RESTRICTED
PREPARATORY COMMITTEE PC/M/6
FOR THE 8November 1994
WORLD TRADE ORGANIZATION
(94-2340)
PREPARATORY COMMITTEE FOR THE
WORLD TRADE ORGANIZATION
MINUTES OFMEETING
Held on25October 1994
1. ThePreparatory Committee fortheWorld Trade Organization (WTO) helditssixth meeting
under theChairmanship ofMr.Peter D.Sutherland.
2. TheChairman welcomed Sudan asanobserver inpursuance ofitsformal request toaccede
totheWTO. Hethenrecalled thattheprogramme outlined byhiminJuly, andagreed bythe
Preparatory Committee, wasbased ontheassumption thatoneshould tryandcomplete allwork
pertaining totheimplementation oftheCommittee 'smandate bythetimeoftheImplementation
Conference. TheChairmen oftheSub-Committees, andtheSecretariat, wereworking withthisend
inview. Headded thatwork under paragraph 8(b)(i), relating tothenegotiation andapproval of
schedules ongoods andservices, might havetocontinue beyond theImplementation Conference since
theconcerned governments haduntiltheentry intoforce oftheWTO tocomplete theprocess. He
trusted thatdelegations hadgeared themselves toanevenmoreaccelerated andaction-oriented approach
based onclear-cut priorities designed tohavetheWTO enter intoforce on1January 1995. There
were roughly sixweeks remaining, andlessifonetookintoaccount theminimum timeneeded for
thetranslation andadvance circulation ofdocuments inthethree working languages before the
Implementation Conference.
3. TheCommittee tooknoteofthestatement.
A. Implementation Conference
4. TheChairman saidthat,asindicated bytheChairman oftheTrade Negotiations Committee
inhisconcludingremarksattheMarrakeshMinisterialmeeting(MTN.TNC/45(MIN),theImplementation
Conference would commence withameeting ofthePreparatory Committee atsenior officials level
tobefollowed immediately thereafter bytheCONTRACTING PARTIES toGATT 1947 meeting in
Special Session. Hisassumption wasthattheImplementation Conference didnotmarkthefinalmeeting
ofthePreparatory Committee. Hehadalready mentioned inhisopening remarks theexample ofwork
under paragraph 8(b)(i) relating totheacceptance of,oraccession to,theWTO Agreement. This,
andotherpartsofitsmandate, might require oneortwofurther meetings ofthePreparatory Committee.
Inanycase, under theMinisterial Decision establishing thePreparatory Committee, theCommittee
remained inplace untiltheWTO 'sentry intoforce.
5. Hefurther proposed thattheConference should haveaspecific andaction-oriented agenda
designed forabusiness-like meeting. ThePreparatory Committee partoftheConference would
essentially dealwithtwoitems: first, theformal establishment ofthedateofentry intoforce ofthe
WTO, which wasthecentral element ofthemandate oftheImplementation Conference; andsecond,
theconsideration andapproval ofthedraftreport ofthePreparatory Committee totheWTO. InsoPC/M/6
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doing, theCommittee would takeaction, asappropriate, ontheimplementation oftheMinisterial
Decision ontheEstablishment ofthePreparatory Committee andtheMinisterial Decision onTrade
andEnvironment. TheSpecial Session oftheCONTRACTING PARTIES toGATT 1947, tofollow
immediately after thePreparatory Committee, would essentially meet toactupon thespecific
recommendations made toitbythePreparatory Committee andwhich fellwithin thejurisdiction of
theCONTRACTING PARTIES totheGATT 1947. Theareathatcame immediately tomind here
wasthatoftransitional arrangements concerning theGATT 1947, including theTokyo Round
Agreements. Thespecific agenda didnotcallforgeneral statements orspeeches, andhedidnot,
therefore, expect any.Headded thatthecollective decision thatallwould taketoconfirm theWTO 's
entry intoforce on1January 1995would entail finalpreparations incapitals andinGeneva toensure
thattheWTO began withthemaximum possible number ofgovernments enrolled asfullyparticipating
members. Forthisreason, itwasimportant fortheImplementation Conference tobeheldasearly
aspossible inDecember. Accordingly, hewould propose thatitbeheldonthemorning ofThursday,
8December.
6. TheCommittee tooknoteofthestatement andagreed tothedateoftheConference andthe
provisional agenda outlined bytheChairman.
B. Ratification
7. TheChairman recalled thathehadstressed theobvious needtoensure thattheWTO began
itslifewiththemaximum possible number ofgovernments actually participating asfunctioning members
fromdayone.Thiswould clearly make foranefficient starttotheactivities andfacilitate thedecisions
immediately needed tobegin work. Equally clearly, however, allthiswould become more difficult
tomanage ifgovernments didnotensure timely ratification. Hehadusedevery occasion, public and
private, tobring home theurgency ofratification togovernments, andhadwritten toMinisters of
participating countries along these linestheprevious month. Tendaysearlier, hehadwritten again
tosome oftheMinisters tospecially urgegovernments totryandcomplete theirratification processes
bythetimeoftheImplementation Conference. From replies tohiscommunications, from bilateral
contacts incapitals andfrom representatives inGeneva, heknew thataverysubstantial number of
governments wereinaposition todosoandweremaking efforts inthisdirection. These trends had
ledtogrowing confidence that1January 1995 would bethedateofentry intoforce oftheWTO.
Hewasalsoconvinced thatallparticipating governments werecommitted tothisdateandthatitsformal
confirmation attheImplementation Conference would bequick andsmooth. Hewould continue to
monitor theoverall picture regarding ratification andkeeptheCommittee fullyinformed.
8. TheCommittee tooknoteofthestatement.
C. Review ofWork Under theSub-Committees
(i) Sub-Committee onBudget, Finance andAdministration
9. Mr.Szepesi (Hungary), Chairman oftheSub-Committee, saidthatsince the22September
meeting ofthePreparatory Committee, theSub-Committee hadmettwice, formally on29September
andinformally on14October. Inaddition, anumber ofinformal consultations hadbeenheldtoconsider
specific elements oftheSub-Committee 'sworkprogramme. Atitsformal meetings, theSub-Committee
hadhada"policy debate" onsome conceptual issues andhadheard progress reports fromtheconsultants
ontheManagement Review. Also, thenegotiating teamfortheWTO Headquarters Agreement had
briefed Members about thepreparation forthenegotiations withtheSwiss authorities, andprogress
reports hadbeenpresented onvarious issues included intheSub-Committee 'swork programme.PC/M/6
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10. Withregard tothepolicy debate, aspreviously agreed bytheSub-Committee, fourissues had
beencovered: economic research andanalysis, technical cooperation, in-house expertise asagainst
resources ofother competent organizations andmedia relations. Inaddition, thedebate hadstarted
withsome general comments concerning thebasic approach andexpectation ofMembers vis-à-vis the
neworganization andthefunctions ofitsSecretariat. Oneachofthefourtopics, theSecretariat had
prepared ashort paper andtheissue hadbeenintroduced byamember oftheManagement or,inthe
caseofthemedia relations, byasenior staffmember. Thediscussion hadbeenattended alsobythe
consultants ontheManagement Review asitwasintended toformpartofthecontribution ofMembers
totheManagement Review. Thepurpose ofthedebate hadnotbeentoarrive atagreed conclusions,
butrather toprovide aforum forMembers tohaveastructured discussion onthese topics.
11. AstotheprogressreportsoftheconsultantsontheManagementReview,herecalledthatpending
thepresentation ofadraftreport bymid-November, andthefinalreport bymid-December, theSub-
Committee hadreceived, andwould continue toreceive, oralreports onaregular basis. Atpresent,
theprocess ofinterviews withtheMembers andSecretariat staffhadnotbeenfullycompleted and
theconsultants hadrecently started toreflect more indepth ontheinformation received andonthe
issues andareas onwhich theirfurther activity andpossible proposals should befocused.
12. With regard tothenegotiations ofaHeadquarters Agreement fortheWTO, thenegotiating
teamappointed bythePreparatory Committee hadworked onthebasis ofinstructions andguidance
received from theSub-Committee regarding thethree main areas tobecovered, namely, privileges
andimmunities, physical facilities, andliving conditions. TheSwiss delegation, ledbyMr.Nordmann,
wascomposed ofrepresentatives oftheBerncentral administration, theCanton ofGeneva, theSwiss
Permanent Mission andtheFIPOI. Thefirstnegotiating session hadbeenheldon19and20October.
After abriefexchange ofviews ontheworking methods andanintroductory presentation ofthetwo
delegations 'respective conceptual approaches tothebroad areaofimmunities andprivileges, thebulk
ofthediscussion hadbeendevoted tothephysical facilities tobeputatthedisposal oftheWTO.
Thefirstexchange ofviews hadincluded theconditions oftheproposed donation oftheCentre William
Rappard, details related totherefurbishing ofitsSouth Wing, different aspects oftheproject concerning
theconstruction ofthenewconference room, andthelocation, access andsecurity ofthetemporary
anddefinitive carparks. Astothefacilities tobeprovided toleast-developed countries, asmall working
group consisting ofrepresentatives ofthese countries andtheSwiss authorities hadbeensetup,and
would meet thefollowing day. Itwould discuss allrelated issues, including thepossibility ofa
decentralized solution, thesizeandnumber ofoffices, anddetails oftheSwiss project concerning the
construction oftheso-called Universal House. Thenextnegotiating session hadbeenscheduled for
26October, topursue thediscussion onfacilities, andfor27and28October, totackle thequestion
ofprivileges andimmunities, aswellasother aspects oftheliving conditions suchasaccess tothe
labour market, andsoon.Heemphasized thatalthough bothsideswished toworkasquickly aspossible
inthebestspirit ofcooperation, alotofwork remained tobedonebefore aproposal could bepresented
tothePreparatory Committee through theSub-Committee. Thenegotiating teamwasoftheviewthat
agood, mutually satisfactory agreement wasbetter thanaquickly-reached compromise thatmight leave
important aspects unaddressed. After thenextsession ofnegotiations, thedelegation would make a
detailed report totheSub-Committee andseekfurther guidance from Members.
13. Concerning theotherelements oftheworkprogramme, suchasthebudget for1995, thetransfer
ofassets andliabilities, thecontract ofemployment policy andthebasisfortheassessment ofMembers '
contributions asfrom1996 andsoon,anumber ofinformal consultations hadtaken place andothers
would take place indifferent settings. Hestressed that aworking group chaired by
Mr.Gosselin (Canada), waspreparing proposals onmany ofthese issues. Asapoint ofinformation,
hementionedthattheGATTBudgetCommitteehadjustbegunexaminationoftheproposed1995Budget.
14. TheCommittee tooknoteofthereport bytheChairman oftheSub-Committee.PC/M/6
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(ii) Sub-Committee onInstitutional, Procedural andLegal Matters
15. Mr.Kesavapany(Singapore),ChairmanoftheSub-Committee,saidthatsincethe22September
meeting ofthePreparatory Committee, theSub-Committee hadheldthreemeetings. Atthesemeetings,
terms ofreference fortheWTO Committees onAgriculture, Balance-of-Payments Restrictions and
Budget, Finance andAdministration hadbeenapproved. Inthecaseofthelatter, atextonmembership
hadalsobeenagreed. Hehoped tohaveagreement onterms ofreference fortheCommittee onTrade
andDevelopment soon, andnoted that,consequent toaproposal bytheCommunity, work hadbegun
onproposed terms ofreference foraWTO Market Access Committee. AstotheContact Groups on
Agriculture, Subsidies andTRIPS, work waswellonschedule anditwasexpected thatthese bodies
would beabletosubmit reports totheSub-Committee bymid-November. Agreement hadbeenreached
intheContact Group onAgriculture onnotifications concerning theAgreement onSanitary and
Phytosanitary Measures. Asregards TRIMs, theContact Group onTRIPS hadjustbegun consideration
ofthisquestion.
16. With regard torules ofprocedure, considerable progress hadbeenmade ondraftrules for
theMinisterial Conference andtheGeneral Council. More recently, ithadbeenagreed thatspecific
rulesbeenvisaged fortheGeneral Council when itconvened astheTrade Policy Review Body orthe
Dispute Settlement Body, andthiswasbeing considered. Work wasalsowelladvanced intherelated
areaofguidelines forobserver status forinternational organizations, which wasnowbeing considered
under thispartoftheSub-Committee 'smandate because oftheintention toinclude suchguidelines
asanannex totherulesofprocedure when allthework hadbeencompleted onthepackage ofrules.
TheSub-Committee wasalsoexamining draftguidelines forobserver status forgovernments, which
would alsobepartofthesame package. Hewassatisfied withtheprogress accomplished thusfar
inthisarea, andwasconfident thatthework would befinalized soon. Stillonthispartofthe
Sub-Committee 'smandate, hesaidthattheSub-Committee hadrequested theSecretariat toundertake
some preliminary work inrelation totheindependent review entity mentioned intheAgreement on
Preshipment Inspection. Onrelations withother international organizations, herecalled thatthe
Sub-Committee hadheldaninformal meeting atwhich theChairman ofthePreparatory Committee
hadreported onrecent discussions withtheHeads oftheIMFandWorld Bank. Atthatinformal
meeting, ithadbeendecided torequest theSecretariat toprepare anoteontheWTO 'santicipated
relations withthesetwoorganizations. Thisnotewasnowready andwasbeing circulated toMembers.
TheSub-Committee would discuss thissubject atitsnextmeeting. Inthemeantime, anotewasbeing
prepared ontheWTO 'santicipated relations withtheUN,andtheUNCTAD inparticular.
17. Ontransitional arrangements, hisconsultations werecontinuing. Atthe21October meeting
oftheSub-Committee, onedelegation hadmade known theintention ofitsauthorities toproceed with
plans towithdraw from theGATT 1947 andtheTokyo Round Codes effective upon entry intoforce
oftheWTO. Widespread concern hadbeenexpressed atthisinformation. Itwasevident from the
ensuing debate thatthegreat majority ofMembers hadaclearpreference forcoexistence oftheWTO
andtheGATT 1947, aconcept which hadbeenthebasis forhisconsultations thusfar.Heintended
tointensify hisbilateral andplurilateral contacts inthecoming weeks. Thequestion oftransitional
arrangements should beseenasapriority among thetasksbefore theSub-Committee, since, forobvious
reasons, solutions hadtoemerge intimeforconsideration andapproval bytheImplementation
Conference. Hewould keepthePreparatory Committee regularly informed ofdevelopments inthis
respect.
18. AsregardstheTextilesMonitoringBody,theContactGrouponTextileshadhelditsfirstmeeting
theprevious dayunder theChairmanship ofMr.Abdel-Fattah (Egypt).
19. Atitsmeetings on7and21October, theSub-Committee hadalsodiscussed thequestion of
theStanding Appellate Body referred tointheDispute Settlement Understanding. Thediscussion hadPC/M/6
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focused onissues suchaswhether theappointment ofmembers oftheAppellate Body should beon
apermanent orpart-time basis, where itsmembers should belocated, theremuneration theyshould
receive andthetypeandamount ofsupport stafftheyshould beprovided with. Following anextensive
discussion onthismatter attheSub-Committee 'smeeting on21October, hehadbeenasked toproduce
adiscussion paper. Anumber ofdelegations hadindicated thattheywould submit theirinputs onthis
subject which would thenbeincorporated intothepaper. Thepaper would beconsidered atthenext
meeting oftheSub-Committee.
20. TheCommittee tooknoteofthereport bytheChairman oftheSub-Committee.
(iii) Sub-Committee onServices
21. Mr.Manhusen (Sweden), Chairman oftheSub-Committee, saidthatsincehisprevious report
totheSub-Committee, further informal consultations hadbeenheldontheoutstanding issues relating
tothescope oftheGATS, namely, measures relating tosocial security, measures relating tothe
settlementofdisputesunderbilateralinvestmentagreementsandmeasuresrelatingtoentryandtemporary
stayofcertain categories ofnatural persons suchasseasonal agricultural workers, university professors
andschool teachers under exchange programmes andworking holidays andyoung workers programmes.
Onthebasisofthese consultations, hehadissued, onhisownresponsibility, aprogress report tothe
Members oftheSub-Committee which attempted, interalia,toidentify common ground where possible
andexplored options forpossible courses ofaction bytheSub-Committee. Hehoped thatthereport
would behelpful inreaching consensus infuture consultations ontheoutstanding issues.
22. Asregards negotiations onMaritime Transport Services, theNegotiating Group onthismatter
hadhelditsthirdmeeting on17October. Thenumber ofparticipants inthenegotiations hadreached
37.Thegroup hadtaken adecision towelcome Ecuador andChinese Taipei, aswellastheWorld
Bank andtheOECD, asobservers. Nodecisions hadbeenreached regarding requests fromtwonon-
governmental organizations, namely theCouncil ofEuropean andJapanese National Shipowners '
Association (CENSA) andtheAmerican Institute ofMerchant Shipping (AIMS). Adiscussion ofthe
draftschedule onmaritime transport services hadconfirmed thegeneral viewthatitconstituted auseful
wayofapproaching thescheduling ofcommitments inthissector. Ithadbeenagreed thatamendments
tothedraftschedule should beminimal, ifatallnecessary, andthatthose interested could submit written
comments, including drafting suggestions, totheSecretariat. Afinalversion ofthequestionnaire on
maritime transport services hadbeenapproved bytheGroup, andthedateof15January 1995agreed
asthedeadline forthesubmission ofresponses. Thenextmeeting oftheGroup hadbeenscheduled
for9February 1995.
23. With regard tonegotiations onMovement ofNatural Persons, thenegotiating group onthis
matter hadhelditssecond meeting on22September. TheGroup hadwelcomed Ecuador and
Chinese Taipei, aswellastheWorld BankandUNCTAD, asobservers. Nodecision hadbeenreached
regarding theoutstanding request fromtheInternational Organization forMigration. TheSecretariat
hadprepared forthatmeeting ashort analysis ofthehorizontal commitments onthefourth mode of
supply. Inbroad terms, thepaper categorized thecommitments interms of(a)market access limitations
onthetotalnumber ofnatural persons supplying services and(b)abinding ofmeasures affecting certain
categories ofdefined persons. Ithadbeenpointed outthatsince theMarrakesh Ministerial meeting
nobilateral negotiations hadtaken place andthatfurther negotiations were necessary toachieve an
improved levelofcommitment. Tothisend,several delegations hadexpressed theirintention tohold
around ofbilateral negotiations before theendofOctober inorder tobeinaposition toreport on
progress atthenextmeeting, scheduled for4November.
24. With regard toFinancial Services, theInterim Group onthismatter hadhelditsfirstmeeting
on12October. Itwasrecalled thatthegroup hadbeenestablished inorder tomonitor theprogressPC/M/6
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offurther negotiations infinancial services pending thecreation oftheCommittee onTrade inFinancial
Services. Thegroup hadapproved requests forobserver status fromChinese Taipei, Ecuador, Panama
andSaudi Arabia andalsofromtheWorld Bank, IMFandUNCTAD. Many participants hadstressed
thattheobjective ofthecontinuing negotiations remained amultilateral, MFN-based agreement covering
financial services. Anumber ofdelegations hadgiven theirassessment ofthecurrent situation and
hadexpressed theirinterest inholding bilateral negotiations bothincapitals andinGeneva during
November inorder toallow forasecond meeting oftheInterim Group tobeheldon1December.
TheSecretariat hadbeenrequested tocirculate acompilation ofthefinancial services commitments
made attheendoftheUruguay Round fortheinformation ofallparticipants.
25. Withregard tonegotiations onBasic Telecommunications, theNegotiating Group onthismatter
hadstarted itsthird meeting on24October andwould continue until26October. Thenumber of
governments participating inthenegotiations hadreached twenty-four andthenumber ofobserver
governments hadreached twenty-six, following thedecision bytheNegotiating Group tograntobserver
status tothree "associated" governments, namely, Panama, Ecuador andChinese Taipei. TheGroup
hadalsogranted observer status totheOECD, theWorld Bank andtheAsia-Pacific Telecommunity.
TheGroup wascurrently discussing responses byparticipants tothequestionnaire thathadpreviously
beencirculated onregulatory issues andmarket structure. Nineteen responses tothequestionnaire
hadbeenreceived thusfarfrom thetwenty-four governments participating inthenegotiations. The
Group would alsobediscussing outstanding technical issues onthebasis ofadocument prepared by
theSecretariat. Itwasexpected thatanother meeting oftheNegotiating Group would bescheduled
before theendoftheyear. TheSub-Committee onServices itself would holdanother meeting on
24November.
26. TheCommittee tooknoteofthereport bytheChairman oftheSub-Committee.
(iv) Sub-Committee onTrade andEnvironment
27. Mr.Lampreia (Brazil), Chairman oftheSub-Committee, saidthatsince themeeting ofthe
Sub-Committee on15-16 September, areport onwhich hadbeenmade tothePreparatory Committee
on22September, hehadbeenconsulting informally withdelegations onthreeissues, namely, exports
ofdomestically prohibited goods, observer status forinter-governmental organizations intheSub-
Committee, andappropriate arrangements forrelations withnon-governmental organizations. With
regard tothelatter twoissues, hewould becooperating closely withtheChairmen ofboththeSub-
Committee onInstitutional, Procedural andLegal Matters andthePreparatory Committee inorder
tocoordinate theoutcome ofthediscussions intheSub-Committee onTrade andEnvironment with
theirbroader mandates.
28. TheSub-Committee would meetagain on26-27 October andwould takeupthefirstitemof
itswork programme, namely, therelationship between theprovisions ofthemultilateral trading system
andtrademeasures forenvironmental purposes, including those pursuant tomultilateral environmental
agreements. Inaddition, theSub-Committee would revert, asnecessary, totheitemonitswork
programme thatwasaddressed atitslastmeeting, namely, therelationship between theprovisions of
themultilateral trading system and: (a)charges andtaxes forenvironmental purposes; and
(b)requirements forenvironmental purposes relating toproducts, including standards andtechnical
regulations, packaging, labelling andrecycling. TheSub-Committee would holditsfinalmeeting for
theyearneartheendofNovember. Indeciding onthedate,hewould attempt nottohaveitconflict
withthevarious meetings some delegations hadpointed outtohimthatwould betaking place inother
international organizations atthattime. Headded that,inhisview, work intheSub-Committee was
proceeding smoothly asaresult oftheseriousness withwhich Members were approaching itswork
andtheadoption ofaconstructive andanalytical approach initsdeliberations.PC/M/6
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29. TheCommittee tooknoteofthereport bytheChairman oftheSub-Committee.
D. Paragraph 8(b)(i) oftheDecision establishing thePreparatory Committee
30. TheChairman saidthatsince the22September meeting oftheCommittee, Burkina Fasohad
submitted itsdraftschedule ongoods. Theschedules onservices ofMali, St.Kitts andNevis and
oftheUnited Arab Emirates werealsonowready forcirculation toMembers oftheCommittee. The
verification ofthepending schedules ongoods would takeplace inearly November. Work onthe
examination andverification ofthepending schedules onservices wassimultaneously under way.
Technical assistance wasbeing intensified tohelpthegovernments concerned, particularly theleast-
developed countries, tocomplete theprocess assoonaspossible. Since the22September meeting
oftheCommittee,theSecretariathadreceivedandcirculatedfivenotificationsofadditionalcommitments,
andsixrectifications andmodifications ofschedules annexed totheMarrakesh Protocol. Astothe
work inprogress inGATT Working Parties onAccession, theWorking Parties ontheaccessions of
Ecuador andMongolia totheGATT 1947 andtheWTO would meet inNovember tocontinue the
examination ofthese governments 'requests. TheWorking Party onSlovenia wasalsoscheduled to
meetinearlyNovembertocontinuetheexaminationofaspectsofSlovenia'sforeigntraderegimerelevant
toWTO membership.
31. TheCommittee tooknoteofthestatement.
32. TheChairman recalled that,inpursuance ofparagraph 2(a)oftheMinisterial Decision onthe
Acceptance ofandAccession totheAgreement Establishing theWTO, Sudan hadrequested the
Preparatory Committee toinitiate theprocess ofitsaccession totheWTO under Article XIIofthe
WTO Agreement. Sudan 'sapplication hadbeencirculated asPC/W/4. Heproposed thattheCommittee
agree toestablish aworking party toexamine Sudan 'srequest.
33. TheCommittee tooknoteofthestatement, agreed toestablish aworking party toexamine
Sudan 'srequest toaccede totheWTO andauthorized itsChairman toholdconsultations ontheterms
ofreference andchairmanship oftheWorking Party.