RESTRICTEDWORLD TRADE
ORGANIZATIONWT/GC/M/65
18 June 2001
(01-3041)
General Council
8 and 9 May 2001
MINUTES OF MEETING
Held in the Centre William Rappard
on 8 and 9 May 2001
Chairman:  Mr. Stuart Harbinson (Hong Kong, China)
Subjects discussed: Page
1. Accession of Moldova ......................................................................................................... ......2
(a) Report of the Working Party................................................................................................. ......2
2. Accession of Iran............................................................................................................ ...........6
(a) Communicati on from Iran..................................................................................................... ......6
3. WTO Pension Plan............................................................................................................. .......7
(a) Rules of procedure of the Management Board ...........................................................................7
(b) Election of a member of  the Management Board .......................................................................7
4. Attendance of observers at the Fourth Session of the Ministerial Conference ...................7
(a) Gover nments................................................................................................................. ..............7
(b) International intergover nmental orga nizations ...........................................................................8
5. Attendance of non-governmental organizat ions (NGOs) at the Fourth Session of
the Ministerial  Conference..................................................................................................... ..9
6. Participation of observer governments in  the informal preparatory meetings of
the General Council for the Fourth Session of the Ministerial Conference ......................10
7. Election of officers of the Fourth Session of the Ministerial Conference...........................118. Waivers under Article IX of the WTO Agreement..............................................................11
(a) Cameroon - Customs Va luation Agreement .............................................................................11
(b) Nicaragua - Establishment of a new Schedule XXIX...............................................................11
(i) Request for extens ion of time-limit ......................................................................................... ..11
(c) Sri Lanka - Establishmen t of a new Schedule VI .....................................................................12
(i) Request for extens ion of time-limit ......................................................................................... ..12
(d) Zambia - Renegotiation of Schedule LXXVIII.........................................................................12
(i) Request for extens ion of time-limit ......................................................................................... ..12
(e) Decision on the introduction of the Harmonized System changes into WTO Schedules
of tariff concessions on 1
 January 1996 ....................................................................................12
(i) Extension of time- limit ..................................................................................................... .........12WT/GC/M/65
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9. Integrated framework for trade-related technical assistance to least-developed
countries...................................................................................................................... .............13
(a) Reports of the Chairman of the Sub-Committee on Least-Developed Countries and of
the Director-General on the proposal for a pilot scheme adopted by the Sub-
Committee...................................................................................................................... ...........13
10. Work programme on el ectronic commerce..........................................................................18
(a) Reports of the Councils for Trade in Goods, Trade in Services and TRIPS and of the
Committee on Trade a nd Development ....................................................................................21
(i) Issues of a hori zontal character............................................................................................ ....21
(ii) Sectoral issues re quiring further work ..................................................................................... 21
(b) Next steps in the General Counc il's work on electr onic commerce..........................................33
11. Review of procedures for circulation and derestriction of WTO documents....................35
12. Proposal to amend certain provisions of the Understanding on Rules and
Procedures Governing the Settlement of Disputes pursuant to Article X of the
Marrakesh Agreement Establishing the World Trade Organization ................................35
(a) Submission by Bolivia, Canada, Chile, Co lombia, Costa Rica, Ecuador, Japan, Korea,
New Zealand, Norway, Peru, Switzerland, Uruguay and Venezuela for examinationand further consideration by  the General Council ....................................................................35
13. Report by the Chairman of the Committee on Rules of Origin on
implementation-related issues................................................................................................39
14. Reports by the Vice-Chairman of the Committee on Agriculture on
implementation-related issues................................................................................................40
15. Reports of the Special Sessions of the Committee on Agriculture and the Council
for Trade in  Services.......................................................................................................... .....42
16. Statement by the Chairman of the Committee on Subsidies and Countervailing
Measures on implementati on-related issues.........................................................................43
17. Statement by the Chairman of the SPS Committee on implementation-related
issues......................................................................................................................... ................43
18. Statement by the United States regarding new restrictions by India for ports of
entry for cer tain goods ........................................................................................................ ...44
1. Accession of Moldova
(a) Report of the Working Party (WT/ACC/MO L/37 and Corr.1-4 and WT/ACC/MOL/37/Add.1
and 2)
1. The Chairman welcomed H.E. Mr. Vasile Tarlev, Prime Minister of the Republic of Moldova,
as well as the other members of the Moldovan delegation.
2. He recalled that in December 1993, the GATT 1947 Council had established a working party
to examine the request by Moldova for accession to the General Agreement on Tariffs and Trade.Having regard to the Decision adopted by the General Council on 31 January 1995, the GATT 1947
Accession Working Party had been transformed into a WTO Accession Working Party.  The report of
the Working Party was now before the General Council in document WT/ACC/MOL/37 and Corr.1-4
and WT/ACC/MOL/37/Add.1 and 2.WT/GC/M/65
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3. Mr. Kumar (India), Chairman of the Working Party, introducing the report, said that the
Working Party had carried out an examination of the foreign trade regime of Moldova during the
period 1997-2001.  Moldova had also carried out market access negotiations with interested Members
in goods, including agriculture, and services.  The results of the negotiations, which constituted the
complete accession package of Moldova to the WTO, were contained in the following documents:the Report of the Working Party (WT/ACC/MOL/37 and Corr.1-4), the Schedule of Concessions and
Commitments on Goods (WT/ACC/MO L/37/Add.1), and the Schedule of Specific Commitments on
Services (WT/ACC/MOL/37/Add.2).  Members of the Working Party had noted with appreciation
Moldova's efforts to put into place the necessary le gislation to implement the WTO agreements by the
date of its accession to the WTO.  This would ensure that Moldova would become an effective
participant in the WTO immediately upon entry into  force of the Protocol of Accession.  The
Appendix to the report reproduced the draft Decision  and the draft Protocol of Accession of Moldova
to the Agreement Establishing the World Trade Organization.  In accordance with usual WTO
practice, the Protocol of Accession incorporated the specific commitments undertaken by Moldova in
relation to matters negotiated in the Working Party.
4. He wished to pay tribute to the efforts, g oodwill and spirit of compromise shown by all
Members to overcome the difficulties encountered in this accession process with diligence andpragmatism.  Without the cooperation of Members and of Moldova's authorities, the successful
completion of the process in the Working Party w ould not have been possible.  Furthermore, he
wished to place on record his appreciation for the assistance he had received from the WTO
Accessions Division.  The results achieved in Moldova's accession negotiations spoke for themselves.
Therefore, as Chairman of the Working Party, he recommended the Report of the Working Party aswell as the texts of the draft Decision and Protocol of Accession for suitable action by the General
Council.
5. The General Council approved the text of the Protocol of Accession of Moldova
(WT/ACC/MOL/40), and in accordance with the Decision-Making Procedures under Articles IX and
XII of the WTO Agreement agreed in Novemb er 1995 (WT/L/93), adopted the Decision on the
Accession of Moldova (WT/ACC/MOL/39).  The General Council then adopted the Report of the
Working Party in document WT/ACC/MOL/37 a nd Corr.1-4 and WT/ACC/MOL/37/Add.1 and 2.
6. H.E. Mr. Vasile Tarlev, Prime Minister of Moldova, speaking as an observer , said that
Moldova's accession to the WTO Agreement contributed further to the universal character of the
organization and was a recognition of the role of small economies.  Since its independence,  Moldova
had directed its efforts to ensure its integration into the international trading system, the
diversification of its commercial relations, and the reform of its economy toward a market-basedeconomy.  The result of Moldova's accession negotiations confirmed these commitments.  As a
country, mainly agricultural, in transition to a market-based economy, Moldova had been confronted
over the last years with numerous difficulties, which had been amplified by its economic system and
the insufficiency of its current exports.  In particular, these difficulties related to its traditional export
markets and competition with heavily subsidized agricultural products from other countries.  Thissituation had led to a decrease in its domestic production and had caused a critical accumulation of
foreign debt, the majority of which related to energy resource imports.  The new Government of
Moldova was maintaining the main trends of economic reforms, which were supported by
international financial organizations.  One of its priorities was the growth of Moldova’s production,
and the support in particular of small- and medium-size export-oriented enterprises.  Moldova'saccession to the WTO would facilitate the implementation of its priorities, increasing first of all the
confidence of its international trading partners and of foreign investors.  To solve its problems,
Moldova looked forward to future multilateral trade negotiations, especially those related to
agriculture in which Moldova intended to participate actively along with other transition economies or
with countries having similar economic interests.  Moldova welcomed the efforts of the Director-General and of the General Council Chairman to increase fairness and effective application of WTO
rules and practices, and expressed satisfaction in relation to the growing transparency in the adoptionWT/GC/M/65
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of decisions as well as to the intensification of active participation of small economies in the
negotiating process.  The accession process had reached its final stage after an extremely complex
process that had started seven years ago.  Moldova's accession was the beginning of its integration
into the WTO.  Moldova was aware that WTO membership implied not only rights but also
obligations.  It was Moldova’s intention to fully comply with all the commitments undertaken and to
seek rapid ratification of its accession by the Parliament.  Finally, he expressed gratitude to the
Members and the Chairman of the Working Party for their efforts and cooperative spirit during the
whole process of accession, as well as to the members of his delegation which had been involved in
that process.
7. The Chairman, on behalf of the General Council, welcomed the accession of Moldova.
8. All representatives who spoke welcomed the Prime Minister of Moldova, H. E. Mr. Vasile
Tarlev, as well as the Moldovan delegation, and the accession of Moldova and looked forward toworking with Moldova in the WTO.
9. The representative of Romania said that her country had had long-standing historical and
trade relations with Moldova.  During the negotiation process, Moldova had made considerable steps
forward aimed at creating an open and competitive economy thus becoming more attractive and
predictable to its trading partners.  Her delegation congratulated the negotiating team for the complex,intensive and often difficult work, and the Government of Moldova for its strong commitment to
participate in the multilateral trading system.  Throughout the lengthy and complex accession process,
Moldova had continuously shown its determination to carry out fundamental economic reforms,
facilitating its full integration into the world trading system.  That process had also been an important
factor in streamlining these reforms.  Moldova's accession to the WTO would improve market-accessconditions for its goods and services on internationa l markets, would implement WTO principles in its
trade policy, and would create new opportunities and a more competitive environment for business.  It
would also ensure a solid foundation for sustai ned investment and economic growth, offering an
excellent platform for intensified global and regional integration.  Moreover, it would bring Moldova
closer to its legitimate goals of joining, once again, the European family of free, democratic andprosperous nations.  She believed that Moldova's accession would contribute to the further
strengthening of the multilateral trading system and hoped that Moldova would become an effective
and active participant in the WTO immediately upon entry into force of the Protocol of Accession.
Moldova was an important trading partner of Romania and their trade relations had been reinforced
since 1995 through a free trade agreement.  Moldova's accession to the WTO would offer new
dimensions to their economic links.  Romania look ed forward to working w ith Moldova in the WTO
in the same excellent, open-minded and friendly spirit that had guided their bilateral relations to date.
10. The representative of the United States said that her government strongly supported approval
of Moldova's accession package.  Moldova should be especially commended for its diligence in
adopting WTO-consistent laws and for the trade liberalizing commitments and concessions it would
undertake as a WTO Member.  The quality of this accession package demonstrated Moldova's intent
to participate in the WTO as an equal partner with current Members.  That participation wouldsupport ongoing economic reforms and further economic development.  The United States urged the
Parliament of Moldova to ratify this accession package in the near future.  The United States had
demonstrated its support for this accession through the provision of technical assistance and through
its thorough participation in the Working Party proce ss.  The United States would continue to provide
technical assistance as implementation needs developed, particularly in the area of technicalstandards.
11. The representative of the European Communities said that the Prime Minister's intervention
demonstrated Moldova's firm commitment to play a ro le both in the multilateral trading system and in
the WTO.  The successful conclusion of Moldova's accession negotiations was a just recognition of
the efforts made to transform its economy and to establish a liberal trade regime.  The CommunityWT/GC/M/65
Page 5
welcomed Moldova's efforts to adopt the range of legislative and institutional reforms required to
ensure conformity with the WTO agreements by the date of accession.  It also welcomed Moldova's
commitments to a liberal, open trading regime through the adoption of commercially sound market-
access commitments.  The Community fully supported the integration of Moldova into the world
trading system reinforcing the special relationship between the European Union and Moldova, whichwould be a neighbour of the European Union in the future.
12. The representative of the Czech Republic, speaking also on behalf of Bulgaria, Croatia,
Estonia, Hungary, Latvia, Poland, Slovak Republic and Slovenia, said that the Prime Minister's
presence and his statement was further evidence of the importance Moldova attached to the
multilateral trading system and to its values and principles.  Moldova's accession package was an
important landmark in the country's transition from a centrally-planned to a market economy.  It also
reflected the tremendous efforts made by Moldova to move in the right direction and to bring itsdomestic regulatory framework into conformity w ith the WTO agreements.  By acceding to the WTO
on the basis of meaningful market-access commitments and full adherence to the existing rules,
Moldova was making a serious commitment to economic development and prosperity.  Moldova's
accession to the WTO would greatly help it to pursue the implementation of its economic and social
reforms and would make the WTO more universal.
13. The representative of Georgia said that Moldova's accession to the WTO was an important
step toward the inclusion of the members of the Commonwealth of Independent States into the
multilateral trading system.  Georgia had excellent trade and economic relations with Moldova, in
particular through their bilateral free-trade arrangement.  Georgia attached great importance to
Moldova's accession as one of the member States of the GUUAM Group1 and was now ready to
cooperate with Moldova within the WTO framewor k.  Georgia and Moldova had many similarities
and were both small, vulnerable economies that needed international support and assistance.
14. The representative of India said that his country had a strong historical, economic and
commercial relationship with Moldova.  Following its request for accession in December 1993,
Moldova had made enormous efforts towards transforming a centrally-planned into a market-basedeconomy.  These efforts had been appropriately accompanied by a number of initiatives in its foreign
trade regime and by an administrative and enforcement mechanism to enable Moldova to fulfil its
commitments under the WTO.  India welcomed Moldova's commitment to continue its process of
structural adjustment in order to, inter alia,  correct an excessive dependence on primary production
notwithstanding the challenges involved.  India belived that universal membership of the WTO would
not only be beneficial to each Member but also to the organization as a whole.
15. The representative of Turkey said that the Prime Minister's presence marked this historical
day both for Moldova and the Black Sea Basin countries and his statement was a testimony of
Moldova's commitment to WTO principles.  Turkey and Moldova had excellent relations both at
bilateral and regional levels.  Moldova’s accession to the WTO was another step for the establishment
of a free market economy in the Black Sea Basin c ountries.  Moldova’s accession to the WTO would
not only contribute to the welfare of its people but would also constitute an important contribution tostability and prosperity in the region.
16. The representative of the Kyrgyz Republic expressed appreciation for the steps Moldova had
taken towards further integration into the multilate ral trading system and believed that this decision
would be beneficial for both Moldova and its trad ing partners.  Like his country, Moldova had
undertaken the process of transforming its economy into a market-oriented one by adapting the rulesand practices used in international trade to develop national mechanisms for economic development.
These mechanisms, based on WTO rules, would serve as key elements for the progressive
transformation of Moldova's economy.  He believed that Moldova's accession to the WTO at the
                                                     
1 Azerbaijan, Georgia, Moldova, Ukraine and Uzbekistan.WT/GC/M/65
Page 6
threshold of the Ministerial Conference in Doha was symbolic. He looked forward to the rapid
ratification by Moldova's Parliament of the accession Protocol so that in the forthcoming negotiations,
Moldova would be a fully-fledged participant.
17. The representative of Thailand, on behalf of the ASEAN Members , said that  Moldova's long
accession process had proved its determination to carry out fundamental economic reforms enabling
its full integration into the world trading system.  Moldova's commitment to reform its trade regime
would not only contribute to its sustained economic development but also to the strengthening of the
multilateral trading system.
18. The representative of Paraguay, on behalf of GRULAC , acknowledged the efforts undertaken
by Moldova in order to join the WTO and welcomed Moldova into the organization, and in particular
among the developing-country Members.  Despite the geographical distance, the GRULAC felt very
close to all developing countries, particularly those from the Black Sea Basin, with which theMERCOSUR had a very close relationship.  He beli eved that working together would be to the
mutual benefit of all within the WTO and within the overall multilateral environment.
19. The representative of Belarus, speaking as an observer
, expressed satisfaction with regard to
Moldova's accession, which was also Belarus' ultimate goal.  Belarus and Moldova had close trade
and economic relations which were facilitated, above all, by the complementarity of their economiesand their geographical proximity.  He hoped that Moldova's accession to the WTO would contribute
to further growth of its trade income, and to that of its traditional partners.
20. The General Council took note of the st atements and expressions of support.
2. Accession of Iran
(a) Communication from Ir an (WT/ACC/IRN/1)
21. The Chairman drew attention to the communi cation from Iran in document WT/ACC/IRN/1
requesting accession to the WTO Agreement.  This item had been included on the agenda of the
present meeting following a request made by Egypt on behalf of the Informal Group of Developing
Countries.
22. The representative of the United States said that her government was currently reviewing this
matter internally and was not in a position to discuss Iran's accession request at this time.
23. The representative of Malaysia, on behalf of the Informal Group of Developing Countries ,
thanked the representative of the United States for her statement.  This item should continue to be on
the agenda and he hoped that an appropriate response would be forthcoming by the next meeting of
the General Council so that the normal procedures would be followed.
24. The representative of the European Communitie s said that the Community believed that each
request for accession to the WTO Agreement should be considered on its merit in accordance with
WTO rights and obligations.  The Community could have contemplated the establishment of a
working party but also recognized that consensus was an important feature of the organization.  The
Community was ready to revert to this matter at the next occasion.
25. The General Council took note of the statements and agreed  to revert to the matter at its next
meeting.WT/GC/M/65
Page 7
3. WTO Pension Plan
(a) Rules of procedure of the Management Board (WT/GC/W/430)
(b) Election of a member of the Management Board (WT/GC/W/431)
(a) Rules of procedure of the Management Board (WT/GC/W/430)
26. The Chairman recalled that pursuant to Article 5 of the Regulations of the WTO Pension
Plan, "the duties and authority of the Management Board, as well as the rules for the auditing of
accounts shall be laid down in rules of procedure which shall be approved by the General Council".
Accordingly, the Chairman of the Management Board had submitted to the General Council the draft
rules of procedure (WT/GC/W/430).
27. Mr. Lee (Korea), Chairman of the Management Board, said that the rules of procedure in
WT/GC/W/430 would provide a comprehensive guide to  the Management Board in the conduct of its
business, ranging from the duties and authorities of Board members to the auditing of accounts and
appointment of a medical adviser.  The rules were the product of extensive discussion and analysis in
the Management Board and had been unanimously adopted by the Board at its meeting on3 April 2001.  He therefore commended these draft rules of procedure to the General Council for its
approval.
28. The General Council approved the rules of procedure contained in document WT/GC/W/430.
2
(b) Election of a member of the Management Board (WT/GC/W/431)
29. The Chairman recalled that Article 4(a) of the Regulations of the WTO Pension Plan
provided, inter alia,  for the election by the General Council of four members and four alternates, each
for a three-year term.  Since Mr. Michael Stone (Hong Kong, China) was no longer available to serve
as a member on the Management Board and following consultations, he proposed the election of
Mr. Remo Moretta (Australia) to hold office during the remainder of the three-year term, expiring on
28 March 2002 (WT/GC/W/431).3
30. The General Council so agreed.
4. Attendance of observers at the Fourth Session of the Ministerial Conference
(a) Governments (WT/L/394)
(b) International intergovernmental organizations(a) Governments (WT/L/394)
31. The Chairman drew attention to document WT/L/394 containing a request by Liberia for
observer status in the Ministerial Conference and proposed that the General Council agree to invite
the Government of Liberia to attend as an observer the Fourth Ministerial Conference.
32. The General Council so agreed.
                                                     
2 Subsequently circulated as WT/L/402.
3 Subsequently circulated as WT/L/401.WT/GC/M/65
Page 8
33. He also recalled that in total, 39 countries had participated as observers in the Seattle
Ministerial Conference in accordance with Annex 2 to the Rules of Procedure for Ministerial
Conference and General Council meetings.  Out of these 39 countries, 34 currently had obtained
observer status in the General Council, either through a request to the General Council or through the
establishment of a working party for their accession to the WTO.  These countries were thereforeautomatically invited to attend the Ministerial Conf erence in Doha as observers.  There were five
countries which had attended the Ministerial Conference in Seattle and which did not currently have
observer status in the General Council:  Comoros, Equatorial Guinea, Eritrea, Libya and San Marino.
He proposed that the General Council agree that these five countries also be invited to attend the
Fourth Ministerial Conference as observers.
34. The General Council so agreed.
(b) International intergovernmental organizations
35. The Chairman recalled that prior to each of the past sessions of the Ministerial Conference,
the General Council had agreed to invite internat ional intergovernmental organizations as observers
on the basis of the following guidelines:  (i) organizations that were observers to the General Council
would be automatically invited;  (ii) organizations that were observers to subsidiary bodies would be
invited if they requested to attend;  and (iii) consultations would be held to determine which otherorganizations that were not observers to the WTO and that had requested attendance to the Ministerial
Conference should be invited.  He proposed that the General Council proceed on the basis of these
same guidelines for the Fourth Ministerial Conference.
36. The representative of Egypt said that while her delegation could go along with the Chairman's
proposal, she sincerely hoped, on behalf of the Arab Members of the WTO, that this time all requests
to attend the Ministerial Conference would be accepted.  In this regard, she wished to inform the
General Council of the request by the League of Arab States to attend the Fourth Ministerial
Conference to be held in Doha.  An official communi cation to that effect would be duly sent from the
Secretary-General of the League of Arab States to the Director-General.
37. The representatives of Bahrain, (also on behalf of Qatar, Kuwait, United Arab Emirates and
Oman), Morocco,  Jordan,  Malaysia,  Tunisia  and Indonesia  supported the statement made by Egypt.
38. The representative of Turkey said that he wish ed to inform the General Council that he would
be in contact with the Black Sea Economic Cooperation (BSEC) to advise that organization to send a
formal request to enable it to attend the Ministerial Conference.
39. The representative of Bulgaria supported the statement made by Turkey.
40. The representative of Israel supported the Chairman's proposal to conduct consultations on
other requests.
41. The General Council took note of the statements and agreed  to proceed on the basis of the
same guidelines that had been adopted for previous Ministerial Conferences, as read out by the
Chairman.
42. The Chairman said that the international intergovernmental organizations which had been
invited to attend the Ministerial Conference in Seattle were listed in document Job(01)/57 which had
been circulated by the Secretariat.  He therefore proposed that the General Council invite these
organizations to the Ministerial Conference in Doha.  He also informed Members that there were three
additional international intergovernmental organizations that had not been observers at the Ministerial
Conference in Seattle, and were neither observers in the General Council nor in other WTO bodies,
which had requested observer status to the Fourth Ministerial Conference.  These organizations wereWT/GC/M/65
Page 9
the following: Arab Authority for Agricultural Investment and Development (AAAID), Gulf
Organization for Industrial Consulting (GOIC) and the Organization of the Petroleum Exporting
Countries (OPEC).  Members wishing to consult the communications from these organizations were
invited to contact the External Relations Division of the WTO.  He proposed that unless any objection
was received by the Secretariat from any Member by 25 May 2001, these organizations also begranted observer status to the Fourth Ministerial Conference.
43. The General Council so agreed.
4
5. Attendance of non-governmental organizations  (NGOs) at the Fourth Session of the
Ministerial Conference
44. The Chairman said that in order to take ca re of the requests from NGOs to attend the 2001
Ministerial Conference, he proposed that the General Council adopt similar criteria to those which had
been adopted by the General Council for the three previous Ministerial Conferences held inSingapore, Geneva and Seattle.  He recalled that in preparing for these previous Ministerial
Conferences, the General Council had agreed on the following procedures regarding registration and
attendance of NGOs at the Conference:
(a) NGOs would be allowed to attend only the Plenary Sessions of the Conference
(without the right to speak);
(b) applications from NGOs to be registered would be accepted on the basis of Article V,
paragraph 2 of the WTO Agreement, i.e. NGOs "concerned with matters related to
those of the WTO";  and
(c) a deadline would be established for the registration of NGOs that wished to attend the
Conference.
45. In light of the above procedures, NGOs that wished to attend the Doha Ministerial Conference
would be requested to supply, in detail, the nece ssary information showing how they were concerned
with matters related to those of the WTO.  With regard to deadlines, he proposed that NGOs submit
their requests for registration before 2 July 2001.  Based on the information provided, the Secretariat
would process a list of organizations that were eligible for registration under Article V, paragraph 2 ofthe WTO Agreement.  In order to ensure that the Secretariat, the host country and NGOs would have
sufficient time to prepare themselves, he proposed that this list be circulated to WTO Members for
information during the course of July.  Immediately thereafter, NGOs would be informed about
further arrangements concerning their attendance and registration forms would be sent.  Depending on
the number of NGOs that wished to attend the Ministerial Conference, it could not be excluded at this
stage that certain limits might have to be imposed on the number of representatives per NGO
delegation.  The registration forms should then be returned, duly completed by the NGOs, to theExternal Relations Division of the WTO no later than 17 September 2001. Confirmation of
registration would be sent to the NGOs as from 1 October 2001.  He proposed that the General
Council agree at the present meeting to this procedure to allow sufficient time for the NGOs to be
informed and to make the necessary arrangements for their attendance at the Fourth Ministerial
Conference.
46. The representative of Egypt said that her delegation could go along with the Chairman's
proposal and asked whether it would be possible for the Secretariat to circulate the guidelines as a
document.
                                                     
4 Subsequent to the meeting, the Secretariat receive d one objection to the granting of observer status to
the Arab Authority for Agricultural Investment and Development (AAAID) and the Organization of thePetroleum Exporting Countries (OPEC) at the Fourth Ministerial Conference.WT/GC/M/65
Page 10
47. The representative of the European Communities noted the Chairman's proposal and
wondered, in this context, whether there would not be  a case for Members to exercise restraint in the
size of their delegation so as to give more possibilities to NGOs.  In view of the number of requests
for registration from NGOs, this issue might have to be examined at the next General Council
meeting.
48. The representative of Pakistan said that his delegation could also go along with the
Chairman's proposal and supported Egypt's request to have that proposal in writing in order to send it
to his capital.  With regard to the participation of NGOs at the Fourth Ministerial Conference, he had
two concerns.  First, he wished to know how the Secretariat would proceed to ensure that there would
be a balanced and fair representation of NGOs from the South.  Second, with respect to the
participation of NGOs from the South, he wonder ed whether the General Council could agree to
finance the participation at the Ministerial Conference of some NGOs from the South and whether theWTO budget had financed such a participation at the Seattle Ministerial Conference.
49. The Chairman said that as to the request made by Egypt, he would ask the Secretariat to
circulate an information note on the procedures for the registration and attendance of NGOs at the
Fourth Ministerial Conference.  With regard to the Community's statement, he believed that one might
revert to that issue when the overall accommodation situation was clearer.  With regard to Pakistan's
concerns, he noted first that it was his understanding that NGOs which applied to attend the
Ministerial Conference as observers would be invited, provided they met the criteria.  There was no
mechanism in place that would allow Members to refu se a request, which fell within the guidelines,
on the grounds that this would result in overrepresentation of a particular point of view.  Second, with
regard to funding, there were no provisions in the WTO budget for this purpose and if Memberswished to pursue the matter, it would be necessary to find a solution outside the WTO's regular
budget.
50. The representative of Canada said that with respect to the statements made by the Community
and Pakistan, one way to address their respective concerns might be to include in their respective
governmental delegations representatives from the NGO community.  In that context, Members mightwish to look into the possibility to provide financial support outside the WTO's regular budget for an
increased representation of Members from the South.
51. The General Council took note of the statements and agreed
 to the Chairman's proposal on the
procedures regarding registration and attendance of non-governmental organizations at the Fourth
Ministerial Conference.5
6. Participation of observer governments in th e informal preparatory meetings of the
General Council for the Fourth Session of the Ministerial Conference
52. The Chairman recalled that during the preparatory process for the Third Ministerial
Conference, the General Council had agreed that observer governments be exceptionally invited to
attend, as observers, the General Council's informal preparatory meetings for the Third Ministerial
Conference.  He proposed that the same arrangement be made in preparation of the Fourth Ministerial
Conference and that, accordingly, observer governme nts be invited to attend the informal preparatory
meetings for the Fourth Ministerial Conference.
53. The representative of Belarus, speaking as an observer , expressed gratitude to the Chairman
for this initiative, which would allow observer govern ments to participate in the informal preparatory
meetings of the General Council, as well as to the Members for their endorsement of that initiative.  In
his delegation's view, this was an important decision which would be beneficial to both observer
                                                     
5 Subsequently circulated in WT/MIN(01)/INF/3.WT/GC/M/65
Page 11
governments and Members.  Observer government s would not only be aware of the preparatory
process for the Fourth Session of the Ministerial Conference but could also make useful contributions.
54. The General Council took note of the statement and agreed  to the Chairman's proposal.
7. Election of officers of the Fourth Session of the Ministerial Conference
55. The Chairman recalled that at its meetings on the 30 January and 8 February 2001, the
General Council had agreed on the date and venue of the Fourth Session of the Ministerial
Conference.  As the date of the 2001 Ministerial Conference was quickly approaching, the General
Council would now have to proceed to the election of officers of the Fourth Ministerial Conference.
Following the practice for previous Ministerial Conferences, he proposed that the General Council
elect the representative of the host government, the Minister of Finance, Economy and Commerce of
Qatar, to Chair the Conference.  With regard to the election of the three Vice-Chairpersons of the
Conference, he intended to conduct consultations with Members.  He therefore proposed that the
General Council agree to revert to this matter at a future meeting to allow for these consultations to
take place.
56. The General Council so agreed.
8. Waivers under Article IX of the WTO Agreement
(a) Cameroon - Customs Valuation Agreement (G/C/W/245 and Add.1 and 2 and G/C/W/258)
57. The Chairman drew attention to the reques t from Cameroon (G/C/W/245 and Add.1 and 2)
for a waiver from its obligations under paragraph 1 of Annex III to the Agreement on Implementation
of Article VII of GATT 1994 until 1 July 2001 and to the related draft decision (G/C/W/258).
58. Mr. Major (Hungary), Chairman of the Coun cil for Trade in Goods, reporting on the
Council's consideration of this request, said that the Council had agreed to forward the draft decision
to the General Council for adoption.
59. The General Council took note of the report and, in accordance with the Decision-Making
Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93),
adopted the draft decision in G/C/W/258.6
(b) Nicaragua - Establishment of a new Schedule XXIX
(i) Request for extension of time-limit (G/L/442, G/C/W/251)
60. The Chairman drew attention to the request fr om Nicaragua (G/L/442) for an extension until
31 October 2001 of the waiver previously granted in connection with the establishment of a new
Schedule XXIX and to the related draft decision (G/C/W/251).
61. Mr. Major (Hungary), Chairman of the Coun cil for Trade in Goods, reporting on the
Council's consideration of this request, said that the Council had agreed to forward the draft decision
to the General Council for adoption.
62. The General Council took note of the report and, in accordance with the Decision-Making
Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93),
adopted the draft decision in G/C/W/251.7
                                                     
6 The Decision was subsequently circulated in WT/L/396.
7 The Decision was subsequently circulated in WT/L/397.WT/GC/M/65
Page 12
(c) Sri Lanka - Establishment of a new Schedule VI
(i) Request for extension of time-limit (G/L/440, G/C/W/250)
63. The Chairman drew attention to the request from Sri Lanka (G/L/440) for an extension until
31 October 2001 of the waiver previously granted in connection with the establishment of a new
Schedule VI and to the related draft decision (G/C/W/250).
64. Mr. Major (Hungary), Chairman of the Coun cil for Trade in Goods, reporting on the
Council's consideration of this request, said that the Council had agreed to forward the draft decision
to the General Council for adoption.
65. The General Council took note of the report and, in accordance with the Decision-Making
Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93),
adopted the draft decision in G/C/W/250.8
(d) Zambia - Renegotiation of Schedule LXXVIII
(i) Request for extension of time-limit (G/L/443, G/C/W/252)
66. The Chairman drew attention to the request fr om Zambia (G/L/443) for an extension until
31 October 2001 of the waiver previously granted in connection with the renegotiation of its schedule,
and to the related draft decision (G/C/W/252).
67. Mr. Major (Hungary), Chairman of the Coun cil for Trade in Goods, reporting on the
Council's consideration of this request, said that the Council had agreed to forward the draft decision
to the General Council for adoption.
68. The General Council took note of the report and, in accordance with the Decision-Making
Procedures under Articles IX and XII of the WTO Agreement agreed in November 1995 (WT/L/93),
adopted the draft decision in G/C/W/252.9
(e) Decision on the introduction of the Harmonized System changes into WTO Schedules of
tariff concessions on 1 January 1996
(i) Extension of time-limit (G/C/W/255/Rev.1 and Corr.1)
69. The Chairman drew attention to the draft d ecision in G/C/W/255/Rev.1 and Corr.1 (French
only) to suspend the application of the provisions of Article II of the GATT 1994 until 30 April 2002.
70. Mr. Major (Hungary), Chairman of the Coun cil for Trade in Goods, reporting on the
Council's consideration of this request, said that the Council had agreed to forward the draft decision
to the General Council for adoption.
71. The representative of India said that the draft decision on the extension of the time-limit to
certain Members that had not yet completed the process of certification of changes to their schedules
resulting from Harmonized System 1996 changes, reflected a carefully crafted balance.  India had
already completed this process in respect of its own schedule.  However, in light of its wider systemicinterest, India recalled that Members had agreed in the Market Access Committee, and subsequently
in the Council for Trade in Goods, to continue with the extension of the waiver on a collective basis
and without prejudice to a possible collective waiver under the Harmonized System 2002 changes.
                                                     
8 The Decision was subsequently circulated in WT/L/398.
9 The Decision was subsequently circulated in WT/L/399.WT/GC/M/65
Page 13
The draft decision thus established a last extension of the waiver on a collective basis but with a
longer term of one year, up to 30 April 2002.  It  was India's expectation that this would prove
sufficient to help clear up pending reservations of Members on outstanding draft schedules, especially
now that the process of verification was being aided by an informal multilateral appraisal mechanism
that had been established in the Market Access Committee in 2000.  Thus, India could join theconsensus to adopt this draft decision.
72. The representative of Pakistan said that his delegation fully associated itself with India's
statement.
73. The General Council took note of the report and of the statements and, in accordance with the
Decision-Making Procedures under Articles IX and XII of the WTO Agreement agreed in
November 1995 (WT/L/93), adopted the draft decision in G/C/W/255/Rev.1 and Corr.1.10
9. Integrated framework for trade-related technical assistance to least-developed countries
(a) Reports of the Chairman of the Sub-Committee on Least-Developed Countries and of the
Director-General on the proposal for a pilot scheme adopted by the Sub-Committee
(WT/LDC/SWG/IF/13)
74. Mr. Fuller, Chairman of the Sub-Committee on Least-Developed Countries, recalled that on
12 February 2001, under the chairmanship of his predecessor, the Sub-Committee had adopted the
proposal for an Integrated Framework (IF) Pilot Sche me.  In relation to this Pilot Scheme, he wished
to highlight four features.  First, the Pilot Scheme would initiate work on “mainstreaming” a trade
integration strategy into least-developed countries  (LDCs') development plans and poverty reduction
strategies, including Poverty Reduction Strategy Papers (PRSPs), focusing on LDCs which had
demonstrated a clear choice and commitment to main stream trade into their development strategies.
Once results would be obtained in the countries initially selected and no later than the Fourth
Ministerial Conference, the Sub-Committee would review the initiative and consider extending it to
other LDCs.  Second, the Pilot Scheme established an IF Trust Fund, which was necessary for promptimplementation of the Scheme.  Third, the Pilot Scheme would elaborate a coordinated, sequenced
programme of trade-related technical assistance and capacity-building for each country, ordered
according to priority.  This programme would be presented at either the country’s World Bank
Consultative Group or its UNDP Round Table meeting for financing by donors.  Only exceptionally
would the IF Trust Fund finance technical assistance projects itself.  Fourth, the Pilot Schemeimproved IF governance by establishing an IF Steering Committee, and expanding the Inter-Agency
Working Group (IAWG) to include two donors and two LDC representatives.  The Steering
Committee included all partners in the IF i.e. donors, LDCs and core agencies, and all interested
WTO Members and observers could also attend its meetings.  He recalled that the purpose of the
Steering Committee was to improve coordination, ow nership, responsibility and involvement of all
parties concerned.  As the implementation of the Pilot Scheme had begun, he was confident that the IF
had been placed on a firmer footing.  With goodwill and hard work from all parties concerned, thePilot Scheme could be a major step forward, assisting confidence-building as Members prepared for
the Fourth Ministerial Conference.  Finally, he wished to pay tribute to all the parties involved in
setting up the Pilot Scheme, particularly LDCs whose active participation had been invaluable, as well
as the Director-General for his determination and support in turning around what had been a failing
programme.
75. The Director-General said that the IF had been successfully redesigned as a viable model for
"mainstreaming" trade into poverty reduction strategies, and as a mechanism for the delivery of trade-
related technical assistance within a coherent policy framework.  The last three years of experience
with the IF had demonstrated that a coherent policy framework was necessary for the delivery of
                                                     
10 The Decision was subsequently circulated in WT/L/400.WT/GC/M/65
Page 14
technical assistance in order to make efficient use of the resources.  The current success of the IF was
due as much to LDCs, as to donor Members, the six core agencies, and the WTO membership.  All
the key stakeholders had been supportive of the effo rts to reform the IF in adjusting their original
positions.  In expressing appreciation to the Chairman of the Sub-Committee for his report, he also
wished to pay tribute to the Government of the United Kingdom for the leadership it had assumed on
LDC matters by agreeing to Chair the Sub-Committee on LDCs following the meeting of
Development Ministers held in London on 19 March 2001, which had provided further support for the
IF's reform.  He recalled that in 2000 he had reported twice to the General Council on the IF.  The
first report on 17 July 2000 followed a meeting of the Heads of the IF core agencies held on 6 July
2000 where a joint statement had been adopted.  The second report on 15 December 2000 indicated
encouraging signs for the IF, which should materialize in 2001.  Following the adoption of the Pilot
Scheme on 12 February 2001, he was now in a position to provide a brief but specific report ondevelopments under the IF, focusing on three specific aspects:  (i) improvements in IF governance
arrangements;  (ii) the transformation of the IF into a funded mandate; and (iii) the implementation of
the Pilot Scheme that was underway, namely country selection and the adoption of a work
programme.
76. With regard to the improvements in relation to IF governance arrangements, a key
development was the establishment of the IF Steering Committee (IFSC) under the Pilot Scheme,
which had met on 15 March and 3 May 2001.  The functioning of the Steering Committee provided a
good model for the management of relations with other core agencies and stakeholders, by bringing
together parties with varied interests but which pursued a common purpose.  The IFSC was arranged
on the tripartite basis of donors, LDCs and core agencies, all participating equally.  He noted that theSteering Committee was not a WTO Committee, and that other core agencies would no longer be
subject to decisions and rules of procedure of one organization as was previously the case.  Inter-
agency satisfaction had been achieved, and in order to ensure transparency, parties who were not
members of the Steering Committee could still be observers in the meetings.  The two meetings held
so far had been practical, business oriented and successful.  On behalf of the General Council, hewished to pay tribute to Ambassador Henrik Rée Iverson (Denmark) who had been elected as first
Chairman of the Steering Committee and to his Vice-Chair, Ambassador Victor Lachesa (Lesotho).
In order to further improve and strengthen IF governance, the IAWG had been expanded to include
two representatives of donors and two LDC repres entatives, who would hold their positions on a
rotational basis.  Currently, they were the United Kingdom and the United States for the donors, and
Nepal and Tanzania for the LDCs.  Two meetings of the IAWG in its expanded mode had already
taken place and had shown successful results.  Participants had agreed on a set of criteria for selectingLDCs for the pilots, decided on the initial pilots, and recommended a work programme to the Steering
Committee, which had been adopted.  Beyond these specific results, the real value of the redesigned
IAWG had been the improvement in transparency in  agency-donor LDC relations.  In this respect, he
underlined core agencies' efforts to adjust and open up to other internal inter-agency meetings of the
IAWG.
77. Another significant achievement of the Pilot Scheme had been the conversion of the IF into a
funded mandate.  At the first and second Steering Committee meetings, nine donor Members, as well
as the UNDP and the World Bank, had pledged the sum of US$5.2 million into the IF Trust Fund.
Donor countries who had immediately contribute d were Canada, Denmark, European Communities,
Finland, Japan, Netherlands, Norway, Sweden and the United Kingdom.  Other pledges would beofficially announced at the Third UN Conference on LDCs (LDC-III Conferen ce) which would begin
on 14 May 2001 in Brussels.  Within the framework of the IF and the Pilot Scheme, the United States
had also funded a stakeholders meeting in Zambia, which was proceeding to integrate trade priority
areas of action into Zambia's PRSP.  The Pilot Scheme established the understanding that
complementary activities by bilateral donors could also be pursued within the IF.  Resources in the IFTrust Fund would be directed towards mainstreaming work, led by the World Bank, in LDCs.  He
expressed his sincere appreciation to donors for their efforts in making the IF effective andWT/GC/M/65
Page 15
operational.  Based on informal communications with the WTO Secretariat, he believed that more
contributions would be made to the IF Trust Fund which was managed by the UNDP.
78. The implementation of the Pilot Scheme was now underway.  In consultation with the other
five IF core agencies and taking into account comments by Steering Committee members, the World
Bank had developed a work programme which had been adopted by the Steering Committee on3 May 2001.  As with the IF, the work programme would be subject to constant refinements.  The
work programme outlined broad steps for mainstreaming trade into LDCs' national development plans
and strategies for poverty reduction, and contained the initial cluster of 15 countries to be considered
under the Pilot Scheme:  Cambodia, Djibouti, Eritrea, Ethiopia, Guinea, Lesotho, Malawi, Mali,
Mauritania, Madagascar, Mozambique, Nepal, Sao Tome and Principe, Yemen, and Zambia.  As a
result of inter-agency consultations, with advice from special representatives of donors and LDCs, the
Pilot Scheme would begin implementation with three LDCs, namely Cambodia, Madagascar and
Mauritania, as had been endorsed by the Steering Committee.  The World Bank would lead the
implementation of the Pilot Scheme, and the mainstre aming of trade integration strategy chapters into
the PRSPs of the pilot countries.  It had been agreed that the World Bank would lead IF missions to
the countries, and that other IF core agencies, including the WTO, would also be involved based on
the mission's objectives and the specific expertise required.  For instance, a joint mission involvingthe IMF, the World Bank and the WTO had been planned for June 2001 to prepare a trade integration
strategy for Mauritania, which was expected to be completed by the Fourth WTO Ministerial
Conference in November 2001.  The strategy would th en be incorporated into Mauritania's full PRSP
by the end of 2001, when a World Bank Consultative Group meeting had been scheduled.
Implementation was also taking account of the limited results, but largely unfulfilled trade-relatedtechnical assistance needs that had emerged from the five LDCs which had held stand alone trade
sector round tables under the "old" IF:  Bangladesh, The Gambia, Haiti, Tanzania and Uganda.  It had
been agreed in the Steering Committee that ITC, on behalf of the IF core agencies, would help the
five countries identify, prioritize and sequence their technical assistance projects, in support of
mainstreaming.  It had also been agreed that these projects would be submitted to the SteeringCommittee for funding from the IF Trust Fund, for a value not exceeding US$300,000 for each of the
five countries.  Other projects from these five round table LDCs, in support of trade integration,
would be submitted for funding to bilateral res ources, World Bank Consultative Groups (CGs), and
UNDP round table meetings.  He believed that such a solution effectively addressed this outstanding
issue under the "old" IF.  The Integrated Framework had been successfully redesigned to become a
potentially effective model for coordination among various actors with distinct but complementary
competencies and mandates for addressing the complex problems facing LDCs, within the
development vehicle of the PRSPs.  Finally, he wished to pay tribute to the WTO membership and the
Secretariat for the work undertaken in the last six months to agree to the six areas of WTO
"deliverables" for the LDC-III Conference.  In a letter addressed to Mr. Rubens Ricupero, Secretary-
General of UNCTAD, the Chairman of the Sub-Committee on LDCs and he had forwarded these
"deliverables" for circulation to all participants at the conference.  WTO Members and others agreed
that WTO "deliverables" to the LDC-III Conference would make valuable and concrete contributions
that would assist LDCs' integration into the multi lateral trading system and the global economy.  The
IF was one of the six areas where the WTO had met this challenge.  These contributions underscored
the WTO's commitment to support LDCs' efforts to alleviate poverty and accelerate their trade
development.  A further report by the Director -General on the IF would be made at the Fourth
Ministerial Conference in Qatar.
79. All representatives who spoke thanked the Chairman of the Sub-Committee and the Director-
General for their reports on the IF Pilot Scheme a nd for their efforts in bringing this process to
fruition.  The representatives of Tanzania, on behalf of LDCs
, the United States , European
Communities, Canada  and Madagascar  underlined the Director-General's personal involvement and
leadership as well as the Secretariat's work in ensuring that the IF would bring real benefits to LDCs.WT/GC/M/65
Page 16
80. The representative of Bangladesh recalled that his country was a member of the LDCs Group,
which had been established by the United Nations in the early 1970s.  The fact that the membership of
the LDCs Group had nearly doubled since its establishment was a recognition that LDCs had
structural handicaps and required special attention to develop speedily and become part of the global
economy.  After the IF's disappointing start, he appreciated the WTO membership's efforts to helpLDCs integrate into the global trading regime, and the renewed sense of enthusiasm it had shown in
introducing the Pilot Scheme.  This would enable countries such as Bangladesh and other LDCs to
develop their trade-related capacity and become more effective members of the international trading
regime.
81. The representative of Tanzania, on behalf of the LDCs
, said that the IF, which had been
established in 1997 to provide comprehensive trade-related technical assistance to LDCs, had not
produced the results that LDCs had expected and in this respect, the introduction of the Pilot Scheme
had given new impetus to the IF.  He thanked the WTO membership, donors and core agencies for
their collective commitment to the success of the IF fo r the benefit of LDCs.  As all the elements of a
successful scheme were in place, he was optimistic th at the IF would now lead to concrete results.  He
welcomed the improvement in the governance of the programme where LDCs were now adequately
represented in the tripartite partnership with donors and core agencies, both in the Steering Committeeand in the IAWG.  He thanked donors for their gene rosity in pledging the sum of US$5.2 million into
the Trust Fund.  He hoped that these contributions would be followed up soon and that more donors
would be forthcoming.  He also hoped that the work programme would be implemented speedily and
that results on the three LDCs initially selected for the Pilot Scheme would be obtained no later than
the Fourth Ministerial Conference to enable the extension of the scheme to other LDCs.  With regardto the five LDCs that had held round tables under the "old" IF, he hoped that the mainstreaming
exercise would be followed up shortly and that the rest of their proposed projects would be taken up
for funding by bilateral and multilateral resources.  While the IF deserved to be one of the six WTO
"deliverables" to the LDC-III Conference in Brussels, the WTO membership, donors and core
agencies should continue in their endeavour to improve the economies of LDCs and the lives of theirpeople.
82. The representative of the United Stated said that her country supported the IF and efforts,
such as the Pilot Scheme adopted by the Sub-Committee on LDCs, to improve it.  Mainstreaming
trade into LDCs development strategies was critical to their overall economic growth and integration
into the global economy.  The United States appreciated the World Bank's efforts to prepare an IF
pilot phase work programme, which was an important  step forward towards strengthening the IF, and
endorsed the pilot phase work plan set out in the programme, which laid out a sequence of activitiesthrough November 2001.  Her country was pleased that the initial pilot project countries had been
identified and that work had begun on the integration studies.  The United States also considered that
complementary activities by donors could make an important bilateral contribution to this multilateral
effort, and welcomed their inclusion as part of the Pilot Scheme proposal adopted by the Sub-
Committee on LDCs.  In support of the IF, the United States had been providing technical assistanceto help Zambia make trade a central part of its development strategy, and would continue in the future
to look at other countries to which such assistance could be extended.  As part of these activities, she
noted that the United States had helped sponsor a trade sector stakeholders meeting on 11 April 2001.
The IF, which was initially perceived as a difficult framework, had started to show some success
under the leadership of the Director-General.
83. The representative of the European Communities welcomed the introduction of the Pilot
Scheme as a further concrete step to help LDCs, together with other deliverables which he hoped
would emerge at the LDC-III Conference in Brussels .  He noted that member States of the European
Union, as well as the European Commission were fully committed to the success of the Pilot Scheme,
as they had made contributions to the Trust Fund and were likely to announce more at the LDC -III
Conference.  The IF Pilot Scheme was a real contribution to coherence and an example of effective
inter-agency cooperation, mainstreaming trade into poverty reduction strategies of the World BankWT/GC/M/65
Page 17
and the UNDP.  He noted that the progress which had been made in this important area should also be
an integrated element of the implementation debate.
84. The representative of India said that the reports by the Chairman of the Sub-Committee and
the Director-General indicated that several significant steps had been agreed upon and that the IF had
started moving forward.  He hoped that the programme set out would make the IF more effective thanit had been so far.  India welcomed the introduction of the Pilot Scheme and the selection of the first
three countries based on their commitment to mainstream a trade integration chapter into their
development processes.  He hoped that progress would be constantly monitored and expedited where
necessary, and that the scheme would be extended to other LDCs before the Fourth Ministerial
Conference.  Moreover, further measures should be taken to substantially increase LDCs' share of
trade in global trade.  His delegation wished to reiterate its support for the programme and looked
forward to participating actively in this important  common endeavour to extend assistance to LDCs.
85. The representative of Switzerland said that his country welcomed the recent measures taken
in the WTO to strengthen the IF for technical assistance to LDCs, which should allow for trade to play
its role as a motor of development.  Switzerland was prepared to join international efforts to develop
LDCs' trade capacity, and would thus make a contribution of US$500,000 to the IF Trust Fund as
would be confirmed at the LDC-III Conference in Brussels.
86. The representative of Japan said that his country shared the belief that trade was a vital means
for LDCs' economic development.  Japan had been extending a variety of technical assistance to
LDCs to enhance their trade-related capacities bilaterally, as well as multilaterally and had also
supported the IF from the outset.  Japan appreciated the concerted efforts made by donor countries,
LDCs and the core agencies to improve the functioning  of the IF over the past year, and welcomed the
launching of the new IF.  Japan also welcomed the selection of three LDCs as initial IF Pilot Scheme
countries on the basis of objective criteria, as well as the significant amount of official financial
contributions to the IF Trust Fund which had been announced.  As part of its commitment to the new
IF, Japan intended to make a contribution of approximately US$500,000 to the IF Pilot Scheme,
which would be officially announced at the LDC-III C onference in Brussels.  He hoped that the initial
IF Pilot Scheme would be implemented effectively and that through its success, the new IF would
gain trust as an effective machinery to help LDCs enhance their trade-related capacities, in order for
them to make full use of opportunities generated by trade liberalization under the multilateral trading
system.
87. The representative of Canada said that his country continued to support the IF and the
coherence agenda upon which it was built.  All interested parties, including the core agencies, should
continue to work together and in this respect, he welcomed the spirit of cooperation which hadtranspired from the last Inter-Agency Coordination meeting.  Canada was encouraged by the recent
development to operationalize the Pilot Scheme, and would also announce a financial contribution to
the Trust Fund at the LDC-III Conference in Brussels.
88. The representative of Norway said that his country attached great importance to the issue of
trade preferences for LDCs, as it had recently extended its preference scheme to allow practically all
products imported from LDCs to enter Norwegian markets free of customs and quotas.  Another
important aspect was to assist LDCs in taking advantage of the trading system and in this respect,
Norway's support for the new IF, which had found expression in a contribution of US$500,000 to the
Trust Fund, was based on the hope that the IF could serve the purpose for which it had been initially
established.  Norway welcomed the start of the Pilot Scheme's implementation and the selection of thefirst three pilot countries, and hoped that more LD Cs would be selected in the near future.  With
regard to inter-agency cooperation and coordinatio n between multilateral and bilateral assistance,
which were other important aspects of the IF, Norway  was pleased that steps had been taken for joint
action, and commended the World Bank for taking the lead with regard to the work in the Pilot
Scheme.  Norway also supported the new methodology and commended the Chairman of the Sub-WT/GC/M/65
Page 18
Committee for putting forward bold recommendations, which provided a good basis for moving
forward.  In order to terminate work before Nove mber 2001, all parties involved would have to show
flexibility.  Norway would on its part contribute to a comprehensive solution and future development
of the IF.
89. The representative of Madagascar said that the fight against poverty was one of his country's
main priorities.  It attached great importance to the IF as a vehicle in ensuring the development of
trade, which would enable LDCs to fully integrate the multilateral trading system.  His delegation
welcomed the measures taken by the six core agencies to inject greater dynamism in the functioning
of the IF, which had been a source of disappointment for LDCs.  Madagascar also welcomed the
creation of the Pilot Scheme and the establishment of the Trust Fund, more particularly as it was one
of the first three countries selected to benefit from the Pilot Scheme.  He thanked donor countries for
their voluntary contributions to the Trust Fund, as well as other countries that would announce theircontribution at the LDC-III Conference in Brussels.
90. The representative of Egypt said that his country supported the efforts to move forward with
the Pilot Scheme and the extension of its coverage, and wished to associate itself with the statements
made by Tanzania and Bangladesh.
91. The Chairman of the Sub-Committee on LDCs thanked delegations for their statements and
their expressions of good will, which was an encouraging sign for the Pilot Scheme.  However, there
was now a need to move forward in order to  reap concrete results as soon as possible.
92. The Director-General thanked delegations for their statements.  He recalled that more work
remained to be done and that he would report on the progress made at the Fourth Ministerial
Conference.  He appreciated Tanzania's concern that the countries which had held Round Tablesunder the old IF system should not be forgotten.  He also thanked delegations who had announced
further contributions to the Trust Fund.  The Director-General noted that this had been a remarkable
file for him since he had started to get involved at the beginning of 2000.  He had been surprised by
the time it had taken to focus on the task at hand.  The experience with the IF offered a lesson, as
Members prepared for the Fourth Ministerial Conf erence, to put forward ideas which they could
support with the necessary resources and level of commitment.
93. The Chairman said that while the concrete steps taken to improve the functioning of the IF
were encouraging, he agreed with the Chairman of the Sub-Committee on LDCs and the Director-
General that much work still remained to be done.
94. The General Council took note of the statements.
10. Work programme on electronic commerce
(a) Reports of the Councils for Trade in Goods, Trade in Services and TRIPS and of the
Committee on Trade and Development (G/C /W/158, G/L/421, S/L/ 74, S/C/13, IP/C/18,
IP/C/20, WT/COMTD/19, WT/COMTD/26)
(i) Issues of a horizontal character
(ii) Sectoral issues requiring further work
(b) Next steps in the General Council's work on electronic commerce95. The Chairman said that as a result of consultations, it appeared that the best way to move
forward and to avoid falling back into a proced ural debate on e-commerce was to look at the
subsidiary bodies' reports submitted to the General Council in July 1999 and December 2000.  He alsoWT/GC/M/65
Page 19
drew Members' attention to a communication by  MERCOSUR member States on "Horizontal and
Sectoral Issues Requiring Further Analysis"11, as well as a non-paper prepared by Singapore on
"Digitized Products"12, and invited these delegations to introduce their submissions first.
96. All representatives who spoke welcomed the opportunity to have a focussed and substantive
discussion on e-commerce.
97. The representative of Paraguay, on behalf of MERCOSUR member States , underlined the
importance that MERCOSUR attached to electronic commerce.  MERCOSUR had participated and
would continue to participate actively in the work programme on e-commerce drawn up in the WTO,
and MERCOSUR's submission had been prepared with the intention of making a positive contribution
towards reinvigorating the work programme and encouraging discussion amongst Members.  The
paper proposed a method to re-launch the work programme by identifying outstanding sectoral issues
which required further study in the relevant subsidiary bodies, as well as cross-cutting issues whichshould be analysed by the competent body, namely the General Council, as agreed by Members in the
Declaration on Global Electronic Commerce adopted at the Second Ministerial Conference on 20 May
1998 and in the Work Programme on Electronic Commerce adopted by the General Council on
25 September 1998.  The paper made a factual analysis of the present situation based on the
subsidiary bodies' reports.  The identification of sectoral and horizontal issues in this paper was notmeant to limit the scope or prejudge the final outcome of the analysis to be made by Members, but
rather to highlight the close relationship amongst the various issues.  In this respect, the issues
pertaining to the classification of the content of some electronic transmissions were particularly
important.  The development-related aspects of e-commerce also merited special attention, especially
since Members had identified development as a horizontal issue in the work programme.  The work inthe Committee on Trade and Development should be strengthened in order to respond to the issues
raised by developing countries and to foster a better understanding of the implications of e-commerce.
MERCOSUR's aim was to continue with the work programme in the most efficient way possible.  He
hoped that the document presented by MERCOSUR woul d help stimulate discussion and reinvigorate
the work programme, both at the sectoral and horizontal levels.
98. The representative of Singapore said that the General Council's examination of the subsidiary
bodies' reports was a necessary first step and was long overdue.  The subsidiary bodies had examined
the issues in their purview in accordance with the 1998 Work Programme on Electronic Commerce
and the outcome was reflected in their reports.  Although the General Council had not yet managed to
review the progress of the work in the subsidiary bodies or take up consideration of trade-related
issues of a cross-cutting nature, Singapore was nevertheless encouraged by the fact that Members
would now set aside the procedural debate which ha d slowed down the work in order to concentrate
on the substance.  The subsidiary bodies' reports indicated that there were a number of outstanding
issues that would require further work by Members.  Some of these issues were sectoral in nature, i.e.
relevant to the work of the subsidiary bodies, while others were of a cross-cutting nature.  Singapore
had itself identified the following sectoral issues.  In the Council for Trade in Services:  (i) distinction
between supply under modes 1 and 2;  (ii) classification and scheduling of new services in the contextof e-commerce;  (iii) constraints in fulfilling legitimate regulatory objectives and technical barriers to
trade faced by developing countries;  (iv) market access commitments on Internet access services and
networks;  (v) access to and use of public telecommunications transport networks and services for
service suppliers.  In the Council for Trade in Goods:  (i) market access for and access to products
related to e-commerce;  (ii) issue of valuation;  (iii) rules of origin issues;  (iv) standards in relation toe-commerce.  In the Council for Trade-Related Aspects of Intellectual Property Rights:  (i) protection
of copyright and related rights;  (ii) protection of trademarks;  (iii) new technologies and access to
technology;  (iv) enforcement of IPRs;  (v) other IPR areas.  In the Committee on Trade and
Development:  (i) effects of e-commerce on the trade and economic prospects of developing countries
                                                     
11 Subsequently circulated as document WT/GC/W/434.
12 Job(01)/55 of 26 April 2001.WT/GC/M/65
Page 20
including, inter alia , market access for enterprises, impact on domestic producers and effects on
competition in different sectors.  With regard to these sectoral issues, the General Council should
direct the subsidiary bodies to continue their work and report back to the General Council on their
progress.  The General Council itself should focus on issues of a cross-cutting nature and in this
respect, the issue of classification of electronically delivered or digitized products had been clearlyidentified in the subsidiary bodies' reports as an issue that would have an impact on the subsidiary
bodies' work and thus required resolution.  Other cross-cutting issues identified included jurisdiction,
technical assistance and the moratorium on customs duties.
99. Singapore's non-paper on digitized products had been submitted to the General Council with
the aim of stimulating discussion amongst Members on the classification of digitized products, and
contained views which had been previously expressed at the General Council meeting on 10 October
2000.  In essence, Singapore was of the view that digitized products should be treated as services andsubject to the disciplines of the GATS.  Since most  of the transactions involving digitized products
had been regarded as services, there remained a small number of such products, e.g. software and
books, for which the issue needed to be clarified in  view of the interchangeability of their contents
between the physical and digitized forms.  Singapore made a distinction between two separate stages
in the supply of digitized products.  The first stage was the transmission of the product over theInternet to the consumer, while the second stage was the immediate consumption or storage of the
product into a carrier medium for future consumption.  The act of transmission of the digitized
product over the Internet by the supplier should be considered a service.  The consumer's choice to
either consume immediately or dow nload and store a digitized product was immaterial to the supplier
since it was not part of his service, and was therefore not part of the transaction or trade.  The actualtransmission of the digitized product from the territory of one Member to the territory of another for
simultaneous and instantaneous consumption was an important element to consider, and thus the
relevant disciplines should be those of the GATS.  Treating all digitized products as services also
removed confusion regarding the distinction between the transmission of the digitized product and the
content of the digitized product itself.  The non-paper also noted that there was no classification ofdigitized contents per se  under the Harmonized System, and that conventional classification of such
products as goods had been based on their carrier media, e.g. floppy diskettes and compact disks.
Digitized contents were goods only in so far as they  were incorporated into a carrier media and in this
respect, digitized products stored in a carrier medium and those transmitted over the Internet could not
be considered as "like products" and similarly classified as goods.  Singapore recognized that there
could be real concerns that products, which currently enjoyed full market access and national
treatment, would lose such treatment if they coul d be delivered online and were therefore considered
services under the GATS approach.  This included products such as software, which when stored in a
carrier medium such as floppy disks and CD-ROMs had been traditionally treated as goods and were
accorded full national treatment and market access, i. e. zero tariffs, under the ITA.  Such products
should not be treated differently from their physical counterparts when delivered online.  One solution
could be an agreement amongst Members that products such as software would be accorded fullnational treatment and market access even if they fell under the category of services when delivered
online.  While in its view the GATS approach would provide the legal certainty on the treatment of
digitized products, Singapore wished to hear other Members' views on this matter.  With regard to the
next steps that should be taken in the General Council's work on e-commerce, the discussion clearly
indicated that Members would have to continue to debate on cross-cutting issues.  While Singaporehad identified classification as an important cross-cutting issue to be addressed, Members had also
raised other issues as being of a cross-cutting nature.  The present General Council meeting was
unlikely to fully address and resolve the issues raised, and while Singapore continued to support the
establishment of a horizontal task force to addres s cross-cutting issues, it recognized that there were
still divergent views among Members on this matter.  In order to move forward with the discussion, adedicated informal session of the General Council should be held in June 2001 to allow for a more
extensive debate on cross-cutting issues.  The outcome of this dedicated informal session could then
be reported to the General Council meeting in July 2001 where further directions could be given and
depending on the outcome of the session in June, another session could be held thereafter.  As theWT/GC/M/65
Page 21
discussion would continue on cross-cutting issues, Members should also be mindful of the
preparations for the Fourth Ministerial Conference and at some point in the preparatory process,
discuss what should be in the Ministerial Declaration regarding e-commerce.  Singapore noted that the
Ministerial Declaration should include the following elements:  e-commerce principles, including the
moratorium on customs duties and the application of WTO rules, and the work programme followingthe Fourth Ministerial Conference, including the structure for the pursuance of work on e-commerce
and outstanding issues to be resolved.
(a) Reports of the Councils for Trade in Goods, Trade in Services and TRIPS and of the
Committee on Trade and Development (G/C /W/158, G/L/421, S/L/ 74, S/C/13, IP/C/18,
IP/C/20, WT/COMTD/19, WT/COMTD/26)
(i) Issues of a horizontal character
(ii) Sectoral issues requiring further work100. The representative of Cuba
13 said that in the Declaration on Global Electronic Commerce
adopted at the Second Session of the Ministerial Conference in May 199814, WTO Members had
agreed to establish a work programme to examine all trade-related issues relating to global electronic
commerce, specifically taking into account the needs of developing countries.  As a result, the four
subsidiary bodies responsible for the work programme had identified a large number of obstacleshindering participation by developing countries in global electronic commerce, including, inter alia ,
problems of access, on a commercial basis, to modern technologies used in digital certification,
electronic transactions, data protection and the authentication of documents.  In this regard, the
Council for Trade in Services
15, within the framework of the wo rk programme, had examined the
need to increase developing countries' participation, inter alia , by the implementation of Article IV of
the GATS concerning the liberalization of market access in areas of export interest to developing
countries and regarding better access to technology, including technology relating to encryption and
security of transactions.  The Council for TRIPS16 was also clear as to the role to be played by
Article 7 of the TRIPS Agreement in encouraging technological development and facilitating access
to technology.  In spite of these provisions and th e recognition that international trade, viewed as a
vehicle for economic and social progress, must be governed by rules and procedures compatible with
the aims of Article XXXVI, Part IV of the GATT 1994, several developing country Members,
including Cuba, as well as other non-Member countries, had been prevented from participating in the
Global Project of the International Telecommunication Union (ITU) conducted in cooperation with
the Swiss company Wisekey as part of the ITU project "Electronic Commerce for Developing
Countries" (EC-DC), owing to the United States' po licy of imposing unilateral and coercive measures
in violation of the rules and principles of international trade.  The Global Project was conceived toafford developing countries access to information technologies so as to guarantee secure electronic
commerce.  These included servers, communication and data storage, hardware, as well as software
packages, including those pertaining to digita l signature and encryption techniques.  Wisekey
integrated technologies from 12 companies, includin g some originating in the United States or using
technologies generated in that country, for which re ason they were forbidden to transfer commercially
available information technology programmes or techniques to the group of developing countries
condemned by the United States.  This prohibition had been made public since the launch of the
Global Project in late November 2000 during the Wiseworld 2000 Conference, denying the
developing countries concerned the possibility of receiving a software package necessary for issuing
digital certificates, with the explanation that this was due to trade restrictions imposed by the United
States.  Yet the software programme being withheld used encryption techniques that were already in
                                                     
13 The statement was subsequently circulated as document WT/GC/W/435.
14 WT/MIN(98)DEC/2 of 25 May 1998.
15 S/L/74 of 27 July 1999.
16 IP/C/18 of 30 July 1999.WT/GC/M/65
Page 22
commercial use and which did not have the potential of being used for other purposes in relation, for
instance, to national security.  These restrictions had many negative consequences both for the
developing countries concerned and for international trade in general.  More specifically, they
represented a barrier to the extremely rapid progress of electronic commerce.  They prevented the
execution of secure transactions by internationally  recognized means, including the collection and
making of payments both in domestic and foreign trade.  This situation was accentuating and further
widening the digital gap between countries and was hampering international trade.  Technological
restrictions of this kind worked against the expansion of global electronic commerce and the creation
of new trade opportunities, an objective recognized  in the aforementioned Ministerial Declaration.  In
light of the above, she underlined the necessity and importance of eliminating across the board all
types of politically motivated restrictions, whet her commercial or technological, including those
affecting the purchase and free use of encryption technologies and hardware available on the market,as they constrained the development of global electronic commerce and the full integration of all
developing countries as an indispensable condition for reaching a multilateral agreement or decision
within the WTO framework in favour of unrestricted electronic commerce.
101. The representative of Japan said that the Gene ral Council played a key role in identifying and
examining the issues of a cross-cutting nature an d in providing guidance to the relevant subsidiary
bodies.  Japan agreed that Members should further examine previous reports submitted by the four
subsidiary bodies, and identify the cross-sectoral issues which needed to be reviewed.  Based on the
work done so far by the four subsidiary bodies within the established Work Programme on Electronic
Commerce, the following issues fell in the catego ry of cross-cutting issues that should be re-
examined:  (i) development;  (ii) jurisdiction;  (i ii) a standstill regarding custom duties on electronic
transmission;  (iv) competition;  (v) domestic regulation;  (vi) classification of digital contents.  The
General Council should also encourage the subsidia ry bodies to continue their examination of the
following items.  In the Council for Trade in Se rvices: (i) distinction between modes 1 and 2 with
respect to electronic delivery of services;  (ii) classification of the Internet access service in the
Schedule;  (iii) application of the Annex on Telecommunications to the Internet access services;(iv) scheduling of new services.  In the Council for Trade in Goods: (i) valuation issues;  (ii) market
access of the products related to e-commerce;  (iii) rules of origin issues.  In the TRIPS Council:
(i) relevant activities in other fora considerin g the progress of the digital network, i.e. WIPO
Copyright Treaty and WIPO Performances and Phonogra ms Treaty;  (ii) international jurisdiction and
applicable law;  (iii) use of digital and telecommunications technologies in the management of
intellectual property rights for the benefit of developing countries;  (iv) international cooperation
under Article 69 of the TRIPS Agreement in the digital environment.  In the Committee on Trade andDevelopment: (i) human resources development;  (ii) case studies for innovative solutions and success
stories;  (iii) the relationship of developing country enterprises to e-commerce.  Japan noted that this
list of sectoral issues was not exhaustive and that it was prepared to join in the discussion of other
cross-sectoral issues.
102. With regard to the written submissions made at the present meeting, Japan wished to study
further the paper by MERCOSUR member States, a nd to make preliminary comments on Singapore's
non-paper.  Japan appreciated Singapore's efforts in preparing a concise and comprehensive paper
which addressed the relationship to GATS, GATT, TRIPS and ITA from a horizontal perspective.
However, while Singapore had distinguished two categories for electronic transmission of digital
contents, namely the transmission of products, and their consumption or storage for examination,Japan noted that it was also possible to examine the electronic transmission of digital contents from
the point of view of the transmission as such and of its contents, and wished to further discuss these
aspects at a later date.  Japan was also of the view that core GATT principles of most favoured nation,
national treatment and the general prohibition of quantitative restrictions should also be applicable to
the digital contents, even if the electronic transmission of the digital contents were to be classified as aservice.  From this viewpoint, Japan would be prep ared to discuss further the suggestion contained in
paragraph 16 of the Singapore paper.WT/GC/M/65
Page 23
103. The representative of Hong Kong, China said that while it should be accepted that not all
issues of relevance to e-commerce may be dealt with in the WTO given its existing competence, the
fact that all relevant WTO bodies had had a work programme on e-commerce underlined the
importance that the WTO attached to this subject.  Since the Seattle Ministerial Conference, a number
of issues remained to be tackled, including classification, the need to inject further impetus to thework programme in the subsidiary bodies, the status of the moratorium on the imposition of customs
duties on electronic transmissions, as well as the need to ensure the existence of a level playing field
and access to developed country markets for developing country producers and suppliers.  Although it
seemed unlikely that Members would reach similar views on these questions, it was timely for
Members to identify horizontal issues and be prepared for subsequent substantive discussions.  In this
respect, the Singapore non-paper on classification was a good reminder of the need for Members to
engage in this debate.  While Hong Kong, China did not entirely agree with some of the detailedanalysis contained in the non-paper, it would offer its views on this question in the near future.
Moreover, further impetus should be injected into  the work in the subsidiary bodies and for this
purpose, his delegation intended to make a submission to the Council for Trade in Services on
possible additional commitments on some basic regulatory principles which could be developed to
promote e-commerce.  The ongoing services negotiations provided an opportunity for the WTO totake a leading, albeit restricted role, in promo ting an environment favourable to e-commerce, which
would lead to greater use of e-commerce by both the business community and consumers.  His
delegation encouraged other Members to make submissions to the subsidiary bodies in order to
stimulate discussion therein and to identify cross-cutting issues that required further work.  Finally,
Members needed to arrive at a common view on the status of the moratorium on the imposition ofcustoms duties on electronic transmissions.
104. The representative of India said that although India wished to offer some comments on
submissions by Members, it hoped that the General Council would take them into consideration in a
detailed manner in a next round of discussions.  The reports from the subsidiary bodies reflected the
importance of electronic commerce for all Members.  India believed that the rapid expansion ofelectronic commerce constituted a major opportunity for trade and development by helping
developing countries and their enterprises reach new levels of international competitiveness and
participate more actively in the emerging global information economy.  This could be a useful subject
for discussion in the Committee on Trade and Development.  However, as it had been noted in some
of the subsidiary bodies' reports, it could not be assumed that the benefits of electronic commerce
would automatically flow to developing countrie s or that developments in this area would be
equitable.  India hoped that Members could gain collectively a better understanding of all trade-related aspects of global electronic commerce in the General Council, aimed at bridging this digital
divide.  With regard to the reports submitted by the TRIPS Council, she noted that electronic
commerce embraced a complex amalgam of technologies, infrastructures, processes and products, and
that trade conducted electronically generally had a relatively high intellectual property content.  The
nature of the "product" had elicited a substantive discussion in both the Council for Trade in Servicesand the Council for Trade in Goods, in particular in the context of the classification of electronic
transmissions, which raised the question as to wh ether electronic transmissions or digitized products
sent electronically via networks, instead of physically via a carrier medium, should be characterized
as goods, services, intellectual property or something else.  Members' views on this matter had
diverged so far.  Members had identified five categories of "products" which raised questions of most-favoured-nation treatment, national treatment and "likeness" of the products, depending on whether
the provisions of GATT or GATS were presumed to apply:  printed matter, software, music and other
media, film, and video games.  The divergence of views on this matter was also evident in other
international organizations.  For instance, in relation to software, the WCO had decided not to
introduce three new Harmonized System codes to classify software in its HS2002 revision as had beenoriginally foreseen, as Members disagreed on this question.  In its non-paper, Singapore had also
highlighted that content had not been classified, and had sought to propose a practical solution to the
classification debate by suggesting that the GATS approach would be the most appropriate for theWT/GC/M/65
Page 24
treatment of digitized products.  India wished to st udy further the implications of this approach, and
hoped that the General Council would revert to the subject.
105. Intrinsically linked to the classification issue was the definition of "electronic commerce".
While the Work Programme on Electronic Commerce had been adopted on the basis of a working
definition of "electronic commerce", it would be useful for Members to see if such definition could beprogressed with a view to resolving the classifi cation issue.  Another issue intrinsically linked to
classification was the issue of technological neutrality of the TRIPS Agreement, GATS and the
GATT.  It had been suggested by some delegations that the basic principles of intellectual property for
instance had survived rapid technological change and that the language used in the TRIPS Agreement
was generally neutral in relation to technology.  A counter argument had been presented that growth
and technological development of e-commerce challenged the protection and use of intellectual
property rights, and that the TRIPS Agreement had been negotiated before the implications of globaldigital networks for the protection and enforcement of intellectual property rights had been an issue
before the international community.  Similar arguments had been made in the Council for Trade in
Services, highlighting the emergence of a new range of services such as Internet access services,
network and data security services, and the use of the Internet as a channel for distribution services,
even when the delivery to the consumer could subsequently be in non-electronic form.  In this respect,she noted the importance of discussing the emergence of new services as a cross-cutting issue.  In the
GATS context, three considerations could be relevant.  First, the classification of services under
GATS, based on the definition provided by the United Nations Central Product Classification
(UNCPC) was sometimes not technology neutral given that the means of delivery was mentioned.
Second, the negotiations on basic telecommunications specifically reached an understanding on theprinciple of neutrality to clarify the coverage.  In this respect, the legal underpinnings of the
Reference Paper would need to be studied further.  Third, a moratorium on duty-free electronic
commerce itself served to undermine the notion of technological neutrality by treating some electronic
delivery of products differently from other modes of delivery.  For instance, the exemption of one
mode of delivery from taxation while others continued to be taxed would entail both a positive trade-creating aspect and a negative trade-diverting aspect, and Members should collectively assess its
impact on traditional transactions and market places, as well as developing countries' revenue
capacity.  The key issue to note in the reports, in respect of each of these aspects, was that these were
inter-linked matters which would require additional analysis or debate, taking into account
developments in other international bodies.  With regard to new technologies and access to
technology, India had already expressed concerns on transfer and dissemination of technology as an
unachieved objective in the TRIPS Agreement which wo uld also have to be addressed in the context
of electronic commerce.  Enforcing effective competition for a level playing field, especially for small
and medium enterprises, would also have to be addressed, since deregulation and liberalization alone
could not ensure the transfer and dissemination of technology, as had been evidenced in other areas of
business.  The development dimension of electronic commerce, while a horizontal issue, would also
need to be integrated in the TRIPS Council's di scussions.  The outstanding cross-cutting issues
identified in the TRIPS Council, and sectoral issues which required further work in the TRIPS
Council were contained in paragraphs 4, 6 and 7 of the TRIPS Council's report on 4 December 2000.
17
She also noted that for India, all the issues set out in the subsidiary bodies' reports required a moresubstantive debate.
106. With regard to the work in the Council for Trade in Services, she noted that the issues of
electronic delivery of services falling within the scope of GATS, technological neutrality of GATS,
and application of all GATS provisions, had already been set out in paragraph 4 of the 31 March 1999
report and paragraphs 4 and 24 to 26 of the 27 July 1999 report of the GATS Council.  The Council
for Trade in Services' reports had highlighted that domestic standards and regulations could be
undermined by the technical underpinnings or favourable treatment accorded to electronictransmissions.  The Internet and electronic commerce integrated domestic and global markets and
                                                     
17 IP/C/20.WT/GC/M/65
Page 25
blurred the borders between domestic and trade policies.  As a general principle, in the areas of
domestic regulation and protection of privacy and public morals and prevention of fraud, a balance
should be maintained between Members' right to regulate, and the need to ensure that domestic
regulatory measures did not constitute unnecessary barriers to trade, and that transparency in their
application was maintained.  A similar balance should also be secured, through collectiveappreciation, to ensure that monopolies and restrictive business practices did not present an obstacle
to electronic commerce, particularly in the access to and use of distribution channels and information
networks, including the Internet, and public telecommunications transport networks.  This would
ensure that developing countries' small and medium enterprises could participate in electronic
commerce and benefit from its growth.  As far as outstanding work in the Council for Trade in
Services was concerned, the Council's reports listed both cross-cutting and technical issues specific to
the Council's work.  While discussions on these issu es in the Council for Trade in Services had been
highly educative, more intensive discussions were required in order to forge a consensus view among
Members.  With regard to the work in the Council for Trade in Goods, India agreed with
MERCOSUR member States that work on issues such as customs valuation and rules of origin would
benefit from progress in the discussion on classification.  In its submissions to the Council for Trade
in Goods, India had highlighted that international standardization should be relevant to electroniccommerce, and that measures and procedures for the establishment and application of standards
should not become trade barriers or an impediment to the competitive development, transfer and
dissemination of technologies related to global information infrastructure.  The global information
infrastructure should allow interconnectivity and interoperability of domestic information
communications structures, as any mismatch would indirectly breed monopolies and cartels in theglobal markets and would restrict participation of developing countries entities.  Other issues related
to this subject which required further discussion were set out in paragraph 8.1 of the 26 July 1999
report of the Council for Trade in Goods.  Moreover , other issues relevant to the work of the Council
for Trade in Goods were contained in paragraphs 3 and 4 of the 24 November 2000 report.  She
recalled that her country attached particular importance to the development dimension of electroniccommerce, and noted in this respect that the summary report on the discussions at the Seminar on
Electronic Commerce and Development held on 19 Fe bruary 1999 was a useful tool to prepare the
first stage of discussions in the CTD.  UNCTAD, which had formulated its work programme from a
developing-country perspective, had also raised in teresting facts and studies.  Although the overall
conclusion which could be drawn from these sources was that developing countries' share in global
electronic commerce was relatively small, India believed that this form of trade promised
considerable potential benefits to developing countries' economic development, and hoped thatthrough discussions in the WTO, Members could realize this potential for developing countries.  India
strongly supported the intensification of work on the issues identified by both the CTD in Section E of
its 15 July 1999 report, and the General Council.  Finally, she noted that Singapore and Japan had
raised issues of a cross-cutting and sectoral nature which required further discussion in the General
Council and the relevant subsidiary bodies as appropriate.
107. The representative of Hungary said that the importance and opportunities created by the
Internet revolution and technological developments in the field of telecommunications and computer
technology could not be overemphasized.  However, in his view, e-commerce was neither a new form
of trade nor a sector in itself, but simply trade with electronic means, and this should be taken into
account in the conduct of the work programme.  In addition to providing valuable information, thereports of the four subsidiary bodies had shown convergence on a number of issues, including the
application of WTO rules to trade with electronic means.  Members had identified so far the
participation of developing countries in e-commerce as a horizontal issue, and the Committee on
Trade and Development was best placed to focus on this issue.  With regard to the issue of
classification, Hungary shared the view that electronic supplies consisted solely of services, and itthus welcomed Singapore's non-paper which presented arguments in this respect.  However, given
that certain Members did not share this opinion, Hungary was prepared to continue the discussion on
this issue.  The subsidiary bodies' reports also indicated that in certain areas such as TRIPS and
services trade, there were specific WTO relevant issues that should be further discussed.  The mostWT/GC/M/65
Page 26
important issues were, in the TRIPS Council: (i) trademarks and patents;  (ii) copyrights and related
rights;  (iii) the link between Internet domain names, and trademarks and geographical indications.  In
the Council for Trade in Services, the issues were: (i) classification;  (ii) telecommunication-related
issues;  and (iii) the application of customs duties on electronic transmissions and a possible
moratorium on them.  Furthermore, a number of e-commerce-related issues identified in thediscussions fell outside of the purview of WTO rules:  electronic signatures, jurisdiction issues,
electronic contracts and some taxation-related problems.  Hungary was not convinced that the WTO
was the right forum to discuss these issues and it shared the view that the membership should
concentrate first on the issues that were directly relevant to the WTO.
108. The representative of the European Communities said that the subsidiary bodies had reached a
high level of agreement on a range of issues, and had identified areas which required further work.
The General Council should note the level of agreement on certain fundamental issues, such as thefact that the WTO Agreements were applicable to e-commerce.  In this respect, he recalled that
e-commerce was simply a way of carrying out trade using electronic means.  The subsidiary bodies'
reports contained other essentially consensual items which should also be endorsed.  The EC believed
that further work should concentrate on a limited number of issues, which were either already on the
agenda of the various bodies involved, were strictly related to the use of electronic means to carry outtrade, and for which progress could be made on the basis of concrete submissions by Members.  With
regard to horizontal issues, the EC believed that developing countries' participation was horizontal in
nature and that the CTD should keep its leading role on this issue to identify means by which
developing countries could seize the opportunities created by the use of information technology and
increase their participation in world trade.  The EC therefore invited Members to look at three lines ofaction on this issue, all of which were complement ary.  First, Members could work on examples by
analysing concrete experiences of developing country Members, in particular those presented at the
joint WTO-ITC seminar in November 2000.  Second, in view of promoting the use of information
technology, the approaches taken by different Members should be studied.  In this context, the CTD
would organize a seminar on the issue and the EC was prepared to share its own experience in thisarea, notably regarding its " eEurope" initiative.  Third, with regard to the role of technical assistance,
the EC was prepared to share its experience in providing assistance and using the advantages of
information technology for promoting development in its assistance to third countries.
109. The issue of classification had been considered by certain Members as a horizontal issue, as it
had been raised in both the Council for Trade in Services and Council for Trade in Goods.  However,
in the Council for Trade in Services, certain Me mbers including the European Communities, as well
as the Secretariat, had provided strong arguments supporting the view that all electronic suppliesconsisted of services.  This approach had also been adopted by Singapore in its non-paper.  In the
Council for Trade in Goods, no comparable arguments had been presented, and the Council had
reached the conclusion that it could not make further contributions on issues such as customs
valuation or rules of origin, unless it could be shown that electronic supplies were goods.  As no
Member had made any submission to this effect so far, the EC considered that the issue ofclassification was not horizontal in nature.
110. The representative of Australia said that his country's position had not changed since the
General Council meeting in December 2000, although its thinking and sense of urgency now reflected
the fact that the Fourth Ministerial Conference was drawing closer.  He welcomed the submissions by
MERCOSUR member States and Singa pore, and would revert to discussing them at a later stage.
Australia proposed that the General Council affirmed that the subsidiary body reports and discussions
to date had indicated four areas of common understanding.  First, existing WTO rules appeared to
apply to e-commerce, and ongoing work should identify any gaps that existed, and if so, how such
gaps should be addressed.  Second, WTO Members supported a minimalist, industry-led regulatory
approach.  Third, the WTO should assist developing countries in understanding the potential ofe-commerce as a trade facilitation tool, devoting partic ular attention to access to infrastructure and
technology.  Fourth, Members should not impose measures that would unnecessarily restrict theWT/GC/M/65
Page 27
development of e-commerce.  Turning to cross- cutting issues, i.e. issues which spanned the
competence of more than one WTO subsidiary body, and in some cases of the WTO, Australia had
identified four issues of a cross-cutting nature in the subsidiary bodies' reports:  (i) the classification
of digital products, for example software, as goods, services, or intellectual property;  (ii) technical
assistance, including access to infrastructure and technology;  (iii) competition issues, in particular,constraints on the development of e-commerce due to concentration of market power;  and (iv) the
moratorium on customs duties on electronic transmissions, as it would require some attention by the
General Council prior to the Fourth Ministerial Conference.  While a number of delegations,
including Singapore and Japan, had raised jurisdiction as another cross-cutting issue, Australia was
not convinced that this was indeed a cross-cutting issue, and would welcome further study to
determine its relevance in the WTO context.  Based on the reports submitted to the General Council, a
number of key elements required further work in each subsidiary body.  In the Council for Trade inServices, Australia had identified:  (i) the scope of the GATS with respect to electronic delivery of
services i.e. the distinction between modes 1 and 2;  (ii) domestic regulations, standards and
recognition;  (iii) protection of privacy and public morals, and the prevention of fraud;  (iv) access to
and use of public telecommunications transport networks and services;  and (v) classification issues in
relation to the services sectoral classification list.  In the TRIPS Council, it had identified:  (i) cross-border transactions involving intellectual property rights that were not necessarily identifiable as
either goods or services;  (ii) intellectual property rights enforcement procedures at the border;
(iii) the implementation of Article 69 of the TRIPS Agreement;  (iv) the use of patents in relation to
software and business models;  (v) accessing new technology and administering intellectual property
rights;  (vi) recognition of WIPO Copyright and Phonograms Treaties;  and (vii) trademarks,including Internet domain names.  In the Council fo r Trade in Goods, it had identified:  (i) valuation
issues arising from application of the Agreem ent on Implementation of Article VII of the GATT
1994;  (ii) rules of origin issues;  (iii) standards in relation to e-commerce;  and (iv) application of the
Agreement on Import Licensing Procedures.  In the Committee on Trade and Development, it had
identified:  (i) innovative solutions and success stories documented as case studies;  (ii) the impact ofe-commerce on domestic producers in specific sectors;  (iii) substitution effects of e-commerce trade;
and (iv) effects of inter-firm relations in e-commerce.  With regard to the next steps in the General
Council's work, he noted that given time and resource constraints, the General Council should decide
at the present meeting on the most efficient way forward by taking two particular courses of action.
First, the General Council should direct the subsidiary bodies to resume their work on e-commerce,
focusing only on outstanding issues, and reporting back to the General Council in a timely fashion if
any of these issues required Ministerial consideration.  Second, Members should agree on a date for adedicated session on e-commerce in June 2001, preferably back-to-back with the Committee on Trade
and Development and United Nations Economic Comm ission for Europe (UN/ECE) seminars.  In the
course of this dedicated session, Members should examine in depth the cross-cutting issues identified
at the present meeting, including the WTO's role and the applicability of WTO rules to e-commerce,
and should also identify relevant elements for consideration at the Fourth Ministerial Conference,including a forward work programme that Ministers could endorse.
111. The representative of Korea said that he hoped that the discussions in the General Council
would help make tangible and constructive progress in the proper accommodation of e-commerce
under the WTO umbrella.  In the context of the new digital environment, discussions in the WTO
should be based on three principles.  First, considering the impact of e-commerce on internationaltrade, Members should ensure that unnecessary restrictions did not undermine the dynamic
development of e-commerce.  Second, the discussions should continue on maximizing the benefits of
trade by promoting and encouraging e-commerce.  Third, Members should seek ways of extending
trade benefits generated by the new digital environment to all Members.  Korea welcomed the
General Council's first step of re viewing the subsidiary bodies' reports in order to identify horizontal
issues, assessing the results of discussions in each body, and addressing additional issues to be further
discussed.  Korea also appreciated the subsidiary bodies' efforts to verify major issues and evaluate
prominent elements of e-commerce.  However, not much progress had been made since the subsidiary
bodies had reported to the General Council in July 1999, namely due to cross-cutting issues such asWT/GC/M/65
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classification, jurisdiction, customs duties, competition and development.  In this context, Korea had
supported addressing these cross-cutting issues in an ad hoc task force, but considering the importance
of accommodating these issues to WTO rules in a proper and timely fashion, Korea did not object to
the idea of holding a special session dedicated to e-commerce to pursue the General Council's
discussion.  This dedicated discussion could enable Members to address more technical issues throughthe participation of private sector experts.  In addition, the General Council should provide guidance
to subsidiary bodies regarding continued discussions on issues requiring further work.  In preparing
for the Fourth Ministerial Conference, Members should accelerate these important works under the
new mandate of the General Council.
112. The representative of Panama thanked MERCOSUR member States and Singapore for their
submissions introduced at the present meeting.  The document prepared by MERCOSUR member
States was useful in identifying horizontal issues which could potentially be dealt with in the GeneralCouncil.  Although it welcomed Singapore's cont ribution as a useful tool for the discussion on
horizontal issues that would be identified by Members, Panama was not convinced by the arguments
presented therein, which seemed to confuse the service with the product, or the transmission with the
object being transmitted.  Members could engage at a later stage in a substantive discussion on this
matter.  The reports had been useful in underscoring the complexity of this issue, although none of thesubsidiary bodies had formally agreed on any specific issue as being horizontal in nature and the
General Council should therefore identify itself the horizontal issues on the basis of the subsidiary
bodies' reports.  However, not every subject relating to e-commerce was relevant to the WTO's work,
and thus Members should be careful in selecting the issues for consideration.  Panama considered, for
example, that issues such as jurisdiction and appl icable law should not be dealt with in the WTO.
Furthermore, issues of a political nature, including for example the moratorium on the imposition of
customs duties on electronic transmissions, should be covered in the course of the preparatory process
for the Fourth Ministerial Conference.  Turning to horizontal issues, Panama identified the following
issues:  (i) classification;  (ii) domestic regulation and recognition, which also included related issues
such as competition and transparency;  (iii) the definition of an "import", which was relevant in bothtrade in services and goods;  (iv) trade facilitation;  (v) market access;  (vi) development issues;
(vii) rules of origin;  (viii) the issues of "likeness";  and (ix) technological neutrality.  Members could
start with a shorter list containing the issues that had been identified by the greatest number of
delegations.  Panama also recalled the General Council's mandate under the work programme on
e-commerce, contained in paragraph 1.2, in relation to the imposition of customs duties on electronic
transmissions.  With regard to subsequent work by the subsidiary bodies, which would be further
guided by the General Council's consideration of horizontal issues, Panama noted the followingissues.  First, the revision of the decision on the valuation of carrier media could be an issue for the
Council for Trade in Goods.  Second, the distinct ion between modes 1 and 2 was an important issue
for the Council for Trade in Services.  In this respect, Members could look at the possibility of
considering e-commerce as a fifth mode of services delivery under GATS, which would allow
Members to get around the problem of distinguishing between the first two modes.
113. The representative of the United States said that her country supported the continuation of the
work programme consistent with the 1998 mandate and the General Council's work programme, and
saw value in the subsidiary bodies' examination of issues related to this particular area of trade and
their reporting back to the General Council.  The work programme had performed a useful role in
educating delegations about the benefits of e-commerce and clarifying how the WTO rules applied.The United States also supported the notion of an ad hoc task force to help the General Council
engage in further discussion on cross-cutting matters.  Moreover, Members would have to discuss
objectives for the Fourth Ministerial Conference and try to define the context in which work on
e-commerce should continue.  Therefore, Member s should continue to work from the premise,
reflected in the statement by the General Council's Chairman in December 2000, that  (i) e-commercefell within the scope of existing WTO agreements;  (ii) in keeping with WTO's trade liberalizing
goals, Members should avoid unnecessary measures that hindered the growth and development of
e-commerce;  (iii) e-commerce had a vital role to play in enhancing development which wasWT/GC/M/65
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consistent with overall WTO objectives.  These principles had long been supported by the
membership and could form the basis for any Ministerial Declaration.  From the subsidiary bodies'
reports, the following issues had been identified as possible cross-cutting issues, i.e. issues which
could potentially impact on all four subsidiary bodies and which should be addressed in an ad hoc
horizontal task force under the auspices of the General Council.  First, the main issue of a cross-cutting nature was the classification issue, i.e. whether e-commerce should be classified as a good
subject to GATT or a service subject to GATS.  Additionally, there were certain elements of
intellectual property that could implicate the TRIPS Agreement.  Contrary to a view expressed by
another delegation, the US was not aware of any determination by the Secretariat that all electronic
transmissions were services.  The US agreed that the supply of services fell under the GATS and most
transmissions.  In any case, this was a Member driven organization.  While the transmission of
various products could be most accurately characterized as a service, the products themselves werenot consumed in their transmission but rather retained a permanence analogous to goods.  Therefore,
it was not accurate to classify all electronic transm issions as services simply because the transmission
was deemed to be a service.  Members should avoid a premature classification of certain digital
products before they had the chance to fully explore the implications of such classification and assess
its impact on this dynamic marketplace.  Given the broader reach of WTO disciplines accorded by theGATT, there could be an advantage to a "GATT versus GATS" approach to such products which
could provide for a more trade liberalizing outcome for e-commerce.  The question was not whether
WTO rules applied to e-commerce, but rather how such rules applied, and this was another way in
which the classification issue could be examined.  The United States was not seeking to develop new
rules on e-commerce, but rather to look at how the existing rules applied to e-commerce.Development or capacity-building was another issue that could be horizontal in nature.  The use of a
telecommunications infrastructure was critical for the expansion of e-commerce in the developing
world.  E-commerce affected both trade in goods and in services, and exploring ways to help develop
trade in these areas was an important cross-cutting issue.  The United States was not convinced that
certain domestic regulatory issues should be considered in the WTO work programme one-commerce, in particular issues such as privacy, jurisdiction, competition policy, which were best
dealt with outside of the multilateral trade organization and which had been in any case the object of
significant work in other fora.
114. The United States supported continuing the work programme in the four subsidiary bodies,
consistent with the 1998 mandate and the General Council work programme to be reviewed by
Ministers.  The subsidiary bodies' reports submitted to the General Council on the status of their work
on e-commerce indicated areas where delegations had identified the need for further work one-commerce.   The United States considered the following issues as requiring further work or being of
a cross-cutting nature.  In the Council for Trade in  Services, issues related to development, customs
duties and classification of certain electronically-delivered products had been identified as cross-
cutting issues.  Sectoral issues included those mentioned by MERCOSUR member States and
Singapore at the present meeting, as well as certain competition issues.  Delegations also wanted todiscuss what in fact constituted a cross-cutting issue and had sought guidance from the General
Council.  Other issues that the Council for Trade in  Services had reported to the General Council as
being sectoral issues requiring further examination included: the scope of GATS with respect to the
electronic delivery of services; domestic regulatory issues; protection of privacy; Annex on
Telecommunications; and applicability of the Basic Telecommunications Reference Paper to theInternet.  The United States did not support the ex tension of the Reference Paper to the Internet, nor
did it define basic telecommunications as including the Internet or considered the Internet to be a
public telecommunications transport network and service.  By doing so, Members could undermine
the principle that domestic regulatory measures did not constitute unnecessary barriers to trade.  In the
Council for Trade in Goods, classification of the content of certain electronic transmissions was
identified as a cross-cutting issue.  Other issues discussed from a sectoral perspective included:
market access for and access to products related to  e-commerce; valuation issues arising from the
application of the Agreement on Implementation of Article VII of the GATT 1994;  issues arising
from the application of the Agreement on Import Li censing Procedures; customs duties;  standards;WT/GC/M/65
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rules of origin issues;  and classification.  The United States supported the Goods Council's continuing
work in this area in light of treatment in the goods context, the 1998 mandate and the General Council
work programme.  The Internet had been a valuable tool for countries exporting goods, and examining
ways in which the Internet and e-commerce could further facilitate trade in goods would be useful.  In
relation to the work in the Council for Trade-Related Aspects of Intellectual Property Rights, sectoralissues included: enhancing the existing protections of TRIPS to incorporate the WIPO Copyright and
Performance and Phonograms Treaties and the general applicability of the TRIPS Agreement on-line.
The maintenance of rights under the TRIPS Agreemen t for all relevant products in the digital realm
was important for all Members, and other issues such as domain names were being examined in other
international fora and were also the subject of considerable domestic debate.  The TRIPS Council had
also noted that the General Council was the appropriate forum to determine whether a task force
should be established.  In relation to the work in the Committee for Trade and Development, shenoted that many development-related aspects of electronic commerce were in general not confined to
one area of WTO work, but related to goods, services, as well as intellectual property and their
development dimension.  There was a significant amount of work that remained to be done with
regard to developing-country issues and e-commerce and in this respect, she recalled that the United
States remained supportive of the establishment of a non-negotiating ad hoc task force under theGeneral Council to examine cross-cutting issues in an educative manner.  The United States'
submission on the Work Programme on Electronic Commerce dated 12 February 1999 had also raised
numerous questions on the various aspects that some delegations could raise as issues worthy of
further study.
115. The United States appreciated the submissions made by MERCOSUR member States and
Singapore.  Although Singapore had made an inte resting contribution with its non-paper on digitized
products, the United States did not share its conclusion that since electronic transmissions were
generally subsumed into services, the GATS approach was most appropriate in treating digitized
products.  The issue of classification of electronic transmissions and particularly digital products had
broad ramifications concerning how WTO disciplines applied, and more work needed to be done inthis area.  A premature and arbitrary classification of digital products as services could result in a net
lessening of market access, as products traded across borders were increasingly distributed
electronically.  The WTO should continue to examine market access and national treatment for digital
products with a view toward hallmark of trade liberalizing goals of the GATT and the WTO.
116. The representative of Venezuela, also on beha lf of Chile, Costa Rica, Colombia, Ecuador, and
Peru, recalled that e-commerce had been under discussion in the WTO since the Second Ministerial
Conference held in Geneva in May 1998, where Ministers had given to the General Council the
mandate to establish a comprehensive work programme to examine all trade-related issues relating to
global electronic commerce.  The development of that programme had been useful to Members in
beginning to explore the relevance and applicability of WTO rules and disciplines to e-commerce, and
had helped them identify two categories of issues:  sectoral issues, pertaining to trade in services,
trade in goods, trade-related aspects of intellectual property rights and trade and development, andcross-cutting or horizontal issues.  Given the still imprecise nature of electronic commerce and its
possible implications on all aspects of trade, Memb ers had agreed to examine in parallel the elements
of the work programme in four subsidiary bodies, namely the Council for Trade in Services, the
Council for Trade in Goods, the Council for Trade-Related Aspects of Intellectual Property Rights
and the Committee on Trade and Development.  In July 2000, Members had agreed in the GeneralCouncil to reinvigorate the work done so far on electronic commerce by the various subsidiary bodies,
and to invite the responsible subsidiary bodies to continue their discussions on the basis of the latest
reports submitted to the General Council, as well as  to identify horizontal issues.  In spite of this
mandate, no substantive progress had been made in deal ing with these issues over the past year owing
mainly to differences amongst Members over matters of procedure for dealing with horizontal issues,while in other fora such as other international organizations and the private sector, work had been
underway for some time.  To help further the study of electronic commerce and given its importance
in Members' development policies, the General C ouncil should work towards the holding of a specialWT/GC/M/65
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meeting on electronic commerce in June 2001, with the participation of experts in the field.  Such a
meeting would aim at taking a joint, in-depth look at the horizontal issues identified by Members, so
that its deliberations would feed into future discussions in the General Council and in the various
subsidiary bodies.  The main issues to be tackled at this special meeting should be:  (i) classification;
(ii) the relationship between traditional forms of commerce and electronic commerce;  and(iii) development-related issues, including the fisc al impact of electronic commerce, infrastructure
development, technical assistance for bridging the digital divide, and the transfer of technology.
Following this special meeting and on the basis of its results, the General Council should then
examine these horizontal issues, as well as any other issues which might arise.  In parallel, the
subsidiary bodies should continue their examination of the following aspects.  In the Council for
Trade in Services, the issues of the GATS and services delivered electronically;  technological
neutrality;  domestic regulations;  national security and protection of privacy;  and classificationshould be further considered.  In the Council for Trade-Related Aspects of Intellectual Property,
issues would include, inter alia , patents;  new technologies;  transfer of technology;  and domain
names.  In the Council for Trade in Goods, issues  such as the implications of rules of origin,
classification and new electronic products should be taken up in the course of further work.  The
Committee on Trade and Development should also continue to evaluate the impact, strengths andweaknesses of electronic commerce in fomenting de veloping countries' growth, by studying positive
national experiences and the impact of e-commerce on investment opportunities, as well as in areas
such as education, public health, and the development of small- and medium-sized industry.  The
WTO should also continue, in conjunction with other international organizations, to provide the
technical assistance required to help developing countries benefit from the advantages of electroniccommerce and bridge the digital divide.  This statement did not prejudge the final position of the
countries supporting it with regard to the suggestions contained therein.  Finally, he thanked the
MERCOSUR member States and Singapore for the submissions they had introduced at the present
meeting.
117. The representative of Norway said that the subsidiary bodies' reports identified a number of
sectoral issues and horizontal issues that required further discussion.  One main cross-cutting issue
was classification, i.e. in order to determine what set of WTO rules applied to an electronic
transmission, there was a need to determine whether the end-product fell into the category of goods,
services or intellectual property.  Other important cross-cutting issues included the question of
jurisdiction as well as the development dimension, including transfer of technology and technical
assistance.  A special session of the General Council might provide a possibility to engage further on
cross-cutting issues.  With regard to sectoral issues, she noted that issues requiring further work in the
TRIPs area included: (i) what kind of exploitation of intellectual property rights on the Internet
constituted an infringement;  (ii) the implicati ons of the WIPO Internet domain names process in
relation to trademarks, geographical indications and other distinctive signs;  (iii) use of patents in the
digital environment, particularly in relation to so ftware and business methods;  (iv) international
cooperation under Article 69 of the TRIPS Agreement in respect of intellectual propertyinfringements.  In the Council for Trade in Goods, the following issu es required further consideration:
(i) valuation;  (ii) applicability of rules of origin in an electronic trade environment;  (iii) standards;
and (iv) import licensing.  In the Council for Trade in Services, she noted:  (i) domestic regulation;
(ii) standards and recognition.  Finally, in the Committee on Trade and Development, issues such as
the impact on e-commerce producers in developing countries, as well as substitution effects could bediscussed.  The continuation of the work could be done through substantial and technical level
discussions on sectoral issues in the relevant subsidiary bodies, and each subsidiary body could speed
up the process by considering whether special sessions devoted to e-commerce, expert meetings or
other practical steps would be best suited to prom ote progress, as well as whether input from the
Secretariat or other relevant organizations would be required.  She supported Australia's view thatthere was a need for the subsidiary bodies to report back to the General Council in a timely manner on
issues that would require a decision by Ministers at the Ministerial Conference.  Given the rapidly
evolving nature of e-commerce as a form of trade, new horizontal and sectoral issues relevant to the
WTO could surface in the course of future work.  A close monitoring of developments was necessaryWT/GC/M/65
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in order to ensure that WTO rules were fully equipped to address emerging issues, and Members
could consider to include a provision to secure such monitoring on the agenda of the Fourth
Ministerial Conference.
118. The representative of Indonesia said that the work carried out in the subsidiary bodies had
contributed positively in helping Members to understand the complex issues involved in the dynamic
area of e-commerce.  The discussions in the subsidiary bodies had been particularly important in
finding answers to the questions as to how e-commerce should be treated in the WTO.  Despite the
intensive discussions undertaken so far in the respective subsidiary bodies, further work was still
required as many issues and questions raised by Members had not been fully answered.  For this
reason, Indonesia supported the subsidiary bodies' recommendation that work should continue both on
the horizontal and sectoral issues.  With regard to the issues of a horizontal nature, he thanked
Singapore for its non-paper on digitized products, which would be a useful contribution to advancethe work on the classification issue.  The classification of digitized products was important in
determining the relevant WTO provisions applicable to such products, and whether they fell under the
GATT, the GATS or both.  He welcomed the subm ission by MERCOSUR member States, and noted
that any Member's contribution would be beneficial to the work on e-commerce.  While Indonesia
believed that the establishment of a non-negotiating task force was necessary in order to have a morefocused and comprehensive discussion on cross-cutting issues, such procedural debate should not
impede on the discussion of substantive issues.  Although it recognized the benefits that e-commerce
could offer, for example in minimizing transacti on costs and reducing cost structure, Indonesia shared
the view that important challenges, such as the lack of telecommunications and physical infrastructure
as well as technical know-how, could impede on developing countries' ability to benefit frome-commerce.  In this connection, the development perspective should be an integral part of the
consideration of e-commerce.  Indonesia fully supported the continuation of the work regarding the
elements identified in the illustrative list pr epared by the Committee on Trade and Development.
Finally, he noted that in order to enable the General Council to prepare its recommendations to the
Fourth Ministerial Conference in the area of e-commerce, the subsidiary bodies should make theirprogress reports at the latest in the Autumn 2001.
119. The representative of Thailand said that her c ountry had identified eight cross-cutting issues
which should be dealt with by the General Council, i.e. issues which could not be considered only by
one subsidiary body and which had implications beyond the responsibility of one subsidiary body:
(i)  classification;  (ii) customs duties and related issues;  (iii) development;  (iv) legal issues;
(v) technological neutrality; (vi) competition issues;  (vii) rules of origin;  and (viii) standards or
technical barriers issues.  Amongst these cross-cutting issues, priority should be given toclassification, customs duties and development-related issues.  She further noted that the issue of
classification would have important implications on other negotiations, such as in the area of services,
and that in considering this issue particular attention should be given to technological neutrality and
the issue of "likeness".  With regard to sectoral issues, Thailand agreed with most of the issues
identified as such by other delegations at the present meeting.  Thailand welcomed recent submissionsmade by Singapore, the European Communities and Australia and encouraged other Members to
make similar contributions to the subsidiary bodies in order to stimulate the discussions.  With regard
to the next steps in the General Council's work, she endorsed Singapore's suggestion to organize a
dedicated session on e-commerce, and agreed with the fact that Members should start thinking about
the preparation of the Fourth Ministerial Conference in relation to electronic commerce.
120. The representative of Canada said that the subsidiary bodies' reports on e-commerce in July
1999, their updates in December 2000, and the discussions that had taken place in the four subsidiary
bodies had identified a range of cross-cutting issues that required further analysis by the General
Council.  These issues cut across specific sectoral spheres of competence and thus could not be
covered in-depth by the subsidiary bodies individually.  For this reason, there would be a justificationfor the establishment of a non-negotiating ad hoc task force to deal with cross-cutting issues.  In
Canada's view, cross-cutting issues that should be taken up for consideration included, inter alia :WT/GC/M/65
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(i) the classification of electronic deliverables that could have a physical equivalent;  (ii) the
applicability of customs duties;  (iii) devel opment-related aspects of electronic commerce;
(iv) competition-related issues;  and (v) jurisdiction and applicable law.  Although no consensus had
been reached on the cross-cutting nature of the issues  identified in the course of the subsidiary bodies'
work over the past two years, a very useful analysis of these issues could, and should nonetheless beundertaken.  He noted that experts and practitioners in the field of e-commerce would largely support
a horizontal approach by the General Council.  Members should also consider how they could
practically engage e-commerce experts and practitioners from both developed and developing
countries into their work, and the recent ITC-WTO forum had been very useful for Members in this
respect.  Turning to the next steps in the Genera l Council's work, Canada would support holding a
dedicated session of the General Council to further discuss cross-cutting issues relating to
e-commerce.  Such meeting should be held in June 2001, well in advance of the MinisterialConference so as to allow any possible preparation for consideration and action by Ministers.
Members should also consider how the subsidiary bodi es might look at their outstanding issues within
the time-line of the Fourth Ministerial Conference.
(b) Next steps in the General Council's work on electronic commerce
18
121. The representative of Japan said that his country supported the idea of holding a dedicated
session on e-commerce in the framework of the General Council in June 2001, and to hold back-to-
back meetings of the relevant subsidiary bodies at that time.  Members should also consider ways to
facilitate the attendance of experts from capitals when organizing such meetings, for instance by
combining them with other related events.
122. The representative of Hungary said that th e General Council should endorse the subsidiary
bodies' reports and ask them to concentrate their atte ntion on issues identified at the present meeting.
The subsidiary bodies should report back to the General Council on their deliberations, and the
General Council could further discuss the cross-cutting issues when it would have enough material to
do so.
123. The representative of the European Communities said that his delegation had not yet taken a
view on the question as to whether Members should engage in a special session on e-commerce in
June 2001.  With regard to the work in the subsidiary bodies, he noted that the Committee on Trade
and Development had already outlined a number of issues for further work, and that the EC had also
outlined complementary approaches in this context to help focus the work and make progress.  In the
Council for Trade and Services, the EC had iden tified three areas for further work:  (i) the
classification of services;  (ii) the application of customs duties and the moratorium;  and
(iii) telecommunications issues.  With regard to work in the TRIPS Council, the EC had identified
four issues:  (i) copyright and related rights; (ii) patents;  and (iii) trademarks;  and (iv) the link
between Internet domain names and trademarks and geographical indications.  The EC had already
submitted papers to the Council for Trade in Services and the TRIPS Council on these issues, and
encouraged other delegations to do the same, on these or on any other issues which they had
identified.  The EC was also considering making a submission to the CTD to contribute to ongoingwork in this area.
124. The representative of Hong Kong, China said that the General Council should instruct the
relevant subsidiary bodies to continue their work on outstanding issues and to report back to the
General Council in a timely manner.  In light of the discussions at the present meeting, a dedicated
session on e-commerce should be held some time befo re the summer with the participation of experts
for a more in-depth discussion.  Moreover, Members would have to prepare for the possible
                                                     
18 India, Australia, Korea, Venezuela, also on behalf of Chile, Costa Rica, Colombia, Ecuador and
Peru, Norway, Indonesia, Thailand and Canada referred to this matter under sub-item (a).WT/GC/M/65
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consideration of e-commerce at the Fourth Ministerial Conference, and the informal General Council
meeting to be held on 15 May 2001 would provide an opportunity to start discussing this matter.
125. The representative of the United States supported Singapore's suggestion to hold a dedicated
session in June 2001 to further discuss issues raised at the present meeting.
126. The representative of Panama said that although the General Council seemed to be close to
taking up consideration of some issues, Members shou ld ensure that work would continue in parallel
in the subsidiary bodies.  Panama was open to the various options identified at the present meeting
regarding future work, including a dedicated session on e-commerce or the establishment of an ad hoc
task force to deal with horizontal issues.  In any case, the General Council would first have to agree
on the horizontal issues to take up for consideration.  For this purpose, the Secretariat could draw up a
list of the issues identified at the present meeting and the Chairman could subsequently hold
consultations on these issues.  Members would need to have a clear understanding of the possibleagenda before a dedicated session was held.  He hoped that the General Council's work would result
in additional guidelines to the subsidiary bodies to inject vitality into their work.  One of the mandates
that had been given to the General Council under the work programme on e-commerce included
consideration of the imposition of customs duties on electronic transmissions.  Although this issue
could help address some of the other cross-cutting issues identified by Members, it would probably
have to be taken up later given the number of issues which the General Council had to consider at this
stage.
127. The representative of Colombia supported the initiative by Venezuela, which added valuable
elements to the constructive perspective propos ed by MERCOSUR member States.  A dedicated
session on e-commerce in June 2001 could contribute to a positive exchange of views on cross-cuttingissues without prejudice to work continuing in the subsidiary bodies.
128. The Chairman thanked delegations for their contribution to this substantive discussion which
was long overdue.  Although differences remained on some of the points raised, there had been
convergence of views on many other points.  It appeared from the discussion at the present meeting
that there would be merit in the subsidiary bodies d eepening their work in certain areas, as they had an
expertise in their own sector of competence.  On the basis of the proposals made by delegations, the
Secretariat should identify the specific areas where the subsidiary bodies could deepen their work.
The notion that the subsidiary bodies should report back to the General Council was also a valuable
one.  Many possible cross-cutting issues had been identified in the course of the discussion, and the
value of a holistic approach had also been highlighted.  Although Members should pursue their
consideration of cross-cutting issues in the General Council, the discussion had shown that there was
limited scope for a regular meeting of the General Council to study these issues as an ongoing item ofits work programme.  A number of delegations had suggested to have a dedicated discussion on
e-commerce, possibly in June 2001 to tackle the cross-cutting issues, and although this idea had not
been endorsed by all delegations, he agreed that this could be a good option.  He proposed that the
General Council ask the subsidiary bodies to contin ue their work and report back to the General
Council, retain the item on the agenda for the next  General Council meeting in July 2001, and agree to
hold a dedicated discussion on cross-cutting issues before the next regular meeting, perhaps in June.
This dedicated discussion could focus on a compilation prepared by the Secretariat on the basis of the
discussion at the present meeting, as well as any papers which Members wished to circulate.  In
preparing this compilation, the Secretariat could consult with delegations to ensure that all the
relevant elements were covered.  Finally, with regard to the consideration of e-commerce at theFourth Ministerial Conference, it may be better for Members to pursue this matter under the "checklist
track" of the Ministerial preparations, subject to further consideration.
129. The General Council took note of the statements and agreed
 to revert to the matter at its next
meeting.WT/GC/M/65
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11. Review of procedures for circulation and derestriction of WTO documents
130. The Chairman recalled that at its meeting on 3 and 8 May 2000, the General Council had
agreed that Mr. Rodriguez, Deputy Director-Gener al, would hold consultations on this matter and
report back to the General Council.
131. Mr. Rodriguez, Deputy Director-General, informed the General Council that he had begun
consultations on this matter.  In these consultations, he had suggested moving from the current system
to much simpler procedures, whereby practically all official WTO documents, namely documents
submitted by Members or prepared by the Secretariat, would as a general rule be unrestricted.  This
would eliminate the cumbersome and lengthy derestriction procedures currently in place.  Such an
approach would be in line with the current practices of Members.  For example, in the ongoing
negotiations in agriculture and services all negotiating proposals presented by Members had been
circulated as unrestricted documents.  He informed the General Council that his consultations werenot yet complete and that he intended to intensify them over the next few weeks, including through
informal open-ended meetings to discuss the various elements for a draft decision.  He therefore
hoped to be in a position to present such a draft decision well in advance to enable Members to take
appropriate action at the next General Council meeting in July.
132. The General Council took note of the statement and agreed to revert to this item at a future
meeting.
12. Proposal to amend certain provisions of the Understanding on Rules and Procedures
Governing the Settlement of Disputes pursuant to Article X of the Marrakesh
Agreement Establishing the World Trade Organization
(a) Submission by Bolivia, Canada, Chile, Colomb ia, Costa Rica, Ecuador, Japan, Korea, New
Zealand, Norway, Peru, Switzerland, Uruguay and Venezuela for examination and further
consideration by the General Council (WT/GC/W/410 and Add.1, 2 and 3)
133. The Chairman said that this item was on the agenda at the request of Japan on behalf of the
co-sponsors of the above-mentioned proposal.
134. The representative of Japan, on behalf of the co-sponsors of the proposal , said that as stated at
the 8-9 February 2001 General Council meeting, the co-sponsors of the proposal had started an open-
ended consultation process with all interested Members with a view to reaching a consensus thereon.
To this end, an open-ended meeting had been held on 4 April 2001 which had provided the co-
sponsors with the opportunity to outline the proposal  and to hear Members' views.  Prior to that
meeting a "user friendly summary" had been circulated to Members explaining the key features of the
proposal. Participation at that meeting had been very good demonstrating the level of interest in this
issue.  The responses of participants had also been very encouraging.  It had been a widely sharedview that the relationship between Articles 21 and 22 of the DSU, the so-called "sequencing" issue
was considered to be an important one which needed to be addressed by Members.  He recalled that
the need to clarify the relationship between Articles 21 and 22 of the DSU had been a key focus of
attention in the course of the DSU review carried out in 1999.  However, the Third Ministerial
Conference had not proved to be the opportunity to  deal with this issue.  Since then the problems
arising from the drafting flaws in Articles 21 and 22 of the DSU had become more apparent, resulting
in the need to enter into bilateral ad hoc agreements aimed at clarifying the sequence.  The proposal,
which had been tabled in October 2000, was aimed at addressing this unsatisfactory situation in order
to clarify the relationship between Articles 21 and 22 of the DSU in a durable and predictable way.  In
the view of the co-sponsors, the Fourth Ministerial Conference in Qatar would provide an excellentopportunity for Members to agree to an amendment cl arifying the relationship between Articles 21.5
and 22 of the DSU. Concerted action by the WTO Membership as a whole would strengthen theWT/GC/M/65
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integrity of the WTO legal system which could be further undermined if the problem related to the
"sequencing" issue remained unresolved.
135. With this time-frame in mind, the co-sponsors would continue to hold open-ended
consultations.  Based on general support of the basic idea behind the proposal, the co-sponsors would
aim at holding more focussed discussions on va rious points of the proposal with a view to
incorporating any improvement thereto.  At the next open-ended meeting, the co-sponsors would
propose to examine the proposal in light of the subsequent developments that had taken place since
that proposal had been tabled and discussed.  The co-sponsors would shortly organize a meeting
trying, at the same time, to minimize the burden on smaller delegations.  They recognized that some
delegations who had participated in the meeting had stated that other aspects of the DSU were also of
interest to them and some had advocated a more comprehensive approach.  While the co-sponsors
respected these views, they had also received st rong support to focus on the "sequencing"-related
issues.  They believed that, for the time being, this was the most efficient way forward.
136. The representative of Thailand thanked Japan and the co-sponsors of proposal for further
explanation provided at the present meeting.  Thailand believed that the DSU provided a workable
and viable dispute settlement mechanism.  At the same time, Thailand also believed that the DSU
might be further improved with a view to enhanc ing its multilateral character.  Thus, negotiations
aimed at amending the DSU were desirable, and Article X of the WTO Agreement could be used for
this purpose.  As Thailand had previously stressed, one of the more urgent issues was the relationship
between Articles 21 and 22 of the DSU, the so-called "sequencing" issue.  The proposal appeared to
be a good starting point on which Members could work with a view to incorporating practices
subsequent to the drafting of the main elements in the proposal, which had been initiated and puttogether in 1999.  The "sequencing" issue should be dealt with in a comprehensive manner.  There
was a need to ensure a feasible amendment option and thus not to open the way to proposals on any
aspects of the DSU.  In Thailand's view, a comprehensive package including only issues of urgency
that were closely related to the issue of "sequencing" was a viable option for consideration at this
stage.  Thailand had an open mind with regard to timing for arriving at a decision on the "sequencing"issue and was ready to hear other Members' views on this matter.
137. The representative of Korea said that his country, as one of the co-sponsors of the proposal,
supported the statement made by Japan in which it had referred to the open-ended consultation held
on 4 April 2001.  Korea had participated in that meeting, and had found it to be a good start to
broaden the support for the proposal and to further refine it with inputs from a larger number of
Members.  At the same time, Korea wished to share with other delegations some of its observations in
relation to that meeting.  First, there had been a discussion about the relative merits of bilateral andmultilateral approaches.  It had been observed that the "sequencing" problem could and, in fact, was
being mitigated through bilateral agreements.  In Korea's view, bilateral arrangements were limited
because they could work only through ad hoc bilateral negotiations, which had to be carried out each
time there was a need to do so.  Korea believed that ad hoc bilateral approaches were not adequate
alternatives to the DSU amendment, given the importance and urgency of the issue.  Second, therehad been  a discussion on the scope and modality of the DSU amendment.  It had been observed that
the scope of the amendment should be broader than the "sequencing" issue and that for this purpose, a
parallel proposal for amendment might be necessary.  In Korea's view, there was already broad
consensus that "sequencing" was the most urgent and important issue that should be addressed
through the DSU amendment. Any serious discussion on the DSU amendment would have to include"sequencing" as a key element.  In that sense, it might not be the best use of time and resources to
have a parallel track for the DSU amendment.  Korea looked forward to further rounds of open-ended
consultations so that a timely outcome could be ac hieved on this issue which was of high importance
for the dispute settlement system.
138. The representative of Hong Kong, China thanked Japan for its report on the state-of-play of
the proposal.  Hong Kong, China had participated in the informal consultations and was ready toWT/GC/M/65
Page 37
participate in any future consultations.  At the pres ent meeting, he wished to reiterate the substantive
views of his delegation on the proposal as reflected in the minutes of the February 2001 General
Council  meeting.  He then sought some clarif ication from Japan with regard to the following
questions:  (i) whether the proposal would be forwar ded to the Fourth Ministerial Conference by the
co-sponsors or a different institutional body;  and (ii) whether the co-sponsors wished to continue tohold their consultations under a separate track or whether they envisaged that at a later stage this
matter would be taken up in the context of the preparatory process for the Fourth Ministerial
Conference.
139.  The representative of Canada said that her country fully shared Japan's assessment that the
resolution of the so-called "sequencing" issue would strengthen the integrity and the credibility of the
dispute settlement system.  Ad hoc "sequencing" agreements, while useful in individual disputes,
required the consent of both parties which might not be forthcoming in all cases.  An amendment tothe DSU was therefore required in order to provide a durable solution to the "sequencing" problem.
The current amendment proposal did not provide an answer to all of the questions that needed to be
addressed in the DSU.  However, it provided a way to address the priority issue of "sequencing" and
its adoption would demonstrate that the WTO could move forward.  As Canada had stated previously,
this proposal was by no means a "take it or leave it" offer.  Her country remained open to discussingmodifications that might be necessary to command a consensus on the proposal, including on issues
other than "sequencing".  Ultimately, Canada hoped that the amendment proposal could be taken up
as a "do-able" for the Fourth Ministerial Conference.
140. The representative of the Philippines thanked Japan and the co-sponsors for their proposal and
was prepared to support it.  The Philippines would participate constructively in any discussion aimed
at further improving that proposal.
141. The representative of Indonesia thanked Japan and the co-sponsors for introducing the
proposal and the explanation provided at the present meeting.  Indonesia believed that the DSU was a
unique system, which provided Members with a mechanism to resolve disputes that might arise under
the WTO Agreement.  Although the DSU had functioned quite well thus far, some weaknesses hadbeen identified in relation to the process of im plementation.  Indonesia welcomed the initiative taken
by the co-sponsors to submit their proposal to the Ge neral Council.  It shared the view of the co-
sponsors that there was a  need to improve the current mechanism, in particular with regard to the
issue of "sequencing" between Articles 21 and 22 of the DSU, in order to remove the existing
ambiguity.  Although Indonesia recognized that it w ould be in the interest of Members to have a
comprehensive approach to improvements of the DSU, it noted that it was necessary to adopt
whatever consensus could be reached in fine tuni ng certain provisions, since a solution to other
complex issues would take more time.  Indonesia believed that it was in the interest of all Members to
strengthen the dispute settlement mechanism and welcomed further work on this issue.  With regard
to the question of procedure, Indonesia supported the idea of open-ended consultations to further
discuss this issue.
142. The representative of Bulgaria said that on previous occasions, his country had already
expressed its views on the proposal and he did not wi sh to reiterate them at the present meeting.  He
only wished to highlight the main points.  Bulgaria shared the objective of clarifying the "sequencing"
between Articles 21 and 22 of the DSU.  At the same time, it considered that the "sequencing" was
already provided for in the DSU and was not prepared to pay for it with a reduction and a reallocation
of the time-periods provided therein.  Bulgaria believed that an amendment was not the only optionfor clarification of the relationship between Articles 21 and 22 of the DSU.  Another option was an
interpretation, as pointed out by the Appellate Body.
143. The representative of the United States said that her country hoped that the maintenance of
this item on the General Council's agenda would encourage Members to continue their efforts to re-
engage in a discussion of needed improvements to the DSU.  The United States hoped that such aWT/GC/M/65
Page 38
discussion could lead to a consensus on changes to the DSU that would improve its provisions on
implementation of panel and Appellate Body reports, and would enhance the transparency of the
dispute settlement process, along with other techni cal changes.  The United States continued to be
ready to discuss improvements to the dispute settlement mechanism in the DSB, where the discussion
more properly belonged.
144. The representative of Ecuador said that as a co-sponsor of the proposal his country had
participated in various consultations held on this matter.  Ecuador believed that, from the point of
view of developing countries, it was necessary to resolve the issue of "sequencing" between
Articles 21 and 22 of the DSU.  His country attached great importance to this issue and would
continue to support the proposal and to contribute to any future consultations to be held on this matter.
145. The representative of the European Communities said that the position of his delegation on
this issue was well known.  It was clear that the co-sponsors had done a great deal of serious work and
one should look at it in that spirit.  However, the Community believed that there was a need for a
more comprehensive approach to this issue and was engaged in the process of identification of the
problems which had occurred in recent years in the process of implementation of the DSU.  The
Community would also be looking at the best ways in which to address them.  The Community was
open to any formulation and was ready to engage in any further consultations to be carried out by theChairman or in any other form, and to work cons tructively with other delegations.  He noted that
whether or not the Community had been involved in specific disputes, there were a number of areas in
which there was a need to look again at the drafting of the DSU text.
146. The representative of Japan said that, in response to the questions raised by Hong Kong,
China, he was not in a position to provide answers at the present meeting on behalf of the co-sponsors
and could only speak on behalf of Japan.  With regard to the first question, much would depend on
future developments and Japan wished to promote as open-ended a process as possible and hoped that
a consensus would emerge on the proposal.  With regard to the second question, he recalled that the
proposal had been made pursuant to Article X of the WTO Agreement and thus, at an appropriate
time before the Ministerial Conference, a decision would have to be taken as to whether or not thisissue would be considered by the General Council.  However, this would depend on future
developments.  Japan was determined to do its best in order to reach a consensus on this matter.
147. The Chairman proposed that the General Council take note of the statements made and agreed
to revert to this matter at its next meeting.
148. The General Council so agreed.
149. The representative of Bulgaria noted that there had been a consistent practice that proposals
sponsored by a group of countries were included on the agenda of General Council meetings at the
request of those countries and thus there was no need to take a decision to revert to this matter at the
next meeting.  This item would have to be placed on the agenda at the request of the countries
concerned and such a request should be submitted in writing.
150. The Chairman said that this was of course possible and had no doubt that it would be done by
Japan.  He said that he had gavelled the matter but one way or another this item would be on the
agenda.
151. The General Council took note of the statements.WT/GC/M/65
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13. Report by the Chairman of the Committee on Rules of Origin on implementation-
related issues
152. The Chairman recalled that at its Special Session on Implementation on 14 and
15 December 2000, the General Council had adopted the following Decision concerning the
Agreement on Rules of Origin:  "Members undertake to expedite the remaining work on theharmonization of non-preferential rules of origin, so as to complete it by the time of the Fourth
Ministerial Conference, or by the end of 2001 at the latest.  The Chairman of the Committee on Rules
of Origin shall report regularly, on his own responsibility to the General Council on the progress
being made.  The first such report would be submitted to the Council at its first regular meeting in
2001, and subsequently at each regular meeting until the completion of the work programme."
153. Mr. Ahn (Korea), Chairman of the Committee on Rules of Origin, in introducing the report
19,
said that, on the basis of the mandate from the General Council, to which the Chairman of the General
Council had just referred, the Committee was carrying out its work with positive results.  First, as
indicated in paragraph 2 of the report, progress had been made at the March 2001 session.  At that
session, the Committee had reached a consensus on 24 i ssues out of more than 400 outstanding issues.
In relative terms this was a significant achievement.  For example, in the period between 1995 until
2000,  the Committee had only reached a consensus on 22 issues in the course of 23 meetings while inthe March session alone a consensus had been reached on 24 issues.  Second, as indicated in
paragraph 3 of the report, the Committee had adopted a new working methodology.  This was due to
the Committee's pace of work since it had only reached a consensus on a fraction of the issues out of
more than 400 remaining issues. For that reason, at the March session there had been a widespread
view that the Committee should adopt a new methodology. Some countries had referred to it as apackage approach which implied that the Chai rman of the Committee should come up with a
collection of recommendations for the remaining 400 issues for further discussion in the Committee.
This new methodology had initially been supported by a group of countries and had not enjoyed
unanimous support.  However, in the end, the Committee had reached a consensus thereon.
154. More than 400 issues still remained to be discussed and decided on by the Committee. In
order to illustrate the complexity of the issues in volved, he gave the following example of an issue
which had recently been discussed in the Committee.  The Committee was required to determine the
rules of origin of bovine cattle in the case in which a cow was born in country A, then exported to
country B, subsequently grown in country B for six months, then exported again to country C, grown
for two months in country C, slaughtered there and re-exported to country B.  He said that more than
400 remaining issues of this type would have to be resolved by the Committee and that this was not an
easy task.  The Committee was aware of the mandate from the General Council and wished to meetthe deadline.  However, support and guidelines from  the General Council would be required in this
regard.  He drew attention to paragraph 4.3 of the report which stated that:  "While making these
efforts, the Committee is conscious of the enormity of the work to be done from now until Doha.  In
this connection, the Committee continues to look up to the General Council  for guidance and support
so that the Council's mandate could be fully achieved with best efforts on the part of the Committee."
155. The representative of India said that his country was confident that the Committee would be
able to meet the deadline set by the General Counc il.  He noted that the Chairman of the Committee
had referred to paragraph 4.3 of the report and had stated that continued support and guidance from
the General Council was required.  He believed that Members could give the authority to the
Chairman of the General Council to request the Chairman of the Committee to continue to work hardto ensure that the deadline was adhered to.
                                                     
19 The full text of the report by the Chairman of the Committee on Rules of Origin on implementation-
related issues is reproduced in Annex 1.WT/GC/M/65
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156. The Chairman said that indeed the Committee, under the guidance of its Chairman, should
continue to work extremely hard with a view to meeting the deadline.
157. The General Council  took note of the statements and of the report.
14. Reports by the Vice-Chairman of the Committee on Agriculture on implementation-
related issues (G/AG//7, G/AG/8)
158. Mr. Suzuki (Japan), Vice-Chairman of the Committee on Agriculture, introducing the report
on "Examination of Possible Means of Improving the Effectiveness of the Implementation of the
Marrakesh Net Food-Importer Decision" (G/AG/7), recalled that the Committee on Agriculture had
been instructed by the General Council at its meeting on 15 December 2000 to examine possible
means of improving the effectiveness of the implementation of the Marrakesh Net Food-Importer
Decision.  At the present meeting, he wished to present his report on progress made by the Committee
on Agriculture thus far.  Subsequent to the General Council's December meeting, a group of 16 WTOnet food-importing developing countries (NFIDCs) had submitted a joint proposal concerning the
Marrakesh Decision to the Committee on Agriculture.  These countries proposed, among other things,
the establishment of an Inter-Agency Revolving Fund for the purpose of providing financial and
technical assistance to LDCs and the NFIDCs.  The text of the proposal was attached to the report in
document G/AG/7.  The ideas contained in the proposal had been the subject of a series of informalconsultations with the net-food importing developing countries and donor Members, and had also
been discussed at the regular meeting of the Committee on Agriculture on 30 March 2001.  A
summary of the Committee's discussion was contained in the attachment to his written report.  As
mentioned in paragraph 23 of the report, he had noted that Members had held an interesting debate on
the issue of causality between the Uruguay Round re sults in agriculture and world food prices and,
although different views had been expressed, there was a common view that it was important to
ensure stable food supplies for LDCs and NFIDCs.  There had also been different views on the
question of which institutions should deal with th e various elements of the Marrakesh Decision.  It
would be his suggestion to continue the informal di scussions with participation of experts from the
relevant international organizations, with a view to  identifying the specific problems in implementing
the Decision.  In such informal meetings, he intended to take up the issues separately, i.e. access to the
financing facilities of the international financial institutions, food aid, and technical and financial
assistance in this regard.  In the informal consultations that he had held on this matter, and in
particular on the proposed Revolving Fund, it had been indicated that it would be useful, as a next
step, to organize a round-table discussion with the participation of experts from the IMF and the
World Bank, as well as the FAO.  It was envisaged that this round-table would take place in mid-June
at the WTO premises and it was his intention to inform the WTO membership of the outcome of thismeeting.  This was an outline of the road map for the coming weeks but there were, of course, further
matters to be addressed, in particular the issue of food aid.  Finally, he noted that this matter would
be, as usual, on the agenda of the regular meeting of the Committee on Agriculture on 28-29 June
2001.
159. With regard to the report of the Committee on Agriculture to the General Council on the
Implementation of Article 10.2 of the Agreement on Agriculture (G/AG/8), he recalled that on
18 October 2000, the question of the implementation of Article 10.2 of the Agreement on Agriculture,
which related to the development of disciplines on agricultural export credits and related facilities,
had been referred by the Special Session of the General Council to the Committee on Agriculture.
The General Council's instructions were that this subject be inscribed on the agenda of theCommittee's regular meetings and that the Committee report back on its progress on this issue to the
General Council.  The Committee on Agriculture had agreed that these progress reports be submitted
to the General Council on the responsibility of the Vice-Chairman of the Committee.  The first such
report, G/AG/6, had been presented to the General Council at its meeting on 7-8 December 2000.  The
report before the General Council contained in  document G/AG/8, dated 27 April 2001, contained a
detailed summary of the Committee's second round of discussions on the question of theWT/GC/M/65
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implementation of Article 10.2, including with respect to the related provisions of paragraph 4 of the
Marrakesh Decision on least-developed and net food-importing developing countries.  This second
round of discussions had been undertaken at the regular meeting of the Committee on Agriculture
held on 29-30 March 2001.  The text of the negotiating proposal on "Export Credits For Agricultural
Products", which had been submitted to the March meeting of the Committee by MERCOSUR(Argentina, Brazil, Paraguay and Uruguay), Bolivia, Chile, Costa Rica, Guatemala, India and
Malaysia (G/AG/W/50), was attached as an Anne x to his report in G/AG/8.  He added that this
proposal had also been submitted to the Special Session of the Committee on Agriculture in the
context of negotiations (G/AG/NG/W/139).  As noted  in paragraph 5 of the report, it was considered
that, overall, the Committee's further  round of discussions on this subject had been useful, including
with regard to the implementation and negotiation aspects of a number of the issues involved.  The
question of the implementation of Article 10.2 and of the related provisions of the MarrakeshMinisterial Decision would be on the agenda of the next regular meeting of the Committee on
Agriculture to be held on 28-29 June 2001.
160. The representative of Sri Lanka said that as stated in the report, useful informal consultations
and discussions had been held at the regular meeting of the Committee on Agriculture on 30 March.
The central issue relevant to implementation of the Marrakesh Decision was the creation of a foodfinancing facility with a corresponding link to international food reserve.  Therefore, as agreed,
further informal meetings would be held to iden tify specific problems concerning the financing
facilities of the international financial institutions, food aid and technical and financial assistance,
which should be addressed in the context of recognition of inadequacy of the currently available
financing facilities.  However, in order to identify specific problems on inadequacy of access tofinancing facilities of international financial institutions, food aid and technical and financial
assistance, the involvement of the relevant international organizations such as the World Bank, IMF
and others at a higher decision-making level would be necessary.  Therefore, Sri Lanka believed that
officials at a higher level from these organizations should be invited to future consultations, in
particular to the proposed round-table discussion, in order to clarify issues so that a positive decisionon the proposal submitted by the group of LDCs and NFIDCs for the creation of an international food
financing facility with corresponding link to an inte rnational food reserve to implement the Marrakesh
Decision could be made.
161. The representative of Egypt said that his country supported the recommendation made to the
General Council to continue the discussion on the Marrakesh Decision either in informal meetings or
in the form of round-table discussions on the issue of the Revolving Fund.  The summary of the
discussion attached to the report contained in document G/AG/7 indicated in paragraph 3 that hiscountry had stated that the Fund proposal had been submitted in the implementation exercise relating
to Uruguay Round commitments and to the ongoing negotiations.  He noted that the proposal had only
been submitted in the context of the implementation exercise.
162. The representative of Pakistan said that his country wished to be associated with the
statements made by Sri Lanka and Egypt.  Pakistan supported the proposal to host a round-table
discussion with donor agencies and the proposed road-map.
163. The representative of Brazil said that his country hoped that the June meeting would provide
an opportunity for a useful discussion on the s ubstance of the proposal contained in G/AG/W/50.
164. The representative of India recalled that the issues related to the implementation of
Article 10.2 of the Agreement on Agriculture had been referred to the Committee on Agriculture on
18 October 2000.  It was India's understanding that the matter had been discussed in two meetings of
the Committee on Agriculture.  From the report it appeared that discussions on substantive issues had
not even started.  It was still under discussion as to whether the disciplines on export credits, export
credit guarantees for insurance programmes should be developed in the Committee on Agriculture as
part of the mandated negotiations or in the OECD.  I ndia wished to reiterate its interest in resolvingWT/GC/M/65
Page 42
this issue as an implementation issue in the Committee on Agriculture and hoped that the Committee
would be able to look at this issue in a more substantive manner in the forthcoming meeting.
165. The General Council took note of the statements and of the reports contained in documents
G/AG/7 and G/AG/8.
15. Reports of the Special Sessions of the Committee on Agriculture and the Council for
Trade in Services (G/AG/NG/6 and 7, S/CSS/5)
166. Mrs. Tantraporn (Thailand), Chairperson of the Committee on Agriculture, introducing the
reports to the General Council on the Committee' s Sixth and Seventh Special Sessions held on
22-23 March and 26-27 March 2001 respectively, said that as agreed by the Special Session, these
reports were being made to the General Council on the responsibility of the Chairperson of the
Committee on Agriculture.  The reports in G/AG/NG/6 and 7 had been prepared and submitted by the
outgoing Chairman of the Committee on Agriculture, Mr. Voto-Bernales (Peru) who had asked her tointroduce the reports on his behalf.
167. The Sixth Special Session had completed consideration of the proposals and technical
submissions that had been tabled in the course of the first phase of the Article 20 negotiations.
Altogether 125 Members out of a total of 140 Members had submitted 44 negotiating proposals and
three technical submissions in the course of the first phase, which had been launched in March lastyear.  In the course of the "stock-taking" exercise undertaken at the Seventh Special Session, a
number of general statements had been made in which participants had outlined, inter alia , their
respective views regarding the negotiating proposals and other submissions which had been presented
and examined in the course of the first phase of the negotiations, as well as with respect to the
organization of further work.  It had been generally agreed that the first phase of the negotiations forcontinuing the reform process had been satisfac torily completed.  Following on from extensive
informal consultations undertaken by Mr. Voto-Bernales, the Committee at the Seventh Special
Session, had adopted a work programme for the second phase of the negotiations for continuing the
reform process under Article 20 of the Agreement on Agriculture.  The work programme was set out
in detail in paragraphs 4 and 5 of Mr. Voto-Bernales' report to the General Council.  Finally, a numberof statements made at these Special Session meetings had been circulated at the request of the
delegations concerned.  These statements were listed in recently circulated addenda to
Mr. Voto-Bernales' reports.
168. The outgoing Chairman of the Council for Trade in Services, Mr. Marchi (Canada) said that
since his last report, the Council for Trade in Services meeting in Special Session had held one formal
meeting from 28 to 30 March 2001.  Members had brought several months of intensive work to
fruition and had adopted negotiating guidelines and procedures pursuant to Article XIX of the GATS.These were contained in document S/L/93.  Members had also held an initial discussion of the
negotiating proposals submitted since the previous meeting of the Special Session of the Council in
December.  Some 60 proposals had been tabled on several services sectors, on the movement of
natural persons and on other horizontal related issues.  Members had agreed to revert to the proposals
for further discussion at the next meeting of the C ouncil.  Under the item dealing with modalities for
the treatment of autonomous liberalization, Members had agreed to hold another special meeting
dedicated exclusively to that issue.  A first special meeting had been convened in December 2000.  It
had also been decided that the new Chairman of the Services Council would be consulting on when
that meeting would be held.  As for the discussion on the assessment of trade in services, the Council
had received a submission from Argentina on its assessment of the participation of developingcountries in services trade.
169. As mandated by paragraph 2(g) of the so-called "road map" agreed in May 2000, the Council
had conducted its stock-taking exercise to consid er both the progress made and how to move forward.
The discussion had been carried out in a positive and constructive spirit.  Delegations had concurredWT/GC/M/65
Page 43
that they had had an ambitious negotiating agenda ahead but that they had made a successful start on
this agenda.  Many referred to ongoing work and to the need to continue the rule-making work with
some degree of dispatch.  On the schedule of meetings for the year ahead, Members had agreed to
hold clusters of services meetings in May, July, October and December 2001 as well as in March
2002, when at that meeting they would review progress made in the negotiations.  With regard to the
scheduling of an additional meeting in February 2002, which had been proposed by two delegations, it
had been agreed that the issue could be considered later in the year by the Council.  As to the
organization of the discussion on negotiating proposals, it had been agreed that all proposals would be
addressed at the May meeting and that the discussion would be structured according to sectors, modes
of supply and the horizontal issues identified.  The proposals would be divided into two groups for a
more detailed discussion at the meetings in July and October.  Members remained free to introduce
new proposals at any time.  It had been pointed out that such a work programme would require theSpecial Session to meet over several days and might have implications on the allocation of time
between the Council and the subsidiary bodies.  Members had underscored that the work programme
had been agreed without prejudice to the outcome of the Fourth Ministerial Conference.
170. The General Council took note of the reports and of the statements and agreed
 to revert to this
matter at its next regular meeting.
16. Statement by the Chairman of the Committee on Subsidies and Countervailing
Measures on implementation-related issues
171. Mr. Moretta (Australia), Chairman of th e Committee on Subsidies and Countervailing
Measures, speaking under "Other Business", reported on his own responsibility on the status of the
Committee's work on the implementation-related issues referred to it in the General Council's decision
of 15 December 2000.20
172. The representative of India said that his delegation would actively participate in the meetings
that had been scheduled to discuss these issues further.  He also said that while welcoming any
information on implementation issues at the earliest possible time, he wondered whether Members
could be given notice prior to the meeting of an y such reports that would be made under "Other
Business".
173. The Chairman said that he was under the impression that many Members felt that there should
be a link back to the General Council as regularly as possible for issues which had been referred to
subsidiary bodies and believed that it was worthwhile taking advantage of the present meeting to hear
this report since the next Special Session of the General Council on implementation issues was likely
to be held in June only.  He understood however that Members would wish to have advance warning
to prepare themselves and he would try to bear that in mind in planning future reporting processes.
174. The General Council took note of the report and of the statements.
17. Statement by the Chairman of the SPS Co mmittee on implementation-related issues
175. Mr. Ehlers (Uruguay), Chairman of the Committee on Sanitary and Phytosanitary measures,
speaking under "Other Business", said that he wish ed to supplement the information contained in the
Chairman's report on implementation-related issues (Job(01)/53).  The SPS Committee had had twomeetings on the issue of equivalence under the Chairmanship of his predecessor, Mr. Nayyar
(Pakistan).  In his view, the discussions, which had been technical and without any political
connotations, highlighted the seriousness and the importance Members attached to that issue and had
been very useful in demystifying it.  Before these discussions, there had been an impression that an
                                                     
20 The full text of the report by the Chairman of the Committee on Subsidies and Countervailing
Measures on implementation-related issues is reproduced in Annex II.WT/GC/M/65
Page 44
agreement on equivalency would be essential for acce ss to markets, would have to be comprehensive
and cover all sanitary and phytosanitary aspects.  As the result of the discussions and, in particular, of
detailed contributions of some Members regarding their national experiences, this was indeed not the
case.  The Committee had been able to focus on specific aspects of the issue and had managed to
endorse a number of conclusions, in particular the fact that the concept of equivalency was not thesame as duplication or equality of measures.   Equivalency could take different forms ranging from the
acceptance of a particular SPS measure to protect against a particular danger with respect to a
particular product to a broad agreement on equivalency.  The Committee had also recognized that a
broader equivalence agreement was most difficult to conclude.  Moreover, to achieve such an
agreement it would be necessary to have considerable transparency in terms of data and information
and to develop bilateral contacts between the countries involved so as to enhance the information and
confidence between the officials and organizations involved.  The national enquiry points would haveto provide all requested information. To enhance transparency, Members should report to the SPS
Committee on their agreements of recognition of equivalency.  Finally, the Committee had decided to
continue its work at its next meeting in July.
176. With respect to the participation of develo ping countries in the standard-setting bodies
namely the OIE, the IPPC and the CODEX there ha d been a very interesting workshop with high-
level participants from the three organizations on decision-making and the process for approval of
standards and recommendations, as well as the participation of developing countries and their specific
needs.  This workshop had clarified many of the concerns of some developing countries regarding this
issue and had also allowed the standard-setting organizations to better understand their concerns.
177. The General Council took note of the statement.
18. Statement by the United States regarding new restrictions by India for ports of entry for
certain goods
178. The representative of the United States, speaking under "Other Business", said that it was the
United States' understanding that India had recently restricted the importation of 300 consumer
products to eleven ports of entry as opposed to the previous 215 ports.  The United States wascurrently seeking further information and was studying this action in order to better understand its
objectives and implications.  The United States would consult further on this matter with India
bilaterally but believed that this information might be of interest to other Members as well.  He
wished to express appreciation to India for its effort s to provide the United States with information on
this matter the day prior to this meeting when it had first been raised.
179. The representative of India was grateful to the United States for having contacted his
delegation the day prior to this meeting so that he had been able to provide it with some initial
information on this issue.  At this point in time, on the basis of the information received from his
capital, it was his understanding that there might be some misunderstandings which would hopefully
be clarified in the next few days.
180. The General Council took note of the statements.WT/GC/M/65
Page 45
ANNEX 1
Report by the Chairman of the Committee on Rules of Origin
on Implementation-Related Issues
1. Background
1.1 The General Council, at its meeting on 15 December 2000, adopted the following decision
concerning the Agreement on Rules of Origin:
"Members undertake to expedite the remaining work on the harmonization of non-preferential
rules of origin, so as to complete it by the time of the Fourth Ministerial Conference, or by the
end of 2001 at the latest.  The Chairman of the Committee on Rules of Origin shall report
regularly, on his own responsibility, to the General Council on the progress being made.  The
first such report would be submitted to the Council at its first regular meeting in 2001, and
subsequently at each regular meeting until the completion of the work programme."(WT/L/384)
1.2 The first such report was made at the February General Council meeting, and this is the
second report.
2. Progress made at the March, 2000 session of the CRO
2.1 The Committee on Rules of Origin held one round of negotiating session from 7 to
16 March 2001.  During this negotiating session, the Committee discussed the overall architecture of
the harmonized rules of origin, as well as outstanding issues concerning rules of origin ofChapters 28-40 (chemical products), Chapters 68-70 (ceramics), Chapter 71 (precious stones and
metals), Chapters 72-73 (iron and steel), Chapters 74-81 (non-ferrous metals), Chapters 82-83
(articles of metal), Chapters 84, 85 and 90 (machinery) and Chapter 91 (watches and clocks).
2.2 The outcome of the discussions on the overall architecture was quite positive.  Most of the
provisions of the overall architecture have now been agreed upon, with only limited number of
provisions remaining to be resolved (G/RO/45/Rev.1).
2.3 With respect to product-specific rules of origin, consensus has been reached on 24 issues
(G/RO/M/35).  This outcome is very encouraging, compared to the results of previous negotiating
sessions in which consensus could be made only on a few items.  It seems clear that since the
establishment of a new deadline by the General Council, the CRO’s work has gained a momentum.
2.4 The Committee has been discussing the outstanding issues on product-specific rules of origin
since September 1997.  In June 1999  when the WCO Technical Committee on Rules of Origin
submitted the final results of its technical work on the Harmonization Work Programme,
486 outstanding product-specific issues were before the Committee (G/RO/41).  Despite its bestefforts, the Committee had resolved only 22 issues by September 2000, averaging less than one
consensus per each of its 23 meetings over the three-year period (G/RO/M/11-33).
2.5 Members' attitudes have clearly changed since October 2000, when the Chairman of the
General Council sent a letter to the Chairman of the Committee, indicating the General Council'sdetermination to complete the harmonized work pr ogramme before the Doha Ministerial Conference.
An awareness of the need to expedite the work was reflected in the welcome flexibility shown by
many Members during the Committee meeting in November 2000, with a result of reaching consensus
on eight issues (G/RO/M/34); and again on 24 issues in March 2001.WT/GC/M/65
Page 46
3. Adoption of a New Working Methodology
3.1 The Committee fully recognized that this resolution of 32 issues over the last two meetings of
the Committee, although significant, was not sufficient, given the number of issues s till remaining:
432 issues.
3.2 Therefore, the Committee, at its meeting on 4 April 2001, adopted a new working
methodology in order to expedite the remaining work.  The main elements of the new working
methodology are as follows:
(1) Outstanding issues are to be split into stand-alone issues (Chapter-specific issues) and
horizontal issues (ex. assembly rule);
(2) The Chairman is to provide the collection of recommendations for stand-alone issues
and horizontal issues;
(3) The Chairman’s recommendations are to serve as basis for negotiation and expedite
the completion of the HWP by the time mandated by the General Council;
(4) The Committee agreed to have an additional two week session in July and to make
arrangements for further meetings, if necessary, in view of the status of progress;  and
(5) The result of the HWP shall be submitted to the Fourth Ministerial Conference.
The new working methodology is attached to this report, entitled "Rules of Origin –
Harmonized Work Programme, 2001".
3.3 In line with this new methodology, the Chairman of the Committee has recently circulated his
recommendations for about 400 outstanding issues. (JOB(01)52)
4. Work up to Doha and beyond
4.1 In the May session, the Committee is going to discuss on the basis of Chair’s
recommendations Chapters 1-24 (agricultural products), Chapters 50-63 (textile products),Chapters 64-67 (footwear, headgear and other articles), Chapters 25-27 (mineral products),
Chapters 41-43 (leather), Chapters 44-49 (wood and paper), Chapters 86-89 (transportation
equipment), and Chapters 92-97 (musical instruments and other articles) (WTO/AIR/1540).
4.2 On the last day of the session in May, as well as in the following sessions of the CRO, the
CRO will review the status of the progress and , if necessary, make changes to the agenda and
methodology and make arrangements for further meetings.
4.3 While making these efforts, the CRO is conscious of the enormity of the work to be done
from now until Doha.  In this connection, the CRO continues to look up to the General Council for
guidance and support so that the Council’s mandate could be fully achieved with best efforts on the
part of the CRO.WT/GC/M/65
Page 47
ATTACHMENT
Rules of Origin - Harmonized Work Programme, 2001
1. Background
At the CRO meeting held on 16 March 2001, many Members expressed a view that the
fundamental modification of the methodology was neces sary in order to meet the goal of ‘completing
the HWP by the Fourth Ministerial’.
Several Members suggested that a single package of the harmonised non-preferential rules of
origin should be prepared in time to serve as a basis of meaningful negotiation and final agreement.Many Members saw advantage in such a ‘package’ approach and expressed willingness to further
study it.
On such a basis, the Chairman of the CRO proposed to circulate a proposal of the new
working methodology by 20 March 2001 and to convoke a CRO meeting on 28 March 2001 in aresumed session to reach a decision on the new methodology.  It was so agreed.
At the meeting of the CRO on 28 March 2001, many Members expressed support for the
Chair’s proposal, while two Members signified difficulty to agree to the new methodology.  The Chair
invited all the Members to submit further written comments on the Chairman's proposal by Friday,30 March 2001, and proposed to circulate a revised new recommendation on 2 April.  The Chair also
proposed to convoke another CRO meeting in a resumed session on 4 April 2001.  It was so agreed.
The following is the new methodology modified on the basis of the written comments and the
statements made by Members in the CRO meeting on 30 March.
2. Outline of the New Methodology (with time-frame)
Outstanding issues in the template in the negotiating document (G/RO/41) would be split into
stand-alone issues (chapter-specific issues) and horizontal issues (ex: assembly rule, value-added
rule).
As the first step, the collection of  Chair's recommendations  for stand-alone issues would be
provided for each group of chapters identified below.  The collection of the Chair’s recommendations
would serve as a basis for further negotiation, and cannot be deemed to prejudice the position of any
Member.
- Chapters  1-24  (agricultural products and fish)
- Chapters 25-27 (mineral products)
- Chapters 28-40 (chemicals)
- Chapters 41-43 (leather)
- Chapters 44-49 (wood and paper)- Chapters 50-63 (textiles)
- Chapters 64-67 (footwear and headgear)
- Chapters 68-70 (ceramics)
- Chapter 71 (precious stones and metals)
- Chapters 72-73 (iron and steel)- Chapters 74-81 (non-ferrous metals)
- Chapters 82-83 (articles of metal)
- Chapters 84-85,90 (machinery)
- Chapter 86-89 (transportation equipment)
- Chapter 91 (watches)WT/GC/M/65
Page 48
- Chapters 92 (musical instruments) and
- Chapters 93-97 (other articles)
 - (12 April 2001) The Chairman would circulate the collection of recommendations  to all
Members for their consideration at the meeting of the CRO in May.
- (7-18 May 2001)(*)  Chapters 1-24 (agricultural products), 50-63 (textile products) and 64
(footwear), including the Chairman's recommendations concerning these chapters, would be discussed
in the first week of the two week session.  The Chairman's recommendations concerning other
chapters would be discussed at the CRO  in the second week of the session.
- (8 June 2001)(**) As the second step, the collection of Chair’s recommendations for all
issues, including both stand-alone and horizontal issues, would be provided for all the chapters.
- (2-13 July 2001)(*)(**) The collection of Chair’s recommendations would be discussed at
the CRO.
- (9-13 November 2001) The results of the HWP shall be submitted to the 4th Ministerial
Conference.
- (*) On the last day of the CRO meeting, the CRO will review the status of the progress and, if
necessary, make changes to the agenda and methodology for future meeting and make arrangementfor further meetings.
- (**) The dates are subject to adjustment.
3. Mechanism for the provision of  collection of recommendations
- The split of issues into stand-alone and horizontal issues and the proposed recommendations
for each issue would be provided by the Chair in consultation with the facilitators for each group of
chapters as identified above.
In preparing the recommendations, the Chair a nd the facilitators shall be guided by the
criterion of substantial transformation as stipulated in Article 9 of the Agreement on Rules of Origin.
Any other criterion may only be of a complementary nature.WT/GC/M/65
Page 49
ANNEX II
Statement by Chairman of the Committee on Subsidies and Countervailing Measures
1. First, concerning procedural matters, the Committee has been working intensively on these
issues, and we foresee a busy schedule of further work between now and the summer break.
2. The discussions to date have been on the basis of the three written proposals received so far,
from Colombia on the definition of inputs consumed in the production process (G/SCM/W/429 ),
from India on the definition of inputs consumed in the production process and on aggregate and
generalized rates of import duty remission (G/SCM/W/430), and jointly from Cuba, the DominicanRepublic, Honduras, India, Indonesia, Malaysia , Pakistan, Tanzania, Uganda, and Zimbabwe
(G/SCM/W/431/Rev.1).  Members ar e now exchanging written questions and responses, which also
have been circulated in the G/SCM/W/- document series, and these written exchanges provide the
focus for the Committee's discussions in its informal sessions.
3. To date, the Committee has held informal meetings on these issues on 2 April and 1 and 3
May, and has scheduled three further meetings, for 31 May, 22 June, and 20 July.  Under the
procedures adopted, the Committee will direct the Chair to provide an interim report to the General
Council with a view to concluding work by 31 July 2001.
4. Taking the proposals in the order of the issues in the General Council’s decision, the joint
proposal by a group of countries seeks a change from 2 years to 5 years for the period over which
export competitiveness is to be established under Article 27.6, and seeks as well a mechanism to re-
allow developing countries that have achieved export competitiveness in a product to resume export
subsidies on that product if exports fall below the export competitiveness threshold.
5. Some of the main technical and operational points raised concerning this proposal are:
(i) Whether any criteria (such as a minimum time-period, how far below the export
competitiveness threshold the country’s exports of the product were, etc.) would be
applied to the loss of export competitiveness to determine whether the country was
eligible to resume provision of export subsidies on that product.  On this point, theproponents stated that this suggestion was worth exploring through further discussion.
(ii) What would happen to countries that went back above the export competitiveness
threshold, whether they would again have a multi-year period to phase out the
resumed export subsidies.  On this point, the proponents indicated that, pursuant toArticle 27.5, Members in this situation would have a further eight-year phase-out
period.
(iii) Whether such a change to a provision of the SCM Agreement could be accomplished
by an interpretation or only through an amendment of the Agreement.  On this point,the proponents stated that the procedural aspects of the issue should not be the main
focus of the discussion at this stage, but that the Committee should rather concentrate
on the substance for the time being, with the possibility of procedural issues being
addressed by the General Council.
(iv) The definition of "product" for purposes of Article 27.5, and in particular whether this
is a four-digit "heading" of the HS, or a "Section" of the HS.  The proponents stated
that the reference to a product as a "section heading" in the English text of Article
27.6 of the Agreement reflects the negotiators' intention to define a product as a
"section" of the Harmonized System.  The Secretariat was asked to look into theWT/GC/M/65
Page 50
terminology used in the French and Spanish versions of the Agreement, and has
found that the corresponding definitional terms used in the French and Spanish
versions of Article 27.6 correspond to the four-digit level, and that the word
"section", which in all three languages refers to a group of chapters, appears only in
the English text.  Members have requested that the Secretariat conduct an institutionalresearch into this issue, perhaps with the assistance of the Market Access Division.
6. Turning to India's proposal in respect of aggregate and generalized rates of duty remission or
exemption, the main idea behind this proposal is that the existing rules in the Agreement concerning
the accounting for duty drawback are too difficult for small and medium-sized businesses, particularly
in developing countries.  India therefore proposes allowing developing-country Members to establish
national averages for the use of imported inputs, based on statistical studies and published sources,instead of requiring every company to maintain it s own detailed records of the amounts of imported
and domestically-produced inputs that it uses in producing goods for export.
7. The main technical and operational questions that have been raised in respect of this proposal
are:
(i) Whether adequate published data would be available to perform the necessary
calculations, whether and how often the av erages would be updated, how different
levels of usage of input materials among producers would be taken into account, and
in general how transparency and verifiabil ity would be ensured, and circumvention
prevented, such that the final amount of total duty exemption or remission in respect
of a given input would be no greater than the amount of duties actually collected orowing on imports of that input incorporated into exported products.
(ii) Some Members suggested that a simpler way to proceed to address the problems
identified would be to establish tax-free zones, or to apply "end use" tariffs, which
apply reduced tariff rates on input products.  India has indicated in its view that thesealternatives would not address the specific problems of developing countries, due to
revenue needs and due to the fact that many companies produce for domestic
consumption as well as export.
8. On the final issue referred to the Committee for discussion, the definition of inputs consumed
in the production process, the proposals of both India and Colombia advocate including capital goods
in the definition in footnote 61 of inputs consumed in the production process.  India’s proposal argues
that capital goods, like catalysts, are not physically incorporated in the goods, and that if catalysts,
which undergo no permanent chemical change in the production process, can be considered "inputs
consumed", so should capital goods, which are depleted during the production process.
9. Among the main technical and operational comments and questions raised in respect of
India's proposal on inputs consumed have centered on is the question of transparency and verifiability,because in many cases a given piece of capital equipment may be used to make goods both for
domestic consumption and for export, capital goods are depreciated over varying and sometimes
lengthy periods, some capital goods may be used to make a range of different products, and some
goods may not easily be identifiable as either capital goods or final goods .
10. Colombia’s proposal, which addresses the question of indirect taxes rather than import duty
remission, is based on Colombia's reading of items (g), (h), and (i) of the Illustrative List of Export
Subsidies.  According to which Colombia's proposal, is  if item (h) is interpreted such that drawback of
indirect taxes is made conditional on the physical incorporation of inputs, this would discriminate
against developing countries by excluding capital goods from the implementation of instruments
intended to allow them to be imported under favourable conditions aimed at enhancing theWT/GC/M/65
Page 51
competitiveness of their exports.  Colombia proposes that "structured incentives" could allow
companies to take advantage of the first part of item (h) of the Illustrative List of export subsidies.
11. Four broad questions were addressed to Colombia, relating to the definition of capital goods,
the allocation of costs of capital equipment over time , the interpretation of item (h) of the Illustrative
List, and the definition of "structured incentives".
12. Colombia explained that the issue is access to capital goods on competitive terms so that
export competitiveness is not diminished by domestic tax burdens, and that reducing or eliminating
taxes and duties on such goods is not possible for some developing countries due to the pressing
revenue needs of governments.
13. I think that it is evident from this somewhat lengthy description of the Committee's
discussions to date concerning the implementation- related issues referred to it that the Committee is
working very hard and keeping a very demanding process going.  In accordance with the Committee'sagreed procedures, Members have based their work largely on written submissions – both proposals
and comments and questions thereon.  These papers have been submitted in accordance with quite
short deadlines, in spite of which they have been substantive and have addressed the proposals and
related issues in some depth.  Thus, I believe that all Members are committed to exploring the
proposals in detail to try to identify areas of common ground.  In terms of next steps, the Committeehas agreed to hold three more informal meetings on the implementation-related issues between now
and the end of July – on 31 May, 22 June and 20 July.  Around those meetings, I intend to consult
informally with Members to try and advance this work as much as possible, and I will keep the
General Council Chair informed of developments.
__________