WORLD TRADE
ORGANIZATIONWT/GC/W/514
28 August 2003
(03-4497)
General Council Original:  English
PARAGRAPHS 13, 14, 15 & 16, DEALING WITH SINGAPORE ISSUES,
OF THE DRAFT CANCÚN MINISTERIAL TEXT CONTAINED
IN DOCUMENT JOB(03)/150/REV.1
Bangladesh, Botswana, China, Cuba, Egypt, India, Indonesia, Kenya, Malaysia, Nigeria,
Philippines, Tanzania, Uganda, Venezuela, Zambia and Zimbabwe
The following communication, dated 27 August 2003, has been received from the Permanent
Mission of India on behalf of the above delegations.
_______________
Paragraphs 13, 14, 15 & 16, dealing with Singapore Issues, of the
Draft Cancún Ministerial Text contai ned in document JOB(03)/150/Rev.1
In paragraphs 13, 14, 15 and 16 of the draft Ministerial Text dealing with Singapore Issues,
two options have been indicated, one expressing the proponents’ view and the other of those who
favour continuation of the clarificatory process.  The sharp difference of view among Members on
these issues does not offer any other choice.
However, the Annexes D, E, F and G to the Draft Ministerial text, that reflect the view of
proponents on the modalities, gives a distorted view, that the Annexes have been discussed by
Members.  It would be recalled that the text on transparency in government procurement was
introduced by the proponents in a small group meeting.  We are not aware of any text having been put
forward by the proponents on trade facilitation.  The text on competition policy was discussed only in
a small group meeting.  Only the proponents’ paper on investment was introduced and discussedinconclusively in the HOD level meeting.  Thus, Members did not have an opportunity to discuss the
modalities identified by the proponents in all the Annexes to the Draft Ministerial text.
There was lack of clarity on how these issues will be dealt with in the draft Ministerial text,
due to which Members, who favour continuation of the clarificatory process, could not put forwardtheir views on the issues for further clarification in the form of a paper, though they had expressed
their views in detail during the consultations.  My delegation along with those of Bangladesh,
Botswana, China, Cuba, Egypt, Indonesia, Kenya, Malaysia, Nigeria,  Philippines, Tanzania, Uganda,
Venezuela, Zambia and Zimbabwe have jointly identified issues that require further clarification in
the respective Working Groups/CTG. These are reflected in the Annexes to the letter.
In the interest of balance in reflecting the broad spectrum of views on these issues in the Draft
Ministerial text, we would like to request you to add these Annexes to the draft text to be transmitted
to the Ministers. In addition, we would request that this letter together with Annexes be circulated to
all the Members as a formal document of the Genera l Council, so that every Member is aware of the
views of our delegations on this important issue.WT/GC/W/514
Page 2
The issues identified in the Annexes are illustrative and not exhaustive;  the cosponsors
reserve their right to bring up additional issues during the process of clarification. Further, it needs to
be recalled that negotiations on these issues can commence only on the basis of explicit consensus on
the modalities for such negotiations.
_______________WT/GC/W/514
Page 3
Relationship between Trade and Investment
Issues for further clarification in the Working Group
1. The objective of the discussions shall be to enable an improved understanding of the elements
of any possible multilateral framework on investment  and the impact of such a framework on national
economies of members, particularly developing members.
2. On the basis of Paragraph 22 of the Doha Ministerial Declaration and the work done thus far
under the Working Group on the Relationship between Trade and Investment, the discussions in the
clarificatory process shall focus on the following aspects:
- There is wide divergence amongst Members on the issue of scope and definition ; whether it
should be restricted to Foreign Direct Investment in goods based on an enterprise baseddefinition with a particular focus on green-field and export platform oriented FDI that will
lead to expansion of trade or should it cover foreign portfolio investments, debt transactions,
investment of short-term & speculative nature, strategic alliances and minority shareholdings,
Mergers & Acquisitions.  There is therefore need for clarity on the kind of FDI that should be
covered in a possible multilateral framework.  There is also need for clarification on whethermeasures at sub-national level should also be covered and if so, the mechanism for retaining
flexibility for developing members, including sectoral carve-outs for developmental purposes.
- There is wide divergence on the extent of coverage of any transparency  obligations –
whether these be limited to publication and notification of relevant policies, laws andregulations or should it extend to administration of domestic laws and procedures, prior
notification and comment on investment provisi ons.  There is no convergence on whether and
how transparency obligations would apply to (i) home Members to cover inter alia
publication, notification of policies, laws and regulations with regard to outward investment
flows, overseas operation of corporations originating in their territories, sectoral restrictions,restrictions on destination and transfer of technology;  and (ii) to foreign investors to cover
information on inter alia  raising of resources, sale and purchase of products and services,
transfer pricing as well as business relations and allocation of resources and profits.. It is not
clear whether and how derogation would be  permitted for developing members from
transparency obligations for developmental reasons or on account of resource constraints.
There is therefore need for further clarification on the scope and coverage of transparency
obligation to host member, home member and foreign investor.
- There is wide divergence on the issue of application of Non-discrimination  (MFN and NT)
principles – whether non-discrimination provisions at the pre-establishment stage of
investment would be part of any multilateral framework at all.  How would members retain
the right to policy flexibility to screen and channel investments in line with national policyobjectives?  How would specific exceptions be provided in the post-establishment phase for
developing and least developed members for development policy reasons?  There is need for
further clarification on the issue of application of non-discrimination principles to movement
of capital/investments -  which is quite distinct from trade in goods or services.
- There is need for clarity on exceptions and balance-of-payments safeguards  including the
right of Members to regulate and to apply restrictions on the movement or transfer of funds
by foreign investors into or out of the host Member to prevent and to address any BOP
problem or any other financial or currency problem.  There is also no clarity on whether and
how broader safeguards for other special situati ons such as the equivalent of an import surge
would apply.
- There is need for certainty on how special and differential treatment  and sufficient
flexibilities would be built into the archit ecture of any framework, including throughWT/GC/W/514
Page 4
exceptions (systemic, general, security, Member-specific, permanent carve outs,
developmental clause) for developing and least developed members.  The entire issue of
integrating the developmental dimension into any possible multilateral framework would
require further clarification.
- There is wide divergence amongst Members on the treatment of performance requirements
in any framework and whether and how developing and least developed members would be
allowed to have the freedom to apply performance requirements including on local content,
technology transfer, R&D, export performa nce, training, manufacturing and employment
generation. This would require further clarification.
- There is wide divergence amongst Members on the need for binding Investors’ Obligations
and Home Government Measures  for enforcement of these obligations on inter alia
prohibiting restrictive business practices, promoting technology transfer, ownership and
control, consumer and environmental protection, disclosure and accounting and whether
Home Government measures should include specific provisions in home Member laws for
enforcement of investor obligations?  It is not  clear how it would be ensured that foreign
investors recognise national policy objectives of host Member, including policies relating toownership, control, participation, and operation of foreign investors, and adhere to its socio-
cultural objectives and values.  How to ensure that any framework reflects in a balanced
manner the interests of home and host members and takes due account of the developmental
polices and objectives of host member government?  The entire issue of Investors’
Obligations and Home Government measur es would require careful examination.
- Clarification of regulation of Investment Incentives  including at sub-national levels with
flexibility for developing Members to pursue their development policies and priorities.
- There is no clarity on protection standards on expropriation and compensation ; would it
exclude indirect, regulatory or creeping expropriation, as well as any loss of earnings or
income from investment from any coverage of expropriation?  Should Members’ right to
regulate in public interest be recognised explicitly?
- There is no clarity on the relationship between any multilateral framework and relevant WTO
provisions;
- Further clarification of the relationship between any multilateral framework and existing
bilateral and regional arrangements on investment;
- Would a multilateral framework on investment be under the purview of the DSU?
- Other issues that participants may wish  to put forward for further clarification.WT/GC/W/514
Page 5
Trade and Competition Policy
Issues for further clarification in the Working Group
- Non-discrimination:
(i) Implication of the principle of national treatment on the policy space enjoyed by
developing and least developed Members for pursuing industrial, social and other
development strategies.
(ii) Scope of application of the principle of non-discrimination.(iii) Further clarification of the relationship between any multilateral framework and
existing bilateral and regional arrangements on trade and competition policy.
- Transparency:   Clarity on the requirement to notify or publish decisions taken in individual
cases; would the transparency requirements cover disclosure of enforcement priorities, case
selection criteria, exemption criteria and principle of derogation?
- Hardcore Cartels:   Clarification on the definition of hardcore cartels, including the role of
export cartels; would the criteria for prohibition of such cartels be based on ‘per se’ or ‘rule of
reason’ approach?  What would be the scope  of exemption from general prohibition on
hardcore cartels?  It is understood that inter-governmental arrangements are to be excludedfrom the definition.
- International Co-operation:   Further clarification on the likely burden on developing and
least developed Members for providing inform ation sought by developed Members and the
means to compensate them for their efforts.  Would voluntary cooperation limit the ability ofdeveloping and least developed Members to receive co-operation from developed Members in
investigation of anti-competitive practices?  What would be the norms for exchange of non-
confidential information, etc?
- Compliance Mechanism:   Clarification on the scope of applicability of DSU and/or peer
review in this area.WT/GC/W/514
Page 6
Transparency in Government Procurement
Issues for further clarification in the Working Group
Any possible new rules should cover transparency aspects only and shall not cover market
access and shall not restrict the scope of Members to give preferences to domestic supplies andsuppliers as agreed to at Doha.
- Definition, Scope and Coverage:    What should be the definition of Government
Procurement; should it cover only goods or both goods and services; should it be restricted
only to procurement at the Federal/Central level; whether only procurement above certain
value thresholds should be covered; would there be any criteria to define thresholds or should
it be left to individual Members to determin e; whether purchases by  public sector utilities
should be excluded; and  what should be the nature of Special and Differential treatment in
respect of these elements?
- Procurement methods and related procedures:   Should there be any prescription for use of
particular procurement methods and related procedures or should the procuring entities havefull flexibility to choose the procurement methods and related procedures in accordance with
their national law and practice?  How would it contribute to development objectives?
- Domestic review procedures:   Should the framework cover only provision of information on
the prevailing domestic review mechanisms or cover broad parameters or principles to beobserved by Members? Should there be common criteria for all Members to follow or should
it be left to individual Member to determine its own mechanism?
- WTO dispute settlement system:   Would the WTO dispute settlement mechanism apply to
possible new rules on transparency.  If so, how would the cross- retaliation mechanismoperate? Would non-violation be applicable?  Can other methods of compliance be explored?
- How can primacy be given in the negotiations to developmental aspects  in line with the Doha
Development Agenda? Given the current level of economic development of most developing
and least developed Members, how can adequate, effective and mandatory special and
differential treatment provisions be included?WT/GC/W/514
Page 7
Trade Facilitation
Issues for further clarification in the CTG
A number of issues require further clarification and reflection before an informed decision
can be taken on whether or not to launch negotiations in this area. Following issues, which are onlyillustrative and not exhaustive need to be focussed on in the future work of the CTG:
- What are the problems that Members have encountered in implementation of GATT Articles
V, VIII and X?
- What would be the estimated cost for developing and least developed members of
undertaking commitments under GATT Articles V, VIII and X of GATT 1994 as suggested
during the clarificatory process undertaken so far?
- What would be an appropriate and effective mechanism for compensating developing and
least developed members for the additional expenditure that they have to incur, to implement
the new rules and procedures?
- What are the possible ways and means of ensuring that the development policy space of
developing and least developed members is preserved?
- Given that some trade facilitation measures like authorised trader status can be discriminatory
towards SMEs on account of comparatively lower volume of their trade and limited financial
resources, what are the possible ways and means that could be adopted for fuller integration
of SMEs in international trade through any possible agreement on trade facilitation?
- What would be the mechanisms adopted for ha ndling situations where the infrastructural
facilities available in a Member country at different entry points vary widely?
- Given that  ‘implementation capacities’ are an important factor in this area, would developing
and least developed members be exempt from taking certain commitments due to lack of
adequate implementation capacity?  If so, what are the parameters to determine theimplementation capacity of Members?
- In the light of security concerns, what responses can be crafted in possible new rules on trade
facilitation to counteract such adverse effects on trade?  How far can principles like
proportionality and necessity test operate for trade procedures adopted specifically to meetsecurity concerns?
- What is the nature of special and differential treatment?  Will it be limited only to extension
of time frames or different levels of commitments?
- How can the concept of “enhanced technical assistance and capacity building” be
operationalized?
- Given that all the proposed new rules and procedures can only be in the nature of best
endeavour principles what is the justification for binding rules?
- What possible methods can be envisaged for enhancing effective co-operation between
customs authorities in the multilateral framework, which could complement the adoption of
trade facilitative procedures?
__________