RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/GC/M/86 
30 June 2004 
 (04-2808) 
General Council 
17-18 May 2004  
 
 
 
MINUTES OF MEETING 
 
Held in the Centre William Rappard  
on 17-18 May 2004  
 
Chairman:  Mr. Shotaro Oshima (Japan) 
 
 
 Prior to the adoption of the agenda, the Ch airman welcomed the Kingdom of Nepal as the 
147th Member of the WTO and the first LDC to accede to the WTO since its entry into force in 1995.1   
  Subjects discussed
: Page  
 
1. Iran – Request for Accession .................................................................................................. 2 
2. Work Programme on Small Economies – Report by the Chairman of the 
Dedicated Sessions of the Committ ee on Trade and Development.......................................4  
3. Waivers under Article IX of  the WTO Agreement................................................................5  
(a) Introduction of Harmonized System 1996 changes into WTO schedules of tariff 
concessions – Requests for waivers............................................................................................5  
(b) Senegal – Request for waiver on minimum va lues in regard to the Agreement on the 
Implementation of Article VII of the GATT 1994 .....................................................................5  
(c) Albania – Implementation of specific commitments in telecommunications services – Request for a waiver .......................................................................................................... ........5
 
4. Committee on Budget, Finan ce and Administration .............................................................6  
(a) Report of the Committee on its meetings  of November and December 2003 ...........................6  
(b) Report of the Committee on its meeting of April 2004 .............................................................6  
5. WTO Pension Plan – Election of a Chairperson to the Management Board  - 
Proposal by the  Chairman ..................................................................................................... 7 
6. Work under the Doha work programme................................................................................7  
(a) Report by the Chairman of the Trade Negotiations Committee .................................................7  
(b) Statement by the Chairman on his recent consultations .............................................................7  
7. Trade Integration Mechanism of the International Monetary Fund – 
Presentation by the Acting Managing-Director of the IMF ...............................................27  
                                                      
1 The statements by the Chairman and by delega tions regarding Nepal's accession are reflected in 
Annex I. WT/GC/M/86 
Page 2  
 
 8.
 Statement by Cuba.............................................................................................................. ....40  
9. Chairmanships of the Working Parties on Algeria, Lao PDR and Uzbekistan – 
Announcement by the Chairman ..........................................................................................40 
 
ANNEX I: Statements regarding the accession of Nepal 41 
 
ANNEX II: Item 6 - Opening and Closing Remarks by the Chairman of the General   Council and the Director-General  (circulated as JOB(04)/50) 43 
 ANNEX III: Item 6 - Statement by the representative of New Zealand as Chair of the  
  Special Session of the Committee on Agriculture (circulated as JOB(04)/51) 49 
 ANNEX IV: Item 8 - Statement by Cuba (circulated as WT/GC/79) 53 
 
 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 Ar ticle XII.  He recalled that at the February 
meeting of the General Council, a number of Memb ers had spoken in support of early positive action 
on this long-standing item on the Council's agenda.  The then Council Chairman had stated that he 
would inform his successor of the content of that  discussion and that the incoming Chairman would 
take the necessary steps to continue to discuss this issue with delegations befo re the next meeting of 
the General Council. 
2. He informed Members that he had held an in itial consultation regarding Iran's request with a 
group of delegations in April, which had incl uded the coordinator of the Informal Group of 
Developing Countries.  At that meeting it had become clear that this continued to be a difficult matter 
for at least one delegation, and that the question of  when positions might change in a way that would 
allow Members to pursue a satisfactory resolution re mained uncertain.  He re mained ready to work 
further with delegations to facilitate progress on this  matter, although he had no t heard of any change 
in positions since April that would encourage him to  think that further cons ultations would be any 
more fruitful at the present stage. 
3. The representative of the United States  said that the issue of Iran's accession to the WTO 
continued to be under review by his Government.  As a result, his delegation had nothing to add to its 
statement at the Council's December meeting. 
4. The representative of Sri Lanka , on behalf of the Informal Group of Developing Countries ,   
said that these countries had taken note of the statem ent by the United States.  They wished to thank 
all those who had supported their position earlier on this issue, as well as the Chairman for his 
consultations.  It was hoped that the United States would complete its review  soon and be able to 
provide a positive response on this issue as soon as possible.  
5. The representative of Turkey  said that his delegation fully supported the statement by Sri 
Lanka on behalf of the Informal Group of Developing Countries.  Iran's request for accession had long been on the Council's agenda, and the time had come to settle this issue with a positive outcome 
as soon as possible.  All liked to highlight that th e WTO was not a political organization, but if this 
was indeed the case, it was necessary that all countries applying to join the WTO were treated in the 
same way and given equal opportunity to exerci se their right to become a Member.  This was 
important if the WTO was to become a truly univer sal organization.  Therefore, his delegation called 
on the membership to treat Iran's request on the basis of its WTO-related merit.  WT/GC/M/86 
 Page 3 
 
 
 6. The representative of the European Communities  said that this matter had been on the 
Council's agenda roughly 15 times.  The Community, fo r its part, had been supportive of the request.  
The Community's position on WTO applicants had been  to treat each application on its own merits, 
independent of political considerations, and it expected  all delegations to treat all applications in the 
same way.  In the Community's view, Iran fulf illed the accession criteria of Article XII.  Starting 
discussions with Iran on its request for accession would help to promote reform in the country.  The 
basic WTO principles of transparency and non-discr imination were at the heart of good governance, 
which the Community wished to encourage.  In the same way, WTO involvement would also be 
beneficial to other peoples in the region as an elem ent to encourage and drive the process of economic 
and political reform in their countries.  The Comm unity was therefore confident that even those 
Members who had not in the past been able to vi ew Iran's request positively would be able to do so 
soon, and hoped that Members would then be able  to welcome an Iranian delegation among them as 
an observer.  In the Community's view, the informal consultations held by the Chairman following the 
February Council meeting shoul d be continued in order to break the current deadlock.  
7. The representative of India  added his delegation's voice to those who had spoken in support of 
Iran's early accession to the WTO.  India had consis tently called for universal membership in the 
WTO.  The issue of Iran's accession had been on the Council's agenda for a long time.  India 
welcomed the initiation of the Chairman's inform al consultations and asked that the Chairman 
continue his efforts to achieve  early progress on this matter. 
8. The representative of China  said that his delegation strongly supported the statement by Sri 
Lanka on behalf of the Informal Group of Deve loping Countries, of which China was a member.  
China also shared the positions taken by Turkey, th e Community and India.  Iran's request had been 
on the Council's agenda for some years.  China found it difficult to understand why Iran's accession 
request could not be accepted by Members in accordan ce with the standards that had been applied to 
other similar requests.  Such non-action was not in the interests of the multilateral trading system, and 
a quick conclusion of the review of this matter by the United States would help Members resolve this 
long-pending issue, and would help Iran become  integrated into the world economy and the 
multilateral trading system.  His delegation urged th e Chairman to continue his consultations with 
concerned Members with a view to reso lving this issue as early as possible. 
9. The representative of Cuba  said her delegation wished to join its voice to that of others who 
had spoken earlier, and to support, in particular, the statement by Sri Lanka on behalf of the Informal 
Group of Developing Countries.  Cuba also supporte d the statements by Turkey, India and China.  
Iran was a developing country which met the criteria established for accession to the WTO.  No 
political elements should constitute a barrier to th e accession of Iran to the WTO.  If Members really 
wished the WTO to be a universal forum, they had to  take a positive attitude to this request.  This item 
had been on the Council's agenda for a long time,  and for this reason Cuba fully supported the 
consultations the Chairman would undertake, in orde r to ensure that Iran's request received a positive 
response as soon as possible. 
10. The representative of Switzerland  reiterated the statement by hi s delegation at the February 
Council meeting that it was time to make progress on th is issue, and that Iran's request for accession 
should be considered seriously and a positive decisi on taken.  Switzerland we lcomed the consultations 
the Chairman had conducted.  His delegation wished  to underline that the establishment of a working 
party to consider Iran's request was not a matter at  issue between developed and developing countries, 
and encouraged the Chairman to include the broad est coverage of the membership in his continuing 
consultations on this matter. 
11. The representative of Malaysia  noted that at the outset of the present meeting the Chairman, 
on behalf of the membership, had welcomed Nepal as the 147th Member of the WTO, and his 
delegation wished to see something positive come out of  Iran's request for accession.  It was clear, in WT/GC/M/86 
Page 4  
 
 welcoming Nepal as the first LDC to accede to the WTO, that the organization was moving towards 
universality, including poor countries and countries with different political systems, all accepted on 
their individual merits, with political considerations set aside.  His delegation wished to reiterate its 
statement at the February Council meeting that this  issue had been too long on the Council's agenda.  
Iran's request dated from 1996.  This showed a failu re – but not of the system, in which all countries 
meeting the WTO requirements were allowed in.  Mala ysia hoped this failure could be rectified as 
soon as possible.  It was without doubt that Iran s hould be given the same kind of consideration as 
other countries.  There was no justification to do otherwise, and Malaysia asked the United States to 
consider this matter in that light and to recognize that Iran's accession could lead to improvements for 
Iran.  In this respect, Malaysia hoped that the Chairman would continue his consultations.  His 
delegation also wished to underscore the statemen t by Switzerland, and hoped that the Chairman 
would include in the consultations as many interested Members as possible. 
12. The representative of Egypt
 said that her delegation endorsed Sri Lanka's statement and also 
supported the Chairman's efforts to find a positive solu tion to this matter.  Egypt was convinced that 
the treatment of general matters, such as acce ssion and observership, required study in the 
organization, on the basis of general criteria that  were clear, and free from any political concern.  
These matters had an impact on the image of the orga nization, as well as on the efficiency of its work, 
and her delegation hoped that a pos itive and prompt solution to them would have a positive impact on 
Members' work relating to trade.  Egypt also suppor ted the statement by Switzerland that this was not 
a North/South debate or an issue between developi ng and developed countries.   Her delegation hoped 
a prompt solution to it could be found.  
13. The Chairman  said that he had taken note of all the statements.  In the light of the discussion, 
he proposed that he continue his consultations, a nd that the General Council revert to this matter. 
14. The General Council took note  of the statements and so agreed . 
2. Work Programme on Small Economies – Report by the Chairman of the Dedicated 
Sessions of the Committee on Trade and Development 
15. The Chairman  recalled that at its meeting in Febr uary and March 2002, the General Council 
had taken note of a framework and procedures fo r the conduct of the Work Programme on Small 
Economies, under which this Work Programme w ould be a standing item on the General Council's 
agenda.  The framework and procedures also pr ovided that the Committee on Trade and Development 
would report regularly to the General Council on th e progress of work in its Dedicated Sessions on 
this subject. 
16. Mr. Clarke (Barbados), Chairman of the De dicated Sessions of the Committee on Trade and  
Development , said that the Committee had met on 12 May.  During that meeting, Members had 
discussed two new submissions:  one from Bolivia, Mongolia and Paraguay;  the other from a group 
of six countries including Barbados, Fiji, Maur itius, Papua New Guinea, Solomon Islands and 
Trinidad and Tobago.  The proposals focussed on trade concerns raised by both land-locked and 
island small economies.  Many delegations, especia lly the non-resident Members participating in 
Geneva Week, had welcomed the proposals.  Ot hers had sought further clarification and had 
requested that the proponents continue to refine their submissions, taking into account the comments 
made in the Dedicated Session.  In order to m ove ahead on the work on small economies in the 
Dedicated Sessions, Members had agreed that furthe r consultations be held , which he intended to 
begin immediately.  
17. The General Council took note  of the report by the Chairman of the Dedicated Sessions of the 
Committee on Trade and Development.  WT/GC/M/86 
 Page 5 
 
 
 3. Waivers under Article IX of the WTO Agreement 
(a) Introduction of Harmonized System 1996 changes into WTO schedules of tariff concessions – 
Requests for waivers 
18. The Chairman  drew attention to the requests for wa ivers from Israel (G/L/670), Malaysia 
(G/L/676) and Panama (G/L/672), and to the releva nt draft decisions in documents G/C/W/482, 485 
and 483, respectively. 
19. Mr. Chiaradia (Argentina), Chairman of the Council for Trade in Goods , reporting on the 
Council's consideration of these requests, said that on 27 April the Council had approved the draft 
waiver decisions concerning the introduction of  HS1996 changes into WTO schedules of tariff 
concessions of Israel, Malaysia and Panama, and ha d recommended that they be forwarded to the 
General Council for adoption. 
20. The Chairman  proposed that, in accordance with the Decision-Making Procedures under 
Articles IX and XII of the WTO Agreement ag reed in November 1995 (WT/L/93), the General 
Council adopt the draft decisions in documents G/C/W/482, 485 and 483. 
21. The General Council took note  of the statements and so agreed . 2 
(b) Senegal – Request for waiver on minimum va lues in regard to the Agreement on the 
Implementation of Article VII of the GATT 1994 
22. The Chairman  drew attention to the request from Sene gal for a waiver on minimum values in 
regard to the Customs Valuation Agreement, a nd to the draft Decision in document G/C/W/488. 
23. Mr. Chiaradia (Argentina), Chairman of the Council for Trade in Goods , reporting on the 
Council's consideration of this request, said that  on 27 April the Council had approved the draft 
waiver decision for Senegal concerning its request  for a waiver on minimum values contained in 
document G/C/W/488, and had recommended that it be forwarded to the General Council for 
adoption. 
24. The Chairman  proposed that, in accordance with the Decision-Making Procedures under 
Articles IX and XII of the WTO Agreement ag reed in November 1995 (WT/L/93), the General 
Council adopt the draft Decision in document G/C/W/488. 
25. The General Council took note  of the statements and so agreed . 3 
(c) Albania – Implementation of specific commitments in telecommunications services – Request 
for a waiver (S/C/21) 
26. The Chairman  drew attention to the request from Albania for a waiver regarding the 
implementation of specific commitments in teleco mmunications services, and to the draft Decision 
annexed to document S/C/21. 
27. Mr. Brno (Slovak Republic), Chairman of the Council for Trade in Services , said that Albania 
had presented to the Council a request for a waiver pu rsuant to Article IX of the WTO Agreement, to 
allow Albania to postpone the implementation of  certain commitments in telecommunications 
                                                      
2 The Decisions were subsequently circulated in documents WT/L/568 - Israel, WT/L/569 – Malaysia 
and WT/L/570 - Panama. 
3 The Decision was subsequently ci rculated in document WT/L/571.  WT/GC/M/86 
Page 6  
 
 services.  At its meeting on 1 March 2004, the Coun cil had adopted the report to the General Council 
contained in document S/C/21 and had approved th e draft Decision attached to this report. The 
Council had recommended that the draft Decision be forwarded to the General Council for adoption. 
28. 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 contained in the Annex to document S/C/21. 
29. The General Council took note  of the statements and so agreed .4 
4. Committee on Budget, Finance and Administration 
(a) Report of the Committee on its meetings of  November and December 2003 (WT/BFA/71) 
30. The Chairman  drew attention to the report of the Committee on Budget, Finance and 
Administration contained in document WT/BFA/71. 
31. Mr. Iversen (Denmark),  Chairman of the Committee , said that the report covered the 
meetings held in November and December 2003 a nd should be read in conjunction with document 
WT/BFA/70, which contained the recommendati ons resulting from these meetings.  Those 
recommendations had been presented to and appr oved by the General Council on 15-16 December 
2003. 
32. The General Council took note  of the statement and adopted  the report in WT/BFA/71. 
(b) Report of the Committee on its meeting of April 2004 (WT/BFA/72) 
33. The Chairman  drew attention to the report of the Committee on Budget, Finance and 
Administration contained in document WT/BFA/72 a nd to the recommendations of the Committee in  
paragraphs 12 and 30 of that report. 
34. Mr. Iversen (Denmark),  Chairman of the Committee , said that the report covered the meeting 
held on 1 April 2004.  The agenda taken up by  the Committee at the meeting (WTO/AIR/2277) 
included (i) various administrative up-dates and progress reports;  (ii) Inactive Members;  (iii) review of guidelines on voluntary contributions from non- governmental donors;  (iv) Appellate Body 
operating fund;  (v) letter from the Chairman of the Appellate Body;  (vi) long-term temporary 
assistance;  (vii) adjustment to the WTO dependency allowances;  and (viii) election of Chairperson.  
He drew attention to the recommendations in para graphs 12 and 30 of the report.  In paragraph 12 
concerning inactive Members, the Committee reco mmended that the General Council urge Members 
in Category IV of the administrative measures to liqui date their arrears.  In paragraph 30 concerning 
the adjustment to WTO dependency allowances,  the Committee recommended that the General 
Council approve the amendments to Annex 2 of  the WTO Staff Rules set out in document 
WT/BFA/W/112. 
35. The General Council took note
 of the statement, approved  the Budget Committee's specific 
recommendations in paragraphs 12 and 30 of document WT/BFA/72, and adopted  the report in 
WT/BFA/72. 
                                                      
4 The Decision was subsequently ci rculated in document WT/L/567.   WT/GC/M/86 
 Page 7 
 
 
 5. WTO Pension Plan – Election of a Chairperson to the Management Board  - Proposal 
by the  Chairman (WT/GC/W/529) 
36. The Chairman  drew attention to the proposal circulated in document WT/GC/W/529 
regarding the election of a Chairman for the Ma nagement Board of the WTO Pension Plan.  As 
explained in that communication, Mr. Terry Collins-Williams (Canada) had kindly agreed to have his 
name put forward for election to the post of Chairm an of the Management Board for a period of three 
years, to replace Mr. Jóhannesson (Iceland), whose term expired in May 2004.  In that communication, he had invited Members to subm it any comments they might have regarding the 
proposed nomination to him by close-of-business on Thursday, 13 May, and had indicated his intention to propose Mr. Collins-Williams's name for election to the Management Board at the present 
meeting.  He had not received any comments from delegations and, accordingly, proposed that the 
General Council elect Mr. Terry Collins-Williams as Chairman of the Management Board of the 
WTO Pension Plan. 
37. The General Council so agreed
. 
38. The Chairman  noted that since Mr. Collins-Willia ms was already a member of the 
Management Board, it would be necessary to elect a replacement member of the Management Board.  
He intended to propose such a replacement at the next meeting of the General Council.  He also 
expressed appreciation, on behalf of the Genera l Council, to Mr. Jóhannesson for having served as 
Chair the past year, and for the outstanding efforts he had made to put the Pension Plan on a sounder 
footing. 
39. The General Council took note  of the statement. 
6. Work under the Doha work programme 
(a) Report by the Chairman of the Trade Negotiations Committee5 
and 
 (b) Statement by the Chairman on his recent consultations
5 
40. The Director-General, Chairman of the Trade Negotiations Committee  made a brief report on 
the twelfth meeting of the TNC held on 21 April, and shared with the membership his sense of the 
developments since that date.6 
41. The Chairman  then reported on his recent consultations.6 
42. Delegations thanked the Director-General and the Chairman for their statements. 
43. The representative of Romania  assured the Chairman and Members that Romania would 
continue to support the negotiation process, while seek ing to have its interests covered by the results 
that would be obtained.  This positive and pro-activ e attitude stemmed from the fact that the process 
of reform in Romania had been positively influenced by the results of the Uruguay Round.  One of the 
most salient outcomes of which was that fore ign trade was and remained the source of the 
development process in Romania.  The opening of Romania's market to competition had reinforced 
the restructuring of its economy, while improved market access conditions fo r its goods and services 
                                                      
5 On the suggestion of the Chairman, these two sub-items were taken up together. 
6 The remarks by the Director-General and the Genera l Council Chairman were subsequently circulated 
in document JOB(04)/50, and are reproduced in Annex II. WT/GC/M/86 
Page 8  
 
 had increased the competitiveness of its suppliers.  This outlined the main grounds for Romania’s 
active participation to the ongoing ne gotiations.  He assures the Chairman and the Director-General of 
his delegation's full and active support in their endea vours to turn the Doha Development Agenda into 
a means of further liberalization of trade within a multilateral set of rules and with a special focus on 
the development dimension. 
44. The representative of the United States
 said that in recent weeks his delegation had perceived 
a growing tendency towards common ground on both th e objectives and the content of a meaningful 
framework package for the DDA by the time of the summer break.  This had been particularly 
noticeable at the recent meetings of the OECD Members and the various developing countries that 
had participated in events at the OECD, and in inform al gatherings at the time of the OECD meeting.  
This was especially important at a time when Members had a strategic economic opportunity, namely, 
to contribute – through ambitious multilateral trade liberalization – to  the expansion and deepening of 
economic growth stemming from the resurgence of ec onomic growth in the United States and strong 
growth in China, India and on the part of some of the countries in East Asia.  Developing countries 
especially needed to be plugged into strong econom ic growth – through significantly improved access 
to major markets – in both developed and devel oping countries, and through the reinforcement of 
domestic economic reforms that occurred through tr ade liberalization.  Members had to put the 
negotiations on track for significant progress during the rest of 2004.  In order to do that, they had to 
have a clear and intense focus on those subjects that w ould help them most to m ove forward.  This did 
not mean jettisoning other topics of importance to vari ous countries, but simply that simply that one 
could not get to second or third base without managing to get to first base.  In the next several weeks, 
getting to first base involved developing frameworks fo r the core market access  issues of agriculture, 
non-agricultural goods, and services, as well as de veloping modalities for the negotiation of trade 
facilitation.  Members also needed to ensure th at they sent positive messages on the importance of 
suffusing development considerations throughout their work. 
45. It was universally recognized that agriculture w as the most critically important element in the 
DDA negotiations and that Members had to address e ffectively all three pilla rs of the agricultural 
structure.  Not only was the United States committed  to obtaining historic reform in each of these 
three pillars, but it was beginning to perceive the outlines of a consen sus framework for the 
negotiations on agriculture.  He briefly sketched out the United States' perceptions as follows.  In 
export competition, the United States welcomed th e indication from the Community that it foresaw 
agreement on the elimination of export subsidies by  a date certain.  This would be an historic 
achievement.  The United States was ready to make its  contribution to this historic achievement by 
eliminating, in parallel to the elimination of classi cal export subsidies, the subsidy element in export 
credit programs, and to discipline the use of food ai d to ensure that it was used only for legitimate 
humanitarian purposes and did not interfere with commercial sales.  Of course, the United States would expect others to contribute by parallel di scipline on trade-distorting practices such as monopoly 
export state-trading enterprises and differential export taxes.  It also appeared that Members were 
getting closer to a framework for reining in, on th e way to elimination of, trade-distorting domestic 
supports.  It was within Members' collective grasp to define a framework in this area that would 
enable them to achieve substantial cuts and policy reforms that would be far superior to what had been 
achieved in the Uruguay Round. 
46. It was in the third pillar of agriculture, market access, that Members had the most work to do 
in the next few weeks.  They had to develop this framework at the same level of detail as for the other 
two areas.  The United States had put forward an am bitious formula proposal that had been deemed to 
be too ambitious by many countries.  Together w ith the Community it had subsequently proposed a 
blended formula approach which had been criticized  by a group of countries.  The United States was 
not wedded to its specific proposals, but it was the responsibility of the critics to put forth their 
suggestions on how to achieve ambitious market a ccess results in agriculture.  Such proposals were 
needed in advance of the next round of agricultu ral meetings in early June.  The United States was  WT/GC/M/86 
 Page 9 
 
 
 encouraged by the commitments th at had been made in Paris by countries from the G-20 and the 
Cairns Group to provide such proposals in that ti me-frame.  This was the most urgent task facing 
Members in the next 10 days.  Obtaining a framework for negotiations on NAMA was equally important to achieving the goal of spreading and d eepening economic growth and to contributing to 
development.  There appeared to be a general understanding that Members had identified the core 
elements needed to move forward to refine this  framework.  These elements included:  a non-linear 
formula for tariff cuts; sectoral negotiations, probab ly employing a "critical mass" approach, such as 
had been used in the Information Technology Agr eement; effective treatment of non-tariff barriers; 
and appropriate treatment of recently acceded Memb ers.  As in agriculture, there was a need to 
achieve the proper balance between ambition and sensitivity to countries' concerns, particularly the 
issues relevant to developing countries. 
47. To fully gain the results of tariff reductions  and the elimination of non-tariff barriers, 
Members should launch negotiations in July on trade f acilitation.  There appeared to be a convergence 
of opinion in favour of this.  Members needed to  move forward in developing modalities that would 
enable all to achieve real benefits in this area.   In services, which accounted for the majority of 
economic activity in both develope d and developing countries and which were intimately related to all 
countries' competitiveness in the global economy, ther e was a need  to encourage more countries to 
make offers as well as to improve the quality of many of the offers already made.  As he had 
mentioned at the beginning of his statement, deve lopment considerations ha d to permeate all work, 
especially in these vital areas of market access.  Th e challenge was to get right the balance among 
three factors:  (1) the overall ambition in the negotia tions; (2) a truly operational sensitivity to the real 
development constraints and needs facing the developi ng countries;  and (3) a reliable pathway for the 
ultimate integration of developing countries into the world trading system.  This was a very sensitive 
and complicated issue, given the great diversity in the circumstances and levels of development 
among the developing countries.  The United States was pr epared to work with others to find the right 
balance.  Some suggestions had been made recently on  this subject.  If other countries wished to work 
on such approaches, the United States was disposed  to do so.  The negotiations should not result in 
excessive burdens on the poorest and most vulnerable developing countries.  For such countries, some 
of the core elements should be to complete the bi nding of their tariff schedules and to participate in 
the negotiations on trade facilitation.  Successful resu lts in the latter would contribute enormously to a 
country's attractiveness to investors – both foreign and domestic – who were trying to tap into the 
global sourcing network.  While giving confid ence to the poorest developing countries that the 
requirements of the final DDA results would not be excessively burdensome for them, Members 
should encourage and support those developing countries who wished to employ the power of trade liberalization in reinforcing their domestic re form programs.  This support and encouragement 
involved both trade capacity building and the provisions of the negotiations themselves. 
48. The areas he had addressed certainly did not c onstitute an exhaustive list of the possible DDA 
results, or even the limits of the work that faced  Members between the present and the end of July.  
Indeed, Members needed to develop a pragmatic way to reflect, in the July results, the ongoing work 
on the other topics.  The United States recognized that there were other topics of importance to 
countries, but at the present point, it was trying to focus attention on the core areas that would have 
the greatest impact on all Members' economies and w ithout which it was inconceivable that the Doha 
Development Agenda could be completed.  Ther e was no doubt that the United States was committed 
to continue to play its leadership role, in co llaboration with the entire membership, in the coming 
months to achieve an effective fra mework package by the end of July , so that the negotiations could 
proceed to their next stage imme diately following the summer break. 
49.
 The representative of the European Communities  said that at present Ministers were definitely 
upbeat about the chances of success at the July meeting of the General Council.  According to the 
Director-General Members were "on the verge of hi storic breakthroughs".  For the Brazilian Minister 
"there was an 80 per cent chance of agreeing to a ne gotiating framework by the end of July".  The US WT/GC/M/86 
Page 10  
 
 Trade Representative saw "important progress and growing momentum" as well as a strategic 
economic opportunity, and the European Trade Co mmissioner had said that the "WTO volcano was 
smoking again".  Thus, it was now up to delegations in  Geneva to match the expectations raised by 
their Ministers.  Only a few months remained to pu t a deal together, but this was perfectly doable if 
seen as a collective task.  Much work had been done, both in agriculture and elsewhere.  Members 
were now at a stage where they had to meet each others' ambitions, while at the same time taking 
account of each others' concerns and sensitivities.  This was not an easy task, as some of those 
ambitions and sensitivities were conflicting.  Ho wever, Members should keep in mind, both in 
agriculture and in NAMA, that th eir aim was to set a framework for modalities, leaving the actual 
negotiations on numbers and percentages for a late r stage.  That framework should not preclude 
Members from realizing the Doha ambitions, but should also properly address defensive concerns 
from both developed and developing countries.  Re garding agricultural market access, it had been 
seen that it was not easy to square the circle.  Th e Community had tried to do this, together with the 
United States, but that blend had not been accepta ble to the G -20 and others.  The Community was 
ready to try a somewhat different mix, as long as it was comfortable with the content.  His delegation 
was ready to work hard on any alternative appro ach, looked forward to concrete proposals in this 
respect from the G-20 and others, and would work w ith its partners in a ge nuine negotiating process. 
50. The market access approach had to be carefully  integrated into the overall approach on all 
three pillars.  Members indeed had a historical opport unity for a breakthrough in agriculture if they set 
that balance right.  Moreover, eventually the ag ricultural package had to be taken as a whole, 
including such issues as non-trade concerns.  For the Community's part, its Trade and Agriculture 
Commissioners had given a strong signal in their lett er to colleagues as to th eir readiness to go a long 
way in both domestic support and export competition.  The concept of full parallelism seemed by now 
broadly accepted, but needed to be spelled out in  the framework agreement.  The framework for 
domestic support was shaping up, but more technical  work was needed to ensure that Members 
achieved a substantial reduction of all forms of trade-distorting support by all major subsidizing 
countries.  Up to the present, the bottom-up appro ach of negotiations among Members and groups of 
Members had functioned fairly well. However, Memb ers would soon arrive at the juncture where the 
Chairman of the Negotiating Group on Agriculture would have to leave the wings of the theatre and go front stage, pulling all the strings together, probabl y sooner rather than la ter, as time was running 
short and as Members needed to see parallel progr ess on the other components of the package. 
51. In Paris, Ministers had been optimistic about  NAMA and the Singapore issues.  It appeared 
that there was a broad sentiment that these two would fall into place once agricu lture was sorted out.  
Nonetheless, Members were not there yet on the NAMA formula, and more work was needed on the modalities for trade facilitation.  It was essential th at developing countries felt comfortable with the 
overall package. The EC's Trade and Agriculture Co mmissioners had been very outspoken about this 
in their letter to colleagues.  Th e weakest countries needed clear assu rances that the price they needed 
to pay in this Round was extremely modest.  They needed this message now and not at the end of the 
negotiations.  This was the political concept behind th e suggestions in the letter that the LDCs, and the 
weak and vulnerable developing countries in a sim ilar position, should not have to open their markets 
beyond existing commitments and should be able to  benefit from increased market access by both 
developed countries and advanced developing countries.  This added a new overriding political 
concept to the Doha Development Agenda without subtracting in any way from the commitment on 
special and differential treatment provisions to  make them more opera tional and to address 
outstanding implementation issues.  It was in no way meant to divide developing countries or to 
subtract from the commitment that S&D treatment and less-than-full reciprocity should be integral 
parts of all elements of the negotiations. 
52. Members now needed to activate the turbo charge r at all levels of their work.  They would 
need the guidance of the Chairman and the Director-G eneral to work out the outline of their decisions 
at the end of July.  However, Members needed to keep this work focused and simple, and should not  WT/GC/M/86 
 Page 11 
 
 
 start overloading the boat.  If Members got the main issues right in July, they could always see how 
additional language on some other Cancún issues could be accommodated.  Some impetus in the 
services negotiations, for example, could certainly be useful.  Above all, Members had to continue to 
focus on substance. 
53. The representative of India  agreed with the Chairman and th e Director-General that there had 
been many positive and encouraging changes in th e past few weeks and months.  There had been 
more intense negotiations between delegations.  Ther e had been an attempt to understand each other.  
There had been greater direct engagement by Ministers, and a series of Ministerial meetings currently planned would further intensify the engagement by Ministers and increase the possibilities for 
success.  However, as the Community had mentioned,  there continued to be fundamental differences 
on some key areas, and Members' chances of success would depend eventually on whether they could 
find ways of resolving these differences in good time.  Achieving the balance needed at any point in 
the negotiations would not be an easy task and would require a great deal of commitment from all.  
Members would have to work very hard to ensu re that the smoking volcano delivered something 
substantial and not just hot air.  As many delegations had mentioned,  most of the discussions had been 
focused on agriculture.  This was as it should be, b ecause agriculture was central to the negotiations.  
But there were other important areas which Members would need to address at the appropriate time, and India hoped that Members would be able to get to these issues within the next few weeks. 
54. The Director-General had made a reference to having some outline of a possible outcome by 
the end of May.  As his delegation had said on prev ious occasions and wished to reiterate now, India 
was facing a situation of political change.  Its new government would have to formulate its own 
policy on various aspects of the Doha work progra mme.  As his Permanent Secretary had mentioned 
in Paris, India would continue to engage constructively and to exchange ideas, but it had to be clearly 
understood that India was in no position to make  any commitments at the present stage until the 
Government had had the opportunity to look at all the issues and to formulate its policies.  Therefore, 
everything that India would do had to be ad referendum. 
55. The representative of Singapore
 said that Members were at a delicate crossroads in the DDA 
process.  A clear political will to move forward had been shown over the past few months, which had 
resulted in improved atmospherics.  All wished to s ee a credible framework in July that would guide 
the negotiations for the rest of the DDA.  Member s were united by the hope that 2004 would not be a 
lost year for the Round.  There had been a growi ng sense that Members might be able to pull off the 
objective of a framework by July.  In this respect, the recent letter from the EC Trade and Agriculture 
Commissioners had given an important shot in th e arm to the negotiations by providing impetus for 
substantive movement in Agriculture, particularly  export competition.  In addition, the letter had 
provided clarity on the Community's position on the Singapore issues – something that was crucial to unblocking the Round.  These were important con cessions by the Community which would hopefully 
make it easier to put the negotiations under the DD A back on track.  As the US Trade Representative 
had put it in his reaction to the Commissioners' letter, Members were beginning to see the shape of the 
foundation upon which to build in the coming weeks and months. 
56. The positive impetus from the Commissioners' lette r had been carried over into the informal 
meeting of Ministers in Paris the previous week.  Members seemed to have been able to consolidate 
and lock in the progress made recently.  There also appeared to be movement by several key delegations on Agriculture and on the Singapore issu es, which would hopefully create momentum for 
progress in Geneva over the next couple of months.  However, Members were not there yet.  Words 
had to be matched by deeds.  Much detailed techni cal work needed to be done to put Members in a 
position to have a framework by end-July.  They would need to temper their various wish-lists with reality.  Their biggest enemy was time, as not much of  this was left.  July probably represented the 
outer limit for any agreement in 2004, before the political calendar set in.  Equally important, 
Members should not be distracted, should remain focused and should not unnecessarily clutter up the WT/GC/M/86 
Page 12  
 
 July process.  As the United States had said, it w as essential that Members get to first base.  What 
Members needed to do now was to focus on th e key substantive issues where an outcome was 
absolutely needed by July, par ticularly on Agriculture and NAMA, as well as on the Singapore issues, 
in particular the modalities for trade facilitation.  Me mbers needed to start th is work immediately and 
to have something on the table by June, so that th ey could use July to fine tune the documents.  
Otherwise, they would be in trouble.  Singa pore remained committed to the DDA process and would 
work with the Chairman, the Director-General a nd the Members towards a good outcome in July.  
However, time was running out, and Memb ers would have to start moving soon. 
57. The representative of Argentina
 said that his delegation was committed to the negotiating 
process.  It was crucially important, for the sake of  the organization and for multilateralism, to reach 
an agreement by July, so as to enable Members to resume work on outstanding tasks with renewed 
vigour as soon as possible in 2005.  For the first time since the Doha Ministerial Conference, his delegation felt that the climate was conducive to c onsolidating the progress made thus far.  Members 
had to take advantage of these circumstances, while bearing in mind that, despite the positive 
atmosphere, time was short and there was still much wo rk ahead.  It was important at the present stage 
to tone down the level of rhetoric and action through public opinion.  Negotiations had to be 
conducted in the appropriate fora a nd not through the press.  Argentina was prepared to be flexible 
and to consider all proposals made.  In the case of proposals that were clearly not constructive, that 
flexibility would consist of simply leaving the proposals aside.  It w ould be useful to try to reach a 
minimum level of understanding on all of the sensitive issues, such as those that were to be included 
in the basic package, so that Me mbers could then move on to the stage of producing texts.  The texts 
should contain as little detail as possible, and the di fferent chapters should be balanced in their 
construction.  Unless an element was predetermined by the Doha process, such as the requirement to 
phase out agricultural subsidies – which, in fact, im plied the total elimination of such subsidies at 
some point – the text should not include figures. 
58. An agreement on agriculture was essential to  provide impetus to the entire negotiating 
process.  Progress in this area should be evenly ba lanced among the three pillars, since they were 
obviously interlinked, but Members should not strive  for balance within the agricultural sector or 
between the interests of importers and exporters, which amounted to the same thing.  The basic 
principle of the Doha Round was the single undertaki ng, and balance therefore had to be sought in all 
areas of negotiation.  Technical work aimed at developing the concept of parallelism in export 
competition had to cover all  forms of export subsidies.  The que st for parallelism should mean that 
some details remained for the modalities phase.  Even  though this was an issue of enormous interest 
to Argentina, and it had already been agreed to te rminate subsidies, his delegation would be prepared 
to listen to the proposals of those Members responsib le for making  the relevant changes within their 
own regimes. 
59. In the area of domestic support, Argentin a welcomed the latest initiatives in the 
communication from the EC Trade and Agriculture Co mmissioners.  On the basis of these ideas, if all 
Members concerned could agree to a substantial re duction in their overall levels of trade-distorting 
support, the negotiations would produce the same pos itive results recently achieved with respect to 
export subsidies.  Regarding Green Box subsidies,  Argentina suggested leav ing aside the semantic 
discussion as to whether what Members would do would strengthen or clarify disciplines.  Members should simply ensure that these disciplines imposed an obligation that such subsidies be genuinely 
non trade-distorting.  In view of the urgent need to find a solution to the co tton issue, an additional 
element that had to be included in the discussi on on domestic support concerned the need to forge 
understandings on product-specific maximum limits a nd reductions.  On the more complex issue of 
market access, Argentina considered it a sign of  maturity that Members had reached unanimous 
agreement that opposing sensitivities ex isted and that the technical work to be carried out from the 
present on should produce guidelines for a formula that  took the various needs into account.  As with 
NAMA, the formula approach was a central and systemic element in improving access.  Tariff rate  WT/GC/M/86 
 Page 13 
 
 
 quotas (TRQs) had to be viewed as an exceptional mechanism which should be incorporated only in 
case of extreme sensitivities.  With the exception of countries that were under no obligation in this regard, such as the LDCs, it should be emphasized th at no developing country or group of developing 
countries had objected to improving access to their own markets.  This should be fully recognized and 
appreciated as a contribution to the process.  It should also be made clear – and this was precisely the 
challenge from now on – that improved access should be designed in a manner that was equitable, 
respecting all the principles applicable to S&D treatment and less-than-full-reciprocity. 
60. With regard to NAMA, Argentina agreed both with the principle that an agreement on 
agriculture would certainly be followed by another in this area, and with the idea that the current text 
would not require major changes to bring a consen sus nearer.  Nevertheless, a few changes were 
required for the text to be consistent with th e Doha Declaration with respect to less-than-full-
reciprocity and the overall balance in the levels of  ambition.  Concerning the Singapore issues, it was 
right to recognize the signs of flexibility shown late ly by the leading demandeurs, particularly the 
Community.  Even though some issues remained outstanding, there was undoubtedly convergence towards a compromise formula along the lines proposed at  the informal Ministerial meeting in Paris.  
Argentina would clearly be prepared to join the co nsensus that was eventually  reached in this area, 
especially as it related to the systemic issue of explicit consensus for negotiating modalities.  The 
development objective was the leitmo tif of the Doha Declaration, a nd without a clear focus in this 
direction the Round would lose its raison d'être .  It was therefore crucially important that this 
objective be included, and that no initiative in this area be tainted by commercial, political or strategic 
interests that were incompatible with the interests of developing countries. 
61. The representative of Canada
 said that time was short and if Members were to achieve a 
framework for negotiations in July, it was essential to move the process forward.  That was why his 
Trade Minister had put a great deal of personal emphasis on the DDA during his bilateral meetings as well as the previous week at the OECD in Paris.  It was clear from his discussions that agriculture was 
key to progress.  Some positive signals had been seen that week, including some welcome signs of 
movement from Europe and from the Ministerial discussions that had just taken place in Paris.  The 
shape of a possible outcome on export subsidies an d on domestic support w as beginning to emerge, 
although some difficult issues remained.  Most notable  were the issues of how to define parallelism on 
export subsidies and how to ensure  that reductions in domestic suppor t would be real and substantial 
and would not allow for support to simply be shif ted between boxes.  However, market access was 
clearly the key sticking point and the area that re presented the biggest thr eat to success in July.  
Members needed first to agree on the general pr inciples that should drive a formula.  Canada 
suggested that the principles for a formula s hould be as follows:  First, Members needed a 
harmonizing formula for tariff reduction – one that re duced higher tariffs more than lower ones, and 
that also addressed the issue of tariff escalation.  Such a formula should also require minimum cuts to 
ensure that all Members made a contribution.  S econd, Members needed to recognize that for some 
sensitive products flexibility was required – not flexib ility that did not allow for real improvements, 
but flexibility in how improvements could be made.  This pointed in the direction of tariff quotas.  However, allowances for flexibility should be restrict ed and should come at a cost, and higher levels 
of flexibility should come at higher costs.  Third, many had said there should be the same formula for 
developed and developing countries.  While the ba sic elements should remain the same, the formula 
had to accommodate the different tariff structures between developed and de veloping countries, and 
to some extent among developing countries themselves.  This might lead up to more variations within 
a harmonizing formula for developing countries, and to  more flexibility in how developing countries 
could address their sensitivities.  By using this appr oach, Members could ensure that the appropriate 
balance between the contributions to be made by developed countries and by developing countries 
was reached.  General principles such as these coul d guide Members towards the development of an 
acceptable framework language on market access. WT/GC/M/86 
Page 14  
 
 62. The other essential elements that Canada agreed  had to be part of a July package were a 
framework on NAMA, further guidance on servi ces, priority on the Singapore issues and 
development.  The development provisions had to  ensure that Members gave even greater S&D 
treatment to the poorest Members.  On NAMA, Ca nada had to see improved market access for its 
exports.  Real market access was essential if this  Round was to meet the interests of the business 
community.  A balance between ambition and flexibility  in NAMA was essential.  Canada agreed that 
if the way forward was found in Agriculture and NAMA, services would not be far behind.  The setting of benchmarks as part of a July package was therefore appropriate, and meeting these deadlines was essential to the spirit of the engageme nt.  Agreement on the Singapore issues seemed to 
be emerging.  With progress in agriculture and NA MA, a deal to launch multilateral negotiations on 
trade facilitation could be struck.  In a demonstrati on of Canada's good faith and in order to provide 
clarity on the other three Singapore issues, his delegati on had agreed to take the latter out of the single 
undertaking and to place them in working groups for further study outside the structure of the DDA.  
Unless all agreed that they were on the same path and that they sh ared the same goal of a strong and 
healthy multilateral trading system and a reinvigorated  DDA, it was certain that the alternative path of 
an increasing number of bilateral deals and an increasingly complex web of rules would emerge.  
Multilateralism might at the present point seem like the ha rder road to travel, but if Members travelled 
it together, this would make all the difference to the global trading system. 
63. The representative of Brazil
 said that his delegation agreed with the overall tone of the 
Chairman's and the Director-Gener al's assessment and pledged its continued willingness to work hard 
under their leadership to take advantage of the window of opportunity Members had before them up 
to July.  All seemed to agree that the new rul es of engagement observed in 2004 had had some 
positive results and it was now a god time to harvest  them.  Brazil continued to be willing and 
prepared to play an active and constructive role in  that regard.  Brazil's position on most of the issues 
was well known and there were no major changes to re port.  Like others, Brazil had been encouraged 
by recent demonstrations of flexibility, both by the United States and by the Community, and was 
encouraged to note that those demonstrations of flexibility had been expressed formally at the present 
meeting.  Brazil was prepared to work with these tw o majors and with all othe r groups of delegations 
in order to achieve the goals all expected.  Howeve r, his delegation wished to make two observations.  
One regarded the statement by the United States that  it expected what it called the critics of its joint 
proposal to assume the responsibility of presenting a lternatives to the proposal before the next 
meeting of the Committee on Agriculture in Special S ession.  Brazil would work for that, and this was 
the commitment and the understanding Ministers ha d expressed.  However, his delegation preferred 
not to use the term "responsibility", nor to ascribe it di rectly or exclusively to what might be termed 
the critics of the joint proposal.  This criticism ha d come well before the Cancún Ministerial, and only 
now had one heard from the proponents of the joint pr oposal that they were ready to look into other 
alternatives.  This should be a joint res ponsibility, and Members should work together. 
64. The Community had mentioned the Brazilian Fore ign Minister's assessme nt that there seemed 
to be an 80 per cent chance of agreeing on a frame work for agriculture by July.  His delegation 
pledged to do its utmost so that his Minister's pe rcentages were proven right and that the other 20 per 
cent did not get buried in the lava of the Commi ssion's volcano.  Brazil would do its part and would 
be meeting with the G-20 that day or the next in or der to consider the situation.  Brazil would have to 
report the following week to its friends who had not  been present at the OECD meeting in Paris about 
the recent developments and examine with its collea gues the best approach to take in the next few 
days.  His delegation was imbued with a sense of urge ncy and was prepared to do its part.  However, 
it wished to ask its colleagues to take note – as Br azil had done – of the remarks just made by India 
regarding the change of government in that country .  Members would have to keep this in mind as 
they worked in the coming days towards achieving proposals that could generate consensus.   
65. The representative of Australia  said that his delegation felt the upbeat assessment made by the 
Chairman and the Director-General was right, certa inly from his observations of the meetings the  WT/GC/M/86 
 Page 15 
 
 
 previous week in Paris.  All Members should be a little more optimistic that the objective they had set 
themselves for July could be delivered.  His feeli ng from some of the discussions at recent meetings 
that had taken place in the light of the LDC Mini sterial meeting, and from the letter from the EC's 
Trade and Agriculture Commissioners, was that  there was now a broad-based political level 
commitment to produce a package by July.  Aust ralia welcomed the emerging consensus that now 
appeared on the Singapore issues.  Some might flippantly say that this had come none too soon, but it 
was nevertheless a welcome development.  It was now appropriate for those Members who had long 
had reservations about including investment, comp etition policy and transparency in government 
procurement in the single undertaking, to agree now  to move forward on trade facilitation, and his 
delegation hoped that Members could find modalities on trade facilitation as part of the July package. 
66. Australia also welcomed the apparent agreement in Paris that the focus of Members' attention 
in July should be on the core elem ents where decisions were needed to move the negotiations forward, 
whether in the form of framework agreements on ag riculture and NAMA, or procedural decisions in 
some other areas.  This was in no way to undermine or forget the importance of a number of other areas of the negotiations – rules, for example – where Members needed to continue the work 
embarked on.  It was clear that agriculture rema ined the biggest challenge.  All had welcomed the 
apparent signs of flexibility that had come in recen t weeks, and Ministers were determined to try to 
reach an agreement on framework modalities by July.  However, it was one thing for Ministers to talk 
about the need and the political will to get there, and it was another for all Members to translate that 
political will into text.  This would be a major ch allenge for all.  The United States had said that 
developing countries needed to be plugged into the growth that was now taking place around many 
parts of the world via market-access improvements, a nd nowhere was this more true than in the area 
of agricultural trade.  It was in the area of ma rket access for agriculture that there was the least 
convergence among major delegations.  His delegation, like Brazil, wa s struck by the United States' 
comments about the major responsibility to find a solution now being placed on the critics of the blended formula.  Like Brazil, Australia did not regard this responsibility as belonging to those who 
had for many months preceding Cancún pointed out the deficiencies in the blended formula and had 
appealed for leadership from the two big trading partners in these negotiations to find a way that 
would accommodate the interests, not only of themselves but of the rest of the Members in these negotiations.  Now, many months after Cancún, the two proponents of the joint proposal had indicated 
they were prepared to look at possible alternativ es.  Australia would be trying within the Cairns 
Group, and with its partners in the G-20, to find alternatives that could accommodate the interests of 
all.   
67. He had been struck by some of the principles Canada had cited in addressing market access.  
His delegation's view was that the litmus test and first principle that would have to govern any elaboration of an approach to market access had to be that it could deliver the Doha mandate, and that 
mandate talked about substa ntial improvements in market access.  It  did not talk about substantial cuts 
in tariffs, nor about substantial improvements in a ll products other than the sensitive ones, but rather 
substantial improvements in market access.  The se cond principle that should govern the negotiations 
on agriculture was that the negotiations shoul d continue and not compromise the process of 
integrating agriculture into the WTO, which had been, after all, the main element driving the 
negotiations on agriculture for many years.  The thir d element was that there had to be some degree of 
harmonization in that the higher tariffs should be  cut the most.  This principle would govern 
Australia's approach to domestic support.  This w as why all wished to eliminate export subsidies, 
because this was the most egregious form of unfair co mpetition.  In the same way, higher tariffs had 
to be cut by more than lower tariffs.  One also ha d to deal also with escalation, an issue about which 
developing countries and others had complained for many years.  There was a need to deal with 
sensitivities.  Australia acknowledged from the out set that all countries, both developed and 
developing, had some sensitivities, but flexibility in  this regard could not be open-ended and should 
come at a price.  Members had to build an incentiv e into the approach on market access which limited 
exceptions.   WT/GC/M/86 
Page 16  
 
 68. Australia also agreed with the idea of a single approach that would apply to all countries, but 
given the mandate, Members would clearly need to take account of different profiles and different 
structures among developing countries and reflect this in any approach adopted.  Finally, Australia 
would suggest that – in the same way Members were talking about trade facilitation as a way of 
assisting private entrepreneurs, exporters and importers – Members should simplify tariffs in 
agriculture, to genuinely help facilitate trade ra ther than construct tariffs in a way that was 
deliberately intended to restrict trade.  In the area  of domestic support there was, as others had said at 
the present meeting, a growing convergence on the key issues that would need to be reflected in any 
framework text.  For a start, his delegation agr eed with both the Community and the United States, 
who had said there was no need for figures in the frame work text.  One area where this was especially 
true was domestic support.  There was a need for genuine reductions in the overall amount of trade-
distorting domestic support which was now delivered  through the amber box, the blue box and de 
minimus.  There was clearly a need for product- specific commitments if Members were to deliver 
genuine reform in any area.  Regarding cotton,  it would be essential to have product-specific 
commitments in the area of domestic support. 
69. On export competition, Australia accepted at face value the EC Trade Commissioner's 
declaration and assurance that the offer on export competition was not a poison pill, and that it was 
not intended to be accompanied by conditions ensu ring that delivery on that commitment would never 
have to be made.  However, Australia also accepte d the idea of parallism in the area of export credits 
and state trading enterprises, and in the need for genuine discipline to ensure that food aid did not 
circumvent export subsidy commitments.  However,  Members should be very careful about trying to 
pursue full parallism to such an extent that it made  the perfect the enemy of the good.  In the areas of 
NAMA and services, his delegation agreed with those who felt that if progress could be made in the next few weeks on agriculture, it should be possible to make progress in these other areas as well.  Australia agreed on the need for some benchmarks on renewed and improved, or new, offers in the 
area of services, and subscribed to the view that an ambitious mandate was needed in the area of 
NAMA which, along with agriculture, provided the b est hope of substantially improving the standards 
of living for all peoples. 
70. The representative of Turkey
 expressed his delegation's thanks to the Chairman and the 
Director-General for their efforts to lay the grou nd for reaching a consensus on a package by end- 
July.  The information they had provided at the present meeting and recent developments increased 
Turkey's optimism that a positive outcome regardi ng the July package could be reached, and was 
pleased to note that the shape of  this package was becoming clear er.  On agriculture, there had 
recently been new initiatives that could be descr ibed as courageous.  Turley welcomed these 
initiatives which might bring Members closer to a breakthrough.  His delegation hoped that market 
access issues, which constituted one of the most sens itive dimensions of the agriculture negotiations, 
not only for Turkey, but also for other developi ng countries, could be addressed with a flexible 
approach, taking into consideration the developing  countries' legitimate needs and concerns in the 
area of tariff reductions.  His delegation would not restate its views on the tariff reduction formula.  
However, in any future agreed formula, the tariff lines that would be subject to minimum tariff 
reduction needed to be defined as broadly as possi ble.  Within these broad tariff lines, special 
products had to be more specifically described.  In this context, Turkey wished to highlight that 
Special Safeguard Mechanisms needed to  be reflected in the July package. 
71. On NAMA, Turkey favoured an ambitious approach that would create market access 
opportunities for all Members in line with the Doha mandate.  In the formulation of modalities, there 
was a need to balance the levels of ambition and fl exibility.  However, it was important not to lose 
sight of achieving significant market access, while  incorporating flexibility provisions into the 
modalities.  Special attention should be given to deal ing with non-tariff barriers in a meaningful way.  
His delegation had observed that the absence of an agreed methodology in this field was the major 
stumbling block.  Trade in services was an importa nt element of the July package and should be  WT/GC/M/86 
 Page 17 
 
 
 treated as such.  Turkey was concerned by the l ack of willingness of some Members to table their 
initial conditional offers in services.  To Turkey's  dismay, some 50 Members had still not submitted 
their services offers.  Turkey had tabled its o ffer before the Cancún Ministerial Conference and 
expected Members who were technically capable of tab ling their offers to do so.  It would be futile to 
discuss the revision of already tabled offers before  the pending initial offers had been received. 
72. On the Singapore issues, Turkey supporte d efforts to open the way for multilateral 
agreements on these issues that would take into account the need for S&D treatment for developing 
countries.  However, there seemed to be an emer ging consensus on only one of these issues, namely, 
trade facilitation.  Turkey was ready to join the consensus on these issues.  Development issues were 
the core elements of the DDA mandate, and there was a pressing requirement to make significant 
progress on S&D treatment issues.  However, his dele gation had serious concerns about attempts to 
create new categories among the developing countries, in particular by resorting to terminologies such 
as "Round for free".  Such an approach would create an unfruitful debate, which would not only be counter-productive but would also hinder Members from reaching a consensus on the July package.  
His delegation would be constructive in building consensus on the July p ackage so that Members 
could benefit from the limited window  of opportunity before them. 
73. The representative of Korea
 said that his delegation had noted the very positive political 
inputs by various Ministerial processes in recent days.  Korea also wished to thank the Community for 
the recent joint letter from its Trade and Agricu lture Commissioners.  His delegation welcomed the 
positive political signals that had opened a window of opportunity to make meaningful progress in the 
negotiations.  It was now up to de legations in Geneva to translate these political commitments into a 
solid framework agreement by the end of July.  Should Members fail to do so, the Doha work 
programme and the WTO would suffer another serious  setback.  Given the limited time available, 
Members had to work in a focused and efficient ma nner.  The July package should contain as its core 
elements substantive decisions on agriculture, NAM A and the Singapore issues.  The package should 
also set out political commitments and procedur al guidelines on other parts of the Doha work 
programme, in particular on the services  negotiations and on development issues. 
74. Agriculture was one of the keys to the July pack age, but this package had to achieve a balance 
of interests, not only in each area but also across the various areas.  This was a fundamental point that 
Members should keep in mind throughout this work.  A balance of interests was especially important 
in agriculture.  The framework had to properly ad dress the concerns of importing countries as well as 
the interests of exporting countries.  In this light , Korea shared the Community's view that it was 
crucial to incorporate flexibility for sensitive produc ts and NTCs in any market-access formula to be 
agreed.  On NAMA, the Derbez text could be a basi s for the framework, since it contained the greatest 
common denominator among the divergent positions and interests.  At the present point it might be 
best to maintain most of the Derbez text on NAMA with only minimal necessary changes.  Of course, 
this did not mean that Korea's ambition had lessened, but rather the other way around. 
75. Korea remained convinced that all four Singa pore issues were very important for the 
multilateral trading system.  However, it was ready to show flexibility to help the overall process 
move forward, and would join the emerging con sensus on launching negotiatio ns on trade facilitation 
and continuing the work on the other three issues in the WTO but outside the single undertaking.  Korea hoped for prompt agreement on modalities for th e negotiations on trade facilitation so that all 
substantive issues could be fully addressed in the next stage.  Finally, on development issues, his 
delegation appreciated the Community's proposal rela ting to the LDCs and other weak and vulnerable 
Members so that they could participate in the negot iations with greater comfort.  Korea hoped that 
efforts to assist those Members could be made without prejudi cing the fundamental goal of promoting 
trade liberalization and the integrity of the WTO sy stem.  Korea would continue to be a constructive 
participant in the collective efforts to arrive at a meaningful July package and to bring the negotiations 
to a successful conclusion. WT/GC/M/86 
Page 18  
 
 76. The representative of Japan
 said that the OECD Ministerial meeting and other informal 
meetings held the previous week had been very useful opportunities for the exchange of views at 
Ministerial level.  Following these meetings his Ministers had instructed his delegation to reflect the political will shown in Paris in the negotiations taki ng place in Geneva, and to intensify the work on 
core issues towards shaping the July package.  The core elemen ts of the July package were 
agriculture, NAMA, the Singapore issues and development.  He wished to speak briefly about these 
core elements, while recognizing that services and ru les were important as well.   On market access in 
agriculture, the task was to find a formula accept able to all, that would realize substantial 
improvements in market access and would take in to account Members' sensitivities reflected in non-
trade concerns in accordance with the Doha Mandate .  On domestic support, the more trade distorting 
this support was, the more substantially it should be reduced.  On export competition, all forms of 
export subsidies – including export credit, food aid and state-trading enterprises – should be eliminated.  Members needed to advance their discu ssions with the broad participation of interested 
Members, and with consideration for balance betw een exporting and importing Members' interests.  
On the Singapore issues, important signals had emer ged from the Ministerial meetings in Dakar and 
Paris.  The meetings in Paris had indicated a sense of direction to launch negotiations on trade 
facilitation as a part of the single undertaking and to ma intain the study of the other three issues in the 
working groups.  Japan had been pursuing a pragmati c, realistic and constructive solution in Geneva 
with other Members, the number of which had alr eady reached 20.  Against this background, Japan 
was committed to continue to play a constructive role in this area. 
77. On NAMA, Members should continue their work  based on the Derbez text.  He wished to 
confirm Japan's firm conviction that development was also an important element of the July package.  
The clock was ticking, and Japan was strongly comm itted to engaging actively and constructively in 
the process ahead in Geneva to shape a meaningful package by end-July. 
78. The representative of Senegal
 said that the LDC Trade Ministers had met recently in Dakar, 
Senegal on 4 and 5 May to take stock and assess their negotiating position – as expressed in the 
Declaration adopted at the second LDC Trade Minist ers meeting in Dhaka, Bangladesh in 2003 – in 
view of the developments in the DDA negotiations.  Senegal wished to thank the Director-General for 
having participated in the Dakar meeting.  Represen tatives of other international institutions such as 
UNCTAD, and the Under Secretary-General of the UN for LDCs and small developing countries had 
also attended.  LDC Trade Ministers had stressed the commitment and determination of WTO Members to move ahead in the Doha work prog ramme and had noted some encouraging and positive 
signs with regard to their concerns.  They had al so recalled their main positions as expressed in Dakar 
and Bangladesh, which remained valid, and had re minded WTO Members that appropriate responses 
needed to be found to these positions.  While rema ining willing to consid er constructively the 
concerns of Members, the LDC Ministers strongl y encouraged Members to attach importance to 
development-related issues at the present stage of  the negotiations.  The meeting had closed with a 
Declaration which had been submitted to the S ecretariat for circulation to all Members. 
79. The representative of New Zealand, speaking as the Chairman of the Negotiating Group on 
Agriculture , made a statement.7  
80. The representative of China  said that his delegation shared very much the comments by the 
Chairman and the Director-General on the Doha wo rk programme.  Judging from the discussions in 
Paris by Ministers of some of the key Members, China felt that a sense of urgency and pragmatism 
was shared by most Members.  The atmosphere was, on the whole, positive and encouraging.  His 
delegation would work closely with  other Members in order to reach agreement on a package by end-
July.  Regarding the final product of July, it was a good idea to give priority to agriculture – including cotton – NAMA, services and trade facilitation, as well as development issues, which was what the 
                                                     
 
7 The statement was subsequently circulated in document JOB(04)/51, and is reproduced in Annex III.  WT/GC/M/86 
 Page 19 
 
 
 whole Round had to address in the first place.  Ag riculture was the key to progress, and the focus 
should be on removing market distortions, with a sp ecific date for termination of export subsidies and 
substantial reduction of trade-distorting domestic su pport.  On market access, the formula to be 
developed as an alternative should reflect the Doha  mandate as well as take into consideration the 
sensitivities of Members with different economic s ituations, different levels of development and 
different tariff structures.  The concepts of SP and SSM should be included in order to address 
developing-country Members' concerns, and the c oncerns of the newly acceded Members and LDCs 
should be addressed.  Finally, the issue of cotton s hould be given priority, w ith substantial reduction 
commitments on a product-specific basis.  On NAMA and services, China aimed to achieve further 
liberalization on the basis of progress in agricultu re, while the principle of S&D treatment for 
developing Members should be give n full consideration.  On the Singapore issues, China supported 
the continued efforts by DDG Mr. Yerxa on the modalities of trade facilitation with a view to starting the negotiation on the basis of consensus.  On de velopment, Members had to stick to the Doha 
mandate, and any efforts to categorize the developi ng countries would not help the process.  China 
was strongly committed to the July goal. 
81. The representative of Cuba
 said that her delegation had listene d with particular attention to 
the statements, some of which seemed to indicate that there was now a better climate for undertaking 
specific commitments in July.  Were that indication to be confirmed, Cuba wished to stress both that 
development was the foundation upon which the Ju ly package should be built, and that much 
remained to be done to achieve it,  given that the proposals on the tabl e for agriculture and NAMA still 
failed to meet this objective.  Further, no progress ha d been made with regard to implementation, in 
spite of the endeavours of the Director-General, or  with regard to the review of S&D treatment 
provisions geared towards strengthening them and making them more precise, effective and 
operational.  The same was true for the following issu es:  cotton;  small economies;  trade and transfer 
of technology;  trade, debt and finance;  and the advancement of the accession processes of a number 
of developing countries.  All of these issues required treatment corresponding to their impact on the 
growth and development of  developing countries. 
82. Cuba was not against continuing  to discuss the Singapore issues – each on its own merits – 
until an explicit consensus was reached to launch ne gotiations, but these issues were not a priority for 
her delegation.  For this reason, given the little tim e between the present and Ju ly and the divergence 
of views on these issues, Cuba did not, for the time being, see them as forming part of the July package.  Members should use th e time remaining before the ne xt General Council meeting to 
undertake a commitment that would create opportunities for all countries, in pa rticular developing and 
least-developed ones.  This would be the best wa y to implement the political will expressed at the 
present meeting by the major industrialized countri es.  Regarding the process under way in Geneva 
from the present until July, her delegation requested th at the difficulties of small delegations be taken 
into consideration, that no paralle l meetings – either formal or info rmal – be scheduled, and that the 
entire informal process be conducted in the respectiv e bodies to ensure both transparency and the full 
participation of all WTO Members. 
83. The representative of Pakistan
 said his delegation was pleased to note that there was now 
momentum and progress on important elements of the Doha work programme.  In the same vein, his delegation was also encouraged to note, from the Chairman's and Director-General's reports, the 
outcome of the Paris meeting.  Pakistan shared th eir views that there were positive signals coming 
from the highest levels to move forward, and fast, in  order to meet the July deadline.  Pakistan also 
wished to acknowledge the initiative recently taken by the Community and its willingness to engage 
positively and with flexibility on certain important  aspects of the DDA.  His delegation was still 
examining elements proposed in the paper which might have a direct impact on developing countries as a whole.  However, Pakistan wa s apprehensive about the proposal to create a new category within the 
membership.  It also welcomed the statement by United States and appreciated its commitment to WT/GC/M/86 
Page 20  
 
 moving the negotiations forward in a ll areas of the DDA.  He assured the Chairman of Pakistan's active 
and constructive engageme nt in the negotiations. 
84. The representative of Hong Kong, China
 said his delegation was encouraged by the positive 
political signals from recent gatherings of Minister s in London, Dakar and Paris.  The recent letter 
from the EC Trade and Agriculture Commissioners ha d also contributed to creating a renewed sense 
of engagement.  Members were now at a crucial j uncture of the DDA, with less than three months 
from the July deadline to agree on the package.  Time was running out.  Members had to seize the 
narrow window of opportunity between now and July to put the DDA negotiations back on a firm and 
sustainable track.  If they missed this opportu nity, the credibility of the WTO and the DDA would 
suffer a severe blow.  The political impetus generated by Ministers now had to be translated into real 
movements in Geneva. 
85. He wished to comment briefly on what his delega tion considered to be the core elements of 
the July package.  On agriculture , thanks to the flexibility shown by the Community and a number of 
other key players, the gaps between Member s on export competition and domestic support had 
narrowed significantly.  The pillar on market access remained difficult and required surgical 
treatment.  His delegation hoped that all key play ers could move from their opening positions and 
start negotiating a compromise as soon as possible.  Since agriculture was the linchpin of the DDA 
negotiations, Members could not afford to delay a breakthrough any longer, without running the risk 
of leaving too little time for nego tiations and to make progress on other important subjects.  On 
NAMA, Hong Kong, China favoured a single non-linear formula applying tariff cuts on all products as the core element, supplemented by sectoral tari ff elimination and NTB reductions.  His delegation 
also supported the view that Members should addr ess the special needs and concerns of developing 
and least-developed Members through S&D treatment. 
86. The draft framework in the Derbez text had provided a very good basis for Members' 
discussion.  While it was certainly not perfect, it struck a delicate balance between the various elements in the framework, in particular in the d escription of the formula and the sectoral component.  
While there was no doubt scope for further refinement  in some aspects, Members should bear in mind 
the risk of unravelling the whole text if they started to reopen some parts of it.  In addition, it had to 
be accepted that some of the questions raised – su ch as the request for more clarity on the defining 
elements of a sectoral component – were unlikely to  be fully addressed at the framework stage, and 
further details could only be wo rked out during the subsequent modalities stage.  Concerning the 
Singapore issues, his delegation wished to thank DDG Mr. Yerxa for the recent informal consultations 
on trade facilitation.  The exchanges there had b een helpful and constructive.  Hong Kong, China 
acknowledged the need to increase the comfort leve l for, and address the concerns raised by, a 
number of developing countries.  Nevertheless, so me of the issues raised, such as the level of 
commitments and the corresponding need for technical  assistance, would have to be worked out 
during actual negotiations.  His delegation urged Members to continue to work on the possible 
modalities with a view to launching the negotiations on trade facilitation by July.  Regarding the other 
three Singapore issues, his delegation welcomed the recent flexibility shown by the Community.  It 
seemed that Members could at least reach a cons ensus by July to put them outside the single 
undertaking. 
87. Development issues were another essential element in the July package.  In this regard, his 
delegation appreciated the concept put forward in th e EC Commissioners' letter to give confidence to 
the weak and vulnerable developing countries in a sim ilar manner to that for LDCs.  Indeed, that was 
the spirit of S&D treatment built into the various part s of the DDA.  Nevertheless, bearing in mind the 
particular concerns among developing-country Me mbers, the precise scope and mode of addressing 
the development dimension would best be tackled in the various negotiating groups in response to 
specific difficulties of various developing countries a nd LDCs.  On services, his delegation wished to 
strongly emphasize the importance Hong Kong, China atta ched to the services negotiations.  As of the  WT/GC/M/86 
 Page 21 
 
 
 present, roughly 50 Members had yet to table their initial offers.  More and improved offers were 
needed very soon.  His delegation had long been  advocating the early tabling of commercially 
meaningful offers by Members, particularly those who had a strong interest in other important areas 
of the negotiations, in order to show the huge opportu nity that was within Members' grasp and in turn 
create momentum for other areas.  His delegation understood that the services experts were working 
on a section which could be readily included in the July package, subject to development in other 
areas.  Paragraph 6 of the Derbez text was being us ed as the basis for such wo rk.  This was a sensible 
way forward, since the text had been heavily nego tiated both before and at Cancún, and contained a 
balance of elements requested by both develope d and developing countries .  In conclusion, his 
delegation was open to considering the inclusion of other elements provided there was a solid basis 
for a consensus to be reached on the individual items  before the summer.  However, attention had to 
be focused primarily on the core elements, and Me mbers' had to refrain from over-icing the cake.  
Time was running out, and Members needed to intens ify their negotiations so they could collectively 
accomplish the task of achieving a substantive and credib le package by the end of July.  As the host of 
the next Ministerial Conference, Hong Kong, China was particularly keen to see a positive outcome in 
July, as this would pave the way for a successful  Ministerial Conference the following year.  His 
delegation would continue to work closely w ith fellow Members to make this happen.  
88. The representative of Malaysia  said that it was an important point of departure that Members 
were feeling positive.  There were certain positive parts in the joint lette r from the EC Trade and 
Agriculture Commissioners and in the letter from the US Trade Representative four months earlier, but there were also some points that, at least for Malaysia, could pose some difficulties.  However, his 
delegation wished to accentuate the positive points a nd to see whether one could move on from there.  
Having said that, Malaysia would not restate its position, which was well-known, but wished only to 
seek clarification that might allow Members to understand each other better and to see whether the 
July deadline could be met.  While the latter was not  an impossible task, it would not be easy.  Despite 
all the current positive feelings, the devil was in th e details, and those details had to be looked at. 
89. On the Singapore issues, which had vexed the ne gotiations from the very start – even before 
the DDA had been launched – some delegations were talking about taking three of the four issues out 
of the single undertaking.  He asked what this real ly meant, since Malaysia had argued that none of 
the four had been part of the single undertaking to start with.  His delegation hoped Members were not 
looking at things from a different perspective, si nce there could be differe nces between taking the 
three issues out of the single undertaking and taking them out of the DDA.  Should it be agreed that 
these issues were out of the single undertaking, w ould there be a possibility of certain Members 
saying that the issues could be taken up in a plurila teral fashion outside the single undertaking?  There 
was a need for clarity on this point, and this w as the kind of comfort the demandeurs should provide.  
What did it mean if these issues were out of th e DDA?  What did it actually mean that, as the 
Community had said a few days earlier, these issues would be somewhere in the WTO agenda on the 
back burner?  Were they to be sent back to th e working groups?  If so, were Members supposed to 
start working on them if there was a consensus to do so, or would the issues just remain on the agenda 
for delegations interested in picking them up agai n?  Clarity was needed if this would help.  
Otherwise, one could perhaps look at some ambi guous language that delega tions could live with. 
90. In terms of the frameworks on agriculture a nd NAMA, some had said there should be no 
numbers in the framework on agriculture, which m eant also that there would be no numbers in the 
NAMA framework as it now stood in the Derbez text.  So me delegations had said that the Derbez text 
on NAMA would have to remain more or less intact , perhaps with some changes here and there.  
However, Malaysia was asking de legations to reflect on this, as some numbers in the NAMA text 
could be crucial to a lot of developing countr ies, especially regarding the S&D treatment in 
paragraphs 4 and 7 of the Derbez text.  For example,  in paragraph 7(b) there was the notion that one 
type of S&D treatment that could be allowed for developing countries was to leave a certain 
percentage of  tariffs unbound during the negotiati ons, and the number in square brackets in the WT/GC/M/86 
Page 22  
 
 Derbez text was five per cent.  Some developi ng countries might like it, some might not, and some 
might ask for a little more.  However, assuming th ere was no number there, but only the notion of 
allowing unbound tariffs, what guarantee was there when one entered into the negotiating modalities 
that developing countries could still get the five per cent?  Without any guarantee, his delegation 
wondered whether the notion itself had any value.   Another concern his delegation had on this 
particular issue was that while developed co untries had acknowledged in recent bilateral and 
plurilateral discussions that they could consider S& D treatment, some continued to say they could not 
allow any leeway for unbound tariffs and were s eeking 100 per cent binding.  Malaysia would find 
this difficult to accept, and there w as a need to rethink this issue. 
91. His delegation accepted that there had been forw ard movement on agriculture and wished to 
thank the Community and the United States for co ming up with ideas.  This would provide the 
necessary confidence for Malaysia to move on the ot her two pillars, and even  on domestic subsidies 
there seemed to be an acceptable notion of wher e Members were going.  However, on market access 
there was considerable difficulty.  His delegation had also asked others to look at this matter from the 
perspective of a developing country like Malaysia , that might have only one or two agricultural 
products to export.  If, by chance or by design, th ose products fell into a very sensitive category where 
there were no commitments or concessions, what  would the agriculture negotiations mean for 
Malaysia?  Thus, one had to look at  this particular aspect and see how to ensure at least that even 
though there were sensitivities in all countries, in cluding Malaysia, some market access element had 
to be included.  
92. There had also been talk about including services in the July package.  Malaysia believed that 
in the July package, while concentrating on the majo r market access issues that had been problematic, 
such as agriculture and NAMA, Members would also need to encompass in one way or another, the 
other issues.  This would not have to be a long listing of all the issues, but just a note, for example, to say that progress had been made on the other issues and that Members agreed to continue negotiations 
to ensure further progress and to meet the objectives of the DDA, or something to this effect.  There 
was no need for a big package, but rather one that  encompassed the main issues.  On services, Hong 
Kong, China had mentioned that 50 countries were yet to made their offers.  The Chairman of the Council for Trade in Services in Special Session had conducted his confessional meetings and could 
perhaps inform Members of their r esults.  On services, two main elements needed to be included in 
the package:  it was essential to encourage Members who had not put forward their requests to do so 
expeditiously;  and it was essential to ensure that th e rule-making side of the negotiations on services 
made progress as well.  This was a package Malaysia  could live with.  However, his delegation also 
wished to underscore that if countries, including Malaysia, had not been able to make offers, it was 
not for lack of desire but rather because consulta tions with the services industry were continuing.  It 
was not easy to convince people in the domestic ser vice industry to open their markets, especially 
when this industry was not export-oriented.  Howe ver, Malaysia would do its best.  Malaysia was 
committed to the negotiations at larg e, and would try to do its best in all other areas.  Regarding the 
question of extensions of deadlines – for example,  in the DSU negotiations – Members needed to 
think about this and decide what to do, as these were important deadlines that had been agreed.   
93. Regarding the notion of "weak and vulnerable" put  forth in the EC Commissioners' letter, he 
asked whether Malaysia – had it been engaged in  the DDA negotiations during the time of the Asian 
financial crisis – would have been considered one of the weak and vulnerable.  In asking this his 
delegation did not wish to criticize this notion, but ra ther to note that it was very difficult to say that 
one country was vulnerable and a nother was not.  This was a political judgement that only each 
country itself could make.  Malaysia  would be the first to say that if a country was politically and 
economically weak, it should not be expected to do  much in the negotiations.  However, once this 
notion was brought up to the multilateral level there would be a lot difficulties.  Thus, his delegation 
merely wished to underscore that it had difficulties with this notion.  Malaysia had come into these 
negotiations with the view that if there was ambition there would have to be sacrifices in the form of  WT/GC/M/86 
 Page 23 
 
 
 liberalization, but on the basis that others sacrifi ced as well.  Malaysia accepted that the LDCs were 
the most vulnerable and the weakest Members, and that was why all had given the political 
commitment that the LDCs were not supposed  to undertake concessions beyond their means.  
Malaysia also noticed a slight change in what th e Community was espousing, that perhaps there could 
be minimal costs or at least a minimal price for those weak and vulnerable economies to pay in the 
way of concessions, should they be able to do so .  His delegation was raising these issues in an 
attempt to seek answers during the forthcoming peri od of consultations the Chairman would conduct. 
94. The representative of Switzerland  said that given the evolution of the present discussion, his 
delegation wished to make a number of clarifica tions regarding Switzerland's position.  Switzerland 
agreed with the Chairman and the Director-Gener al that recent developments could be deemed 
encouraging.  First among these was the fact that th e participants in the negotiations had expressed the 
political determination, if not to review in depth the positions held hitherto, at least to attempt to find 
common ground on which to develop agreed solutions.  The past few weeks had, moreover, enabled 
Members to gain a clearer view of the outlines of po ssible solutions in the main areas of negotiation.  
This allowed them in turn to view the end of Ju ly deadline with a little more optimism, although the 
task of putting together a package for which each Me mber might claim ownership remained daunting.  
The first practical step towards achieving results  consisted in focusing on essentials.  As his 
delegation had noted on previous occasions, the s ubjects that were essential were agriculture, 
including cotton, NAMA and the Singapore issues.  Of  these, agriculture was th e most difficult at the 
present stage and hence the one to which particular effort had to be devoted.  Switzerland intended to 
remain faithful to the spirit and the letter of the Doha mandate, and stood read y to make a constructive 
contribution towards solutions that were acceptable to  all.  To that end, his delegation had already 
stated that it was prepared to su bscribe to the idea of a deadline for the phasing  out of all forms of 
export subsidies, provided that this was accompanied at the same time by acc eptance of the idea of 
parallelism regarding the various forms of such subs idies.  Switzerland was encouraged in that view 
by the statements by a number of delegations, pa rticularly those of the United States and the 
Community.  Furthermore, Switzerland was prepared to reduce substantially domestic subsidies that 
affected trade, on condition that the green box was ke pt intact.  With regard to market access – which 
for Switzerland was by far the most difficult area and would determine the extent of its flexibility in 
the areas of export subsidies and domestic support – hi s delegation was ready to participate actively in 
seeking a formula to secure significant improvement in  market access, a formula which would need to 
reflect the sensitivities of all and to accommodate  non-trade concerns, as the Doha Declaration 
prescribed. 
95. On NAMA, his delegation wished to make two br ief comments.  The first was that the level 
of ambition in this sector could not, for obvious r easons, be substantially different from the level of 
ambition agreed for agriculture.  For this sector, a nd the same should probably be said of agriculture, 
his delegation found it difficult to see how the id ea of a "free round" could have any validity 
whatsoever beyond the consideration to be afforded  to the special situation of the least-developed 
countries.  The second comment was an appeal to th e Chairman of the Negotiating Group on Market 
Access to prepare to define su fficiently early the form the NAMA component might take in a 
hypothetical end-July package.  However useful a nd satisfactory the Derbez text might be deemed to 
be, efforts to reach a consensus on NAMA would not  bear postponement to 31 July.  As to the 
Singapore issues, much headway had been made si nce Doha.  It was now time to conclude the 
consensus which seemed to be emerging, with a centr al component consisting, on the one hand, of the 
opening of negotiations on trade facilitation withou t preconditions and reservations that would devoid 
them of meaning and, on the other, of the continuation of the WTO work programme on the other Singapore issues, currently in abeyance.  Lastly, throughout the exercise Members would have to engage in between the present and the end of Ju ly, Members would continue to face two challenges 
that would need to be met – defining the degree of  specificity of the agreements they intended to 
conclude, and ensuring balance in the reciprocal  commitments they would agree to undertake. WT/GC/M/86 
Page 24  
 
 96. The representative of Uruguay
 said that Uruguay fully supported the objective of completing 
a framework agreement by July.  Th is was a vital step towards the conclusion of negotiations within 
the time-frames provided by the Doha mandate.  His delegation would continue  to do its utmost to 
make this goal a reality.  Uruguay also understood  that in recent weeks there had been positive 
political signs, thanks to which the rather negative expectations that had prevailed up to a few months 
earlier with respect to the direction of these negot iations had dissipated, and that in the General 
Council prospects for reaching an agreement by July  had become, if anything, positive.  Members 
should take the most realistic approach possible in  tackling the work ahead, in which there would be 
no lack of obstacles.  Members should carefully consider the following points:  (i) In seeking agreement on the frameworks, Members of course had to strike a balance between ambition and 
flexibility.  As one was dealing with frameworks, much of the flexibility achieved would be couched 
in more abstract and general terms than befit fu lly-fledged modalities.  However, Members should not 
forget that the frameworks would be just one el ement within a broader process of negotiation that 
would resume after the summer break.  Differences that were not resolved now would have to be 
settled later.  In other words, the final outcome of this negotiation should respect the agreed levels of 
ambition established in the Doha Ministerial mandate. 
97. Agriculture remained a key element to these ne gotiations.  Signs of flexibility had recently 
emerged regarding the possibility of reaching an agre ement to phase out export subsidies according to 
a definite timetable, which would be a significant step  forward.  Clearly, in this regard a balance had 
to be struck among the three pillars of the negotia tions, but on the understanding that the outcomes of 
the three pillars would contribute to securing better trade opportunities and to the pursuit of the 
process of reform and liberalization of global agricultu ral markets.  It was also evident that market 
access was the area on which Members should continue to  focus their best efforts.  Discussions held 
in the past two special sessions of the Committe e on Agriculture had shown the importance of the 
formula as a key element in the substantive improve ment of market access, and had brought to light 
the obstacles the blended formula lay in the path of th is objective.  It had to be taken as a positive sign 
that Members were able to discu ss alternatives.  Moreover, Member s should not spread their efforts 
too thinly by introducing new contentious approaches into this already difficult process of negotiation, 
to which all would have to contribute.  Theref ore, the best solution for addressing the needs of 
developing countries involved the formulation of an  appropriate chapter on S&D treatment, as there 
was no need to create new categories which both divided developing countries and undermined 
chances of concluding the agreement now emerging.   Transparency and inclusiveness were basic 
principles for the viability of any agreement to be  forged.  It was absolutely essential for all WTO 
Members to have the opportunity to express their vi ews and to defend their interests.  Accordingly, 
every effort should be made to reconcile the inter ests of various Members prior to the drafting of any 
texts or proposals for the framework. 
98. The representative of Kenya
 said his delegation noted with appreciation that Members had 
recently shown commitment to achieve the objectives set out in the Doha work programme.  This was 
encouraging, and Kenya hoped that the current moment um would be sustained so that the July target 
could be met.  Statements at the present meeting indicated that most Members saw sense in making progress.  On agriculture, which had been controversia l in the past, there were encouraging signs that 
Members were not far from agreeing on a pack age of basic understandings and frameworks that 
would allow them to enter the next phase of nego tiations.  Kenya hoped Members would be able to 
overcome the problems they faced on market acce ss by exploring alternativ e options that would 
accommodate the concerns of all.  However, substantial improvement in market access would not come only through the reduction of tariffs but also through the reduction or elimination of non-tariff 
barriers (NTBs).  Therefore, Kenya expected NTBs to be treated in the same way as tariff reductions, 
both in agriculture as well as in NAMA.  Kenya wished  to reiterate that, in accordance with the Doha 
mandate, concrete and effective S& D treatment for developing countries should be an integral part of 
any framework agreement.  In this respect, his de legation expected the SP and SSM concepts to be 
key elements in the S&D component.  On NAMA, the elements proposed for a framework should not  WT/GC/M/86 
 Page 25 
 
 
 undermine the development efforts currently being unde rtaken by developing countries, particularly 
those in sub-Saharan Africa. 
99. His delegation took note of the IMF initiative to address the issue of preferences.  The 
launching by the IMF of the Trade Integration Mechanism (TIM)8 implied a recognition that there 
were negative effects to trade liberalization that needed to be addressed.  Nonetheless, Kenya saw the 
IMF initiative as a complement to and not a substitu te for the solution Members were seeking in the 
WTO.  On development issues, his delegation was encouraged by the Director-General's assurance 
that development issues, including S&D treatment, would be an integral part of the July package.  In 
the spirit of the Doha mandate, Members would need  to look at ways and means of optimizing S&D 
treatment in order to assist developing countries to put trade to work for development.  It was 
therefore imperative that Members agree to enha nce the value of S&D treatment by encompassing 
policy space, market access and fair trade, and tran sfer of resources to help build strong institutions 
for adjustment.  His delegation welcomed the recen t proposal by the Community on the need for the 
negotiations to give special attention to the econom ically weak and vulnerable Members, and in this 
respect endorsed the Community's statement at th e present meeting.  The Community had responded 
positively to proposals presented by the developing countries individually and collectively in various 
negotiating groups.  Therefore, the Community's proposal was not intended to divide developing 
countries, but to bring them closer to the same higher levels of development enjoyed by some developing countries.  The countries who would bene fit from this proposal would not have a free ride, 
as some Members might think, because they would par ticipate fully in the negotiations – for instance, 
on NTBs and ensuring that concrete S&D treatment components were included in the outcome of the 
negotiations.  The proposal therefore merited suppor t from other Members.  On the Singapore issues, 
Kenya took note of the emerging consensus on trad e facilitation.  However, as a number of Members 
had said, a decision would have to be taken by expl icit consensus in order to move to the next phase 
after clarification of the issues raised by some Memb ers.  On the other three issues, Members needed 
to be clear on how these would be treated , although Kenya preferred to drop them. 
100. The representative of Costa Rica
 said his delegation was heartened by the flexibility that had 
been shown by various Members recently at different  Ministerial meetings a nd through the initiatives 
of major trading partners, which demonstrated the political will to achieve a package by July.  The 
common will his delegation believe d existed forced Members to focus their efforts on the areas 
identified for the present stage – agriculture, NAMA and the Singapore issues.  However, the package 
had to be good in two senses – it had to reflect the high level of ambition in the Doha Declaration, and 
to facilitate subsequent stages of the negotiations.  Regarding agriculture, Co sta Rica was pleased that 
both the United States and the Community had expressed their willingness to comply with the 
elimination of all forms of export subsidies, and it was encouraged by Switzerland's statement at the 
present meeting to the same effect.  Costa Rica was also pleased to see that considerable progress had 
been made with regard to domestic support.  Th e benchmarks should include a substantial reduction 
in Aggregate Measurement of Support (AMS), de minimis  and blue box levels, as well as guarantees 
that the green box would not have a distorting effect on trade.  Like Australia, Costa Rica felt that the 
guiding principle for this framework regarding mark et access should be that it duly fulfilled the Doha 
mandate – i.e., substantial improvements in market access.  The formula should pave the way for, and 
under no circumstances jeopardize, the process of inte grating agriculture into the WTO framework.  
His delegation trusted that the openness shown by  the demandeurs of the blended formula would 
enable the alternative to be put forward by other delegations to be taken in to real consideration. 
101. Regarding NAMA, the formula had to be amb itious, non-linear and the main component of 
tariff reduction.  Similarly, sectoral negotiations  could be a complementary element, and his 
delegation therefore welcomed the flexibility of th e United States, which had referred at the present 
meeting to the "critical mass" criterion, as it had done in the successful negotiations on information 
                                                      
8 See Item 7 below. WT/GC/M/86 
Page 26  
 
 technology products.  These trade liberalization effort s had to be complemented by an agreement to 
launch negotiations on trade facilitation in July within the single undertaking.  The results of such negotiations would be beneficial to all Members, and particularly the developing countries.  Costa 
Rica would therefore continue to support the process under the responsibility of DDG Mr. Yerxa.  
With regard to the other three Singapore issu es, Costa Rica could accept the emerging consensus, 
whereby the working groups would carry out th eir work under the WTO work programme, but 
outside the single undertaking. 
102. Regarding the issue of S&D treatment for devel oping countries, full consideration should be 
given to the needs of the Members suffering the gr eatest development problems.  Flexibility should be 
afforded them to undertake new commitments, and their access to other markets should be 
guaranteed.  However, if support was to be won fo r this objective, it was important not to mix the 
needs of these countries with the defensive interest s of developed countries.  Preferences should not 
become fresh obstacles to trade liberalization in  the multilateral system, and market access obtained 
for developing countries as a result of the Round ha d to be defined on a most-favoured-nation basis.  
This, needless to say, included full liberalization of tropical products, which was an outstanding 
commitment.  Access obtained by developing countr ies through trade preferences or bilateral or 
regional agreements was important , but should not undermine the most-favoured-nation principle of 
the multilateral trading system.  His delegation wish ed to point out that not all developing countries 
had been offered a "free round".  Costa Rica had not requested a free round, nor did it expect this to be offered.  However, neither s hould developing countries such as Costa Rica be asked to offer a free 
round to other Members. 
103. The representative of Chile
 said he was pleased that there was a very strong optimistic current 
with regard to making significant progress in the nego tiations, and that Chile shared this optimism.  
The situation was much better th an some weeks – even months – earlier, and Members had been 
making progress, with the due political involveme nt, to which his delegation, like others, was 
committed. 
104. With regard to services, as Chairman of the Services Council in Special Session , he said that 
most of the membership, including developing countri es, had made initial offers.  He had recently had 
meetings with 27 Members individually, and was continuing these consultations.  The information 
given to him in these meetings was confidential and he would respect that.  However, he could say 
that it had been extremely useful to understand th e reasons why many Members had not been able to 
make initial offers, and many of them had the same  problems Malaysia had cited, namely a problem 
of trade authorities having to coordinate and gain the attention of ministries and agencies that dealt 
with the different areas of services to mobilize these initial offers.  The process had deteriorated 
because of the effects of Cancún and the successive occasions at which Members had not been able to comply with agreed deadlines.  Th ere had been a loss of credibility and interest that had impacted on 
progress in this process.  He was optimistic that  when Members started negotiations, this would 
generate more interest and the need to make th ese initial offers.  He believed there was also an 
awareness that without having a critical  mass of initial offers by July, it would be difficult to arrive at 
a consensus in order to have improved offers furthe r on.  He had identified in many cases the need for 
technical assistance in drawing up initial offers, which was very specific in the case of some 
Members, and the Secretariat was doing what was necessary in that regard.  Several Members had 
also pointed out that there were linkages with the lack of progress in other areas of negotiations.  He 
was optimistic with regard to the meetings that he had held, and was hopeful that there would be a 
critical mass of offers before July and that Member s would be able to improve the initial offers they 
had already submitted. 
105. With regard to process, he believed that as from the following week, Members would need to 
be clear on how the process was going to be deve loped between then and July.  Members should 
ensure that in July, each negotiatin g group reached a consensus on th e elements necessary to continue  WT/GC/M/86 
 Page 27 
 
 
 to make progress in the negotiations.  In agricultu re and in NAMA, it would be a framework.  In 
services, there would be other characteristics, and in  other groups the reports might indicate only that 
work was progressing and would continue.  It was in  the TNC meeting that Members, on the basis of 
the reports of the different negotiating groups, woul d have to ensure that there was a collective 
balance that would allow Members to say they were going to continue working on the basis of certain 
orientations agreed in each group.  This would im ply that the so-called package for July would be a 
compilation of these reports that would be produ ced by each negotiating group and would inform the 
TNC, which itself would decide whether there was a ba lance between the interests of the parties.  For 
this, there was a need for the "conditional trust"  referred to by the Chairman of the Committee on 
Agriculture in Special Session.  The TNC would make a brief report to the General Council, which 
would take decisions on areas such as the Singapore issues.  There would, therefore, be a package that 
would not be like the Cancún document or the Derbez text, but rather a compilation of the reports and decisions of the General Council as appropriate.  This  also meant, in his opinion, that it would 
probably be necessary for at least the TNC to meet well in advance of July – perhaps in an open-
ended session, so that at the appropriate time the TNC could be convened to see if there was a 
balanced package on the table.  He would not go in to further details, but wished to encourage the 
Chairman and the Director-General to continue thei r consultations so that Members could be clear on 
these procedural issues. 
106. The Director-General
 made a closing statement.9 
107. The Chairman  then made a closing statement.9 
108. The General Council took note  of the statements. 
7. Trade Integration Mechanism of the Intern ational Monetary Fund – Presentation by the 
Acting Managing-Director of the IMF (WT/L/565 and Add.1) 
109. The Chairman  welcomed to the meeting the Acting Managing-Director of the International 
Monetary Fund, Ms. Anne Krue ger, who would present the Fund' s Trade Integration Mechanism 
(TIM), which aimed to mitigate the concerns of some Members that implementation of WTO 
agreements by others might give rise to temporary balance-of-payments shortfalls.  He drew attention 
to the paper on the TIM initiative prepared by the st aff of the IMF, which had been circulated in 
document WT/L/565.  A Press Release relating to th is initiative had been circulated as an Addendum 
to that document. 
110. Ms. Krueger, Acting Managing-Director of the IMF , said that the TIM initiative was an 
example of the efforts at enhanced coherence in economic policy-making between the WTO and the 
Fund, and of the ways the Fund could give its member countries additional confidence to pursue 
ambitious trade liberalization under the Doha Rou nd trade negotiations.  She was delighted to be 
attending the present meeting and greatly appreciated the invitation to do so  and the opportunity it 
provided to discuss with WTO Members some of the ways the IMF was seeking to support the Doha 
process.  That invitation and her presence at th is meeting underlined the closeness of the two 
institutions. The Co-operation Agreement between th e IMF and the WTO signed in 1996 had, in her 
view, been a great success.  Each institution had di fferent responsibilities, but a shared objective – the 
expansion of world trade and the rapid growth and ri sing living standards this would bring.  The more 
the WTO and the IMF could work together, th e better the chance of realizing their goal. 
111. The heads of WTO delegations were all much cl oser to the negotiations currently under way, 
and consequently better informed, than she was.  Ho wever, she felt her visit to Geneva had come at a 
                                                      
9 The remarks by the Director-General and the Genera l Council Chairman were subsequently circulated 
in document JOB(04)/50, and are reproduced in Annex II. WT/GC/M/86 
Page 28  
 
 propitious moment.  There were clear signs of  renewed commitment to a successful Doha Round 
outcome, and that commitment was essential for a deal  to be struck.  Of course, there were many 
hurdles still to be overcome, but the Director-General, in his remarks to the meeting of the International Monetary and Financ ial Committee (IMFC) in Washington  in April, had spoken of the 
intensive consultations under way, and of the c onstructive and determined manner in which those 
consultations were taking place.  Reports of developments since th en had continued to be positive, 
and there was a real prospect of completing the frame work agreements by the summer.  On behalf of 
the Fund, she urged all Members to continue the work in this constructive spirit.  She also wished to 
spell out why the Fund thought a Doha deal was so  important, and where the Fund thought it might be 
able to play a modest role in assisting the process. 
112. This was hardly the place for her to rehearse the benefits to be had from free trade.  After all, 
WTO Members were, collectively, the embodiment of  the multilateral trading system that had served 
all so well for nearly 60 years.  The rapid gr owth of world trade in past decades had been 
accompanied by rapid sustained economic growth, rising living standards and poverty reduction. 
Never before had so many people escaped from poverty,  and driving that rapid growth in trade had 
been the process of multilateral trade liberalization.   Launching the Doha Roun d had been intended to 
maintain the momentum established by previous tr ade rounds and to press on with the lowering of 
tariff and non-tariff barriers to trade.  The ambiti ous Doha programme went further than previous 
negotiating rounds in the commitment made to devel oping countries, and was thus referred to as the 
Doha Development Agenda.  To succeed, the DDA n eeded, and deserved, the support of all Members.  
A successful Doha Round would provide the foundati on for rapid and sustainable growth around the 
world, bringing rising living standards and reducing poverty. 
113. Trade liberalization should be embraced enthusi astically.  No country had achieved rapid and 
sustained growth over a long period – with all the bene fits that brought – without trade liberalization.  
The Doha Round offered the opportunity to free many  more people from poverty – indeed, it was vital 
if there was to be any chance of meeting the M illennium Development Goals.  This was a win-win 
situation for all countries – although, as she woul d discuss shortly, there could be short-term 
adjustment costs for some.  However, as the co mmuniqué of April's IMFC meeting pointed out, 
successful completion of the Doha Round was a shar ed responsibility.  The developed countries had 
obligations, especially with respect to market access  and to the reduction of trade-distorting subsidies, 
but developing countries had to play their part as well.  The developing world had by far the most to gain from a Doha agreement.  The World Bank estim ated that around two thirds of the gains would 
accrue to developing countries.  However, it was important to remember that most of these gains 
would come from trade liberalization by and among th e developing countries.  Trade barriers between 
developing countries were significantly higher than those imposed by developed countries. 
114. She had noted earlier that the Fund’s role in the promotion of global trade was different from 
that of the WTO.  However, it did have an impor tant role, and this was a responsibility it took very 
seriously.  Trade cut across many aspects of the IMF's work.  The Fund firmly believed that trade 
liberalization could be most effective, and bri ng the greatest benefits, when carried out in a 
multilateral framework.  However, ev en unilateral trade liberalization brought benefits for the country 
that undertook such liberalization.  The Fund's su rveillance work provided it with a good opportunity 
to encourage its member countries to adopt trade polic ies that were in their best interests.  The Fund 
conducted what it called Article IV consultations ever y year with most of its members, marginally 
less frequently for the remainder.  Trade liberalization was often an important part of these 
consultations because it could help achieve the objectives all members shared – macroeconomic 
stability, sustainable growth and rising living standa rds.  When needed, the Fund could also provide 
technical assistance to those countries that needed  practical help in creating the right economic 
framework to encourage growth through trade.  It could, for example, advise on how to replace 
revenue from import tariffs with re venue from less distorting tax regi mes.  The Fund now had several  WT/GC/M/86 
 Page 29 
 
 
 regional technical assistance centers able to provide  or marshal more focused advice, and could, 
where appropriate, provide financial assi stance through Fund-supported programmes. 
115. However, in the past year the Fund had been reflecting on whether it could do more, as it 
became more keenly aware that there was antipat hy in some developing-country members to the 
potential costs to them of a Doha Round result.  In some countries, there was concern about the 
economic impact of preference erosion, or about changes in the terms of food trade resulting from 
liberalization in export markets and reforms of th e subsidy regimes of othe r countries.  In other 
countries, there was concern about the eliminati on of quotas on textiles and clothing which, although 
agreed under the Uruguay Round, would come into full effect only at the end of 2004.  The doctrinaire response to such concerns would be to dismiss them and to reite rate that free trade was 
beneficial and desirable, but that would be wr ong.  It would also ignore the Fund’s traditional 
practice, which was that it had always taken the concerns of its members seriously.  If the Fund 
judged those concerns to be misplaced, it was its duty to explain why, to the satisfaction of its 
members.  Based on experience with previous trade rounds going back fifty years or so, there was no 
question that the overall impact of an ambitious D oha agreement would be positive and large, for the 
global economy as a whole and, over the longer term, for virtually all countries.  This conclusion was 
supported by the Fund's own research and that of othe rs.  However, some of the concerns expressed 
by individual countries were understandable, and th e Fund had been studying ways to address these.  
A minority of WTO Members might need some assistan ce initially as they adjust ed to a more liberal 
multilateral trading system.  They might, for example,  have to cope immediately with the elimination 
of preferences that affected them disproportionately, and there could be delays before the benefits that 
would flow from a more liberal tradi ng environment began to be realized.  
116. In keeping with the Fund's mandate, it had focused on the possible balance-of-payments 
implications of further multilateral liberalization. It had examined the possible impact of preference 
erosion and expected this to be overwhelmingly concentrated in a sm all number of products – above 
all, sugar, bananas and textile products.  If one assumed an ambitious Doha outcome, the Fund 
reckoned that no more than two dozen countries woul d experience a decline in export values of 2% or 
more from preference erosion.  In most instances, at least some part of this decline would be offset by 
increased exports resulting from improved market access for other exports.  It was harder to predict 
the impact of agricultural subsidy reform on changes in the food terms of trade, but the experience of 
the Uruguay Round suggested this was not likely to be very large.  The consequences of a more 
competitive environment for textile exports were even  more difficult to judge, but a range of estimates 
suggested that the impact could be significant for a small number of countries. 
117. However, she wished to be clear that for the vast majority of countries – as for the global 
economy as a whole – the benefits of a Doha agreem ent would be overwhelmingly positive, even in 
the short term.  In the great majority of cases,  the Fund would expect any balance-of-payments 
shortfalls to be small and temporary.  For exampl e, a decline in export income from certain products 
that currently enjoyed preferential market access woul d not necessarily mean an equivalent impact on 
the balance of payments, as other exports would be nefit from the more liberal trading environment.  
Even for those Members who might be adversely aff ected in the early stages of implementation of a 
Doha agreement, the impact was unlikely to last long.  In most  cases, the phasing-in of Doha 
liberalization would take place over several years, a nd thus allow time for smooth adjustment.  It was 
also important to remember that all countries w ould gain from the expansion of trade and the 
consequent impact on global economic growth.  Countries that were in need of temporary assistance 
would, of course, still have access to all the usual forms of assistance the Fund provided as a matter of 
course.  However, the Fund recognized that this, along with the assurances she had spelled out, might 
not be enough to provide reassurance for govern ments concerned about the economic adjustment 
needed to benefit from a more liberal  world trading system.  It was to address those concerns that the 
Fund had developed the Trade Integration Mechan ism (TIM).  This initiative had first been 
announced at the Ministerial Conference in Cancún.  Since then, the Fund had been working to flesh WT/GC/M/86 
Page 30  
 
 out the proposal and the mechanism had been formal ly approved by the Executive Board a few weeks 
earlier.  She wished to briefly spell out how it would work. 
118. Countries expecting short-term balance-of-payment s difficulties in coping with the effects of 
a liberalization in third country markets – either  under a Doha agreement or other non-discriminatory 
liberalization that had similar effects – would  be  able to request assistance under the TIM.  They 
could do this within the context of an existi ng Fund-supported program – such as under a standby 
arrangement, or a program under the Poverty Reduc tion and Growth Facility – if they already had 
one, or they could seek financing under a new Fund arrangement.  Once a request had been received, 
the next step would be for the Fund staff to make  an assessment of the likely size and timing of any 
adverse economic impact.  This “baseline” figure w ould be used to calculate how much financial 
assistance might be needed, or, if a country already had a Fund-supported program, how much  extra 
assistance should be provided.  The baseline was impor tant, because if it transpired that the impact 
was greater than anticipated by this reference fi gure, the mechanism could provide a country with 
rapid topping-up – of up to 10% of  its Fund quota – without waiting for the regular program review, 
and following simplified assessment procedures.  An y larger unanticipated financing need could be 
considered under a regular review.  Of course, this  topping-up provision would relate specifically to 
the issue of trade liberalization and not to a more general need reflecting, for instance, problems in 
implementing the Fund-supported program. 
119. Conditionality would not necessarily be different  under the TIM than under an arrangement 
that had no TIM element, but where assistance was provided through the TIM, the Fund would be 
looking to encourage countries to adopt the policies needed to enable the economy to adjust as rapidly 
as possible to the new, more liberal, global trading system.  Any agreed topping-up under the TIM 
would not normally involve additional conditions.  Those countries who might wish – and were 
eligible for – assistance under the terms of the new mech anism  would, of course, be interested in the 
terms on which such help would be available.  Wh ere a program already existed, the additional help 
would carry the same terms.  Where a new Fund-su pported program was needed, the terms would be 
those of the framework under which TIM assistance was provided.  Thus, for example, TIM support 
provided to low-income countries through a Povert y Reduction and Growth Facility (PRGF) would 
usually incorporate a considerable subsidy element.  However, one important factor to bear in mind 
was the impact of new assistance on a country’s exte rnal debt burden.  In countries with a precarious 
debt situation, any non-grant assistance, including un der the TIM, would clearly need to be carefully 
evaluated.  The Fund confidently expected any bala nce-of-payments impact to be temporary, while 
the positive changes in the trading environment would, of  course, be lasting.  It would be important to 
structure the help provided under the TIM in such a wa y that it did not slow the process of adjustment.  
Anything that delayed the time at which a country w as able fully to exploit the undoubted benefits of 
trade liberalization would be counter-productive.  The TIM’s purpose was to make the transition 
easier, not to put it off.  Ultimately, it was sustai nable growth that would bring poverty reduction, and 
trade liberalization was an important element in driving that growth. 
120. The TIM’s purpose was clear – to ensure that the Fund was properly attuned to any need to 
ease adjustment that might arise during the in itial period when a Doha agreement was being 
implemented.  A clear focus on potential problems was important for two reasons:  first, it should 
provide reassurance to those governments apprehen sive about how the results of the Doha Round 
might affect their economies in the short-term;  an d second, to ensure that the Fund was geared to 
rapid action both in anticipating needs and in reacti ng if those needs turned out to be greater than 
initially thought.  It was a way of exploiting the Fund ’s financial resources in a more targeted way in 
order to deal specifically with what would be a rapidly changing – and, she wished to emphasize, 
rapidly improving – global trade environment.  Wh en the Fund had first started to develop this 
mechanism, it had viewed it rather like an insuran ce policy.  The clear evidence was that only a very 
small number of countries would ever need the assist ance the TIM offered.  However, if its existence 
helped to provide governments and policymakers with  the reassurance they needed, it should make it  WT/GC/M/86 
 Page 31 
 
 
 easier for them to embrace the Doha Development Agenda, knowing that they would be able to 
exploit the opportunities an agreement would pr ovide, while worrying less about the potential 
downside risks, however small these were. 
121. Of course, some work remained to be done on the mechanism.  In particular, more work 
would be needed to ensure that the initial asse ssment calculations could be done accurately and 
speedily.  Much of the expertise for some of this de tailed work lay outside the Fund – indeed, much of 
it was at the WTO, as well as at UNCTAD and the ITC.   It made sense for these institutions to work 
closely together as the Fund began to implement th e mechanism, and she had asked Fund staff to push 
ahead as speedily as possible with their counterpa rts at the WTO and elsewhere.  The encouraging 
developments of the past few weeks had given ne w impetus to the Doha negotiations.  The Fund was 
following events closely, and enthusiastically su pported the goals of the WTO and the progressive 
liberalization of world trade.  In its original artic les of agreement first set out sixty years earlier, the 
Fund was charged with promoting trade.  The Fund's role was not the central one, but it was determined to do what it could to encourage th e process and, through the TIM, remove potential 
obstacles to a successful outcome.  Ultimately, th e fate of the Round depended on WTO Members, 
and she wished them all success. 
122. The Director-General
 said he wished to add his personal  welcome and thanks to Ms. Krueger 
for having come to Geneva to brief the Genera l Council on the TIM.  Ms. Krueger, and former 
Managing-Director Mr. Köhler, had exercised important  leadership in shepherding this initiative from 
its conception in May 2003 through to its recent approval by the IMF's Board of Executive Directors.  
He thanked Ms. Krueger for the role she had play ed, and asked her to pass on his appreciation to 
Mr. Köhler.  The TIM was a welcome contribution to the Doha Round, in particular to attaining 
ambitious market access results.  It could help r eassure low-income developing countries that they 
would receive assistance from the international comm unity to help them deal with adjustment 
difficulties they encountered from the loss of trade preferences that would result from the lowering of 
MFN tariffs at the end of the Doha Round.  Concern about the erosion of trade preferences was a 
more prominent feature of the Doha Round than of previous trade Rounds.  More low-income 
developing countries were now Members of the WT O, and preference schemes had increased in the 
past few years under various trade initiatives in troduced by developed and developing-country 
Members in favour of low-income countries.  The TIM could already start making an important contribution by helping to address th ese concerns, even before any calls were placed through it on the 
use of IMF resources.  It was a valuable commitm ent from the international financial community to 
support the deeper integration of low-income countri es into the trading system.  A welcome feature of 
the mechanism was that it would be available for u se by Members to deal with temporary adjustment 
difficulties they might encounter in 2005 as a result of the expiry of the Agreement on Textiles and 
Clothing and the restoration of more liberal trade in textiles and clothing.  The WTO Secretariat would cooperate closely with IMF staff to assist  Members to evaluate the opportunities the TIM 
presented.  It hoped also to be able to contribute constructively to the TIM's effective implementation 
by the IMF. 
123. All delegations who spoke under th is item expressed their appreciation to Ms. Krueger for her 
leadership on the TIM initiative and for taking th e time to come to Geneva to make a detailed 
presentation of this new IMF initiative.   
124. The representative of Mauritius
 welcomed the IMF's initiative to try to come to the rescue of 
countries that would be adversely affected by trade liberalization.  His authorities were examining the 
various modalities of this mechanism, and the presen tation at the present meeting would help them to 
get a better grasp.  He was expecting some inputs fro m his capital, but for the time being wished to 
limit himself to some preliminary comments.  His first impression after liste ning to Ms. Krueger was 
that this mechanism would tend to focus on th e balance-of-payments (BOP) problem.  Mauritius 
agreed with this, but the problems went beyond BOP problems.  All knew that trade liberalization for WT/GC/M/86 
Page 32  
 
 small countries like Mauritius and other African countries could also lead to unemployment, 
disinvestment and deindustrialization, to name just a few effects, in addition to BOP problems.  It had 
to be agreed that this would have a de-multiplier effect on the whole of the economy.  His delegation 
was appealing to the IMF not to minimize this problem by simply focusing on BOP problems. 
125. The second point was that this issue should no t be addressed in post-BOP crises only, after 
countries had already suffered all the adverse conse quences, had reached the point of no return and 
the damage had already been done.  There was a n eed to be more preventive and curative.  For 
Mauritius, adjustment was wider than just findi ng a temporary solution for a BOP problem.  His 
delegation had said this repeatedly in WTO bodies.  Countries like Mauritius knew they had to adjust and to adapt if they did not want to perish, but they  had also said they needed some time in the form 
of a transition period to carry out the necessary refo rms and adjustments.  Irrespective of what that 
mechanism might be, and irrespective of the shape it  might take, the countries that would be affected 
would need time to adjust, and this was why they had repeatedly said that the solution lay first and 
foremost in the WTO itself, in the negotiations .  It was not the IMF or other Bretton Woods 
institutions that could provide the transition peri ods sought.  Whatever the IMF or the World Bank 
might do to help that adjustment would come only as a complement.   
126. Another point concerned the issue of preference erosion, and he appreciated that Ms. Krueger 
had elaborated on this in her presentation.  Ther e was a time in the WTO when the subject of 
preference erosion was taboo, but Mauritius was gratif ied to see that its partners in the WTO agreed 
that this issue had to be dealt with.  It was true that with trade liberalization, some small countries – 
especially the LDCs from Africa – would lose their competitive opportunities.  Some LDCs in Africa 
– as most of them were – were already faci ng enormous difficulties exporting under a duty-free 
situation, and on top of this they had supply-side  constraints.  The question was how these vulnerable 
countries – whether small economies or LDCs – could compete on an equal footing with larger and 
more competitive suppliers, and how one could help th em to adjust.  If the problem was with rules of 
origin, Members should tackle that problem.  Rega rding the issue of conditionalities, his delegation 
found these to be very complicated and hard to understand.  He wondered if these could not be 
stream-lined and made simpler.  His first impr ession, after having heard the various conditionalities 
that went along with the TIM, was that they were  not only very complicated, but would make the TIM 
almost inaccessible for the intended recipients.  Thus, while his delegation welcomed the TIM initiative and all the efforts the Director-General was making to help countries address these concerns, 
he wished to reiterate that the first solution sh ould come from the WTO.  Whatever mechanism the 
Bretton Woods institutions might devise to help these countries – for which they were indeed grateful 
– could only complement whatever was done in the WTO to smooth out their difficulties.  His 
delegation would elaborate its views further in the appropriate forum. 
127. The representative of Japan
 welcomed the IMF's newly adopted TIM.  Maintaining and 
strengthening the multilateral trading system thr ough the DDA would further promote the integration 
of developing-country Members into the global economy, which would contribute to the stable 
development of the world economy.  On the othe r hand, however, Japan acknowledged that in the 
course of pursuing ambitious improvements in market access and in clarifying and improving trade rules, developing-country Members might face certain  difficulties, such as temporary BOP problems.  
Such problems could not be resolved only by the WTO, and policy coherence among the relevant 
international organizations, such as the IMF and th e World Bank, was indispensable in coping with 
these problems.  In this context, Japan highly valu ed the TIM as one tangible outcome of this policy 
coherence. 
128. The new TIM policy by the IMF should provide the mechanism that would bring sustainable 
stability to developing-country Members experiencing BOP difficulties arising from trade liberalization measures introduced by other Member s pursuing more open market access.  With the 
TIM, Members would be better equipped to pu rsue and accomplish ambitious improvements in  WT/GC/M/86 
 Page 33 
 
 
 market access, along with clarification and improve ment in trade rules.  Japan wished to see an 
effective implementation of the TIM.  It also wish ed to continuously monitor the management of the 
TIM in order to come up with an improved mechanis m at its three-year review.  Paragraph 5 of the 
Doha Ministerial Declaration stated that "we sh all continue to work with the Bretton Woods 
institutions for greater coherence in global economic po licy-making."  In this regard, in order to cope 
appropriately with the problems faced by each Memb er, Japan would work not only in the WTO, but 
also in close cooperation with other relevant in ternational organizations, such as the IMF and the 
World Bank, in a broad range of areas, includi ng technical assistance and capacity building. 
129. The representative of Bangladesh  commended the Director-General's efforts for coherence in 
the policies of the WTO and the Bretton Woods ins titutions.  Thanks to his efforts, in 2003 both the 
President of the World Bank and the Managing Direct or of the IMF had attended the General Council 
for the first time.  The Doha work programme was am bitious.  It had the potential to deliver benefits 
to many developing countries, which might be in c ontrast to their experiences in earlier trade rounds.  
The central challenge for any country was to ensure that the benefits of the Round would outweigh its 
associated costs.  The question before Member s was how countries could withstand the shocks 
inevitably associated with liberalization, and whet her the IMF's TIM could help countries adjust to 
some of these shocks.  Regarding the fundamental assumptions in the TIM, it had been stated that 
"Multilateral trade liberalization has been a majo r contributor to the world economy's unprecedented 
growth over the past half century."  It was indeed correct that over th e past fifty years, there had been 
unprecedented growth and unprecedented liberalizati on as well.  However, to state that trade 
liberalization had been a major contributor might be to ignore the host of other factors responsible for 
growth of the economy.  Furthermore, it might actually be putting the cart before the horse. 
130. The IMF was well aware that, historically, libe ralization had been the outcome of the process 
of growth and improved competitiveness.  Only wh en countries were sufficiently secure in their 
capacity to do so did they actually liberalize and, at that stage, encourage others to liberalize as well.  
The assumption of the IMF in suggesting that th e TIM sent an implied message to developing 
countries that they first had to liberalize trade in orde r to grow was not borne out by historical facts.  
Rather, it was only part of the story.  The TIM was not a facility that would provide resources under special terms.  Rather, it was a policy designed to increase the predictability of resource availability 
under existing facilities – the upper credit tranche, the CFF and the PRGF.  In fact, the proposal 
expected "a modest increase in IMF financing".  The IMF would perhaps be guiding developing-country Members much more clearly if it indicated , in dollars and cents, how much it expected its 
lending programme to expand as a result of the TIM.  This would indicate exactly how much 
Members could expect their indebtedness to increase if  they used the TIM.  After all, the TIM would 
only give loans that ultimately had to be repaid. 
131. The TIM had a very important objective – to mitigate concerns that the implementation of 
WTO agreements might give rise to temporary BOP shortfalls.  In such cases, the IMF would be 
ready to discuss, with countries facing such shor tfalls, new arrangements within existing lending 
facilities.  The IMF would take into account the anticipated impact of trade adjustment on the 
Member's BOP situation in determining the appropria te size of access.  It was positive that the IMF 
was prepared to augment arrangements under simplif ied procedures, which meant, presumably, lower 
conditionality, if the actual BOP effect turned out to  be larger than anticipat ed.  Unfortunately, it 
appeared that the conditionality was explicit and fro nt-loaded.  To be addressed under the TIM, the 
BOP shortfall would typically result from measure s under WTO agreements or liberalization on a 
non-discriminatory basis.  In other words, the shocks  had to be exogenous to the individual country.  
A country's own liberalization was excluded on the ground that it was covered under existing 
programmes of the IMF.  What the IMF had failed to explain was how it proposed to assess the impact of adverse shocks to the balance of paymen ts.  Work in this regard was currently under way 
and, according to the IMF paper, Members might e xpect the methodologies to be developed in 2004.  
In the meantime – and this was an important conditio nality – country authorities were to "... carefully WT/GC/M/86 
Page 34  
 
 evaluate the quality of trade statistics without dela y, and to make needed improvements, including 
through participation in the General Data Di ssemination System".  For a poor country like 
Bangladesh, it was indeed a tall order to get all of this done. 
132. One of the issues the Fund had decided to address through the TIM was the erosion of 
preferences.  In so doing, the Fund had stated that the value of preferences wa s unlikely to be large.  
The key was the assessment of preferences.  If one used old data, as the IMF had done in its earlier 
study, or covered a very limited scope without considering the dynami c or multiplier effects, the value 
of the preferences might indeed appear very sm all.  It was only recently that LDCs such as 
Bangladesh had begun to use the preferences given by the Community or Canada, or other countries.  
A correct and comprehensive assessment of the impa ct of preferences would be necessary.  The TIM 
proposal, as explained in document WT/L/565, containe d some interesting statements.  Table 1, for 
instance, showed clearly that some countries seem ed to be losing on account of trade liberalization 
under the WTO.  However, there was no indication th at the IMF was prepared to address this issue, 
apart from presenting some stylized facts.  Secti on E of the TIM proposal contained some clear 
conditionalities.  For example, the changes in relative prices and market access had to be permanent.  
While one could assume a certain predictability in ma rket access, it would be unusual to be able to 
predict prices – perhaps the IMF had special mechanisms to do so.  The IMF acknowledged the 
practical difficulties in determining the exact size of this impact ex-ante.  The section on Modalities 
was so vague as not to present any concrete pict ure of how the TIM would be implemented.  His 
delegation would have liked to see in the TIM conc rete measures to help countries benefit from the 
liberalization process, and not just to try to mitig ate the costs involved.  Bangladesh appreciated the 
interest of the IMF in contributing to the Doha negotiations.  The message Bangladesh seemed to be 
getting was that it need not worry about any negoti ations in the Doha work programme that would 
lead to trade liberalization.  The IMF would cover some – he emphasized "some" – of the temporary BOP shortfalls that might be expected, but only  after the full implementation of the relevant 
agreement.  Bangladesh was happy that the concer ns it was raising in the WTO were being heard 
outside as well.  His delegation regarded the TIM as being in its development phase.  Only when it 
took concrete shape could Bangladesh seriously addr ess it.  His delegation looked forward to the IMF 
being able to present the TIM to Mermbers soon in its final form. 
133. The representative of Kenya
 said that the launching of the TIM was a clear recognition both 
by the IMF and the WTO that further tariff cuts  would impact negatively on developing countries 
currently benefiting from preferential market access.   The IMF's proposal was one of the ways of 
solving the problems that would occur as a result of MFN tariff liberalization, but was not sufficient 
to address market access opportunities lost in th at process.  Kenya noted from Ms. Krueger's 
presentation and the paper prepared by the Fund th at the resources being offered to address, in 
principle, extra BOP problems were not new.  Because the TIM was not a new facility, it did not 
provide new concessional resources to compensate c ountries for trade losses.  In stead, access to these 
resources by the affected countries would be govern ed by the existing IMF rules that most of the 
developing countries had been subjected to in the pa st, and the consequences of which they were well 
aware of.  In any event, the augmentation in the case of deviation had been capped at 10 per cent of quota per arrangement, regardless of the actual effect of the trade measure on a country's BOP.
  From 
this assessment, it would appear that the affect ed countries would address their trade-induced BOP 
problems through additional debt, thereby aggravating their debt burden. 
134. Paragraph 28 of the paper by the IMF staff argue d that "financial support of this nature still 
needs to be associated with an appropriate macroeconomic environment, which may entail 
adjustment."  However, the cause of the BOP probl em was not within the country seeking financial 
assistance, but rather in another country that would not be required to make any adjustment.  The paper also noted that the TIM was expected to be in operation for a period of three years, after which 
its continued existence would depe nd on an evaluation to be undertaken, while the implications of 
multilateral trade agreements might be of a permanen t nature.  As all knew, adjustment periods tended  WT/GC/M/86 
 Page 35 
 
 
 to last longer than expected, and only the economi es that undertook liberalization at mature stages and 
in a well sequenced manner had succeeded, while ma ny others, particularly those in Africa, had 
struggled for longer periods and continued to suffe r chronic imbalances, lower or negative growth 
rates and increased poverty.  The conditions that would allow more mature countries to make a 
smooth and rapid transition were absent in many countries, especially in Africa.  It was therefore hard 
to imagine that the TIM would provide a solution to address this.  Nonetheless, as Kenya had said 
earlier, it saw the TIM as supplementary to, and not a substitute for, a solution in the WTO. 
135. A study by Elena Ianchovicina, Aaditya Mattoo and Marcelo Olarreaga in 2002, quoted in a 
paper by Aaditya Mattoo of the World Bank and Ar vind Subramanian of the IMF, entitled "The WTO 
and the Poorest Countries:  The Stark Choices", gave an illustration of whether the interests of 
preference-receiving countries were served by MFN tari ff liberalization or preferential margins.  It 
was estimated that if 37 sub-Saharan African count ries were to receive unrestricted preferential access 
to the markets of the Quad countries, their welfar e would increase by about $1.7 billion, and a 25 per 
cent MFN tariff reduction by the Quad countries w ould erode the preference margins received by 
these countries and reduce their welfare by about $0. 5 billion, or about 30 per cent.  Given this 
scenario, would it be advisable for sub-Saharan African  countries to opt for the TIM or to seek a trade 
solution within the WTO?  His delegation was worri ed that if such contradictions were left 
unresolved, swift solutions that were prescribed would make matters worse for the preference-
receiving developing and least-developed countries.  His delegation encouraged the continuance of 
interaction among relevant institutions in future and hoped that this would contribute positively to 
achieving greater coherence in global economic polic y-making, particularly in addressing the needs 
and concerns of the economically weak and vulnera ble countries in a more holistic manner.  Kenya 
looked forward to seeing a genuine effort undertaken urgently to resolve this very serious issue. 
136. The representative of the United States  expressed his delegation's appreciation for 
Ms. Krueger's personal effo rt and involvement in supporting the work of the WTO and, specifically, 
the Doha Development Agenda, as evidenced by th e present meeting with the membership and the 
presentation on the TIM facility.  His delegation we lcomed the IMFs recent adoption of the TIM, 
which was a unique and tangible example of co herence between the WTO and support from the 
international financial institutions, specifically th e IMF.  The TIM was not meant to solve all the 
development problems, all the trade problems, or even all the adjustment problems.  It was aimed at specific areas of adjustment that were importa nt for certain developing counries in certain 
circumstances, and the United States hoped that Members would not minimize the importance of this 
kind of initiative.  His delegation urged all to wo rk closely and positively with the IMF to take 
advantage of this concrete and important mechanism for addressing clearly identified adjustment 
problems.  The United States appreciated the collabo ration and support of the IMF in this effort to 
secure a successful outcome of the DDA, and hoped  that this commitment by the IMF to provide 
additional support and assurances to de veloping countries as they integrated further into the global 
trading system would bolster their resolve to participate meaningfully in the DDA. 
137. The representative of China
 said that his delegation appreciated the Fund's efforts in 
addressing concerns of developing-country Member s, particularly the LDCs, about the possible 
negative impact of trade liberalization taking place under WTO agreements.  China welcomed the 
establishment of this mechanism.  This was a good step towards building coherence among various 
international organizations, including the WTO and the IMF.  Trade liberalization in some sectors 
might cause some short-term difficulties for developing-country Members, especially LDCs.  An 
effective way to address such difficulties was to provide these Members with development tools and 
technical assistance, including initia tives such as the Fund's TIM, which would help achieve a sort of 
balance between trade liberalization and development.   Having said that, there might be a need for 
some improvement in the current TIM concerni ng conditionalities.  As Mauritius, Bangladesh and 
Kenya had said, the programme focused on BOP prob lems only, although the problem for LDCs went 
beyond BOP problems.  There were a load of other problems and factors to be addressed.  The answer WT/GC/M/86 
Page 36  
 
 might perhaps be to try to combine longer-term tr ansition periods with an improved TIM that would 
address the concerns of LDCs in a more efficient manner. 
138. The representative of Canada
 said that his delegation commended the IMF on its prompt 
response to help address the needs of developing co untries.  This was a positive demonstration of the 
type of action that could be taken to meet the concerns of vulnerable countries which might face 
short-term adjustment problems as a result of multila teral trade liberalization.  The response to these 
needs would undoubtedly require a combination of approaches, including less onerous commitments, longer transition periods, trade-rela ted capacity building and development assistance.  Canada agreed 
with Mauritius that most of these elements would have to be designed within the WTO.  Other 
measures did require coherence with other internatio nal organizations, donors and recipients.  Canada 
welcomed the Director-General's confirmation that the WTO Secretariat would continue to work on 
Members' behalf with the IMF and other organiza tions to that end.  The IMF contribution which 
Ms. Krueger had presented was not only a practical step toward enhancing global policy coherence, 
but also evidence that the WTO and the IMF could wo rk together to find solutions to help Members 
reach the goals set out at Doha. 
139. The representative of Chile
 said he wished to address specifically the question of the erosion 
of trade preferences and the problems this posed.  Th e fact was that trade preference erosion had taken 
place already.  Tariffs were coming down every day,  every week and every month.  One had only to 
look at all the free-trade agreements in place already.   Therefore, in a sense, for those who said that 
preference erosion might pose a problem, he would say  that the problem was already there.  He hoped 
to see an analysis of how these countries were coping with these aspects already.  He believed that 
regardless of what happened in the negotiations in Geneva, preferences would continue to be eroded.  
His understanding was that the TIM would not be available in the case of problems that might arise from erosion taking place under bilateral free-trade agre ements.  His delegation would not expect this 
to be otherwise, but sought some confirmation in this respect. 
140. The representative of Jamaica
 said that the TIM initiative was worthy evidence of the 
willingness of the international financial institutions to respond to the concerns raised by a number of 
developing countries regarding the impact of trade lib eralization, and particularly of the Doha Round, 
on their economies.  As was to be expected, Jama ica did not share all of the views expressed by 
Ms. Krueger in her statement, and Jamaica's prelim inary reaction to the TIM, while positive, was not 
without a number of queries and concerns, many of wh ich a number of earlier speakers had reflected.  
First, while Jamaica agreed that trade liberalizati on was beneficial, it did not believe that the overall 
impact on developing countries, especially those w ith serious supply-side constraints and weaknesses, 
had been generally recognized in terms of the difficulties posed.  The situation was much more 
nuanced than was recognized by the IMF and, ind eed, other multilateral bodies.  While he would not 
quarrel with the data provided, it was interesting that these indicated that the gains from trade 
liberalization were very significant, while the lo sses to be suffered by developing countries – who 
might lose as much as 40 per cent of their preferential  margins – was, in turn, quite minimal, at only 
two per cent.  That being said, it was very impor tant that there was no general acceptance that 
multilateral trade liberalization had costs – even if ju dged to be short-term – and that there were not 
benefits only.  Second, preference erosion coul d be the source of one of the costs that were 
attributable to trade liberalization.  Economies that  did not survive the short term, needless to say, 
would not be able to share the longer-term benefits. 
141. These were his delegation's preliminary reactions. His authorities were studying the TIM, but 
as he had indicated, their reaction was generally favo urable.  His delegation noted that the mechanism 
was not a special facility that would provide measur es under special terms.  As had been stated by 
other delegations, it was a policy designed to incr ease the predictability of resources available under 
existing facilities.  Jamaica wished to express its c oncerns regarding this.  The TIM would not provide 
additional concessionality in funding, and variou s conditionalities would apply even though the  WT/GC/M/86 
 Page 37 
 
 
 problem being addressed was arising from trad e negotiations which themselves had inbuilt 
liberalization processes.  Inherent in that was the possibility of cost conditionality.  Jamaica was also 
concerned that the TIM could worsen Members' debt  profile at the same time as their export earnings 
were declining, even if only in the short term.  His delegation was surprised that the TIM would apply 
to BOP difficulties suffered as a result of third-party trade liberalization on a multilateral basis.  Given 
the IMFs view that autonomous liberalization was beneficial to the country seeking autonomous 
measures, and given the importance of regional liberalization as building blocks for multilateral 
liberalization, it would be worthwhile to provid e for potentially wider access to the facility.  These 
comments were not intended to undervalue the importa nce of this initiative.  However, as had been 
said by others, the TIM was only one of a number of needed responses to the situation of many 
developing countries, particularly the preference -receiving countries.  Those responses should include 
sensitivity to the specific concerns of preferen ce-receiving and other developing countries in the 
negotiations themselves, as well as enhance effo rts to address the supply-side and structural 
impediments that prevented these countries from taking advantage of multilateral trade liberalization in the short term – and indeed, if one looked at th e data from a region such as Jamaica's, much longer 
than the short term. 
142. The representative of Colombia
 said that his delegation attached importance to the Fund's 
efforts regarding this mechanism which might m itigate the effects in certain countries of the 
elimination of preferences.  Colombia shared the analysis that an ambitious Round would generate, in 
the long term, benefits for all, but that in the s hort term it could also generate some difficulties for 
certain countries.  In the light of this situati on, it was necessary to find solutions for all parties 
concerned, and the measures suggested by the Fund c ould be useful in this regard.  Consequently, 
Colombia appreciated this speedy and prompt re sponse by the Fund to the requests from various 
countries, including Colombia.  These measures c ould allow for appropriate coordination among 
institutions, and his delegation was certain that this  initiative could play an important role in the 
negotiations. 
143. The representative of the European Communities  said that his delegation welcomed the TIM 
initiative and saw it as an expression of increased c oherence in global economic policy-making.  He 
recalled that this was a point the Director-General  had pursued from the outset when he had taken up 
his post at the WTO.  It was very important for developing countries to dispose of this additional safety net which could cushion adjustment problems cau sed by liberalization in other markets.  Like 
others, the Community wished to emphasize that the TIM initiative was only part of the solution.  It 
was not a deus ex machina which could solve all the problems caused  by trade liberalization.  It was 
only part of the overall tool kit to  address these problems.  Other parts of the tool kit were within the 
WTO itself, such as transition periods, longer implem entation periods and so on, and also with – and 
this was very important – bilateral donors thro ugh their trade-related technical assistance and 
capacity-building programmes.  Last but not least, the developing countries themselves could play a 
role through their adjustment programmes and domes tic policy programmes to face the issue of tariff 
preference erosion. 
144. Ms. Krueger, Acting Managing-Director of the IMF
, said there had been a large number of 
challenging, interesting and suggestive remarks.  Regarding the comment by the Community and 
others that there was no one thing the internatio nal community could offer that would solve all 
problems, the TIM was not expected to do this.  It  was only one small addition.  One element she had 
perhaps not made sufficiently clear was that the TIM was aimed, in a sense, at providing 
automatically some "going forward" insurance to countries that already had IMF programmes, in that 
it could provide an automatic topping up in the event of loss due to third-country liberalization or erosion of preferences.  If, for example, a c ountry already had an IMF programme which looked 
forward to a particular macroeconomic framework a nd a particular BOP stance, and it turned out that 
because of the erosion of preferences the loss  of export earnings was somewhat larger than 
anticipated, the IMF programme could very quickly  and automatically be increased by the amount WT/GC/M/86 
Page 38  
 
 necessary up to this 10 per cent of quota, and not 10 per cent of exports, and thus was potentially 
much larger.  The automaticity of this was a ne w feature – while there was always conditionality in 
IMF programmes, the TIM would not necessarily m ean additional conditionality.  This might not 
have been sufficiently clearly spelled out in he r initial presentation.  The TIM was not a new facility, 
but it was an additional reason why there might be s upport, or more support, and in that regard it 
would entail no particular additional conditionality.  Some delegations had said this did not help with 
own-country liberalization.  Obviously, when count ries themselves liberalized, adjustments would be 
needed, and in many instances those adjustments would,  to a certain extent, automatically take care of 
the problem.  If there was a bigger problem, the country could approach the Fund as they would for any other BOP difficulties.  In that sense, Fund sup port was already available.  The TIM was intended 
to cover the third-party effects on a country, not the effects of their own liberalization per se .  Thus, in 
this sense there were already safety nets. 
145. Several delegations had raised concerns that the Fund would only provide support in the case 
of BOP needs.  The paper by the IMF staff made cl ear that this was the only basis on which the Fund 
could provide support.  Of course, if there was mu ltilateral trade liberalizati on and therefore a change 
in circumstances or in the price of  a particular export, the expectati on was that this change would be 
permanent, because the liberalization was expected to be permanent.  In such cases the Fund would 
assess what the impact had been on a particular member country.  To say that a change and its impact 
were permanent did not mean that the price would al ways stay at the level occasioned by the change.  
However, it did indicate that for at least a few years, an adjustment would need to be made as a result 
of that price.  While she could not address all of the specific questions raised, delegations who wished 
to have more information were welcome to contact her at the Fund.   
146. Some had suggested that countries would not have recourse to the TIM until the difficulties 
had occurred.  This had not been the Fund's intent.  Rather, the intent was that, as always in Fund 
programmes going forward, it would look at the fina ncing needs coming up in the coming one, two or 
three years, and the financing needs would include estimates of export earnings, imports and so on.  If 
the Fund programme already captured what it anticipated  to be the impact of, for example, terms-of-
trade changes or reduced textile exports, and if th e impact turned out to be larger, the topping up 
could be automatic.  Some had said it would take too much time to get any benefit from the TIM.  In 
fact, the Fund did a two-, three- or four-year review of all its facilities.  This was not unique to the TIM.  This did not mean that whenever it did a review, the facility would be phased out.  More 
importantly, even if it was decided in year three of a three-year programme to phase out the facility, 
the programme itself would remain in place.  In effect, the support under the programme could be for 
somewhat longer than had been indicated in her initial presentation.  
147. Regarding preference erosion, there were several considerations, the first of which was that in 
many instances countries would find that their own producers were unable to compete, and that their 
own domestic adjustment – be it in cost-structure productivity increases, investments or other things – 
would more than offset the effects of preference erosion.  In other cases there would be other 
macroeconomic adjustments, perhaps depreciation of th e real exchange rate.  The particular situation 
would dictate the adjustment measures.  The Fund w ould expect that in many instances some of the 
adjustments would take place in this way.  In add ition, however, a successful conclusion of the Doha 
Round would lead to more rapid expansion of worl d trade, which in turn would support more rapid 
expansion of world economic grow th, which would increase access to markets for other products.  
Thus, some of the impact, even when there was preference erosi on from third countries – or when 
there were negative terms of trade, for example, in food – would be offset by the expanded markets 
that would result from accelerated economic growth.  In some countries, there would be even more 
market expansion – for example, when tariff reducti ons on other items led to an expanded market and 
therefore more imports globally – in which even count ries that had lost preferences would gain shares.  
Thus, preference erosion did not necessarily translate to a loss for a particular country.  Even without 
other measures, in general there would be offsets.  Some delegations had sai d that the TIM could be  WT/GC/M/86 
 Page 39 
 
 
 considered only a complement to WTO measures, and the Fund agreed.  The WTO was clearly the 
central area for action. 
148. As to whether trade liberalization had or had not  helped growth, she took at least partial issue 
with some of the claims made.  A large number of  countries had experienced very rapid growth once 
they had begun to open their trade regimes, and fo r countries such as Korea, Chile and even China, 
their expansion of exports and openi ng up of markets had been very im portant and, indeed, an engine 
of growth for them internally.  Thus, while it was never the whole story and while she did not have an 
export theory of value, it was very difficult for countries to accept much more rapid growth without 
liberalizing their own markets and letting their own producers compete on an equal footing with producers in other countries.  This was because they  had the same access to world markets and could 
get the cheapest source for whatever interm ediate goods they needed.  The evidence was 
overwhelming that high protection in a developi ng country prevented the growth of the export 
industries in which they might otherwise have competitive advantage.   
149. There had been some comment about the Fund asking members to contribute data to the 
General Data Dissemination System (GDDS).  Th is was something the Fund did because experience 
showed that policy-makers who were better in formed about what was happening to the economy 
could make better decisions.  There was no particularly  greater pressure to provide data because of the 
TIM.  Regarding the claim that the modalities were vague, what she had wished to say was that there 
was no additional modality in a case where a country u sed the TIM because of the automaticity of the 
topping up.  The Fund had not wanted a new facility  where there would be new mechanisms and new 
reviews, but rather wanted it to be more automa tic.  The TIM would come into being with the 
anticipated erosion of preferences due to the im plementation of trade agreements under the Doha 
Round.  
150. Several delegations had talked about the TI M not adding new resources.  This was both 
correct and incorrect.  It was correct in the sense  that the TIM was not a new facility and the total 
resources of the IMF would not be any greater.  It was not correct, however, because at any given 
time, there were resources available for suppor t of any individual programmes, as not all Fund 
resources were used.  In that sense the Fund could be lending more, for example, than it currently 
was.  It was not true that the Fund had additi onal Poverty Reduction and Growth Facility (PRGF) 
resources at present.  However, it was true that it w ould have to come back to this issue very shortly 
to see what the needs were.  If ther e was more need under this authority, she was certain that this 
would be a factor in future.  The Fund did not antic ipate any cross conditionality in terms of the TIM.  
If, indeed, a country was impacted by the loss of pr eferences or the loss of access or the deterioration 
in terms of trade because of multilateral liberalizatio n, the Fund would be prepared for this automatic 
upgrade.  The same was true of the debt profile.  Obviously, whenever the Fund learned that this was 
a concern, and for countries where most of their support was concessional, these countries were 
normally eligible for the PRGF, in which case it wa s concessional support to a large degree.  Lastly, 
several delegations had said that the TIM was only fo r third-party liberalization, and had asked about 
wider access.  That access was already there.  What was new was the automaticity, but otherwise access was the same as it was before, and those facilities were already there. 
151. The Chairman
 thanked Ms. Krueger for her very info rmative responses to the questions and 
comments, and on behalf of the General Council, e xpressed appreciation for her personal initiative on 
the TIM and for taking the time in her busy sche dule to come to Geneva to present it to WTO 
Members.   
152. The General Council took note  of the statements. WT/GC/M/86 
Page 40  
 
 8. Statement by Cuba 
153. The representative of Cuba
, speaking under "Other Business", made a statement expressing 
concern at measures imposed by the United Stat es against Cuba, which she said violated the 
principles and objectives of the WTO, adversely a ffected the credibility of the multilateral trading 
system and infringed upon Cuba's rights, as well as encroached on those of other Members of the 
organization.10 
154. The representative of China  said that his delegation fully supported the statement by Cuba.  
The whole series of questions raised by Cuba were food for thought for all.  China remained to be 
convinced why the United States had to impose rest rictive measures against Cuba, which had been a 
Member of the multilateral trading system since th e very beginning of the organization.  All knew 
well that unilateral restrictions against another Me mber's trade and transit of goods was generally 
prohibited by the WTO agreements.  Non-discriminati on was the fundamental principle of the WTO.  
Restrictive measures such as those against Cuba were not healthy for the development of the 
multilateral trading system.  China therefore strong ly urged the United States to take the necessary 
measures to address the situation. 
155. The representative of Venezuela  said his delegation supported the statements by both Cuba 
and China.  In an organization such as the WTO it should not be possible for any restrictions to be 
applied, particularly as Members were currently engaged in a very delicate process of developing a 
programme that had been approved two years earlier in the DDA. 
156. The General Council took note  of the statements. 
9. Chairmanships of the Working Parties on  Algeria, Lao PDR and Uzbekistan – 
Announcement by the Chairman  
157. The Chairman , speaking under "Other Business",  informed Members that following 
consultations between the respective Working Party members and the authorities of Algeria, Lao PDR 
and Uzbekistan, respectively, and in accordance w ith usual WTO practice, the following nominations 
had been agreed: 
- Mr. Guillermo VALLES (Uruguay) as Chairman of the Working Party on the 
Accession of Algeria, to replace Mr. Perez del Castillo (Uruguay) who had retired as Chair; 
- Mr. Tim Groser (New Zealand) as Chairman of the Working Party on the 
Accession of Lao PDR, to replace Mr. G. Raby (Australia) who had retired as 
Chair;  and 
- Mr. Hyuck Choi (Korea) as Chairman of the Working Party on the Accession 
of Uzbekistan, to replace Mr. Supperamaniam (Malaysia) who had retired as Chair. 
158. The General Council took note
 of this information. 
                                                      
10 At the request of the delegation of Cuba, the full te xt of the statement was su bsequently circulated as 
document WT/GC/79, and is reproduced in Annex IV.  WT/GC/M/86 
 Page 41 
 
 
 ANNEX I 
 
 
Statements Regarding the Accession of Nepal  
 
 
 Prior to the adoption of the Agenda, the Chairman  said that the present meeting was an 
important occasion to welcome formally into the WTO community the Kingdom of Nepal as the first 
least-developed country to accede to the WTO since the latter's entry into force in 1995.  Nepal had 
become the 147th Member of the WTO on 23 April.  He wished to welcome, on behalf of all 
Members, the Kingdom of Nepal and its Permanent Representative to the present meeting and to the 
WTO, and to congratulate Nepal on its achievement.  He believed he could speak for all Members in 
expressing the hope that Nepal's participation in the trading system as a new WTO Member would yield substantial and continuing benef its for its country and its people.  
 
 The representative of Nepal
 expressed gratitude to the Chairman for his words of welcome.  
His delegation took pleasure in being able to take  up its seat formally as a WTO Member.  Nepal had 
joined this organization with a solemn hope that  a rule-based, equitable and open multilateral trading 
regime would not only enhance growth and prosperity , but would also expand the circle of growth and 
prosperity encompassing all countries.  As a l east-developed country, Nepal expected that WTO 
membership would help it integrate its economy more  meaningfully into an inclusive global trading 
regime that would help Nepal reduce poverty and accelerate sustainable growth in all countries.  
Nepal also held the firm belief that trade was an  engine of growth and prosperity.  However, 
marginalization of LDCs from global trade was a pa latable reality.  Thus, acceleration of the growth 
of trade and its predictability and sustainability was a constant challenge.  Therefore, Nepal had 
pinned high hopes on the early and successful implementation of the Doha work programme, so that 
all would be able to realize fully the development dimension of international trade for all Members, 
including LDCs.  He wished to recall the Pream ble of the Marrakesh Agreement establishing the 
WTO, which clearly recognized the need for positiv e efforts designed to ensure that developing 
countries, especially LDCs, secured a share in the gr owth in international trade commensurate with 
the needs of their economic development.  With these objectives in mind, his delegation would work 
diligently, in its own modest way but in a constr uctive manner, with all Members to contribute to, 
consolidate and promote a fair and rule-based multilateral trading regime in the days ahead. 
  Delegations welcomed Nepal as the first LDC to accede to the WTO since its entry into force, 
and congratulated Nepal on this achievement.  
 The representative of India
 said that India had had a long an d enduring tradition of friendship, 
mutual support and co-operation with Nepal, wh ich was a valued member of the South Asian 
community of nations.  His delegation was sure th at Nepal's presence in the General Council would 
greatly enrich its deliberations in future.   The representative of Brazil
 wished Nepal a fruitful participation in the WTO. 
 
 The representative of Australia  expressed the hope that Nepa l would benefit from being a 
Member of this organization.   The representative of Cuba
 said that Nepal's accession in creased the number of developing-
country Members of the WTO, which already account ed for over three-quarters of the membership. 
  The representative of Pakistan
 said it was happy to see a country with which Pakistan had 
enjoyed historic links, and which was also an impor tant member of the South Asian Association for WT/GC/M/86 
Page 42  
 
 Regional Cooperation (SAARC), present in the Gene ral Council.  This augured well for the WTO's 
aim of universality, as Members were welcoming another LDC to the fold. 
  The representative of Hong Kong, China
 said that his delegation was sure that, like other 
recently acceded Members, Nepal would make a va luable contribution to the multilateral trading 
system. 
  The representative of Kenya
 said that his delegation looked forward to working closely with 
Nepal in advancing issues of mutual interest in the WTO.  
 
  WT/GC/M/86 
 Page 43 
 
 
 ANNEX II 
 
Item 6 - Opening and Closing Remarks by the Director-General  
and the Chairman of the General Council (circulated as JOB(04)/50)  
 
 
Opening remarks : 
 Director-General 
  Thank you, Mr. Chairman. 
  With your permission, I would like to make my report in 2 parts.  First of all, a brief report on 
the twelfth meeting of the TNC which was held on 21 April.  Secondly, I would like to share with the 
membership my sense of the developments since th at date.  I believe these developments are very 
positive and encouraging.  If the signs of flex ibility and convergence that have emerged from the 
recent political-level discussions can be continued and translated into substantive progress in our 
Geneva process, I believe we have  a very good chance of achieving our objectives in July.  Of course, 
there remains much to do, but the contacts taki ng place among Members at many levels are giving 
this work a new sense of purpose and direction.  
 Firstly, let me make a brief report on the TNC's twelfth meeting on 21 April.  This was the 
first meeting since July 2003, and it took up two age nda items.  Under the first item, the Chairpersons 
of the bodies established by the TNC took the floor to  introduce their reports to the TNC and provided 
participants with updates in their respective areas.  All the negotiating groups had restarted their work, 
following the consensus on the slate of names for th eir Chairpersons at the February General Council 
meeting.  In addition to a number of formal meetings, there had been an impressive number of 
informal activities accompanying the formal sessions.   This work has continued intensively since 
then, and I wish to thank all the Chairs for their continuing dedication.   Our discussion under the second agenda item, st atements by participants, was brief and 
business-like, and I would like to thank delegations fo r responding to my suggestion that we take such 
an approach to this meeting. 
  The remarks I made at our meeting were circ ulated to all delegations shortly after the 
meeting.  I think everyone shares the optimism I expressed in my remarks at the way in which the 
negotiating groups had restarted their work.  But I also  warned of the scale of the task ahead of us in 
the narrow window of opportunity available until July.  I pointed out that the time constraint is very 
important in this respect, and I urged delegations not to not lose any time. 
  I have repeatedly stated that the shape of th e framework level package must start to emerge 
around the end of this month to allow us to go on and finalize it in the time available.  I believe the 
recent encouraging political signals suggest that this  shape is indeed beginning to emerge, and this is 
very welcome. 
  Moving on to the second part of my report, let me say a little more about these encouraging 
political signals.  Since our April TNC meeting, th ere have been a number of developments which I 
believe demonstrate a new level of political will to  make progress in the DDA.  Let me mention some 
of these.  Firstly, the outcome of the LDC Ministers'  meeting in Senegal.  Secondly, the initiatives by 
Commissioners Lamy and Fischler set out in their le tter to all Ministers.  And, most recently, the 
discussions that have taken place in the context of the OECD Ministerial meeting in Paris.  It was 
particularly helpful that Ministers or senior re presentatives from a range of developing-country 
Members of the WTO also took part.  These developments have all shown very significant and WT/GC/M/86 
Page 44  
 
 encouraging signs of a willingness to find compromise solutions that has been previously missing in 
our work.   There have been strong indications of a growing convergence, firstly, on the shape of the July package.  In particular it seems clear that we must include the key elements that were identified in our 
work after Cancún.  But it is also clear that othe r important issues in the DDA, particularly those with 
an important development dimension, must also be duly reflected.   The second area where there have been equa lly encouraging signs of a trend towards 
convergence is on the substance of the key issues.  This is not to underestimate the remaining 
difficulties and the need for any outcome to be accepta ble to the membership as a whole.  However, I 
am encouraged that even on the most difficult areas in agriculture, for example, discussions among 
Ministers have produced a new sense of focus and determination.   A third encouraging aspect is that all the indica tions from Ministers – most recently in Paris, 
and I welcome the leadership shown by the various  Ministers involved – have made a huge difference 
to the atmosphere and political environment in which we are working.   The political impetus given to the Round in recen t weeks has been absolute ly vital.  We need 
it to be continued through the ongoing series of Minist erial-level gatherings wh ich will take place in 
the near future, such the African Union in Kigali, and then the G90 and APEC. 
 
 The challenge now is to bring this political momentum to bear in the Geneva process and to 
obtain concrete outcomes at the multilateral level.  We only have a very limited time in which to do 
this.  
 The negotiating group Chairs will have the prim ary responsibility for this work.  I urge all 
delegations to support them fully in their delicate a nd essential work.  It is also particularly vital for 
governments to ensure that key capital-based offici als are available to the Geneva process, possibly 
for extended periods, as we approach the end of July.   We have some 10 weeks before the July General Council meeting and we must all be 
prepared to work very intensively in this period.  I certainly intend to play my part to the fullest.  I 
have been working and will continue to work very  closely with the negotiating group Chairs and with 
the Chairman of the General Council.  I will also ma intain my frequent contacts with Ministers, to do 
all I can to ensure that the positive messages from the political level get through clearly and 
effectively to Geneva. 
 Let me also stress the importance I attach to  transparency.  The informal processes I have 
mentioned are an important element in our work aime d at building consensus, but it can only be the 
membership as a whole which takes the necessary deci sions in July.  For this reason, as the process 
evolves the General Council Chairman and I will also  need to convene informal open-ended meetings 
more frequently.  Concerning the formal sessions of the TNC, I intend to convene further meetings on 
30 June and in July as necessary. 
 
 For the short term our main focus must remain on July and the results we aim to achieve then.  
However, there are also longer-term questions, esp ecially of timing and be nchmarks, to which we 
shall have to turn our attention at the appropriate time.  And there is one other immediate issue that, 
with your permission, Mr. Chairman, I would like to  mention – the upcoming deadline for the Dispute 
Settlement negotiations. 
  As you know, these negotiations are scheduled to  be completed by the end of this month.  
You will recall that at the last meeting of the TN C, the Chairman of the Special Session of the DSB 
had reported that despite Members' very strong co mmitment to the dispute settlement system, there  WT/GC/M/86 
 Page 45 
 
 
 was still a broad range of views as to how the DSU c ould best be improved or clarified.  I understand 
that efforts are still underway among participants to tr y to elaborate the basis for a possible agreement, 
and that the Chairman will also be consulting furt her with delegations himself until the next meeting 
of the Special Session on 25 May, to develop by the end of the month, in light of the progress made, a clearer sense of what can be reported to the TNC.  I trust that participants will engage constructively 
in this process, so that we can take this very im portant subject forward in the most fruitful manner. 
  Overall, we have a window of opportunity but it is  a small one and it is closing rapidly.  This 
is the time for us to move into a cooperative probl em-solving mode and show the world that Geneva 
is capable of delivering significant results. 
 
 With these words, I conclude my report to th e General Council.  Thank you, Mr Chairman. 
  
Chairman 
 
 I thank the Director-General for his statement.     As regards the current state-of-play in the ne gotiating areas, I share very much the Director-
General's cautious optimism that we seem to be making the kind of progress in key areas that allows us to hope for agreements at a framework level by July.  There are now unmistakable signs of 
momentum from the highest political levels, and it is  incumbent upon us in Geneva to do everything 
possible by July to seize and build on these developm ents, to move the work under the DDA to a new 
level and accelerate it.    Let me add to the Director-General's repor t with an update on my recent consultations. 
 
 Since taking over as Council Chairman in Februa ry, and as I promised, I have made efforts to 
meet as many representatives of Members as possible,  individually as well as in informal groups of 
various configurations.  I have also met regularly with the Chairs of the bodies reporting to the 
General Council, the Chairs of the negotiating b odies, and with the Dir ector-General and his 
colleagues.  I have also held an informal open-e nded meeting of all Heads of  Delegations on 29 April 
shortly after the TNC meeting on 21 April, so th at Members would have an opportunity to address 
themselves to those issues under the DDA that do not  come under the TNC.  My statement at that 
meeting, together with a report by DDG Mr. Yerxa on his consultations, have been circulated as 
document Job (04)/48.  
As we work towards the July General Council, I intend to meet more regularly with Heads of 
Delegations in this informal format.  I am pla nning to hold the next such informal HODs meeting 
around the 1
st of June, and will confirm this date shortly.    
  As you know, the recurrent theme in all of  these contacts has been a widely shared 
understanding that our work in this half of the year should result in an outcome by July that will 
unlock key issues and provide the momentum and direction to guide our work across all fronts 
through to the end of the year.   The Director-General and I have, as a result,  already been raising with delegations the 
question of the nature and scope of the July outco me, and the process needed to get there.  At the 
informal meeting of Heads of Delegations in April,  we received very useful inputs from delegations 
on this issue.  We will be consulting further with de legations on this in the coming weeks.  Our aim is 
to arrive at a shared understanding very soon on the shape of the July product so that as we intensify 
our negotiations on the substantive content, like Ag riculture and NAMA, we have a clear picture of WT/GC/M/86 
Page 46  
 
 the shape of the product we will be working towa rds.  As the Director-General has noted, recent 
conversations at Ministerial level appear to have been helpful in this respect. 
  Another subject we took up at the informal H ODs meeting in April was the Singapore issues.  
I would like to report to you on the consultations I ha ve been holding.  Let me start by recalling what I 
said at the beginning of that meeting.  
  I opened this subject by saying that:  "there is  still a range of positions on the table and there 
is not yet a convergence on any of the possible scenario s.  To be more specific, major questions of 
which of the issues, if any, should be within the single undertaking, and of what should be done with 
those issues to be put outside the single understanding are yet to be resolved." 
  It turned out that the discussion at the HODs mee ting was, as I said at that time – and all seem 
to agree – the most constructive on the issue until then.   
 Thirty or so delegations made  interventions.  None of them  were restatements of well-known 
positions.  Rather, all statements indicated a willingn ess to address the issues squarely so that this 
matter does not block the positive outcome we are aspiring for at the end of July.   There were indications that discussions at all levels and in various formats are creating an 
atmosphere that is very conducive to final convergence. 
 
This discussion at the HODs was followed by  another round of c onsultations under the 
Chairmanship of DDG Mr. Yerxa on the technical asp ects of possible modalities for trade facilitation.  
I understand this meeting was also very useful, although there is still much to be done in this area as 
well. 
 
 Since then, there have been significant initiativ es at the political level, including at various 
Ministerial meetings outside Geneva, such as th e recent LDC meeting in Dakar, Senegal and a 
number of the most recent meetings in Paris in th e context of the OECD Ministerial.  Reports on all 
these meetings seem to confirm that Ministers par ticipating in these meetings were demonstrating 
every flexibility on the treatment of the Singapore Issues. 
 
 I hope that when delegations address the Counc il today, they would do so in reflection of 
what transpired at the HODs meeting as well at DDG Mr. Yerxa's meetings.  I hope also that 
delegations whose Ministers took part  in the number of Ministerial mee tings of various types will also 
inject the necessary developments  into the Geneva process.  
 
 I would now like to invite delegations to sp eak, and to address in a single intervention both 
the DG's report as well as my own statement regarding my recent consultations.   
Closing remarks
: 
 
Director-General  
 I detected today two concrete signs of real commitment by Members.  The first sign is the real 
communication that we are seeing between the Geneva  process and capitals.  I am convinced that the 
positive signals that have been emitted from capitals are mainly due to the good work that we have 
been doing in Geneva.  And this morning all of you are making the effort to respond in kind to these 
positive signals.  This is a definite improvement in the way that we connect between Geneva and 
capitals.  We have to keep doing more of th is sort of thing in the next few weeks. 
  WT/GC/M/86 
 Page 47 
 
 
  Secondly, I noticed that there are a number of senior officials from capitals participating in 
this General Council meeting.  Although there has b een no explicit invitation, I take this as a concrete 
sign, as a form of commitment to this process, as we  move toward the July target.    We need to 
appreciate this kind of gesture and, as I have been tr ying to reiterate to Member s, in the next couple of 
weeks we need real commitment in all forms.  This is one of the most needed forms - participation by 
senior officials from capitals.     
  All the signs that we are seeing in the last couple of months, from the beginning of the year 
with a letter from Ambassador Zoellick and now the latest letter from Commissioners Lamy and 
Fischler, point in an encouraging direction.  All th e signs are there, all the conditions are there for us 
to achieve more than we have done in the past.  I cannot predict how much we can achieve, but it 
really would be highly unfor tunate if we fail to pick up on all th ese signals and reach a concrete deal 
at the framework level by July.   I would like to underline three other points by way of guidance.  The first is that I know that 
the devil is in the detail.  But I do not think that we  are going to deal with all the devils by July.  In 
other words, we are not going to deal with all the de tails by July.  We should not negotiate as if we are 
going to conclude the Round then.  Let us work so that by July we establish the right foundation so 
that we can build upon it afterwards, taking into account the needs of all participants. 
   Second, I have been hearing from you and from various Ministers around the world that 
everyone needs to defend their position.  But now I am hearing more to the effect that, after all, if we 
cannot compromise there will be no July package.  This is the time to start making compromises, 
which does not mean that you are giving away everythi ng.  There must be different roads to the same 
goal.  We need to see how we can reconcile our di fferences.  Some of the meetings that I have 
attended around the world have demonstrated that, when people began to listen and compromise, we 
can achieve positive results.   
  Lastly, I am not encouraged just by the recent positive signals, but also by the fact that they 
have been made in a timely way.  We need these in or der to be able to reach our July target in time.  
We have to learn from our past experiences.  One of  the causes of  past failure was that we responded 
too late to the demands of the situation.  So I se e the meetings in Dakar and elsewhere and the signals 
that they have produced as very positive in terms of our July target. 
  I hope that the forthcoming meeting of the African Union Trade Ministers will move us 
forward in the same direction, and will add anot her building block to the consensus for July.  
 
 
Chairman 
 
 Thank you, Dr. Supachai for those words.  I am sure my colleagues have taken good note of 
those remarks.   
 I would very much like to thank you all for a very interesting and constructive discussion 
under Item 6.  At the beginning, the DG and myself indicated a few impressions we have captured through the past weeks and days, and I think the di scussion today confirmed our feeling that there is 
an emerging sense of convergence on the shape of the final product and on substance as well.  Of 
course there is much to be done but on very important  substantive items there seem to be indications 
that you are all committed to work towards convergen ce in the limited time available before us.  
Political leaders will provide us with inputs in the upcoming Ministerial meetings, but of course much of the work will be here in the negotiating groups.  We have heard  an interesting input from the Chair 
of the Agriculture negotiating group, and I am sure he  and the other Chairs will be able to count on WT/GC/M/86 
Page 48  
 
 co-operation from all of you.  I would very much like to urge you to work very hard in the remaining 
period until July on these various important items.   Before closing on this item I would like to add a few words on the situation as I see it concerning the particular point I have been consulting on, namely the Singapore Issues.   
 
 As we have seen from the discussions, I sense that while we are not yet in a position to decide on these issues, it seems clear that Memb ers are moving towards convergence. 
  There is an increasingly widely held view th at Trade Facilitation should be negotiated within 
the single undertaking.  Of course, formal ag reement to launch nego tiations would depend on 
reaching consensus on modalities.  I hope that in the coming days, under DDG Mr. Yerxa's chairmanship, further technical work will be pursu ed to see how any concerns that may still remain 
can be addressed.  
 There also seems to be an emerging sense that  the other three Singapore Issues would not be 
negotiated within the single undertaking nor in any other form during the Doha Round, but that 
Members could nonetheless be willing to con tinue to work on them within the WTO. 
  These are the trends I have perceived here today.  Whether this development will gel 
sufficiently in the weeks ahead in order for us to be  able to finalize it will also be influenced by the 
outcome of negotiations in other areas.  In other wo rds, while I believe that the final decision on the 
treatment of the Singapore Issues in the next phase of the DDA can only be made at the end of July 
after some more work among Members, for the moment  the perception that I have outlined could be a 
working hypothesis we can keep in  mind as we work to obtain the ove rall package at the end of July. 
 
 I will be pursuing consultations in the coming weeks on this as well as on the question of the 
shape of the July product, as many of you have su ggested.  As I mentioned in my earlier statement, I 
hope to convene an informal Heads of Delegation meeting around 1 June and will confirm this date 
shortly.    
 
  WT/GC/M/86 
 Page 49 
 
 
 ANNEX III 
 
Item 6 - Statement by the representative of New Zealand as  
Chair of the Special Session of the Comm ittee on Agriculture (circulated as JOB(04)/51)  
 
 
 
• I have been asked by numerous colleagues in the last few working days to try to outline some of 
my thinking about the way ahead on agriculture.  This may not be the ideal occasion, but time is 
pressing.  
 
• I will of course be consulting colleagues to get their views on how we can develop a technically 
coherent framework that has sufficiently wide political ownership behind it.  
 
• My comments are grouped under 6 questions or head ings.  Few of my comments are new; it is 
more a matter of consolidating thinking that is  perhaps a little less theo retical today as we are 
about to move into a negotiating phase than they were when I first made them:  
 
o Who is going to write this Framework on agriculture?  
 
o What texts and inputs can we use to write a framework? 
 
o When can the drafting/negotiation phase begin?  
 
o What are the implications of trying to draft a framework rather than full modalities in the 
light of recent developments discussed today?  
 
o The question of balance between the pillars;  and 
 
o Some of my thinking on the informal negotiating process;  
 
Where is the Framework Going to Be Written? 
 
• The first marker I put down as Chair on my first day was that this framework would be written 
in Geneva or it would not be written at all.  As the Ambassador of the EU has just said, "It is up 
to us, colleagues, to meet the high expectations of our Ministers".  I hope everyone now understands the full implications of this.  
 
• This in no way depreciates the great significance of the political openings that have been given 
to us in the context of what was so accura tely described by the previous speaker, the 
distinguished representative of Senegal reporting on the meeting of Ministers in Senegal, as 'the 
evolution' of this negotiation.  The word 'evoluti on' is particularly well-chosen, in my view.  As 
the negotiation has evolved, new political signals of  a positive nature have been given to us, the 
negotiators, and without that political space to  move we officials would get nowhere.  
  
What Text or Texts Will be Inputs? 
 
• This question has been asked many times and sin ce we are moving into the negotiation of a text 
this is very important, it may be worth recalling my earlier view.  
 
• The Derbez text was not created in a vacuum.  Quite apart from numerous proposals of the 
various Groups such as the G90, the Cairns Gr oup and key delegations' proposals, we had the WT/GC/M/86 
Page 50  
 
 EU/US Framework, then the political riposte of the G20 Framework, then other group 
frameworks.  Perhaps people may yet find hidden me rits in aspects of the Harbinson text and 
some of its annexes – who knows?  It is up to  you, not me, to determine their relevance. 
 
• These are all fragments of our negotiating history.  I am sure you will all take them into account, 
plus more recent key political openings, as we draft a Framework. 
 
When Can We Start the Drafting/Negotiating Process? 
 
• As soon as possible – there can only be one answer to  that question.  Momentum here is vital.  I 
am well aware that individual delegations have a range of practical considerations that need to 
be taken into account.  But the deeper reality is that we need to get moving. 
 
What Are we Trying To Achieve in a Framework? 
 
• We have an entirely realistic negotiating scenario now – the negotiation of a Framework, not full 
modalities.  
 
• As the Ambassador for Argentina a nd others have today observed, th is implies we shall not have 
numbers but this does not mean that it is impo ssible to convey some direction on the level of 
ambition in a framework.  
 The Question of the Balance Among the Three Pillars: 
 
• Let me explore this further, since it immediately raises in some of your minds the entirely 
legitimate matter of balance among the pillars.  I would not dare to comment on the even more 
delicate matter of the balance of the negotiation in a global sense.  You have heard the two 
competing perspectives on this from the disti nguished representatives of Argentina on the one 
hand and of Korea on the other hand. 
 
• It seems already clear that the basis for taking political decisions  is foreseeable in two of the 
pillars:  export competition and domestic support,  although of course the devil is in the detail 
and much needs to be done in developi ng a coherent text on these two pillars.  
 
• But it would, in my view, be naïve to believe th at these decisions can be taken in a positive way 
if the language on the third pillar of market access remains either undeveloped from the Doha 
language or developed with so me highly refined diplomatic  language that no-one, even 
ourselves, really understands.  
 
The Informal Negotiating Process: 
 
• It is my responsibility now to evolve a consensu s text amongst participants.  This means I need 
to find the right balance between efficiency and transparency.  
 
• My background is that of a negotiator from a very small country that has sometimes great 
difficulty getting its voice heard and interests taken into account.  That would describe the position of the majority of delegations in this room. 
 
• Thus, I am acutely conscious of people's concerns  on this point.  I also understand that – to use 
the well-chosen words of the African coordinator at  my last agriculture meeting:  " ... we request 
that we be given sufficient time, within our tight time schedule, to examine any proposal;   WT/GC/M/86 
 Page 51 
 
 
 indeed, we have to bear in mind that ownership of a text is as important as the contents thereof."  
Quite so. 
 
• I would add a third point beyond content and political  ownership: it is vital to avoid confusion.  
If, in an organisation that decides by consensu s, there is total confusion at decision making 
point, failure is almost inevitable.  Experienced  negotiators can finally accept results well short 
of the perfect result they envisaged in their opening negotiating position but they must broadly 
understand at least what they are being asked to recommend to their Governments at decision 
making time.  
 
• If you are expecting a  perfect solution, we will fail.  There is no perfect solution.  
 
• So I am going to need a great deal of support and the full application of a principle that I have 
called 'conditional trust'.  I will not elaborate he re since I believe my views are well known on 
this point.  
 
• I cannot be specific today about the precise way I intend to consult the membership for the very 
simple reason I do not yet have specific plans.  I will be talking intensively to many of you to 
help me develop a workable process and I doubt it will be a fixed plan – it is far more likely to 
evolve over time as the dynamic of a real Gene va negotiation unfolds.  Those who have seen this 
before may understand th is better than others. 
 
• What is clear to me, even before I start, is th at none of you will consider  you are being consulted 
in a serious way if the representatives of the biggest  players are not present.  I have been in that 
situation before personally as a negotiator for a small country and know exactly what conclusion 
colleagues would draw from any consulta tion without key negotiators present.  
 
• This implies, of course, a core group of the representatives of the most powerful countries or 
groups must  be present on all  occasions when we meet to develop an emerging text.  I will of 
course need their cooperation for that. 
 
• That in turn implies logically bringing in others  in different configura tions and depending on the 
issue different people may be better able to help us. 
 
• It also implies regular and fully transparent re porting back.  The Director General has talked 
today of open-ended informals to make the same  point in terms of his responsibilities and we 
will need a similar process in agriculture.  
 
• It is not, may I suggest, simply the responsibilit y of the Chair to develop understanding amongst 
the Membership as a whole of where the negotiation of a Framework is heading.  
 
• This is a collective responsibility and those nego tiators who are better placed than others with 
smaller delegations, have a responsibility to bear much of this burden.  The comments today of 
Ambassador Seixas Correa, describing his intenti ons with respect to reporting back to the G20 
are an excellent example, in my view, of someone in a leadership role taking their share of this 
collective responsibility. 
 
• Finally, this process will have to be s upplemented by 'confessionals'.  Please do not 
underestimate the value of direct and personal contact with me, pa rticularly when you know that 
in effect you are being represented by another spokesperson who may not fully grasp a special 
point of interest to you.  
 WT/GC/M/86 
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 • After all, there may be clashes of interest between you and the person assumed to represent your 
view.  There is nothing unusual, less still embarra ssing about this.  This is the norm.  But please 
do not expect me to guess what the problem is a nd try and come to me with some solutions that 
fit into the emerging shape of the Framework negotiation. 
 Linkage With Other Negotiating Frameworks: 
 
• Whatever the scope of the July package may be, it is clear that negotiators in other areas are 
waiting for momentum in agriculture before they can move.  
 
• I do not have any problem with that.  But the real question is – what is the test of whether 
momentum in agriculture is taking place?  
 
• Well, it is up to you, but I would not wait for the formal tabling of a paper on agriculture as the 
test of whether there is momentum developing.  You have just heard the realistic advice of 
Ambassador Chandrasekar today – and this is simply one of the more important political 
considerations that will bear on th e timing of any composite paper. 
 
• For my last point, I will switch hats and talk  as the NZ Ambassador, because it may not be 
appropriate for a Chair to make such blunt remarks.  
 
• Ladies and Gentlemen, as far as the NZ delegation is concerned, when we assess the non-
agriculture areas of the negotiation, we are not wa iting for a paper on agriculture to emerge.  We 
know there already  is momentum on agriculture.  To us this is crystal clear and those who 
cannot see that reality and grasp the opportunity , because they are always thinking it is 'good 
negotiating tactics' to hold all your cards to th e last minute, may find to their disappointment, 
like legions of disappointed negotiators before them, how misleading conventional wisdom is on 
this point of what constitutes 'good negotiating tactics'. 
 
  WT/GC/M/86 
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 ANNEX IV  
 
Item 8 – Statement by Cuba (circulated as WT/GC/79)  
 
 
 The WTO was created to support and safeguard  an open and non-discriminatory multilateral 
trading system designed to raise the standards of living of its Members.  With regard to these 
principles, the second paragraph of the Doha Minister ial Declaration states that  international trade can 
play a major role in the promotion of economic  development and the alleviation of poverty. 
 
 However, for 45 years the United States Gove rnment has violated these commitments with 
the imposition of a unilateral economic, commercia l and financial blockade against Cuba which 
places serious constraints on the economic, cultural a nd social development of my country, creates 
obstacles to trade relations among states  and jeopardizes the welfare of the Cuban people.  The 
resulting material losses are calculated at more than US$70 billion, or not less than US$1,600 million 
per year. 
  If there is a true commitment to the multilateral trading system and the WTO:   Why does the United States of America maintain  the blockade against Cuba and impose its 
laws on the rest of the world by means of the Torricelli Act and the Helms-Burton Act, penalizing 
entrepreneurs from other countries for trading with Cuba? 
  Why does it block the entry to its territory of  exports from Cuba of sugar, nickel, tobacco, 
fisheries products, vaccines, biotechnology pro ducts, computer software and other products? 
 
 Why does it hamper and impose severe restrictions on Cuban imports? 
  Why does the United States prohibit its citizens from travelling to Cuba?   Why is Cuba prevented from acquiring stat e-of-the-art technology and equipment for 
accessing the Internet? 
 
 By what right does the United States now c onfiscate payments by Cuba to third-country 
companies or governments for using the US dollar for foreign trade transactions?   Why is there a ban on the importation into Unite d States territory of products manufactured in 
third countries which contain Cuban raw materials? 
  Why does the United States not authorize its banks to provide loans to Cuba or allow its companies to trade with and invest freely in our country?  Are these banks and companies not privately owned?  
 Why does it uphold Section 211 in clear violation of US intellectual property legislation and 
commitments and the TRIPS Agreement, and the blatant unlawfulness of which was recognized by a WTO panel?   Why does it impose severe prohibitions on maritime shipping to and from Cuba, by refusing 
to allow third-country vessels which put in at Cuba n ports to enter United States ports for a period of 
180 days under threat of inclusion on a “black list”?   On 6 May 2004, the United States Government, still dissatisfied over its failure to secure the 
collapse of the Cuban economic and political syst em, announced fresh measures to intensify yet WT/GC/M/86 
Page 54  
 
 further its economic war against Cuba.  These measures are geared towards strangling our 
development and reducing to a bare minimum the fore ign exchange resources critical to satisfying the 
basic requirements of the Cuban people in terms of food, healthcare services, education and other 
essentials.  
 The continued implementation of such measur es targeting Cuba violates the principles and 
objectives of the WTO, adversely affects the credibility of the multilateral trading system and infringes upon Cuba's rights, as well as encroaching on those of other Members of this Organization. 
  
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