RESTRICTED
PREPARATORY COMMITTEE PC/R/W/1/Rev.1
FOR THE 6December 1994
WORLD TRADE ORGANIZATION
(94-2672)
PREPARATORY COMMITTEE FOR THE
WORLD TRADE ORGANIZATION
PREPARATORY COMMITTEE FOR THE WORLD TRADE ORGANIZATION
DRAFT REPORT TOTHE WTO
Revision
1. Thefollowing report ofthePreparatory Committee fortheWorld Trade Organization (WTO)
totheWTO hasbeenprepared inpursuance ofparagraph 8(b)(iv) oftheMarrakesh Ministerial Decision
Establishing thePreparatory Committee (MTN/TNC/45(MIN), Annex IV).
2. Incarryingoutitstask,thePreparatoryCommitteeheld[...]meetingsduringtheperiod29April
to[...]December 1994. Theminutes ofthesemeetings andofthose oftheSub-Committees, contained
indocumentsPC/M/1-[...],PC/BFA/M/1-[...],PC/IPL/M/1-[...],PC/SCS/M/1-[...]andPC/SCTE/M/1-
[...],willremain therecord oftheCommittee 'swork aftertheentryintoforceoftheWTO Agreement.1
Adoption ofthisreport, which setsouttheaction taken bytheCommittee under itsMinisterial mandate
asoutlinedinparagraph8oftheMarrakeshMinisterialDecisionEstablishingthePreparatoryCommittee
andmatters referred totheWTO forfurther action, willconstitute approval bytheMembers ofthat
action taken andofthatreferral.
3. Thefollowing subjects areincluded inthereport:
A. Introduction
(a) Establishment ofthePreparatory Committee anditssubsidiary bodies .....3
(b) Membership andObservers ................................3
(c) Chairmanship ofthePreparatory Committee anditssubsidiary bodies .....4
(d) Derestriction ofdocuments oftheCommittee anditssubsidiary bodies ....4
B. Report ontheindividual items ofthemandate ofthePreparatory Committee
(a) Administrative, budgetary andfinancial matters
(i) theHeadquarters Agreement provided forinArticle VIII:5 oftheWTO
Agreement .....................................5
(ii) financial regulations, including guidelines fortheassessment ofWTO
Members 'budget contributions, inaccordance withthecriteria setout
inArticle VIIoftheWTO Agreement ....................5
(iii) thebudget estimates forthefirstyearofoperation oftheWTO ....6
(iv) thetransfer oftheproperty, including financial assets, ofthe
ICITO/GATT totheWTO ...........................6
(v) thetransfer andtheterms andconditions ofthetransfer oftheGATT
stafftotheWTO Secretariat ..........................6
(vi) therelationship between theInternational Trade Centre andthe
WTO .........................................6
(vii) other budgetary, financial oradministrative matters ............6
1Thedocuments ofthePreparatory Committee anditssubsidiary bodies arelisted inPC/R/W/1/Rev.1/Add.1.PC/R/W/1/Rev.1
Page2
(b) Institutional, procedural andlegalmatters
(i) examination ofandapproval oftheschedules submitted toitin
accordance withthe"Decision onAcceptance ofandAccession tothe
Agreement Establishing theWorld Trade Organization" andproposals
regarding terms ofaccession inaccordance withparagraph 2ofthat
Decision
(1) Work onMarket Access Schedules .................6
(2) Requests forAccession under Article XIIoftheWTO
Agreement ................................7
(ii) proposals concerning terms ofreference forthebodies oftheWTO,
inparticular those established inArticle IVoftheWTO Agreement,
andtherulesofprocedure which theyarecalled upontoestablish for
themselves, bearing inmind paragraph 1ofArticle XVI
(1) Terms ofreference ...........................7
(2) Rules ofprocedure ...........................7
(3) Notification formats andprocedures ................8
(4) Standing Appellate Body .......................8
(5) Ethical Code ofConduct .......................8
(iii) recommendations totheGeneral Council oftheWTO onappropriate
arrangements withrespect torelations withotherorganizations referred
toinArticle VoftheWTO Agreement ...................8
(c) Matters related totheentry intoforce oftheWTO Agreement andtothe
activities oftheWTO within theCommittee 'sscope andfunctions
(i) Convening andpreparing theImplementation Conference ........9
(ii) Initiating theworkprogramme arising fromtheUruguay Round results
assetoutintheFinal Act,suchasoverseeing, intheSub-Committee
onServices referred toinparagraph 3oftheDecision Establishing
thePreparatory Committee, negotiations inspecific services sectors,
andalsoundertaking work resulting fromDecisions oftheMarrakesh
meeting
(1) Services ..................................10
I. Overseeing on-going negotiations
II. Issues relating tothescope oftheGATS
III. Guidelines fornotifications under theGATS
IV. Working Party onProfessional Services
(2) Trade andEnvironment ........................11
(iii) Discussing suggestions fortheinclusion ofadditional items onthe
agenda oftheWTO 'swork programme ...................13
(iv) Making proposals concerning thecomposition oftheTextiles
Monitoring Body inaccordance withthecriteria setoutinArticle 8
oftheAgreement onTextiles andClothing .................13
(v) Convening thefirstmeeting oftheMinisterial Conference orthe
General Council oftheWTO, whichever meets first, andpreparing
theprovisional agenda thereof .........................13
C. Transitional Arrangements .....................................13
D. Points forAction ...........................................14PC/R/W/1/Rev.1
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A. Introduction
(a) Establishment ofthePreparatory Committee anditssubsidiary bodies
(i) Preparatory Committee
4. ThePreparatory Committee fortheWorld Trade Organization (WTO) wasestablished on
14April 1994bytheMarrakesh Ministerial Decision Establishing thePreparatory Committee forthe
World Trade Organization (MTN/TNC/45(MIN), Annex IV).
5. Inaccordance withparagraph 4oftheMinisterial Decision, theCommittee tookdecisions by
consensus.
(ii) Subsidiary Bodies
6. TheMinisterialDecisionEstablishingthePreparatoryCommitteeprovidedfortheestablishment
ofSub-Committees onServices (paragraphs 3and8(c)(ii)) andonBudget, Finance and
Administration (paragraphs 3and8(a)(i)). Atitsfirstmeeting, thePreparatory Committee established
aSub-Committee onInstitutional, Procedural andLegal Matters (PC/M/1, paragraph 2).
7. TheMinisterial Decision onTrade andEnvironment separately provided foraSub-Committee
onTrade andEnvironment tobesetupunder thePreparatory Committee "pending thefirstmeeting
oftheGeneral Council oftheWTO" (MTN/TNC/45(MIN), Annex II).
8. Inorganizing theirwork, further adhocdecisions weretaken bytheSub-Committees mentioned
below:
- TheSub-Committee onServices established anInterim Group onFinancial Services
(PC/SCS/M/2, paragraph 13)andmonitored theactivities oftheNegotiating Groups
onMaritime Transport, Basic Telecommunications andMovement ofNatural Persons,
which hadbeenestablished under therelevant Ministerial Decisions adopted bythe
Trade Negotiations Committee on15December 1993 andcontained intheFinal Act
embodying theresults oftheUruguay Round Negotiations.
- TheSub-Committee onInstitutional, Procedural andLegal Matters established four
informal contact groups onAgriculture, TRIPS including TRIMs, Anti-Dumping and
Subsidies, alsocharged withthequestion ofSafeguards, andTextiles.
- TheSub-CommitteeonBudget,FinanceandAdministrationestablishedworkinggroups
todealwithspecific parts ofitsmandate.
(b) Membership andObservers
(i) Membership
9. Inkeepingwithparagraph2oftheDecisionEstablishingthePreparatoryCommittee,membership
oftheCommittee wasopentoallSignatories oftheFinal ActoftheUruguay Round ofMultilateral
TradeNegotiationsandtoanycontractingpartytotheGATT1947eligibletobecomeanoriginalmember
oftheWTO inaccordance withArticle XIoftheWTO Agreement. Interms ofparagraph 3ofthe
same Decision, membership oftheSub-Committees wasopentoallmembers oftheCommittee.PC/R/W/1/Rev.1
Page4
(ii) Observers
10. TheCommittee decided (PC/M/1, paragraphs 14and15)tofollow thepractice adopted by
theUruguay Round Trade Negotiations Committee andtoinvite asobservers therepresentatives of
theso-called associated governments, i.e.,States orseparate customs territories thatwere currently
negotiating accession totheGATT 1947, andrepresentatives oftheUnited Nations, UNCTAD, IMF
andtheWorld Bank.
11. TheSub-Committees were leftfreetodecide onthequestion ofobservership. The
Sub-Committee onBudget, Finance andAdministration decided nottoinvite observers. The
Sub-Committees onServices andonInstitutional, Procedural andLegal Matters followed thepractice
ofthePreparatory Committee. TheSub-Committee onTrade andEnvironment invited thefollowing
organizations inaddition tothefourorganizations mentioned inparagraph 10above: EFTA, FAO,
ITC, OECD, UNCommission onSustainable Development, UNDP, andUNEP.
12. Certain international organizations were associated onanadhocbasis withthework ofthe
bodies established under Sub-Committees. TheContact Group onAgriculture established bytheSub-
Committee onInstitutional, Procedural andLegal Matters invited theFAO, theCodex Alimentarius
Commission, theInternational Office ofEpizootics, andtheInternational PlantProtection Convention.
TheContact Group onTRIPS invited theWIPO, andtheContact Group onTextiles invited theITCB.
(c) Chairmanship ofthePreparatory Committee anditssubsidiary bodies
(i) Preparatory Committee: Mr.Peter D.Sutherland
(ii) Subsidiary Bodies:
- Budget, Finance andAdministration: Mr.A.Szepesi (Hungary)
Mr.Szepesi wasassisted inhistaskbyMr.P.Gosselin, (Canada) Chairman
oftheGATT 1947 Committee onBudget, Finance andAdministration
- Services: Mr.C.Manhusen (Sweden)
- Institutional, Procedural andLegal Matters: Mr.K.Kesavapany (Singapore)
- Trade andEnvironment: Mr.L.Lampreia (Brazil)
(d) Derestriction ofdocuments ofthePreparatory Committee anditssubsidiary bodies
13. ThePreparatory Committee adopted theDecision indocument PC/4 providing forthefuture
derestriction ofdocuments pertaining totheCommittee anditssubsidiary bodies.PC/R/W/1/Rev.1
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B. Report ontheindividual items ofthemandate ofthePreparatory Committee
(Paragraph 8oftheDecision Establishing thePreparatory Committee2)
(a) Administrative, budgetary andfinancial matters3
(i) theHeadquarters Agreement provided forinArticle VIII:5 oftheWTO
Agreement
14. On22July,theCommittee approved Geneva, Switzerland, astheseatoftheWTO (PC/M/4,
Annex 1)subject toasatisfactory conclusion ofthenegotiation ofaHeadquarters Agreement with
theSwiss Authorities.
15. Negotiations onaHeadquarters Agreement withtheSwiss authorities started inSeptember 1994
andwerecarried outbyateamcomposed oftenmembers -theChairman oftheSub-Committee on
Budget, Finance andAdministration, theChairman oftheGATT Committee onBudget, Finance and
Administration, Argentina, France, Indonesia, Japan, Morocco, Pakistan, Trinidad andTobago, Zambia
andfourrepresentatives oftheSecretariat. Thenegotiations covered threeareas: thephysical facilities
fortheWTO (donation oftheCentre William Rappard, thenewconference room, carparks); the
accommodation fortheLLDCs; andtheprivileges andimmunities forboththeWTO andtheMissions
andtheirrespective staff.
[TOBECOMPLETED]
(ii) financialregulations,includingguidelinesfortheassessmentofWTOMembers'
budget contributions, inaccordance withthecriteria setoutinArticle VIIof
theWTO Agreement
16. Asstipulated inArticle VII:2 oftheWTO Agreement "thefinancial regulations [oftheWTO]
shall bebased, asfaraspracticable, ontheregulations andpractices ofGATT 1947" which, in
accordance withdecisions oftheCONTRACTING PARTIES toGATT 1947, arebased ontheFinancial
Regulations andRules oftheUnited Nations.
[TOBECOMPLETED]
17. Withregard toguidelines forbudget contributions byMembers oftheWTO, thePreparatory
Committee agreed (PC/BFA/M/1) that,inprinciple, theassessment should reflect shares ininternational
trade ingoods, services andintellectual property, butthat,pending further study, thecalculation of
assessments forthe1995 budget oftheWTO should follow existing practice under theGATT 1947.
Changes toreflect theabove-mentioned decision inprinciple would beintroduced nolaterthanone
yearafterthecreation oftheWTO.
2Paragraph 8reads: "The Committee shallperform suchfunctions asmaybenecessary toensure theefficient operation
oftheWTO immediately asofthedateofitsestablishment, including thefunctions setoutbelow"
3Theintroductory paragraph 8(a)reads: "Toprepare recommendations fortheconsideration ofthecompetent body of
theWTO, or,totheextent necessary, takedecisions or,asappropriate, provisional decisions inadvance oftheestablishment
oftheWTO, withrespect totherecommendations submitted toitbytheChairman oftheSub-Committee onBudget, Finance
andAdministration referred toinparagraph 3above, incooperation withtheChairman oftheGATT Committee onBudget,
Finance andAdministration, assisted byproposals from theSecretariat on:"PC/R/W/1/Rev.1
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(iii) thebudget estimates forthefirstyearofoperation oftheWTO
18. On8December, thePreparatory Committee, meeting ontheoccasion oftheImplementation
Conference, [approved] theBudget Estimates for1995, asrecommended bytheSub-Committee on
Budget, Finance andAdministration indocument PC/W/8, W.50/11 andCorr.1.
[TOBECOMPLETED]
(iv) thetransfer oftheproperty, including financial assets, oftheICITO/GATT
totheWTO
[TOBECOMPLETED]
(v) thetransfer andtheterms andconditions ofthetransfer oftheGATT staff
totheWTO Secretariat
[TOBECOMPLETED]
(vi) therelationship between theInternational Trade Centre andtheWTO
[TOBECOMPLETED]
(vii) other budgetary, financial oradministrative matters
19. Atitsmeeting on22July,thePreparatory Committee mandated theSub-Committee onBudget,
Finance andAdministration todecide onmatters relating totheorganizational structure, including a
management review. Thecreation oftwenty-one (21)additional posts for1994 wasdecided
[PC/BFA/M/..., paragraph ...]andaManagement Review wasentrusted totheManagement Consulting
firmDeloitte andTouche, which submitted itsreport on[...]December 1994. ThePreparatory
Committeewillforwardthereportandtheconclusionsthereinforconsiderationandactionasappropriate
early in1995 bytherelevant WTO bodies.
(b) Institutional, procedural andlegalmatters
(i) examination ofandapproval oftheschedules submitted toitinaccordance
with the"Decision onAcceptance ofandAccession totheAgreement
Establishing theWorld Trade Organization" andproposals regarding terms
ofaccession inaccordance withparagraph 2ofthatDecision
(1) Work onMarket Access Schedules
20. ThePreparatory Committee established aprocess (PC/M/2, paragraphs 17to24)toimplement
itsmandate under thissub-paragraph. Asagreed bytheCommittee, theChairman informed the
GATT 1947Council ofRepresentatives andtheexisting Working Parties onAccession toGATT 1947,
including theWorking Party onChina 'sstatus asacontracting party, ofthedetails oftheprocess,
requesting them totakeaction asappropriate. [...]schedules were examined under therespective
procedures ongoods andservices. Ofthese, [...]schedules weredeemed tohavebeenverified and
approved bytheCommittee.
21. Theprocess could notbecompleted inrespect ofthefollowing Uruguay Round participants
[...]andofStates andseparate customs territories [...]whose requests foracceptance ofandaccession
totheWTO Agreement werestillunder examination inworking parties established under theGATTPC/R/W/1/Rev.1
Page7
1947. These cases, along withtherecords ofallthework donesofar,willbeforwarded totheWTO
foraction, asappropriate.
[TOBECOMPLETED]
(2) Requests forAccession under Article XIIoftheWTO Agreement
22. TheCommittee tooknoteofCroatia 'srequest toaccede totheWTO Agreement under paragraph
XIIthereof andinkeeping withCroatia 'srequest, instructed theWorking Party previously established
toexamine Croatia 'srequest foraccession totheGATT 1947toconduct thenecessary work andreport
totheCommittee (PC/M/4, paragraph 40).
23. TheCommittee took noteofSudan 'srequest toaccede totheWTO Agreement under
paragraph XIIthereof andagreed toestablish aWorking Party toexamine thatrequest (PC/M/6,
paragraph 33).
[TOBECOMPLETED]
24. TheCommittee tooknoteofastatement bytheChairman oftheCouncil ofRepresentatives
oftheGATT 1947 onthe"Management ofAccession Negotiations" indocument PC/2, which will
beforwarded totheWTO.
(ii) proposalsconcerningtermsofreferenceforthebodiesoftheWTO,inparticular
those established inArticle IVoftheWTO Agreement, andtherules of
procedure which theyarecalled upon toestablish forthemselves, bearing in
mind paragraph 1ofArticle XVI
(1) Terms ofreference
25. FollowinganexaminationbytheSub-CommitteeonInstitutional,ProceduralandLegalMatters,
thePreparatory Committee decided thatnoparticular work wasneeded inrespect ofbodies whose
mandates weresufficiently welldefined bytherespective WTO Agreements. Theterms ofreference
forcertain WTO bodies, i.e.,theCommittees onAgriculture, onBudget, Finance andAdministration
(theterms ofreference inthiscaseareaccompanied byaprovision onmembership), onBalance-of-
Payments Restrictions (BOP) andonTrade andDevelopment (CTD), andonMarket Access, were
agreed bythePreparatory Committee andarecontained indocuments PC/IPL/1, 2,3,4and5,
respectively. These terms ofreference, along withthestatement orunderstanding readoutbythe
Chairman oftheSub-Committee onInstitutional, Procedural andLegal Matters alsoagreed forsome
ofthese Committees atthetimeoftheadoption oftheirterms ofreference andwhich arereproduced
intheminutes oftherelevant meetings (Agriculture -PC/IPL/M/6, paragraphs 23and24;BOP-
PC/IPL/M/7, paragraph 2;andCTD -PC/IPL/M/9, paragraphs 2,3and4),willbeforwarded tothe
WTO.
(2) Rules ofprocedure
26. Asapproved bythePreparatory Committee, therules ofprocedure fortheMinisterial
Conference, theGeneral Council, theTrade Policy Review Body andtheDispute Settlement Body,
including guidelines forobserver status forgovernments ofStates orseparate customs territories, are
containedindocumentPC/IPL/9.ThesewillbeforwardedtotheWTOforfurtheraction,asappropriate.PC/R/W/1/Rev.1
Page8
(3) Notification formats andprocedures
27. Additionalworkingproceduresconcerningnotificationformatsandrequirementsweredeveloped
ininformal, open-ended Contact Groups established todealwithparticular aspects ofWTO Agreements
which required attention toensure thattheWTO became fullyoperational from theentry intoforce
oftheWTO orassoonaspossible thereafter, andbytheGATT 1947Committee onTechnical Barriers
toTrade. ThePreparatory Committee approved thereports andtherecommendations emanating from
these groups, ascontained inthefollowing documents for:
- Agriculture, PC/IPL/12, attachment tothereport.
- Sanitary andPhyto-Sanitary Measures, PC/IPL/6, paragraphs 1,2,3and4.
- Anti-Dumping, PC/IPL/11, Annex 7.
- Subsidies, PC/IPL/11, Annexes 1to6.
- TRIPS, PC/IPL/7, paragraph 9.
- TRIMs, PC/IPL/8, paragraphs 2,4and5.
- Technical Barriers toTrade, PC/IPL/10.
28. These recommendations willbeforwarded totheWTO tobenoted andimplemented, as
appropriate.
(4) Standing Appellate Body
[TOBECOMPLETED]
(5) Ethical Code ofConduct
[TOBECOMPLETED]
(iii) recommendations totheGeneral Council oftheWTO onappropriate
arrangements withrespect torelations withother organizations referred toin
Article VoftheWTO Agreement
29. Ontheissue ofobserver status forinternational intergovernmental organizations, thedraft
guidelines indocument PC/IPL/W/14 willbeforwarded totheWTO asapossible basis forfuture
work.
30. TheCommittee tooknoteofformal requests forobserver status intheWTO received bythe
Chairman oftheCommittee from thefollowing organizations: EBRD, EFTA, FAO, GulfStates
Cooperation Council (GCC), OECD, ITCB, SELA, UNIDO andtheWorld Tourism Organization,
andagreed toforward these requests totheWTO.
31. Asregards appropriate arrangements with respect torelations with other international
intergovernmental andnon-governmental organizations referred toinArticle VoftheWTO Agreement,
theSub-Committee onInstitutional, Procedural andLegal Matters agreed tofocus firstonorganizations
having functional links with theWTO arising specifically from their mention invarious WTO
Agreements.Thosewereidentifiedasthefollowing:theIMF,WorldBank,WIPO,CustomsCooperationPC/R/W/1/Rev.1
Page9
Council (since renamed World Customs Organization (WCO)), theCodex Alimentarius Commission,
theInternationalOfficeofEpizootics,andtheSecretariatoftheInternationalPlantProtectionConvention;
andonenon-governmental organization, namely theISO. ThePreparatory Committee sawnogrounds
forformal institutional links between theWTO andtheUnited Nations, although theneedforthe
establishment ofcooperative tiesbetween thetwoorganizations wasunderscored; thislatter aspect
could betaken upbytheWTO. TheCommittee feltthattheWTO should establish arrangements with
UNCTAD foreffective cooperation atanearly stage.
32. Awork programme aimed atestablishing close cooperation andmutually supportive relations
between theWTO andtheWIPO wasinitiated (PC/IPL/7, paragraphs 5,6and7).Itisrecommended
that,during 1995, pending theconclusion ofthese arrangements, WIPO beinvited toattend meetings
oftheWTO 'sTRIPS Council inanobserver capacity (PC/IPL/7, paragraph 8).
33. ThePreparatoryCommitteetooknoteoftheinterestoftheOECD,SELAandtheWorldTourism
Organization toconclude formal cooperation arrangements withtheWTO andagreed totransmit this
matter totheWTO.
34. Anumber ofnon-governmental organizations (NGOs) haveexpressed theirinterest infollowing
theWTO 'swork inspecific areas. Theapproach tothisquestion would takeintoaccount the
deliberationstakingplaceintheSub-CommitteeonTradeandEnvironmentasdescribedinparagraphs48
and49.
35. Discussions wereheldonthequestions of(a)formalising, inwriting, theunderstanding that
theInternational Chamber ofCommerce (ICC) andtheInternational Federation ofInspection Agencies
(IFIA) will,forthetimebeing, betheorganizations which aretoconstitute jointly theindependent
entity under Article 4oftheAgreement onPreshipment Inspection, and(b)clarifying thestatus of
thatindependent entity toenable Article 4ofthePSIAgreement tobeimplemented. Proposals inthis
respect willbeprepared bytheSecretariat, inconsultation withinterested delegations andwiththe
IFIA andtheICC, forconsideration andaction bytheWTO (PC/IPL/M/6, andPC/IPL/M/10).
[TOBECOMPLETED]
(c) Matters related totheentry intoforce oftheWTO Agreement andtotheactivities of
theWTO within theCommittee 'sscope andfunctions
(i) Convening andpreparing theImplementation Conference
36. On22July, thePreparatory Committee set6to15December 1994 asthetarget period for
theImplementation Conference. Italsoagreed thattheConference would becomposed ofameeting
ofthePreparatory Committee atSenior Officials leveltobefollowed immediately thereafter bythe
CONTRACTING PARTIES toGATT 1947meeting inaSpecial Session. (PC/M/4, paragraph 43-45)
37. On25October, theCommittee setthedateof8December 1994forholding theImplementation
Conference. TheCommittee alsoagreed theprovisional agenda fortheConference proposed bythe
Chairman (PC/M/6, paragraph 6).Theminutes ofthePreparatory Committee meeting ontheoccasion
oftheImplementation Conference arecontained inPC/M/[...].
[TOBECOMPLETED]PC/R/W/1/Rev.1
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(ii) Initiating thework programme arising fromtheUruguay Round results asset
outintheFinal Act,suchasoverseeing, intheSub-Committee onServices
referred toinparagraph 3oftheDecision Establishing thePreparatory
Committee, negotiations inspecific services sectors, andalsoundertaking work
resulting from Decisions oftheMarrakesh meeting
(1) Services
38. ThePreparatory Committee 'smandate intheareaontrade inservices wasconducted bythe
Sub-Committee onServices. TheSub-Committee onServices held[six]meetings during theperiod
19May1994 to[...]December 1994 andaddressed thefollowing matters:
I. Overseeing on-going negotiations
39. TheNegotiating Group onBasic Telecommunications heldfourmeetings in1994. TheGroup
approved aquestionnaire onregulatory issues andmarket structure (TS/NGBT/W/3). Themajority
ofgovernments participating inthenegotiations havecommunicated theirresponses tothequestionnaire
forfurther discussion andexamination. Discussions, based onaNote prepared bytheSecretariat
(TS/NGBT/W/2) arealsounder wayontechnical andconceptual issues related totheconduct of
negotiations andthescheduling ofcommitments onbasic telecommunications. Theparticipants have
beenurged toputforward initial offers byMarch orApril 1995.
40. TheNegotiating Group onMaritime Transport Services heldthree meetings in1994. The
Group approved aquestionnaire onmaritime transport services (S/NGMTS/W/2). 15January 1995
wasagreed asthedeadline forthesubmission ofresponses tothequestionnaire. Discussions inthe
Group onadraftschedule onmaritime transport services haveconfirmed thegeneral viewthatwould
beauseful wayofapproaching thescheduling ofcommitments inthissector.
41. TheNegotiating Group onMovement ofNatural Persons heldthree meetings in1994.
Preliminary multilateral discussions wereheldonhorizontal commitments inthisarea. Tofacilitate
work, theSecretariat prepared aninformal notedated 15September 1994 which analyzed thenature
ofthevarious possible types ofhorizontal commitments. TheGroup heard preliminary reports from
certain delegations onbilateral consultations aimed atimproving thelevelofcommitments inthisarea.
42. TheInterim Group onFinancial Services established bytheSub-Committee onServices on
15July1994(PC/SCS/M/2, paragraph 13)wasmandated tomonitor progress inthenegotiations under
paragraph 1oftheDecision onFinancial Services adopted atMarrakesh untiltheentry intoforce of
theWTO Agreement andtheestablishment oftheCommittee onTrade inFinancial Services. The
Interim Group has,sofar,heldtwomeetings. Participants stressed theircommitment toachieving
abroad, MFN-based package ofliberalization commitments andreported onpreliminary bilateral
consultations andnegotiations.
II. Issues relating tothescope oftheGATS
43. Todealwithcertain unresolved issues raised during thefinalstages oftheUruguay Round
negotiations, thethenChairman oftheUruguay Round Group onNegotiations inServices hadprovided
participants withanadditional period upto15December 1994 toconsult onsuchmatters andreport
theresults totheCouncil forTrade inServices under theWTO forappropriate action (Chairman 's
statement dated 14December 1993 (MTN.GNS/W/260)). TheSub-Committee onServices agreedPC/R/W/1/Rev.1
Page11
itwould provide theforum forsuchdiscussions andprepare areport totheWTO 'sCouncil forTrade
inServices. Areport bytheSub-Committee totheCouncil forTrade inServices ontheissues relating
tothescope oftheGATS iscontained indocument PC/SCS/[...].
[TOBECOMPLETED]
III. Guidelines fornotifications under theGATS
44. Asrequested byMembers, theSecretariat prepared draftguidelines fornotifications required
under different provisions oftheGATS. Theguidelines wererevised onthebasis ofdiscussions in
theSub-Committee. Theguidelines, asagreed, aresetoutindocument PC/SCS/W/8 fortransmission
totheCouncil forTrade inServices forconsideration andaction asappropriate.
IV. Working Party onProfessional Services
45. TheSecretariat wasasked byMembers oftheSub-Committee toestablish contacts withthe
relevant specialized international bodies inpreparation forthecommencement ofwork bytheWorking
Party onProfessional Services upon theentry intoforce oftheGATS. TheMinisterial Decision on
Professional Services establishing theWorking Party identifies theaccountancy sector asanareaof
priority. Accordingly theSecretariat initiated contacts withaviewtodeveloping relations withthe
International Federation ofAccountants (IFAC). Areport bytheSecretariat ontheseandothercontacts
iscontained inparagraph 22ofdocument PC/SCS/M/3.
46. ThePreparatory Committee tooknoteofthework doneintheareaofservices andagreed to
transmit ittotheWTO forinformation andaction, asappropriate.
(2) Trade andEnvironment
47. TheMarrakeshMinisterialDecisiononTradeandEnvironment(MTN.TNC/45(MIN),AnnexII),
directs thefirstmeeting oftheGeneral Council oftheWTO toestablish aCommittee onTrade and
Environment opentoallmembers oftheWTO and,pending thefirstmeeting ofthisbody, establishes
aSub-Committee ofthePreparatory Committee opentoallmembers ofthePreparatory Committee,
tocarry outwork inthisarea.
48. TheSub-Committee heldfiveformal meetings. Inaddition, theChairman hasheldinformal
consultationson:theorderinwhichthefutureCommitteeonTradeandEnvironment'sworkprogramme
should betaken up;howbesttoaddress theseventh itemofthework programme pertaining tothe
issueofexports ofdomestically prohibited goods; andobserver status forintergovernmental andnon-
governmental organizations. Consultations onthelatter issue havebeencarried outinthecontext of
theMinisterial Decision toinvite theSub-Committee, andtheWTO Committee onTrade and
Environment when itisestablished, toprovide input totherelevant bodies inrespect ofappropriate
arrangements forrelations withintergovernmental andnon-governmental organizations referred toin
Article VoftheWTO.
49. Withregard toappropriate arrangements forrelations withnon-governmental organizations the
Preparatory Committee tooknoteofabackground notebytheSecretariat indocument PC/SCTE/W/2
on"Arrangements forrelations withnon-governmental organizations intheUnited Nations, itsrelated
bodies andselected other intergovernmental organizations". Italsotooknoteofasubmission bya
delegation indocument PC/SCTE/W/6 on"NGO observation ofthework ofCommittee onTrade and
Environment". TheCommittee hasagreed totransmit these twonotes totheGeneral Council for
information. Informal consultations conducted bytheChairman oftheSub-Committee haveledtoPC/R/W/1/Rev.1
Page12
acertain amount ofprogress onthisissue. ThePreparatory Committee has[agreed] thatinformal
consultations willneedtobecontinued inthecontext ofWTO Committee onTrade andEnvironment.
[TOBECOMPLETED]
50. Following ageneral exchange ofviews onthework programme, Members agreed tofocus
initially onthefirst,thirdandsixthitems ofthework programme, building where possible onthework
oftheGroup onEnvironmental Measures andInternational Trade (EMIT) under theGATT 1947.
Itwasalsoagreed thatdelegations would befreetoaddress other items ofthework programme with
aviewtoensuring thatwork should progress flexibly andconstructively. TheSecretariat prepared
several background papers, attherequest ofMembers, toassist discussions.
51. Under thefirstitemofitswork programme -therelationship between theprovisions ofthe
multilateral trading system andtrade measures forenvironmental purposes, including those pursuant
tomultilateral environmental agreements -theSub-Committee focused ontheuseoftrade measures
forenvironmental purposes, particularly those applied inthecontext ofmultilateral environmental
agreements andthose applied specifically tonon-parties tothose agreements. Delegations began
reviewing thepotential advantages anddisadvantages ofexanteandexpostapproaches toestablishing
therelationship ofthese measures totheprovisions ofthemultilateral trading system, andarelooking
forward toSecretariat papers ontheissue including onerequested from theSecretariat onthe
effectiveness andnecessity ofusing trade measures inthiscontext.
52. Under thethirditemofthework programme -therelationship between theprovisions ofthe
multilateral trading system and: (a)charges andtaxes forenvironmental purposes; (b)requirements
forenvironmentalpurposesrelatingtoproducts,includingstandardsandtechnicalregulations,packaging,
labelling andrecycling -delegations began reviewing theuseofenvironmental taxes inparticular in
thecontext ofGATT disciplines onborder taxadjustment, andextended further theirexamination of
environmental regulations andstandards, notably those related toeco-labelling, onthebasis ofthe
extensive work thathadalready beenundertaken onthissubject bytheEMIT Group.
53. Under thesixthitemofthework programme -theeffect ofenvironmental measures onmarket
access, especially inrelation todeveloping countries, inparticular totheleastdeveloped among the,
andenvironmental benefits orremoving traderestrictions anddistortions -delegations highlighted for
further examination issues suchastheeffects oftariffescalation, non-tariff barriers andtradedistorting
subsidies ontheenvironment, export diversification anditsrelationship toenvironmental protection,
market opportunities forenvironmentally friendly products particularly from developing countries,
andtheimportance oftechnology transfer andtechnical andfinancial assistance inpursuit ofsustainable
development. Many noted thisisacross-cutting issuerelated toother items ofthework programme,
includingtransparencyandcharges,taxesandproductrequirementswhichserveenvironmentalpurposes.
54. Informal consultations ledtoagreement intheSub-Committee ontwoother issues:
(a) work ontheissueofexports ofdomestically prohibited goods should betaken upearly
in1995, andwillbeassisted byabackground paper being prepared bytheSecretariat.
(b) thelistofintergovernmental organizations invited toobserve thework oftheSub-
Committee wasextended toinclude UNEP, FAO, ITC,UNDP, theUNCommission
onSustainable Development, OECD andEFTA. Itwasagreed thatfurther requests
forobserver status fromsuchorganizations should betaken uponacase-by-case basis,
taking intoaccount thegeneral criteria andconditions forobservership for
intergovernmental organizations tobeapproved bytheSub-Committee onInstitutional,
Procedural andLegal Matters.PC/R/W/1/Rev.1
Page13
55. ThePreparatory Committee tooknoteofthework doneaswellastheprogramme setoutfor
thefuture, andagreed totransmit ittotheWTO forinformation andaction, asappropriate.
56. ThePreparatory Committee further invited thefirstmeeting oftheGeneral Council oftheWTO
toestablish aCommittee onTrade andEnvironment, opentoallmembers oftheWTO, withtheterms
ofreference andprogramme ofworkascontained intheMinisterial Decision onTrade andEnvironment
(MTN.TNC/45(MIN), Annex II),andtransmitted totheWTO Committee theworking documents and
reports oftheSub-Committee onTrade andEnvironment.
(iii) Discussing suggestions fortheinclusion ofadditional items ontheagenda of
theWTO 'swork programme
57. Suggestions fortheinclusion ofadditional items ontheagenda oftheWTO 'swork programme
were made bydelegations attheMinisterial Meeting oftheUruguay Round Trade Negotiations
Committee atMarrakesh from 12to14April 1994. TheChairman, Mr.Sergio Abreu Bonilla
(Uruguay), listed thesesuggestions inhisconcluding remarks on15April 1994(MTN.TNC/45(MIN),
page12,sixth paragraph). ThePreparatory Committee tookupthismatter atitsfirstmeeting on
29April (PC/M/1, paragraph 8).
[TOBECOMPLETED]
(iv) Making proposals concerning thecomposition oftheTextiles Monitoring Body
inaccordance withthecriteria setoutinArticle 8oftheAgreement onTextiles
andClothing
[TOBECOMPLETED]
(v) Convening thefirstmeeting oftheMinisterial Conference ortheGeneral
Council oftheWTO, whichever meets first, andpreparing theprovisional
agenda thereof
[TOBECOMPLETED]
C. Transitional Arrangements4
[TOBECOMPLETED]
4Thesubject of"Transitional Arrangements" wasincluded byconsensus inthemandate oftheCommittee atitsmeeting
on31May 1994 (PC/M/2, paragraph 6and7).PC/R/W/1/Rev.1
Page14
D. Points forAction
Note: Thissection willberevised andcompleted inthelightofdevelopments inthe
Preparatory Committee anditssubsidiary bodies, inparticular theSub-Committees
onBudget, Finance andAdministration andonInstitutional, Procedural andLegal
Matters.
58. Thefollowing matters arebeing hereby forwarded totheWTO forinformation and
implementation, asappropriate.
(a) Administrative, Budgetary andFinancial:
(1) The1995 Budget: paragraph 18
(b) Institutional, Procedural andLegal :
(1) Market Access Schedules: paragraphs 20and21
(2) Terms ofreference ofWTO bodies: paragraph 25
(3) Notification formats andprocedures: paragraphs 27
59. Thefollowing matters arebeing hereby forwarded totheWTO forfurther consideration
andaction asappropriate.
(a) Institutional, Legal andProcedural:
(1) Accessions: paragraphs 22,23and24
(2) Management ofaccession negotiations: paragraph 24
(3) Rules ofprocedure: paragraphs 26
(4) Observer status forintergovernmental organizations: paragraphs 29and30
(5) Arrangements withintergovernmental andnon-governmental organizations:
paragraphs 31,32,33and34
(c) Services:
(1) Scope oftheGATS: paragraph 43
(2) Guidelines forGATS notifications: paragraph 44
(3) Overall work onServices: paragraph 46
(d) Trade andenvironment:
(1) Overall work onEnvironment: paragraphs 55
(2) Establishment ofCommittee onTrade andEnvironment: paragraph 56