RESTRICTED
PREPARATORY COMMITTEE PC/IPL/M/5
FOR THE 21October 1994
WORLD TRADE ORGANIZATION
(94-2133)
SUB-COMMITTEE ONINSTITUTIONAL ,
PROCEDURAL AND LEGAL MATTERS
MINUTES OFTHE MEETING HELD ON26SEPTEMBER 1994
1. TheSub-Committee onInstitutional, Procedural andLegal Matters helditsfifthmeeting on
26September 1994 under theChairmanship ofMr.K.Kesavapany (Singapore).
A. Paragraph 8(b)(ii) oftheDecision establishing thePreparatory Committee
(i) Terms ofreference forWTO bodies
2. TheChairman saidthathehadhoped tobeabletoputaside thisitemontheSub-Committee 's
agenda assoonaspossible. Atthesame time, however, hewasaware thatthere wasanoutstanding
issue withregard toterms ofreference fortheCommittee onAgriculture.
3. Therepresentative ofAustralia saidthathisdelegation hadhoped tobeabletosettle thismatter
without controversy atthepresent meeting. Among allthecommittees intheWTO framework, only
theAgriculture Committee required agreement onspecific terms ofreference, since suchterms for
other committees werealready included intheWTO texts. Inthecontext ofthenegotiations in1993
tofinalize theUruguay Round package, allhadagreed thatspecific terms ofreference fortheAgriculture
Committee would beleftaside inorder toallow timeforthecontentious political issues thathadto
besettled inrelation totheAgriculture package. However, thisissue wasstillunder discussion in
theAgriculture Contact Group without anyconsensus onit.Anumber ofelements oftheAgriculture
Agreement required careful monitoring. There was,forexample, theoperation ofthespecial safeguard
provision inrelation toimports oftariffied items; themonitoring andsurveillance ofspecific
commitments onmarket access, domestic support andexport subsidies under Articles 6,7,8 and9of
theAgreement; theprevention ofcircumvention ofexport subsidy commitments inArticle 10;the
disciplines tobeobserved onexport prohibitions andrestrictions inArticle 12;theoperation of
Article 13onduerestraint; andfinally, Article 16,dealing withtheeffect oftheAgreement onthe
least-developed andnetfood-importing countries, which needed toberegularly monitored. The
Agriculture Committee hadtohaveabroad mandate toeffectively monitor andimplement allthese
provisions. Article 17oftheAgreement simply provided fortheestablishment ofaCommittee without
providing thenecessary terms ofreference forittobeabletoeffectively monitor andimplement all
aspects oftheprovisions oftheAgreement. Hehoped thatagreement onthisissue could bereached
quickly inthecontext oftheContact Group onAgriculture.
4. TheChairman asked whether Australia wasconcerned thatifspecifics were notmentioned
interms ofreference fortheAgriculture Committee thenitwould notsubsequently beabletoconsider
these issues.
5. Therepresentative ofAustralia saidthatthere wasalacuna inthetextoftheAgriculture
Agreement inthattheonlyspecific Article which referred tofunctions oftheAgriculture Committee,
Article 18,dealtwiththespecific market access anddomestic support andexport subsidy commitments.PC/IPL/M/5
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Most oftheother Articles which alsorequired administration andmonitoring didnothaveanyspecific
reference toarolefortheAgriculture Committee intheiradministration.
6. Therepresentative ofArgentina saidthatconsensus onterms ofreference fortheAgriculture
Committee intheContact Group hadnotbeenpossible duetoaminor detail. Heunderlined thatterms
ofreference forthisCommittee wereneeded notonlyinrelation toprovisions invarious Articles of
theAgriculture Agreement inaddition toArticle 18,butalsoinviewofthesecond andthirdpreambular
paragraphs which setoutthelong-term objectives oftheagricultural reform process andwere very
important. Furthermore, Argentina believed thattheCommittee should beoneoftheforaassociated
withthenegotiations forthecontinuation ofthereform process which wasmentioned inArticle 20.
IntheSub-Committee 'sdiscussions onthismatter thusfar,hisdelegation hadnotheard anyobjections
tothereasons thathadbeengiven astowhyterms ofreference forthisCommittee wereneeded, and
therefore could notunderstand whyagreement wasnotpossible.
7. Therepresentative ofChile expressed support forthestatements byAustralia andArgentina.
Chile believed itwasnecessary tohaveterms ofreference fortheAgriculture Committee andthatthese
should besufficiently broad.
8. Therepresentative ofUruguay echoed theviews expressed byAustralia andArgentina. There
wasaneedtoavoidanydoubtsanddisagreementinfutureastotheAgricultureCommittee'scompetence,
andUruguay hoped thatagreement would bereached onthismatter assoonaspossible.
9. Therepresentative ofNewZealand associated hisdelegation withAustralia 'sstatement. The
Agriculture Committee hadnotbeenintended tobetheonlycommittee intheWTO without terms
ofreference. Ithadalways beenassumed inthenegotiations thatthiswould beaddressed atthistime,
together withtheissue ofrules ofprocedure. Itwasimportant nottoallow thisCommittee tocome
intoexistence withdoubts astoitsprecise functions, andtoresolve thismatter quickly, bearing in
mind thatshort andsimple terms ofreference were needed. Thealternative would bealongand
protracted negotiation ontrying toinclude intheterms ofreference allaspects ofwhattheCommittee
would do,which might takemonths. NewZealand believed thattheproposed terms ofreference before
theAgriculture Contact Group, which wereshortandgeneric, weresuitable. Itwasimportant toensure
thattheAgriculture Committee could operate withabroad mandate.
10. Therepresentative ofBrazil associated hisdelegation withthestatements byAustralia and
NewZealand. Allother committees hadterms ofreference, andBrazil didnotseeclearly whythe
Agriculture Committee should not.Thesimpler theterms ofreference thebetter, asthiswould mean
theywould bebroader andthediscussion onthemshorter. Hisdelegation hoped thatthismatter would
beresolved quickly.
11. Therepresentative ofThailand, speaking onbehalf oftheASEAN countries, echoed theviews
ofAustralia andother Cairns Group members ontheneedtosettle thisissue. Given thevarious
requirementsontheAgricultureCommitteetomonitortheimplementationoftheAgricultureAgreement,
theASEAN countries believed itnecessary toestablish appropriate terms ofreference thatwould give
theCommittee aclearmandate tocarry outitsfunctions. Itwasimportant thatthisissue beresolved
asquickly aspossible, andtheircountries would agree totheproposal putforward byAustralia.
12. TheChairman asked ifAustralia wastabling aformal proposal atthisstage.
13. Therepresentative ofAustralia saidthattheterms ofreference proposed intheAgriculture
Contact Group wereasfollows: "TheCommittee onAgriculture shallcarry outthefunctions necessary
toimplement theprovisions oftheAgreement onAgriculture andthefurtherance ofitsobjectives.
TheCommittee shallalsoprovide aregular forum forconsultations." These were simple, genericPC/IPL/M/5
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andnon-threatening terms ofreference ofthekindthatevery committee intheWTO Agreement had.
Thereluctance being encountered tosuchabroad, general textwasdifficult tounderstand.
14. Therepresentative oftheEuropean Communities saidthatArticle 18oftheAgriculture
Agreement provided aclear definition oftheresponsibilities oftheCommittee thatwasestablished
under Article 17.Article 18wasbroad enough tocover everything thatwould fallunder theconcept
of"monitoring" tobeundertaken bytheCommittee. Ittherefore seemed tohimthatthediscussion
ondevising terms ofreference fortheCommittee wassuperfluous.
15. TheChairman asked whether, inviewofthewidespread support forhaving general terms of
reference fortheAgriculture Committee, andifthese didnotseem tobethreatening orinjurious to
anyparticular interest, theCommunity hadanyfundamental objection thereto. Ifnot,hewondered
whether theCommunity could nottrytoaccommodate theviews ofanumber ofdelegations inthis
instance asagracious actonitspart.
16. Therepresentative oftheEuropean Communities saiditalldepended onwhat onecalled a
broad orwidespread support. Thenumber ofspeakers inthisdiscussion could notalone determine
whowasrightandwhowaswrong.
17. TheChairman saidthatifasufficient number ofmembers believed thatnoharm would be
done byhaving general terms ofreference, andothers believed thattheexisting provisions were
sufficient, itshould bepossible towork outsomething thatassuaged everyone 'sconcerns.
18. Therepresentative ofSwitzerland saidhewassurprised atthedebate intheSub-Committee
because theAgriculture Contact Group hadheldaninitial discussion onthismatter onthebasis of
aproposal, andallseemed tobeinfavour ofbriefandprecise terms ofreference. Hebelieved that
thatdiscussion should becontinued, since ithadonlyjustbeenbegun, andhadnotbyanymeans been
concluded. Thisshould notbeseenasanintention todelay inanywaythedefinition ofterms of
reference fortheAgriculture Committee. While Switzerland wished toseearapid conclusion tothis
matter,alittlemoretimewasneededforfurtherdiscussions,andhereiteratedhisdelegation'swillingness
tocontinue thisdiscussion.
19. TherepresentativeofJapansaiditwasunfortunatethatthedraftersoftheAgricultureAgreement
hadnotgiven thought toincluding anArticle defining theterms ofreference fortheAgriculture
Committee. However, hebelieved thattheAgreement hadclearly stipulated thetasksoftheCommittee
indifferent Articles, andthatthese provisions were sufficiently precise andbroad astopermit any
discussion related totheimplementation oftheAgriculture Agreement. Japan therefore didnotsee
anabsolute needtodefine terms ofreference. TheChairman hadsuggested defining suchterms of
reference ifthere wasnoharm indoing so.However, asaresult ofthediscussions intheContact
Group, Japan wasconcerned thattheintent ofsome oftheparties indefining these terms ofreference
wascoming perilously close toreopening negotiations ontheAgreement itself.
20. Therepresentative oftheUnited States associated hisdelegation withthestatements by
Switzerland andJapan.
21. TherepresentativeofKoreasaidthatwhilehisdelegationwasnotagainstenablingtheAgriculture
Committee toperform itsfunctions, these functions were provided forinthevarious parts ofthe
Agriculture Agreement itself. However, thismatter waspresently being discussed intheContact Group,
andhisdelegation hoped thatasolution would befound inthatforum.
22. Therepresentative ofCanada associated hisdelegation withAustralia 'sstatement.PC/IPL/M/5
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23. TheChairman saidthatwhile hedidnotwanttopreempt thework oftheAgriculture Contact
Group, heconsidered itnecessary fortheSub-Committee tounderstand whyafterthreetofourweeks
ithadnotbeenpossible fortheContact Group totakeaposition onthequestion ofterms ofreference
fortheAgriculture Committee.
24. Therepresentative ofAustralia noted withsatisfaction thatSwitzerland wasnotopposed to
broad, generic terms ofreference fortheAgriculture Committee, andthattheUnited States agreed
withSwitzerland 'sstatement. AstotheCommunity 'sstatement, itwastruethatArticle 18ofthe
Agreement referred totheroleoftheCommittee inmonitoring theimplementation ofparticular
commitments. However, thisonlyconcerned oneaspect oftheAgreement. Other aspects ofthe
Agreement thathehadreferred toearlier were notmentioned inArticle 18.Heagreed withthe
Chairman thatitwould beagracious actonthepartofthose thatwerereluctant toseethishappen,
toagree togeneric, non-threatening terms ofreference forthisCommittee similar tothose thatexisted
foralltheother committees. Australia wasnotseeking tochange thetextoftheAgreement toobtain
this.
25. Therepresentative ofArgentina saidthatAustralia 'scomment about notwanting tochange
ormodify theAgreement onAgriculture wasimportant. IfArticle 18hadindeed covered allaspects
oftheCommittee 'swork, thenterms ofreference would notbeneeded. Hisdelegation agreed with
Switzerland thatdiscussion becontinued onthisissueintheAgriculture Contact Group toseewhether
theproposed terms ofreference were athreat orsimply amatter ofinternal consistency.
26. TheChairman saidhewould urgetheAgriculture Contact Group toaddress thisissue with
aviewtoitsresolution bythetimeofthenextmeeting oftheSub-Committee, which wasscheduled
for7October.
27. TheSub-Committee tooknoteofthestatements.
28. TheChairman, turning tothequestion ofthestatus intheWTO oftheGATT 1947Committee
onTariff Concessions andtheTechnical Group onQuantitative Restrictions andother Non-Tariff
Measures, saidthat,ashehadindicated atthe14September meeting oftheSub-Committee, among
theideas putforward informally tohimonthissubject wasthepossible merger ofthese bodies inthe
WTO tofulfilthefunctions ofboth, aswellastocontinue work ontheIntegrated DataBase. Hewould
welcome views onthismatter, sothatappropriate action could betaken.
29. Therepresentative oftheEuropean Communities saidthatthematters considered bythetwo
bodies atpresent under theGATT 1947 should beconsidered together intheWTO. Toimprove the
efficiency, andperhaps alsotocutbackonthenumber ofmeetings, onecould therefore consider merging
theTariff Concessions Committee andtheTechnical Group which would make itpossible toidentify
intheWTO where theproblems arose inmarket access andtodealwiththemasefficiently aspossible.
30. Therepresentative oftheUnited States saidthat,forthereasons given bytheCommunity,
hisdelegation would alsosupport suchamerger. However, careshould begiven, when considering
terms ofreference forthenewcommittee, nottocreate conflicts withcommittees under otheragreements
intheWTO thatwould alsobedealing with,among otherthings, quantitative restrictions intheirsectoral
areas. Thisdidnotseem tobeaninsurmountable problem, andhisdelegation looked forward to
discussing itintheSub-Committee.
31. Therepresentative ofAustralia supported theproposal bytheCommunity. TheTariff
Concessions Committee hadanimportant roletoplayinmonitoring theimplementation ofnegotiated
reductions intariffs, andwould continue tohave thisvery important function following the
implementation oftheUruguay Round results. TheWTO therefore needed toprovide forsuchaPC/IPL/M/5
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committee withterms ofreference verysimilar tothose ofthepresent committee. Italsomade sense
toinclude inthenewcommittee thepresent functions oftheTechnical Group. AstheUnited States
hadindicated, particular attention would needtobegiven toworking outthespecific terms ofreference
forthiscommittee.
32. Therepresentative ofCanada supported theproposal toestablish asuccessor totheTariff
Concession Committee, andtoincorporate intoittheresponsibilities oftheTechnical Group. The
terms ofreference ofthenewCommittee should notberestricted tothemonitoring ofimplementation
ofMTN commitments butshould alsoinclude responsibilities foranumber oftechnical issues, such
asimplementingchangestotheHarmonizedSystem,derogationsfromnegotiationsunderArticleXXVIII
oftheGATT 1994, andsoon.
33. Therepresentative ofThailand, speaking onbehalf oftheASEAN countries, supported the
Community 'sproposal.
34. Therepresentative ofArgentina supported theCommunity 'sproposal, andsaidthatoneof
theproblems thatwould havetobelooked atcarefully bothinthenewcommittee andinother WTO
committees where thisissue would beanalyzed, wasthequestion ofquotas.
35. Therepresentative ofJapan saidthathisdelegation didnothaveinstructions thatwould allow
ittosupport theCommunity 'sproposal. While there might besome necessity toestablish some kind
ofsuccessor bodytotheTariff Concessions Committee, hisdelegation didnothavethesameimpression
withregard totheTechnical Group, which hadnotbeenparticularly active untilnow. Thefunctions
relating toquantitative restrictions andnon-tariff measures weredistributed intheWTO todifferent
bodies created thereunder, andJapan believed thatonewould firsthavetodetermine what needed
tobedoneinthisareabefore deciding about thenature ofthatgroup intheWTO.
36. TheChairman expressed thehopethatinreaching adecision onthismatter, Japan would take
account ofthebroad measure ofsupport fortheproposal tomerge thetwobodies intheWTO. He
proposed thattheSub-Committee revert tothequestion ofthesuccessor bodytotheTariff Concessions
Committee atitsnextmeeting, afterJapan'sdelegation hadreceived further instructions which would
hopefully allow aconsensus agreement.
37. TheSub-Committee tooknoteofthestatements, andagreed totheChairman 'sproposal.
(ii) Rules ofProcedure forWTO bodies
38. TheChairman saidthatheshared theviewthathadappeared toprevail intheSub-Committee
thattheSub-Committee should draw uprulesofprocedure fortheMinisterial Conference andforthe
General Council, andthatrules forthethird-level bodies, namely subsidiary bodies, would notbe
necessary asofdayoneoftheWTO andcould belefttothebodies concerned ortotheGeneral Council
todealwith. However, herecalled thatNewZealand hadproposed thatitmight beuseful forrules
ofprocedure ofsubsidiary bodies alsotobedrawn upbytheSub-Committee. Hehadnoproblem
withthissuggestion except tosaythattheinput forthese rulesofprocedure would havetocome from
delegations themselves. Hehoped thatNewZealand would beabletoprovide aninput inthisregard
atthepresent meeting.
39. Therepresentative ofNewZealand saiditwasimportant thattheSub-Committee prepare draft
rules ofprocedure forthewhole array ofcommittees thatwould beestablished intheWTO sothat
theycould function effectively from dayone. Thedraftrules ofprocedure fortheGeneral Council
andtheMinisterial Conference would, aftertheyhadreceived detailed consideration, provide guidance
forrulesofprocedure forsubsidiary bodies. Henoted thatthedraftrulesofprocedure fortheGeneralPC/IPL/M/5
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Council already contained references totheapplication ofthose procedures insubsidiary committees
established under theGeneral Council. Inthelightofthediscussion onthetwosetsofrulesofprocedure
presently before it(document numbers 2028and2029), theSub-Committee would beinabetter position
todefine whatwasappropriate forsubsidiary bodies.
40. TheChairman saidthatNewZealand 'ssuggestion wasonewayofproceeding, although he
hadhoped formore specific suggestions fromthatdelegation withregard torulesforsubsidiary bodies.
41. Therepresentative oftheEuropean Communities saidthatitwould beappropriate, first, to
consider rulesofprocedure forthefirst-andsecond-level bodies andthen, iftimepermitted, tolook
atthethird-level bodies. Time wasshortandtheSub-Committee should concentrate onwhatwasreally
needed asofdayone.Since theWTO Agreement provided forrulesofprocedure ofsubsidiary bodies
tobeapproved bytheGeneral Council before theywere finally adopted, there would besome time
laginanycase, albeit minimal. TheSub-Committee should concentrate onquestions ofimmediate
importance. Asregards thenon-papers bytheSecretariat onrules ofprocedure fortheMinisterial
Conference andtheGeneral Council, theCommunity believed theywere agood basis forfurther
discussion. TheCommunity hadanumber oftechnical observations tomake onthese non-papers and
suggestedthatadraftingcommittee,composedofasmallnumberofinteresteddelegations,beestablished
todiscuss thesematters. There wereconsiderations oftransparency which would havetoberespected,
butthere were alsoconsiderations ofefficiency involved.
42. TheChairman saidthattheCommunity 'ssuggestion wasuseful. While transparency would
mean thatallwere engaged intheprocess, hewould suggest thatonlyreally interested delegations
participate inanysuchexercise. Hewould givethismatter further thought.
43. Therepresentative ofAustralia saidthathisdelegation hadcomments onparticular aspects
ofthenon-paper onrules fortheMinisterial Conference, butifthismatter were going tobetaken
upinanother forum thenhisdelegation would waituntilthatoccasion.
44. Therepresentative ofCanada saidthathisdelegation toohadcomments onthetwopapers which
itcould make either inasmaller drafting group, which wasagood suggestion, orinwriting tothe
Secretariat, whichever waytheChairman chose toproceed.
45. Therepresentative oftheUnited States saidthathisdelegation hadcomments similar tothose
ofAustralia andCanada, andthatitwould appreciate aruling fromtheChairman onhowtoproceed.
TheUnited States would support adrafting group.
46. TheChairman saidhehadhoped thatdelegations would givetheirgeneral views onthetwo
non-papers, ontheirapproach, onwhether theircoverage wasadequate andwhether anyareas had
beenleftoutstanding. Adrafting exercise would beuseful onlyaftersuchviews were known.
47. Therepresentatives ofNewZealand, Hong Kong, Poland, theUnited States, India, the
European Communities, Morocco, Egypt, andSwitzerland expressed support forthethrust ofthenon-
papers bytheSecretariat andbelieved them tobeagood basis forfurther discussion.
48. Therepresentative ofNewZealand saidthathisdelegation hadanumber ofspecific comments
which itwould make inasmaller drafting group iftheChairman believed thattobeappropriate.
49. Therepresentative ofHong Kong saidthathisdelegation wished tonotethereference inRule7
oftherulesforMinisterial Conference, andasimilar reference intherulesfortheGeneral Council,
toacommunication fromoronbehalf ofaMinister forForeign Affairs. Some Members didnothavePC/IPL/M/5
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aMinister forForeign Affairs, andthisprovision could therefore bereformulated insome way,perhaps
byincluding reference toaMinister forTrade aswell.
50. Therepresentative ofPoland saidthatalthough thenon-papers faithfully reflected theoriginal
concepts andrules, hebelieved thatnearly fiftyyears aftertheyhadbeendrafted itwould perhaps
beuseful toreflect onthepragmatic experience oftheGATT which hadbeenquite useful andwhich
hadhadtheparticular advantage ofhaving turned outtobeworkable. Rules suchasthecomplex
procedure forcredentials, thefiveminute speaking ruleandtheprocedure foramendments would more
usefully betackled inalessformal way, onthebasis ofpastGATT practice.
51. Therepresentative oftheUnited States saidthatthecomments byPoland seemed tobe
appropriate. There wasstillsome work tobedoneandtheUnited States therefore hadagreed with
others onthesuggestion foradrafting group. While hisdelegation would havedetailed comments
tomake inwhatever forum suggested bytheChairman, itwished tonote, ashadbeenindicated by
theSecretariat, thatthere were ongoing discussions onderestriction ofdocuments inthe
GATT 1947 Council. TheUnited States hadrecently circulated some specific ideas inthisregard for
consideration attheforthcoming GATT Council meeting, andlooked forward tohaving those ideas
discussed inthisSub-Committee ifandwhen theChairman feltappropriate.
52. Therepresentative ofIndiasupported Poland 'sstatement. Hisdelegation wasopentotheidea
ofasmall drafting group, butbelieved thatifdelegations hadonlyafewcomments tomake theycould
dosonowsothattheSecretariat could haveafairideaofthemodifications thatwere necessary in
thetwonon-papers. Theideaofasmall drafting group gavetheimpression thatcomprehensive changes
tothedrafts might bemade, which wasnotsomething thathisdelegation waswilling tocontemplate.
53. TheChairman saidthatifthesuggestions made byindividual delegations wereimmediately
acceptable toothers there would benoproblem. However, ifsome delegations hadreservations on
some suggestions, thenitwould bebesttoresolve itwithin asmaller group.
54. Therepresentative oftheEuropean Communities saidthattheCommunity 'scomments onthe
non-papers were technical innature andmight bedifficult toresolve onthespot. Forthisreason,
theCommunity hadsuggested adrafting group. However, analternative would betoaskparticipants
tosubmit theircomments inwriting within acertain deadline, andthentoasktheSecretariat toredraft
thenon-papers onthebasis ofcomments received.
55. Therepresentative ofMorocco agreed withIndia thatiftheSecretariat 'sdrafts appeared to
needonlytobeenhanced inonewayoranother byadding certain technical drafting aspects, thenthat
could bedoneintheSub-Committee itself. However, ifmoresubstantial changes werefelttobeneeded,
thenadrafting committee would beessential. Hisdelegation wished tounderline thatonewasdrawing
updraftrules ofprocedure forthebodies ofaworld trade organization. Therules ofprocedure for
theMinisterial Conference ofthatorganization should, therefore, bemore elaborate inorder toavoid
possible conflicts ofprocedure inthefuture. Rule1,forexample, stated thatsessions oftheMinisterial
Conference "shall beheldfrom timetotime", which wasveryvague. Onecould surely saysimply
thattheMinisterial Conference would beheldatleastonceevery twoyears. Vague aspects ofthis
typeprompted himtosaythattherulesshould perhaps beenhanced further tomake themafirmbody
ofrules ofprocedure oftheWTO.
56. TheChairman saidthatthephrase "from timetotimeasrequired" referred tobyMorocco
inRule1hadbeenintended toprovide flexibility incalling sessions oftheMinisterial Conference.
57. Therepresentative ofAustralia saidthathisdelegation would bewilling toeither submit its
views inwriting totheSecretariat, ortoraisethem inasmaller drafting group. However, heagreedPC/IPL/M/5
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withIndia thatitwould beuseful togivetheSecretariat some verygeneral orientation. Inthisregard,
hewished tomake twocomments. First, inrelation torule7oftheMinisterial Conference, oneneeded
tobecertain thattherulefullycovered thebroad functions oftheMinisterial Conference andnotjust
thedecision making aspects oftheWTO. Second, inrelation torules 8and9,oneneeded toconsider
carefully thewords inthese tworules inrelation totheissue ofcountries thathadnegotiated inthe
Uruguay Round andsigned theFinal Actbutwere stillacceding totheGATT andtheWTO.
58. Therepresentative ofEgypt saidthatthedraft rules should besubject tofurther editing or
reediting, inviewofsome shortcomings. Forinstance, Egypt would prefer toseeadifference made
inthetextbetween anordinary session andanextraordinary session. Also, some rules appeared to
bedifficult toread, suchasrule29,andhebelieved thatfurther drafting would berequired onsuch
rules. Asothers hadsuggested, comments onthevarious rulesinthedrafts could beprovided tothe
Secretariat within alimited period oftime, andthenadrafting group could beestablished totakethat
work further.
59. Therepresentative ofSwitzerland saidthattheCommunity hadmade anexcellent proposal
ontheestablishment ofadrafting group. Establishing suchagroup would notmean thatonewould
redraft completely thetexts, butwould beatooltodealwithquestions ofdetail more efficiently. By
wayofgeneral comments onthenon-papers, hesaidthatitwasimportant tokeepinmind thatthe
WTO would beaninternational inter-governmental organization which would beincharge of
administering theagreements emerging from theUruguay Round. Inaddition, theWTO would be
anegotiating body, which wasafundamental character oftheorganization. Onewould havetobe
careful thatalltheprovisions intherules ofprocedure tookaccount ofthenegotiating character of
theorganization. AsPoland hadsaid,theexperience oftheGATT would beofvalue inthisrespect.
These basicconsiderations hadaparticular importance inrelation torules 8and9onobservers, which
would havetobedealtwithinamore prudent andsystematic way, perhaps byindicating acertain
number ofcriteria ascontained inanother non-paper bytheSecretariat (document 2035).
60. TheChairman requested delegations thathadparticular proposals tomake, toconvey them
inwriting totheSecretariat by30September. After these proposals hadbeenreceived, hewould,
together withtheSecretariat seewhether adrafting committee wasrequired. Iftheproposals could
beeasily incorporated intorevised versions ofthetwonon-papers, thiswould bedone. If,inaddition
totheirwritten suggestions, delegations believed thattheyneeded anopportunity tositaround atable
thentheconvening ofadrafting group would beconsidered.
61. TheSub-Committee tooknoteofthestatements.
B. Transitional Arrangements
62. TheChairman noted thatmembers oftheSub-Committee hadhadanextensive exchange of
views onthissubject ataninformal meeting on23September. Therepresentative ofHong Kong had
notbeenpresent atthatmeeting, andsincethatdelegation hadrecently circulated apaper onthismatter
(PC/IPL/W/7), hewould callonittobriefly introduce itscommunication. However, hedidnotpropose
toenter intoadiscussion atthepresent meeting because, ashehadindicated attheinformal meeting,
heintended tomove intoabilateral andplurilateral stage. Once thathadbeencompleted, hewould
return tothebroader informal group andthentotheSub-Committee.
63. Therepresentative ofHong Kong saidthatthepaper inPC/IPL/W/7 raised alotofquestions
without providing definite answers. Itwasbelieved thatananalytical approach along theselineswould
helptoidentify thewayforward, especially ifagreement could bereached onthegeneral criteria for
asolution,whichhisdelegationhadpreviouslysuggestedasbeingneutrality,effectivenessandsimplicity.
TheUruguay Round hadbeencompleted ingood faithandthePreparatory Committee process wasPC/IPL/M/5
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acontinuation ofthat. Assuming good faithnowandaftertheentry intoforce oftheWTO, itcould
bethattheproblems onbothsides, namely inrespect ofcoexistence andalsoinrespect ofwithdrawal,
were being overemphasised. Hong Kong believed thatanarrangement wasneeded todealwiththe
oddcases where adegree oflegalcertainty wasindispensable. Inother words, oneshould belooking
atnothing more thanasafety netforall.Forsuchasafety net,oneneeded onlytwoelements. First,
acommitment byalltobe,irrespective ofwithdrawal, partoftheoldinstitution, including the
continuation ofconsultations andthedispute settlement procedures. Second, acommitment torespond
tonewdispute settlement requests inareas where thespecial transitional rulesinthenewagreements
might operate toleave avacuum. Inthisregard, Hong Kong'spaper haddrawn particular attention
toanti-dumping, andsubsidies andcountervailing measures. Onecould callthisapproach minimalist
because itdidnotaimtodoanything more thanwasabsolutely necessary. Theapproach wasbuilt
ongood faithanddidnotrequire anypreconditions. Inother words, aparty remained freetodecide
onitsownregarding coexistence orwithdrawal. Ifcoexistence could beagreed allround andits
associated legal problems adequately sorted out,theideahehadoutlined might notbenecessary at
all.Hong Kong waswilling toexplore withothers anysolutions inthisdirection. Itspaper hadnot
dealtatlength withinstitutional arrangements, onwhich therehadbeenasubstantial contribution from
Mexico andwhich should bereadsidebysidewithHong Kong'scontribution.
64. Therepresentative ofMexico agreed thatthequestion oftransitional arrangements involved
issues notonlyrelated tothecoexistence oftheGATT 1947 system andthenewWTO system, but
alsothewithdrawal ofcontracting parties from GATT 1947. Inthiscontext, herdelegation had
circulated acommunication (PC/IPL/W/4), which ithadnotyethadthechance tointroduce indetail,
showing thespecific aspects ofproblems deriving from pending cases indispute settlement.
65. TherepresentativeofArgentinasaidthatasidefromtheproblemsthathadalreadybeenidentified,
there might alsobecases ofatransitional nature innegotiations under Article XXVIII, andArgentina
wasalready involved insuchacase.
66. TheChairman saidheintended tomove ontoaplurilateral process within thecourse ofthe
present orthefollowing week.
67. TheSub-Committee tooknoteofthestatements.
C. Paragraph 8(c)(iv) Decision establishing thePreparatory Committee
(Composition oftheTextiles Monitoring Body)
68. TheChairman recalled thatatthe14September meeting oftheSub-Committee, hehadindicated
thathewould holdconsultations onsuggestions fortheestablishment ofaninformal open-ended body
todiscuss thequestion oftheTextiles Monitoring Body (TMB). Following extensive consultations,
heproposed thataninformal, open-ended Contact Group onTextiles beestablished, which would report
totheSub-Committee assoonasconcrete proposals emerged. Onthequestion ofChairmanship, while
hehadtoregretfully decline suggestions thatheassume thispost, hewasintheprocess ofsearching
forasuitable candidate whowould command abroad measure ofsupport.
69. TheSub-Committee tooknoteofthestatement andagreed totheChairman 'sproposal.
D. Paragraph 8(b)(iii) oftheDecision establishing thePreparatory Committee
(i) Arrangements foreffective cooperation withother inter-governmental organizations
70. TheChairman saidthattheSub-Committee should concentrate ondeveloping arrangements
withthose inter-governmental organizations withwhich formal arrangements hadtobeinplace byPC/IPL/M/5
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1January 1995orshortly thereafter. Using thisasaguiding principle, hewould suggest thattheSub-
Committee consider arrangements forcooperation withthefollowing fourorganizations: theIMF,
World Bank, UNCTAD andWIPO. Hewasopentosuggestions astowhether other organizations
should beincluded, andastohowthequestion ofestablishing relations withtheseorganizations should
beapproached.
71. Therepresentative ofAustralia saidthatthegeneral framework presented byhisdelegation
atthe19Julymeeting oftheSub-Committee, envisaging threecategories oforganizations withwhich
theWTO would needtodevelop relations, might stillbeuseful. Thecategories werethefollowing:
(i)organizations which hadbeengiven afunctional roleunder particular WTO Agreements. Included
inthiscategory would betheIMFandWorld Bank, mentioned bytheChairman inhislist,plusalso
theCCC, which hadafunctional roleunder theAgreements onCustoms Valuation andRules ofOrigin.
Relations withthese organizations would needtobemore formal thanwithothers, suchasthrough
theestablishment ofmemoranda ofunderstandings between theheads ofthose organizations andthe
ChairmanoftheGeneralCouncil;(ii)organizationswhichhadafunctiontosupplyinformationregularly
totheWTO oritsorgans. Included inthiscategory would betheWIPO andUNCTAD, alsomentioned
bytheChairman inhislist,andpossibly others suchastheUNEP andCSD. Relations withthese
organizations would belessformal, withthenegotiation onlyofapossible exchange ofletters setting
outterms under which information would regularly beprovided totheSecretariat rather thanthrough
participation intheWTO bodies concerned; and(iii)organizations which wished simply tobekept
informed ofdevelopments inWTO bodies. None oftheorganizations mentioned bytheChairman
would fallintothiscategory, andoneperhaps didnotneed totaketoomuch trouble withthese
organizations atthisstage.
72. TheChairman referred toadebate thatwastaking place intheTrade andDevelopment Board
oftheUNCTAD, which would alsobetaken upattheUNGeneral Assembly 'spresent session, on
thequestion oftheoverall, global institutional mechanism foreconomic andfinancial policy making.
Inthisconnection, anumber ofcrucial questions would needtobeaddressed andsome agreement
reached. Forexample, where didtheWTO seeitself inthisregard? Diditseeitself asbeing part
oftheUN,asaspecialized agency along thelinesoftheIMFandWorld Bank, orasanindependent
organization existing onitsown? Orwastheresome middle ground between these threeoptions such
thattheWTO could havearelationship withtheUNbutatthesame timemaintain acertain degree
ofcontrol overitsownactivities?
73. Therepresentative ofArgentina saidthatwhile Australia 'sapproach wasagoodbasistostart
from, hisdelegation would suggest adding, whether inthefirstorthesecond category, thefollowing
fourorganizations tothelist:theFAO, which wasmentioned inArticle 10:4(b) oftheAgreement
onAgriculture; andtheInternational Office ofEpizootics, Codex Alimentarius Commission andthe
Secretariat oftheInternational Plant Protection Convention, allofwhich were mentioned inthe
AgreementonSanitaryandPhytosanitaryMeasures.Specificcooperationmechanismshadbeenprovided
forinrespect ofthelatter three organizations.
74. Therepresentative oftheUnited States saidthatthequestion oftheWTO 'srolewithrespect
totheUNclearly needed tobediscussed. Hewould note, however, thatincontrast toprovisions in
agreements establishing other international organizations, there wasnoprovision intheAgreement
establishing theWTO thatwould create aclearrelationship withtheUN.Asregards thecategorization
suggested byAustralia, herecalled thattheChairman hadindicated previously thattheSecretariat had
already commenced work withother international organizations withaviewtodefining thescope of
cooperation between theWTO andthese organizations. TheUnited States encouraged thatwork, and
sought some typeofstatus report asandwhen theChairman deemed appropriate. Inparticular, it
would beuseful toknow what positions theSecretariat wastaking indiscussions withthese other
organizations.WithregardtotheIMFandtheWorldBank,theUnitedStateswasinterestedinexploringPC/IPL/M/5
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withtheSub-Committee theestablishment ofasmall representative office inWashington topermit
more frequent interaction among theWTO, IMFandtheWorld Bank, based ontheexperience and
ontheadvantage ofhaving hadanoffice inGeneva representing theIMFand,previously, theWorld
Bank. These would, however, notnecessarily serve asmodels forarepresentative WTO office in
Washington because thefunctions were clearly somewhat different.
75. Therepresentative oftheEuropean Communities saidthattheorganizations listed bythe
Chairman included allthose thatwere apriority andalready represented acertain amount ofwork
thatwould havetobedonequiterapidly. Withregard topossible linksbetween theUNandthefuture
WTO, theCommunity believed thattheGATT hadthusfarsurvived verywellinitsparticular situation,
anddidnotseeanypoint atthisstage inundertaking anyurgent thinking onthisparticular matter.
Ifanyinitiative weretobeforthcoming fromtheUN,there would betimeenough toconsider itthen.
Hisdelegation agreed withtheUnited States thatthere wasnothing intheWTO statutes concerning
relations withtheUN. There wasalsonothing intheUNCharter asregards thisaspect which would
compel theWTO tomove inthedirection ofpossible linkswiththeUN,eventhough certain comments
orideas might becirculating inthisrespect.
76. Therepresentative ofIndia saidthattheframework suggested byAustralia wasagood one
since ithelped toclassify organizations intothree useful categories which might enable theSub-
Committee totakedecisions. While hisdelegation didnotexpect either thefirstorthesecond category
toposemany problems, there wasacasefordecisions tobemade inthethirdcategory, andinthis
regard hehadsomepreliminary remarks1ontheSecretariat 'snon-paper indocument 2035. Withregard
totheUnited States 'proposal forarepresentative office inWashington, hisdelegation would convey
thistoitsauthorities forconsideration.
77. TherepresentativeofHongKongexpressedsupportforthecategorizationsuggestedbyAustralia
which could provide alogical listing oforganizations withwhich theWTO would beexpected todevelop
relations ofonetypeoranother. Asregards theWTO 'srelationship withtheUN,hebelieved this
tobeaserious question andagreed withtheCommunity thatthiswasperhaps notapriority issue at
thepresent time. Hewould offer thesame comment ontheideaofanoffice inWashington, which
could waituntilthemore immediate problems hadbeenresolved.
78. Therepresentative ofNewZealand saidthathisdelegation hadnoted others 'comments on
thequestion ofrelations between theWTO andtheUN,andwould seekfurther guidance thereon from
itsauthorities.
79. Therepresentative ofEgypt saidthatAustralia hadpresented agood proposal onthe
categorization oftherelationship between theWTO andother international organizations. However,
theChairman hadraised apertinent question which needed tobeaddressed priortodefining theWTO 's
relationship withother organizations. Onewould needtoconsult onhowtheWTO sawitself, whether
aspartoftheUNoraspecialized agency. Also, withthedebate thatwasgoing totakeplace atthe
UNGeneral Assembly level, oneshould think ofhowtoperceive theassessment tobemade bythe
General Assembly, andconsider making acontribution tothedebate. Certainly, astheCommunity
hadsaid,theGATT hadsurvived thusfar,butithaddonesoonthebasis ofadefacto relationship.
Egypt didnotbelieve thatonewould want theWTO tocontinue inthismanner. TheWTO hadto
haveaclearer legalstatus andacleardefinition about itsrelationship withother organizations. One
could perhaps takeacloser lookatthevarious kinds ofrelationship agreements theUNhadwithother
international organizations toseewhere onewanted tohavetheWTO initsrelationship withtheUN.
1Carried under sub-item (ii)below.PC/IPL/M/5
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There wasadistinction, forexample, between thetypeofrelationship theUNhadwiththeFAO and
WHO, andthatwiththeIMFandWorld Bank andtheIAEA.
80. Therepresentative ofCanada associated hisdelegation withtheCommunity 'sstatement on
thequestion ofpossible links between theUNandthefuture WTO.
81. Therepresentative ofSwitzerland saidthattheChairman hadprioritized thedifferent
organizations correctly andthatAustralia 'sproposal washelpful. Switzerland attached importance
tocooperation withtheIMFandWorld Bank, andbelieved itwasimportant tolooknotonlyatthe
kindofarrangement thatwasbeing proposed bytheUnited States concerning anoffice inWashington,
butalsoother arrangements suchascooperation atthestafflevel. Onewould alsohavetoreflect on
thepossibility ofjointanalyses together withtheIMFandtheWorld Bank inorder tosaveresources
andenhance thequality oftheoutput.
82. TheChairman saidthathisintention hadbeentosensitize GATT delegations tothekindof
views being expressed bothinGeneva andinNewYork onthequestion ofrelations between theWTO
andtheUN.Delegations inother forums weretaking upthisquestion andwould viewitinadifferent
perspective. Itwasimportant forGATT delegations alsotosensitize theircapitals tothewaythey
looked atthequestion oftheWTO 'srelations withinternational organizations. Otherwise, hecould
foresee asituation inwhich decisions weretaken, perhaps attheUNGeneral Assembly orelsewhere,
andtheWTO being faced withafaitaccompli. Unless national delegations weresensitized astothe
roletheWTO sawforitself, thisaspect would notbetaken intoconsideration ineither supporting
orvoting against theresolution thatwasbeing floated onthissubject. Therefore, bydefault onecould
findoneself inanuncomfortable situation.
83. Therepresentative ofArgentina saidthatthelackofaspecific mention intheWTO provisions
regarding thenature oftherelationship between theWTO andtheUNwasdeliberate andnotan
omission. Hisdelegation agreed withothers thatthiswasnottherighttimetoanalyze thisquestion,
andwould consider aproposal inthisconnection withkeeninterest inthefuture.
84. Therepresentative ofMorocco saidthathisdelegation attached importance tocooperation
agreements between theWTO andthemajor international organizations active inthemonetary, financial
anddevelopment fields. Herecalled thatintheMarrakesh Declaration, Ministers hadconfirmed their
resolution tostrive forgreater global coherence ofpolicies inthefields oftrade, money andfinance.
TheSub-CommitteenowhadtheoccasiontotrytooutlinewhatMinistershadimpliedinthatDeclaration,
namely theworldwide coordination ofthesepolicies. Indeed, attheclosing ceremony oftheMarrakesh
Ministerial meeting, theKing ofMorocco hadinvited theinternational community toreflect onthe
possibility ofinstitutional arrangements thatwould make itpossible toensure better coordination of
policies attheworld level. TheSub-Committee hadnowtheoccasion tobegin withareview ofthe
cooperation agreements existing between GATT 1947 andtheIMFandWorld Bank andtoseenot
onlytowhat extent these agreements could berenewed orextended, butalsowhether these were
sufficient toachieve thegoals outlined atMarrakesh.
85. TheChairman saidthattherewasnoquestion thattheWTO needed acooperative relationship
withinternational organizations, andinparticular withtheUN. However, onehadtobecareful that
inestablishing suchrelationships theWTO 'sownfreedom ofaction andfreedom todevelop inline
withtheaimsandprinciples oftheWTO Agreement were notcompromised orcircumscribed.
(ii) Observer status forinternational organizations
86. Therepresentative oftheUnited States saidthathisGovernment hadadopted afairly non-
restrictive viewonthequestion ofwhich organizations should begiven observer status sincethisrelatedPC/IPL/M/5
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indirectly totheparticipation ofnon-governmental organizations aswell, amatter thathisdelegation
hadbeenpursuing forthetimebeing intheSub-Committee onTrade andEnvironment. Onthequestion
ofcriteria andconditions forobserver status intheWTO, theSecretariat 'snon-paper (document 2035)
wasontherighttrack. However, inkeeping withitsnon-restrictive approach, hisdelegation would
suggest deletion oftheword "only" inparagraph 2ofthenon-paper inorder toallow flexibility to
consider requests from organizations other thanthose specifically referred tointhatparagraph. His
delegation agreed thatobservership ofadditional international organizations should beconsidered on
acase-by-case basisandguided bytheprinciples ofrelevance, responsibility andwillingness toprovide
reciprocal access. TheUnited States believed thatthepursuit ofspecific agreements withinternational
organizations seeking observership should probably belimited tothemostimportant ones, assuggested
bytheChairman. Inthisconnection, theSecretariat might wishtodevise astructure which identified
classes ofinternational organizations anddefined thescope ofparticipation inWTO proceedings based
onthespecific classification ofindividual organizations. Inother words, onemight wanttolookat
observership inthecontext ofspecific WTO bodies rather thangeneral observer status intheWTO
because oftheparticular interests oftheorganization involved.
87. Therepresentative ofIndia saidthatthere should besome element ofselection anddiscretion
inthecriteria, andthattheword "only" inparagraph 2ofthenon-paper should beretained. On
paragraph 4,ifitwereagreed thatrequests should beconsidered onacase-by-case basis, thensome
general agreement onthecriteria would alsoberequired. Inthisconnection, hisdelegation believed
that"membership oftheorganizations concerned" wasperhaps notadequate, andthatsomething would
needtobesaidabout thenature ofthemembership oftheorganizations concerned. Onparagraph 6,
hisdelegation hadnobasic disagreement, butwished torecall aquestion raised atanearlier occasion
astowhether oneshould seekoutorganizations tobeobservers orwhether arequest should come
from theorganization itself. Asregards the"sunset" provision, India believed ittobeappropriate
because there hadtobeademonstrable interest intheproceedings oftheWTO onthepartofobserver
organizations. India categorically rejected thegranting ofobserver status toNGOs, because itwould
amount toapoliticization oftheorganization, which wasnotinanyone 'sinterest. Hisdelegation hoped
thatagreement onthecriteria forgranting observer status could bereached soon.
88. Therepresentative ofHong Kong saidthatonewould firsthavetoconsider thecriteria for
granting observer status before moving toactual cases. Clearly, there might alsobedifferent levels
ofobservers, withsome observers restricted toaCommittee orSub-Committee andsome restricted
toaCouncil, andsoon.
89. TheChairman, referring tothequestion ofobserver status forNGOs, saidthatsince thisissue
wasbeing considered intheSub-Committee onTrade andEnvironment, oneshould await theresults
ofthatdiscussion andseewhether theyweresuitable alsoforthepurposes ofthisSub-Committee 's
work.
90. Therepresentative ofNewZealand, addressing thenon-paper, saidthathisdelegation didnot
atthepresent stageseeanydifficulty withtheword"only" inparagraph 2.Onparagraph 4,hesuggested
thatpastpractice regarding relations withGATT 1947 beincluded asoneofthecriteria, particularly
inlightoftheprovision inArticle XVI:1 oftheWTO Agreement. Onparagraph 5,heagreed with
others thatobserver status forsome organizations might notbenecessary forallWTO bodies, in
particular theMinisterial Conference andGeneral Council. Finally, hisdelegation agreed withthe
provision ofa"sunset" clause inparagraph 10.
91. Therepresentative ofCanada supported acautious approach toquestions ofautomaticity in
granting observer status insome ofthesubsidiary bodies. Inthisconnection, hesuggested thatthe
lastsentence inparagraph 6ofthenon-paper might bedeleted. Henoted thatgovernment observersPC/IPL/M/5
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intheGATT 1947 bodies werecurrently assessed anannual fee,andraised thequestion ofsuchan
assessment onorganizations thatwere granted observer status intheWTO.
92. Therepresentative ofSwitzerland supported thecautious approach suggested byothers with
respect toobservers. Hisdelegation believed thatthequestion ofobservers intheMinisterial Conference
should beaddressed before considering thedifferent criteria thatthose observers should fulfil.
93. Therepresentative oftheEuropean Communities agreed withNewZealand thatdueaccount
should betaken ofexisting cooperation agreements orarrangements between theGATT 1947andother
international organizations inparagraph 4ofthenon-paper. Hisdelegation questioned whether the
firsttwosquare-bracketed textsinthatparagraph should bemaintained, because itwasdifficult tosee
howtheywould provide anyguidance onwhich organizations toinvite ornot.Hesupported theidea
ofreciprocity inthelastsquare bracket, andnoted inthisconnection thatfeesassessed onother
international organizations thatwere observers might haveacounter-productive effect ifthose were
thentoassess asimilar feeontheWTO. Onparagraph 2,aslongasitwasclearthatonewasdealing
withobserver status forinternational organizations, theretention ordeletion oftheword "only" would
notmake much difference. Onparagraphs 3and6,hisdelegation believed thattheword"automatically"
could bedeleted without anyeffect onthetext.
94. TheChairman, referring tothequestion ofcharging feestoother international organizations,
saidthatitwasoutofcourtesy thatinternational organizations didnotassess anysuchcharges oneach
other, andthathecould foresee problems ingoing along thatpath.
95. Therepresentative ofMorocco agreed withtheChairman 'sstatement. Withregard tothenon-
paper, hisdelegation believed itwasagood basis forfurther work.
96. TheChairman, summing upthediscussion under thisitemasawhole, saidthatAustralia had
setoutalogical andoperative framework which envisaged looking atthisissue atthree levels, and
which would assist indetermining whatorganizations theSub-Committee wasgoing tolookat.In
addition, theSecretariat 'snon-paper onobserver status would needtoberevisited. Inthecourse of
future debate, onewould needtoseewhere theWTO fitinthegalaxy ofinternational organizations
andintheframework ofinternational cooperation. TheUNSecretary-General hadestablished a
Committee thatwasdiscussing thewhole question ofinternational economic policy andfinance, and
whether oneliked itornot,thiswould havetobegiven dueconsideration. Informing views onthe
organizations withwhich relations would beimmediately needed, namely asof1January 1995, he
suggested concentrating onthefourhehadmentioned atthebeginning ofthediscussion, andtotake
intoaccount thesuggestions made byArgentina andsomeothers onafewotherfunctional organizations.
97. TheSub-Committee tooknoteofthestatements.