WORLD TRADE

ORGANIZATION

RESTRICTED

WT/GC/M/7527 September 2002

(02-5186)

General Council8 and 31 July 2002

MINUTES OF MEETING

Held in the Centre William Rappardon 8 and 31 July 2002

Chairpersons: Mr. Sergio Marchi (Canada)(for items 1 - 7, 9(a) - (d), 17 and 18)

Mr. Carlos Pérez del Castillo (Uruguay)(for items 8, 9(e), 10 - 16 and 19)

Subjects discussed: Page

1. Iran – Request for Accession .....................................................................................2

2. Procedures for the appointment of future Directors-General – Statement by the Chairman......................................................................................................................3

3. Review of the exemption provided under Paragraph 3 of the GATT 1994 ...........5

4. Work Programme on Electronic Commerce – Progress report by the Chairman6

5. Internal transparency and effective participation of Members – Preparatory process in Geneva and negotiating procedure at Ministerial Conferences ...........7

6. Committee on Budget, Finance and Administration..............................................27

(a) Reports of the Committee on its meetings of 15 April and 8 May .............................27

(b) Statement by the Chairman of the Committee in relation to pledges announced and payments received to finance the implementation of the WTO Secretariat Annual Technical Assistance Plan ..........................................................................................27

7. Election of the Chairman, Members and Alternates of the Management Board of the WTO Pension Plan .............................................................................................28

8. Report on the evaluation of the Joint Integrated Technical Assistance Programme (JITAP) – Statement by the Deputy Director-General.....................28

9. Waivers under Article IX of the WTO Agreement................................................32

(a) Romania - Introduction of Harmonized System 2002 changes into WTO schedules of tariff concessions – Request for waiver ......................................................................32

(b) Côte d'Ivoire - Customs Valuation Agreement – Request for waiver ........................32

(c) El Salvador - Customs Valuation Agreement – Request for waiver ..........................33

(d) Least-developed Countries – Obligations under Article 70.9 of the TRIPS Agreement with respect to pharmaceutical products – Draft waiver ............................................33

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(e) New EC Special Tariff Arrangements to Combat Drug Production and Trafficking – Request for Waiver .....................................................................................................34

10. Marrakesh Ministerial Decision concerning the possible negative effects of the reform programme on least-developed and NFIDCS – Report of the Inter-Agency Panel on short-term difficulties in financing normal levels of commercial imports of basic foodstuffs........................................................................................34

11. Report by the Chairman of the Trade Negotiations Committee...........................43

12. Work programme on small economies – Report by the Chairman of the dedicated sessions of the Committee on Trade and Development.........................44

13. Committee on Rules of Origin – Report by the Chairman of the Committee to the General Council ..................................................................................................45

14. Council for Trade in Goods – Recommendations for appropriate action regarding proposals contained in paragraphs 4.4 and 4.5 of the Doha Ministerial Decision on Implementation-Related Issues and Concerns relating to the Agreement on Textiles and Clothing........................................................................51

15. Committee on Trade and Development – Report by the Chairman of the Committee in Special Session on Special and Differential Treatment in pursuance of paragraph 12.1 of the Doha Ministerial Decision on Implementation-Related Issues and Concerns .......................................................63

16. Committee on Subsidies and Countervailing Measures – Report on review of provisions regarding countervailing duty investigations in pursuance of paragraph 10.3 of the Doha Ministerial Decision on Implementation-Related Issues and Concerns...................................................................................................71

17. Proposal to remove and avoid inconsistencies in the texts of the WTO Agreements – Communication from Chile .............................................................73

18. One-day retreat for Permanent Representatives of WTO Members – Statement by the Chairman........................................................................................................74

19. Farewell to the Director-General.............................................................................75

1. Iran – Request for Accession (WT/ACC/IRN/1)

1. The Chairman drew attention to the communication from Iran in WT/ACC/IRN/1, requesting accession to the WTO Agreement. He recalled that the General Council had last considered this matter at its meeting in May, and had agreed to revert to it at the present meeting.

2. The representative of the United States said that her delegation did not have anything to add to its statement at the May meeting. The issue of Iran's accession to the WTO Agreement was under review by her Government, and her delegation was not in a position to speak to this matter at the present meeting.

3. The representative of Malaysia, speaking on behalf of the Informal Group of Developing Countries, said that he had taken note of the statement by the United States. At the May meeting of the General Council, these countries had expressed the hope that they would get a positive response to Iran's request for accession as soon as possible. This request had been on the agenda of the General Council for some time, and they were disappointed that the United States was still not able to provide a positive response on the matter. They strongly urged the United States to respond positively to this issue at the next meeting of the General Council.

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4. The representative of the European Communities informed Members that the Community had recently agreed on a mandate for the negotiation of a bilateral trade agreement with Iran that foresaw the reciprocal granting of most-favoured-nation treatment. In this connection, the Community saw merit in starting a process that would lay the foundation for granting such status also at the multilateral level.

5. The General Council took note of the statements and agreed to revert to this matter at its next meeting.

2. Procedures for the appointment of future Directors-General – Statement by the Chairman

6. The Chairman recalled that the July 1999 Decision of the General Council on the Appointment of the next Director-General (WT/L/308) called for a comprehensive set of rules and procedures for the appointment of Directors-General to be elaborated and adopted by the end of September 2000, and that good work had been done under this mandate by Ambassador Bryn of Norway, both in his capacity as General Council Chairman in the course of 2000, and in more recent consultations at the request of his successor in that post, Mr. Harbinson of Hong Kong, China. As he had indicated at the May General Council meeting, it was his intention to tackle this issue this year, given the express desire of many delegations to take advantage of the window of opportunity this year offered. Since May, he had held extensive consultations aimed at ascertaining delegations' views and determining where Members would need to focus their work, and had also solicited the views of the non-resident Member delegations. On 12 June, he had circulated some background materials in document Job(02)/56 to assist Members in their reflection on this matter and, on 19 June, the General Council had met in open-ended informal session to consider this issue. In his view, that meeting had been very constructive, as well as a valuable contribution to the discussion of this issue. Some 35 delegations had taken the floor. There had been a broad convergence of views on many of the nine points identified in document Job(02)/56. The discussion had also served to underline a number of issues where more focused work was clearly necessary. These included: (i) decision-making, and whether or not there was need for a "circuit breaker" should consensus not be reached by an agreed deadline; (ii) whether a principle of rotation should be followed and, if so, what kind; and (iii) whether an advisory committee to assist the Chairman should be provided for.

7. On decision-making, all delegations had expressed a strong preference for a decision by consensus, while many had been prepared to contemplate other alternatives as a last resort. Two delegations had said they could not accept any deviation from consensus, and several others had expressed strong reservations on voting, although there had been a cross-section of support for the use of straw polls at established stages in the process in order to facilitate consensus. It had been stressed that a consensus decision was important in order for the Director-General to have the level of confidence of the Members necessary for him or her to operate effectively, and that the focus should be on devising a process that would facilitate a consensus decision. Some had felt that providing an alternative to consensus decision-making would in fact make Members less inclined to make efforts at accommodation and building a consensus. On the question of voting, many delegations had said they could accept this as a last resort "circuit breaker" if it were circumscribed only to the appointment of the Director-General. However, there were differences of view as to the method of voting, with many countries insisting on a simple majority as provided in Article IX of the WTO Agreement, or a qualified majority – such as two-thirds or three-fourths of Members voting – while others had opted for a trade-weighted vote. In a spirit of compromise, a good number of delegations had spoken in favour of a double majority, such as, for example, trade-weighted plus simple majority.

8. On rotation, there had been a broad cross-section of views as to whether there should be no rotation, a developing-country/developed-country rotation, or a geographic rotation. A broad mix of Members had felt that the selection of a Director-General should be based solely on merit, and that

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any rigid rotation principle could limit the pool of capable candidates at any given time and run counter to the interests and needs of Members and the organization. However, many developing countries had spoken in favour of some type of rotation, most supporting a simple developing/developed-country rotation, with some arguing for a geographic rotation.

9. On an advisory committee, while all seemed to agree that the Chairman needed assistance in the selection process – for example, to conduct consultations and get a reading on candidates' levels of support – and that transparency was essential in this context, views varied on how to provide for this. Most delegations seemed to favour an informal "Friends of the Chair" approach and felt that any more formal approach would unnecessarily politicize the process and make it more difficult. Others had suggested that Chairs of other main WTO bodies could play this role, while still others had also called for regional representation in any such group.

10. The other points that had been discussed, and on which some broad convergences were beginning to emerge, were the following: First, on the time-period for the entire process, most delegations had suggested starting the process 6-12 months prior to the expiry of an incumbent's term, with a deadline for decision 3-6 months before the term expired. All were in favour of specific deadlines that would need to be honoured throughout the process of nomination, campaigning by the candidates and decision-making. Second, on nominations, all who spoke had felt that nominations should be made by Member governments only; however, there were differing views on whether a government might nominate a non-national. Third, on qualification criteria, most delegations had felt that since nominations would come from governments, detailed criteria should not be fixed in advance, and that a General Council discussion of the broad attributes required in the post at any given time, with a summing-up by the Chairman, could provide useful guidance for governments. Fourth, with regard to the term of office, many delegations had favoured a four-year term with one renewal. Some had stressed that there should be no expectation of automaticity in the renewal. Others had suggested that one longer term, such as five or six years, with no renewal might be more appropriate. Fifth, on the senior management structure, most delegations had felt that this discussion should remain separate from the present exercise, but that there was a need to ensure continuity in the transition period through staggering the terms of office of the Director-General and the Deputy Directors-General. Finally, on remuneration, there was an overall view that the remuneration package should be set in advance in a transparent way and non-negotiable.

11. Overall, the discussion at this informal meeting had been very positive and had provided an excellent basis on which to build. He intended to hold more focused consultations in the early autumn on those issues Members had identified as the most important and those that required additional work, with a view to moving this exercise towards a successful conclusion by the end of the year. Where there was a will there was clearly a way, and he believed that all Members shared a common will to succeed on this matter.

12. The representative of Brazil said that his delegation fully supported the Chairman's efforts aimed at clarifying the procedures for appointment of future Directors-General. Brazil believed that Members should strive to ensure a smooth transition between the outgoing and incoming Directors-General and, to that end, clear guidelines could facilitate the process. As his delegation had participated in the Chairman's consultations, he would not expand on the various aspects mentioned in the Chairman's statement. However, he wished to stress that Brazil considered it essential that the basic WTO rules should stand. Article IX of the WTO Agreement was clear that to the extent possible, decision-making should be by consensus, and that where a decision could not be arrived at by consensus, the matter at issue should be decided by voting, with each Member of the WTO having one vote. He wished to put on record that Brazil categorically rejected any attempt to override this basic principle of the WTO with proposals regarding weighted voting or a double majority vote or, indeed, any other possible scheme of weighted voting. If consensus were unattainable, and in order to facilitate consensus, Members could explore ideas such as a direct election in two rounds, in case

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there were more than two candidates. Other ideas could also be further developed, such as an informal advisory committee to help the Chair, the possibility of rotation and a deadline for the appointment process. Irrespective of the direction taken in the consultations by the Chairman, Brazil considered that the selection process should, above all, be transparent and take on board the views of the whole membership.

13. The representative of India expressed appreciation for the Chairman's efforts to try to resolve this matter. His delegation believed that the main problem Members were likely to face related to the circuit-breaker issue. Like Brazil, India would not find it possible to support trade-weighted voting of any kind, whether direct trade-weighted voting or a double majority vote. If Members were to go ahead with the circuit-breaker issue, the provisions of Article IX of the WTO Agreement should be followed. Regarding the other issues identified in the Chairman's statement, there was a high degree of flexibility and desire on the part of Members to move forward, and his delegation was convinced that, with further discussion, resolution of these issues would be achieved.

14. The Chairman, referring to Brazil's statement on the transition between outgoing and incoming Directors-General, said he wished to put on record his appreciation to both Mr. Moore and Dr. Supachai for having worked out an efficient transition process that would serve as a positive precedent for future transitions. Dr. Supachai's attendance at the forthcoming meeting of the Trade Negotiations Committee on 18-19 July was reflective of that healthy transition process.

15. The General Council took note of the statements.

3. Review of the exemption provided under Paragraph 3 of the GATT 1994 (WT/L/444)

16. The Chairman recalled that Paragraph 3(a) of the GATT 1994 provided an exemption from Part II of GATT 1994 for measures under specific mandatory legislation, enacted by a Member before it had become a contracting party to the GATT 1947, which prohibited the use, sale or lease of foreign-built or foreign-reconstructed vessels in commercial applications between points in national waters or waters of an exclusive economic zone. On 20 December 1994, the United States had invoked the provisions of Paragraph 3(a) with respect to specific legislation, known as the "Jones Act", that met the requirements of that Paragraph. Paragraph 3(b) of the GATT 1994 called for a review of this exemption five years after the date of entry into force of the WTO Agreement, and thereafter every two years for as long as the exemption was in force, in order to examine whether the conditions which created the need for the exemption still prevailed. The General Council had last considered this matter at its meeting in May, and had agreed to revert to it at the present meeting. From the discussions that had been held thus far on this issue, there did not yet seem to be a meeting of minds on the conduct of the review to be undertaken by the General Council under this provision. Therefore, while he did not wish to pre-empt any discussion at the present meeting, he believed that it might be helpful, under the circumstances, if he were to consult informally with the delegations who had spoken on this item thus far, at least in the first instance, with the aim of trying to get a sense of the way forward and to bring some closure to this issue at a future meeting. If this were agreeable, he would propose to begin consultations on this matter early in the autumn, and that the General Council agree to revert to this item at a future meeting before the end of the year.

17. The representative of the European Communities welcomed the Chairman's proposal to proceed to informal consultations. For the Community, it was important that the review be a substantive one and not a pro forma exercise. He believed that the Chairman's consultations could contribute to a substantive review.

18. The representative of Norway said that his delegation also welcomed the Chairman's proposal to hold consultations in the autumn and wished to participate therein. Norway hoped that there would be

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a substantial discussion on this issue in order to examine whether the conditions for the exemption still existed.

19. The representative of the United States thanked the Chairman for his proposal to hold consultations in the autumn and welcomed the opportunity to participate in them.

20. The representatives of Australia, Panama, Japan, Korea and Chile expressed their interest in participating actively in the consultations to be held by the Chairman.

21. The General Council took note of the statements and agreed to revert to this matter at a future meeting before the end of the year, and that the Chairman would hold consultations on it early in the autumn.

4. Work Programme on Electronic Commerce – Progress report by the Chairman

22. The Chairman recalled that at the May meeting of the General Council, Deputy Director-General Mr. Stoler had reported on the second dedicated discussion on cross-cutting issues under the auspices of the General Council, which had been held on 6 May 2002. A factual summary of that discussion had been circulated in WT/GC/W/475. Also at that meeting, delegations had expressed views on how to handle future work on cross-cutting issues. As a follow-up to that discussion, Deputy Director-General Mr. Stoler, on behalf of the Chairman, had held consultations with interested delegations on the most appropriate way to continue the work on cross-cutting issues. The results of those consultations were as follows: First, there was broad support for continuing in the format of periodic dedicated discussions of cross-cutting issues under the auspices of the General Council; no delegation continued to advocate the establishment of a horizontal task force. Second, the agenda for future dedicated discussions should be narrowed in order to focus the debate, on the understanding that any delegation might expand the agenda at any time; thus, the next dedicated discussion would focus on (a) "classification" issues and (b) fiscal and other revenue-related issues. Third, delegations could accept a notional schedule of future meetings as follows: September or October; late December; late February 2003; and the May-June 2003 period, during which Members would take up drafting the report to the General Council for incorporation in the overall report to be sent to the Fifth Ministerial Conference. Fourth, on the issue of whether reports on future meetings should be in the current factual summary format or a more extensive format reflecting each delegation's position, it had been agreed to revisit this at the next dedicated discussion. He wished to thank Deputy Director-General Mr. Stoler for having chaired these consultations.

23. On the separate issue of the most appropriate institutional arrangements for handling the Work Programme as a whole, which Ministers at Doha had instructed the General Council to consider, he wished to invite delegations to reflect on this, with a view to taking a decision at the October meeting of the General Council. Informal consultations would be held on this matter between now and that meeting. As Members were aware, to date these institutional arrangements had been that the Councils for Trade in Services, Trade in Goods and TRIPS, and the Committee on Trade and Development would examine and report on aspects of electronic commerce relevant to their respective areas of competence, and that the General Council would play a central role in the entire process, would keep the work programme under continuous review and would consider any trade-related issue of a cross-cutting nature.

24. The representative of Chinese Taipei said that his delegation wished to commend the fine work done under the Work Programme on Electronic Commerce and chaired by Deputy Director-General Mr. Stoler. The Work Programme had crystallized five cross-cutting issues which constituted a very useful basis for future discussion. He expressed appreciation to Members who had contributed to progress on this issue. As stated in the Doha Ministerial Declaration, electronic commerce posed challenges and generated opportunities for Members at all stages of development. It had a far-

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reaching effect on trade facilitation and liberalization. Members should pay great attention to the development of electronic commerce in order to seize its ample business opportunities. Chinese Taipei had been one of the beneficiaries of a robust electronic commerce environment, as demonstrated by, inter alia, its vibrant e-banking and online securities trading system. His delegation was willing to take part in the Work Programme and to share Chinese Taipei's experience in this regard. As recognized in Doha, it was important to create and maintain an environment that was vital to the future development of electronic commerce. In this regard, the development of a set of rules on electronic commerce and adequate infrastructure in e-commerce was a must, in order to achieve the goal set by the Doha Ministerial Declaration.

25. The representative of the United States said that a liberalized trade environment for digital products in both the goods and services sectors would facilitate a vibrant e-commerce economy. For example, making meaningful market-access and national treatment commitments in the relevant services sectors would create a globally networked environment where digital products and services would flow unimpeded by trade barriers. His delegation believed that the WTO Work Programme on Global Electronic Commerce had been a useful exercise, and was encouraged by the commitment to extend the Work Programme, as well as the current practice of not imposing customs duties on electronic transmissions. The Work Programme should continue in a manner that would assist the ongoing negotiations in a meaningful way. While there was disagreement on how to classify a small set of products – digitally downloaded products (e.g., books, videos, movies, software) – this should not impede progress in recognizing the importance of applying all WTO rules to the development of e-commerce. In order to provide appropriate guidance on trade in digital products, the following goals should be at the core of the overall negotiations: first, trade in digital products should continue to flourish in a liberal and open trade environment reflected in the principles of national treatment and other non-discriminatory measures; second, greater market access and national treatment commitments across a broad range of relevant goods and services sectors would lead to greater development of e-commerce and economic growth; third, if necessary, domestic regulations affecting e-commerce should follow existing WTO principles, namely, they should be transparent, minimal, non-discriminatory and the least trade-restrictive means to accomplish legitimate objectives; finally, in light of the importance of trade liberalization in trade in digital products, the moratorium on customs duties on electronic transmissions should be made permanent and binding.

26. The General Council took note of the statements and agreed to revert to the question of appropriate institutional arrangements for the conduct of the Work Programme as a whole at its next meeting.

5. Internal transparency and effective participation of Members – Preparatory process in Geneva and negotiating procedure at Ministerial Conferences (WT/GC/W/471, WT/GC/W/477, WT/GC/W/422)

27. The Chairman recalled that the General Council had discussed this item at its meeting in May, and had agreed to revert to it at the present meeting. He had indicated at the May meeting that subsequent to the discussion at the present meeting, this issue could be taken to the next step of consultations, which would start in the autumn. Since the discussion in May, a further communication on this subject had been received from a group of eight delegations and circulated in document WT/GC/W/477. Also, at the request of Bulgaria at the May meeting, its communication on internal transparency circulated in November 2000 (WT/GC/W/422) would be included in the document references for this item each time it was taken up by the General Council.

28. The representative of Australia, introducing the communication in WT/GC/W/477 on behalf of its co-sponsors, recalled that at the final panel session of a seminar hosted by UNCTAD the previous week on the WTO's dispute settlement system, a number of suggestions had been made by the panel as to how WTO Members should approach the review of the Dispute Settlement Understanding

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(DSU) with which Ministers has tasked Members. It had been suggested that in improving the existing system, Members should be guided by four considerations: first, that they avoid setting overly-prescriptive rules of procedure; second, that they maintain a balance between general principles and elaborated procedures; third, that they ensure sufficient flexibility to accommodate unforeseen developments; and fourth, that they have faith in the institution's ability to make appropriate adjustments as the need arose. While the panel had been referring specifically to the DSU, the suggestions seemed equally applicable to the system for preparing for Ministerial Conferences. In fact, these latter thoughts had been among the reasons the co-authors of the communication in WT/GC/W/477 had decided to reflect collectively on the discussion at the May General Council. The question was what was the most sensible way to balance the interests of transparency, inclusiveness and predictability with the interests of flexibility, efficiency, pragmatism and progress.

29. The communication sought to capture a view that had been widely expressed at the May meeting that in looking ahead to preparations for the Cancún Ministerial Conference – which was not much more than a year away – Members needed to draw on their shared experience over recent years in how to prepare for such meetings. That experience embraced both the success at Doha and the lack of success at Seattle. Many delegations had recalled in May that the experience of failure in Seattle had spurred Members collectively to do things better, and that that commitment to find a better way of working had led very directly to the success Members had collectively experienced in Doha. In turn, the experience of Doha had encouraged Members to agree on and implement further improvements in management practice. Some delegations had talked in May about trying to codify best practice since Seattle and, by inference, avoiding the perceived mistakes of the past. Many delegations had also appeared to conclude that best practice, in fact, meant minimal practice – that keeping processes light and flexible was the key to successful management of the difficult process of securing agreement among 144 Members through a process of consensus-based decision making. At the same time, Members needed to maintain the best practice of consultation and internal transparency built up during 2000 and used to good effect during the run-up to Doha in late 2001.

30. He doubted that any of the co-sponsors of the paper would argue that the Doha experience had been perfect. There were always things that could be improved. However, he felt that all would agree that the Doha process had been measurably better than the previous approach, and had produced measurably better results. Members would not need a lot of convincing to move away from the sort of approach taken collectively to Ministerial Conferences prior to Doha and some of the practices that had proved to be seriously flawed. In concrete terms, Members needed to avoid setting themselves – and their Ministers – up for a situation where a 32-page text full of square brackets was forwarded to Ministers as a negotiating document. As the communication pointed out, while criticism of any preparatory process was inevitable, the fact was that the document referred to Ministers in Doha had emerged pretty well intact at the end of the Conference. That said something very positive about that process and, of course, about the judgment, skill and tact not only of the then Chairman, but also of delegations in Geneva.

31. He wished to make two other observations about the background to this communication. First, the principal reason Members needed to give attention to the issue of preparation of Ministerial Conferences was the fact that this was an organization with treaty status and with significant commercial interests at stake, comprising a large number of Members of necessarily diverse interests, which took decisions by consensus. This point was critical. Few delegations, if any, wanted to move away from consensus decision-making. But that came at a cost to the organization in terms of the amount of time and effort put collectively into securing agreement on issues. Since the negotiation of the Marrakesh Agreements, decisions had inevitably been taken with even more caution than under the GATT, reflecting the increased level of commitments, a strengthened dispute settlement mechanism, and a substantially larger membership. However, the corollary of this was that Members might be tempted to try to take decisions at every turn in the road on the way to Ministerial meetings,

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and that, in turn, would mean that they did not always allow themselves to see the whole picture. On the other hand, Ministers would insist on weighing up the whole picture in terms of perceived national interest, and that meant being able to identify and assess both the perceived benefits and the costs.

32. Second, – a point that had been made at the May meeting and was also critical to consideration of the issues being discussed – representatives in Geneva were tasked by Ministers to prepare a meeting at which they expected to be able to take decisions about the future of the organization, and to advance what they saw as national trade interests. Ministers would not thank representatives in Geneva for making preparations for their meeting more complex than necessary, by introducing a heavy decision-making process for each step on the road or by limiting their capacity to engage with their fellow colleagues. As had been observed in May, Ministers had to work out political deals. There was a need to avoid risking paralysis and getting in the way of Ministers being able to see where the most important consensus lay, i.e. the consensus at the conclusion of the Ministerial Conference. Just as the lack of progress in this multilateral trade forum had encouraged Members to look for bilateral and regional solutions, overly prescriptive rules of procedure would likely lead to driving substantive discussion into informal groups, with all the dangers this posed for transparency and the interests of smaller delegations. In concluding, he suggested that Members avoid introducing unnecessary rigidities into their work, avoid strait-jacketing themselves and their Ministers, keep their decision-making light, flexible and pragmatic, continue to follow best practice as collectively identified over the past few years, and ensure sufficient flexibility to accommodate unforeseen developments and evolution in the international environment.

33. Any attempt to codify best practice would require Members to be very cautious about whether they should specify more than they had already, through the internal transparency work they had developed and implemented since Seattle. That approach should inform the whole range of components that made up a Ministerial meeting, including the preparatory processes in Geneva, arrangements for the hosting of the meeting, the role of the Chair and whatever facilitators he or she might wish to invite to help run the conference, and the practical management of the meetings, including the consultative process on the ground. As one of the panel members at the UNCTAD seminar had said, Members should all show some faith in the system.

34. The representative of Chile said that although his delegation had worked on the paper in WT/GC/W/477 together with the other sponsoring delegations, it had not been possible to include Chile as a co-sponsor, owing to last minute differences with his capital. However, Chile now wished to be included in the list of countries sponsoring this paper1, and wished also to endorse the statement by Australia. The paper by the group of 15 countries in WT/GC/W/471 had been a very useful contribution and had served to awaken the awareness and attention of all delegations to the need to have a good preparatory process for the next Ministerial Conference. Although this contribution had raised several aspects that were of concern to Members and which needed to be discussed, Chile did not see it as a proposal for a rigid and inflexible process. Chile was appreciative of this contribution, which had allowed it and other delegations to respond with a complementary paper. As Chile had stated on other occasions, experience showed that changes in terms of processes had been important in the WTO. This was, to some extent, very important in marking the differences between the process leading to the failure of Seattle and that leading to the success of Doha. In other words, it was the process by which Members arrived at decisions that would give sustainability and credibility to results. Doha had been the result of an open and transparent process. However, no process was perfect and Members would continue to learn over the years and improve their processes and procedures. One also had to improve the exercise of confidence-building and take a further step in that direction. While the process leading up to Doha had not been perfect and could be improved on, each Ministerial Conference had its own particularities, and the Cancún Conference would certainly have its own. The differences and particularities of each Conference would have to be accompanied

1 The revised list of sponsors was circulated in WT/GC/W/477/Add.1.

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by adjustments in the process that was employed. Therefore, the first point that Chile wished to highlight was that in adding to the existing practice, Members should be prudent, cautious and flexible. Any process should be capable of responding with flexibility and fluidity to the different challenges that Members would face along the way. The Chairman of the General Council should be given the freedom to conduct the process, which should take into account the collective interests and opinions of Members. The Chairman's room for manoeuvre needed to be preserved, in order to allow the best results to be achieved in a way that responded appropriately to the interests and needs of Members. Ministers needed to have in their hands not only a report which reflected substantively the work carried out, but also as much room as possible to be able to take decisions and assume the political responsibilities which fell to them. It was very difficult to prescribe criteria, which was why flexible and fluid procedures were needed. As a developing country, Chile was highly committed to the multilateral trading system, and had a vital and urgent interest in having good results within established time-frames, and was certain that the current process would lead to that objective. His delegation urged that consultations be held on this matter, in which it wished to be included. Chile wanted the process to result in some type of understanding among Members as soon as possible so that work in the final run-up to Cancún could be carried out on the basis of improved procedures.

35. The representative of Colombia said that this issue was closely linked to that of internal transparency within the organization, which had been extensively discussed in recent years. In Colombia's view, it was a matter of the greatest priority to establish clear rules and criteria for these Ministerial processes. Her delegation agreed with the approach in WT/GC/W/477 and the fact that transparency was an issue on which major headway had been made since the Seattle Conference. Under the leadership of the two previous General Council Chairmen – Amb. Bryn and Mr. Harbinson – and the present Chairman, the organization had taken great strides forward by guaranteeing inclusive consultation mechanisms which allowed all Members to voice their concerns and interests in the different activities of the organization. It went without saying that there would always be room for improvement, and it was Members' job to remain open to each others' suggestions. However, pragmatic criteria that would enable Members to complete preparations for the forthcoming Conference on time and, subsequently, to bring the negotiations mandated by Ministers in Doha to a successful conclusion, had to be maintained. In this respect, Colombia felt there were a number of ways, in keeping with the matter at hand and the particular circumstances, in which progress could be made with negotiations and the difficult consensus-building process. Her delegation considered that no one single method should be adopted for the work to be undertaken by the Chairpersons of the various negotiating committees and facilitators at Ministerial Conferences. Her delegation therefore wished to reiterate that it welcomed proposals that helped to enhance the transparency of Members' work and would analyse each in terms of the contribution it made to this objective, while remaining attuned to the need to maintain flexibility and pragmatism in the negotiating processes.

36. The representative of Bulgaria said the most important aspects of transparency were those that related to the decision-making process. The debate about transparency had started after Seattle, where some delegations had not been admitted to closed meetings, the aim of which had been to produce last-minute proposals to be tabled for a decision at the official session of the Ministerial Conference. His delegation believed that the debate in the General Council about transparency would not be successful if Members could not agree on procedural guarantees against such last-minute proposals prepared by some Members to the exclusion of others. Under the current rules of procedure, proposals for decisions had to be tabled in writing 12 hours before a decision was taken. This, in Bulgaria's view, was clearly inadequate for a transparent and inclusive decision-making process. Therefore, his delegation had proposed in document WT/GC/W/422 that draft decisions be tabled before the circulation to Members of the convening notice for the relevant meeting, and that such draft decisions be referenced in the convening notice. Bulgaria's proposal would not make last-minute bargains between delegations impossible, but would make it impossible that such last-minute bargains between some delegations were imposed on others under the pressure of time. Bulgaria proposed that draft decisions or amendments to them that were circulated to delegations after the convening notice

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for a meeting could be adopted on an ad referendum basis only, in order to give time for consultation with capitals and interested national stakeholders. The proposal provided for the kind of flexibility and fluidity that would be helpful for an efficient and result-oriented process advocated by the paper just introduced by Australia. It would soon be three years since the General Council had started the discussion on transparency and inclusive participation in decision-making. There had been some improvements, but in order to provide real and lasting solutions, there needed to be more than mere discussion. There needed to be procedural guarantees that would make it impossible to revert to non-transparent practices. Indeed, there had recently been cases which demonstrated the need for such procedural guarantees. Bulgaria felt that its proposal provided such guarantees against what could be considered the worst form of non-transparency.

37. The representative of Brazil said his delegation joined others in thanking the co-sponsors of WT/GC/W/471 for having raised a number of issues that deserved the General Council’s careful consideration. There was much that Brazil could agree with in that paper. The preparatory process in Geneva should indeed proceed under the close supervision of the General Council and its Chairman, with the assistance, if necessary, of working groups and facilitators. At the Ministerial Conference itself, consultations should be transparent and inclusive, and marathon negotiating sessions should be avoided. Recently, another paper on this issue had been circulated by a group of countries in WT/GC/W/477, which helped to enrich and broaden this debate. Brazil agreed with several of the points set out in these papers, in particular that consensus should remain the rule for decision-making and that the preparatory process should leave space for the Ministerial Conference to take up those issues which called for resolution at a higher political level. Brazil had also taken note of the communication from Bulgaria in WT/GC/W/422.

38. As the communications showed, this was indeed a very timely discussion. The WTO was a young organization that was quickly evolving in tune with its expanding membership. At the same time, institutionally it was influenced by a tradition established over almost half a century under the GATT. The challenge facing the WTO was that of reconciling the GATT legacy for pragmatism and efficiency with the contemporary call for greater transparency and more democratic and inclusive decision-making processes. Just as Brazil had supported the idea of establishing “principles and practices” for the TNC, from the very outset it would not be averse to looking at a set of general guidelines for Ministerial Conferences and the preparations for them. Brazil believed that a greater degree of procedural predictability was desirable and could be attained without strait-jacketing the consultative process or micro-managing Ministers. It seemed to Brazil that one was dealing with a structural problem. Members went from long preparatory meetings in Geneva at the Ambassadorial level to an intense, concentrated Ministerial process lasting a few days, without anything in between to iron out the most politically sensitive difficulties. He noted that most Ministerial gatherings or summits had a senior-officials-meeting component that set the stage for the adoption of decisions. Something similar could be contemplated for the WTO's Ministerial Conferences, so that Ministers were not confronted with proposals for bridging gaps, even as their Geneva representatives strove to stay abreast of complex evolving scenarios they were no longer in control of. If Ministerial Conferences could be preceded by two or three days of preparatory work at the senior officials level – at the same venue as that of the Ministerial Conference – the transition from the preparatory process to the decision stage might become smoother and less challenging for small and medium-sized players, who constituted the vast majority of the membership. This would probably obviate the need, felt by some, for very detailed procedures for either the Geneva process or the Ministerial phase. His delegation believed that, among other valuable suggestions, Members might give some thought to this idea.

39. The representative of Morocco welcomed the initiative behind the paper in WT/GC/W/477. As this document was still under review in his capital, he wished to make the following preliminary comments. The paper would enrich the present debate at a time when Members were starting the preparatory process for the next Ministerial Conference and the process of negotiations. The paper

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asserted that the membership of the WTO was made up of a diversity of countries, interests, positions and points of view. This was a clear reality. The conclusion of the paper was a call for less rigidity, and more flexibility and pragmatism. This was a conclusion that his delegation supported. The paper contained positive elements that Members should make the best use of in the light of past experience. Morocco had always said that lessons should be learned from both failures and successes. In the history of the WTO there had been both successes and failures, and Members should not base their approach to future processes only on the successes, but should also reflect on and learn from the failures, with a view to not repeating them. The views in WT/GC/W/477 were not totally in contradiction with those in WT/GC/W/471. There were links that should be explored, and a synthesis of the two papers should be made with a view to finding the common ground between them. Every contribution on this issue should be encouraged, as even the most contradictory submissions would shed light on this issue and aid in addressing it. The submissions in both WT/GC/W/471 and 477 had the same goal, which was a successful Ministerial Conference in Mexico, and to make the preparatory process flexible, transparent, inclusive, without friction and satisfactory to all Members. As long as the objective was clear, even though there might be differences in tactics and approach between developed- and developing-country Members, it would be possible to achieve this objective. What was necessary was flexibility, political will and a longer-term global view. His delegation wished to be included in consultations on this matter.

40. The representative of Norway said that the communications in WT/GC/W/471 and 477 deserved very close attention and study because they addressed the problem from different perspectives. He agreed with Morocco that the two papers were complementary in style. In his delegation's view, both papers had their strengths and their weaknesses. He recalled that the overriding theme of the discussion in May of the paper in WT/GC/W/471 had related to flexibility, i.e. the need for flexibility as opposed to creating very strict rules, strict deadlines and so forth. That theme had been well picked up in WT/GC/W/477. His delegation had stated clearly in May that there should not be too strict rules which would entail a strait-jacket, but that, on the other hand, the call for flexibility did not mean there should be no guidance at all. There was a need for balance, and Brazil had made a very good point regarding the need for procedural predictability, i.e. some predictability in the way things would be done which would allow flexibility in addressing the substance. In his view, it was a question of including flexibility in how Members developed the substance, rather than in how Members would change from one system, structure or procedure to another.

41. The communication in WT/GC/W/477 had picked up on the flexibility which the General Council had been trying to implement since Seattle in order to develop its own accommodation and some understanding on what was needed – i.e., as Brazil had said, how to marry the old GATT and the new WTO. This was exactly what was at stake and what Members were trying to do. Regarding the process in Geneva in 2001 leading up to Doha, his delegation, for its part, had basically had very few grievances, if any, and it seemed that most delegations would say that the process had worked quite well. Australia, in introducing the paper in WT/GC/W/477, had said that Members should be very careful not to return to the sort of process that had produced a 30-40 page draft declaration before Seattle. Indeed, it would be catastrophic to go back to such a procedure. While there were obviously some things Members could improve on in the Geneva process leading up to a Ministerial Conference, Norway felt that Members now had, in the Geneva process, the sort of procedural predictability that Brazil had talked about.

42. Regarding how this applied to Ministerial Conferences, there were two points he wished to highlight. The first related to decisions on the structure for Ministerial Conferences and how the work during Ministerial Conferences should be concluded, because based on the most recent experience, Members might have the impression that the Ministerial Conference was owned by the host country. It had very much been left to the host country to decide, in co-operation with the Director-General, on the Conference's structure and how it should be organized. He was certain that Norway had not been the only delegation to find out only on arrival in Doha, how that Conference was going to be

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organized. The situation had been the same at Seattle two years earlier. Norway had not had a clear picture of the organizational structure of the Conference, and his delegation questioned whether that system was a good one. While the host country had of course to have a say on the structure and organization of the Conference, Norway agreed with the suggestion in WT/GC/W/471 that Members should decide on this, in co-operation with the host country and the Director-General, before they accepted another invitation from a Member to host a Ministerial Conference. Norway also questioned whether, as the main rule, Ministerial Conferences should not be held at the WTO's headquarters. This was not to say that Members should not take up an invitation for the Conference to be held elsewhere. However, Norway questioned whether this should be the main rule. This was the first point on which his delegation felt that perhaps some procedural guidance might be useful.

43. The second point related to what happened during the Ministerial Conference. In many ways, the Doha experience had been good for 90 per cent of the duration of the Conference, but what was somewhat striking in the paper in WT/GC/W/477 was that it talked about the entirety of the process in Geneva and the 90 per cent of the Ministerial Conference, but left out what had happened during the last 24 hours of the Doha Conference, which was not insignificant. His delegation did not have a solution to that problem, and neither, it seemed, did others. This had to be admitted and the problem looked at, because it seemed to his delegation that for part of the meeting in Doha, the WTO had perhaps ceased to exist, and the old GATT had been resurrected. Obviously, if Members were going to set up guidelines, these would have to cover the whole process, from the very beginning until the final Ministerial Declaration was adopted, and not leave out the 24 hours that were the most crucial. Having said this, Norway supported continuing consultations on this issue in order to take it further. In his delegation's view, the two communications provided a very good basis for refining the procedures even more than had already been done, and Members could, before the next Ministerial Conference in Cancún, have the sort of procedural predictability Brazil had mentioned.

44. The representative of Zimbabwe said that the submission of the paper in WT/GC/W/477 was a positive development in terms of Members engaging on this issue. There was now a basis to move forward and to start consultations on this issue. The issues raised in WT/GC/W/471 were quite fundamental, and the fact that other delegations had responded showed that, in this spirit, Members could improve the working systems within the WTO. The WTO was the Members' organization, and there was room for improvement. Members should not stick to the status quo if the latter did not suit the greater part of the membership. Zimbabwe agreed on the need for predictability. Members needed to have rules that would guide them in their work. Flexibility and informal rules would, in his delegation's view, lead to anarchy. It would be the rule of the jungle, whereby everything would depend on who was in the Chair. Rules did not have to be rigid or create a strait-jacket, as some had said, but would at least provide a road map or guidelines for whoever was hosting a Ministerial Conference. His delegation had seen situations in which the host of a Ministerial Conference did not know how to proceed, which showed the need to put procedures or a general outline down on paper. In certain circumstances, Members had found themselves in the hands of the Secretariat, which had made an interpretation of a particular situation. His delegation would feel more secure were the organization run on the basis of clear procedures. Such procedures needed to be established, and the papers submitted would form the basis for further consultations on this matter.

45. There were specific quotations in WT/GC/W/477 from the findings of Ambassador Bryn, as General Council Chairman, on internal transparency. However, those findings needed to be taken as a whole, because they clearly demonstrated the urgent need to ensure full transparency and envisaged further work, as suggested by the paper. Members needed to be more holistic in their approach, and not to select just a few of Ambassador Bryn's findings to support their own position. Australia, in introducing the paper, had talked about faith, but religious faith had to be based on belief, and faith in a system had to be based on a protocol of guidelines that could be relied on. The Chairman had a basis to take this process further, so that when Members arrived at Cancún, they would have something in place, and the rule of the jungle – where negotiations could continue until 5  a.m and

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people would accept this as normal – would not apply. There had to be guidance for Ministers on how to resolve such situations. The paper in WT/GC/W/477 praised what had happened in Doha, but included no mention of the objections made in Geneva by many delegations regarding the text that had gone to Doha, or that at the opening of the Conference, developing-country Members had objected to the process. This could not be ignored, unless the organization was to become power-driven instead of Member-driven. In Zimbabwe's view, the organization remained Member-driven.

46. The representative of Japan said that the importance of and the need for transparency in order to ensure predictability and the effective participation of all Members could not be overemphasized. At the same time, however, the imposition of excessively rigid rules on the negotiation process could compromise the process itself, to the point of thwarting efforts for the successful outcome of a Ministerial Conference. In this spirit, Japan welcomed the communication in WT/GC/W/477 and echoed the support for it expressed by previous speakers. Japan intended to participate in the further work on this matter.

47. The representative of South Africa welcomed the views in the communications in WT/GC/W/471 and 477 on the preparatory process and the negotiating procedures at Ministerial Conferences. Both papers reflected South Africa's concern to ensure that Members built a strong multilateral trading system that had the confidence and support of all its Members. His delegation wished to stress the following points. First, in the processes and procedures adopted, both for the preparatory process for and the conduct of Ministerial Conferences, Members should ensure the fullest possible transparency and inclusiveness. Second, negotiations would only result in a successful outcome if all parties were prepared at the end of the day to give up some of their high expectations and to be willing to take on board some onerous obligations. Thus, some flexibility in the process to enable Ministers to engage intensively and to make the hard decisions that were necessary was essential. Thus, in his delegation's view, some flexibility would be required to enable Ministers to make these compromises. However, Members should ensure that this was done in a spirit of inclusiveness and total transparency. South Africa supported the process the Chairman had embarked on and would continue to work with him to find a proposal acceptable to all.

48. The representative of Egypt recalled that Egypt was among the 15 delegations that had co-sponsored the communication in WT/GC/W/471. That document had outlined some practical difficulties encountered in the preparatory process for Ministerial Conferences and during those Conferences. It had also proposed some solutions or scenarios to avoid the recurrence of those difficulties in the future, particularly with regard to the next Ministerial Conference in Cancún and to ensure a smooth preparatory process. Although there had as yet been no opportunity to have informal consultations on these proposals, a new submission had been made by eight delegations in WT/GC/W/477, which her delegation welcomed, as this would help enrich the discussion. While her delegation would need more time to study the elements in the new paper, a quick reading of it gave the impression that there was an existing process for consultations. Unfortunately, this was not the case, although Egypt recognized the efforts and improvements made by the former General Council Chairman, Ambassador Bryn, to make the process more inclusive. The subsequent Chairman of the General Council, Mr. Harbinson, had also made similar efforts. However, there had been no decision by the General Council on any structure or method for the preparation of Ministerial Conferences, and thus no legal certainty that any structure would be implemented or followed. For this reason, among others, Egypt and the other co-sponsors had proposed specific modalities in their paper. The intent was not to be restrictive or inflexible. To the contrary, the paper called for inclusiveness and flexibility by all Members. Egypt remained ready to engage constructively in informal consultations on this issue, including on Bulgaria's submission, after the summer break, as the Chairman had suggested.

49. The representative of the Czech Republic said that this discussion was about how to combine efficiency and the effective participation of all Members in the preparation and conduct of Ministerial

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Conferences. It was also about Members' collective ability to deliver results in a timely manner and the need to engage all Members in consensus-building. The fact that the WTO was both changing and expanding made the process of consensus-building more complex. He had deliberately used the word "consensus-building" because the discussion, as his delegation understood it, was not about the manner in which Members took decisions in the WTO. No one seemed to want to change the principle of decision-making by consensus. What Members were discussing were certain practical and organizational measures to enhance inclusiveness, transparency and information flow. From his delegation's perspective, these measures should be of a fine-tuning character and should be drawn from the experience of the successful process leading up to, and including, the Doha Ministerial Conference, while taking account of further improvements in terms of greater transparency and inclusiveness that had occurred in the daily activities of the WTO since Doha. This was certainly not to say that everything was well in the WTO, or that there was no room for further improvement. On the contrary, he agreed that more work remained to be done, especially concerning the desirability of setting up, during the preparatory process in Geneva, any negotiating structures to deal with specific subjects at Ministerial Conferences.

50. Another issue which required further discussion was the role of the host country. The experience gained in Doha demonstrated that the host country could and should help to forge a consensus, and that the Chairs of the General Council and the Trade Negotiations Committee and the host country should play mutually supportive roles. However, like many other delegations, the Czech Republic believed that Members, when searching for additional procedural rules regarding the preparatory process for and the conduct of Ministerial Conferences, should make every effort to avoid putting themselves in a strait-jacket or subjecting themselves to unnecessary rigidity. The co-sponsors of WT/GC/W/477 were right in stating that in a Member-driven organization, processes needed to be kept flexible. Indeed, a certain amount of flexibility in the process was an absolute necessity if Members wanted to make Cancún a success. At the same time, Members should not lose sight of the fact that preparations for the Cancún Ministerial Conference would be somewhat different from the process leading up to Seattle, and also from the road map to Doha. The Cancún meeting would not be just about the future work programme, nor would it be about trying to launch a new round of negotiations. That Conference would have different objectives which would determine the nature of the process to be followed. Ministers had provided a time-bound mandate, and the Cancún Conference would be an opportunity to assess jointly the progress in the negotiations and to agree on how to channel the process onwards. Ministers in Mexico would also address a number of important decisions regarding modalities for negotiations in areas like competition, investment, trade facilitation and transparency in government procurement, and decisions concerning other elements of the Doha Development Agenda. It was apparent that this Ministerial Conference would be about negotiations that, at the end of the day, would result in new contractual obligations for Members. In this situation, it was more important than ever to ensure that the preparatory process and the conduct of the Ministerial Conference were truly transparent, inclusive and predictable. Members should hold no illusions about any Member's willingness to move unless it was reassured of being part of the decision-making process, and that its voice had been properly heard. His delegation supported consultations by the Chairman after the summer break, and would comment then in more detail on a number of points that had been raised in the discussion to date.

51. The representative of Indonesia recalled that Indonesia was one of the co-sponsors of the paper in WT/GC/W/471. Her delegation appreciated the discussions that had taken place and the interest Members had shown both in the paper and in the issue. In this connection, her delegation wished to thank Bulgaria and the group of countries who had submitted the paper in WT/GC/W/477 for having submitting papers reflecting their views on this issue. Indonesia believed that these papers would stimulate further discussion on this issue. In preliminary comments on WT/GC/W/477, she said that Indonesia shared some of the views expressed in the paper, in particular that the WTO's expanding membership and the wide differences in delegations' capacities had practical consequences for the preparatory process for Ministerial Conferences and the negotiations in the WTO, and that the

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principle of WTO decision-making by consensus had to be maintained. However, Indonesia was a little dismayed by the conclusions offered in the paper. In Indonesia's opinion, the existence of a diverse membership capacity and interest in the WTO further highlighted the need for some clear basic principles and procedures for the decision-making process, as well as for the preparatory process and negotiations. Her delegation did not see the connection between having clear basic principles and procedures for the decision-making process, and creating circumstances that would hamper the principle of decision-making by consensus, as mentioned in tiret 1 of the conclusions in WT/GC/W/477. In Indonesia's view, such principles and procedures would in fact ensure the effective participation and inclusiveness of all Members. While a prescriptive and detailed approach might not be the best approach, Members should not sacrifice the principle of total transparency and inclusiveness for the sake of being flexible. In this regard, Indonesia agreed with Norway that being flexible did not mean there was no need to ensure transparency and inclusiveness.

52. Regarding the argument in tiret 2 of the paper's conclusion that “In a Member-driven organization processes need to be kept flexible. We need to avoid rigidities", Indonesia disagreed with this conclusion and felt there was a basic misunderstanding of the concept of a Member-driven organization. In Indonesia's view, the basic meaning of a Member-driven organization was that any issues to be raised, discussed or negotiated in the WTO had to be initiated by the Members. This had nothing to do with being flexible. Therefore, Indonesia strongly believed that laying the foundation of basic principles and procedures to ensure predictability and certainty in the preparatory process and negotiations did not detract in any way from the concept of a Member-driven organization. Her delegation had the same understanding with regard to Ministerial Conferences taking up unresolved issues that could not be settled in Geneva, and was of the strong opinion that any issues to be decided and resolved by Ministers had to be previously agreed by all Members. Furthermore, considering the short time over which Ministers met at each Ministerial Conference, the issues that Ministers took up at those Conferences should be limited to those that reflected the priorities and interests of the entire membership. In conclusion, she stressed the urgent need to have clear guidelines, especially for preparations for the Cancún Ministerial Conference. Her delegation stood ready to welcome and discuss any constructive proposals in order to achieve this objective.

53. The representative of Thailand said that the objective of having a preparatory process in Geneva was to assist Ministers in arriving at consensus at Ministerial Conferences. Thailand agreed that too prescriptive and detailed an approach to the preparatory process might be counterproductive, with unnecessary delays or procedural hurdles, and that the process should be kept flexible. The preparatory process for the Cancún Ministerial Conference might require a different approach from the previous one. However, his delegation believed that there should be some appropriate principles or guidelines for the process to follow. The preparatory process had to be inclusive, transparent and predictable. Open-ended consultations should be standard practice. Whenever it was necessary to have small-group consultations, the results of these should be reported to open-ended meetings at the earliest opportunity. From its past experience, Thailand tended to agree with some of the suggestions made in WT/GC/W/471, for example, that the agenda for the Ministerial Conference should be agreed in Geneva before being forwarded for adoption to the Ministerial Conference, in order to avoid unpleasant surprises.

54. Reaching consensus at the Ministerial Conference was the prime objective, but not at any cost. Members should be given opportunities to express their views and to participate in open-ended consultations. Members who were not included in small-group consultations should be informed of developments immediately after such meetings. They should be able to raise their concerns at an open-ended meeting before a conclusion was reached at a formal meeting. In addition, Thailand agreed with the proposal to have the draft agenda for the Conference adopted at the first formal plenary session, and not at the ceremonial opening session. While Thailand was attracted to the ideas in WT/GC/W/477 that focussed on the flexibility that was necessary to achieve consensus among Members, at the same time it favoured the positive elements on basic principles and guidelines

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provided in the paper in WT/GC/W/471. His delegation expected that there would be additional suggestions and proposals from other Members during the consultations on this issue, and hoped to arrive at the best compromise solution well before the next Ministerial Conference.

55. The representative of Hungary said that this was a very important question because of the recognized need to ensure full participation and a sense of ownership for all Members of the organization. The discussion thus far seemed to show that this was not a North/South issue. The various views, which went in a similar direction, were evenly distributed among the developed and developing countries and, for example, there were a number of developing countries among the co-sponsors of WT/GC/W/477. Hungary recognized that there were positive intentions behind all of the papers submitted. The paper in WT/GC/W/471 contained many positive thoughts and very commendable goals. The question was to what extent they were achievable. Clearly, as was pointed out in sub-paragraph (v) of that paper, it would be better if any draft declaration was clear and unambiguous and could be based on consensus. Hungary would also agree that the work in Geneva should be completed to the maximum extent possible. These were very positive intentions, but experience thus far had shown that, more often than not, this was impossible, simply because the WTO was an organization with a large number of Members with very distinct economic interests, and it was extremely difficult to find common approaches and common interests on controversial issues. The Geneva-based process was important, but it was not the end of the road. There was a higher-level political process, in the form of the Ministerial Conference, that followed the Geneva process. The question was what could or should be done to solve the well-known contradiction between transparency and participation on the one hand, and flexibility and efficiency on the other. The General Council's discussion in 2000 that was referred to in WT/GC/W/477 had provided some ideas. However, this might not be sufficient, and Members might have to work further on the details.

56. His delegation wished to note two issues that had come out of WT/GC/W/471 and which, he was sure, had been unintended, but which might still give some cause for concern. First, the proposal seemed to have a basic lack of content regarding the present process and the need for basic changes or reform. Members had to recognize the important progress that had been made since Seattle in the pre-Doha process and even during the Doha Conference. While no one would say that this process had been perfect, there had very clearly been major improvements, and Hungary was not sure whether the proposals to make the process extremely regulated and prescribed – even micro-managed – would be feasible and would achieve the intended goal. There was another, and more problematic message in this document, which was the relationship between the Geneva-based process and the role of Ministers and the Ministerial Conference. When his capital had read WT/GC/W/471 it had had an uneasy feeling that there was some kind of – no doubt unintended – message of patronizing Ministers. Ambassadors in Geneva were, after all, executing policy and not making policy. The policy-makers were governments and Ministers, and when Ministers came together for a high-level meeting, it was not clear to what extent they needed an extremely detailed prescription from Ambassadors. His delegation would not like to be put among those officials who treated their Ministers in a patronizing way. Members had to think in a serious manner about the extent to which it was advisable to micro-manage by procedural rules the clearly political process that took place at Ministerial Conferences, and whether too much in this case would not perhaps translate, in the end, to too little in the outcome. In conclusion, his delegation felt that the concerns in all of the papers were valid. A number of good ideas had been raised. His delegation had noted, among others, the proposal by Brazil on the possibility of a senior officials meeting prior to a Ministerial Conference. There might also be other issues that could be discussed, and Hungary was ready to work on this. However, as he had said, it would be important not to lose sight of the basic objectives of this work and the basic role of Ministerial Conferences.

57. The representative of Korea said his delegation agreed that both the preparatory process and the conduct of Ministerial Conferences should be transparent, inclusive and predictable. Korea sympathized with the co-sponsors of the paper in WT/GC/W/471 on some points that had been raised.

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However, as his delegation had stated at the May General Council meeting, the flexibility and efficiency of WTO activities, and the practicability of formulating any guidelines, should be emphasized as well. In this regard, Korea had co-sponsored the paper just introduced by Australia. On specific points, his delegation did not have much to add to Australia's statement, but wished to emphasize that when Members sought to reach a consensus on certain items, the snowball effect was quite useful, rather than a flat discussion. Any guidelines that were developed should be very general, should not set out too specific procedures, and should not be overly prescriptive. His delegation looked forward to a constructive discussion on this matter.

58. The representative of the European Communities said he had noted with much interest Australia's presentation of the communication in WT/GC/W/477, and agreed with most of what Australia and the other co-sponsors had said during this discussion. However, this did not mean that the Community would disagree with most of what was suggested in WT/GC/W/471. In fact, the two documents were complementary. All agreed on the paramount need for internal transparency and inclusiveness, on which he believed significant progress had been made. Members should continue to follow up on their best practices, to build on the positive experiences and to put trust in the chairpersons of the General Council. His delegation agreed with previous speakers that one should avoid being overly prescriptive, should be sufficiently flexible and should avoid strait-jacketing the process. It also agreed that one should allow sufficient room for manoeuvre for chairpersons of negotiating groups and, more particularly, for the Chair of the General Council. Members had to put their trust in the system and in those whom they had tasked collectively to guide their work. Regarding the role of the host country, Qatar had been a good experience, and he was certain that Mexico would match this performance. The Community remained open-minded about setting additional guidelines as suggested by a number of Members. It had also taken note of the interesting suggestion by Brazil regarding a possible senior officials meeting. However, all of these guidelines should help Ministers to reach decisions, and not render the decision-making process more cumbersome or complicated. The overall process should contribute to a balanced overall result for all Members. In this spirit, the Community would constructively participate in any consultations the Chairman might wish to conduct.

59. The representative of India said that, along with other delegations, India welcomed the paper in WT/GC/W/477. His delegation considered it to be an important step forward and an attempt to engage in serious discussion of a subject which 15 Members had introduced at the May meeting of the General Council. The discussion at the present meeting had shown that the objective of all delegations was the same – to ensure the success of the Cancún Ministerial Conference by finding consensus within WTO processes and delivering on the Doha mandate. As the co-sponsors of WT/GC/W/477 had indicated in their paper, Members had a huge task before them. There was a large amount of work to do in a limited time, some of it involving issues on which there were divergent views. The key to success, in India's opinion, would lie in creating a degree of comfort among all delegations. This would necessitate creating a certain predictability in the process, ensuring that Ministers knew the agenda for the Ministerial Conference, the issues on which they would need to take decisions, the format within which deliberations would take place, the manner in which decisions would be taken, and how inclusiveness and transparency would be ensured. There would be a manifold increase in the chances of success at Cancún if Members were able to create confidence among all delegations in the preparatory process and at the Ministerial Conference itself.

60. He said that all delegations recognized the need for flexibility. The important point was not the concept of flexibility itself, but the manner in which such flexibility was exercised. Flexibility should be exercised, and should be seen to be exercised, in a fair, objective, transparent and inclusive manner. The parameters within which flexibility would be exercised and the manner of exercising such flexibility should be defined, so that the requisite level of comfort and confidence was attained. No delegation should ever have the feeling that flexibility was being exercised in such manner as to drive a particular, predetermined agenda, known only to a select few delegations. This would not

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detract from flexibility or pragmatism. On the other hand, it would add credibility to the system and build confidence in it. Members should not forget that they were engaged in the task of formulating virtually inflexible rules and rigid commitments enforceable through a dispute settlement mechanism. There had to be a certain degree of predictability in the procedures leading to these rules and also to these commitments. Members should also not presume that the outcome of Doha necessarily justified the Geneva process that preceded it or the procedures at the Ministerial Conference itself. The Doha Ministerial Conference had taken place in a particular historical context; Cancún would take place in another context. Doha had laid a framework for a work programme; Cancún would endeavour to flesh out this framework. Even the Doha framework had many holes in it. The fact that the mandate was not clear and explicit in all aspects was evident from the time and resources delegations were spending in Geneva debating the meaning of certain decisions. His delegation believed that at the Cancún Ministerial Conference, Ministers would demand a much higher degree of precision in the final draft, as serious commercial and developmental interests would be at stake.

61. He also wished to comment on a point made by Hungary at the present meeting. It was not the intention of India or of any other Member who had co-sponsored the paper in WT/GC/W/471 to be patronizing towards, or limit the role of, Ministers. The document in WT/GC/W/471 had not been drawn up by 15 Ambassadors in Geneva, but in fact represented the views of 15 governments and 15 trade Ministers. It was an attempt to contribute to a constructive discussion of this subject. It was important that Members saw the multilateral trading system as an evolving process. In this context, he wished to recall the statements by Australia, Chile and others at the present meeting that no system was perfect and that every system could be improved. Members would, therefore, need to constantly re-evaluate the system to improve it and to make it more effective, more inclusive, and more capable of fulfilling the expectations of all Members. His delegation also wished to support the suggestions by Bulgaria in WT/GC/W/422. Changes in the system would need to be reflected in the rules of procedure, and Bulgaria had made an important contribution to strengthening the rules of procedure in order to make them more transparent. His delegation was also attracted by Brazil's idea regarding a preparatory committee of senior officials prior to the Ministerial Conference. This idea should be seriously discussed during the Chairman's consultations. India requested the Chairman to engage in further consultations on this important subject on the basis of the papers in WT/GC/W/471, 477 and 422, the discussions that had taken place in the General Council in 2000, and the views expressed by delegations at the present meeting. India attached the highest priority to a decision on this matter before the next Ministerial Conference.

62. The representative of the United States said that at the May meeting her delegation had spoken to the proposal in WT/GC/W/471 and had agreed with the over-arching goal identified in that paper. The preparations for Ministerial Conferences and the Conferences themselves should be transparent, inclusive and predictable. She would not comment at the present meeting on the paper in WT/GC/W/477, which her delegation believed represented a thoughtful assessment of the elements necessary for a preparatory process that could facilitate a successful Fifth Ministerial Conference in Cancún. Her delegation concurred with the proponents of that paper that the practical points outlined in Section V had to be taken into consideration when making decisions on the format of the preparatory process. It also agreed with the conclusions that were drawn in the paper, such as that prescriptive and detailed approaches would not create the best circumstances for consensus, that processes needed to be kept flexible, that current processes on internal transparency and the effective participation of Members should continue and that room should be left for the Ministerial Conference to take up the issues that called for resolution at Ministerial level. Most importantly, these guidelines would help Members achieve their ultimate goal of consensus in the negotiations.

63. The representative of Jamaica, recalling that Australia, in introducing the paper in WT/GC/W/477, had asked Members to show faith in the system, said that Jamaica was prepared to show faith, but would stop short of showing blind faith in this or any other system. His delegation believed that all could accept that change and improvement in rules and procedures were desirable

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and should be sought. Thus, criticism had to be examined seriously. This would help Members move continuously towards rules and procedures that, as far as possible, safeguarded the interests of all Members. Jamaica was grateful to the co-sponsors for having put forward their ideas in WT/GC/W/477, because they believed that, at the very least, it would contribute to a process of critical analysis that was necessary. However, Jamaica hoped that the discussion would not proceed on the basis of polar extremes, such as over-prescriptiveness, strait-jackets and rigidities, as these were not the intention, nor should they be. One spoke often of the uniqueness of the WTO, but the WTO was not unique as an institution or as an organization in needing to balance procedural certainty and predicability with the need for flexibility and the need to take account of different circumstances and different situations – in the present case, as they related to Ministerial Conferences.

64. Jamaica was a great supporter of flexibility. It had emphasized the importance of flexibility and recognized its value and usefulness, not only in terms of organizational and procedural matters, as some seemed to, but also in terms of obligations and application of substantive rules. Thus, his delegation had absolutely no difficulty with flexibility and had been consistent in being able to see its merit, both in terms of process and substance. Jamaica believed there remained difficulties with the organization and conduct of Ministerial Conferences that needed to be recognized and addressed. His delegation was prepared to put faith in Members' collective capacity to examine the experience thus far with Ministerial Conferences, and to examine critically the three papers submitted and possible remedial measures. He wished to clarify that it had not in any way been the intention of his delegation to diminish the involvement of Ministers in Ministerial Conferences. To the contrary, Jamaica had thought that the quality and scope of their involvement could be improved in ways that would enhance rather than diminish their involvement, and raise the level of that involvement both in terms of numbers and in terms of Ministers' capacity to make desired inputs that were necessary.

65. The representative of Canada said that as a co-sponsor of WT/GC/W/477, Canada associated itself with the statements by Australia and Chile. His delegation wished to reiterate that as a Member-driven organization, one of the most important features of the WTO was the role of Ministers, as set out in Article IV of the WTO Agreement which provided authority to Ministers to take decisions on all matters under any of the multilateral trade agreements. This Ministerial direction was essential to ensure the political impetus that Members were required to live up to and to advance their trade liberalization agenda. In order for Ministers to carry out this mandate, Canada believed that Members had to maintain flexibility as well as transparency, predictability and inclusiveness in the preparatory process for Ministerial Conferences. His delegation wished to thank New Zealand for its work in the preparation of the paper that Canada had jointly submitted with other delegations, and would be pleased to participate in any process of consultation which the Chairman deemed appropriate to advance this issue.

66. The representative of Switzerland said that as a co-sponsor of WT/GC/W/477, his delegation clearly supported the statement by Australia introducing that paper. His delegation had read with great interest the paper in WT/GC/W/471 submitted by a group of 15 other Members, and had found many interesting points that merited reflection. However, the approach of the co-sponsors of WT/C/W/477 was not fully in tune with that of WT/GC/W/471, which was why they had felt it necessary to make the dialogue easier by putting this matter back into a more appropriate context. His delegation wished to underscore several points. The first was that Members were faced with a new situation each time there was a Ministerial Conference, as each Conference was clearly of a different nature and scope from the previous or future one. This fact could not be ignored. Therefore, Members had to try to reduce to a minimum the procedures and mechanisms for Ministerial Conferences. Regarding the management of Ministerial Conferences, there were two different constraints, which were not very different from those in the General Council. One was the increase in the number of WTO Members, and thus an increased diversity in the individual positions taken. This had already led Members to work within an evolving process of procedural adaptation. Members had

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learned from past experience, be it before or after Doha, and the various documents and understandings that had been developed in the past few months confirmed this readiness to adapt.

67. There seemed to be a fairly broad consensus, if not unanimity, on the concepts of transparency, inclusiveness and predictability. However, there were differing assessments, as some felt there was incongruity between the concept of flexibility and these latter three concepts. His delegation, however, believed that flexibility would make it easier, both in individual cases and generally, to achieve transparency, inclusiveness and predictability. Switzerland agreed entirely with Brazil's suggestion to beware of the temptation to put the process into a strait-jacket and to engage in a type of micro-management that would not be positive for preparing Ministerial Conferences. Recent experience had shown the importance of the individuals and bodies in charge of the process – the Chairman of the General Council, the Chairman of the TNC and the Director-General as head of the WTO Secretariat. Experience had also shown that the limited flexibility they had – limited because it was linked to an ongoing dialogue with all Members – had been very positive in the preparations for Doha. Members should continue to maintain and recognize the specific role played by the governing bodies of the WTO, and the importance of the ongoing dialogue between Members and those governing bodies. Finally, he stressed that the entire process that was being examined should have a very clear goal, which was to make it easier for Ministers to take decisions at Ministerial Conferences, and not simply to transfer to Ministers the problems that delegations had not been able to solve in the General Council or in other WTO bodies. His delegation agreed with the comment by Hungary that Ministers wanted to play their own role – as he had witnessed this with his own Minister several times – and this should be kept in mind regarding questions of organization and management of Ministerial Conferences.

68. The representative of Mexico said that since his Government had the responsibility for organizing the Fifth Ministerial Conference, it was particularly interested in ensuring the best conditions for a harmonious, productive, inclusive and effective Conference that would allow Members to provide impetus to the work started in Doha. Mexico would accept any proposal coming from the General Council, and he expressed his delegation's appreciation in advance for all of the proposals that might be made. His delegation wished to highlight certain points that were particularly relevant for it in the paper in WT/GC/W/477 which Mexico had co-sponsored. For Mexico there were three basic aspects of the preparatory process for and conduct of Ministerial Conferences. These were transparency, flexibility and trust. Transparency was necessary in order to ensure active participation by all Members, to maintain a continuous flow of information and a free exchange of points of view, and to facilitate the analysis and internal decision-making of each Member. Flexibility was necessary in order to adapt to circumstances which were usually changing, to maintain freedom of movement, and to give Ministers the space they needed to take decisions. Trust was a vital condition if Members were to cooperate efficiently throughout the entire process. There was a lot of work ahead if Members were to achieve the objective of concluding the negotiations before 1 January 2005. There was no doubt that it was very important to lay down suitable procedures that would set standards for Members' actions. However, he had no doubt that what would truly determine the success or failure of the negotiations would be the substantive work – in other words, proposals, debate and the agreements Members would reach in the two and a half years ahead.

69. The representative of Pakistan, recalling that Pakistan was a co-sponsor of the paper in WT/GC/W/471, said his delegation welcomed the submissions in WT/GC/W/477 and 422 and looked forward to having detailed discussions on this important subject. His delegation would examine the submission in WT/GC/W/477, and welcomed consultations in order to arrive at common acceptable principles for the preparatory process. Some interesting points had been made by Brazil and Norway, especially about the last 24 hours of a Ministerial Conference, as pointed out by Norway. It was encouraging to note that delegations found merit in the paper in WT/GC/W/471. There was no denying the fact that procedures were required for the preparatory process and for the Ministerial Conference, and the paper submitted by the 15 delegations was proof of this need. Regarding the

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statement by Hungary that the paper was patronizing to Ministers, Pakistan wished to reiterate what had already been stated by India, namely that the joint submission was an outcome of the views of the respective Ministers, and that Ambassadors in Geneva had acted on their behalf. There was a need to have rules and guidelines, and Pakistan hoped that the consultations proposed by the Chairman would result in a positive outcome.

70. The representative of Kenya said that while his delegation agreed with document WT/GC/W/477 that finding consensus on the Doha mandate remained a challenge, it did not share the view that because of the large number and diverse membership, forming consensus was difficult and time-consuming. What created difficulties and was time-consuming for the membership was a decision-making process that did not include all of the Members. Kenya did not share the view that the results of the Doha Conference confirmed a successful preparatory process in Geneva. Members had been successful in Doha, but the process had not been right. While the process in Geneva might have been transparent and all-inclusive, the results of that process had not been reflected in the Chairman's text that was sent to Doha. Kenya therefore agreed with delegations that had stressed the need for the process to be Member-driven and to produce results that reflected Members' views. This was one reason, among others, that 15 Members had proposed improvements to the process both in Geneva and at Ministerial Conferences in WT/GC/W/471, which her delegation believed formed a good basis for future consultations. Kenya welcomed the proposal by Brazil to hold preparatory meetings of senior officials before Ministerial Conferences. This was a very good idea that should be explored further.

71. The representative of Malaysia said that his delegation welcomed the contribution in document WT/GC/W/477 as another important input on this issue. Malaysia saw the paper as an opportunity for Members to offer suggestions to improve the preparatory process and also to understand each others' position on the matter at hand. Malaysia agreed with the co-sponsors of WT/GC/W/477 that the process instituted after the Seattle Ministerial Conference had been by far a vast improvement. It had served the membership well and had also paved the way for a relatively satisfactory process prior to Doha. However, this did not mean that the process could not be improved upon, especially in the light of experience gained prior to and at Doha. Malaysia sincerely believed that there had been instances at the Doha Ministerial Conference that made it necessary for Members to consider certain changes to the current procedures, as well as to fine-tune some aspects to ensure that transparency and inclusiveness were not sacrificed for political expediency. There had never been any disagreement that flexibility was necessary. While his delegation agreed that the process should not be strait-jacketed, it also believed that over-flexibility could have adverse effects. Hence, Members needed to find a balance that ensured that flexibility did not provide a "carte blanche" that could be used to disadvantage some Members. In short, what was needed was procedural predictability. Members should strive to find a balance between general and detailed procedures.

72. The representative of Singapore said that as a co-sponsor of the paper in WT/GC/W/477, her delegation fully endorsed Australia's statement introducing the paper. Singapore wished to reiterate further several points. The starting point for Singapore's overall position was guided by the Marrakesh Agreement of 1995, in which Ministerial Conferences were given full powers under the Agreement to "carry out the functions of the WTO and take actions necessary to this effect." Ministerial Conferences also had the "authority to take decisions on all matters under any of the multilateral trade agreements." The key to achieving this objective was to provide Ministers with the flexibility and manoeuvrability that would allow them the space to take the necessary political decisions at Ministerial Conferences. One should therefore not have prescriptive rules that would straitjacket the preparatory process in the run-up to the Ministerial Conference and at the Ministerial Conference itself. Members' overall decision-making process should be kept flexible and pragmatic.

73. The paper in WT/GC/W/477 had been developed based on experiences gained from past Ministerial Conferences – the failure at Seattle and the success at Doha. Following the failure at

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Seattle, Members had pursued a flexible preparatory structure that had led to the success at Doha. In particular, Singapore saw the following strengths of the present system: In the run-up to Doha, the General Council Chair had undertaken a combination of formal and informal processes, with open-ended and small-group meetings that had allowed for the flow of information and an outcome of consultations between small groups and the entire membership. This process had enabled the Chairman of the General Council to produce a draft declaration that encapsulated the sense of the entire membership. Members should continue to give the General Council Chair the flexibility to submit a document to the Ministerial Conference that did not contain a compendium of issues with a host of square brackets. To do otherwise would be a recipe for disaster, as had been the case in Seattle. Members had made significant progress on internal transparency, inclusiveness and predictability. They should therefore build on the good experience of the pre-Doha preparatory process. At the Ministerial Conference proper, it was paramount that Members recognized that Ministers attended Ministerial Conferences to work out the final political details and compromises in order to reach an outcome. Ministers were not acting as rubber stamps at Ministerial Conferences. The successful Ministerial process at Doha, together with the key role played by the host Minister, had achieved a compromise outcome that had launched the Doha Development Agenda. Members should therefore avoid paralyzing the process at future Ministerial Conferences by putting in place rigid rules to micro-manage Ministers. Her delegation looked forward to working closely with the Chairman in any consultations he might conduct on this subject.

74. The representative of Chinese Taipei said that his delegation wished to pay tribute to all Members who had contributed to the discussion on this topic. It seemed that the core issue was to strike a balance between maintaining the effectiveness of Ministerial Conferences and ensuring the transparency of all negotiating procedures. His delegation believed that it was Members' common goal that the preparations for Ministerial Conferences, and the Conferences themselves, should be transparent, inclusive and predictable. While sharing some of the remarks made by previous speakers, his delegation invited Members to consider the following three aspects of this issue: First, in such a wide-ranging negotiating forum, there was always ample room for further improvement in the preparatory process for and the conduct of Ministerial Conferences. However, as mentioned by many delegations, the effort undertaken after Seattle had been quite encouraging, including the great success in Doha. Therefore, the course for enhancing transparency, inclusiveness and predictability had been set. His delegation would therefore suggest allowing the process to run its course, since Members were more or less on the right track. Second, all understood that the core functions of the WTO were to serve as a negotiating forum, to develop trade rules and to provide a dispute settlement mechanism. While it was imperative to enhance internal transparency and to promote effective participation of Members, the maintenance of efficient WTO functions should remain a top priority. Third, given that the next Ministerial Conference was approaching in September 2003 and that there were serious delays on most topics mandated by the Doha Declaration, it seemed to his delegation that the time-limit should be a serious concern, as Members continued to engage in a time- and energy-consuming discussion. In conclusion, his delegation believed that it would be appropriate to maintain the status quo and to try to improve the existing process as much as possible. The intention to improve the process should not become, in itself, another potential problem. All understood that in the WTO, it was by no means easy to develop a perfect solution that met the needs and aspirations of each and every Member. What was needed at present was to stay the course and try to improve the process as the occasion arose.

75. The representative of China said that his delegation joined others in welcoming the papers in WT/GC/W/471 and 477, as well as the paper by Bulgaria in WT/GC/W/422. These submissions formed a good basis for thorough discussions in preparation for the next Ministerial Conference. His delegation believed it was very important to draw on the good experiences and lessons from Seattle and Doha, and to ensure the smooth running of the Cancún Conference. While it was important to have flexibility, there was a need for certain guidelines in order to guarantee the principles of transparency, inclusiveness and predictability. China believed the paper WT/GC/W/471 provided

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some good elements for consideration – for instance, the proposal that "any new draft on specific issues should be circulated to all Members well in advance so that Members have sufficient time to consider them". This and other proposals in the paper provided a good basis for further discussion. His delegation fully supported the proposal by Brazil that preparatory meetings of senior officials be held prior to Ministerial Conferences. China believed that this kind of meeting would be conducive to the success of Ministerial Conferences. His delegation would study further the three papers and would take an active part in the discussions aimed at ensuring transparency, inclusiveness and predictability of Ministerial Conferences.

76. The representative of Tanzania said that as a co-sponsor of the paper in WT/GC/W/471 Tanzania fully endorsed it. Tanzania also associated itself with the statements by Members of the Like-Minded Group. Her delegation emphasized that Members needed to establish clear guidelines for the preparatory process for Ministerial Conference so as to ensure a process that was transparent, all-inclusive and predictable. Her delegation would further study the submissions in WT/GC/W/422 and 477. Tanzania supported Brazil's proposal to convene a preparatory senior officials meeting prior to Ministerial Conferences.

77. The representative of the Philippines recalled that at the May meeting of the General Council, his delegation had subscribed to the general principles and approaches in WT/GC/W/471 as a starting point for discussions on an important issue in preparation for the Cancún Ministerial Conference. He could also endorse some elements of the paper in WT/GC/W/477 as a very useful basis for achieving some positive movement in the process towards Cancún. However, he wished first to comment on the question of faith mentioned by Australia. Faith to the Philippines was both a religious and temporal way of life. As a temporal experience, it was related to the saying that "Man proposes but God disposes." Thus, one had to work hard enough to merit the promise of God among a society of men with different pre-dispositions about the state of things in the world. In the course of this discussion, there had been many references to principles like transparency, flexibility, inclusiveness, procedural predictability, and fairness, to which all subscribed, versus rigidity and straitjacketing, which Members obviously rejected. However, the search was for the right and acceptable balance which all could agree to in guidelines, rules or operating procedures to serve as standards to make the Mexico Ministerial a truly successful, effective event in the evolution of the WTO process – something all could take ownership for, and not reject as an imposition in a setting clouded with uncertainty. Thus far, this balance had been elusive, but his delegation was pleased that Members were approaching it from the most candid and pragmatic point of view, using practical examples from their experience in Seattle and in Doha, and the useful inputs from those who were deeply involved in the Geneva process.

78. His delegation's objective was from the "outcomes" and not the "process" point of view. First, regarding the structure of the preparations in Geneva and the Ministerial Conference itself, given a transparent and all-inclusive process, outcomes of the Geneva process should be up to 90 per cent complete. To those insisting that this robbed Ministers of the exercise of political judgement, he said that Ambassadors in Geneva also got their mandates from their Ministers, and exercised nothing less than political judgment on most of the issues that were sensitive to domestic constituencies, and oftentimes the level of support for an issue in Geneva had to be accepted as such, and the issue not pushed to the Ministerial Conference for an altogether objectionable process in order to ensure its acceptance. He seconded Norway's question as to who really owned the Ministerial Conference if it was hosted outside Geneva. Given that Members were preparing decisions for Mexico on rules and market-access commitments, the paper in WT/GC/W/471 calling for clear and unambiguous language would be in order, and Chile's proposal for clarity and consistency in the legal texts of the decisions was also relevant here. In this connection, his delegation noted, for example, the statement in WT/GC/W/477 that "[f]inal judgments on the more intractable issues had to be made by Ministers in Doha on the basis of their assessment of overall balance." He said that if, by definition, these issues had been intractable in Geneva – for example, environment and the Singapore issues – what sort of

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balancing could have prevailed upon Ministers, had they all been part of the process, to cause them to change their positions? The answer was not the perception of balancing imposed on Members by a few developed countries – least of all the main proponents of this paper – in the final 12 hours of the deliberations. In fact, as it turned out, this experience had spoiled the balance of Members' current negotiating positions in Geneva. In terms of outcomes, one could expect that final decisions would receive the overall acceptance of Ministers, rather than frustration that after painstakingly shaping their country positions on the so-called intractable issues – negotiating with partners and allies – the outcome would be a rejection of their positions and of the legitimate interests of this group of countries. However, there were issues of a not such intractable nature which might need to be discussed by Geneva-based and capital-based negotiators, and these could well be addressed by Brazil's proposal for a senior officials meeting of two to three days between the General Council and the Ministerial Conference. This was a common practice in all multilateral meetings, and his delegation supported this proposal. Members were very candidly and positively engaged in making the Cancún process better than the previous ones, and he hoped that some of the experience and observations – in particular the outcomes experienced in the past – would guide Members to a better future.

79. The representative of Cuba said that the proposals submitted on this subject, together with the debate they had engendered, were a clear indication of the importance delegations attached to this issue, and proof that there were grounds for concern. The paper in WT/GC/W/477 recognized the major differences in delegations’ capacity to participate in Geneva processes. This was a reality which had to be taken into consideration. However, her delegation was of the opinion that this was not merely a procedural, but also a substantive aspect. Many delegations, in particular those from developing countries, encountered great difficulties both in participating and in ensuring that their interests were taken into account during such processes. Transparency was, for this very reason, particularly significant to Cuba. There was a need for effective participatory transparency so that all Members were familiar, by way of formal sessions and their official records, with the opinions of other Members on the issues under discussion, and were able to judge on which matters agreement had or had not been reached, and thus avoid making individual interpretations which merely served to hinder the process.

80. Her delegation's attention had been drawn by the reference in WT/GC/W/477 to the fact that "the preparatory process for the Fifth Ministerial Conference will probably need to get under way from early 2003". Were Members therefore talking about a six-month preparatory process? Her delegation was of the opinion that the preparatory process was already well under way, since there were timetables to be observed, some within the next few days, and Cuba had no wish to embark on an intensive process at the very last minute. She wished to endorse the elements in the paper in WT/GC/W/477, which Cuba had co-sponsored, and which was designed to ensure the adoption of principles and procedures that would enable all Members, with no exceptions whatsoever, to prepare themselves appropriately for and participate in these processes, which would lead to a more viable and lasting multilateral trading system that met the needs of its Members. Given the significance of this issue, Cuba endorsed India’s suggestion that consultations open to interested parties be launched on the basis of the proposals submitted, so that the required procedures for the Fifth Ministerial Conference could be agreed upon sufficiently in advance.

81. The representative of New Zealand said that as one of the delegations that had participated in the preparation of WT/GC/W/477, that this initiative had been prompted by the important questions raised in WT/GC/W/471 by 15 delegations, on which the General Council had had an initial discussion in May. The approach in WT/GC/W/477 emphasized several things: the fact that Members had made a serious effort to identify and apply the lessons from the Seattle experience; the continuing validity of the work done in the General Council in 2000 under the then Chairman, Ambassador Bryn, which had been applied directly to the Doha preparatory process in 2001 and had provided an excellent framework for that process; and the fact that Members needed to be cautious

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about departing from that framework. In New Zealand's view, the 2001 Geneva process had worked well. New Zealand had had problems with some elements of the draft declaration that had emerged, as had all delegations. However, all things considered, he said it was not easy to see how one could have had a better basis for Ministers' work in Doha. The Doha process had likewise been a model in many respects, but as Norway had noted earlier, there had been a problem with the final 24 hours. Like many other delegations, New Zealand had been disconcerted at what had emerged and the lack of opportunity for input into that final process. His delegation did not have an easy solution to offer. However, part of the answer lay in comments made earlier by South Africa on the need for Members to limit their ambitions. The final paragraph of the paper made the point that much depended on Members' level of ambition and the force with which they pursued their objectives. Consensus would be possible only if individual Members were ultimately prepared to moderate their objectives and to take a broader view of where their interests lay. It followed that New Zealand was not convinced there were simple procedural solutions to this issue. However, his delegation was happy to be part of an effort to work with other delegations to see whether there were ways one could improve procedures and offer delegations more of the "comfort" that India had referred to.

82. The representative of Nigeria said that his delegation associated itself fully with the statement by Kenya. Nigeria believed that that statement contained positive elements and would assist Members in finding a process acceptable to all. It also welcomed the proposal by Brazil for a preparatory meeting of senior officials before Ministerial Conferences. This was an idea which should be further explored. Nigeria looked forward to working with the Chairman on this issue.

83. The representative of Hong Kong, China said that as a co-sponsor of the paper in WT/GC/W/477, his delegation endorsed what Australia had said on behalf of the group of co-sponsors. Despite the differences in the papers tabled and in the interventions made, all shared a common objective: to ensure that the process leading up to and at Ministerial Conferences was strong, predictable, inclusive and transparent. The differences among Members might have arisen from different perceptions of the Doha preparatory process and the lessons learned from Doha. His delegation agreed that the Doha process had not been perfect. As many delegations had said, there was room for further improvement. His delegation welcomed opportunities for engaging in further consultations in the autumn, as the Chairman had indicated. While it was not averse to developing some guidelines for the preparation and conduct of Ministerial Conferences, Hong Kong, China believed that such guidelines should be broad and flexible, and capable of taking into account the different needs of each Conference and the situation at the time. It was concerned that overly prescriptive preparatory and Ministerial Conference processes would discourage compromises and make delegations entrenched in their positions. There was also a risk, as some delegations had mentioned earlier, of some Members turning to informal processes outside the WTO. As his delegation had said at the May meeting, rigidity could lead to failure to deliver timely results in the organization. This could lead frustrated Members to turn even more to preferential trading arrangements. His delegation agreed with Switzerland that flexibility and the principles of transparency, inclusiveness and predictability were not trade-offs, and could be advanced in a complementary manner. Hong Kong, China was confident that in the forthcoming consultations Members would be able to find ways to promote these principles in parallel.

84. The General Council took note of the statements and agreed to revert to this item at a future meeting, and that the Chairman would hold consultations on this matter in the meantime.

6. Committee on Budget, Finance and Administration

(a) Reports of the Committee on its meetings of 15 April and 8 May (WT/BFA/58 and 59)

85. The Chairman drew attention to the reports of the Committee on Budget, Finance and Administration in WT/BFA/58 and 59.

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86. Mr. McMillan (United Kingdom), Chairman of the Committee on Budget, Finance and Administration, said that the Committee had met on 15 April and 8 May, the reports of which were contained in documents WT/BFA/58 and 59, as well as on 5 July, for which no written report was yet available. At its meeting on 5 July, and at an informal meeting beforehand, the Committee had looked at a number of recommendations from an independent consultant on the introduction of Results-Based Management in the WTO Secretariat. The Committee had agreed that the Secretariat would incorporate as many elements of the recommendations as possible in the 2003 budget proposals, and that it would monitor progress on objective-setting and reporting of outcomes. The Committee had also agreed to work further on the possibility of including in the 2003 budget an amount to set up an agreed termination scheme for WTO staff, using the existing provisions of the WTO staff regulations. With regard to the report in WT/BFA/58, the Committee recommended to the General Council that a pro rata contribution to the 2002 budget amounting to SwF 2,830,632 be assessed on the Government of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu. That assessment, calculated as from 1 January 2002, was based on an annual contribution of 1.992 per cent, taking into account the international trade figures – which were imports plus exports in goods, services and intellectual property rights – of Chinese Taipei for the years 1997-1999. The Committee also recommended to the General Council to assess an amount of SwF 171,449 on the Government of the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu as an advance to the Working Capital Fund.

87. The General Council took note of the statement, approved the Budget Committee's specific recommendations in paragraph 9 of its report in WT/BFA/58, and adopted the reports in WT/BFA/58 and 59.

(b) Statement by the Chairman of the Committee in relation to pledges announced and payments received to finance the implementation of the WTO Secretariat Annual Technical Assistance Plan (WT/BFA/SPEC/77)

88. Mr. McMillan (United Kingdom), Chairman of the Committee on Budget, Finance and Administration, recalled that at its meeting in December 2001, the General Council had approved the terms of reference of the Doha Development Agenda Global Trust Fund (DDAGTF), which was contained in the report of the Committee on Budget, Finance and Administration in WT/BFA/56. In particular, the General Council had approved a target of SwF 15 million for the DDAGTF for 2002, and that 100 per cent of this amount should be in the bank by the end of June 2002. Equally, the pledging conference held on 11 March had produced an unprecedented level of pledges from Members, as set out in WT/BFA/SPEC/77. At that pledging conference, donors had announced pledges totalling SwF 21.3 million to the DDAGTF for 2002 and a further SwF 4 million of earmarked contributions. This had been against a Secretariat estimate of the requirements of SwF 17.3 million. Since May, when he had last reported to General Council, the situation had improved dramatically and the June deadline had almost been met. As shown in WT/BFA/SPEC/77, the WTO had received a total of SwF 14.7 million by 25 June. Since then, new contributions of SwF 15,000 and US$20,000 had been received from Iceland and the United States respectively. This change over the past three months had been highly encouraging and he wished to thank all the donors who had helped to meet the target. He had also heard that a number of other contributions were expected to be remitted shortly. However, there were another SwF 6.6 million pledged for 2002 which had not yet been remitted. There was a very clear link drawn in the Doha Ministerial Declaration between availability of technical assistance and agreement to deal with the issues set out therein. The Secretariat needed these funds quickly if it was to deliver on a very ambitious plan on time. He therefore urged all the donors who had not yet done so to transfer their promised contributions as quickly as possible.

89. The representative of Japan said that his Government took pride in having managed to make a substantial contribution to the Global Trust Fund in addition to its contribution to the WTO regular

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budget. These contributions had come from hard-earned taxpayers' money, and his Government was held accountable for the way that money was used. As in the case of the WTO, the call for greater transparency and accountability was heard more frequently in Japan as well. Therefore, Japan wished to request that the Secretariat provide information on the use of the contributions, as well as on how effective each technical assistance mission had been in meeting its objective. This accountability was crucial for Japan's future contributions to WTO technical assistance.

90. The General Council took note of the statements.

7. Election of the Chairman, Members and Alternates of the Management Board of the WTO Pension Plan (WT/GC/W/474)

91. The Chairman recalled that Article 4 of the Regulations of the WTO Pension Plan (WT/L/282) provided for the establishment of a Management Board comprising, inter alia, a Chairman, four members and four alternates elected by the General Council. The term of office of the current membership of the Management Board had expired on 29 March 2002. Following consultations that had been held on this matter, he proposed that the General Council agree to the election of the following candidates, whose names had been submitted to Members in advance in WT/GC/W/474, to serve in these positions on the Board for a three-year term:

Chairman: Ambassador Mary Whelan (Ireland)

Members: Mr. Andrew Johnston (United Kingdom)Mr. Iba Mar Oulare (Senegal)Ms. Andréa Saldanha da Gama Watson (Brazil)Mr. Terry Collins-Williams (Canada)

Alternates: Mr. Mark Linscott (United States)Mr. Jean-Marc Mignon (France)Mr. Xiaodong Wang (China)Ms. Lai-Peng Yap (Malaysia)

92. The General Council agreed to the election of the above candidates to the Management Board of the WTO Pension Plan for a three-year term.2

8. Report on the evaluation of the Joint Integrated Technical Assistance Programme (JITAP) – Statement by the Deputy Director-General

93. The Chairman invited Mr. Ouedraogo, Deputy Director-General, to report on the meeting of the JITAP Common Trust Fund Steering Group that had been held on 25 June to discuss the evaluation report of two international consultants relating to the effectiveness of JITAP in building the human and institutional capacities of beneficiary countries and on its future direction.

94. Mr. Ouedraogo, Deputy Director-General, said that the JITAP Common Trust Fund (CTF) Steering Group was composed of representatives of the JITAP executing agencies (ITC, UNCTAD and WTO), representatives of the 13 donors contributing to the CTF (Austria, Belgium, Canada, Denmark, Finland, France, Germany, Ireland, Netherlands, Norway, Sweden, Switzerland and United Kingdom), as well as representatives of the eight partner countries of the programme (Benin, Burkina Faso, Côte d’Ivoire, Ghana, Kenya, Tunisia, Uganda and Tanzania). The CTF Steering Group also had a number of observer countries. The 25 June meeting had been dedicated to reviewing the findings, conclusions and recommendations of the Summative Evaluation Report (SER), the

2 The Decision was subsequently circulated as WT/L/474.

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management response and the joint proposal by ITC, UNCTAD and WTO with regard to the way forward, as the current phase of JITAP was expected to end on 31 December 2002. The SER had been presented by two international consultants, Mr. Leelananda De Silva (Sri Lanka) and Ms. Ann Weston (Canada), on behalf of the team of evaluators. The SER was based on their findings and field visits, and on eight reports by national evaluators that were specific to the participating JITAP countries. All consultants had been appointed by ITC, UNCTAD and WTO, and the evaluation process had been conducted on the basis of terms of reference agreed by the CTF Steering Group in December 2001.

95. The achievements of JITAP had been highlighted in five substantive areas: (i) human resource development; (ii) domesticating the multilateral trading system (MTS); (iii) policy development; (iv) infrastructure of trade; and (v) export strategy development, as a way of exploiting market access opportunities. The SER further took cognizance of the sustainable elements of JITAP, namely the inter-institutional committees, the reference centres, the development of cadres of trainers and trainees, and the creation of capacity for export-sector strategy development. The SER particularly acknowledged the contribution of JITAP to promoting a greater understanding of MTS issues in general, and of the WTO in particular, among the different stakeholders in beneficiary countries. The evaluators had pointed out that JITAP had helped promote a positive image of the WTO in beneficiary countries. The SER recommended that JITAP should be extended for a further period of three years, beginning in January 2003, and that a future JITAP should focus on three substantive areas: (i) developing capacities at the national level to discuss and elaborate on MTS issues; (ii) building human resources development capacities; and (iii) assistance to the development of export-sector strategies, focusing on supply-side issues. It considered greater emphasis on trade and poverty issues to be essential in these three areas. The SER also recommended that “the current cluster approach be replaced and that a radical overhaul” be operated “in terms of substance and in management systems.” The current eight beneficiary countries in Africa should continue to participate in JITAP for the next two to three years, but with their programmes on a smaller scale, with a view to consolidating work already undertaken. It was important to underline that in view of the great success generated by the Programme, 32 countries had submitted requests to join JITAP. In doing so, the Programme would cover almost all Africa. The SER established that “both conceptually and in practice, there is no conflict between JITAP and the Integrated Framework for Trade-Related Technical Assistance to Least-Developed Countries (IF). They are, indeed, complementary. A future JITAP has important opportunities for building close working relationships with the Integrated Framework Processes." The SER also made the following recommendations and remarks: (i) close links should be established with the IF at the country level; (ii) instead of the IF process and JITAP being in conflict or overlapping each other, they were mutually complementary and could indeed be supportive of each other; (iii) a future JITAP should place more emphasis on inter-country and sub-regional scales of activities, and the country coverage needed to be geographically contiguous; (iv) bilateral donors and multilateral agencies such as UNDP should buy into any one of the three broad areas of activity which had been defined as the substantive focus of JITAP for the future; and (v) the three agencies (WTO, ITC and UNCTAD) should establish a "Task Force to, inter alia, review the current JITAP model, make recommendations for a revised or a new model of Multilateral Trading System-Related Technical Assistance, and provide an outline of the main components of the next phase of JITAP."

96. After extensive discussions, the CTF Steering Group Meeting had taken note of the evaluators' report with the overall conclusion that JITAP made an important contribution to raising awareness and developing capacities in the beneficiary countries for managing their integration into the multilateral trading system. The donors had agreed to the request, submitted in early 2002, for extension of the current phase of the programme to end-2002. The CTF Steering Group had approved the joint recommendation presented by ITC, UNCTAD and WTO regarding the preparation of detailed proposals on successor arrangements to JITAP and had endorsed the establishment of an Inter-Agency Task Force (ITF) to take the process further in full consultation with all stakeholders,

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including donors and beneficiaries. The ITF would inter alia: (i) review the current model and the results of implementing the programme and draw lessons from the experience to date; (ii) lay down the process parameters for future programme development, on the basis of the Summative Evaluation Report and observations of the CTF Steering Group, and formulate recommendations for a revised, or new model, of Multilateral Trading System-Related Technical Assistance to underpin the successor arrangement for JITAP; (iii) elaborate various scenarios, both in relation to composition and delivery modality of such arrangement by the three Geneva-based agencies; (iv) make a realistic assessment of the financial resources needed and the likely availability of such resources for implementing a successor programme in the short and medium term, and rank the identified scenarios accordingly; (v) provide recommendations on an appropriate management structure and on the processes that should be used for efficient delivery of Trade-Related Technical Assistance by the three agencies, including oversight mechanisms, the needs of the three executing organizations to strengthen their capacity to implement and manage the successor arrangement of JITAP, and the modalities for delegation, decentralization and extensive use of subcontracting; and (vi) recommend mechanisms to ensure that the programme could be effectively coordinated and linked to other multilateral and bilateral initiatives in the field, including the Integrated Framework. The CTF Steering Group had taken note that a Management Meeting/Workshop would be held on 11-13 September 2002, with the participation of donors and beneficiaries. The meeting would consider the findings and recommendations of the Task Force and deliberate on the draft proposals for a successor arrangement, within a feasible and realistic framework. The Inter-Agency Task Force would present the detailed proposals for a feasible successor arrangement for JITAP to the Steering Group at its next meeting in October 2002.

97. He recalled that JITAP had been mentioned by name at the recent G-8 summit held at Kananaskis, Canada on 27 June 2002, where the Government of Canada had announced a contribution to this programme in the following terms: "Specifically, Canada will invest Can$7 million over three years in the Joint Integrated Technical Assistance Programme of the International Trade Center, the World Trade Organization and United Nations Conference on Trade and Development. The Programme is supported by thirteen donors, including Canada, and provides support to African countries so they can better participate in the multilateral trading system and take advantage of trade opportunities. Because of similar needs in many countries, JITAP can efficiently provide support and enable African countries to benefit from each other's experience." With this positive signal from Canada, it could be expected that other donors would follow Canada's example. In concluding, he noted that in their report the evaluators had stated that "JITAP has a claim to be the most high-profile technical assistance programme in the world." The atmosphere at the meeting among donors and beneficiaries had been very positive, indicating the necessity to undertake the second phase, in order to consolidate the current phase of JITAP in beneficiary countries, and also to enable other developing countries to benefit from the JITAP experience in the area of capacity building.

98. All delegations who spoke expressed appreciation to the Deputy Director-General for his report on the evaluation of the JITAP.

99. The representative of Canada recalled that at the G-8 Summit in Kananaskis in June 2002, Canada had announced its intention to invest Can$20 million over three years in three initiatives to help African countries identify export opportunities, produce new products in demand by export markets and build capacity, including by training personnel in African trade organizations. More specifically, Canada would invest Can$7 million in the next phase of JITAP, which would emerge from this recent evaluation. Canada looked forward to collaborating closely with the three agencies, with African partners and with other donors in the design of the second phase of JITAP.

100. The representative of Kenya said that as one of the beneficiaries of this programme Kenya welcomed its extension for another period of three years. JITAP would enable many developing

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countries, especially those in Africa, understand and be able to integrate fully into the multilateral trading system. In Kenya's case, since the programme was to be extended for another three years, more work would be done, especially on the inter-institutional committees, the reference centres, the communication discussion facilities and also the technical tools, especially those designed by the ITC, which could be used both for marketing strategies as well as for the current negotiations in the WTO. The joint operation of this programme by the three agencies offered one important way of making the multilateral trading system more acceptable to and more friendly in low-income developing countries, especially those in Africa, and Kenya in particular. In Kenya's view, a formal and sustainable arrangement should be put in place and one should start thinking of JITAP beyond the three-year extension. As stated in the report, the programme should focus on capacity development, multilateral trading system, human resources and export sector strategy development, since that was what trade was. Kenya hoped to see many African countries join this Programme, welcomed Canada's recently announced contributions to the JITAP and other programmes for Africa, and encouraged other donors to follow Canada's example.

101. The representative of Uganda said that the JITAP had been very successful in helping Uganda build capacity to integrate into the multilateral trading system. Like Kenya, Uganda also believed it was necessary to extend this programme with a view to consolidating, in particular, the work of the inter-institutional committees which brought together the various stakeholders within the nation interested in both export and the ongoing negotiations. Uganda had made it known to the three agencies that this was a priority for the country. Uganda wished to underscore that JITAP and the Integrated Framework were complementary though not necessarily the same, and that both aimed at mainstreaming trade into national development strategies. Both programmes could learn from each other. Uganda welcomed Canada's contribution and encouraged others also to support financially the extension of JITAP to other African countries. One important question indicated in the evaluation report related to building capacity on inter-regional cooperation, and this was vital in particular for the East African Cooperation Organization since in the short run, its members intended to have a common external tariff and negotiate jointly within the context of the WTO. Uganda hoped that the JITAP and other programmes would support regional cooperation efforts and strengthen the capacity of the East African Cooperation Organization in order to enable it to follow up on the negotiations. In concluding, he wished to express appreciation to the UNCTAD and the ITC, which had been cooperating with the WTO in offering technical assistance to Uganda.

102. The representative of Zambia said his delegation hoped that the next JITAP would strengthen the existing complementarity between the Integrated Framework and JITAP. Zambia welcomed donors for the financial support needed for JITAP, and particularly welcomed Canada's recently announced contribution. Zambia would also welcome the extension of JITAP to the 32 applicant countries, and in particular to the LDC African countries, and indicated its own interest in taking part in this programme.

103. The representative of Tanzania noted that her country was one of the beneficiaries of the JITAP, and welcomed its extension for an additional three years. Tanzania would also welcome the extension of JITAP to the other 32 applicant countries. Regarding the future JITAP, her delegation believed its focus should be on building capacity in beneficiary countries, in particular since the East African Cooperation Organization was in the process of building a customs union. Tanzania called upon the donor community to make contributions following Canada's example in order to make this a reality. As JITAP and the Integrated Framework were complementary and aimed at mainstreaming trade, Tanzania hoped that the international community would assist both programmes adequately.

104. The representative of Djibouti said that the JITAP could play an important role in all of Africa. Djibouti wished to congratulate all the countries which had contributed financially to JITAP, and in particular Canada which had recently also made available funding for different programmes in Africa. He hoped that other donors would follow Canada's example. His delegation also wished to

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express gratitude to the three executing agencies which had worked together and made these programmes available. He believed that other countries should be added to the list of beneficiaries, and noted that Djibouti had requested to be a beneficiary for a long time, to no avail.

105. The General Council took note of the statements.

9. Waivers under Article IX of the WTO Agreement

(a) Romania - Introduction of Harmonized System 2002 changes into WTO schedules of tariff concessions – Request for waiver (G/L/553, G/C/W/383)

106. The Chairman drew attention to the request from Romania (G/L/553) for a waiver for the introduction of Harmonized System 2002 changes into WTO schedules of tariff concessions, and to the related draft Decision (G/C/W/383).

107. Mr. Supperamaniam (Malaysia), Chairman of the Council for Trade in Goods, reporting on the Council's consideration of this request, said that at its meeting on 27 June, the Council had agreed to the request by Romania and had recommended that the draft Decision in G/C/W/383 be forwarded to the General Council for adoption.

108. The General Council took note of the report and, in accordance with the Decision-Making Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93), adopted the draft Decision in G/C/W/383.3

(b) Côte d'Ivoire - Customs Valuation Agreement – Request for waiver (G/C/W/301 and Add. 1 and 2, G/C/W/385)

109. The Chairman drew attention to the request from Côte d'Ivoire (G/C/W/301 and Add. 1 and 2) for a waiver from its obligations under the Agreement on Implementation of Article VII of GATT 1994, and to the related draft Decision (G/C/W/385).

110. Mr. Supperamaniam (Malaysia), Chairman of the Council for Trade in Goods, reporting on the Council's consideration of this request, said that at its meeting on 13 June, the Council had approved the revised waiver request in G/C/W/301/Add.2, and had recommended that the draft Decision in G/C/W/385 be forwarded to the General Council for adoption.

111. The General Council took note of the report and, in accordance with the Decision-Making Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93), adopted the draft Decision in G/C/W/385.4

(c) El Salvador - Customs Valuation Agreement – Request for waiver (G/C/W/372, G/C/W/388)

112. The Chairman drew attention to the request from El Salvador (G/C/W/372) for a waiver from its obligations under the Agreement on Implementation of Article VII of GATT 1994, and to the related draft Decision (G/C/W/388).

113. Mr. Supperamaniam (Malaysia), Chairman of the Council for Trade in Goods, reporting on the Council's consideration of this request, said that at its meeting on 27 June, the Council had approved El Salvador's request and had recommended that the draft Decision in G/C/W/388 be forwarded to the General Council for adoption.

3 The Decision was subsequently circulated as WT/L/477.4 The Decision was subsequently circulated as WT/L/475.

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114. The General Council took note of the report and, in accordance with the Decision-Making Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93), adopted the draft Decision in document G/C/W/388.5

(d) Least-developed Countries – Obligations under Article 70.9 of the TRIPS Agreement with respect to pharmaceutical products – Draft waiver (IP/C/W/359)

115. The Chairman drew attention to the draft waiver in IP/C/W/359 regarding the obligations of least-developed country Members under Article 70.9 of the TRIPS Agreement with respect to pharmaceutical products until 1 January 2016.

116. Mr. Perez Motta (Mexico), Chairman of the Council for TRIPS, said that at its meeting on 25-27 June, the Council for TRIPS had adopted a Decision on the Extension of the Transition Period under Article 66.1 of the TRIPS Agreement for Least-Developed Country Members for Certain Obligations with respect to Pharmaceutical Products (IP/C/25). In connection with this, the TRIPS Council had also approved a draft waiver in respect of the obligations of least-developed country Members under Article 70.9 of the TRIPS Agreement for the same period, i.e. until 1 January 2016, and had agreed to forward it to the General Council for adoption. As reflected in the recitals of the draft waiver, the TRIPS Council had considered that obligations under Article 70.9 of the Agreement, where applicable, should not prevent attainment of the objectives of paragraph 7 of the Doha Ministerial Declaration on the TRIPS Agreement and Public Health, and had noted that, in light of the foregoing, exceptional circumstances existed justifying the waiver. In connection with the approval of the draft waiver at the meeting of the TRIPS Council, he had noted that it was understood, in regard to the review foreseen in paragraph 2 of the draft waiver, that the exceptional circumstances justifying this waiver would continue to exist for least-developed country Members until its expiry date of 2016.

117. The representative of Zambia, speaking on behalf of the Least-Developed Countries, expressed appreciation to Members for their efforts to provide special measures within the Agreements in order to enable LDCs to use trade to raise their standards of living. It was through steadily growing volumes of real income and effective demand and expansion of the production of and trade in goods and services that LDCs would benefit. Member partners, both developed and developing, had recognized that LDCs had special difficulties that had to be taken into account when implementing the Agreement on TRIPS. The Agreement had made a special provision for LDCs in paragraph 1 of Article 66 which stated that "such Members shall not be required to apply the provisions of this Agreement, other than Articles 3, 4 and 5, for a period of 10 years from the date of application as defined under paragraph 1 of Article 65. The Council for TRIPS shall, upon duly motivated request by a least-developed country Member, accord extensions of this period." The language in Article 66.1 of the TRIPS Agreement was mandatory and unambiguous. The LDCs wished to remind the membership of this provision in order to clarify their interpretation of the draft waiver in IP/C/W/359 to be approved at the present meeting. No LDC Member had made "a duly motivated request" in accordance with the provisions of Article 66.1 of the TRIPS Agreement. Hence, the draft waiver had not been based on a request from an LDC as provided for in that Article. The draft waiver was to be read in the context of the provisions of paragraph 7 of the Declaration on the TRIPS Agreement and Public Health adopted by the Ministerial Conference in Doha (WT/MIN(01)/DEC/2). The LDCs wished to reaffirm that neither the provisions of this draft waiver, nor the procedure under which it had been requested, should in any manner be construed to curtail the right of any LDC Member to obtain an extension from the Council for TRIPS under Article 66.1 of the TRIPS Agreement.

5 The Decision was subsequently circulated as WT/L/476.

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118. The General Council took note of the report and of the statement and, in accordance with the Decision-Making Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93), adopted the draft Decision in IP/C/W/359.6

(e) New EC Special Tariff Arrangements to Combat Drug Production and Trafficking – Request for Waiver (G/C/W/328 and Add.1)

119. The Chairman said that, as delegations were aware, this waiver request was presently under consideration by the Council for Trade in Goods, in accordance with the procedures laid down in Article IX(3)(b) of the WTO Agreement. Although that Council had not yet been able to submit a report, he had been informed that its Chairman was continuing to hold consultations with a view to finalizing the report. He would therefore encourage the Chairman of the Council for Trade in Goods, Amb. Supperamaniam (Malaysia), and all delegations to persevere in their efforts to reach agreement as soon as possible. Taking into account the situation he had just described, he proposed that Members not, on the present occasion, enter into a discussion of this topic, the positions on which were well known to all the parties. In this regard, he would therefore propose that the General Council take note of his statement and revert to the matter once the Council for Trade in Goods had submitted its report pursuant to Article IX(3)(b).

120. The General Council so agreed.

10. Marrakesh Ministerial Decision concerning the possible negative effects of the reform programme on least-developed and NFIDCS – Report of the Inter-Agency Panel on short-term difficulties in financing normal levels of commercial imports of basic foodstuffs (WT/GC/62–G/AG/13)

121. The Chairman drew attention to the report of the Inter-Agency Panel on short-term difficulties in financing normal levels of commercial imports of basic foodstuffs (WT/GC/62-G/AG/13). The Panel had been composed of representatives of the World Bank, IMF, FAO, International Grains Council and UNCTAD, and had completed its report by 28 June. However, the translation of this report, which consisted of some 150 pages, into French and Spanish was still under way. Given this situation, he understood that some delegations wished to defer consideration of the report until 31 July, in order to allow time for the French and Spanish versions to be made available, as this was a matter of considerable interest to all delegations. Accordingly, he proposed that delegations start discussion of this item at the present meeting with the presentation of the report of the Chairman of the Inter-Agency Panel, Mr. Suzuki (Japan), who was not in Geneva, by Mr. Matsushima (Japan), on his behalf.

122. Mr. Matsushima (Japan), on behalf of the Chairman of the Inter-Agency Panel, recalled that the Panel had been established following the recommendation adopted by the Doha Ministerial Conference and had submitted its report to the General Council on 28 June, in accordance with the terms of reference agreed by the Committee on Agriculture and approved by the General Council. The work of the Panel was part of the follow up to the Doha Decision on Implementation-Related Issues and Concerns. In the context of discussion on how to improve the implementation of the Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-Developed and Net Food-Importing Developing Countries ("the Marrakesh NFIDC Decision"), the Panel had explored ways and means of improving access by LDCs and NFIDCs to multilateral programmes and facilities, in order to assist with short-term difficulties in financing normal levels of commercial imports of basic foodstuffs, and had examined the concept and feasibility of the proposal for the establishment of a revolving fund. The detailed terms of reference,

6 The Decision was subsequently circulated as WT/L/478.

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as agreed by the Committee on Agriculture and approved by the General Council, were contained in the report.

123. The Panel had made a detailed analysis of the price trends on international markets for basic foodstuffs since the entry into force of the Agreement on Agriculture. It had continued by studying the trends in the cost of cereal imports by LDCs and NFIDCs and the short-term difficulties in financing normal levels of commercial imports of basic foodstuffs, taking into account the written contributions made by the Members concerned. The Panel had then examined the issue of access by the LDCs and the NFIDCs to short-term multilateral financing facilities, i.e. the IMF and World Bank facilities. It had also considered the Arab Monetary Fund facilities. The Arab Monetary Fund had been the only regional financial institution that had responded positively to its query about the existence of a short-term concessional financing facility. Subsequently, the Panel had analyzed the proposal on a revolving fund, as well as other options to address the concerns expressed by the LDCs and NFIDCs in securing short-term financing for normal levels of commercial imports of basic foodstuffs. These other options were an ex-ante food import financing scheme, commodity price risk management and the Integrated Framework studies.

124. The conclusions and recommendations of the Panel on the basis of these examinations and analyses were contained in Section III of the report. As they were short and concise, rather than restating them at the present meeting he invited Members to read them. Regarding the proposal for a revolving fund, the Panel was of the view that the potential usefulness of such a fund in its proposed form was limited, and that if any future work was to be conducted, it could be of greater value to explore the possibility of an ex-ante financing mechanism aimed at private-sector importers.

125. The representative of Sri Lanka said that the establishment of the Panel had been approved by the Doha Ministerial Conference in the context of implementation of the Marrakesh NFIDC Decision. This group of countries consisted of 49 LDCs and 19 NFIDCs. Broadly, the Panel's terms of reference provided a mandate for it to address three main issues: First, to examine the terms and conditions of existing facilities of the international financial institutions, namely the IMF and World Bank, to which these groups of countries would have recourse in order to address short-term difficulties in financing normal levels of commercial imports of basic foodstuffs; second, to examine the concept and feasibility of the proposal by a group of countries to establish a revolving fund; and third, to make recommendations for consideration by the General Council.

126. On the first issue, the Panel had stated in paragraph 162 that the existing multilateral financing facilities assessed the need for financing in the context of the balance-of-payments situation in the country concerned. Paragraph 165 stated that the World Bank did not have facilities especially designed to help countries cope with short-term difficulties in financing food imports. Based on its conclusions, the Panel had recommended in paragraph 168 of the report that consideration of this issue be given in the context of the impending review of the Compensatory Financing Facility (CFF) of the IMF, to extend the product coverage of the facility to cover all basic foodstuffs and to provide a greater degree of automaticity without requiring an IMF support programme, and also to clarify access in the context of an existing arrangement with the IMF. While Sri Lanka recognized the importance of these positive recommendations, the Panel had not indicated when the impending review of the CFF would take place. While recognizing the importance of these positive recommendations, Sri Lanka believed that they did not adequately cover all of the conclusions the Panel had drawn in its report on this issue. However, Sri Lanka could accept the Panel's recommendations on this first issue.

127. On the more important second issue concerning the examination of the concept and feasibility of the proposal for the establishment of a revolving fund submitted by a group of developing countries, in its conclusion in paragraph 167 of the report, the Panel had stated that "[w]e have examined the concept and feasibility of the proposal for the establishment of a revolving fund." Thus,

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the Panel had examined the concept of a revolving fund and had accepted its usefulness. However, on the feasibility of the fund, it had examined the relevant aspects of ex-post operation of the fund and, having addressed the limited potential usefulness of an ex-post revolving fund to support food import bills, had recommended in paragraph 168 (b) that "[t]he feasibility of an ex-ante financing mechanism aimed at food importers be explored." Therefore, the most promising modalities of the operation of the fund ex-ante had not been examined by the Panel. Therefore, the Panel had not yet completed its work as mandated by Ministers, as well as stated in paragraph 2 of the terms of reference to examine the concept and the feasibility of the proposal which should cover the operational mechanism ex-ante as well. The Panel's own recommendation was that the feasibility of an ex-ante financing mechanism aimed at private-sector importers should be explored. Hence, this promising part of the Panel's work had yet to be completed. Therefore, Sri Lanka considered that it was necessary for the Panel to be reconvened in order to complete its work and submit its report and recommendations on the feasibility of an ex-ante financing mechanism to the General Council. The Marrakesh NFIDC Decision remained to be operationalized. This Decision had been meant to address the concerns of 49  LDCs and 19 NFIDCs, i.e. 68 Members. Thus, the valuable work undertaken by the Panel on this important issue, and implementation of its recommendations, were extremely important, as this would also have an impact on the ongoing negotiations in agriculture, and developing instruments to address concerns of NFIDCs would enable these countries to engage positively in the agriculture negotiations.

128. The representative of Egypt said that the technical elements in the report were now being considered by her capital, particularly those related to the conclusions and recommendations. However, Egypt wished to highlight one aspect in the recommendation dealing with access to financial facilities, and the implicit notion in the report that current facilities were inadequate to address the objectives of the Decision. Egypt looked forward to continuing its consideration of this important implementation issue in light of the elements of the Panel's report.

129. The representative of Jordan said that all of the recommendations in the report were clear except the recommendation on the feasibility of establishing a revolving fund, which in Jordan's view was due to the limited time available to the Panel. Jordan proposed that the same Panel be reconvened and complete its study by October, and that its report be submitted again to the General Council in October.

130. The representative of Cuba said that the Panel's mandate had not been fully implemented inasmuch as the aspects relating to the concept and feasibility of the establishment of a revolving fund had not been tackled. Cuba proposed that the Panel be reconvened and the planned activities concluded, in accordance with the terms of reference approved by the General Council, and that the Panel's recommendations be submitted to the General Council in October.

131. The representative of Pakistan said that the terms of reference envisaged a mandate for the Panel to examine three issues. On the issue of examining the terms and conditions of existing facilities of international financial institutions, the Panel had concluded that facilities offered by the World Bank did not cater to the short-term difficulties in financing normal levels of commercial imports of basic foodstuffs. The Panel had also stated that the existing international financial institutions' facilities for financing were linked to the balance-of-payments situation in the beneficiary countries. In paragraph 168 of its report, the Panel recommended two steps: expansion of the product coverage to include all basic foodstuffs, and an enhanced degree of automaticity in financing in the context of existing arrangements with the IMF. These recommendations should be given consideration, as the report said, in the context of the impending review of the CFF under the IMF compensatory facility. However, the report failed to indicate the exact timing of such a review. The Panel had fallen well short of fulfilling its mandate on the examination of the concept and feasibility of the proposal by a group of developing countries for the establishment of a revolving fund. On this issue, the Panel had recognized the need to explore the feasibility of an ex-ante financing mechanism for private-sector importers. Clearly this mandate had been left unaccomplished, hence the need for

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the Panel to fulfill this mandate. Pakistan urged that this mandate be fulfilled at an early date so that Members would be able to discuss the recommendations in this regard as well.

132. The representative of Japan said that the report of the Panel contained many ideas and suggestions that would be useful in tackling the issues of food security of LDCs and NFIDCs. As the report pointed out a number of difficulties to be overcome before establishing a revolving fund, it was essential that Members heed the points raised by the report, and then give careful consideration to the feasibility of establishing such a fund. There was an acute need for Members to address seriously the situation the LDCs and NFIDCs experienced. These countries faced difficulties in financing even normal levels of commercial imports of basic foodstuffs when the prices of those commodities were rising. Members had to remember that such a situation had been the starting-point of developing such ideas. With these observations in mind, Japan had proposed the establishment of an international food stockholding, so as to fully encompass the objective and purpose of the Marrakesh NFIDC Decision. As Japan had already explained the details of this scheme at the Special Session of the Committee on Agriculture, it would refrain from repeating this explanation. Japan had proposed this scheme as a part of its continuing initiative towards addressing the food security concerns of LDCs and NFIDCs.

133. The representative of Mauritius said that his delegation supported the statements by Sri Lanka, Egypt and Pakistan. As an NFIDC, Mauritius was greatly concerned by the implementation of the Marrakesh NFIDC Decision.

134. The representative of Tunisia said that his delegation believed the mandate given the Panel had not been completely fulfilled, especially with regard to the concept and feasibility of the proposal to establish a revolving fund.

135. The General Council took note of the report and of the statements, and agreed to revert to this item at its meeting on 31 July.

136. At the reconvened meeting of the General Council on 31 July, the Chairman recalled that at its meeting on 8 July, the General Council had started its consideration of the report of the Inter-Agency Panel and had agreed to revert to it at the present meeting, in order to allow delegations more time to examine this report. Eight delegations had commented on this report at that meeting, and there had been several suggestions that the Panel's recommendation in Paragraph 168(b) with regard to the feasibility of an ex-ante financing mechanism aimed at food importers should be pursued.

137. The representative of Canada said that the Panel had provided a useful set of recommendations setting out practical ways to improve access by LDCs and NFIDCs to multilateral programmes and facilities to meet these countries' needs. Having done so, Canada believed that the Panel had completed its task.

138. The representative of Mauritius said that his delegation fully endorsed the various comments made by the NFIDCs on 8 July. He noted that the report in its analytical part was quite comprehensive and provided useful information, particularly to small delegations. However, when it came to concrete measures, it fell short of their expectations. Reference was made to a review of the CFF of the IMF, and the report recommended that consideration be given to a certain number of factors which would, if implemented, be of help to these countries. However, no indication had been given as to the date of this review, and Members would have to ask the IMF to take account of these recommendations. This issue also related to coherence, and Mauritius believed that the WTO should liaise with the IMF to ensure the smooth implementation of this measure. The ex-ante financing mechanism was a very important measure. Mauritius welcomed it, but was frustrated by the fact that the report merely suggested that is should be explored whether a feasibility study should be

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conducted. Mauritius had been expecting concrete proposals. In fact, Members were back to square one. In Mauritius' view, the Panel should reconvene and complete its task.

139. Members had agreed in Doha to an ambitious work programme in agriculture, and in this regard, they had to establish modalities by 31 March 2003 and submit comprehensive schedules by the Fifth Ministerial Conference, i.e. September 2003. This work programme leading to further reform would yield results which might compound the problems faced by LDCs and NFIDCs. In this work programme, the LDCs and the NFIDCs, as other countries, were expected to come up with proposals and eventually make commitments which would be designed to address their particular concerns. In this sense also, the report was not helpful, as Members would be conducting vital negotiations without even knowing how their past predicaments were being addressed. Not only were they bearing the brunt of reform, but they were also deprived of vital data to address the future. All of this had to be viewed in the perspective of the small NFIDCs, i.e. the small-economy developing countries. These countries' preferences had been eroded and would be further eroded, but they still did not know what would be done to address their concerns as NFIDCs.

140. The representative of Japan said that the Panel had been required to examine the concept, as well as feasibility, of the proposal for the establishment of a revolving fund as had been described in the Panel's terms of reference. After conducting a thorough analysis, the Panel had concluded that the revolving fund as proposed had limited feasibility and usefulness in addressing short-term financial difficulties of the countries in question. While some Members might not be happy with this conclusion, there was no question that the Panel had duly fulfilled its mandate. In Japan's view, if some Members considered that it was necessary to conduct a further analysis of an ex-ante revolving fund, they needed to submit a new proposal, together with a detailed operational scheme. Should such a new proposal be submitted, Japan was ready to discuss it, including the appropriateness of establishing another panel to examine it. Regarding the current financial mechanism under the IMF's CFF, Japan considered that it was within the discretion of the IMF to review how its own CFF mechanism should operate. Therefore, the WTO should ask the chairman of the Committee on Agriculture to officially convey to the IMF the report of the Inter-Agency Panel, so that the IMF could give due consideration to the Panel's report in the course of reviewing the CFF. The Chairman should then report back the results of the IMF 's review to the General Council. It was also indispensable that Members continue their efforts to make LDCs and NFIDCs more familiar with the conditionality of the CFF and the reasoning behind it.

141. With respect to the Diagnostic Trade Integration Studies mentioned in paragraph 168(c) of the report, Japan suggested that the proponents raise this issue at the next meeting of the steering committee of the Integrated Framework, scheduled for 24 October, and that Members discuss what the Integrated Framework could do within its own mandate. Regarding the Commodity Price Risk Management Group of the World Bank, the World Bank had its own responsibility for reviewing its own financing schemes. Therefore, the WTO should ask the Chairman of the Committee on Agriculture to send the Panel's report, with its clear explanation, to the World Bank and ask the Chairman of the Agriculture Committee to report back subsequently to the Members on the results of the World Bank's review.

142. The representative of Egypt said that it was Egypt's feeling that the Panel had not fully complied with its mandate from Ministers. The Panel was to have discussed the feasibility of the revolving fund and report on it, but it had not been able to come up with a conclusion as to whether the revolving fund would be feasible. The Panel had merely said that the fund would be more useful had it been ex-ante, but it had still not said that an ex-post fund was absolutely untenable. Egypt had heard proposals by some delegations, and in its view, the ex-ante option should be further looked into. However, it was not clear whether this should be done by the same Panel. Members could, as demandeurs, make some input into the process, but in Egypt's view, it would be useful for the Panel to examine this. On other recommendations, Egypt believed that the ideas relating to the CFF, as

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reported by the Panel, should be related to the IMF in no uncertain terms. Since most Members were members of both organizations, it would be useful for the General Council Chairman to suggest to the Executive Director of the IMF that during the forthcoming review of the CFF, something be done to ameliorate the conditionalities of the CFF and to make them more in line with the Marrakesh Decision on NFIDCs and LDCs. Egypt also agreed with the proposal by Japan relating to Paragraph 168(d) on the commodity price risk management idea. In Egypt's view it was most important that the General Council give some credibility to what Ministers had decided in Doha.

143. The representative of Zambia, speaking on behalf of the LDCs, said that the subject matter under discussion was very important to all LDCs. These countries were still studying the report, and would need more time to study it further before they could provide detailed comments on it.

144. The representative of the European Communities said the Community believed that the Panel's terms of reference had been closely respected and that its recommendations contained interesting ideas on ways and means to improve access by LDCs and NFIDCs to multilateral programmes and facilities to assist with short-term difficulties in financing normal levels of commercial imports of basic foodstuffs. In the Comuunity's view, the Panel had duly fulfilled its mandate. Thus, the Community did not favour a re-opening of the Panel. However, if the NFIDCs insisted on the idea of an ex-ante financing mechanism and tabled a proposal in this respect, the Community, like Japan, would be open to examining such a proposal in the appropriate competent body, which in its view, would be the Committee on Agriculture.

145. The representative of Chile said that his delegation did not have a clear and definite opinion on whether the mandate of the Panel had been completely fulfilled. However, the conclusions at the end of the report gave Members some indications. First, the Panel had said that there had been no clear ascending trend in food imports by LDCs and NFIDCs since the start of the reform process in the agriculture sector in 1995, so there was no clear trend that the invoicing for food had increased. Second, the report also recognized that from 1995 to 1997 there had been an increase in the price of cereals, but it added that the available evidence had brought the Panel members to conclude that it was a result of a number of factors in both the short and long term, was only partially related to the reform programme of the agriculture sector under the Uruguay Round Agreement, and was not due to the international price increasing. Moreover, developing countries that were net food importing countries had come across authentic difficulties in financing normal levels of commercial imports of basic foodstuffs, although this had little relationship with the agricultural reform programme of the Uruguay Round. Therefore, in Chile's view, the difficulties experienced by those countries were not in large measure related to this agricultural reform programme. Several conclusions could therefore be drawn; first, that the fears of several developing countries and NFIDCs that the account for food would increase had not materialized; second, that in reality the agricultural reform of 1995 had not had the results expected, since the prices of agricultural products had not increased substantially. Thus, these fears had not materialized as a result of the agricultural reform programme. This did not mean that in the future there would be no problems as a result of the negotiations which were under way. Chile wished to point out these conclusions provided a factual basis for dealing with this topic, which was of interest to many developing countries.

146. The representative of Sri Lanka said that her delegation was not very optimistic about the fact that the Panel had recommended that there would be an opportunity – when the IMF undertook certain reforms, which it intended to do on a regular basis – for that process to take into account the recommendations made by the Panel. Sri Lanka believed that the previous reforms undertaken by the IMF, particularly on the issue of the CFF, had had very limited results. Rather, an attempt had been made to strengthen the link between access to the CFF and the balance-of-payments situation of the country concerned. The Panel had, of course, suggested that certain flexibilities be entertained with respect to reforming the CFF facility. However, the most recent review by the IMF in 2000 had not provided much hope. Therefore, Sri Lanka was not optimistic about the IMF taking into account the

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recommendations of the Panel. Regarding the revolving fund proposal, the Panel's recommendation to examine the possibility of an ex-ante mechanism posed several questions of both a procedural and substantive nature. With regard to the procedural issues, the question remained as to who should undertake the examination and whether the ex-ante mechanism proposed by the Panel would really be able to address the problems set out by the LDCs and NIDFCs. Sri Lanka believed that the process of examination of whether there was any possibility of an ex-ante mechanism should be undertaken by the Panel. Hence, her delegation believed that the Panel should be continued. With regard to the substantive issue, the Panel had raised difficulties relating to the implementation of the proposed revolving fund, which went beyond its express nature. Some of those constraints or difficulties would reappear even in an ex-ante mechanism, such as the risk of default and the implications of the fund for indebtedness. Similarly, due to the limited time that had been available to the LDCs and NFIDCs before the Doha Ministerial Conference, they had agreed to the establishment of this Panel with the specific mandate to look into the short-term difficulties of the LDCs and NFIDCs. This was only one window of the Marrakesh Decision, along with two other windows, i.e. on food aid and on technical assistance for improving agricultural productivity in further detail.

147. She recalled that the proposal of the LDCs and NFIDCs was very comprehensive and had encompassed all three windows. However, due to the time available, Members had been able to deal with only one window of the short-term facilities. The proposed revolving fund actually served the purpose of responding not only to short-term difficulties, but also, and particularly, regarding the window of technical assistance aimed at improving agricultural productivity. Since the Panel had looked into the relevance of the revolving fund only with respect to the short-term difficulties, Sri Lanka believed that in its continuation of the work, it would also have to look into the necessity of the revolving fund with respect to addressing the difficulties of NFIDCs through technical assistance. This was a further reason why Sri Lanka believed the Panel had to continue. Regarding Chile's statement, in Sri Lanka's view, the Panel had tried to dealt with the issue of the impact of the agricultural reform programme on LDCs and NFIDCs. Members knew how markets functioned and they had been able to build up some linkages with respect to prices for the period 1995-1997. When the reform process in the agricultural sector had really begun, countries had made commitments, so there was some kind of a linkage between prices and the reform process. However, subsequently when countries had notified their commitments, they used all of those commitments and, according to information from the Secretariat pertaining to the utilisation rate with respect to commitment levels, these countries clearly had not only fully utilized the commitments they had made for the period 1998-2000, but they had also carried forward some of the unutilized commitments from previous years. This had been due to a kind of imbalance in the agreement, which allowed Members to carry forward their unutilized commitments. Therefore, during that period they had a high utilisation rate with respect to their commitments. In Sri Lanka's view, this point should not be raised in the General Council over and over again, because agricultural trade was highly distorted and there was actually a direct link between the prices of agricultural products and the reform process. In Sri Lanka's view, this issue needed more consultations, and her delegation therefore wished to request the Chairman to have informal consultations in order to identify the way forward with respect to the Panel report and the other issues that were pending.

148. The representative of the United States said that the Panel had met the terms of reference for its work and her delegation agreed with the Panel's recommendation in paragraph 168(c), which proposed that work under the terms of reference of the Diagnostic Trade Integration Studies be undertaken within the context of the Integrated Framework to include, as appropriate and if requested by a Member, "food security implications of trade development strategies, and availability of, and access to, adequate financing, in particular by the private sector, to support food imports." The United States believed that the Panel's recommendation in paragraph 168(d) that the World Bank's Commodity Price Risk Management Group consider commodity price risk management issues of developing countries, was reasonable. Regarding the Panel's recommendation in paragraph 168(a), the United States did not believe that the WTO should intervene with guidance for the operation of the

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IMF's CFF. Decisions on the use of this IMF facility had to be made by the respective organization's membership. However, the United States could support having the WTO Committee on Agriculture or General Council Chairman send letters asking the IMF and the World Bank to review the Panel report as it related to this issue. Finally, regarding the issue of a revolving fund identified in paragraph 168(b) of the Panel's recommendations, the Panel had examined very thoroughly the concept embodied in the revolving fund proposal, which it had described as an "ex-post financing mechanism" in paragraph 116 of its report, and had determined that it had not been a workable solution to potential short-term financing problems of developing countries. In the United States' view, the idea of an ex-ante mechanism, which had been proposed by UNCTAD, was new and differed substantively from the original proposal.

149. The United States was willing to examine within the Committee on Agriculture an "ex-ante" revolving fund idea, on an expedited basis if appropriate, and invited interested Members to develop suggestions to address these and other relevant considerations. However, before deciding whether and how to pursue this idea further, it would be important for the United States to have further details on this idea from those Members who would like to pursue it, and to have an opportunity to discuss it further. In particular, it would be helpful if the proponents of this approach could lay out their thoughts on: first, what the criteria would be for access to financing, and participation by governments, state-owned enterprises, and private importers; second, which developing countries would have access to the fund; and third, what repayment conditions would be set to ensure that this would be truly a revolving fund.

150. The representative of Switzerland said that the Panel had fulfilled its mandate and his delegation was ready to accept the Panel's conclusions and recommendations. In Switzerland's view, solutions other than a revolving fund had to be available for dealing with short-term difficulties in financing normal levels of commercial imports of basic foodstuffs. Two options had been highlighted and some comments had been made at the present meeting to give Members elements for possible action. First, of course, was the CFF of the IMF, which could be better utilized. In this regard, Switzerland believed that the IMF could expand the product coverage of the mechanism to include all basic foodstuffs in order to better satisfy needs. However, the World Bank could also come up with strategies for NFIDCs for better management of food prices. Switzerland was ready to discuss any other options in the appropriate body, which in its view was the Committee on Agriculture, to the extent that the concerned Members submitted a concrete proposal, which should include modalities for implementation and consequences. Switzerland was also open to discussing the other elements relating to the Marrakesh Agreement, which had not been looked at in detail thus far.

151. The representative of Djibouti said that since his delegation had not yet read the report, it was not able to make a detailed analysis of it. However, after listening to certain delegations' views, he believed that the WTO and other concerned bodies should reach a consensus on the reform framework to cover all LDCs and certain NFIDCs. Djibouti was sure that Members would come up with a solution with respect to the main body concerned, which was the IMF.

152. The representative of Cuba said that this matter was of great importance to her delegation. During the period 1995-1996, Cuba had been engaged in an intensive process of negotiation to obtain private financing to ensure essential levels of food imports for its people. The value of the food imports that were financed had risen by approximately 26 per cent from one year to the next. This increase had represented an additional expense of US$150 million. In 1999, the increase in the value of imports financed had been 36 per cent relative to the same figures for 1997. The need to manage these credits, determined by the urgent need to import food regardless of the increase in market prices, had led Cuba to bear very high costs and, in 1997, Cuba had paid as much as 18 per cent in annual interest. At the same time, she wished to point out that Cuba did not have access to the resources of the multilateral financial institutions, since it was not a member of the IMF or the World Bank. Cuba

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considered that since the Panel had not managed to bring its discussions to a conclusion, its mandate had not been fully discharged, and therefore, the examination of this item should continue.

153. The representative of Hungary said that the Panel had fulfilled its mandate and had provided a number of conclusions. Hungary wished to make two general comments. First, it agreed with Chile that, as was seen in paragraph 160(a), there had been no negative effect of the agricultural reform on the food bill of the countries concerned, and this showed that certain positive expectations could be made with respect to the continued reform. Second, regarding the issue of the use of food aid and the purpose of food aid, paragraph 36 of the report referred to statements by a number of participants and the World Bank that food aid tended to respond to the need to reduce surpluses in donor countries, rather than responding to needs in the recipient countries. In Hungary's view, this was an important observation, which had also been underpinned by the conclusions of the Panel itself in paragraph 160(c), with a clear reference that food aid had tended to decrease the difficulties of importing countries when prices had been on the high side, and that in these years the volume of food aid shipments had been lower than normal and there had been a higher share of commercial cereal imports. This had also underpinned the usefulness of the Panel report for the ongoing negotiations on agricultural reform, and Hungary believed that this provided new evidence, if such was needed, that food aid – especially in the form of concessional food aid, which was not in the form of a grant – was used as one of the forms of supported exports. In Hungary's view, these findings could be useful in Members' work on trying to establish uniformly applied rules and disciplines on all forms of export support.

154. The representative of Senegal said that work still remained to be done because risks continued to exist, insofar as the report stated clearly that the four countries which had responded to the questionnaire on short-term financing difficulties – Cuba, Egypt, Jordan and Tunisia – had encountered funding difficulties for their food imports, even if they had stated that this did not seem to be linked with the reform programme in agriculture. Further, the report established that in the light of the experience of these countries, the multilateral funding facilities that existed did not play a key role in resolving this problem. This simply signified that if countries had had difficulties and had not been able to resolve them through multilateral funding facilities, Members then had to think about facilities that could enable them to overcome these difficulties, because the facilities existing at the time these countries had faced difficulties had not been beneficial to them. The idea that this was not linked to the reform programme in agriculture did not enable Members to affirm that there was no problem. Senegal believed that the reform programme had not led to the expected results, because the level of subsidies for domestic support and export subsidies remained very high. When Members decided to address the problem of subsidies, it was not clear what would happen to NFIDCs. This was why the risk still existed. The point was not to wait until the negative affects cropped up to consider funding mechanisms, because the funding mechanisms had up to the present not met the expectations of countries facing difficulties. Members needed a prevention mechanism enabling them to resolve this problem. It was true that in the report, mention was made of ex-ante mechanisms. In Senegal's view, these possibilities could be explored further and the work should continue. Senegal had also noted that for the LDCs, it had been proposed or recommended in the conclusions that as part of the diagnostic studies, an effort should be made to introduce certain points, in particular, to examine the strategies for food security and to develop such strategies and offer appropriate funding to the private sector, in particular for food products and access to financing. The LDCs for whom diagnostic studies had been concluded were going to see how they could take them into account and to implement the programmes. As Zambia had correctly said, LDCs should try to reflect on this issue. In conclusion, Senegal observed that on page 28 of the French version of the report, Senegal's name was not mentioned in the list of LDCs, and it therefore asked the Secretariat to add its name to the list.

155. The Chairman noted the following aspects from Members' discussion. First, many countries had highlighted the crucial importance of this issue for developing countries, in particular for the LDCs and the NFIDCs, and the need to instrumentalize the Marrakesh Ministerial Decision. Second,

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Members had heard different opinions as to whether the Panel had fully completed its mandate. In particular, many delegations had affirmed that the Panel had not completed its study of the feasibility of an ex-ante financing mechanism for food importers. Members had also heard differences of opinion as to the appropriate formula for dealing with the recommendation for an ex-ante financing mechanism, and while some countries felt that the same Panel should pick up the examination of this matter, others had indicated there was a need to define some modalities, some working method, on this. These countries would prefer that the Chairman of the Committee on Agriculture consult the interested Members so that the most appropriate formula could be given to the follow-up on this matter, and some Members had indicated that this work should take place in the Committee on Agriculture itself.

156. He noted that some countries had stated that they were ready to approve at the present meeting the recommendations in the Panel's report. A series of countries had noted that they did not see favourably the recommendations in paragraphs 168(a), (c) and (d) that the General Council authorize its Chairman to write to the IMF, the World Bank and the Integrated Framework Agencies, drawing their attention to the fact that the General Council had approved these recommendations of the Panel, and urging them to take up these matters promptly within the framework of their own institutional structures. However, an important group of countries, the LDCs, had said they needed more time to be able to study in more depth the Panel's report, and in particular the recommendations made. Based on this – especially the last point – and on the differences of view on how to proceed with respect to the Panel's recommendations in paragraph 168, he proposed that at this stage, the General Council take note of the statements and agree to return to this matter at its next meeting. In order not to lose time, he also proposed that the General Council invite the Chairman of the Committee on Agriculture to consult with interested Members on the way forward with regard to following up on the Panels' recommendations, especially with regard to paragraph 168(b), which had to do with the ex-ante financing mechanism, and to report on the results of his consultations to the General Council at its next meeting.

157. The General Council so agreed.

11. Report by the Chairman of the Trade Negotiations Committee

158. The Director-General, Chairman of the Trade Negotiations Committee, reporting on the TNC's third meeting on 18-19 July, said that the meeting had been constructive and fruitful. Members had made a good start to the negotiations, which had been better than many had predicted. The meeting had been attended by a number of capital-based officials, and he had also been pleased to welcome his successor, Dr. Supachai Panitchpakdi, to the meeting. The process of transition to the next Director-General was proceeding smoothly. Under the first item on its agenda, the TNC had considered reports by the Chairpersons of the bodies established by it. On behalf of all participants, he expressed appreciation to all the Chairpersons for their hard work over the past few months. While all of these bodies had submitted written reports to the TNC meeting, the respective Chairpersons had all been good enough to take the floor to share the latest information on the work of their respective groups. Roughly 40 delegations had commented on these reports, and his sense from the discussion was that everyone was committed, and even optimistic. It was only natural that problems would crop up – this was part of the very nature of the negotiations Members had embarked on. He recalled that when he had opened the meeting, there had been one major unresolved issue, i.e. the programme of meetings for the Negotiating Group on Market Access. However, thanks to the hard work of that Group's Chair and the cooperation and flexibility shown by participants, an acceptable solution had been reached. The Negotiating Group had subsequently met in formal session directly following the TNC meeting on 19 July, and had adopted its programme of meetings. Nevertheless, other problems still remained. On the issue of observership for international intergovernmental organizations, some creativity would be necessary. Members were not yet near a solution to this problem, and he urged delegations to continue to seek a creative and pragmatic way forward.

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159. Overall, the work was moving ahead at a steady and deliberate speed. All Members were aware that time was the only thing they could not replace or recycle. Thus, Members could not indulge in spending too much time in the next few months on issues of process. The focus in Geneva, in capitals and at cabinet tables had to be on substance and on the Doha Development Agenda. Many delegations had touched on the meeting's second agenda item, Future Work, in their statements under the first agenda item, so this discussion had been shorter. He recalled that at the TNC meeting in April, he had said that by the time of the July meeting, Members should have a more precise road map to Mexico. To facilitate discussion at the TNC, he had circulated, in Job(02)/78, a timeline from the present until Cancún, showing the key dates and deadlines that had been established thus far. He believed that this road map was clear, that the deadlines were known, and that everyone was committed to meeting those deadlines. It was now about substance and real negotiations. He had talked to a number of Ministers about Ministerial-level involvement in this work, and believed that it was also important that senior officials continued to be closely involved in Geneva from time to time, so as to allow this Member-driven, Ministerial-led organization to achieve what Members wanted it to achieve by the time of the next Ministerial Conference. He had also passed on to his successor his best advice concerning the road map. Following consultation with Dr. Supachai, he had informed participants that the next meeting would be held on 3-4 October, and that at least one more meeting was foreseen thereafter in 2002, i.e. on 4-6 December.

160. The General Council took note of the report by the Chairman of the Trade Negotiations Committee.

12. Work programme on small economies – Report by the Chairman of the dedicated sessions of the Committee on Trade and Development

161. The Chairman recalled that at its meeting in February and March 2002, the General Council had taken note of a framework and procedures for the conduct of the Work Programme on Small Economies, under which this Work Programme should be a standing item on the General Council's agenda. The framework and procedures also provided that the Committee on Trade and Development should report regularly to the General Council on the progress of work in its Dedicated Sessions on this subject.

162. Mr. Ali (Bangladesh), Chairman of the Committee on Trade and Development, reported on the Committee's activities in this matter. This report was being made pursuant to the decision of the General Council at its meeting on 1 March 2002. The General Council had instructed the Committee on Trade and Development (CTD) to develop a programme of work on small economies through dedicated sessions. It had also been stated that the CTD should report regularly to the General Council on the progress of the work in the dedicated sessions.7 As had been stated in the first report, the CTD had formally begun this work by holding its first dedicated session on 25 April 2002. A submission for that meeting had been made jointly by Barbados, Belize, Bolivia, Cuba, Dominican Republic, El Salvador, Fiji, Guatemala, Haiti, Honduras, Jamaica, Mauritius, Nicaragua, Papua New Guinea, Paraguay, Solomon Islands, Sri Lanka, and Trinidad and Tobago (WT/COMTD/SE/W/1). The small-economy Members had been requested to take into account the comments on their document and to develop a road map to present at the second dedicated session.

163. The second dedicated session had been held on 1 July 2002. For that meeting, a submission had been made by Barbados, Belize, Bolivia, Dominican Republic, Guatemala, Honduras, Mauritius and Sri Lanka (WT/COMTD/SE/W/3). Since then, Cuba, El Salvador, Fiji, Nicaragua and Paraguay had added their names to the list of Members co-sponsoring the paper. A second submission had been received from Macao, China (WT/COMTD/SE/W/2). Both documents had been introduced and there had been an initial discussion of them. The submission in WT/COMTD/SE/W/3 was substantial, and

7 Document WT/L/447

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as most delegations had seen it for the first time at the meeting itself, they had been unable to provide substantive comments. However, several delegations had given their preliminary comments on the paper as well as the procedure for dealing with the issues it contained. The Secretariat had prepared and circulated a paper on small economies (WT/COMTD/SE/W/4). Further research and analysis requested by the small-economy Members would be undertaken by the Secretariat. It was his intention to convene an informal meeting soon after the summer break, tentatively on 10 September 2002, to discuss these issues. Thereafter, discussions would be held in the next dedicated session in early October. He hoped that Members would continue their work on fulfilling the mandate given in paragraph 35 of the Doha Declaration and the instructions to the CTD given by the General Council on 1 March 2002

164. The representative of Mauritius, speaking on behalf of the small-economy Members, welcomed the intention of the Chairman of the CTD to hold consultations on 10 September and expressed the hope that these consultations would be fruitful.

165. The representative of the United States said that her delegation was ready and willing to continue to work with interested delegations to identify and examine the issues relating to the trade of small economies in order to move forward on this initiative.

166. The General Council took note of the statements and of the report by the Chairman of the dedicated sessions of the Committee on Trade and Development.

13. Committee on Rules of Origin – Report by the Chairman of the Committee to the General Council (G/RO/52)

167. The Chairman recalled that at its meeting in December 2001, the General Council had agreed that the Committee on Rules of Origin (CRO) should hold two additional sessions in the first half of 2002 to resolve remaining issues under the harmonization work programme (HWP), and that in the process, it might identify a limited number of core policy-level issues which in its view needed to be reported to the General Council for discussion and decision at that level. It had also been agreed that the outcome of the CRO's further work would be reported by the Chairman of the Committee, on his own responsibility, to the General Council at its first regular meeting after the end of June 2002, at which point the matter would be in the hands of the General Council. The General Council had further agreed that the deadline for completion of the HWP would be extended to the end of 2002.

168. Mr. Costa Filho (Brazil), Vice-Chairman of the Committee on Rules of Origin, speaking on behalf of Mr. Moser (Switzerland), Chairman of the Committee, said that the report to the General Council in G/RO/52 was being made by the Chairman of the Committee on his own responsibility. He recalled that in December 2001, the General Council had agreed on a specific mandate for the CRO. Accordingly, the CRO had held two sessions in April and June 2002 during which it had resolved 18 outstanding issues. As indicated in G/RO/52, the number of issues resolved in 2002 compared to the 300 issues resolved in 2001 was quite modest, and it was clear that the encouraging progress made in 2001 had slowed in 2002. He noted that issues informally agreed in 2001 and 2002 were still pending formal approval in the CRO. As mandated by the General Council at its meeting in June 2002, the CRO had forwarded 93 product-specific core policy issues (paragraph 3 of G/RO/52), as well as one overarching issue, the so-called "implications issue" (paragraph 4 of G/RO/52), to the General Council for discussion and decision. In view of the relatively high number of core policy issues and the likely difficulties in addressing these issues, the Chairman had included in the report, on his own responsibility, the recommendation that the General Council first focus on 12 of the 94 core policy issues (paragraph 5 of G/RO/52). One of the 12 issues, the implications issue, had been identified by several delegations as the main stumbling block to progress in the CRO's work and was closely related, among other things, to the problem of circumvention of anti-dumping procedures, and the application of SPS measures and quota regulations. The implications issue had

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first been raised in 1998, and paragraph 4 of G/RO/52 referred to the relevant paragraphs of the minutes of the Committee's discussions on this issue. He suggested that delegations read through those minutes during the summer break in order to grasp the full impact of this issue. If the General Council could reach a common understanding on the implications issue, a major breakthrough would be possible that would facilitate the conclusion of the HWP for non-preferential rules of origin. This was also true for the 11 other core policy issues.

169. The Chairman thanked the CRO Vice-Chairman for the report and recommendations, and for the efforts made in the Committee to bring this matter to a close. However, although the pace of the HWP had picked up in November 2000, that encouraging progress had recently slowed. As a result, Members were faced with a considerable number of outstanding issues to tackle in a very short time. As Members had agreed in December 2001, this matter was now in the hands of the General Council. Taking into account the CRO Chairman's recommendations, he proposed holding a first General Council meeting on this matter, concentrating on the 12 core policy issues proposed by the CRO Chairman in paragraph 5.1 of G/RO/52. Given the complexity of the questions to be resolved, he suggested that in cooperation with the CRO Chairman, consultations be held after the summer recess to prepare and organize that meeting. In order to make further progress and meet the deadline of 31 December 2002, he encouraged delegations to reflect on this matter during the summer break and to seek new ways of resolving the outstanding problems.

170. The representative of Japan8 supported the Chairman's procedural proposal and commented on the question of the relationship between harmonized rules of origin and domestic regulations, and on the value-added rule. The CRO had begun work on the HWP seven years earlier, and Japan hoped that the deadline of 31 December 2002 set by the General Council would be met. Regarding the implications of the harmonized rules of origin on other WTO agreements, in its communication in G/RO/W/74 Japan had stressed the need to clarify the relationship between the harmonized rules of origin on the one hand, and domestic consumer labelling requirements on foods and sanitary and phytosanitary measures on the other. The line of thinking that seemed to be broadly shared by Members in the CRO was the following: (i) the policy objectives of Members regarding domestic consumer labelling on foods, or sanitary and phytosanitary measures, were quite different from the objectives of origin determination for customs purposes, which were to be enforced under the harmonized rules of origin; (ii) since these objectives were not mutually exclusive and there was no hierarchy between them, there should be no conflict between them; they were supplementary in nature and should coexist without any particular difficulties. Although this line of thinking might not be a definitive conclusion in a legal sense, it provided useful guidelines as a working basis, thus providing comfort to Members for continuing the current harmonization process in the General Council. In this regard, Japan requested that the details of the discussions in the CRO under the HWP be recorded in an appropriate form, such as, for example, in the formal report of the Chairman of the Committee to be attached to the final results of the HWP. Japan was prepared to show further flexibility on many of the product-specific issues related to agricultural products, provided this request was accorded.

171. In Japan's view, harmonized rules of origin should not create a new trade obstacle and should be easily usable by customs officials as well as trading business people. Harmonized rules of origin were to be used for all non-preferential purposes. This meant that they covered a very broad range of trade cargo. For example, trade statistics would be prepared on the basis of non-preferential harmonized rules of origin. Adoption of the value-added rule for harmonized rules of origin would be very burdensome on companies as well as on customs officials. Moreover, adoption of the value-added rule would not only run counter to the fundamental objective of trade facilitation, but would also lead to a situation in which the origin of a product might change daily, depending on changes in exchange rates or other cost factors. This would be detrimental to transparency, consistency and

8 The full text of the statement was subsequently circulated in WT/GC/63.

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predictability. The value-added rule would compromise impartiality and neutrality, and Japan therefore strongly opposed its adoption.

172. The representative of India recalled that pursuant to Article 9.2(a) of the Agreement on Rules of Origin, the HWP was to be initiated as soon as possible after the entry into force of the WTO Agreement and completed within three years of initiation. That three-year period was long past. In December 2001 the General Council had extended the deadline for completion of the HWP to the end of 2002. In his report in G/RO/52, the CRO Chairman had indicated that 138 issues still needed to be resolved. While much had been done since 1995 under the HWP, much still remained to be done. Recognizing the trade-facilitation potential of harmonized non-preferential rules of origin, India was convinced that clear and predictable harmonized non-preferential rules of origin were essential to facilitate the flow of international trade and to reduce unnecessary obstacles to trade. The HWP was part of the unfinished agenda of the Uruguay Round. India recognized that the hard work done by Members actively participating in the CRO meetings and the flexibility shown on several issues had made progress possible. India was also appreciative of the work of the CRO Chairman and the Secretariat in trying to find a solution to contentious issues. His delegation was disappointed that this work had not led to the completion of the HWP, but welcomed the mechanism by which the General Council would take over that work with a view to completing it within the shortest possible time.

173. Among the core policy issues identified in G/RO/52, India had strong concerns relating to the agriculture and textile sectors, as well as footwear and marine products. In India's view, certain restrictive origin rules in the textiles sector proposed by some Members would not serve the purpose of a liberal trade regime. In the agriculture sector, India had concerns about conferring origin to countries on account only of minimal operations like mixing. A rule of origin should not confer an artificial origin on considerations merely of trade interest, but on the principle of what constituted the last substantial transformation. With respect to fish products, the rule of origin should be harmonized with the rights of the coastal states under the United Nations Convention on the Law of the Sea. However, India was willing to engage constructively on all issues in order to take the process forward.

174. Regarding the so-called "implications issue", which could alter the balance of rights and obligations provided under the Agreement on Rules of Origin, his delegation had the impression that some Members wanted the adoption of harmonized non-preferential rules of origin to be optional. Should such an approach be adopted, this would open the floodgates to disputes, and Members with fewer resources and technical expertise would bear the brunt of the ill effects thereof. That approach would be in total conflict with the provisions of Articles 1.2 and 9.1(a) of the Agreement on Rules of Origin. India could not be a party to the burial of the Agreement on Rules of Origin, to which such an understanding would inexorably lead. In its view, the progress that had been made was not sufficient. A number of crucial issues pertaining to agriculture, fish and fish products, textiles, footwear, machinery and chemicals, among other issues, remained on the table. In order to end the deadlock, new methods to resolve outstanding issues could be adopted. One way might be to identify areas where flexibility could be attempted on a cross-product sector basis. India stood ready to consider any suggestions to carry the HWP forward in a constructive and positive spirit, and urged the General Council to put in place an appropriate mechanism to ensure quick decision-making, so that the work could be completed not later than December 2002.

175. The representative of Chile said that his delegation had concerns about the progress of this work, as crucial matters had to be addressed, particularly in relation to the repercussions of these rules of origin. The Chairman's report reflected a strong divergence between Members as to the purpose of harmonized rules of origin and made reference in paragraph 4.2 to a proposal by the CRO Chairman. Paragraph 1 of that proposal stated that the harmonized rules of origin should be applied to commercial policy instruments. This included, for example, those set out in Articles I, II, III, XI and XIII of GATT 1994; anti-dumping and countervailing duties under Article VI of GATT 1994; and safeguard measures under Article XIX of GATT 1994, among others. Paragraph 2 of that proposal

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stated that each Member should decide which rules of origin it would use. Therefore, paragraph 2 of the proposal nullified paragraph 1. Consequently, Members would have to clear up that confusion, and the consultations proposed by the Chairman were the most appropriate means to do that.

176. The representative of New Zealand said it was clear that although this issue was technical, its political implications were very important. Members had already faced this type of problem, where the political implications of a technical issue could not be resolved at a technical level, but where it was not simple to resolve the issue at a political level because the currency of the debate was necessarily technical. This was not a new conundrum, and the proposed procedure was appropriate. This issue was serious and not pro forma. Some flexibility had been shown in earlier interventions, and provided Members kept in mind priorities, principles and ultimate objectives, real progress could be made. However, there was very little time. New Zealand would participate in trying to solve the substantive technical and political issues within the proposed procedure.

177. The representative of Switzerland said his country regretted that the work on harmonizing non-preferential rules of origin had not been completed, particularly as these rules played an essential part in trade policy, insofar as they were used in the implementation of numerous trade policy instruments. In this regard, his delegation endorsed the general remarks at the beginning of India's statement. Successful completion of the work on harmonization, in accordance with the terms of reference, would constitute an important contribution to trade facilitation and the establishment of stable and predictable market-access conditions. Moreover, an agreement on the harmonization of rules of origin would help prevent a number of potential conflicts. The report of the CRO Chairman clearly indicated that the General Council should henceforth assume its share of responsibility in this process. Indeed, the CRO was currently encountering obstacles that it could no longer overcome without a policy decision being taken. In this regard, his delegation was grateful to the General Council Chairman for his suggestions. Switzerland believed it was the task of the General Council to consider how to give a clear direction to future discussions on rules of origin, and therefore urged the Chairman of the General Council to begin consultations on the 12 core issues identified by the CRO Chairman in his report, especially the first indent of sub-paragraph 5.1 of that report, with a view to determining the dimensions of the problems and to explore solutions which would allow Members to get out of the current impasse.

178. The representative of Brazil supported the proposal by the Chairman of the General Council to hold consultations on this issue in cooperation with the CRO Chairman. He wished to highlight two of the main issues. The first related to the implications of harmonized rules of origin on other WTO agreements. In his delegation's view there was no fundamental incompatibility between the Agreement on Rules of Origin and other WTO agreements. A reading of the Agreement on Rules of Origin clearly indicated that whenever a determination of origin was required under the provisions of any WTO agreement, it was the harmonized non-preferential rules of origin that should be used. What could not be envisaged was an interpretation that undermined the provisions of the Agreement on Rules of Origin itself, which required that Members "apply rules of origin equally for all purposes as set out in Article 1". Brazil was confident that a solution was within grasp. With regard to the other issue he wished to highlight, he recalled that in the preamble to the Agreement on Rules of Origin, Members had recognized that "clear and predictable rules of origin and their application facilitate the international flow of trade". In Doha, Ministers had instructed continued work on trade facilitation, with a view to possible negotiations after the Cancún Ministerial Conference. Brazil would rather view the conclusion of the HWP, as mandated by Ministers in Marrakesh, as a major trade-facilitation item, and one which would have a confidence-building impact if satisfactorily dealt with. Brazil supported the recommendations of the CRO Chairman on the issues to be dealt with as a matter of priority by the General Council, as this could give the impetus to the HWP required to meet the current deadline. The conclusion of the HWP was a matter of urgency on its own merits, but could also be seen as a contribution to improved implementation of the Uruguay Round under more

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balanced rights and obligations, and as an indispensable step in moving forward the work programme established in Doha.

179. The representative of the Philippines said that her delegation attached utmost importance to work on the HWP because of the contribution it would make to Members' trade-facilitation agenda. The trade-facilitating objective of the HWP had also been an issue raised by Australia and New Zealand, as identified in paragraph 4.3 of the report in G/RO/52. The completion of the HWP without further delay would demonstrate to the global trading community Members' collective effort to ensure clear and transparent rules. These rules would not only facilitate the flow of goods across borders, but would also help the trading community to reduce unnecessary transactions regarding compliance, which in the end would benefit all consumers. As such, her delegation was concerned by the inability of Members to conclude the work despite several attempted deadlines. This did not speak well of the WTO, especially at a time when Members were working under strict deadlines to be able to deliver, by the time of the Ministerial Conference in Cancún, what Ministers had collectively agreed in Doha. The HWP was unfinished business from the Uruguay Round and an implementation-related issue that had to be concluded. Failing to conclude it would result in yet more unfinished business.

180. In her delegation's view, efforts at technical resolution of the issues identified in the CRO Chairman's report had been exhausted. It was now time for the General Council to demonstrate political will and to make the necessary compromises on those issues. The deliberations in the General Council should not be a repeat, at a higher level, of the CRO Committee debates. Agreement on the list of core policy issues in the product-specific rules in paragraph 3 of G/RO/52 had been reached with great difficulty and debate in the CRO. Consensus had eluded the Committee because on some issues, one or two delegations could not accept the majority view. On the first indent identified in Appendix 1, definition 2(i), which was the issue of origin of products of sea fishing, her delegation believed that the origin rule should be consistent with the provisions of the United Nations Conference on the Law of the Sea. A good number of other product-specific issues belonged to the agriculture and textiles sectors, which were very important for developing countries. With regard to the so-called implications issue in paragraph 4 of G/RO/52, her delegation did not understand this issue, because in the Philippines' view there should be no incompatibility between the Agreement on Rules of Origin and other WTO agreements. Where a particular WTO agreement called for the determination of origin, it was the harmonized non-preferential rules of origin that should apply. Some delegations seemed to have a different view. Given this situation, her delegation was prepared to work constructively in the General Council to find a fair solution that would enable some delegations to be more forthcoming with regard to the resolution of product-specific rules. The Philippines agreed with the CRO Chair's recommendations outlined in paragraph 5 of G/RO/52 on how the General Council should proceed. As such, it agreed to the Chairman's proposal and encouraged him to consult soon after the summer break.

181. The representative of Norway supported the Chairman's proposal and said that Members should instruct the Chairman to take up consultations in the autumn with a view to preparing a General Council meeting to discuss the 12 core policy issues identified by the CRO Chairman. In this regard, he wished to stress the following points: first, the harmonized rules should facilitate and not hamper trade. To achieve this objective, the rules should be simple and administered in a consistent, uniform, impartial and reasonable manner. They should not be used as instruments to pursue trade objectives or to impose unduly strict requirements. Second, the implications issue, as referred to by the CRO Chairman, was very complex and had gradually surfaced as the major problem in the current work. Such problems concerned the implications of rules of origin in relation to, inter alia, SPS, labelling and anti-dumping rules. The various problems brought forward, although they might reflect legitimate concerns, should not render the completion of the HWP impossible. These problems could be adequately addressed only in the respective Committees established for such purposes. Completion of the HWP by the end of 2002 would demand discipline and flexibility from all parties, as well as a willingness to prioritize and make compromises. He was convinced that by taking this

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issue up in the General Council and with Members' willingness, compromises would be found in the consultations the Chairman would hold in the autumn.

182. The representative of China supported the Chairman's proposal to hold consultations after the summer break. Work under the HWP had been going on for seven years, and had set a certain record in the history of the WTO. This issue was of crucial importance to facilitate trade flows and avoid potential trade obstacles between Members. China therefore urged the parties concerned to adopt a more positive attitude and to show more flexibility, so as to bring the HWP to an early conclusion.

183. The representative of Thailand commended the CRO Chairman's perseverance in trying to bridge the disparate positions in order to fulfil the task mandated to the CRO. However, progress on the HWP in the first half of 2002 had been disappointing, since it was below Members' expectations regarding the number of issues resolved thus far. Thailand believed that Members, and more particularly developing-country Members, could reap real benefits for market-access commitments only if there was one single predictable rule on each issue under the HWP. The HWP was at a critical stage, and the Members concerned should exercise flexibility. In this regard, his delegation supported the CRO Chairman's recommendation that the General Council take appropriate action on this issue. However, in view of the deadline for completion of the HWP, the General Council should have a clear work plan for how to deal with the 12 core policy-level issues, and should instruct the CRO to continue and to complete its work on the remaining core policy issues and make periodic progress reports to the General Council. There was no longer any time to waste. After six years of discussion and several deadline extensions for the completion of the HWP, it was time for all Members to show to the outside world the integrity and credibility of the organization.

184. The representative of Australia supported the Chairman's proposal that the General Council accept the CRO Chairman's recommendations and consider the 12 core policy issues. This support was on the proviso that the remaining issues would also be dealt with in due course. Australia shared the Philippines' view that the General Council should not simply elevate the technical discussion to a higher level. He sought clarification on the process for the examination of these issues.

185. The representative of Singapore said that over the past seven months, Members had managed to make some progress on some of the outstanding issues, albeit at a much slower pace compared to 2001. As the Vice-Chairman had reported, 94 issues still needed to be resolved. In this regard, his delegation supported the CRO Chairman's recommendation that the General Council should first focus on the 12 core policy issues which he had identified. Like previous speakers, Singapore hoped that this matter would be resolved before the end of 2002. It also hoped that the work to be undertaken on the outstanding unresolved issues would not hold up progress in other areas where negotiations were ongoing under the Doha Development Agenda.

186. The representative of the United States said that Members had come very far in work under the HWP through the serious efforts and commitment of all delegations. The United States remained committed to meeting this objective. There appeared to be a consensus emerging that a fundamental cross-cutting issue had emerged as the linchpin for further progress, pertaining to the implications of harmonized rules of origin for rights and obligations under other WTO agreements. The United States was pleased to join with other Members in seeking a solution to this issue. It remained committed to achieving, with others, a successful completion of the harmonization work, and supported the Chairman's suggestion for the next steps to be taken.

187. The representative of Colombia supported the CRO Chairman's recommendations in G/RO/52, as well the Chairman's proposal, in order to make progress on this matter. Colombia was flexible as to the steps to be taken for the completion of the pending work. His delegation would continue to participate actively in the CRO's work until the completion of the HWP before the end of 2002. To this end, the CRO could make an additional effort and focus on the core issues identified by

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its Chairman in paragraph 5 of G/RO/52. As to the remaining issues, delegations should leave aside positions of principle and show flexibility in order to find points of convergence, and should accept the recommendations that had resulted from the many technical discussions in the marathon working sessions of the Committee. Colombia supported the inclusion of the implications issue as part of the core issues to be addressed. To this end, the Secretariat should draw up a compendium of the discussions thus far and positions expressed by Members, which would serve as guidance for this discussion.

188. The representative of Pakistan said that his delegation also attached great importance to the completion of the HWP and endorsed Norway's view that the harmonized rules of origin should be simple, easy to administer and, above all, should facilitate rather than restrict trade. Pakistan therefore welcomed the Chairman's suggestion to take up the core policy issues after the summer break with a view to completing all of the work by the end of 2002.

189. The representative of the European Communities said that the Community shared the views expressed by India. With regard to the CRO Chair's proposal regarding working procedures, as it would be difficult to deal with all of the 94 items together, his delegation agreed to focus first on the 12 so-called crucial issues identified in G/RO/52. This did not mean that the 82 remaining issues were less important. On the contrary, many of the latter were crucial to the Community.

190. The Chairman said that he wished to provide some clarification with respect to his procedural proposal. Following the recommendation of the CRO Chairman, the General Council would hold a first meeting on the 12 issues identified in paragraph 5.1 of G/RO/52. This meeting would be preceded by consultations to be held by the General Council Chairman. These 12 core policy-level issues were horizontal issues, and it was understood that the resolution of the problems involved in connection with these issues could have a positive impact on the resolution of the other 82 issues, which had also been identified and had to be resolved by the General Council. This would be the first of several meetings that would deal with all 94 issues identified by the CRO. Therefore, he was in no way suggesting that the General Council would take up only these 12 core issues. He would hold consultations after the summer recess for the purpose of preparing and organizing this first meeting.

191. He then proposed that the General Council take note of the report by the Chairman of the Committee on Rules of Origin in G/RO/52 and of the recommendations contained therein, as well as of the statements by Members, and that it agree to hold a first meeting on the 12 issues identified in the above-mentioned report. This meeting would be preceded by informal consultations after the summer recess for the purpose of preparing and organizing the meeting. It was understood that these General Council-level meetings would deal with all of the issues identified by the Committee on Rules of Origin in G/RO/52.

192. The General Council so agreed.

14. Council for Trade in Goods – Recommendations for appropriate action regarding proposals contained in paragraphs 4.4 and 4.5 of the Doha Ministerial Decision on Implementation-Related Issues and Concerns relating to the Agreement on Textiles and Clothing

193. The Chairman recalled that pursuant to paragraphs 4.4 and 4.5 of the Doha Ministerial Decision on Implementation-Related Issues and Concerns, the Council for Trade in Goods had been requested to examine two proposals relating to the Agreement on Textiles and Clothing, and to make recommendations to the General Council by 31 July 2002 for appropriate action.

194. Mr. Supperamaniam (Malaysia), Chairman of the Council for Trade in Goods, said that the two proposals set out in paragraphs 4.4 and 4.5 of the Doha Decision on Implementation-Related

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Issues and Concerns related to the method of calculating quota growth rates under the Agreement on Textiles and Clothing (ATC). The examination of the two proposals had begun in March and April, with three informal meetings to discuss ways to approach this task. It had been decided to begin the examination at the formal meeting of the Council for Trade in Goods (CTG) on 2 May, with a series of informal sessions to examine the proposals in detail and prepare the draft report and recommendations, along with the formal meetings to put matters on record. This item had been on the agenda of four formal meetings of the CTG in May, June and July, and had been discussed at eight informal consultations during that period. A great deal of documentation had been provided during this exercise in support of the arguments made at the meetings, in the form of statistics on trade developments during the ATC period, as well as detailed submissions setting out the positions of Members. It had become clear from the outset that there were fundamental differences between the views and understandings of the restraining Members and those of the developing-country exporting Members, on both the contents of the report and the recommendations. Great effort had been made to try to present these views in a factual and balanced manner in a draft report. Discussion of the draft text had led to repeated demands for further points to be included, which in turn had resulted in demands for balancing texts. The draft report had been re-written repeatedly in order to accommodate these requests. However, the required consensus on the report and on the recommendations had not been reached. In view of this, there had been no alternative but to conclude the exercise without results. Consequently, he was not in a position to present a report with recommendations to the General Council.

195. All delegations who spoke expressed gratitude to the CTG Chairman for his efforts and skill in trying to achieve a positive outcome on the mandate given by Ministers on the two proposals on textiles.

196. The representative of Hong Kong, China said that despite the CTG Chairman's efforts, the CTG had not been able to come up with any recommendations, mainly because of the lack of flexibility of the restraining Members. He recalled that in paragraph 12 of the Doha Ministerial Declaration, Ministers had agreed to "attach the utmost importance to the implementation-related issues and concerns raised by Members and are determined to find appropriate solutions to them". They had also agreed in paragraph 3 of the preamble of the Decision on Implementation-Related Issues and Concerns that "[T]he Ministerial Conference [is] determined to take concrete action to address issues and concerns that have been raised by many developing-country Members regarding the implementation of some WTO Agreements and Decisions," and in paragraph 4 they had recalled the General Council Decision of May 2000 to meet in special sessions to address outstanding implementation issues and to assess the existing difficulties, identify ways needed to resolve them, and take decisions for appropriate action. The specific mandate given by Ministers in paragraphs 4.4 and 4.5 of that Decision consisted of two parts: the CTG was first to examine the two proposals, and then to make recommendations to the General Council by 31 July 2002 for appropriate action.

197. The restrained Members, including Hong Kong, China, had put forward detailed arguments in favour of the two proposals at the CTG meetings on 2 May, 13 June and 23 July, as well as in the numerous informal consultations. In his delegation's view, the approval and implementation of these market-enhancing proposals would go towards redressing the balance of rights and obligations under the ATC, without requiring any modification to the Agreement. The International Textiles and Clothing Bureau (ITCB) members had also submitted a 16-page document in the context of the Second Major Review, which had comprehensively made the case that the balance in the ATC had been impaired. The detailed justifications provided by Hong Kong, China could be found in the relevant minutes of the CTG meetings, in document G/C/W/304, as well as in the statement his delegation had made at the CTG meeting on 23 July. Despite the clear and unambiguous mandate given by Ministers, the CTG had not been able to come up with recommendations. It was clear from the Doha Decision that Ministers themselves did not, as they had some others, reject these two

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proposals. The inference from paragraphs 4.4 and 4.5 of the Doha Decision was that Ministers expected some progress and some recommendations.

198. The developing-country exporting Members had made it clear that they were open to any possible means of making progress, however meagre, towards further progressive liberalization of trade in textiles and clothing. Members were not wedded to these two proposals as the only way forward. However, the response from restraining Members had been uniformly and totally negative. The latter would not take one additional step beyond the absolute minimum legally required of them under the ATC. To justify such a lack of movement, it had been argued that the markets of the restraining Members were already opening up very quickly and could not bear any further acceleration of imports. The statistics showed that imports were indeed increasing, but in a highly skewed way. In the clothing sector of the US market, in which Hong Kong, China had the closest interest, overall imports had increased in value terms by 74 per cent between 1994 and 2000. This impressive figure hidden the fact that the increase had been only 44 per cent for restrained suppliers, while it had been 220 per cent for unrestrained suppliers. Even Canada, which was not so competitive in the clothing sector, had recorded a 170 per cent increase. In terms of import shares, the restrained suppliers had dropped from 83 per cent to 69 per cent over that period, and Hong Kong, China from 12 per cent to 7 per cent. The unrestrained suppliers' import share had increased from 17 per cent to 31 per cent. The import increase from unrestrained suppliers was due largely to the combination of continued quotas, high tariffs and very restrictive preference-qualifying local content rules incorporated in preferential schemes. These preferential schemes often required considerable input from US domestic industrial sources. This was another form of protectionism, and created a culture of dependence among the beneficiaries, who in fact might do better in an open market. These trends and the ongoing protectionism exhibited meant that little was being done to prepare the domestic industries in restraining markets for liberalized trade in textiles and clothing. In fact, the US market was being even more distorted as the end of the transitional period approached. With regard to job losses, it was obvious that the majority of these losses were at the instigation of the US domestic manufacturers themselves, who were trying to make the most out of regional preferential schemes, and the traditionally restrained suppliers could not be asked to bear the blame for this.

199. In the European Union market, the share of clothing imports from the restrained suppliers had declined from 47 per cent to 43.5 per cent between 1994 and 2000. The share of non-restrained suppliers had increased, while that of Hong Kong, China had decreased. The question was what could justify keeping under restraint exporters who accounted for much less than half – and a declining share – of EU imports, especially at a time when restraints had even been eliminated on some non-WTO Members. As in the US market, restrained suppliers in the EU market should not be worse off under the ATC, with its commitment to progressive liberalization, than they were under the Multi-Fibre Arrangement. However, this appeared to be the case. The legitimate expectations of many exporters regarding what should have resulted from the implementation of the ATC had been undermined. It had been argued that the quota growth rates had already been so high that that they had become no barrier to trade. Some greatly inflated statistics had been quoted in this respect. However, on the basis of Hong Kong, China's analysis, for quotas that still remained in place, the average yearly pre-ATC growth rate had been 3.26 per cent for the EU and 3.84 per cent for the US. For the period 1995-97, these rates had increased to 3.78 per cent for the EU and 4.45 per cent for the US. For the period 1998-2001, these had been 4.72 per cent for the EU and 5.56 per cent for the US. Such figures did not translate to significant additional access resulting from the operation of the ATC. Meanwhile, the number of embargoes placed on certain categories as a result of full utilization of quotas had been increasing. The argument had also been put forward in some instances that restraining Members would only be prepared to increase their market access on a reciprocal basis, through the lowering of tariffs of developing-country exporting Members. This did not compare like with like. One could not equate the removal of GATT-inconsistent quantitative restrictions with the lowering of GATT-bound tariffs. Members should remember that they were now engaged in negotiations in which the issue of tariffs all around could be addressed. Furthermore, the restraining

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Members' sudden conversion to the cause of reciprocal market access in textiles and clothing came at a suspiciously late time, just over two years before Members were legally bound to eliminate quantitative restrictions under the ATC. Hong Kong, China would no doubt become an exception even if the principle of reciprocal market access were to be embraced, since its market had always been completely open. It had also been argued that agreeing to the two proposals would require a change in the ATC. However, the ATC stipulated minima, but not ceilings, in terms of growth rates. Therefore, no change would be required.

200. He believed that the CTG discussion had demonstrated that it was not the ATC that would need to be changed, but rather the undertakings and promises given by governments in the restraining countries to their domestic industries. This was an entirely different matter. It was clear that the restraining Members refused to budge on this issue. Hong Kong, China had never harboured any illusions on this count. As it was familiar with the power of the textiles lobbies in the importing countries and the susceptibility of the governments concerned to their arguments, Hong Kong, China did not expect any substantive benefit from that exercise and therefore was not disappointed. However, WTO Members would have to take into account more broadly the following: a number of developing-country Members had implementation concerns regarding some of the Uruguay Round agreements, including the ATC; they had joined the consensus to launch the Doha Development Agenda partly on the basis that these concerns would be addressed; and textiles and clothing was a key sector for their development. Accordingly, Hong Kong, China was concerned that the total rejection of these proposals might have a negative effect on the Doha Development Agenda and would be seen as requiring rebalancing elsewhere in the Agenda. Therefore, the issue of ATC implementation was of interest to the WTO membership as a whole. In this context, in its Hanoi Communiqué dated 23 May 2002, the ITCB Council had stressed that "the engagement of developing countries in the Doha Development Agenda is predicated on full delivery of the Uruguay Round legacy, in particular the commitment to fully and faithfully integrate trade in textiles and clothing into the normal disciplines of the WTO". The fact that the CTG had not been able to make any recommendation to the General Council meant that the second part of the mandate had not been fulfilled. Under these circumstances, these proposals were now back in the domain of the General Council, performing the function of the Ministerial Conference between Ministerial Conferences.

201. The representative of Pakistan9, referring to the trade policy review of the European Communities on 24 and 26 July, said that a point had been raised on the question of whether the EU had considered compensating developing countries for serious impediments to their growth and development, as the result of the Community's trade policies in key sectors, especially textiles and clothing. In an ideal world, the answer would have been affirmative. Developing countries had been called upon to make tremendous sacrifices in accepting to live under quota restrictions on their exports for over 40 years. In the Uruguay Round, they had also had to make significant concessions to secure a progressive and gradual phase-out of these restrictions. Despite seven and a half years of the ATC, however, the promise of progressive quota elimination had remained only a hope. This was due to the rather ineffectual implementation by major restraining Members of their commitments under the ATC. Developing countries, including Pakistan, had made a comprehensive case demonstrating that ATC implementation had impaired the balance of the Agreement to their disadvantage. Virtually all quota restrictions remained in place. Other actions had also been responsible for disrupting the balance of the ATC, such as a number of safeguard actions without justification under the ATC, most of which had been found by the Textiles Monitoring Board or dispute settlement panels and the Appellate Body to be inconsistent with ATC obligations. New restrictions had been imposed, including on imports from Pakistan. Rules of origin had been changed. Anti-dumping actions had been initiated, causing great damage to the exports of developing countries, including in products that had already been under severe quota restrictions. Losses in business and import shares had taken place. Some restrictions had then been withdrawn on non-WTO Members,

9 The full text of the statement was circulated in WT/GC/64.

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while kept on WTO Members. The principles of equity and non-discrimination had therefore been discarded. The restraining Members had not contested these facts. While developing countries had made written submissions based on facts and figures, restraining Members had merely made oral remarks, with the exception of the United States, which had made a written submission. The US submission had essentially made three points: first, that the proposals would require modifying the ATC; second, that as imports had generally been increasing under the ATC, the ATC implementation should be deemed to be on track and without problems; and third, that the proposals would subvert the balance of the ATC. At the CTG meeting of 23 July, the US submission had been considered and a number of delegations had proved the US reasoning to be unconvincing. While detailed records of that meeting would have to be awaited, those interested could refer to documents G/C/W/404 and 405. These documents reproduced the statements made at the CTG by Pakistan and Hong Kong, China, in which it was pointed out that implementing these proposals would require no modification of the ATC or of the domestic legislation of the restraining Members. The purported increases in imports were not the result of ATC implementation, but rather of the preferential arrangements made by major restraining Members of their own volition. The proposals would go towards correcting the imbalance created by the implementation of the ATC rather than disrupting it. The adoption of the proposals would be beneficial not only for restrained developing-country Members, but would also assist restraining Members in fulfilling their commitment to fully implement the Agreement. This could result in a win-win situation and would be beneficial to restrained Members, restraining Members and consumers. Furthermore, it would be a positive and concrete signal to the outside world that the WTO system could be responsive to calls from developing countries.

202. His delegation had been disappointed that the CTG had not been in a position to produce a consensus report with recommendations to the General Council. This issue involved an important mandate by Ministers and an equally important element of the Doha Development Agenda. Its satisfactory resolution was critical to the confidence of developing countries in the Doha work programme. The General Council should now play its role in taking up and fulfilling the Ministerial mandate in accordance with its responsibility in the interval between Ministerial Conferences.

203. The representative of China said that the failure of the CTG to fulfil the mandate given by Ministers in Doha was due to the stringent attitude of restraining Members, even though the ATC provided the possibility for Members to adopt the two proposals. At the CTG meeting of 23 July, the restraining Members had recognized that adoption of the two proposals would not require amendment to or reopening of the ATC, since the ATC merely provided for minimum thresholds for increases in growth rates. Regrettably, these Members had chosen not to take any appropriate action on the two proposals. His delegation fully endorsed the comprehensive analysis and comments made by Pakistan and Hong Kong, China. As this was an important implementation issue of great interest to developing-country Members and a part of the Doha Development Agenda, this failure was contrary to Ministers' commitments in the Doha Declaration, which stated that they were "determined to take concrete action to address issues and concerns that have been raised by many developing-country Members regarding the implementation of some WTO Agreements and Decisions". Restrained Members had expressed their concerns over the manner in which restraining Members had implemented various provisions of the ATC. Undisputed facts were contained in the submissions (G/C/W/368, 304, 325 and 339) by developing-country exporting Members to the CTG to facilitate its examination of the two proposals and in the context of the Second Major Review. Adopting the two proposals would not only benefit exporting Members, but also restraining Members by facilitating their internal industrial adjustment. It was clear that one important benefit of the multilateral trading system was to facilitate domestic reform and adjustment. It was hard to imagine that industrial adjustment in restraining Members would become easier when most of the quotas were to be eliminated at the very end of the implementation period of the ATC, i.e. 1 January 2005. It was also clear that the textiles and clothing sector played a significant role in the economic and social development of developing-country Members. The unsatisfactory implementation of the ATC in the past seven and a half years had greatly weakened the confidence of developing-country Members in

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the multilateral trading system. The failure to adopt these two proposals would also send a negative signal to the outside world about the ability of the multilateral trading system to address the problems and concerns of developing countries. It would also unavoidably affect Members' enthusiasm for other issues of the Doha Development Agenda. In order to restore and maintain developing-country Members' confidence, his delegation urged the General Council to address this issue.

204. The representative of Brazil said that the issue of implementation of the ATC was of great importance to the developing countries in the overall balance of the Doha work programme. Textiles constituted a key sector in terms of generating revenue for developing counties. In the context of a so-called "development round", one would have expected a little more flexibility on the part of the restraining Members. According to paragraphs 4.4 and 4.5 of the Doha Ministerial Decision on Implementation-Related Issues and Concerns, the CTG had been required to "make recommendations to the General Council by 31 July 2002 for appropriate action". For well-known reasons, this had not been possible and the mandate had therefore not been fulfilled. The implementation of the ATC had not met the expectations of developing countries in respect of enhanced market-access opportunities for textiles and clothing exports in the restraining countries' markets. The process of implementation of the ATC by restraining Members, who were leaving the large bulk of quotas in place until the end of the transitional period, had caused serious imbalance to exporters' rights. The purpose of the ATC was to secure a progressive phase-out of quota restrictions during the transition period. The restraining Members, however, seemed to pay little attention to this element of progressiveness. In terms of trade, barely 20 per cent of imports that had been under specific quota restrictions had been liberalized. The approval and implementation of the two proposals would partly redress the balance. The CTG had a specific mandate to take appropriate decisions to ensure that the balance of rights embodied in the ATC had not been impaired. The two proposals fell within the existing provisions of the ATC, and their adoption would not require any modification in the Agreement or in the domestic legislation of the restraining countries. The dissatisfaction of his delegation was amplified by the fact that the absence of results in implementation had become the rule rather than the exception. Brazil hoped that this situation would be corrected in the near future and that Ministers' instructions on an issue of fundamental importance to developing countries would be fulfilled.

205. The representative of Bangladesh associated his delegation fully with the statement by Hong Kong, China. As a developing country, Bangladesh appreciated the goodwill of the WTO membership for issues of concern to Bangladesh. Special provisions were embedded in the WTO agreements that were designed to enable developing countries to develop more rapidly. Members, both developed and developing, recognized that developing countries had problems that demanded special attention and treatment until these countries were able to engage in this phase of globalization as equal partners. Bangladesh had been gratified when, in the Doha Declaration, Ministers had stated that "we shall continue to make positive efforts designed to ensure that developing countries, and especially the least-developed among them, secure a share in the growth of world trade commensurate with the needs of their economic development." This was a reaffirmation of the will of the community in this respect. Moreover, the Doha Declaration reflected a compromise. Each country had accepted the decisions in a spirit of cooperation and accommodation. Members might recall that Bangladesh had asked for much more in the area of textiles, but had accepted what had emerged out of the process of negotiations, on the basis that what had been agreed upon would be taken seriously. Consequently, Bangladesh had been extremely hopeful with regard to the outcome of these two outstanding proposals relating to textiles and clothing. Members were aware of the key role that export-led growth now played in restrained economies. Textiles were the thrust sector for their growth, for exports, and also for the relative ease with which they were able to provide employment. Many countries that were now developed had relied on the textiles industry in their early stages of development, and therefore might appreciate these concerns. Bangladesh had been eagerly anticipating a successful result, especially as its quota entitlements for some of its major export items to the largest single import market were almost fully utilized. For example, seven months into the quota year, 75 per cent of Bangladesh's quota for 2002 for cotton knit shirts had already been filled.

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Likewise, 76 per cent of its quota for cotton and man-made fibre skirts, 95 per cent for cotton trousers, and 70 per cent for man-made fibre trousers had already been utilized. Although not directly related to the two proposals, he wished to point out that Bangladesh's products faced the highest tariff barriers, compared with other products from developed countries. These restrictions were a severe barrier to the country's export possibilities. For the first time in two decades, Bangladesh's total export earnings in the 2001-2002 fiscal year had dropped. Bangladesh was disappointed that the CTG had not come to any conclusion with respect to the examination of the two proposals for making recommendations for action to the General Council, in keeping with the mandate from Ministers. He recalled that the Ministerial decision in favour of least-developed countries adopted at the conclusion of the Uruguay Round provided that various agreements should be applied in a flexible and supportive manner for the least-developed countries. To this effect, sympathetic consideration should be given to specific and motivated concerns raised by least-developed countries in the appropriate Councils in the WTO. Unfortunately, two major restraining countries had not given any effect to Bangladesh's specific concerns or to the implementation of the relevant provisions of the ATC in favour of least-developed countries. Bangladesh had repeatedly raised its concern with respect to this situation, including during the consideration of implementation-related issues prior to the Doha Ministerial Conference, the major review of ATC implementation, and in connection with the examination of the two proposals by the CTG.

206. The proposals in paragraphs 4.4 and 4.5 of the Doha Ministerial Decision had been designed to enhance market-access opportunities for developing countries. The adoption of paragraph 4.4, in particular, could alleviate the market-access constraints on Bangladesh's exports and would be a concrete manifestation of the goodwill to which he had referred earlier. In the examination of the two proposals, Bangladesh had not been convinced by the reasons put forward by the restraining Members against their adoption. Contrary to the claim that they would disrupt the balance in the ATC, their adoption was necessary to redress the imbalance that had been created due to the manner in which the restraining Members had been implementing the ATC. However, he expressed appreciation to those countries providing Bangladesh free access to their markets. In 2001, the European Union had given considerable access to its markets, through the Everything-But-Arms initiative. Norway had announced significant market-access opportunities for the LDCs, while Canada had also announced its desire to eliminate all quota restrictions on exports from LDCs as from 1 January 2003. Bangladesh would have hoped for a similar dispensation from the other major developed country that maintained quota restrictions on its exports. As the CTG had been unable to come up with a recommendation, it was now for the General Council to deal with the mandate given by Ministers in Doha. This issue was an important element of the Doha work programme and the WTO membership should continue its efforts to find a solution to it for the remaining years of the ATC.

207. The representative of the European Communities10 said that the intensive discussions concerning the implementation of the ATC, which had lasted several months, were now coming to an end. The process of integration of the textiles and clothing sector under the normal rules of the WTO was in its seventh and a half year, and all Members were committed to the full and faithful implementation of the ATC, which included the termination of the ATC on 1 January 2005. In addition, as the report on the second stage of the ATC had pointed out, all countries had been living up to their commitments. There might have been disagreements on a number of issues, but overall things were well on track. Against this background, the Community wished to stress several points. First, regarding compliance with their ATC obligations, the restraining Members had proceeded to the different stages of integration of products under the ATC. More than 51 per cent of their imports in 1990 volume terms had now been freed and subject to normal WTO rules. In the Community's case, 82 quotas had been eliminated in the second and third stages of integration. The Community had not used the temporary safeguard mechanism of Article 6 of the ATC one single time. The Community noted with satisfaction that the use of this safeguard mechanism had decreased and almost fallen into

10 The statement was subsequently issued in WT/GC/65.

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disuse. Second, facts showed that the ATC had made a difference when it came to exports from restrained Members in real life. In the EU, between 1994 and 2001, its imports from all WTO countries which were subject to one or more quotas had grown between 1994 and 2001 by 58 per cent, to reach €72.2 billion in 2001, accounting for one-third of its total consumption of textile products and garments. In that same period, its imports from the same WTO countries of products subject to quota had grown by 66 per cent. The latter growth was not only higher than growth of all textiles and clothing imports from those countries, but also four percentage points higher than the growth of all textiles and clothing imports from all countries. Such relatively good performance of imports into the EU of products subject to quotas could only be explained by a combination of two factors. First, EU quotas vis-à-vis WTO Members had increased steadily. They had almost doubled in volume between 1994 and 2001. This was also due to the ATC provisions for accelerated growth. Second, many of the EU quotas were not very much utilized and therefore were not often a major restriction to imports. In 2001, out of a total of 299 quotas applied vis-à-vis WTO countries, only 40 had been utilized at 95 per cent or more, representing 13.4 per cent of the total number of quotas. Total EU textiles and clothing imports under quota had represented over the last few years a consistently low share of total textiles and clothing imports, between 23 and 25 per cent only.

208. Other factors could explain the performance of non-EU suppliers, and especially from developing countries, which were by far the Community's largest suppliers. These were low custom duties and the absence of technical barriers to trade. The average EU import duty of 9 per cent in the sector was amongst the lowest in the world, and there were no tariff peaks, as its customs duties did not exceed 12 per cent. Moreover, the EU did not maintain any quotas against least-developed countries, which benefited from duty exemption for textiles and clothing. Some 40 per cent of the Community's imports entered duty free, almost all from developing countries. Over one third of EU imports from developing countries benefited from reduced customs duties under the Community's GSP scheme. Over 90 per cent of yearly increases in EU imports in this sector were accounted for by developing countries. The EU had an integrated internal market with no technical or administrative barriers on textiles and clothing imports. The EU textiles and clothing industry had taken a full share of the brunt of this steady market opening in the sector. In 1995, that industry had comprised 132,162 firms and had employed 2,549,100 people; in 2001, these figures were 112,968 companies and 2,117,200 people, representing drops of 17 per cent and 20 per cent respectively, mostly in areas experiencing difficulties of industrial decline in the EU. With regard to EU compliance, he said that it should be noted that EU textiles and clothing imports bore no comparison with the very low levels of imports of many of those countries that were insisting most that the EU and other countries proceed to faster liberalization of their markets, beyond their ATC obligations. As shown in document G/C/W/402, imports of some of these countries, not only from the EU but also from among themselves, were almost negligible for clothing and very modest for textiles. At the Community's request, the WTO Secretariat had provided comparative information on Members' bound and applied duty rates (G/C/W/406), in order to enable them to make an assessment of the various market-access conditions. As compared with the so-called "exporting countries", the EU duty rates were considerably lower. The 9 per cent average duties of the Community contrasted with the duties of other Members which were bound at higher levels or not bound at all. The average bound levels were 20 per cent for some countries and 30 to 35 per cent for others.

209. Regarding the request for "rebalancing" the ATC, he would concentrate on paragraph 4.5 of the Doha Ministerial Decision on Implementation, since, regarding paragraph 4.4, the EU had already been applying the most favourable methodology for imports from small suppliers. The Community understood that the restrained Members would like to have increased access to markets such as its own. However, the Community failed to see any need for rebalancing, as its alleged non-compliance with its ATC obligations had not been proved. The proposals for a recalculation of the "growth-on-growth" provisions would introduce a new commitment absent in the ATC, which had established very precise calculations for the acceleration of the growth rates of quotas. In the Community's case, this would require a change of current legislation, as increases in quotas could take place only as

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implementation of agreements or stand-alone legal acts that would need to be properly justified. In this regard, it would be very difficult to justify a concession to a number of countries which, in many instances, had not opened up their textiles and clothing markets in any meaningful way so as to enable the EU to export its products into those potential markets. It would also be very difficult to justify a concession that would benefit many countries that were not WTO Members at the time of negotiation of the ATC, and which could therefore not hold any legitimate expectation from the implementation of the ATC.

210. The ATC was designed to put an end to thirty years of textiles and clothing quotas. It was a very finely balanced instrument and one of the cornerstones of the WTO. The EU had done its share of adjustment in the sector, prompted by constant market opening. Unfortunately, many other countries were not taking real steps to secure a level playing field in textiles trade worldwide. This was worrying because the EU was the largest textiles exporter in the world and the second largest combined exporter of textiles and garment products. The Community considered that textiles trade should not be a one-way affair. While reasserting its commitment to ending the quota system in 2005, the Community did not believe that much could be gained by maintaining what amounted to a certain re-reading of the ATC, which had been agreed by all WTO Members.

211. The representative of Thailand, speaking also on behalf of Indonesia said that these delegations were disappointed that the CTG had been unable to fulfil its mandate on either the examination of the proposals or on making any recommendations to the General Council. Such a situation was the result of the inflexible approach adopted by the major developed restraining Members. It was universally recognized that the implementation of the ATC had not lived up to its billing. The large bulk of quota restrictions still remained in place after more than seven years of the ATC implementation period. In a number of instances the rights due to developing-country restrained Members had not been faithfully delivered. Thus, the promise of the ATC to developing countries had not been delivered. On the contrary, there was ample evidence that the manner in which restraining Members had been implementing the ATC had led to a situation of serious imbalance, to the disadvantage of restrained developing-country Members. In his delegation's view, the reasons put forward by the restraining Members to justify this imbalance were not convincing. Under these circumstances, his delegation believed that the General Council should now consider how to deal with the situation, in order to fulfill the mandate given by Ministers in Doha.

212. The representative of Panama said that the process in which Members were currently engaged would lead to the termination of the ATC on 1 January 2005. His delegation had sympathy for those Members that defended the opening of a market with trade barriers. Panama's clothing industry, though small compared with others, had managed to survive the opening of its market to international trade and was prepared to compete and possibly increase its market share. However, his delegation had concerns with respect to the positions that had emerged from the discussions on the phasing-out of the ATC. In these discussions, the needs of small industries such as those in Panama seemed to have been overlooked. Panama would pay particular attention to any initiative under the phasing-out procedure that would result in an increase in the shares of traditional exporters to the detriment of the small industries which were currently engaged in a preparatory process for 2005.

213. The representative of India recalled that in paragraph 12 of the Doha Ministerial Declaration, Ministers had attached the utmost importance to the implementation-related issues and concerns raised by Members and had expressed their determination to find appropriate solutions to them. The CTG had been given the clear mandate to examine the two textile proposals contained in paragraph 4 in the Decision on Implementation-Related Issues and Concerns and to make recommendation to the General Council by 31 July 2002 for appropriate action. Like the EU, his delegation also wished to provide statistics to justify India's position. Clothing imports shares from the restrained countries had declined from 83 per cent in 1995 to 69 per cent in 2000 in the US market, and from 48 per cent in 1995 to 43 per cent in 2000 in the EU market. That share had slightly increased in Canada only, from

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69 per cent in 1995 to 70 per cent in 2000. As shown in the Secretariat document (G/C/W/366), during the period 1994-2000, the market share of textiles and clothing of restrained Members exports had declined from 77 per cent to 66 per cent in the US market, and from 46 per cent to 43 per cent in the EU market. India's annual growth rate of exports in value terms to the US market had been 17.7 per cent in the period 1990-94 and had come down to 10.3 per cent during the period 1995-2000. In the EU market, that annual average rate had been 11 per cent for the period 1990-94 and had decreased to a negative growth rate of 0.8 per cent for the period 1995-2000. With respect to India's market access conditions, the quantitative restrictions on most textiles products had been removed, peak rates had been slashed and the rates currently applied were far below the bound rates. India's textile imports had increased from US$ 1.168 billion in 2000/2001 to US$ 1.535 billion in 2001/2002, representing an increase of 31.4 per cent. India's textile sector provided employment to 35 million persons and indirect employment to another 58 million.

214. Developing-country exporting Members had repeatedly expressed concerns about the implementation of the ATC. These related to lack of meaningful integration of retrained categories, unjustified anti-dumping actions on products already under quota restrictions, and other customs and administrative formalities, including changes in rules of origin and other issues affecting market access of developing-country exporting Members. Most of the quotas would remain in place until the end of the ATC, against the objective and purpose of the Agreement of a gradual and progressive phase-out of quota restrictions. In India's case, 95 per cent of its apparel, fabric and yarn trade would remain non-integrated with some of its major trading partners even after the third stage. During the Second Major Review of the ATC implementation, ITCB members had demonstrated how the balance of rights and obligations had been impaired to the detriment of developing-country exporting Members (G/C/W/304). In a joint submission with the ITCB (G/C/W/368) and at the CTG meetings over the last three months, developing-country exporting countries had made a strong case, backed by logic and facts, arguing for the acceptance of these proposals. They had emphasized that adoption of these two proposals would not require any modification in the ATC and would go some way toward redressing that imbalance. However, India was disappointed that restraining Members' stance on these two proposals had made progress on these issues impossible.

215. As Members were aware, the two textile tirets were part of the overall package negotiated by Ministers at Doha. If the intention had not been to take any action on these two tirets, Ministers would not have incorporated paragraph 4 in the Decision on Implementation-Related Issues and Concerns. This, in turn, would have impacted on other decisions taken at Doha, and the resulting Doha package would have been different. The Doha work programme constituted an overall package with emphasis on development. What was coming out of the current situation on this issue was that the development dimension had been jettisoned after Doha. The first two deadlines under the Doha package were both of great interest to developing countries. In the case of a decision under paragraph 44 of the Doha Ministerial Declaration relating to special and differential treatment, the deadline for completing the work would need to be extended to 31 December 2002, much to India's disappointment. The non-acceptance of these two proposals by the restraining Members and the inability of the CTG to make recommendations to the General Council clearly went against the mandate given by Ministers to address all outstanding implementation issues as a matter of priority. If the package negotiated at Doha were recast in the post-Doha process in Geneva in such a manner that the development aspects were sidelined, it would inevitably impact on other aspects of the negotiations and discussions. Any attempt to drive the Doha work programme forward at two speeds – at a faster pace for areas of concern to developed countries and at a lower pace for areas of concern to developing countries – would lead to unraveling of the package and would create roadblocks in the process. This should be avoided at all costs, in the interest of the future of the multilateral trading system. These two tirets, as unresolved implementation issues, were now within the domain of the General Council. His delegation hoped that substantial progress would be made on all implementation issues, as well as on special and differential treatment in the months to come.

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216. The representative of the United States said that the CTG had completed its examination, met its deadline and exhausted its mandate. The inability of the CTG to agree on any recommendations did not alter this fact and should not come as a surprise. Her delegation had actively participated in the extended debate in the CTG. It had requested data to inform the discussion and had prepared submissions in which it had carefully responded to the arguments advanced by the proponents. It had carefully reviewed other Members' data submissions. However, at Doha, it had made clear to all parties that they should not expect a change in the US position. At Doha, it had not been in a position to agree to these proposals, and this remained currently the case. The difficulties with these tirets had been acknowledged in the Doha Ministerial Declaration, as the two tirets had been handled uniquely in the Declaration. The plight of the US industry had worsened since Doha and the pace of plant closing, bankruptcies and job losses had accelerated over the past nine months. Since the entry into force of the WTO agreements, employment in the textiles and apparel industry had fallen by 700,000 jobs, representing 42 per cent of the work force, with 87,000 of those job losses over the past 12 months. Meanwhile, statistics showed a rapid increase in textile and clothing imports since 1994. US imports of textiles and apparel had increased 79 per cent in value and 90 per cent in quantity since the WTO agreements had entered into force. Some of the speakers at the present meeting had argued that the share of retrained countries in the US market had declined. It should be noted, however, that that share was still 69 per cent, in a market that had grown 79 per cent in value.

217. ITCB countries, in particular, had benefited from the growth in trade in textiles and apparel vis-a-vis the US market. According to data on the ITCB web site, the value of US imports of textiles and apparel from ITCB members since the inception of the ATC had grown faster than total imports. In the period 1994-2000, US imports from ITCB members had increased 91 per cent from 1994 to 2000, while total imports of textiles and apparel had increased 79 per cent. The value of US imports of textiles and apparel between 1994 and 2000 had increased by US$ 31.7 billion. The value of US imports from restrained countries and from ITCB members had increased by US$ 24.5 billion and US$ 22.2 billion respectively, while the value of CBI and NAFTA imports had increased by US$ 14.8 billion. The percentage increase in the value of US textile and apparel imports from the CBI and NAFTA countries had been larger between 1994 and 2000, which had to be expected since their 1994 level had been relatively low. However, the dollar value increase from the ITCB countries, and all restrained sources, had been nearly 50 per cent larger, and nearly 65 per cent larger, respectively, than the dollar value increase from the CBI and NAFTA countries. Finally, the share of US imports in value terms of textiles and apparel from ITCB members had increased from 61 per cent in 1994 to 65 per cent in 2000. The ATC had also extended similarly impressive benefits to small suppliers, least-developed countries and cotton-producing textile exporting countries. According to US statistics, under the ATC, between 1994 and 2001, the US textile and apparel imports from its 22 "small supplier" partners had increased 63 per cent in volume terms and 64 per cent in value terms. The US textile and apparel imports from its only least-developed country trading partner under ATC restraints had increased by 140 per cent in volume and 137 per cent in value. That least-developed WTO Member was the fourth largest supplier of apparel to the US market, accounting for US$ 2 billion of such imports. The US textile and apparel imports from cotton-producing exporting countries had increased 240 per cent in volume and 204 per cent in value. Conversely, the US expectations for improvements in access to the markets of the exporting countries had not materialized. The European Union had recently circulated statistics generated by the Secretariat that showed virtually no clothing imports in some major exporting countries.

218. These proposals were not about the implementation of the ATC, but rather would effectively amend its balance. The economic justification advanced by the proponents of these proposals simply did not withstand scrutiny. These proposals would harm the prospects of smaller exporters and some of the most vulnerable least-developed country trading partners of the United States. They called for billions of dollars of additional access for certain exporting countries, that would be extremely disruptive to the adjustment process that the US industry was in the midst of as a result of the ATC. Despite the hardship to its industry resulting from the ATC, the United States was faithfully meeting

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its requirements and remained committed to its full implementation. Her delegation encouraged all Members to focus time and energy on preparing for the challenges that increased competition would bring in the coming months, particularly when quotas disappeared in 2005.

219. The representative of Canada said that the Doha mandate to examine the two textile implementation proposals had been completed. The facts did not support the exporters' contention of problems with the implementation of the ATC, still less of any impairment of rights. In the case of Canada, it had met and exceeded its obligations under the ATC transition arrangements. Apparel imports into Canada from restrained exporters had increased over 80 per cent from 1994 to 2001, and the domestic market share held by the restrained importers was up from 31 to 45 per cent from 1994 to 2001. Canada remained committed to the full integration of the textile and clothing sector into GATT 1994 disciplines by 1 January 2005, as provided for in the ATC, and for the elimination of all remaining quotas by that date. The ATC had also provided for a negotiated ten-year transition process to allow domestic industry to adjust. This represented a fundamental commitment that Canada had made with its industry and workers. Therefore, no one should expect Canada to agree to proposals that would alter this ten-year transition process. However, while not directly related to these implementation proposals, Canada had announced a major market-access liberalization package for LDCs other than Myanmar, that would provide full quota-free and duty-free access for all products of LDC origin other than a very few supply-managed agricultural goods. This would take effect on 1 January 2003 and would include clothing and textiles. He said that it should be noted that apparel alone accounted for more than half of the LDCs' exports to Canada. The CTG Chairman had described the difficult and protracted examination of these proposals, which had been undertaken over the past months. In the light of the fundamental differences that remained, Canada believed that the process had reached its conclusion.

220. The representative of Bolivia said that his delegation attached great importance to the issue of implementation. The full integration of textiles and clothing under the WTO rules negotiated during the Uruguay Round was a step forward towards strengthening the multilateral trading system for developing countries. This fact had led to initiatives and expectations in several developing countries and adjustments in others. The legitimate aspirations of some developing countries to speed up the process that could signify modifying some commitments was understandable. However, given the importance of this issue and the social and economic impact that it could have, Bolivia believed that Members should continue to analyze these proposals and see how developing countries' concerns might be met.

221. The representative of Colombia said that his country attached great importance to the implementation process as a whole, and to this issue in particular. The examination carried out in the CTG on this issue had enabled Members to become aware of the aspirations of some countries and the difficulties faced by others. The historical exclusion of the textiles sector from multilateral disciplines prior to the Uruguay Round had made it more difficult to wait for the ten-year transition period provided for in the ATC pending the establishment of a fully liberalized market. However, Colombia had some concerns about the implications of the proposals for the negotiating process that had been undertaken. It was therefore important to maintaining favourable conditions, to enable Members to fully participate in the negotiations, since it would be impossible to progress without their cooperation in the expansion of the multilateral trading system.

222. The representative of Hong Kong, China said that he wished to clarify that the statistics quoted in his earlier intervention were data circulated by the WTO Secretariat at the request of the United States in G/C/W/366. These statistics therefore carried some authority and weight. The statistics he had quoted dealt with import share and not market share. It was clear that in terms of import share, the restrained Members had been losing out very markedly. In value terms, however, the restrained Members had increased their exports into the US over the period 1994-2000 by 44 per cent, while the unrestrained Members had increased in value terms over the same period by

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222 per cent. With respect to the US statement in relation to the hardship to its industry resulting from ATC implementation, it was clear from the statistical data that this hardship was mainly caused by the unrestrained suppliers. Portraying the hardship to the US industry as being caused only by the ATC implementation could mislead the public and political circles. In his delegation's view, the restrained suppliers were not causing the entire problem. Regarding the argument that it was impossible for restraining countries to open up further when they were faced with high barriers elsewhere, Hong Kong, China was the living proof that this was a hollow linkage.

223. The Chairman said it was clear from the discussion that although, in accordance with the mandate received, this matter had been examined in the CTG, it had not been possible to formulate any recommendations for the General Council by 31 July 2002. Second, it was clear that the matter continued to be of great concern to a substantial number of delegations, from both importing and exporting countries. Third, it was apparent that there were still fundamental differences between the views and understandings of the importing countries and of the exporting developing countries with respect to the mandate and possible recommendations. Fourth, delegations had expressed very differing views on how best to deal with this issue, and Members had clearly not reached a consensus on how to resolve it. In view of this situation and having examined various possible options, he proposed that the General Council take note of the statement by the Chairman of the CTG and of those by delegations, on the understanding that this would not prejudice the various positions taken by Members, which would be duly reflected in the minutes of the present meeting. He was convinced that all Members would use the summer break to continue to reflect on the various views that had been expressed.

224. The General Council so agreed.

15. Committee on Trade and Development – Report by the Chairman of the Committee in Special Session on Special and Differential Treatment in pursuance of paragraph 12.1 of the Doha Ministerial Decision on Implementation-Related Issues and Concerns (TN/CTD/3)

225. The Chairman recalled that in Paragraph 44 of the Doha Ministerial Declaration, Ministers had agreed that "[a]ll special and differential treatment provisions shall be reviewed with a view to strengthening them and making them more precise, effective and operational." Ministers had also endorsed the programme of work on S&D treatment set out in paragraph 12.1 of the Decision on Implementation-Related Issues and Concerns, which had mandated the Committee on Trade and Development (CTD) to report to the General Council with clear recommendations for a decision by July 2002. In pursuance of this mandate, the Trade Negotiations Committee, at its meeting of 28 January and 1 February 2002, had agreed that the review of all S&D treatment provisions with a view to strengthening them and making them more precise, effective and operational provided for in Paragraph 44 of the Ministerial Declaration should be carried out by the CTD in Special Sessions. The report by the CTD in Special Session had been circulated in TN/CTD/3.

226. Mr. Smith (Jamaica), Chairman of the Special Session of the Committee on Trade and Development, said that the report had been adopted at the sixth Special Session of the CTD held on 24 July 2002, and consisted of four sections: an introduction, a section on cross-cutting issues, a section entitled "Agreement-Specific Proposals and Issues", and a section entitled "The Way Forward". The first three sections were factual in nature. They essentially summarized very briefly the discussions in the Special Sessions' formal and informal meetings. Annexed to the report were lists of the submissions received from Members. The "Way Forward" section contained recommendations to the General Council, inter alia, (i) that the reporting deadline contained in paragraphs 12.1(i) and 12.1(ii) of the Decision on Implementation-Related Issues and Concerns be extended to 31 December 2002, (ii) that the analysis and examination of the Agreement-specific proposals and issues raised in written submissions and in discussions be continued, and that Members

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should provide detailed responses to the various Agreement-specific proposals by 31 October 2002, (iii) that the analysis and examination of the cross-cutting proposals and issues raised in written submissions and in discussions be continued at the same time, (iv) that a monitoring mechanism for S&D treatment be established, and the functions, structure and terms of reference be elaborated for the General Council’s approval, (v) that there be continued examination of other proposals on institutional arrangements, (vi) that the proposals on criteria for technical and financial assistance and training be submitted to the CTD regular session for the inclusion of any agreed elements in future technical assistance plans, and finally (vii) that consideration be given to how S&D treatment might be incorporated into the architecture of WTO rules, in accordance with paragraph 12.1(iii) of the Decision on Implementation-Related Issues and Concerns.

227. Following the adoption of the report, he had stated that the recommendations in paragraphs 15 and 16, as they appeared, preserved the opportunity for those Members who so wished to make cross-linkages between the two areas of work indicated, and to make inputs from one to the other as they considered appropriate. He had also stated that some delegations had felt strongly that the new deadline at the end of 2002 would be impossible to meet, and that he recognized that it had only been in the spirit of achieving the consensus necessary to continue the work that these delegations had gone along with the new deadline. These Members had been of the view that the results achievable by the end of 2002 had to be assessed in the light of the views on the new deadline. He had also stated that other delegations had expressed their disappointment that the July 2002 deadline had not been adhered to, given the importance that these delegations attached to this deadline in the overall process agreed in Doha. However, they had been willing to agree to a new deadline of 31 December 2002, as they had seen it as an appropriate and reasonable extension.

228. The Special Session had made several recommendations to the General Council regarding the work on S&D treatment which had been undertaken pursuant to the Doha mandate. He wished to emphasize that considerable substantive work still remained to be done. As the report indicated, a large number of Agreement-specific proposals had been tabled. At the same time, a number of cross-cutting and systemic issues had also been raised. It was clear from the report and from his concluding remarks when the report had been adopted that there were different views on important matters, such as the pace of the work, the relevance to the mandate of some of the matters raised, the priority to be accorded to different areas of work and the appropriate sequencing of the work to be undertaken. Should the recommendation to extend the deadline be approved by the General Council, it would be vitally important to have a focussed work plan that could move the work expeditiously and effectively forward. He looked forward to Members' full cooperation in this regard. The coming months would be critical insofar as the work of the Special Session was concerned. Considerable effort and thought had gone into the elaboration of submissions that had been tabled in the Special Session, and there was an opportunity for useful discussion and constructive engagement in the months ahead. Many Members had repeatedly emphasized the importance they attached to the work of the Special Session as a pillar of the Doha Development Agenda. He hoped that Members would show the flexibility and goodwill required to arrive at clear recommendations for decision by the time of the new deadline.

229. The representative of Kenya, speaking on behalf of the African Group, noted that further work would have to be done on the detailed Agreement-specific proposals that had been tabled but not fully discussed by the Committee. It was the African Group's understanding that work during the additional period would focus on these proposals. It would be essential to focus on these Agreement-specific proposals in order to avoid any delays in fully discharging the mandate given to the Special Session of the CTD. In this regard, these countries expected less time to be spent on issues that had already been more or less exhaustively discussed, on which there had been near agreement and on which there could have been concrete recommendations to the General Council. They would include in this category of issues the monitoring mechanism and technical assistance. These countries had participated in discussion of the report and, as pointed out by the Chairman of the Special Session of the CTD in his closing remarks when the report had been finalized, delegations had

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not been entirely satisfied with the report. However, in the spirit of moving the process forward, they were ready to adopt it. As delegations would note from the report, the Special Session had not yet delivered on its mandate in any concrete manner. All the various items mentioned in the recommendations were in terms of further work to be done, without any final product being delivered at the present time.

230. The mandate to the Special Session of the CTD had been given in urgent terms – Ministers had expected results by 31 July 2002. This was a serious matter, because in the discussion in the Special Session various proposals, particularly from the African Group, had received substantial and general acceptance by practically all delegations. Clear examples of this included the proposals and various explanations on the monitoring mechanism and on technical assistance. There had been broad support for the monitoring mechanism as proposed by the African Group. The functions of the mechanism had been identified and explained, as the Chairman's report indicated. However, the report recommended additional work on some aspects of the mechanism. The African Group urged the General Council to instruct the Special Session of the CTD not to dwell so much on the monitoring mechanism. Rather, work on the monitoring mechanism should be concluded almost immediately. Should any guidance be required in this regard, the establishment of the Committee on Regional Trade Agreements could serve as a reference. That Committee had been established by a short and precise decision of the General Council in February 1996. Therefore, the African Group did not envisage any further complications and delays, and urged the General Council to proceed along these lines expeditiously.

231. While not a single delegation had objected to the proposals on technical assistance, the report provided for further work in the CTD in regular session to take up elements to be agreed. The proposal had been for inclusion of these criteria and considerations in the architecture of the WTO agreements and to do this in accordance with the Doha mandate – i.e. the Special Session was to recommend these criteria and considerations to the General Council for adoption as a decision governing all subsidiary bodies in implementing and operationalizing technical assistance provisions. It had not been proposed that these criteria operate on an ad hoc basis, nor that they operate in a truncated manner that could still result in maintaining the current manner of providing technical assistance. The proposals had been a critique of the latter, and the African Group would be disappointed if the results were anything other than a distinctly different approach to technical assistance, taking the form of obligations to be complied with by all WTO bodies and Members. Finally, they wished to re-emphasize their disappointment that concrete results had not been obtained, and urged the General Council and all delegations to show good will in fully discharging the mandate to the Special Session of the CTD. The result of this exercise would determine whether the Doha Development Agenda became a reality or not.

232. The representative of Zambia said that the mandate given the Special Session of the CTD was very clear in terms of the work required of Members and of the results they were expected to deliver by 31 July 2002. However, clear recommendations on the three different subjects had not been made, and Members had agreed to a new deadline. His delegation wished to reiterate the importance Zambia attached to the issue of S&D and, as had been previously pointed out, that this issue lay at the root of justifying the outcome of Doha as a development agenda. Without it, there would be no "development" in the Doha Development Agenda. Zambia hoped that Members would take advantage of the new deadline to ensure that the work was completed by 31 December 2002. Zambia also recommended adoption of the report.

233. The representative of Uganda said that issues of S&D were interconnected with the issues discussed under item 14 of the present meeting regarding the interests of developing countries. The need for S&D treatment for the LDCs, as provided under the enabling clause, was not in question. Although Uganda had hoped that some of the recommendations the LDCs had made would end up as specific recommendations for decision at the present meeting, there had been progress on the question

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of the monitoring mechanism. Uganda hoped that when the Special Session of the CTD met again, it would work expeditiously, so that the monitoring mechanism could be agreed. Regarding the other issues, it seemed to Uganda that Members had postponed addressing these. The issue of S&D treatment was critical, and Uganda hoped that a message would be sent that Members would seriously examine, and make positive responses to, the proposals made.

234. The representative of Korea said that although the CTD had not been able to fulfil its mandate in the Decision on Implementation-Related Issues and Concerns, it had made substantial progress. More than 80 specific proposals had been submitted, and agreement had been reached on the establishment of a monitoring mechanism which would represent an important step forward to enhance the effectiveness of S&D treatment provisions. Now that the deadline had been extended, Members needed to use the additional time for in-depth discussions on the remaining issues. Korea would actively participate in the work of the CTD Special Session, which should be held back-to-back with the relevant negotiating groups and other special committees. Under this format, the CTD Special Session would benefit from participation of capital-based experts. When the CTD Special Session resumed its work in September, Members should do their best to fulfil the mandate, since there was not much time, given the number and complexity of remaining issues, before the new deadline. In this regard, Members should bear in mind that S&D treatment provisions had been agreed on as part of a single undertaking at the end of the Uruguay Round negotiations. In pursuing its mandate, the CTD Special Session needed to maintain the delicate balance between the rights and obligations incorporated in the relevant WTO Agreements.

235. The representative of Thailand said that the S&D treatment issue was the core element that truly reflected the fact that the WTO respected the unequal level of development of its Members in participating in the multilateral trading system. This had been confirmed when Ministers in Doha had reaffirmed that provisions for S&D treatment were an integral part of the WTO agreements, and had clearly instructed Members to seriously review S&D provisions with a view to strengthening them and making them more precise, effective and operational and to make clear recommendations by 31 July 2002. While Thailand was disappointed that the Special Session of the CTD had not been able to come up with any single clear recommendation based on the specific proposals submitted by developing countries and LDCs, it had not given up hope, and encouraged others to do the same. Thailand still believed that everything could be accomplished if Members tried hard enough, and thus urged the CTD Special Session to make a greater effort in order not to miss the new deadline and fail the trust of developing-country Members. Thailand supported the establishment of the monitoring mechanism with terms of reference to be discussed in the CTD Special Session and approved by the General Council. On technical assistance and capacity building, it supported this being discussed in the regular sessions of the CTD under the Technical Assistance Work Plan, in order to balance the limited financial and human resources.

236. The representative of Brazil said that Brazil was discouraged by the lack of progress in the Special Sessions of the CTD. Paragraph 44 of the Doha Ministerial Declaration and paragraph 12.1 of the Decision on Implementation-Related Issues and Concerns mandated Members to consider S&D treatment provisions with a view to strengthening and making them more precise, effective, operational and, as appropriate, binding. After several formal and informal meetings of the CTD Special Session to tackle this mandate, very little progress had been made, and there were signs that the exercise could derail into discussions for which it had not been conceived. According to the Doha Ministerial Declaration, implementation issues were an integral part of the work programme. Those that fell under the mandate of the negotiating groups were being considered in those bodies, and the remaining issues were to be addressed by the relevant WTO bodies. He recalled the terms of the cover letter through which the Director-General and the then General Council Chairman, Mr. Stuart Harbinson, had conveyed the draft Ministerial Declaration and the draft Decision on Implementation-Related Issues and Concerns to the Fourth Ministerial Conference. That letter had underlined that issues not proposed for immediate action, including those referred to other WTO

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bodies – a category that included the mandate on S&D treatment – as well those listed in the compilation on outstanding issues, would be addressed in the course of the future work programme, in accordance with paragraph 12 of the Ministerial Declaration. In Brazil's view, Members should abide by these terms and conditions.

237. Brazil was highly skeptical of the motivation behind the position taken by a few developed countries who had been reinterpreting the mandate given by Ministers at Doha, by proposing to include under the review of S&D provisions a debate on the different levels of development among developing countries. This attitude was not conducive to creating the positive atmosphere necessary to allow progress in Members' discussions on S&D. As Brazil's Undersecretary-General on Integration, Commerce and Economic Issues had stated at the most recent TNC meeting, "we should be wary of re-interpreting the Doha mandate in such development-unfriendly ways". The report prepared by the Special Session of the CTD to the General Council contained only one, and as yet incomplete, result. It recommended the establishment by the General Council of a monitoring mechanism to follow up on the implementation of S&D provisions. It was not clear what the terms of reference and parameters of such a mechanism would be. In any case, in Brazil's view this was a procedural proposal and not a substantive one. Its usefulness would depend on whether it was oriented towards constructive objectives, as Brazil hoped it would be. Brazil shared the widespread frustration over the missed deadline of 31 July. At the same time, it remained committed to the exercise in the CTD and hoped that political will and true commitment, commensurate with the spirit of the Doha Ministerial mandate, would be forthcoming in order to advance discussions over the coming months. There were more than 80 specific proposals to improve S&D provisions of particular interest to developing countries and LDCs, and Members should not lose any time in demonstrating their commitment to the new round by effectively providing it with its much-heralded development dimension.

238. The representative of China said that his delegation shared the position and comments set out in the statement by Kenya on behalf of the African Group. S&D provisions were extremely important to developing-country Members. Concrete progress on improvement of S&D provisions would have a meaningful impact on the success of the negotiations. All WTO Members, especially the developed ones, should show good faith on this issue and sincerely implement the mandate given by Ministers in Doha. In China's view, the main reasons for the inefficient utilization of the existing S&D provisions were the ambiguity in the wording of the provisions and the lack of precise, effective and operational means of implementation. The Doha mandate gave Members very explicit instructions on what they should do in this area. China did not believe that there was any need or room for Members to re-interpret the Doha mandate. It agreed that it was important to have a clear idea of the principles and objectives of S&D provisions. However, discussions on principles, objectives and other cross-cutting issues should not detract from the negotiations on the further clarification and improvement of the specific S&D provisions in the existing WTO agreements, which it believed should be the focus of Members' work in the WTO in the area of trade and development. China hoped that the major developed-country Members could show flexibility in the discussions and negotiations so that concrete progress could be made to fulfil the mandate given by Ministers, and so that the Chairman of the CTD would be able to report positive results to the General Council by the end of 2002.

239. The representative of Cuba said that her delegation agreed with the statements by Kenya on behalf of the African Group and by Zambia on behalf of the LDCs. Cuba was concerned about the failure to meet the deadline of 31 July 2002 for a report to the General Council with concrete recommendations for strengthening S&D provisions, as Ministers had mandated. However, Cuba was not surprised at this outcome, since from the time the CTD had begun its work, her delegation had noticed that there was no political will on the part of the principal industrialized countries to engage in an in-depth discussion of the proposals submitted. S&D treatment was an issue that had been given priority by Ministers in Doha, and her delegation was concerned about the discussion being side-

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tracked into a reinterpretation of the principle of S&D treatment by adjusting its application. Cuba expected the future discussions to be oriented towards fulfilment of the Doha Ministerial Declaration mandate within the new deadline, since it formed an integral part of the package adopted in Doha and failure to fulfil it would upset the general balance made possible by the Doha compromise.

240. The representative of Indonesia said that her delegation agreed to a new deadline of 31 December 2002 since Indonesia saw this as an appropriate and reasonable extension. Since time would not be on Members' side, they had to organize the work in an optimal way. In this regard, her delegation was of the view that the extension of the deadline had to provide Members with the opportunity to agree on a detailed work plan. While it recognized that some innovative ideas needed to be developed, Indonesia urged Members to make extra efforts to overcome differences in order to be able to make the same progress as in other areas of negotiations. Indonesia strongly suggested that the General Council take note of the various cross-cutting issues and proposals raised in written submissions and discussions in the CTD Special Session. The Special Session should also further examine these issues without prejudging whether an issue constituted part of the mandate under paragraph 12 of the Decision on Implementation-Related Issues and Concerns and paragraph 44 of the Doha Ministerial Declaration. The issue of S&D being discussed in the Special Session of the CTD was very crucial to developing countries, including Indonesia. Thus, Indonesia's position was that progress in other areas of negotiations could not be de-linked from progress on the issue of S&D, as Members had agreed in Doha that it was a part of the package.

241. The representative of Paraguay said that S&D treatment was a very complex subject area and the Doha mandate in this regard was important, along with other matters that Members dealt with in the CTD. Members had clarified concepts, they had looked at the rules that existed and at present they were clearly in a better position to achieve an understanding on S&D treatment for developing countries – one which contemplated their needs, incorporated flexibility and included the proviso that what was granted to one did not hurt the other. Paraguay believed that Members needed to make a special effort in the months ahead to 31 December. It was ready to work together with all Members to determine S&D treatment clearly in order to make the new round truly a development round.

242. The representative of Malaysia said that his delegation shared the views of previous delegations who had expressed disappointment that the exercise had not yielded any recommendations. However, Malaysia wished to acknowledge that at least some progress had been achieved, especially with regard to the establishment of the monitoring mechanism. The fact that Members had this – although not very significant – accomplishment, showed that if they had the will and put sincere effort into an exercise like this, they should be able to bring about more tangible results. Malaysia had noted that there were several proposals before Members but that unfortunately, due to the lack of substantive engagement on some of these proposals, Members had not been able to arrive at any concrete results on the specific proposals. S&D treatment remained an integral part of the WTO agreements and was part of the rights and obligations under the Uruguay Round agreements. Malaysia did not believe that any strengthening of S&D should result in the dilution of these rights or in denying the right of developing countries to S&D treatment.

243. It was concerned about recent discussions in the Special Session of the CTD in which the right of developing countries to S&D treatment had been raised, and viewed with strong concern attempts to differentiate between developing countries by income level or size and to make unnecessary cross-linkages with Agreement-specific proposals. In Malaysia's view, such attempts diverted attention from the real issue at hand, which was to review all S&D provisions in order to strengthen them by making them more precise, effective and operational, as well as mandatory. Ministers in Doha had given clear instructions on such a review. These instructions were to address concerns of developing countries regarding the operation of S&D provisions, in addressing specific constraints faced by developing countries. In this respect, the principles and objectives of S&D, as enshrined in Part IV of the GATT 1994, should be recognized and respected. As Members now had a

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new deadline, Malaysia urged them to strengthen their collective resolve with a view to achieving a tangible outcome by 31 December 2002. If Members did not move in this direction, the extension of the deadline would be meaningless.

244. The representative of India said that Ministers had been clear and specific in their mandate. They had noted the concerns expressed by developing countries with regard to the operation of S&D provisions and had agreed that "[a]ll special and differential treatment provisions shall be reviewed with a view to strengthening them and making them more precise, effective and operational." In paragraph 12 of the Decision on Implementation-Related Issues and Concerns, they had laid down a specific work programme for conversion of S&D treatment measures into mandatory provisions and to examine additional ways by which S&D provisions could be made more effective and more user-friendly. The CTD had been directed to make clear recommendations for decision by July 2002. On this basis, a number of proposals had been put forward by developing and least-developed countries, the majority of them from the African Group. It was unfortunate that there had been no constructive engagement on any of these proposals, with the result that at the end of the period specified by Ministers, no progress had been achieved on even one of the proposals. India could not accept the argument that there had been inadequate time or that the issues were exceedingly complex.

245. The time available for discussion had been known to all delegations from the beginning. In addition, these were not new issues. Members had been dealing with them for the past seven years, and in the pre-Doha period they had had a series of discussions on many of them. Even after Doha, proposals had been put on the table as early as April 2002, and if the developed countries had seriously wanted to make progress, Members would not be in the situation in which they found themselves at the present meeting. The Doha work programme was a composite package negotiated over several months. It consisted of two elements – both carefully negotiated – namely, a sequence of events with clearly defined deadlines, and substantive issues prescribing the content of the work programme. According to the Doha package, certain events were to take place in July and December of 2002, in March and May of 2003 and at the Fifth Ministerial Conference. Members had missed all the July deadlines. There were no recommendations whatsoever from the Council for Trade in Goods in respect of paragraphs 4.4 and 4.5 of the Decision on Implementation-Related Issues and Concerns relating to textiles, no serious progress on paragraph 10.3 of the same Decision relating to countervailing duty investigations, and no clear recommendation on any specific S&D provision. India believed that a very negative signal had been sent to all developing countries. Many statements had been made by Ministers, both of developed and developing countries, regarding the strong development dimension built into the Doha work programme. Unfortunately, in the present situation developing countries were beginning to look at these statements with a great deal of skepticism, disbelief and disillusionment.

246. Lack of progress on these issues also led to other inescapable conclusions. Members had to conclude that the deadlines laid down by Ministers were flexible and could be changed by delegations in Geneva. They also had to conclude that even the meaning of the decisions made by the Ministers could be altered. Members had to remember, moreover, that when Ministers had laid down a specific schedule of work, which was to proceed in accordance with certain clearly defined deadlines, they had also expected that certain events would be completed before others. This was of great importance, particularly for smaller delegations. If deadlines were missed and the work spilled over to later periods, there would obviously be a serious impact on the ability of delegations to deal with other issues in a time-bound manner. This could impact adversely on other deadlines. India sincerely hoped that hereafter Members would engage constructively in the Special Session of the CTD to fulfil the mandate given by Ministers on S&D treatment provisions, at least by the next target date they had set for themselves at the present meeting. To achieve concrete results, it was necessary that the CTD Special Session had a detailed plan structuring its future work for the remaining period, as the Chairman had proposed in his report. Considering the commitment of all delegations to the process initiated at Doha, it was important to ensure that the package Ministers had put together at Doha did

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not evolve in a lopsided fashion in the post-Doha process, thus jeopardizing the balance in the package.

247. The representative of United States welcomed the report of the CTD Special Session and the significant engagement on the issues that had taken place there, and said that her delegation was poised to take the work forward in a positive manner. Work on this issue had been enriched by the many ideas that had been put forward, including a very detailed proposal by the African Group that suggested a number of new ideas. Not surprisingly, various views had emerged during the work, including the sense that Members needed to look carefully at their approaches to S&D, given the varying levels of development of trading partners, and to tailor their responses accordingly. The United States agreed that this was an area that deserved more attention in Members' future work. Thoughtful comments and suggestions had been made about specific agreements, including the use of transition periods. Whether the subject was agriculture or subsidies, the discussion had shown that a single approach was not necessarily the best approach in all circumstances.

248. The United States was pleased that the CTD in Special Session had been able to agree on recommendations to establish an appropriate monitoring mechanism on S&D, and pledged to work with the Chairman and other Members of the CTD in developing this idea and bringing it to fruition. Similarly, the United States supported the recommendation of the CTD in Special Session to submit the proposals of the African Group on technical and financial assistance to the CTD for inclusion of any agreed elements in future Technical Assistance Plans. Given the large number and complexity of the proposals submitted to the Special Session, the United States believed that it was important that its report set out a roadmap for further work. She reassured Members that her delegation was prepared to engage in a discussion of ideas on specific S&D provisions. However, a note of caution was in order. In several cases, the issues raised were part of the ongoing negotiations or had been the subject of previous debate and review under the heading of "implementation." As the United States had stated at the recent TNC meeting, Members would need to have realistic expectations in this area. In the United States view, S&D was not an end in itself. It was a tool to foster economic development, adjustment and integration into the multilateral trading system. The certainty and predictability of adhering to a rules-based system, combined with thoughtful recourse to S&D provisions, had been shown to be the best way to promote long-term economic growth.

249. The representative of the European Communities said that the Community was pleased that the hard work in the Special Session of the CTD had allowed Members at the present meeting to continue their important work on S&D. The recommendations contained in the report of the Special Session were well balanced and allowed his delegation to better examine, with more time available, the numerous specific proposals by Members. They also allowed the Community to step back a little and to examine the principles and objectives which governed the WTO's approach to S&D treatment. Such basic reflection on the principles and objectives of S&D was an essential component of its examination, helping it to frame its responses to individual proposals. The Community wished to underline that it remained fully committed to a successful outcome of the review. It was aware that the legitimate aspirations of developing countries would have to be met in the Doha work programme, and believed that meaningful, precise and operational S&D provisions which enhanced developing countries' participation in world trade were in all Members' interest. The new deadline of the end of the year might still be ambitious, but the Community would work hard and constructively with other Members under the stewardship of the Chairman of the CTD in Special Session.

250. The representative of Nigeria that this matter was very important to his delegation because without it, low-income countries like Nigeria would not be able to cope in the WTO. Nigeria believed that S&D treatment was an integral part of the Doha mandate and that it should not be diluted. Members should remain faithful to this mandate and not try to reinterpret it. Nigeria believed that this mandate was a package in which everything was linked to the everything else and nothing should be

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done to undermine any part of it. Nigeria supported the new deadline of 31 December 2002 agreed by Members and endorsed the report to the General Council.

251. The General Council took note of the statements and of the report of the Chairman of the Special Session of the CTD (TN/CTD/3), and approved the recommendations contained in paragraphs 14 to 19 of the report.

16. Committee on Subsidies and Countervailing Measures – Report on review of provisions regarding countervailing duty investigations in pursuance of paragraph 10.3 of the Doha Ministerial Decision on Implementation-Related Issues and Concerns

252. Mr. Kim (Korea), Vice-Chairman of the Committee on Subsidies and Countervailing Measures, speaking on behalf of the Chairman of the Committee, said that the Chairman's report in G/SCM/45 was presented on the latter's own responsibility and was without prejudice to the position of any Member. The report was submitted pursuant to paragraph 10.3 of the Decision on Implementation-Related Issues and Concerns adopted on 14 November 2001 at the Doha Ministerial Conference, where Ministers had agreed "that the Committee on Subsidies and Countervailing Measures shall continue its review of the provisions of the Agreement on Subsidies and Countervailing Measures regarding countervailing duty investigations and report to the General Council by 31 July 2002." Since establishing a framework for the mandated review in December 2001, the Committee had been engaged in the review of the numerous proposals made by the proponents. It had held a series of informal meetings, and the Chair had conducted informal consultations. The issues involved in the review were highly technical. Members had exchanged numerous documents containing proposals, explanations, questions and answers, and had engaged actively in discussions, and the results were contained in G/SCM/45.

253. The review of these issues had revealed that many Members recognized the importance of the issues raised. During the course of the review, some delegations had expressed their understanding – and, in some cases, support – in respect of some of the proposals or elements thereof. In addition, the Chair's perception was that many delegations, regardless of their views on the substance of a given proposal, had found the review extremely useful in enhancing their understanding of the proposals and the technical issues they raised, as well as of Members' views concerning the proposals. In the Chair's view, this was confirmed by the high degree of constructive spirit with which Members had engaged in the detailed discussions on these highly technical and complex issues. This said, however, the Chair had noted that there existed diverging views on whether and how the Committee could or should proceed after the completion of the 31 July 2002 mandate, and he had been unable to identify any significant basis for a consensus on any specific suggestion by the Committee in terms of the substantive aspects of the review or with respect to any next step. He had noted that certain delegations had expressed disappointment in this regard, as they had hoped that the Committee might be in a position to formulate some sort of recommendations to the General Council on some or all of the proposals, and had also hoped that the Committee might be able to agree to make a recommendation regarding next steps forward in respect of these proposals in another forum. Other delegations, however, had emphasized their view that the Committee had satisfied the terms of its mandate, that the issues involved, as developed and clarified through the review process, could now be left in the hands of Members, and that any Member might, if it so wished, submit the proposals and the report itself, or portions of it, for discussion in an appropriate forum.

254. In the light of this, the Chairman had had to conclude that in the context of the Committee, the discussions of these issues had been taken as far as possible. While the Chairman realized that this might be less than had originally been expected by some Members, he nevertheless was reassured that the quality of the discussion and exchange of ideas was, in itself, valuable, and supported his belief that the Committee had usefully spent the time devoted to the review. The Chairman expressed appreciation to the Members of the Committee for their active and cooperative engagement in the

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review, with each other and with him as Chairman, and to the previous Chairman of the Committee for his hard work on these issues, as well as to the Secretariat for its support in this process. As the Committee had completed its work under the existing mandate, he hoped that Members would find useful the information in the detailed report presenting the results of the Committee's review of the provisions of the SCM Agreement regarding countervailing duty investigations, and in the documents submitted in that context.

255. The representative of Brazil thanked the Chairman of the Committee, his predecessor in that post, and the Secretariat for their hard work and dedication in the process of examining Brazil's proposals. He also wished to thank the delegations which had presented questions or comments on the different points raised, either in writing or orally. The proposals were of a systemic nature. They stemmed from Brazil's assessment, which was shared by many, that the countervailing duty (CVD) part of the Subsidies Agreement could and should be improved, by means of interpretations or amendments to the text, as appropriate. Contrary to the view expressed by some in the course of this exercise, if a proposal was labeled as an implementation one, it did not follow that it should not entail amendments to a WTO agreement, if necessary. In any event, now that Members were in a negotiation mode, and paragraph 12 of the Ministerial Declaration was clear in this regard, this distinction lost its meaning.

256. It was clear that Brazil was disappointed that Members had not been able to reach a consensus at the present time on at least some of its proposals. This was particularly frustrating since it appeared that many of those suggestions enjoyed a considerable degree of support. In fact, the practice of many Members already went in the same direction as the some of the proposals. Brazil had hoped that this extensive period of almost one year would have been enough to reach some conclusions on these issues, but unfortunately this had not been the case. Regarding the implementation process as a whole, it was clearly not an encouraging sign that no sort of recommendation on this issue could be reached in the Committee. This was even more worrying when one noted, as his delegation had under another Agenda item, that the lack of results on implementation had become a most disturbing trend. Independent of the treatment given to these CVD issues under the responsibility of the General Council, Brazil intended to come back to them in the appropriate forum. That being said, his delegation wished to affirm that the status of these issues remained unresolved. The mandate that Ministers had given the Committee was to "continue its review of the provisions of the Agreement on Subsidies and Countervailing Measures regarding countervailing duty investigations and report to the General Council by 31 July 2002". As the Committee had not been able to present a consensus report to the General Council, but simply a text under the responsibility of its Chairman, it could not be said that the mandate had been fulfilled, regardless of the line of action Brazil followed in the future.

257. The representative of India thanked the Chairman of the Committee for a comprehensive report, and the Vice-Chairman for presenting it, pursuant to paragraph 10.3 of the Decision on Implementation-Related Issues and Concerns adopted at the Doha Ministerial Conference. His delegation had hoped that the deliberations in the Committee, which had lasted over ten months, would have resulted in final recommendations on at least some of the proposals. There were many issues which, in India's view, were not difficult, given a will to address them. However, constructive engagement with a view to finding solutions to the problems had been lacking. The result had been that the Committee had failed to make any recommendation to resolve these issues. Most disconcerting had been the reticence on the part of some Members to make even a recommendation to address these issues as a priority in another forum. Therefore, the Chairman of the Committee had not been able to come up with a consensus report on further work. His delegation, in its comments under Item 14 of the Agenda, had already underscored the danger of an adverse impact on other deadlines if deadlines on issues relevant to many developing countries were not met.

258. The representative of the United States said that her delegation had been pleased with the active participation of Members in the Subsidies Committee during its review of the procedures for

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CVD investigations. She wished to express particular appreciation to Brazil and India, both of whom had worked tirelessly to answer numerous questions, on a timely basis, from her delegation and other interested Members, in order to bring greater clarity to these issues. It was evident from even a cursory glance at the Chairman's report that the Committee had had a full and rich discussion of these important but highly technical items. All Members had obtained a greater understanding of the items, as well as of the concerns of those Members requesting that they be reviewed. The Doha Implementation Decision mandate had charged the Committee with reviewing procedures for CVD investigations, and her delegation was pleased that this work had been completed within the prescribed deadline. From the United States' perspective, further work within the Committee would be unwarranted, because there was little likelihood that a decision could be reached on a possible recommendation on any of these items. Moreover, none of the items had appeared to attract broad support. In fact, none of the proposals had attracted support from more than a few Members. Indeed, although the discussion in the Committee had been interesting and detailed, it had been limited to relatively few participants. She recalled that specific proposals to undertake negotiations on the Agreement on Subsidies and Countervailing Measures had initially been tabled well in advance of the Ministerial Decision. Should the proponents be so inclined, they could pursue further work on these items in the Negotiating Group on Rules. Her delegation believed that the Members who had made proposals on these items would benefit from the Committee's discussion and the Chairman's report thereon, as they considered the possibility of bringing these items as proposals to the Rules Negotiating Group. The technical analysis of, and Members' reactions to, the items should be considered as important inputs in assessing the likely viability of the items as proposals within a negotiating process, and in reformulating the proposals to attract support.

259. The Chairman proposed that the General Council take note of the report of the Chairman of the Committee on Subsidies and Countervailing Measures and of the statements by delegations, which he noted would be duly reflected in the minutes of the meeting.

260. The General Council so agreed.

17. Proposal to remove and avoid inconsistencies in the texts of the WTO Agreements – Communication from Chile (WT/GC/W/473)

261. The representative of Chile, speaking under "Other Business", recalled that this matter had been discussed at the May General Council meeting. Since then, his delegation had held consultations with various Members, and there was an awareness that there was a real problem. However, Members still did not have complete knowledge of the precise scope and depth of the problem, and therefore of its real implications. The consultations thus far had also brought to light more examples of differences and discrepancies between texts, based on the experiences of different Members. Many Members had also raised concerns that were shared by Chile, the main concern being that any exercise aimed at resolving discrepancies should not be transformed into a renegotiation of the agreements. This had never been Chile's intention, and he agreed that Members needed to be careful to avoid this. Some Members had also pointed out that there were inconsistencies not only among the different language versions of the WTO agreements but also panel reports and other formal WTO documents. However, Chile's intention had always been to limit this exercise to the legal texts of the WTO agreements.

262. Concerns had also been expressed that this could be a time-consuming exercise that could take up resources at a time when Members had the ongoing negotiations and other work to attend to as a priority. While Chile was aware of this, it believed that if there were a will and a consensus to address this problem now, Members would avoid similar problems in the future and prevent the loss of time and resources that would otherwise be spent under the dispute settlement system. Other Members had indicated that in any negotiations there were ambiguities in the texts and that problems of this type could result in an exercise aimed at clarifying these ambiguities. Chile's proposed

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exercise, however, was not aimed at resolving ambiguities, but rather those situations where there were clear differences among the texts, or where there were omissions in one text as compared to another. The view had also been expressed that, generally, texts were negotiated in English and that many delegations used the text in English as a reference. Some delegations – especially the English-speaking delegations – had stated that this was not a problem for them. However, these same delegations could have a problem when a non-English speaking delegation applied the text as it stood in another official language, the scope of rights and obligations resulting from which could damage the trade interests of English-speaking Members. Chile believed that Members should proceed with caution and point out clearly – and agree on – where the problems lay. Many delegations believed there was a need to avoid similar problems in the future, and that during the course of the ongoing negotiations, Members could set up the necessary mechanisms in a timely manner, so that the texts resulting from these negotiations would not contain inconsistencies similar to those contained in some of the Uruguay Round texts. While his delegation had several suggestions to make in this regard, it would be premature to table them at the present time. He hoped that at the next General Council meeting, Members would be in a position to take up this matter again on a more solid basis. Accordingly, his delegation requested that this matter be placed on the agenda of the next meeting of the General Council.

263. The General Council took note of the statement and agreed to revert to this matter at its next meeting.

18. One-day retreat for Permanent Representatives of WTO Members – Statement by the Chairman

264. The Chairman, speaking under "Other Business", said that during the WTO's seven years of existence, it had extended its geographic coverage significantly, as its family of Members had grown. Similarly, the agenda of the WTO had widened and deepened considerably, and it was in many respects a different and more complicated organization than when it had been established. It was almost inconceivable for such a large and growing organization to exist for this long without some kind of informal discussion on the institutional and systemic challenges facing its owners. Members had perhaps become so focussed on the day-to-day business of negotiating and advancing national positions that they had not taken the time to reflect on and discuss the larger issues facing the WTO. Based on these considerations, and on the positive comments he had received from colleagues, he informed delegations that it was his intention to organize a one-day retreat for all Permanent Representatives of WTO Members on Saturday, 12 October.

265. The overall objective of the retreat would be to provide Permanent Representatives with an informal and off-the-record setting in which to discuss broad systemic and institutional challenges facing the WTO and the multilateral trading system. It would be an opportunity for all Members to discuss informally important issues which otherwise had no obvious outlet in the daily work of the organization. The event would also allow Permanent Representatives to shed the rigidities of their national positions and think collectively as shareholders of the system. The retreat would also provide an opportunity to encourage personal interaction among Permanent Representatives for the benefit of the system. He stressed that this would be an informal, casual event where no record would be kept.

266. The timing of the event was a reflection of the need to make it as inclusive as possible, as the second Geneva Week of 2002 would begin on 14 October, thus making it possible for non-resident Members to participate in the retreat. It was also his intention to organize an informal dinner on the eve of the retreat, on Friday 11 October, at which he hoped the new Director-General, who was very supportive of the retreat, could share his thoughts on the way forward for the WTO. Also, in line with the nature of the retreat, the aim was for this event to have no implications for the WTO budget. He was hopeful of finding appropriate sponsorship for the modest costs involved, and would report further on this. He would communicate the final details of the retreat in the very near future. While

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there were still a few loose ends to tie up, he believed that all would benefit from an opportunity to have a frank, informal and off-the-record discussion outside the General Council meeting room.

267. The General Council took note of the statement.

19. Farewell to the Director-General

268. The Chairman, speaking under "Other Business", recalled that this was the last meeting of the General Council that Mr. Mike Moore would be attending as Director-General. Although tributes had already been paid to him at the meeting of the Trade Negotiations Committee held on 18-19 July, it was also fitting to bid farewell to him at the present meeting. He requested the Secretariat to read out a message from the Chairman of the General Council, Ambassador Marchi, who was unable to be present on this occasion.

269. Mr. Rogerson, Director of the Council and TNC Division, read out the following message from the Chairman of the General Council:

"I sincerely regret that I'm not here in person for your last General Council appearance, and I am grateful to Carlos for arranging to pass on this message of thanks, appreciation and friendship. When I say we will all miss you very much, I am speaking not only as Council Chairman and Canadian Ambassador, but also as a fellow member of the Geneva branch of the politicians' trade union. I am, in fact, proposing you for life membership of the union, in recognition of all you've done to encourage your brethren about life beyond national politics.

"There is of course a serious point to this message, just like there's always been a serious vein to your work, ever since you entered public life. Yet, you are also a man with a great sense of humour, someone whose scribbled notes and witty comments are already the stuff of folklore. The world's stock of New Zealand expressions has been permanently expanded in the last three years, at least for those of us who understood your English. It was English, wasn't it? We have all learned about backing the truck up, about feeling pumped and very competitive, and especially about smelling a deal. And of course our interpreters have had to enter an entirely new and frightening world!

"However, the charm of your humour has always been its warmth. In a world where words are cheap, your genuine humanity and compassion have been an inspiration. Even those who may not have agreed with you, have never doubted the sincerity of your commitment to making the WTO system work for all, particularly for its least advantaged Members. You have also demonstrated that international economic organizations need not be boring or heartless. And in this regard, the international community as a whole owes you a major debt of gratitude. The WTO owes you much more. You helped us get back into business, and reminded us what line of business we are supposed to be in. You drew on all the resilience acquired in the ups and downs of a long political career and made it ours. You never lost faith or optimism. And you never forgot that organizations like ours exist to serve people, not the other way around.

"You have always been quicker to accept blame rather than credit, which is definitely not a good move for a politician. Yet, you can't escape your major share of the credit for Doha. Sure it was a team effort, but as we all know the right coach can make all the difference. Thanks to you, we all lifted our play. Finally, it is a measure of your generosity of spirit and commitment to the WTO community, that you have arranged the transition to your successor better than it has ever been done before. Mike, I know I speak for all the

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membership when I say a simple, but heartfelt Thank You. We will miss you, and wish you and Yvonne every success and happiness in the future."

270. The Chairman said that he wished to add his own words of tribute and farewell to the Director-General, which he believed also reflected the feelings of Members, as follows:

"I would like to say that all of us wish to thank you for the efforts you have made and for the leadership you have shown as the head of this organization. I believe that you can feel very satisfied at the excellent work that you have done. All of your achievements will be remembered. You have made a huge contribution towards the launching of a new round in Doha, and you have helped in the reestablishment of the credibility of the WTO after the very difficult moments the organization had gone through earlier. On top of this, during your term of office ten new Members have joined the organization and many negotiations with others have been started, technical assistance has been strengthened, as has training, and there has been better coordination with other organizations. There have also been obvious changes in the functioning of the organization through a working style of open doors, greater transparency, greater participation of the developing countries and always in an environment where good humour has prevailed. All of this is part of the inheritance we have received from Mike Moore. On behalf of all delegations, I would like to wish you all success in your new function. Whatever it may be, we know that the WTO will always have support and inspiration from Mike Moore."

271. The Director-General then made the following statement:

"In my farewell speech to the New Zealand Parliament in 1999, I described my new position at the WTO as continuing a life-long career in public service. I said I would travel to Geneva and give this job everything I have got. I have done that. I travelled here with an agenda. Yes, I was biased. I wanted to see a new round launched with development issues at the centre. I wanted to enlarge our membership. I wanted to re-position the WTO and advance multilateralism. As my term as Director-General of the World Trade Organization nears its conclusion, as I clear my desk and take down the paintings of beautiful New Zealand landscapes from my office wall, I want to tell you that every day that I have been able to serve this institution has been a great personal honour and every day has been a privilege.

"It is not my intention here to rehearse the history of our time together. That will be the subject of my next book which, when completed, will be available in all good bookstores. I come out of it pretty well but I have instructed the publisher not to put your names in the index so you will have to buy the book. Three years on, I believe we are entitled to look back on a record of very solid achievement. This will also help remind us how much there is still to do and why the work is so important and so urgent.

"When I arrived in Geneva in September 1999, the WTO was at a crossroads. Never before had the multilateral trading system enjoyed such prominence in international life; yet never before had it been so fiercely attacked. Never before had the fundamental principles of the system – consensus, non-discrimination, the rule of law – been so right and so necessary; yet never before had it been so hard to see them applied in practice. Never before had open trade within a rules-based system done so much to lift living standards and increase opportunity, yet never before had the persistence of poverty and exclusion been so glaring.

"In Seattle, the intersection of these interests became the site of a major pile-up, a collision, a clash of priorities and imperatives. Much has been written about Seattle. Some of it is even true. Ministerial meetings had failed before, but never in such spectacular fashion. In truth, we did not fail because of the protestors or because of gaps in our processes,

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although neither helped. We failed on substance and because Members were too far apart on key issues. Seattle cost us two years and, for some at least, called into question the very legitimacy and survival of the multilateral trading system. However, through continued faith in the core principles and objectives of this institution, as well as hard work by Ambassadors, Ministers, officials and the Secretariat, we are very much back in business.

"I am proud of what we have achieved together in these last three years. Confidence in the system is restored after the setback of Seattle. We have maintained our core focus on trade liberalization but also placed development issues and the interests of our poorer Members rightfully at the centre of our work. We are doing more than ever before to assist poorer and smaller Members to integrate into the trading system and participate successfully in WTO processes. I believe also that our outstanding success in launching a new round of trade negotiations in Doha last year has opened up enormous possibilities to advance the conditions of people throughout the world.

"We can take pride as well in the momentum we have maintained since Doha. Our negotiating structures are in place and substantive work is well under way. Members have also acted decisively by approving an increased budget for 2002 and pledging 30 million Swiss Francs to a new Global Trust Fund for technical assistance. It is now up to negotiators to work with commitment and flexibility to realize the benefits offered by the multilateral trading system. This work is urgent. It is urgent because there are just 13 months until the Fifth Ministerial Conference in Cancún. It is urgent because Ministers have set a deadline of January 2005 for completing the round (this is not a three-year round because we have already spent four years on it). The Doha Development Agenda is urgent too because more than half of the world's population continue to live on less than two dollars a day, and a successful conclusion to the round can help lift billions of people out of poverty. This Agenda is about them. Our greatest motivation is the people we serve.

"It is a source of great personal satisfaction that in the last three years we have been able to welcome more than a quarter of the world's population into the World Trade Organization – from Estonia, Jordan, Georgia, Albania, Oman, Croatia, Lithuania, Moldova, China and Chinese Taipei. I pay tribute to those hard-working negotiators and Secretariat staff who were able to conclude these accession processes. Looking at the long list of countries still seeking to join the WTO, I am profoundly confident in the long-term prospects of this institution. In the immediate term, Armenia, Former Yugoslav Republic of Macedonia and Vanuatu should join our membership this year. If we get Russia in by the time of the Fifth Ministerial Conference next year, that will be a great victory. If Russia is not in by the time of the Sixth Ministerial Conference in 2005, that will be a great defeat. We can all take pride in changes made to the way the WTO operates. Let us reflect briefly on some of these changes.

"First, we are now much more inclusive in our processes. It used to be difficult for smaller and poorer Members to attend meetings in Geneva and follow our processes. Now, we are bringing these representatives here ourselves and scheduling training activities so they can also be present for key meetings of our General Council and Trade Negotiations Committee. We have also greatly expanded our technical assistance and training activities, both in Geneva and in capitals, and we are utilising new technologies such as the internet and distance-learning facilities.

"Second, we are more transparent and accountable in the way we do things and in the way we take decisions. This shows in all areas of our work – in technical assistance where we have new systems for auditing and evaluation; in Councils and Committees where we

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now declassify documents with much greater urgency; and on our website where information on WTO activities flows freely to delegations and the public.

"Third, we are cooperating with international and regional agencies more closely than ever before. Also, the growing role of our institution in the management of the world economy continues to be recognized through invitations to participate in various UN Conferences, summits of the G8 and many other ministerial-level meetings. It has been an honour to work closely with great international public servants like Kofi Annan, Jim Wolfensohn and Horst Kohler. I believe we have made real progress in our efforts to ensure coherence in the work of our respective institutions. I am pleased too at the progress that has been made in re-energising the Integrated Framework and JITAP and in expanding our dialogue with regional and developmental institutions.

"Fourth, I believe we have made real progress in our efforts to enhance the WTO's image and engage civil society. We are reaching out to NGOs through regular seminars and symposia. We have developed important new links with parliamentarians and policymakers. We are also seeking to encourage a greater level of engagement from business leaders, trade unions and other sectors of civil society.

"Finally, the Secretariat has re-positioned itself so we are better able to assist Members in the work programme. We have consolidated our internal structures and refocused our priorities clearly to reflect the Doha Development Agenda. Also concerning the Secretariat, we have continued efforts to achieve the broadest possible diversification of the Secretariat consistent with the highest standards of competence, efficiency and integrity. In just 10 years, the number of women in the Secretariat occupying professional posts has more than doubled; the number of developing countries represented in the Secretariat has increased by over 40 per cent. As well, in just the last three years we have seen very encouraging movement in the overall number of nationalities represented in the Secretariat, our re-energized internship programme is now taking almost twice as many young people from developing countries as three years ago. Dr. Supachai Panitchpakdi takes office at the WTO on 1 September. Transition arrangements are well in hand and he has been receiving all the papers for several months. I am in regular contact with him and will do all I can to support him and the WTO.

"I take this opportunity to thank you all for the support, cooperation and friendship I have received during my time here. I thank you too for your wisdom, leadership, compassion and commitment. You are outstanding representatives of your peoples. I pay tribute to you, your Ministers, and your Governments. I should like to pay tribute also to the Chairman of the General Council, the previous Chairmen, and the other fine diplomats who have presided over our various committees and working groups.

"This is a moment too to pay tribute to the Directors-General who have gone before me, particularly Arthur Dunkel, Peter Sutherland and Renato Ruggiero. I shall never forget the advice and support I received from these three great public servants. In the more difficult moments of my tenure, their phone-calls and words of encouragement always helped to lift my spirits. Both you and I have been well served by the WTO Secretariat. They have worked hard over these last three years, with commitment and dedication. They are professional. They are objective. I owe a great debt to my Deputies. I should also like to acknowledge and thank all other members of staff – my own office, Directors, divisional staff, conference officers, translators, guards, cleaners, drivers, everyone. You are all part of the team. You have all done a fine job. A special word of thanks also to the interpreters. One Ambassador recently expressed regret that I was leaving, saying that she was just beginning to understand my English. "Exactly the reason I should go", I replied. "And don't

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worry, no one in New Zealand understood me either". Thank you to the interpreters who had to struggle with a fourth official language – NZ.

"I know that I have sometimes offended people and I offer apologies. I have made some mistakes. But never out of malice. Mostly, my mistakes were borne of enthusiasm to get the job done, complete our agenda, serve the public. George Bernard Shaw said that reasonable people do not make change. Thus, all human progress is based on the unreasonable person. So, I have sometimes been unreasonable. Let me end by quoting a great English statesman. Asked what qualities were required of a politician – and I might add a Director-General – Winston Churchill replied: "'The ability to foretell what is going to happen tomorrow, next week, next month and next year. And to have the ability afterwards to explain why it didn't happen." My book will be published in due course. It will show how things did happen here. And it will show how you and I, together, made them happen. I will continue to serve the public. I can think of no greater vocation. I may even join an NGO or march with the protesters to the gates of this very institution. You will know me immediately. My banner will say 'Justice Now, Finish the Round'."

272. The Chairman said that while he did not wish to cut short the homage to the Director-General, in view of the lateness of the hour and given that delegations had already expressed themselves in the context of the 18-19 July meeting of the TNC, he would invite only four delegations to speak. Three would reflect the three regions of developing-country Members – Indonesia for Asia, Zambia for Africa, and Panama for Latin America – and New Zealand would reflect the developed-country Members.

273. The representative of Indonesia, speaking on behalf of the ASEAN Members, expressed heartfelt thanks to the Director-General for his relentless efforts on behalf of the WTO as well as for his high sense of responsibility regarding the task he had shouldered, both as Director-General and as Chairman of the TNC. Despite the fact that Mr. Moore’s tenure as Director-General had been marked by some challenging years in the history of WTO, the ASEAN Members recognized the achievements he had made. One of his most notable achievements had been the efforts to develop the focus on technical assistance and capacity building, with a view to helping LDCs and developing countries better participate in the various negotiations and in the multilateral trading system. The ASEAN Members wished to express their deepest appreciation for Mr. Moore's impressive stewardship in giving the WTO a fresh impetus and purpose. They had every confidence that his perceptive leadership would do justice to his endeavours in another challenging assignment now awaiting him, and wished him every success in the future.

274. The representative of Zambia, speaking on behalf of the LDCs, congratulated and thanked Mr. Moore for the tremendous contribution he had made to the WTO. There was no doubt that the organization had experienced a welcome metamorphosis, particularly when one remembered the long journey from Seattle to Doha. The LDCs thanked him for the emphasis on development that he had worked so hard to infuse in the work of the WTO. This also demonstrated his unwavering desire to assist LDCs in terms of technical assistance and capacity building. Mr. Moore's special efforts to assist LDCs had led him to create an LDC office in the WTO which he had immediately put directly under his own office. This act alone had done much to elevate the profile of LDCs in the WTO. It had also helped to send a positive signal both to the WTO Secretariat and the entire WTO membership to start taking LDC issues much more seriously. The LDCs also remembered Mr. Moore's tireless campaign among the donor community to mobilize resources needed for various LDC programmes in the WTO. For all this, and much more, the LDCs wished to express their gratitude to Mr. Moore, and to wish him the very best in his future plans.

275. The representative of Panama, speaking on behalf of GRULAC, expressed their sincere appreciation to the Director-General. Mr. Moore had made an unforgettable impact on the

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organization and would remain with it in spirit. These countries wished to say "see you later", rather than "good-bye", as it had been a real pleasure for them to get to know him. They hoped that he would soon return to meet with them again in future.

276. The representative of New Zealand said that he knew perhaps better than any other delegate how hard Mr. Moore had worked over the years as a servant of the New Zealand public and subsequently as a servant of the international community. He also knew how hard he had worked to make the transition to the next Director-General a success. Mr. Moore had one of his great achievements behind him, which was the launch of the new round. His own advice to fellow New Zealanders was not to be too pessimistic about this process. It was and always had been very difficult to get consensus. However, there had been other negotiating rounds, none of which had ever failed. Sometimes the timetable had had to be adjusted, and although he was not making a prediction, this was the historical reality. But participants had never failed to keep the commitment, and he was confident that the round that Mr. Moore had been so central to getting under way would not be the first failure. Mr. Moore had left this round in excellent shape, and since the most recent TNC meeting, there had been an indication of the impending passage of trade promotion authority in the United States. Thus, there had been a successful launch of the round, delegations had been getting their proposals together during the past six months, and this excellent news had developed. Thus, Mr. Moore could leave the organization not only feeling he had done a very good job, but that Members were going to succeed with the Doha Development Agenda he had so ably put together. On behalf of all of the Members, he sincerely thanked Mr. Moore for his huge commitment during the time he had been with the WTO.

277. The Director-General thanked all who had spoken for the kind words that had been expressed. He would be watching and working in whatever capacity he could to make sure that the round was a success. To paraphrase a great Australian, he said that he was a true believer.

278. The Chairman regretted that due to the lateness of the hour, he had not been able to give the floor to all delegations who wished to speak.

279. The General Council took note of the statements.

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