RESTRICTED
PREPARATORY COMMITTEE PC/M/3
FOR THE 7July1994
WORLD TRADE ORGANIZATION
(94-1418)
PREPARATORY COMMITTEE FOR THE
WORLD TRADE ORGANIZATION
MINUTES OFMEETING
Held on27June1994
1. ThePreparatory Committee fortheWorld Trade Organization (WTO) helditsthirdmeeting
atthelevelofHeads ofDelegations under theChairmanship ofMr.Peter D.Sutherland.
A. Review ofWork doneunder theSub-Committees
(a) Sub-Committee onTrade andEnvironment
2. Mr.Lampreia (Brazil), Chairman oftheSub-Committee, reporting ontheSub-Committee 's
work thusfar,saidthatitwaspursuing itswork inthecontext oftheterms ofreference andwork
programme contained intheMinisterial Decision onTrade andEnvironment (MTN.TNC/45(MIN),
Annex II).Oneformal meeting ofanorganizational nature hadbeenheldon11May, andtwoinformal
meetings hadsubsequently beenheldtodiscuss which elements oftheworkprogramme would constitute
theinitial focus oftheSub-Committee 'swork. Asecond formal meeting wasplanned for12July.
TheSub-Committee wasoftheviewthatitwasworking onacontinuum basis, andthatthesubstance
ofthework programme ithadinitiated would continue beyond thelife-span ofthePreparatory
Committee. Thishadbeenmade clearbytheMinisterial Decision, which directed thefirstmeeting
oftheGeneral Council oftheWTO toestablish aCommittee onTrade andEnvironment which would
essentially carry onwiththesubstance oftheSub-Committee 'swork.
3. TheCommittee tooknoteofthereport bytheChairman oftheSub-Committee.
(b) Sub-Committee onServices
4. Mr.Manhusen (Sweden), Chairman oftheSub-Committee, reporting onthework oftheSub-
Committee thusfar,recalled thatatthemeeting ofthePreparatory Committee on31May, itsChairman
hadreported ontheproceedings ofthefirstmeeting oftheSub-Committee heldon19May, andon
itswork programme andpriorities fortherestoftheyear. Asregards developments inthethree
Negotiating Groups -onBasic Telecommunications, Movement ofNatural Persons andMaritime
Transport Services -which hadbeensetuppursuant totheDecisions taken byMinisters atMarrakesh,
allthree Groups hadheldtheirfirstmeetings inMay, andwould meetagain on11,12and13July,
respectively. Hehadbeenholding consultations regarding theappointment ofChairpersons forthese
Groups, onthebasisofwhich hehadproposed thefollowing appointments: Mrs.Bautista (Philippines)
asChairperson oftheNegotiating Group onMovement ofNatural Persons; Mr.Kenyon (Australia)
asChairman oftheNegotiating Group onMaritime Transport Services; andMr.MacMillan
(United Kingdom) asChairman oftheNegotiating Group onBasic Telecommunications. These
appointments hadbeenproposed inawritten procedure under which theywould beconfirmed unless
objections werereceived inwriting bytheendofthatday. Noobjections hadyetbeenreceived and
hewasconfident thatthese appointments would beconfirmed. Agreement hadalsobeenreached on
theparticipation ofobservers intheNegotiating Groups. Heinformed theCommittee thathewasabout
tostartconsultations ontheestablishment ofaNegotiating Group onFinancial Services, which wasPC/M/3
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likely tobeconstituted intheautumn, andrecalled thattheMinisterial Decision onFinancial Services,
unlike theother Decisions towhich hehadreferred, hadnotestablished anegotiating group. With
regard totheSub-Committee onServices itself, oneofitsfirstpriorities wastocomplete areport on
outstanding questions relating tothescope oftheAgreement onServices. Hehadheldafirstinformal
meeting onthissubject andanother suchmeeting would takeplace shortly before thesummer break.
TheSub-Committee wasscheduled tomeeton15July.
5. TheCommittee tooknoteofthereport bytheChairman oftheSub-Committee.
(c) Sub-Committee onBudget, Finance andAdministration
6. Mr.Szepesi (Hungary), Chairman oftheSub-Committee, reporting onthework oftheSub-
Committee thusfar,saidthatithadmetonanumber ofoccasions andthatvarious informal consultations
hadalsobeenheld. Furthermore, Mr.Gosselin (Canada), Chairman oftheGATT Budget Committee,
washeading aninformal working group onguidelines fortheassessment ofWTO members 'budget
contributions. With regard totheseatfortheWTO, theconsideration oftheoffers oftheFederal
Republic ofGermany andSwitzerland, proposing Bonn andGeneva respectively asthesiteoftheWTO,
hadstarted asscheduled. Thetwooffers hadbeendistributed simultaneously tomembers oftheSub-
Committee on15June. Representatives ofthetwogovernments andcities concerned hadmade formal
presentations oftheiroffers totheSub-Committee intheprevious week. Following thesepresentations,
andinaccordance withaprocedure approved bytheSub-Committee, hewould holdconsultations,
togetherwithMr.Gosselin,inordertodetermineanemergingview.AllmembersoftheSub-Committee
would beconsulted, andheindicated thatthefirstround ofthese informal consultations would take
placeduring thefirstpartofthefollowing week. Delegations would shortly beadvised bytheSecretariat
aboutthetimingoftheconsultations.Itwasimperativethatdelegationsparticipatedintheseconsultations
withclearinstructions andviews fromtheirauthorities regarding theirpreference fortheWTO seat.
Hewould report totheSub-Committee ontheresults ofthese consultations, hopefully with a
recommendation ontheseatandonthemandate tobegiven forthenegotiation ofaheadquarters
agreement. Theobjective remained tohavetheissueoftheseatsettled bythePreparatory Committee
before thesummer break. TheSub-Committee would therefore aimtoapprove itsrecommendation
notlaterthan15July. Headded thatashort while earlier, hehadreceived acommunication from
themunicipal authorities ofBonn inviting arepresentative group of10or15,orevenmore, permanent
representatives tovisitBonn inthenearfuture. Consultations would needtobeheldonthatinitiative
verysoon.
7. Asregards guidelines fortheassessment ofWTO members 'budget contributions, hehad,as
hehadmentioned earlier, asked Mr.Gosselin toheadaninformal working group, thecomposition
ofwhich wascomparable tothatoftheGATT Budget Committee. Mr.Gosselin hadinformed him
thatseveral consultations hadalready taken place, andthatdiscussion hadprimarily centred onthe
basis forthecalculation ofassessments. Consideration wasbeing given tothequestion ofwhether
andhowtrade inservices andtrade aspects ofintellectual property rights, inaddition tothecurrent
GATT practice ofusing datafortrade ingoods, could betaken intoaccount. Other issues thathad
beendiscussed included, interalia,thequestion ofhowtodealwiththeAgreements inAnnex 4of
theWTO Agreement, andwiththeexpected parallel existence oftheWTO andGATT foraninitial
period. Some otherareassuchasminimum contributions, arrears related totheGATT andthetreatment
ofeventual arrears intheWTO would beexamined atalaterstage. Itwashisexpectation thatthe
Chairman oftheinformal working group would make afullreport totheSub-Committee, hopefully
withappropriate recommendations, before theendofJuly.
8. TheSub-Committee hadstarted tostudy thequestion oftheorganizational structure andinitial
staffing requirements oftheWTO Secretariat. TheGATT Secretariat hadputforward aproposal in
thisregard, which hadbeenintroduced andconsidered ininformal meetings. Hedrew attention toPC/M/3
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thefactthatthisproposal might haveimplications already in1994, i.e.intheGATT budget forthe
current year. Hewascontinuing consultations withdelegations andhoped tobeinaposition inthe
nearfuture toobtain theviews ofmembers, thusenabling theSub-Committee topropose some
preliminary decisions inthisimportant area. TheSub-Committee would soonhavetoproceed tothe
examination ofotherrelated issues, suchasstaffconditions ofservice. Examination ofbudget estimates
for1995would follow afterthesummer break, when other keyelements, suchasthesiteoftheWTO,
would alsobeknown.
9. Finally, withregard totheother tasksrelating tothefinancial regulations, thetransfer ofthe
property, including financial assets, oftheICITO/GATT totheWTO, andthetransfer andtheterms
andconditions ofthetransfer oftheGATT stafftotheWTO Secretariat, itwashisintention totake
upthesematters oncefurther progress hadbeenmade intheareashehadmentioned earlier. Asregards
therelationship between theInternational Trade Centre (ITC) andtheWTO, ithadbeenagreed that
more timeshould begiven tothenewExecutive Director oftheITCnotonlytosettle intotheITC,
butalsotogetacquainted withthesituation before taking upthisquestion.
10. TheCommittee tooknoteofthereport bytheChairman oftheSub-Committee.
(d) Sub-Committee onInstitutional, Procedural andLegal Matters
11. Mr.Kesavapany (Singapore), Chairman oftheSub-Committee, reporting onthework ofthe
Sub-Committeethusfar,saidthatonthebasisofthemandategrantedtoitbythePreparatoryCommittee,
theSub-Committee hadprioritised thevarious aspects ofitsworkasfollows: workonterms ofreference
andrules ofprocedure forallWTO bodies; relations between theWTO andother international
organizations; transitional arrangements; andpreparation ofthereport ofthePreparatory Committee.
Tofacilitate discussion onthefirstthree items, theSub-Committee hadrequested theSecretariat to
prepare background papers oneach. On22June, theSub-Committee hadmetinformally toexchange
views ontheSecretariat 'spaper onthefirstitem, andtodiscuss related matters. Following the
discussion, theSecretariat hadbeenrequested toprepare afollow-up paper inwhich standard terms
ofreference forWTO bodies andacommon setofrules ofprocedure applicable toallsuchbodies
would besuggested. Withregard totheterms ofreference, itwasagreed thattheseshould beasreflected
inthevarious agreements contained intheFinal Act. Asregards rules ofprocedure, theintention
wastocompile them intoaWTO handbook ofrules which allbodies could use.Thepaper thatthe
Secretariat would produce would alsoidentify theneed, ifany,forspecific arrangements tobedevised
forparticular WTO bodies andagreements. Onthequestion ofspecific arrangements, heinformed
theCommittee thatonmatters relating toagriculture, aninformal open-ended contact group hadbeen
established. Thisgroup, which would function under theaegis oftheSub-Committee, would submit
periodic progress reports. TheSub-Committee would examine anddecide ontheneedforsimilar contact
groups tobeestablished inother areas thatrequired advance work tobedoneinorder thattheUruguay
Round Agreements concerned wereready forimplementation fromthefirstdayoftheentry intoforce
oftheWTO orimmediately thereafter. Hehadbeenapproached byseveral delegations withaview
tosetting uptwoother contact groups todealwithmatters relating toTRIPs andAnti-dumping and
Subsidies, andwasholding consultations onthismatter. Work onthesecond andthirdparts ofthe
Sub-Committee 'smandate, namely theWTO 'srelations withother international organizations and
transitional arrangements, would commence assoonasthebackground papers bytheSecretariat were
ready. Withregard tothereport ofthePreparatory Committee, thiswould beundertaken atthevery
endofthePreparatory Committee process.
12. Turning toanother issue, hesaidthathehadbeendirected bytheSub-Committee toreferthe
question ofthecomposition oftheTextiles Monitoring Body totheChairman ofthePreparatory
Committee withaviewtohaving theCommittee consider whether thistaskmight beallocated tothe
Sub-Committee, andthathehaddonesothrough aletter dated 21June. TheSub-Committee awaitedPC/M/3
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adecision bytheCommittee before including thismatter initsprogramme ofwork. Asregards
observers attheformal meetings oftheSub-Committee, invitations would beextended toallthose
organizations thatpresently attended Preparatory Committee meetings. Further requests forobserver
status would bedealt withonacase-by-case basis. Inthisregard, hehadreceived arequest from
theFAO, which would bepresented totheSub-Committee atitsnextmeeting forconsideration. In
conclusion, theSub-Committee planned toadvance itswork tothemaximum extent possible before
thesummer break. Thenextformal meeting oftheSub-Committee would beheldintheweek starting
4July, andanother inthethirdweek ofJuly. TheSub-Committee hoped tomake afurther progress
report totheCommittee before thesummer break.
13. TheCommittee tooknoteofthereport bytheChairman oftheSub-Committee.
B. Paragraph 8(c)(iv) oftheDecision establishing thePreparatory Committee
14. TheChairmansaidthat,asjustindicatedbytheChairmanoftheSub-CommitteeonInstitutional,
Procedural andLegal Matters inhisreport totheCommittee, thelatter hadaddressed acommunication
tohimwhich hadreferred totheinter-relationship between thework undertaken bytheSub-Committee
inrespect ofterms ofreference andrules ofprocedures forWTO bodies andthetaskunder
paragraph 8(c)(iv) oftheCommittee 'smandate, namely tomake proposals concerning thecomposition
oftheTextiles Monitoring Body. Heproposed thattheSub-Committee onInstitutional, Procedural
andLegal Matters beasked totakeup,onbehalf ofthePreparatory Committee, thework pertaining
toparagraph 8(c)(iv).
15. TheCommittee soagreed.
C. Paragraph 8(b)(i) oftheDecision establishing thePreparatory Committee
16. TheChairman, reporting onprogress intheimplementation oftheCommittee 'sDecision of
31Mayconcerning paragraph 8(b)(i) ofitsmandate, saidthatasregards thesubmission, negotiation
andverification ofthegoods andservices schedules ofleast-developed countries andstates orseparate
customs territories which hadjoined GATT 1947orwhich might become contracting parties between
nowandtheentry intoforce oftheWTO, theSecretariat wasactively providing technical assistance
tosuchcountries orcustoms territories, including adhocmissions tocapitals, tofacilitate thesubmission
ofdraftschedules ingoods andservices. These countries orcustoms territories werebeing assisted
intheactual preparation oftheir schedules. Forthem, andalsoforthose whose schedules were
provisionally attached totheMarrakesh Protocol, theSecretariat stood ready todoallthatwaspossible
toaccelerate thebilateral andplurilateral processes concerning thenegotiation andfinalization of
schedules, including their technical verification. Inview ofthetime constraints, hestrongly
recommended thatthegovernments concerned takethestepsnecessary toensure thattheworkinGeneva
thathehadjustoutlined, commenced without anyfurther delay.
17. Withregard tothecases ofstates orseparate customs territories whose requests foraccession
toGATT 1947werebeing examined byworking parties established bytheCONTRACTING PARTIES
toGATT 1947, andwhomight alsowishtoaccept theWTO oraccede toit,henoted that,atitsmeeting
on21June, theGATT Council hadtaken noteoftheCommittee 'sDecision of31Mayinrespect of
paragraph 8(b)(i). TheChairmen ofthevarious accession working parties hadalsobeenseparately
informedoftheCommittee'sDecisionandhadbeenrequestedtotakeactionasappropriate.Asmembers
might beaware, theWorking Party ontheAccession ofSlovenia toGATT 1947 hadconcluded its
examination ofSlovenia 'saccession request on22June. Slovenia hadrequested thattheWorking Party
should reconvene tocarry outthework under paragraph 8(b)(i). TheWorking Party would meet
forthispurpose aftertheGATT Council hadconsidered andactedupontheDraft Protocol ofSlovenia 's
Accession toGATT 1947.PC/M/3
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18. Anumber ofother governments hadexpressed theirintention toseekoriginal membership
intheWTO. These governments werenowintheprocess ofproviding information ontheircurrent
trade régimes inrespect ofareas suchasservices, TRIPS andTRIMs. They would, ofcourse, also
havetheadditional taskofpreparing andsubmitting draftUruguay Round schedules ongoods and
services forexamination andapproval bytheCommittee through theprocesses thattheCommittee
hadputinplace on31May. Hewould provide regular reports ondevelopments inthisareatoenable
theCommittee tomaintain aneffective supervisory role.
19. Therepresentative ofSweden noted thathisdelegation, onbehalf oftheNordic countries, had
raised thequestion ofthemanagement ofaccession negotiations atthemeeting oftheGATT Council
on21June. Ashisdelegation hadstated onthatoccasion, themultilateral trading system wasonits
waytobecoming global intherealsense oftheword. Anumber ofrequests foraccession hadalready
beenmade, andmore were forthcoming. TheNordic countries believed thattheaccession process
should notbehampered byadministrative orresource problems, andviewed thisasamatter of
management andtechnical assistance. TheNordic countries were notinanywayimplying thata
candidate country should beallowed toentertheGATT ortheWTO onanylower levelofcommitments
thanthose required toguarantee theruleandeffectiveness ofthetrading system. Their countries did
nothaveanswers tothequestions theyhadraised, andbelieved thatitwasimportant todiscuss these
matters,andthatthereshouldbecooperationbetweentheGATTCouncilandthePreparatoryCommittee.
Theyhadproposed aprocess ofconsultations toconsider theaccession issuewiththeaimofformulating
some kindofaction plan. While hisdelegation would notgointodetails atthepresent meeting, it
would bewilling todiscuss withtheChairman andwithother delegations howonemight proceed.
20. Inresponse, theChairman suggested thatonewould havetoawait theresults oftheconsultations
being conducted onthismatter bytheChairman oftheGATT Council. Henoted thatasofthe
Marrakesh Ministerial Meeting, instrictly legalterms onlystates orseparate customs territories that
became contracting parties toGATT 1947prior tothedateofentry intoforce oftheWTO andwhose
GATT 1994 goods schedules andGATS commitments hadbeen examined andapproved bythe
Preparatory Committee would beeligible fororiginal membership. Those thatwerenotabletofulfil
these requirements would havetoaccede totheWTO under Article XIIoftheWTO Agreement.
21. TheCommittee tooknoteofthestatements.
D. Ratification
22. TheChairman saidhebelieved even more strongly thanbefore thatthecentral taskfor
governments -and,therefore, fortheCommittee -wasthatofensuring timely ratification soasto
achieve maximum possible participation intheWTO when itentered intoforce. Theoverall picture
atpresent continued tobepositive. Most administrations werecompleting basicdomestic requirements
suchasthetranslation oftextsintonational languages andtheidentification ofpossible changes needed
indomestic legislation asaresult oftheWTO agreements. Asprovided forbytheFinal Act,the
Secretariat hadbeenmaking certified treaty textsavailable togovernments. Many governments had
beenscheduling Parliamentary sessions onUruguay Round Implementing Legislation intheperiod
leading uptotheGeneva summer break orimmediately thereafter. Allreports fromtheSecretariat 's
contacts withdelegations andcapitals -andhisownrecent visittoWashington -hadconfirmed that
1January 1995 remained firmingovernments 'calendars. Hewould review thesituation inrespect
ofratification again atthenextmeeting oftheCommittee.
23. TheCommittee tooknoteofthestatement.PC/M/3
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E. Organizational Matters
24. TheChairman saidthatanumber ofdelegations hadbrought tohisattention thequestion of
thescheduling andfrequency offormal andinformal meetings. Asactivity picked upandintensified,
particularly afterthesummer break, itwould beimportant thatthework programme takeaccount of
theconstraints ofdelegations. Awellcoordinated approach would benecessary toavoid overlapping
meetingstotheextentpossibleandtoensureconstructiveparticipationbydelegationsandtheSecretariat.
HeandtheChairmen oftheSub-Committees would beinregular contact toensure coordination. As
animmediate step,hehadasked theSecretariat tocirculate anindicative schedule ofmeetings asit
currently stood. AttheCommittee 'snextmeeting, hehoped togivemembers anupdated version of
thatschedule containing information onmeetings proposed afterthesummer break, andplanned to
provide theCommittee withregular updates.
25. TheCommittee tooknoteofthisinformation.