RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/24
21 January 1998
(98-0203)
General Council
14 November 1997
MINUTES OF MEETING
Held in the Centre William Rappard
on 14 November 1997
Chairman:  Mr. C. Lafer (Brazil)
Subject discussed: Conditions of service of WTO staff
The Chairman recalled that at its meeting on 22 October, in view of the fact that certain
governments had still been considering the question of conditions of service of WTO staff and had not
been in a position to join in a consensus, th e General Council had agreed to defer further
consideration of this matter to a future meeting to be convened by the second week of November at
the latest.  Since the 22 October meeting, progress had been made towards a consensus, but some
additional time appeared to be needed for Members to reach a final decision.
The representative of the United States informed the General Council that his authorities had
now concluded that they could, in principle, accept the establishment of the WTO Secretariat on an
independent basis.  This was an important development and should be seen as taking the "political
decision" which the Director-General had for so long been urging Members to take.  This decision
had been taken by his authorities in light of the importance they attached to the WTO and the high
regard in which they held the staff of the Secretariat.  The decision was not, however, anunconditional one.  The United States attached a number of conditions to the decision which it
believed were consistent with good management in international organizations.  It believed also that
these conditions could be met, and stood ready to  work intensively with others to fine-tune the
proposals on the table so that its decision in principle could be converted into a final approval of
withdrawal from the UN common system.  The conditions had been specified in a letter to the
Director-General from the US State Department's  Under-Secretary of State for Economic, Business
and Agricultural Affairs, and could be summarized as follows:  First, a single, detailed specificproposal should be developed, including a compensation philosophy, which included a clear rationale
and justification for each new element of the plan.  Much of this work had been done already in the
Working Group on conditions of service, and Members needed to finish that work.  Second, the plan
should incorporate salary and benefit levels that, in the aggregate, did not exceed salary and benefit
levels in the common system.  Third, when the plan was ready, it should be certified by anindependent actuary as "personnel-cost neutral" over the following five to seven years.  Finally, the
United States would expect the independent WTO salary and pension plan to be implemented in a
long-term context of zero nominal growth in the budget for the Organization.  As had long been the
practice in the WTO, decisions on an independent personnel plan and other budgetary and
administrative questions should be consensus decisions.  The United States would be stronglyopposed to any such decisions being put to a vote.  The decision that the United States was not
opposed, in principle, to the establishment of a Secretariat for the WTO independent from the
common system had been arrived at only after considerable reflection and discussion in Washington.WT/GC/M/24
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His delegation could well understand if not all delegations had arrived at this point, but hoped that
they would soon be in a position to arrive at a similar decision.
The representative of Morocco said that the US decision was an important development, and
expressed the hope that other delegations would also see this as the right decision for the WTO and be
able to join the ranks of the majority on this issue in the near future.  He asked if it would not be
necessary at this stage to re-instate the Working Group on conditions of service to consider the issuesraised by the United States.
The Chairman said he would revert to the questio n raised by Morocco in the light of the views
expressed by delegations in response to the US statement.
The representative of the Netherlands said that his government was among those that were not
yet in a position to join in a consensus in favour of an independent system for the WTO Secretariat.
The Netherlands had always believed that this decision was primarily a political one, and that most of
the relevant technical information was on the table even though not every point had been fullyclarified.  The statement that had just been made by the United States was very relevant for his
government.  He would report on that statement to his authorities and the situation would have to be
reviewed by the Cabinet in the light of the circumstances.  However, since this matter required a
political decision to be taken at the Cabinet level, he would request that some additional time, perhaps
two weeks, be allowed for this purpose.  At a procedural level, he asked whether the Chairman
foresaw the General Council taking the political decision first followed by the elaboration of further
details in the Working Group, or vice versa.
The representative of Hong Kong, China commended the United States for its welcome and
timely announcement, and hoped that the lengthy debate on this matter could now finally be
concluded.  It was his understanding that the WTO would need to notify the UN Joint Staff PensionFund very soon of its intention to withdraw from the Fund, and that if a decision were not taken in the
very near future on this matter, the WTO might have to pay for a further actuarial valuation.  He asked
what the timing was on this and what the costs would be of any delay.
The Director-General welcomed the US statement.  The political decision taken in
Washington was extremely important and positive for the life of the Secretariat and the institution.
He had always been convinced that this decision, which had also earlier been taken by a large
majority of Members, was fully in the interests of all.  He hoped that the US decision would now
facilitate the adoption of a consensus on this matter.  He had noted the conditions specified by the
United States.  These would of course be studied in a very positive spirit with a view to ensuring the
best management of this institution, which he believed should serve as a model for the reform of otherinstitutions.
Mr. Lavorel, Deputy Director-General, said that if the WTO intended to withdraw from the
UN Joint Staff Pension Fund on 1 January 1998, it would need to notify the UN of its intention in
time for the matter to be considered by the Fifth Committee at its present session, before which the
matter would also have to be taken up by the Pension Board.  If the WTO failed to notify the UN in
time for withdrawal on 1 January 1998, a separate actuarial study would be needed for a subsequent
withdrawal, at a cost of up to US$300,000.
The representative of Japan welcomed the US decision, which he hoped would contribute to
bringing this long-protracted issue to a conclusi on.  In his delegation's view, only some of the US
conditions seemed to be directly related to the political decision to be taken to establish a WTO
Secretariat on an independent basis.  Some of the other conditions, such as the actuarial certification
and zero long-term nominal budget growth, seemed to be issues to be taken into account in futurebudgetary considerations.  While Japan supported the idea of zero budget growth, it believed thatWT/GC/M/24
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most Members would not be in a position, in taking the political decision on the matter at hand, to
agree to commit themselves to zero nominal budget gr owth forever into the future.  He concluded that
Members should take note of the US conditions, but that they were of a different nature in terms of
Members' commitments.
The Chairman said that in order to help Members take the necessary political decision on this
question, a revised draft decision would need to be prepared taking into account the latest
developments.  He would therefore invite the Chairman of the Working Group on conditions of
service to prepare such a text for the consideration of Members as soon as possible.  He would
propose also that the present meeting be adjourned in the meantime until consultations on the draft
decision were completed, and that it be reconvened at the earliest possible date with a view to taking a
decision on this matter.
The General Council took note of the statements and so agreed .1
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1The discussion at the reconvened meeting will be reflected in an addendum to the present document.