RESTRICTED
WORLD TRADE WT/GC/M/4
4July1995
ORGANIZATION(95-1821)
GENERAL COUNCIL
31May1995
MINUTES OFMEETING
Held intheCentre William Rappard
on31May1995
Chairman: Mr.K.Kesavapany (Singapore)
Subjects discussed: Page
1. Rules ofProcedure fortheCouncils forTrade inGoods, TRIPS andServices 2
2. Approval ofschedules ongoods andservices pursuant totheMinisterial Decision in
Favour ofLeast-Developed Countries 2
3. United States 'autoandautoparts issues: USunilateral measures 3
- Statement byJapan 3
4. Japan'sautomotive barriers andrestrictive practices 3
- Statement bytheUnited States 3
5. Headquarters agreement 4
(i) Agreement between theWTO andtheSwiss Confederation 4
(ii) Infrastructure contract 4
6. Committee onBudget, Finance andAdministration 4
(i) Report oftheCommittee dated 21April 1995 4
(ii) Report oftheCommittee dated 22May1995 5
7. Enlargement oftheEuropean Communities 6
- Communication from theEuropean Communities 6
8. Ratifications oftheWTO Agreement 6
(i) Poland 6
(ii) Egypt 7
9. Papua NewGuinea -Increase inapplied tariff oncanned mackerel 7
10. United States -Imposition ofimport duties onautomobiles fromJapan under Sections
301and304oftheTrade Actof1974 7
11. Working Party ontheAccession oftheFormer Yugoslav Republic ofMacedonia 7
- Chairmanship 7
12. Observer status forinternational intergovernmental organizations 8WT/GC/M/4
Page2
1. Rules ofProcedure fortheCouncils forTrade inGoods, TRIPS andServices (G/C/W/2,
IP/C/W/2, S/C/W/2)
TheChairman recalled thatArticle IV:5oftheWTO Agreement provided thattheCouncils
forTrade inGoods, TRIPS andServices "shall establish theirrespective rules ofprocedure subject
totheapproval oftheGeneral Council". Hedrewattention todraftrulesofprocedure fortheseCouncils
indocuments G/C/W/2, IP/C/W/2 andS/C/W/2, andsaidhehadbeeninformed thatsome further
work wasrequired before these draftrulescould beformally approved bytheGeneral Council. Since
theoutstanding issues appeared tobeofconcern toallthree sectoral Councils, heproposed thathe
holdconsultations withtheChairmen oftherespective Councils onthese issues, andthattheGeneral
Council revert tothismatter atitsnextmeeting.
TheGeneral Council soagreed.
2. Approval ofschedules ongoods andservices pursuant totheMinisterial Decision inFavour
ofLeast-Developed Countries
TheChairman recalled thatunder theMarrakesh Decision inFavour ofLeast-Developed
Countries, thesecountries hadbeengiven anadditional period ofoneyearfrom15April 1994tosubmit
theirschedules asrequired under Article XIoftheWTO Agreement. TheCouncils forTrade inGoods
andforServices respectively hadverified anumber ofschedules submitted pursuant tothisDecision
andhadforwarded them totheGeneral Council forfinalapproval.
Mr.Endo (Japan), Chairman oftheCouncil forTrade inGoods saidthaton29May, theCouncil
hadtaken noteofareport bytheChairman oftheCommittee onMarket Access concerning the
verification ofdraftfinalschedules ofconcessions ongoods, andhadagreed toforward theschedules
ofthefollowing countries totheGeneral Council forapproval: Angola, Botswana, Burundi, Central
African Republic, Djibouti, Grenada, Guinea, Guinea Bissau, Haiti, Lesotho, Malawi, Maldives,
Mozambique, Papua NewGuinea, Rwanda, St.KittsandNevis, Sierra Leone, Togo andZaire.
Mr.Manhusen (Sweden), Chairman oftheCouncil forTrade inServices saidthaton30May,
theCouncil hadverified anumber ofschedules ofspecific commitments ofleast-developed countries
submitted pursuant totheMarrakesh Decision. Inthatprocess, theCouncil hadaddressed twoquestions
withrespect toeachschedule, namely whether thenegotiations onsubstance hadbeenconcluded with
other members, andwhether there were anytechnical problems relating totheaccuracy andlegal
consistency oftheschedules. Theschedules which hadbeenverified andsubmitted totheGeneral
Council forapproval were those ofAngola, Botswana, Burundi, Central African Republic, Chad,
Djibouti, theGambia, Guinea, Guinea Bissau, Haiti, Lesotho, Malawi, Maldives, Mali, Mauritania,
Rwanda, Sierra Leone, Togo andZaire.
TheChairman recalled thatinaddition totheleast-developed countries inrespect ofwhich
theGoods Council hadforwarded schedules forapproval, thegoods schedules ofChad andtheGambia
hadbeenapproved bytheGeneral Council on3April. Thegoods schedules ofMaliandMauritania
hadbeenapproved bythePreparatory Committee fortheWTO under themandate given toitby
Ministers atMarrakesh. However, theschedules onservices forthese fourcountries hadnotyetbeen
approved. InthecaseofMozambique, while itsschedule onservices hadbeensubmitted prior tothe
Marrakesh Ministerial meeting, andwasalready annexed totheGATS, itsschedule ongoods hadnot
beenapproved earlier. Theleast-developed countries inrespect ofwhich schedules ongoods aswell
asonservices werenowready forapproval werethefollowing: Angola, Botswana, Burundi, Central
African Republic, Chad, Djibouti, theGambia, Guinea, Guinea Bissau, Haiti, Lesotho, Malawi,
Maldives, Mali, Mauritania, Mozambique, Rwanda, Sierra Leone, Togo andZaire. Thenames ofWT/GC/M/4
Page3
these countries andtherelevant document references werecontained inapaper, dated 31May, which
hadbeenmade available todelegations.1Heproposed thattheGeneral Council approve theschedules
listed andtakenoteofthestatements.
TheGeneral Council soagreed.
TheChairman saidthattheapproval oftheschedules ongoods aswellasservices inrespect
ofthetwentyleast-developedcountrieshadcompletedtheprocessenvisionedbyMinistersinparagraph1
oftheMarrakesh Decision. Accordingly, theseleast-developed countries hadfulfilled therequirements
ofmembership pursuant toArticle XIoftheWTO Agreement. Inrespect oftenofthese countries,
namely Botswana, Central African Republic, Djibouti, Guinea Bissau, Lesotho, Malawi, Maldives,
Mali, Mauritania andTogo, which hadalready accepted theWTO Agreement, membership would
takeeffect immediately. Inrespect oftheother least-developed countries forwhich schedules had
beenapproved atthepresent meeting, membership would takeeffect onthethirtieth dayfollowing
thedateofacceptance, inaccordance withArticle XIV:1 oftheWTO Agreement, assuming thatthese
countries accepted theWTO Agreement within thetwo-year period provided forinArticle XIV:1.
TheCouncil tooknoteofthestatement.
TheChairman thennoted thatinhisstatement theChairman oftheCouncil forTrade inGoods
hadreferred totherecommendation oftheCouncil inrespect ofthegoods schedules ofthree other
countries, namely Papua NewGuinea, Saint KittsandNevis andGrenada. These countries werenot
least-developed countries andwere covered bytheDecision ontheFinalization ofNegotiations on
Schedules onGoods andServices (WT/L/30). Approval ofthese schedules would betaken upbythe
General Council when consultations ontherequirements forinstruments ofaccession inrespect of
these countries were completed.
TheGeneral Council tooknoteofthisinformation.
3. United States 'autoandautoparts issues: USunilateral measures
- Statement byJapan
and
4. Japan'sautomotive barriers andrestrictive practices
- Statement bytheUnited States
TheChairman saiditwashisunderstanding thatdelegations didnotwish toenter intoa
discussion onthese matters atthepresent meeting, butrather tohavetheGeneral Council takenote
ofthestatements thathadbeenmade onthese Items atthemeetings oftheCouncil forTrade inGoods
on29MayandoftheDispute Settlement Body thatmorning.
Therepresentative ofArgentina saidhewished tomake three comments ontheitems under
consideration. First, hewondered whether onewasfacing astrictly sectoral problem oraproblem
ofmore important economic andtradedisequilibria. Onlythefuture would provide ananswer tothis.
Second, hebelieved thatthose matters should onlybedealtwithwithin theWTO Agreement andnot
outside theAgreement. Thisapplied bothtotherespect forthecommitments entered intobyway
ofmarket access concessions andthedisciplines contained intheWTO Agreement, including the
mechanism forthesettlement ofdisputes contemplated bytheAgreement. Third, hisdelegation noted
withsatisfaction thereadiness ofbothparties tohaverecourse toArticle XXII ofGATT 1994 and
totheDispute Settlement Understanding, andurged themtosticktothiscourse inorder nottojeopardise
1Subsequently issued asWT/L/70.WT/GC/M/4
Page4
from theoutside thevalidity ofatrading system thathadtaken seven years tosetup.Anydecision
taken outside thescope ofthemultilateral rulescould seriously weaken thesystem, would exceed the
framework ofabilateral dispute andmight affect allWTO Members.
Therepresentative ofChile saidthathiscountry viewed thisdispute withconcern, notonly
because Japan andtheUnited States wereChile'smain trading partners, butalsobecause theywere
twomajor members ofthemultilateral trading system. Chile hadaninterest inthiscontroversy because
ofitskeennesstoseedisputesresolvedwithintheframeworkofthelegalinstrumentsthatWTOMembers
hadestablished asof1January 1995. Chile urged thetwoparties tofindasolution within theframework
oftherights andobligations thatgoverned allMembers equally. Itnoted withsatisfaction thatthe
United States hadaccepted theconsultations requested byJapan, andhoped these would result ina
mutually satisfactory solution consistent withWTO provisions.
TheChairman proposed thattheGeneral Council takenoteofthestatements, aswellasof
thestatements made onthese Items atthemeetings oftheCouncil forTrade inGoods on29May2
andtheDispute Settlement Body thatmorning.3
TheGeneral Council soagreed.
5. Headquarters agreement (WT/GC/3)
(i) Agreement between theWTO andtheSwiss Confederation (WT/GC/1)
(ii) Infrastructure contract (WT/GC/2)
TheChairman drew attention totheNote bytheNegotiating Team fortheHeadquarters
Agreement indocument WT/GC/3, andtothetwoAgreements negotiated between theSwiss authorities
andtheWTO Negotiating Team contained indocuments WT/GC/1 andAdd.1 andWT/GC/2. In
accordance withtherecommendations oftheNegotiating Team, heproposed thattheGeneral Council
approve thetwolegalinstruments negotiated between theSwiss authorities andtheWTO Negotiating
Team ascontained inWT/GC/1 andAdd.1 andWT/GC/2, andauthorize himandtheDirector-General
oftheWTO toaccept these legalinstruments onbehalf oftheWTO.
TheGeneral Council soagreed (WT/L/69).
6. Committee onBudget, Finance andAdministration
(i) Report oftheCommittee dated 21April 1995 (WT/BFA/3-L/7628)
Mr.Metzger (France), Chairman oftheCommittee, introducing theCommittee 'sreport in
WT/BFA/3-L/7628, recalled thatatitsmeeting on3April, theGeneral Council hadapproved the
Committee 'srecommendations contained inparagraphs 22,24and26ofthereport onthebasis of
documentWT/BFA/2.WithregardtotheCommittee'sotherrecommendations,concerningcontributions
tothejointWTO/GATT budget ofDjibouti, Guinea, Papua NewGuinea andtheSolomon Islands,
andtheirrespective advances totheWorking Capital Fund (paragraphs 32to35ofthereport), he
noted thatthese hadbeenapproved bytheGATT 1947 Council on4Mayandthattheyhadalsoto
2SeeG/C/M/3, items 5and6.
3SeeWT/DSB/M/5, items 2and3.WT/GC/M/4
Page5
beapproved bytheGeneral Council oftheWTO inviewofthejointnature oftheorganization 'sbudget,
eventhough these fourcountries were notyetmembers oftheWTO.
TherepresentativeofEgyptsaidthathisGovernmenthadexpressedconcernonseveraloccasions
intheBudget Committee regarding thecreation ofan"Inactive Members" category consisting of
governments withmore thanthree years ofarrears asat15March 1995, whowere thennotgiven
thebenefit oftechnical assistance andtraining. Egypt believed thatthese governments should rather
begiven assistance tobemore involved inthemultilateral trading system, andurged thattheGeneral
Council reconsider thisissue.
TheChairman oftheCommittee saidthattheadministrative measures applicable tomembers
witharrears hadbeendiscussed intheGATT andWTO bodies. These measures were notpunitive
butrather anincentive inproposing favourable treatment forcountries witharrears. Thismatter
continued tobefollowed closely inorder toensure anevengreater participation ofallmembers.
TheChairman saidthat,asaformer Chairman oftheCommittee, hecould confirm thatthe
Committee hadspent considerable timeonthisissue tofindanequitable solution. While hecould
understand Egypt 'sconcerns, onehadtobefairtothose governments paying theircontributions on
time. Heinvited Egypt tomake proposals intheBudget Committee withaviewtofinding anequitable
solution tothismatter.
TheGeneral Council tooknoteofthestatements, approved theBudget Committee 'sspecific
recommendations inparagraphs 32,33,34and35ofitsreport inWT/BFA/3-L/7728, andadopted
thereport.
(ii) Report oftheCommittee dated 22May1995 (WT/BFA/4-L/7629)
Mr.Metzger (France), Chairman oftheCommittee, introduced theCommittee 'sreport
(WT/BFA/4-L/7629) onitsmeeting of25April and3May1995. TheCommittee hadconsidered
thefinancial implications ofanadditional postofDeputy Director-General, following thedecision of
theGeneral Council on24March 1995 tocreate suchapost. TheCommittee hadnot,inthecourse
ofitsdiscussion, considered theprocedures concerning theappointment ofDeputy Directors-General
approved bytheGATT 1947 Council inApril 1987 (BISD 34S/173), which would continue toapply
inthiscase. TheCommittee 'srecommendations onthefinancial implications oftheadditional Deputy
Director-General postwerecontained inparagraph 9ofitsreport. Withregard toadditional resources
needed fortranslation, theCommittee hadrecognized that,asaresult oftheexpansion ofthescope
oftheWTO 'sactivities, theworkload fortranslation hadincreased substantially andcould nolonger
becovered satisfactorily from existing resources. TheCommittee 'srecommendations inthisregard
were contained inparagraph 13ofthereport. Finally, hedrew attention totheCommittee 's
recommendations regarding thefinalposition ofthe1994 budget oftheGATT (paragraph 15ofthe
report).
Therepresentative ofSwitzerland noted that,inmaking itsrecommendation ontheadditional
postofDeputy Director-General, theCommittee hadunderlined thatthecreation ofthepost"shall
notprejudice theongoing deliberations withregard totheManagement Review, including thestructure
ofthefuture Secretariat, northeexamination ofthe1996budget proposals" (paragraph 9ofthereport).
Hisdelegation wished thattheDirector-General would giveparticular attention tothisinthecreation
andthefilling ofthispost. Switzerland believed thattheparticular circumstances inwhich thispost
hadbeendecided could notconstitute thebasisforanewpractice regarding future appointments, and
thattheprocedures forthefuture appointments ofDeputy Directors-General approved bytheGATT
1947 Council in1987, andnowpartofGATT 1994, remained fully valid. Finally, Switzerland
reconfirmed itsfullsupport totheDirector-General instrengthening theSecretariat 'sefficiency,WT/GC/M/4
Page6
rationalizing itsactivities andensuring, evenatthehighest management level, thecontinuation ofthe
consistent andcoordinated staffing policy followed untilthepresent, sothatMembers hadasefficient
aSecretariat aspossible which would provide thenecessary support intheimplementation oftheWTO
Agreements.
TheGeneral Council tooknoteofthestatements, approved theBudget Committee 'sspecific
recommendations inparagraph 9,13and15ofitsreport inWT/BFA/4-L/7629, andadopted thereport.
7. Enlargement oftheEuropean Communities
- Communication from theEuropean Communities (WT/L/67)
TheChairmandrewattentiontothecommunicationfromtheEuropeanCommunities(WT/L/67)
inwhich theCommunity hadagreed totheprolongation ofallrights heldbyWTO Members under
Article XXVIII:3 ofGATT 1994beyond 30June1995until31December 1995, inrespect oftheArticle
XXIV:6 negotiations under wayfollowing theaccession ofAustria, Finland andSweden totheEuropean
Union on1January 1995.
Therepresentative ofCanada saidthattheprincipal reason fortheprolongation ofMembers '
rights under Article XXVIII:3 wastheCommunity 'sfailure tocomply withtherequirement tonotify
andconsult withitstrading partners priortoimplementing tariffchanges. Thishadmeant thatexports
tothethreeacceding countries frommany trading partners including Canada hadbeenimpaired without
compensation forfivemonths. Canada hadexplained itsposition regarding theenlargement inbilateral
consultations withtheCommunity andreserved itsrights toreact asappropriate.
Therepresentative ofJapan hoped thattheArticle XXIV:6 negotiations withtheCommunity
onseveral increased tariffs tobeapplied bythethree newmembers following theiraccession would
leadtoanagreement assoonaspossible. Japan wasready toaccept theprolongation ofMembers '
rights under Article XXVIII:3 provided thatitwould notprejudge theinterpretation ofArticle XXIV:6
andother relevant provisions oftheGATT 1994. Japan reserved thepossibility toexercise itsrights
under theArticle XXVIII:3 provisions ofGATT 1994 before 31December 1995, ifnecessary.
TheChairman proposed thattheGeneral Council takenoteofthestatements andagree that
thesix-month period referred toinArticle XXVIII:3 would notbeconsidered toexpire prior to31
December 1995.
TheGeneral Council soagreed.
8. Ratifications oftheWTO Agreement
(i) Poland
Therepresentative ofPoland, speaking under "Other Business", saidthathiscountry had
completed itsratification process fortheWTO Agreement andoftheMultilateral Trade Agreements
annexed thereto, andthattheAgreement would enter intoforce forPoland on1July1995. Henoted
thatPoland 'smarket access commitments contained initsschedule attached totheMarrakesh Protocol,
andnotcovered bytheAgreement onAgriculture, werebeing effectively implemented byPoland since
1January 1995.
TheGeneral Council tooknoteofthestatement.WT/GC/M/4
Page7
(ii) Egypt
Therepresentative ofEgypt, speaking under "Other Business", saidthatEgypt hadcompleted
itsdomestic procedures forratification oftheWTO Agreement andthathisdelegation haddeposited
aninstrument ofratification withtheSecretariat thatday.
TheGeneral Council tooknoteofthestatement.
9. Papua NewGuinea -Increase inapplied tariff oncanned mackerel
Therepresentative ofJapan, speaking under "Other Business", saidthatalthough Japan had
notopposed thefinalization oftheverification ofPapua NewGuinea 'sgoods schedule, itwasconcerned
overtherecent increase inthatcountry 'sapplied tariffoncanned mackerel. Although theceiling binding
onthisproduct inPapua NewGuinea 'sschedule hadbeensetat55percent, theapplied tariff had,
on1May, suddenly beenraised to100percent. Japan wasconcerned thatthisincrease hadtaken
place justbefore thefinalization oftheverification ofPapua NewGuinea 'sschedule, andfound it
unacceptable thattheincreased tariff should bemaintained aftertheentry intoforce oftheschedule.
JapanstronglyhopedthatPapuaNewGuineawouldreverttothepreviouslyappliedtariffforthisproduct
ofzeropercent.
TheGeneral Council tooknoteofthestatement.
10. United States -Imposition ofimport duties onautomobiles fromJapan under Sections 301and
304oftheTrade Actof1974
Therepresentative oftheEuropean Communities, speaking under "Other Business", saidthat
theCommunity wished tobejoined intheconsultations under Article XXII:1 ofGATT 1994requested
byJapan4concerning theUnited States 'trade measures affecting imports from Japan ofcertain
automobiles under Sections 301and304oftheUSTrade Actof1974. TheCommunity considered
thatithadasubstantial tradeinterest inthestrict observance oftherulesconcerning thestrengthening
ofthemultilateral trading system contained inArticle 23oftheDispute Settlement Understanding.
TheGeneral Council tooknoteofthestatement.
11. Working Party ontheAccession oftheFormer Yugoslav Republic ofMacedonia
- Chairmanship
TheChairman, speaking under "Other Business", recalled thatthechairmanship ofthisWorking
Party hadbeenannounced atthemeeting oftheGeneral Council on3April. Since Mr.Ekblom
(Finland), theappointed Chairman, wasnolonger available duetoother pressing responsibilities, he
wascontinuing consultations tofindanewChairman. Hehoped tobeinaposition toresolve this
matter soon.
TheGeneral Council tooknoteofthisinformation.
4SeeWT/DSB/M/5.WT/GC/M/4
Page8
12. Observer status forinternational intergovernmental organizations
TheChairman, speaking under "Other Business", recalled that,inaccordance withtheadhoc
arrangementsforobserverstatusforinternationalintergovernmentalorganizationsapprovedataninformal
meeting ofHeads ofDelegations on16March, andasagreed attheGeneral Council meeting on3April,
thefollowing organizations hadbeeninvited asobservers tothepresent meeting: United Nations,
UNCTAD, IMF, World Bank, FAO, WIPO andOECD. Itwashisunderstanding that,pending
agreement onguidelines forobserver status forinternational organizations, theabove organizations
would alsobeinvited tothenextmeeting.
TheGeneral Council tooknoteofthisinformation.