December 2004.  These recommenda tions, which required decision by the General 
Council, concerned the following:  (i) Financia l matters: the Director-General's budgetary and 
financial report for 2003 and report of the external auditor thereon;  divisional reporting on objectives 
and expenditures for 2003 and report on extra-budge tary funds for 2003;  (ii) Assessment of 
additional contribution to the 2004 budget and advance to the working capital fund with regard to the 
accession of the Kingdom of Cambodia to the WTO;  (iii) Adjustment to dependency allowances;  
(iv) International Trade Centre UNCTAD/WT O – 2005 revised budget estimates;  (v) Doha 
Development Agenda Global Trust Fund for 2005;  (v i) Remuneration of Appellate Body members;  
and (vii) WTO revised budget estimates for 2005. 
153. The Committee had examined the financial re ports for 2003, had taken note of the three 
relevant documents and had formulated the recomme ndations in paragraphs 1 and 2 of WT/BFA/75.  
With regard to the additional contribution to the 2004 budget and advance to the working capital fund 
subsequent to the accession of Cambodia, th e Committee had formulated the recommendation 
contained in paragraph 3.  The recommendations on adjustment to dependency allowances and the 
remuneration of the Appellate Body members could be  found in paragraphs 4 and 7, respectively.  
The Committee had examined the 2005 budget pr oposals for the ITC and had formulated the 
recommendation in paragraph 5.  The total ITC budge t had amounted to Sw F 34,191,200.  The WTO 
contribution to the ITC budget had amounted to Sw  F 16,280,250 and formed part of the budget for 
the WTO as a whole. 
154. With regard to the Doha Development Age nda Global Trust Fund, the target level of 
resources in 2005 had been set at Sw F 24 million.   The relevant recommendation was contained in 
paragraph 6.  In this context, Members were urged to pledge additional contri butions to this Fund up 
to the 2005 target level, in order to ensure a stab le and solid financial basis for the WTO programme 
of technical assistance and training.  With rega rd to the WTO revised budget estimates for 2005, the 
recommendation in paragraph 9 was the fruit of vari ous meetings and consu ltations over the past 
weeks.  He drew attention to pa ragraph 8, which highlighted the a pproach and view of the Committee 
in formulating the recommendation on the WTO revi sed 2005 budget estimates.  In this context, he 
wished to recognize the pragmatic approach and cons tructive dialogue on the part of the Members and 
the Secretariat, which had permitted this exercise to  be completed.  He wished to address two points 
in particular – security and human resources.  The Committee had examined in detail over a number 
of months the proposal with regard to the Secu rity Enhancement Programme. In accepting the multi-
year security programme, the Committee wished to place on record the very high importance 
Members attached to the security and safety of all in the WTO.  The resources for 2005 had been 
included in the budget that was before Members fo r approval.  In addition, a Management Group 
composed of representatives of Members, the Secretar iat and the Swiss authorities had been formed to 
identify rapid solutions to related questions, incl uding those concerning the security of, and access to, 
the grounds surrounding the Centre William Rappard. 
155. The second point concerned human resources in the WTO.  The Committee had welcomed 
the initiative of the Secretariat with regard to the Resource Allocation Exercise, which was intended 
to move towards a rationalization and reallocation of available res ources, including those relating to 
textiles, as well as issues that would not form part of the Doha negotiations.  The Committee had also  WT/GC/M/90 
 Page 35 
 
 
 appreciated the spirit in which the new approach to temporary staffing had been presented by the 
Secretariat in response to Members' concerns.  Having endorsed the new approach with regard to 
temporary assistance, the Committee w as confident that, in conjunction with the Resource Allocation 
Exercise, both measures would contribute to ensuri ng a more solid human resources environment, so 
that the Secretariat would be in a position to c ontinue to meet the present and growing challenges 
facing the WTO.  The recommended 2005 revised budge ts for the WTO Secretariat and the Appellate 
Body and its Secretariat, contained in paragraph 9,  amounted to a total of Sw F 168,703,400.  He drew 
attention to page 3 of the document, where ther e were a number of bullet points explaining the 
Committee's recommendations and considerations around the 2005 budget, and underlined that these 
bullet points formed an integral part of the Comm ittee's recommendations.  In conclusion, he said that 
paragraphs 1 through 9 of WT/BFA/75 re quired decision by the General Council. 
156. The Chairman  thanked the Budget Committee Chairman  for his extensive report, and for 
having shouldered a very difficult and arduous task. 
157. The representative of Japan  expressed his delegation's appreciation to the Budget Committee 
Chairman for his tireless efforts in producing agreement on the recommendations contained in 
WT/BFA/75.  Japan also wished to commend the effo rts made by the Secretariat, and in particular, by 
the Director of the Finance and General Services Division and his team.  There were important positive elements in the revised budget estimates for 2005 .  Above all, ensuring transparency in the 
budgeting process was highly important from the standpoi nt of accountability.  Japan wished to point 
out that a so-called "zero-growth principle" was imposed on most Members in the context of their 
contributions to international or ganizations.  However, Members had accepted both nominal and real 
growth of the WTO budget.  His delegation understood this as evidence that Members correctly 
evaluated the role of each organization and highly va lued the WTO.  Japan en couraged the Secretariat 
to meet Members' expectations during the w hole budgetary process, starting from the proposal-
making stage through the decision-making stage, fo llowed by implementation.  During this process, 
discussion in the Budget Committee was crucial, as this was fundamental to ensuring mutual 
understanding about budget proposals, given that  the WTO was a growing organization.  His 
delegation believed that this budgetary discussion w ould become much deeper and wider, thereby 
strengthening the credibility of the WTO Secretariat,  which consisted of excellent specialists.  Japan 
wished to applaud the outgoing Director of the Finance and General Services Division, who would 
soon retire after 20 years of dedicated service to th e organization.  Japan was convinced that his 
successor would provide similar excellent service to Members over the years. 
158. The General Council took note
 of the statements and approved  the Budget Committee's 
specific recommendations in document WT/BFA/75. 
159. The Chairman of the Committee , said that he, too, wished to thank the outgoing Director of 
the Finance and General Services Division for the la tter's tireless efforts during several decades in 
order to assist this difficult process, and to pay tribute to his knowledge and helpfulness, without 
which the Budget Committee would not have succeeded in its tasks in 2005.  He wished the Director 
all the best for his retirement. 
160. The Director-General  said he wished to make a few comments on the 2005 Budget just 
adopted and the various decisions that went with it.  First, regarding the Security Enhancement 
Programme, he wished to thank the Chairman a nd members of the Budget Committee for their hard 
work on this since the summer, and to congratulate them on the outcome.  He recognized the 
importance of the political message the Budget Comm ittee had given – that improved security, in the 
context of an uncertain world, was the top priority for all who worked in the WTO.  He had noted that 
there was still work to do to finalize the part of  the programme that depended on decisions by the 
WTO's Swiss hosts.  As the Budget Committee Chai rman had stated, a management group had been 
established to pursue this matter, bringing together  the Swiss authorities, the WTO management and WT/GC/M/90 
Page 36  
 
 representatives of Members.  Work would continue, in order to see how best to take this matter 
forward. 
161. The rest of the programme to be implemented by the WTO had now been formally approved.  
There were some delicate aspects for the WTO manage ment to put in place, especially in the area of 
reorganization of personnel, which was of the greates t importance to management and to its relations 
with WTO staff.  This part of the exercise was already under way.  His other comment related to 
management and administration.  He considered  these to be among the most important of his 
functions as Director-General, and he welcomed th e broad policy indications and strategic oversight 
contributed by the Budget Committee in this area.  He wished to focus on two resource matters 
mentioned in the Committee's report:  the need for continuing redeployment of WTO staff and 
adaptation to changes in the WTO's level of activity,  and the need to make a start in tackling the use 
of funds for temporary assistance or short-term contract staff.  In both cases, Members had given clear signals of their wish to have a more vigorous polic y applied and stricter control of these resources.  
He was aware of the pressure on resources exerte d by many Member governments at the national 
level, and had referred to this in  his presentation of the 2005 budget.  An internal resource allocation 
exercise had been conducted in 2004 to begin to r espond to such pressures, although he accepted that 
there was a need to make a more determ ined effort in the direction indicated. 
162. At the same time, he would be failing in his duty if he did not remind Members that there 
were also conflicting signals:  Members' demands in  areas such as technical assistance and training, 
their activities in dispute settlement and the level of  detailed reporting required  both in this and in 
other areas, their demands for facilities for bilate ral and regional group activities – all of these were 
creating substantial additional pressure on existing r esources which, at present, was simply being 
absorbed.  The Secretariat would not be able to do this indefinitely.  Thus, the WTO Secretariat was 
ready to take up the challenge, but would ask Me mbers in turn to allow it the necessary space to 
tackle these difficult policy changes.   The Secretariat of course had to work within the rules and 
regulations Members approved, and often faced legal and personnel c onstraints which complicated the 
task.  Progress was being made, but real policy ch ange would only be possible in a gradual and 
progressive fashion.  This was the nature of an inte rnational organization.  In closing, he wished to 
acknowledge, on behalf of the out going Director of the Finance and General Services Division, the 
tributes that had been paid to him. 
163. The General Council took note
 of the statements. 
10. Committee on Balance-of-Payments Restrictions 
(a) Consultation with Bangladesh (WT/BOP/R/76) 
(b) Note of the meeting of 29 November 2004 (WT/BOP/R/77) 
164. The Chairman  suggested that these two sub-items be taken up together. 
165. Mr. De Vito  (Italy), speaking on behalf of the Chairman of the Committee on Balance-of-
Payments Restrictions, introduced the Committee' s report on its consultation with Bangladesh 
(WT/BOP/R/76).  The conclusions of the consu ltations were that Members recognized that 
Bangladesh had, in 2002, been granted justifica tion under the balance-of-payments provisions to 
restrict the import of chicks, eggs, common salt and cartons until 2009.  Members had welcomed the 
dismantling of other restrictions in accordance w ith the time table submitted in WT/BOP/N/54 and 
looked forward to the notification by the Government  of Bangladesh regarding the final elimination of 
quantitative restrictions on these items on 1 Janua ry 2005.  On the understanding that Bangladesh 
would submit a time table for the removal of the remaining restrictions by 2007, it was agreed that the 
next consultations would be held in the spring of 2007.  WT/GC/M/90 
 Page 37 
 
 
 166. In addition to the consultations with Banglad esh, the Committee at its meeting in November 
had also held its third transitiona l review of China under Section 18 of China's Protocol of Accession, 
and had adopted its Annual Report.  The Note on the meeting of 29 November at which these matters 
were considered was contained in WT/BOP/R/77. 
167. The General Council took note  of the statement and of the information contained in the Note 
of the Committee's meeting of 29 Novemb er in document WT/BOP/R/77, and adopted  the report on 
the consultation with Banglad esh in document WT/BOP/R/76. 
11. Waivers under Article IX of the WTO Agreement 
(a) Introduction of Harmonized System 2002 changes into WTO schedules of tariff concessions – 
Draft decision (G/C/W/500/Rev.1) 
168. The Chairman  drew attention to the draft decision in document G/C/W/500/Rev.1 to waive 
obligations under Article II of GATT 1994 for Member s listed in the Annex to the decision with 
regard to the introduction of HS2002 changes into WTO schedules of tariff concessions. 
169. Mr. Choi (Korea), Chairman of the Council for Trade in Goods , said that at its meeting on 
25 November, the Council had approved the draft waiver decision in G/C/W/500/Rev.1, and had 
agreed to forward it to the General Council for adoption. 
170. The Chairman  proposed that, in accordance with the Decision-Making Procedures under 
Articles IX and XII of the WTO Agreement ag reed in November 1995 (WT/L/93), the General 
Council adopt the draft decision in G/C/W/500/Rev.1. 
171. The General Council took note  of the statement and so agreed .4 
(b) Review of waivers pursuant to Ar ticle IX:4 of the WTO Agreement 
(i) United States – Caribbean Basin Economic Recovery Act, granted on 15 November 1995 
until 31 December 2005 (WT/L/104, WT/L/593) 
(ii) Canada – Caribcan, granted on 14 Octob er 1996 until 31 December 2006 (WT/L/185, 
WT/L/595) 
(iii) United States – Former Trust Territory of the Pacific Islands, granted on 14 October 1996 
until 31 December 2006 (WT/L/183, WT/L/594) 
(iv) EC – Autonomous Preferential Treatment to th e Countries of the Western Balkans, granted 
on 8 December 2000 until 31 December 2006 (WT/L/380, WT/L/596) 
(v) EC – Transitional Regime for the EC Autonomous  Tariff Rate Quotas on Imports of Bananas, 
granted on 14 November 2001 until 31 December 2005 (WT/L/437) 
(vi) EC – The ACP-EC Partnership Agreement, granted on 14 November 2001 until 
31 December 2007 (WT/L/436, WT/L/597) 
(vii) Cuba – Article XV:6 of GATT 1994, grante d on 20 December 2001 until 31 December 2006 
(WT/L/440, WT/L/592) 
                                                      
4 The Decision was subsequently circulated in document WT/L/598. WT/GC/M/90 
Page 38  
 
 172. The Chairman
 recalled that, in accordance with para graph 4 of Article IX of the WTO 
Agreement, "[a]ny waiver granted for a period of more than one year shall be reviewed by the 
Ministerial Conference not later than one year af ter it is granted, and thereafter annually until the 
waiver terminates."  Seven waivers were before th e General Council for review.  The Decisions on the 
waivers for Canada, Cuba, and the United States,  and on two of the waivers for the European 
Communities provided that an annual report should be submitted by these Members on the operation 
or implementation of the respective waivers, with  a view to facilitating the annual review by the 
General Council under paragraph 4 of  Article IX.  The reports from these Members on the relevant 
waivers had been circulated in documents WT/L/592 through 597. 
173. The representative of Ecuador , referring to sub-items 11(b)(v ) and 11(b)(vi) jointly, expressed 
his delegation's appreciation for the information pr ovided by the EC on the functioning of these two 
waivers, which had been granted more than three years earlier, and the review of which was one of 
the requirements established under current WTO ru les.  He recalled that the conditions and 
atmosphere prevailing at the time these waivers had been granted had been far from ideal.  The waivers had been granted following a number of  important DSB decisions that comprised, in 
connection with bananas, a number of vital elements  that strengthened the institutional framework of 
the multilateral trading system.  In any case, these waiv ers had also been adopted in the framework of 
the Doha Ministerial Conference, which had set out the guidelines for the crucial process of seeking to 
develop a more harmonious  relationship between trade and development. 
174. In examining these two waivers, which were dire ctly linked to a product of crucial importance 
to Ecuador, his delegation wished to reiterate onc e again that acceptance of these waivers had been, 
and remained, a reflection of Ecuador's spirit of  cooperation, as it was convinced that short, 
transitional arrangements would strengthen the chie f objectives that guided the international trading 
system.  Ecuador had accepted these waivers and continued to accept them, in spite of the burden they imposed on its population and economy – a developi ng-country economy – and on its producers, who 
were in great need of relief.  Ecuador had done so  in spite of the waivers' adverse impact on its 
exports.  This contribution and willingness to co operate with many of Ecuador's LDC and ACP 
partners should be duly appreciated, particularly si nce it did not come from a developed country – as 
such cooperation should – but from another devel oping country seeking to ensure that the rules 
applied under the international trading system were equal for all, that S&D treatment was not paid for 
by the developing countries themselves, and that  the course of a country's development was not 
predetermined by those granting tariff preferences. 
175. His delegation wished to reiterate that the cent ral pillar of this organization, Article I of 
GATT 1994, had to continue to be the substantive basi s of a just international trading system, and that 
exceptions were no substitute for this fundamental rule .  On the other hand,  regarding the functioning 
of the waivers under review, access to the Europe an market for Ecuadorean bananas – under the 
prevailing exceptional conditions and subject to the conceptual considerations discussed above – had 
to function within this framework.  This status quo was reassuring for Ecuador's exports.  However, 
his delegation wished to note that these two waiver s had been granted when the EU market had been 
made up of 15 countries.  As all knew, the nature and size of the EU market had changed significantly 
with the accession of 10 new members.  Ecuador wi shed to see this change in conditions, and its 
consequences, to be taken properly into cons ideration during the ongoing consultations and 
negotiations in relation to the enlargement of the European Union to 25 members. 
176. As on previous occasions, his delegation wished to stress that it considered the establishment 
of a tariff-only regime for bananas, governed by Article XXVIII of the GATT, to be a separate and 
different process from the negotiations relating to th e enlargement of the European Union, which was 
governed by Article XXIV of GATT 1994.  He recalle d that the waiver for the ACP-EC Partnership 
Agreement provided, among other th ings, for the application of Artic le XXVIII, with a view to the 
implementation by the Community of a tariff-only regi me for the entry of bananas into its market as  WT/GC/M/90 
 Page 39 
 
 
 from 1 January 2006.  In that connection, it was ess ential to bear in mind that the Annex to the ACP-
EC Partnership Agreement expressly stated that th e envisaged rebinding of the EC tariff on bananas 
would result "in at least maintaining total market access for MFN banana suppliers".  His delegation 
wished to reiterate its concern that the Community  had thus far failed to proceed in accordance with 
the Annex to this waiver, particularly regarding any genuine intention of establishing a mutually 
satisfactory tariff that would ensure compliance with  the above-mentioned condition – i.e. at least to 
maintain total market access for MFN banana suppliers to the EU market. 
177. Ecuador had taken note of the information provided by the EC with respect to the 
methodology used to arrive at its proposal of a tariff of 230 euros per metric tonne.  However, 
Ecuador had also expressed its non-acceptance of that methodology, because the price gap in itself 
was insufficient and did not comply with the oblig ation of the European Communities at least to 
maintain total access to its market .  In other words, it did not square with the commitment assumed by 
the Community when the waiver had been adopted .  It was also important to recall that the 
Community had to guarantee total access for MFN ba nanas, not only during th e year of entry into 
force of the tariff-only regime, but also into the fu ture.  Ecuador therefore insisted that the method 
used by the EC should be supplemented with ec onometric studies establishing the tariff level that 
would permit total EU market access for MFN bananas, as well as the impact in terms of volume, income and prices that the establishment of a singl e tariff could have for Latin American suppliers. 
178. The contacts that had taken place between repr esentatives of the Community and Ecuador had 
shown that there was no real desire on the part of  the Community to effectively negotiate the single 
tariff to be applied to MFN bananas in accordan ce with its commitment under the agreements and 
waivers under review at the present meeting.  In ot her words, the Community was not ready to alter 
its original position – unexpectedly announced to a group of ACP countries – of applying a tariff of 230 euros per metric tonne.  The only thing that ha d clearly emerged from those contacts was that the 
EC's intention was not to alter the protection it wa s currently granting to bananas from its partners 
under the Cotonou Agreement.  The Community's statem ents suggested that all it wished to do was to 
replace the current system of tariff quotas and licen sing with a tariff that would maintain the same 
degree of protection.  In other words, it intended merely to change the form of protection, and 
Ecuador clearly could not accept this, any more than  it could accept the proposed tariff or the attempts 
at protectionism that ran counter to the spirit of th e organization.  Access to the European market for 
Latin American bananas was a binding commitme nt the Community had assumed under the waivers 
in question.  In closing, his delegation wished to  draw attention to the fact that the European 
Community had committed itself to the entry into  force of the new EC tariff-only regime on 
1 January 2006.  As mentioned on previous occasions , Ecuador, in the short time that remained under 
the annex to the waiver in document WT/L/436, stood ready to enter into consultations as stipulated in 
the waiver agreement, prior to arbitration – which was also provided for under the waiver – with a 
view to reaching a mutually satisfactory solution.  His delegation wished this statement to be viewed 
as an example of the positive and construc tive spirit that had always guided Ecuador. 
179. The representative of Honduras
 said he wished to echo the concerns expressed by Ecuador. 
180. The General Council took note  of the statements and of reports by Members contained in 
documents WT/L/592 through 597. 
12. Review under Paragraph 8 of the Decision on the Implementation of Paragraph 6 of the 
Doha Declaration on the TRIPS Agreement and Public Health (WT/L/540) – Report of 
the Council for TRIPS (IP/C/33) 
181. The Chairman  recalled that on 30 August 2003, the General Council adopted a Decision on 
the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public 
Health.  Paragraph 8 of that Decision provides th at the TRIPS Council shall review annually the WT/GC/M/90 
Page 40  
 
 functioning of the system set out in the Decision w ith a view to ensuring its effective operation, and 
shall annually report on its operation to the Genera l Council.  The Decision also provides that the 
review by the TRIPS Council shall be deemed to fulf il the review requirements of Article IX.4 of the 
WTO Agreement.  The report by the TRIPS Counc il on its first review under paragraph 8 of the 
General Council Decision was before  Members in document IP/C/33. 
182. Mr. Miller (Hong Kong, China), Chairman of the TRIPS Council
, said that, at its meeting on 
1 and 2 December, the TRIPS Council had taken up th e annual review pursuant to paragraph 8 of the 
Decision on the Implementation of Paragraph 6 of th e Doha Declaration on the TRIPS Agreement and 
Public Health.  As the Chairman had noted, th e Council's report to the General Council had been 
circulated in document IP/C/33.  The cover not e of this document set out factual information 
regarding the implementation of the Decision a nd the work pursuant to its paragraph 11 on the 
amendment to the TRIPS Agreement.  The record of the discussion that had taken place under that 
agenda item was attached to it. 
183. The representative of Nigeria , speaking on behalf of the African Group , said that the process 
of converting the 30 August 2003 Decision into a permanent solution should be a priority area of 
Members' work in the WTO.  The African Group was of the view that a permanent solution was more 
predictable and legally certain.  The Group had st ated this in the TRIPS Council, and urged all 
Members to work positively and constructively to  meet the deadline of March 2005 for completing 
the amendment process.  The African Group stood read y to work with other Members, and hoped that 
all would show the necessary flexibility and political  will needed to convert the temporary solution 
into a permanent one. 
184. The General Council took note  of the statements and of the report of the TRIPS Council. 
13. Appointment of Officers to WTO Bodies – A nnouncement by the Chairman pursuant to 
paragraph 7.1(a) of the Guidelines (WT/L/510) 
185. The Chairman  recalled that the Guidelines for the Appointment of Officers to WTO bodies 
(WT/L/510) provided that the outgoing Chairman of  the General Council woul d conduct consultations 
on the appointment of chairpersons to the WTO bodi es outlined in Groups 1, 2, 4 and 5 of the Annex 
to the Guidelines.  The Guidelin es also provided, in paragraph 7.1(a), that in order to promote 
transparency, the selection process should be starte d with an announcement by the Chairman at the 
General Council meeting held in December each year.  Accordingly, he wished to inform the General 
Council that he would be starting the selection pr ocess for the appointment of chairpersons to the 
WTO bodies outlined in Groups 1, 2, 4 and 5 of the Annex to the Guidelines.  As delegations were 
aware, the three working groups on the Singapore issues were inactive at the present time, and he 
would therefore not be consulting regarding their ch airpersons.  In accordance with paragraph 7.1(b) 
of the Guidelines, he would be assisted in the selection process by the serving Chairperson of the 
DSB, Mrs. Mohamed (Kenya).  In keeping with  paragraph 7.1(d), Mrs.  Mohamed and he would 
communicate, as early as possible, a specified time-per iod in which they would be available to hear 
the views and suggestions, if any, of Members, indivi dually and/or in groups.  Finally, in keeping with 
the provisions of paragraph 7.1(c) of the Guidelin es, he requested the Secretariat to distribute to 
delegations in the meeting Room a list of past Chairs of major bodies, in order to provide some 
structure for Members' subsequent deliberations on the possible distribution of chairs, based on past 
practice and the need for balance. 
186. The General Council took note  of the statement.  WT/GC/M/90 
 Page 41 
 
 
 14. Review of WTO activities 
 - Reports of: 
  (a) General Council (WT/GC/W/538), Dispute Settlement Body (WT/DSB/37 and 
Add.1), Trade Policy Review Body (WT/TPR/154) 
 
 (b) Sectoral Councils (G/L/721, S/C/22 and IP/C/32)   (c) Committees on Trade and Development (WT/COMTD/50), Trade and 
Environment (WT/CTE/11), Balance-of-Payments Restrictions (WT/BOP/R/74), 
Budget, Finance and Administration (WT/BFA/74), and Regional Trade 
Agreements (WT/REG/14) 
  (d) Working Groups on Trade, Debt and Finance (WT/WGTDF/3), and Trade and 
Transfer of Technology (WT/WGTTT/6) 
 
 (e) Committees under the Plurilateral Trade Agreements (GPA/82, WT/L/591) 
 
187. The Chairman
, in pursuance of the Decision concerning procedures for an annual overview of 
WTO activities and for reporting under the WTO (WT/ L/105), drew attention to the annual reports of 
the Councils and Committees that ha d been submitted for considerati on under this Agenda item.  He 
proposed that, in the interests of allowing Members to conclude the present meeting on schedule, the 
Chairpersons of the various Councils and Committees not introduce their respective reports orally.  
He would invite only those Chairpersons who wished to draw particular attention to any aspect of the 
work carried out in their bodies to take the floor. 
188. Mr. Choi (Korea), Chairman of the Council for Trade in Goods , said that since the circulation 
of the annual report of the Council for Trade in G oods (CTG) in document G/L/721, the CTG had on 
10 December concluded the Major Review of the Implementation of the Agreement on Textiles and 
Clothing (ATC) in the Third Stage of Integration, by adopting a report contained in document G/L/725.  Consequently, an Addendum to the CTG' s annual report had recently been circulated to 
reflect this development.  He wished to undersco re the historic importance of this moment.  The 
major review concluded the previous week marked the final major review of the ATC.  Also the 
previous week, the Textiles Monitoring Body had held its final meeting.  These were significant 
developments and major accomplishments for the WT O.  They signaled the expiry of the ATC in 
approximately two weeks, which would conclude th e implementation of one of the major results 
from the Uruguay Round.  It was evident that the conclusion of ATC implementation would enhance the credibility of the rules-based system, st rengthen the institution,  provide impetus to the 
ongoing negotiations, and bring considerable gains and benefits to the global economy.  He wished 
to express sincere gratitude to all Members, not just for their hard work and persistence, but also for 
their flexibility and compromise, which had enabled the conclusion of the last major review.  He also 
wished to thank the WTO Secretariat for its vital contributions and hard wo rk, which had facilitated 
agreement among Members. 
189. The General Council took note
 of the statement, adopted  the report of the Committee on 
Trade and Development (WT/COMTD/50), and  took note  of the reports of the other WTO bodies, 
including the reports of the Committees under the Pl urilateral Trade Agreements as follows:   Dispute 
Settlement Body (WT/DSB/37 and Add.1), Trade Policy Review Body (WT/TPR/154), Council for 
Trade in Goods (G/L/721 and Add.1), Council fo r Trade in Services (S/C/22), Council for TRIPS 
(IP/C/32), Committee on Trade and Environment (WT/CTE/11), Committee on Balance-of-Payments 
Restrictions (WT/BOP/R/74), Committee on Budge t, Finance and Administration (WT/BFA/74), 
Committee on Regional Trade Agreements (WT/RE G/14), Working Group on Trade, Debt and WT/GC/M/90 
Page 42  
 
 Finance (WT/WGTDF/3), Working Group on Trade and Transfer of Technology (WG/TTT/6), 
Committee on Government Procurement (GPA/82) , and Committee on Trade in Civil Aircraft 
(WT/L/591). 
190. The General Council then adopted
 the draft report of the General Council contained in 
document WT/GC/W/538, on the understanding that  the Secretariat would make the necessary 
adjustments to that draft report so as to include matters that had been considered at the present 
meeting.5 
15. 10th Anniversary of the WTO – Statement by the Director-General 
191. The Director-General , speaking under "Other Business", recalled that on 2 December he had 
circulated a letter to all delegations regarding the 10th Anniversary of the WTO in 2005.  That 
occasion would provide Members with a good opportunity  not only to celebrate, but more importantly 
to reflect upon the past ten years, and to renew th eir commitment to the multilateral trading system.  
From the outset, he wished to reassure Members, as he had stated in the letter, that he did not intend to 
organize any major events that might distract Me mbers from their main task, which was advancing 
the DDA and preparing for the Hong Kong, China Ministerial Conference.  The strategy would be to 
take advantage of a series of events, conferences or  seminars that were being organized elsewhere, 
and to inject into such programmes a serious discussion about the multilateral trading system, ten 
years after the establishment of the WTO.  As th ese events would mostly be organized by other 
institutions, there should be no major financial bur den on the WTO  budget.  He also wished to 
confirm to the membership that th e report by his Consultative Board would be ready for distribution 
by the middle of January 2005.  He intended to prov ide an opportunity for all delegations to exchange 
views on this report with members of the Board.  To this effect, an informal meeting had been 
scheduled for 24 January.  He hoped the report woul d provide a good basis for mature reflection about 
the state of the organization ten years after its entr y into force.  He also intended to host a modest 
reception for delegations in the margins of  the February General Council meeting. 
192. The General Council took note  of the statement. 
16. Chairmanship of the Working Party on the Accession of Belarus – Announcement by 
the Chairman 
193. The Chairman , speaking under "Other Business", informed Members that, following 
consultations between the respective Working Party members and the authorities of Belarus, and in 
accordance with usual WTO practice, it had been agr eed that Ms. Mia Horn Af Rantzien (Sweden) 
would replace the outgoing Chair of the Working Part y, Mr. Christer Manhusen (Sweden).  On behalf 
of the General Council, he wished to thank Mr. Manhusen for his work as Chair of this accession 
Working Party. 
194. The General Council took note  of this information. 
 
__________ 
 
  
                                                     
 
5 The annual report of the General Council was subsequently circulated in document WT/GC/86.