RESTRICTED
WORLD TRADE WT/BFA/4
L/7629
ORGANIZATION 22May1995
Limited Distribution
(95-1336)
REPORT OFTHE JOINT WTO/GATT COMMITTEE ONBUDGET,
FINANCE AND ADMINISTRATION
INTRODUCTION
1. TheWTO Committee onBudget, Finance andAdministration andtheGATT 1947Committee
onBudget, Finance andAdministration, hereafter referred tojointly astheCommittee, meton
25April and3May1995.
2. TheCommittee waschaired byMr.J.-M. Metzger ofFrance. Theterms ofreference and
composition oftheCommittee aresetoutindocuments L/5964/Rev.9 of20March 1995 and
PC/IPL/2 of28October 1994.
3. TheAgenda forthemeeting contained indocument WTO/AIR/69, GATT/AIR/3681 was
adopted.
A.FINANCIAL IMPLICATIONS OFANADDITIONAL
DEPUTY DIRECTOR-GENERAL
CRP(95)6 ,CRP(95)10 &CRP(95)14
4. TheChairman referred totheminutes ofthemeeting oftheWTO General Council of
24March 1995 (WT/GC/M/2) whereby theChairman ofthatbody mentioned thatanunderstanding
hadbeenreached "onthecreation ofonemore postofDeputy Director-General, inaddition tothe
three existing Deputy Director-General posts." TheChairman oftheGeneral Council stated that"it
wastherefore recommended thatthenecessary measures tocreate suchaposition andtomake the
appointment betaken upimmediately bytheWTO Committee onBudget, Finance andAdministration
andthenewDirector-General respectively..." TheCommittee onBudget, Finance andAdministration
wastherefore invited bytheGeneral Council "...to takeupthequestion oftheestablishment of
another postofDeputy Director-General andreport totheGeneral Council onthismatter..."
5. Amember oftheSecretariat introduced documents CRP(95)6, relating tothefinancial
implications ofanadditional Deputy Director-General, andCRP(95)10, concerning aproposal for
financing theadditional costs. Thecosts in1995 (6months) wereestimated atSwF261,000 forthe
postofDeputy Director-General andSwF56,000 persecretary post.
6. Intheensuing discussions, members oftheCommittee raised anumber ofpoints. Itwas
thought that(i)ajobdescription should havebeenmade available before anydecision onthematter,
(ii)thenewpostshould betreated inthecontext oftheon-going examination ofboththemanagement
review aswellasthevarious personnel-related questions oftheWTO, and(iii)thespecific and
general mandates which havebeengiven totheCommittee should bekeptinmind. Amember of
theCommittee stressed thatitwasnecessary toensure thattheWTO isequipped tofulfil itsrolein
themost efficient andconcrete way. Hesuggested thatanyrecommendation which might bemadeWT/BFA/4
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should beaccompanied byanobservation thatapossible decision tocreate anadditional postof
Deputy Director-General should notprejudice thecompletion ofthedebate intheCommittee
regarding thestructure ofthefuture secretariat oftheWTO northeexamination ofthe1996 budget.
Thewhole structure oftheWTO secretariat should thusbere-examined inthelightoftheprocess of
examination currently being conducted intheBudget Committee anditsworking group.
7. Withregard tothequestion ofadditional support staffmentioned indocument CRP(95)6, the
Committee recalled itsprevious discussions onthenecessity toimprove theGeneral
Service/Professional ratiointheSecretariat. Theopinion wasexpressed thattheSecretariat should
provide thenecessary staffthrough redeployment orpooling ofstaffrather thancreating additional
posts. TheSecretariat, inthename oftheDirector General made areserve inthisregard.
8. Returning totheSecretariat 'sreserve mentioned above, theChairman reported thatthe
Director General hadindicated tohimthathewould havepreferred acompromise onthequestion
ofthetwosupport staff requested fortheadditional postofDeputy Director General. The
compromise would betoapprove onesupport postrather thanthetwooriginally requested. The
Committee, however, maintained itsposition onthisissue andrequested theSecretariat topropose
aplanforrationalization ofGeneral Service staffintheWTO. TheChairman suggested thattheissue
might bere-examined when theoverall additional staffrequests arediscussed.
9. Inthelight oftheinvitation oftheGeneral Council totakeupthequestion ofthe
establishment ofanother postofDeputy Director-General, TheCommittee recommends thatthe
financial implications oftheadditional postofDeputy Director-General, nottoexceed SwF261,000
according tothedetails presented indocument CRP(95)6, befinanced primarily from thecredit of
SwF300,000 foreseen inthe1995 budget under Section 15-Unforeseen Expenditure. Inmaking
thisrecommendation, theCommittee underlines thatthecreation ofthepostshallnotprejudice the
on-going deliberations withregard tothemanagement review, including thestructure ofthefuture
secretariat, northeexamination ofthe1996 budget proposals.
B.ADDITIONAL RESOURCES NEEDED FOR TRANSLATION REQUIREMENTS
CRP(95)10, CRP(95)11 &CRP(95)15
10. Amember oftheSecretariat introduced thetopicandexplained thattheworkload withregard
todocument translation andmanagement hadobviously increased substantially overthecourse ofthe
Uruguay Round negotiations. With theentry intoforce oftheWTO, theworkload hadcontinued to
increase; thefirstquarter of1995 hadalready shown a20percentprogression over1994, withthe
trend appearing tobegaining momentum. Increases indocumentation could beattributed tothe
increases inthenumber oflegal instruments tobeimplemented intheframework oftheWTO, of
standing bodies, ofnotification requirements andof"Code" members.
11. TheCommittee generally recognized that,asaresult oftheexpanded scope ofthenew
organization, theworkload hadincreased significantly. Some members mentioned, however, thatit
wasperhaps toosoontosaywhether acertain element ofthecurrent workload might betheresult
ofstart-up activities which might stabilize ordiminish overthecourse oftime.
12. AstheCommittee indicated thatitwould beprepared toexamine thequestion ofimmediate
needs onaTemporary Assistance basis andtoconsider longer-term needs inthecontext ofthe
examination ofposts for1995/1996, document CRP(95)15 wassubsequently prepared andsubmitted
tothemeeting of3May. Thispaper indicated thatthecostsfortheimmediate needs onaTemporaryWT/BFA/4
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Assistance basis amounted toSwF758,000 for36work/months oftranslators and18work/months
ofsupport staff, withagain thesame additional requirements required inthesecond halfof1995.
13. Asitwasdecided toconsider onlythemost immediate needs atpresent, theCommittee
recommends thatthefinancial implications ofimmediate additional resources fortranslation
requirements, nottoexceed SwF758,000 according tothedetails inparagraph 2a)andtable of
CRP(95)15, befinanced asfollows :(i)anybalance ofthecredit forunforeseen expenditure (Section
15)under theregular budget aftertaking account ofthefinancial implications ofanadditional Deputy
Director General; (ii)anybudgetary savings for1995; (iii)anyexcess ofmiscellaneous income over
estimated miscellaneous income for1995; and(iv)withdrawal ,ifnecessary, from theWorking
Capital Fund.
C.FINAL POSITION OFTHE 1994 BUDGET OFTHE GATT
L/7627
14. Amember oftheSecretariat introduced document L/7627 anddrewtheCommittee 'sattention
totheSurplus Account inAnnex Bofthedocument. Itshowed thattheregular budget showed a
savings ofSwF638,000, while expenditure under thesupplementary budget amounted to
SwF2,730,000 against anauthorization ofSwF3,706,000. Theunder-expenditure withregard to
thesupplementary budget wasmainly theresult ofthefactthattheadditional personnel hadnotbeen
abletotakeuptheirfunctions before theendoftheyear. Inaccordance withthedecision ofthe
Council meeting of4-5October 1994, thesupplementary budget wasfinanced from theprovision
forunforeseen expenditure (SwF100,000), thepositive balance oftheSurplus Account asat
31December 1993 (SwF556,000), 1994 budgetary savings (SwF638,000), thesurplus of
miscellaneous income overthatforeseen for1994(SwF1,369,000), withthebalance ofSwF67,000
being taken fromtheWorking Capital Fund. According totherulesoftheFund, thisamount would
bereimbursed totheFund through acredit inthe1996 budget.
15. TheCommittee recommends theapproval oftransfers between sections ofSwF895,558
which arenecessary inorder tocover excess expenditure overapproved appropriations onthesections
mentioned inparagraph 15ofdocument L/7627 bysavings onother sections.
D.ACTUARIAL SITUATION OFTHE UNITED NATIONS PENSION FUND -
POSITION OFICITO/GATT
CRP(95)13 &Rev.1
16. Amember oftheSecretariat introduced CRP(95)13 dealing withtheproposed terms of
reference forthestudy bytheSecretariat oftheWTO oftheconditions forthepossible withdrawal
oftheWTO (ICITO) fromtheUnited Nations JointStaffPension Fund (UNJSPF) andthefeasibility
ofaWTO Pension Plan(WTOPP). Hesaidthattheproposed terms ofreference dealtnotonlywith
withdrawal from theUNJSPF butalsowiththefeasibility ofaWTOPP asitwasnecessary to
undertake thetwoexercises intandem. Itwasnoted thatanywithdrawal from theUNJSPF would
ultimately havetobeapproved bytheUnited Nations General Assembly.
17. TheCommittee discussed theproposed terms ofreference andmade several suggestions which
were included inCRP(95)13/Rev.1. Anumber ofmembers oftheCommittee recognized the
problems oftheUNJSPF, particularly theproblem ofoverlap inbenefits between General Service
staffandProfessional andhigher category staff. Some delegations saidtheUNJSPF hadcertain
advantages which should alsobetaken intoconsideration bythestudy. They expressed concern aboutWT/BFA/4
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thecostofthenewscheme andpreferred toremain intheUNJSPF, butwere prepared tokeepan
open mind pending theresults ofthestudy. Inresponse toaquestion regarding theefforts ofthe
International CivilService Commission toaddress theproblem ofoverlap inbenefits, itwasexplained
thattheimpact ofmeasures currently under discussion would haveonlyamarginal impact andthat
theproblem would continue toexist. Anumber ofmembers stressed thatthestudy wasatechnical
onewithout prejudice tothequestion ofprinciple astowhether theWTO should leave theUNJSPF,
which could onlybedecided inthelightofthestudy taking account ofarange offactors. Thewhole
question should betreated withprudence astheydidnotwanttobeputinfront ofa"faitaccompli"
andtheydidnotwanttocreate falseexpectations forthestaffoftheSecretariat.
18. After further discussion, theCommittee approved theterms ofreference ascontained in
document CRP(95)13/Rev.1 attached hereto asAnnex A.
E.CASH SITUATION AND STATEMENT OFOUTSTANDING CONTRIBUTIONS
ASAT31MARCH 1995
CRP(95)7 &WT/BFA/CONT/3
19. TheSecretariat prepared adocument onthecashsituation (CRP(95)7) asat31March 1995,
1994 and1993 andastatement ofoutstanding contributions (WT/BFA/CONT/3) asat
31March 1995.
20. TheCommittee tooknoteofthereports.
F.INSTALMENT PAYMENTS FOR COUNTRIES INARREARS
(CONTRIBUTIONS FROM 1987 AND EARLIER YEARS) -
PROGRESS REPORT ASAT31MARCH 1995
CRP(95)8
21. TheSecretariat prepared thereport (CRP(95)8) asat31March 1995 onthepayment of
arrears bythethirty-two contracting parties assessed attheminimum andthesixcontracting parties
assessed above theminimum in1988.
22. TheCommittee tooknoteofthereport.
G.CONTRIBUTION OFOBSERVER COUNTRIES TOWARDS THE COST OF
DOCUMENTATION SERVICES PROVIDED BYTHE SECRETARIAT -
PROGRESS REPORT ASAT31MARCH 1995
23. TheSecretariat prepared areport (CRP(95)9) asat31March 1995 onthecontributions of
observer countries.
24. TheCommittee tooknoteofthereport.
POINTS FOR APPROVAL : Paragraph 9
Paragraph 13
Paragraph 15WT/BFA/4
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INTERNATIONAL TRADE CENTRE UNCTAD/GATT
FINANCIAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE
BIENNIUM ENDED 31DECEMBER 1993 AND REPORT OFTHE
BOARD OFAUDITORS
A/49/5
25. Arepresentative oftheInternational Trade Centre UNCTAD/GATT (ITC) presented
document A/49/5 (Supplement No.5),theFinancial Report andAudited Financial Statements forthe
Biennium ended 31December 1993 andReport oftheBoard ofAuditors. Hedrew theCommittee 's
attention tothestatement ofincome andexpenditure fortheperiod inquestion which indicated that
expenditure ofUS$36,184,032 hadbeen US$196,068 lessthantheapproved estimates forthe
biennium. Asurplus ofUS$197,048 asat31December 1993 wasnoted.
26. TheCommittee tooknoteofthereport.WT/BFA/4
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ANNEX A
TERMS OFREFERENCE FOR THE STUDY BYTHE WTO SECRETARIAT OFTHE
CONDITIONS FOR THE POSSIBLE WITHDRAWAL OFTHE WTO (ICITO) FROM THE
UNITED NATIONS JOINT STAFF PENSION FUND (UNJSPF) AND FEASIBILITY OFA
WTO PENSION PLAN (WTOPP)
A. Possible withdrawal from theUNJSPF
(i) Toconsult withtheSecretariat oftheUNJSPF toestablish apreliminary estimate
ofthesums which current GATT/ICITO participants intheUNJSPF might beable
totransfer toafuture WTOPP, inthecontext (a)ofatransfer agreement under
Article 13oftheFund'sRegulations ofthetypenormally approved bythe
UNJSPF, and(b)ofatermination ofmembership under Article 16oftheFund's
Regulations.
(ii) Toprepare, onthebasis ofthese estimates, illustrative estimates ofthesums
potentially available fortheinitial funding ofapossible WTOPP, onarange of
assumptions about thechoices likely tobeopentocurrent GATT/ICITO
participants, intheUNJSPF, identifying, interalia:
(a) participants withmore than15years ofcontributions totheUNJSPF;
(b) participants within fiveyears ofretirement age;
(c) participants expected tohavetheirUNJSPF pension entitlements calculated
onthebasis ofUNJSPF methodology forGeneral Service staff, andfor
other staff.
(iii) Toconsider theimplications inthecasethatcertain staffmight notwishto
withdraw from theUNJSPF.
B. Proposal foraWTO pension plan
With aviewtoseeking torelate pension benefits more closely toemployee remuneration
asadjusted forcostofliving inGeneva, andmindful ofstaffconcerns about overlap between P
andGgrade pensions, theSecretariat shallreport onthefollowing areas:
(i) options forpension plans forPgrade staffintheWTO, taking intoaccount (a)the
particular characteristics ofitsstaff(age, gender distribution, average length of
service, possible countries ofretirement); (b)likely salary levels intheWTO;
(c)theneedtominimize thecostimplications fortheOrganization, given the
budgetary constraints ofMembers, andforthestaff; (d)thefeatures ofthe
UNJSPF which thestaffwillwishtoretain inaWTOPP;WT/BFA/4
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(ii) estimate ofcontribution raterequired tofundbenefits envisaged under plans
proposed under B(i)above;
(iii) estimate ofadditional start-up capital required inlightofanyshortfall envisaged
under A(ii)above;
(iv) estimate ofcostofrunning theWTOPP, including day-to-day administration,
financial andinvestment management;
(v) comparison withtheUNJSPF interms oflikely investment performance, risksfor
planmembers, range ofguaranteed benefits including costofliving andexchange
rateadjustments, andadministration costs.
C. Timing
TheSecretariat isrequested toinitiate consultations withtheUNJSPF Secretariat andto
commence work onalternative plandesigns assoonaspossible inorder thataproposal on
possible withdrawal from theUNJSPF andthefeasibility ofaWTOPP canbepresented tothe
General Council intheautumn of1995.
D. Consultant actuary
Inorder toassist intheconduct oftheabove study, theSecretariat mayretain theservices
ofaconsulting actuary. Amaximum amount ofSwF125,000 hasbeenearmarked inthe1995
budget forthispurpose.