RESTRICTEDWORLD TRADE
ORGANIZATIONWT/BFA/45
27 January 2000
(00-0333)
Committee on Budget, Finance and Administration
REPORT OF THE MEETINGS HELD ON 27 SEPTEMBER,
AND 4, 12 AND 29 OCTOBER AND 14 DECEMBER 19991
1. The WTO Committee on Budget, Finance and Administration met on 27 September, and 4, 12
and 29 October  and 14 December 1999 under the chairmanship of Ms. Dubois-Destrizais of France.  The
terms of reference and composition of the Committee are set out in document WT/L/44/Rev.1.  TheAgenda contained in document WTO/AIR/1175 was adopted.
I. DIRECTOR-GENERAL'S FINANCIAL REPORT ON THE 1998 ACCOUNTS OF THE
WTO AND REPORT OF THE EXTERNAL AUDITOR THEREON
2. A member of the Secretariat presented the Director-General’s Financial Report on the 1998
Accounts of the WTO and the Report of the External  Auditor Thereon (WT/BFA/W/34).  He explained
that the report was based on the Final Position of the 1998 Budget of the WTO (WT/BFA/W/33) whichpresented the budgetary situation at 31 December 1998 and which was approved by the General Council
on 15 July 1999 WT/GC/M/45.  He highlighted the positive balance of CHF 6.5 million in the Surplus
Account as at 31 December 1998 and drew the attention of the Members to the proposal of the Director-
General contained in document WT/BFA/SPEC/37 with regard to the use of the Surplus.  Referring to the
recommendations of the external auditors, he indicated that:  (i) the auditors had requested that they bekept informed about important developments regarding the Pension Fund;  (ii) a member of the audit
team who specialized in pension funds would come to Geneva with the other members of the team in the
autumn to look into the developments concerning the WTO Pension Fund;  (iii) the Personnel Division is
committed to collecting data for the purpose of monitoring personnel management;  and (iv) the
information regarding fulfillment of divisional workpl ans and realization of objectives would be included
in the reports on the 1999 budget.
3. With regard to the auditors' comment that consideration be given to the creation of a post of
Internal Auditor, a member of the Secretariat gave a detailed overview of the financial control system as
it exists in the WTO.
4. After discussion, it was thought that the matter should be deferred until the Senior Management
of the WTO was in place. The Committee agreed to review the possibility of creating a post of internal
auditor post in 2000.
5. See Recommendation I of  document WT/BFA/44.
                                                     
1 This report should be read in conjunction with document WT/BFA/44 which contains the
recommendations to this report and which was approved by the General Council on 17 December 1999.WT/BFA/45
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II. WTO SECRETARIAT AND THE APPELLATE BODY AND ITS SECRETARIAT
A. PERFORMANCE AGAINST BUDGET AS AT 31 AUGUST  1999
6. A member of the Secretariat presented the Performance Against Budget Report as at
31 August 1999 (CRP(99)22).  It was projected that  there would be an overall saving of some
CHF 1,975,000 which was the net result of anticipated savings over expected excess expenditures.
Expected excess expenditure was mainly due to (i) the large demand for temporary assistance, in
particular for translation and interpretation, (ii) communications and utilities costs, (iii) insurance, and,
highly significantly, (iv) Dispute Settlement Panels (where expenditure was expected to be some 2.4
times the allocation). Savings were foreseen mainly under (i) salary and pension costs, (ii) Staff OverheadCosts for Joint Services, and (iii) Trade Policy Training Courses.
7. In order to better understand the overall costs of the Dispute Settlement Mechanism (DSM), the
Secretariat distributed document CRP(99)17 which provided a summary of the relevant costs incurred at
31 December 1998 and 31 August 1999.  It was noted that expenditure for DSM activities was financedfrom the regular budget of the WTO Secretariat and the Appellate Body (permanent costs) as well as
from the Appellate Body Operating Fund (with regard to variable co sts). The information showed that
total 1998 expenditure under the various areas amounted to some CHF 8.3 million and 1999 expenditure
to 31 August amounted to some CHF 6.9 million, which could theoretically lead to total expenditure of
some CHF 10.3 million if the expenditure trend continued to the end of the year.
8. In response to a query, the Secretariat indicated that the anticipated savings made in the Trade
Policy Training Courses were due mainly to the fact that (i) some costs related to the study tours had been
met by the relevant host governments and (ii) the daily subsistence allowance in Geneva had not been
increased as anticipated.
9. The Committee took note of the report on the Perf ormance against Budget as at 31 August 1999.
B. B
UDGET ESTIMATES FOR 2000
10. The Secretariat introduced the Director-General's budget proposals for 2000 (document
WT/BFA/SPEC/37) which amounted to CHF 128,73 8,110 for the WTO Secretariat activities and
CHF 2,330,550 for the Appellate Body and its Secretariat (permanent costs).  With regard to the WTO
Secretariat activities, the estimates showed a real increase of 3.18 per cent over the 1999 approved
budget.  The major areas of increase concerned:  (i) a total of nine additional posts, three each in the areas
of legal expertise, translation, and technical assistance;  (ii) additional resources for electronic data
processing and informatics, and (iii) temporary assist ance.  With regard to the permanent costs of the
Appellate Body and its Secretariat, the estimates showed a real increase of 1.99 per cent over the 1999approved budget.  The increase concerned essentially additional internships and the reproduction of
Appellate Body reports.  The Secretariat drew the attention of the Members to the 2000 draft scale of
contributions that was calculated on a basis of 0.015 per cent as instructed by the Committee in June
(WT/BFA/40, paragraph 17).
11. Referring to the documents CRP(99)28 and 29, the Secretariat confirmed that the present grading
was in accordance with the grading prior to the cancel led reclassification exercise.  With regard to the
various elements of the standard costs, the Secretariat informed the Members that:  (i) the statutory
increases included costs related to staff entitlements, the salary index system as well as the full funding of
new posts authorized for 1999;  and (ii) the increase in the other common staff costs included theprovision for dependant spouse, which was previously an element of salary for Professional staff with
dependants, as a result of the introduction of the WTO Conditions of Service.
12. Further, the Secretariat indicated that, as the Institut Universitaire des Hautes Etudes
Internationales (IUHEI ) still occupied the basement of the Centre William Rappard (CWR), new officesWT/BFA/45
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had been identified in the area near the CWR.  The offices would be made available under the terms of
the Infrastructure Contract of the Headquarters Agreement signed with the Swiss authorities (WT/GC/2,
Part G, Future Infrastructure of the WTO).
13. Some Members showed concern over their assessed contributions for 2000 and others indicated
that it would be difficult for their countries to accep t such high increases.  The Secretariat informed the
Members that one of the various reasons which could account for variations in assessed contributions
concerned the years for which International Monetary Fund data was available.  The Chairperson
indicated that it would be difficult to review the methodology of calculation for 2000;  the matter could,however, be taken up in the Committee next year.
14. With regard to a question concerning the inclusion of the funding of Technical Assistance
Activities into the regular budget, the Secretariat indi cated that the matter would be discussed in the
context of the Ministerial Conference in Seattle.  At the request of members of the Committee,documents CRP(99)31 and 32 providing comparisons of  the draft scales of contribution for 2000 in the
budget proposal document with scales based on th e inclusion into the regu lar budget of CHF 4 million
and CHF 10 million respectively were distributed.  It was stressed that the tables were for information
purposes only.
15. One Member suggested that “ Staff Overhead Costs “ be amalgamated into Part A of the Budget
in the future.  With regard to staff costs, the Secretariat drew the attention of the Committee to the
expanded presentation concerning the evolution of overall costs for salaries, pensions and other common
staff costs from 1999 to 2000.  The presentation was included at the request of members of the
Committee so that the various elements entering into the total amount could be readily identified.
16. Some Members recalled that, at the time of the establishment of an independent WTO
Secretariat, it was stressed that potential cost increases in the WTO budget, including those relating to
staff, should be offset through efficiency gains, improved priority-setting and other savings measures to
ensure cost neutrality in the overall level of the WTO budget.  The Secretariat informed the Members that
the increase in activities as clearly shown in document CRP(99)38 (Summary of Workload Indicator
Data) was far in excess of any proposed increase in the regular budget, which indicated that efficiencygains had been and were continuing to be effected in  the WTO.  It was also indicated that the actuarial
certification with regard to cost neutrality (WT/GC/W/103) was (i) based on calculations and projections
of the staffing situation as it existed in July 1998 and (ii) was foreseen over a period of seven years
(document CRP(99)35).  Moreover, the cost of the transitional measures would diminish in the coming
years.
17. In addition, the Secretariat also informed the Member s that a call for tenders with regard to health
insurance was made on a periodic basis.  Further, the Secretariat confirmed that it was a standard practice
among international organizations to participate in the cost of insurance premiums for retired staff
members.
18. With regard to the EDP, some Members questioned the reasons for the increase including the
additional resources requested for consultants.  The Secretariat provided documents CRP(99)27 and
CRP(99)27/Add.1 which gave an overview of the EDP sy stem in the WTO.  A member of the Secretariat
explained to the Members that the informatics programme could be viewed in terms of:  (i) keepingexisting systems up and running;  (ii) improving the quality of services directly provided to Members;
(iii) improving the output of the Secretariat;  and (iv) communicating with the outside world.  He
explained the various projects foreseen for 2000 but insisted that their implementation, whether partial or
complete, depended on the resources made available.
19. The Secretariat drew the attention of the Committee to paragraph 75 in the budget proposal
document (WT/BFA/SPEC/37) with regard to th e proposed amount of CHF 400,000 for the next
Ministerial Conference subsequent to the Conference in Seattle.  It was noted that the financing of aWT/BFA/45
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Ministerial Conference over two annual budgets would imply the creation of an operating fund, as the
CHF 400,000 in the 2000 budget would be one-half of the amount foreseen for the next Conference.  The
other half would be financed from the budget for 2001, which was assumed to be the year in which the
Conference would take place.
20. In the general discussions which followed, the Secretariat provided a combined staffing and post
table which showed both the distribution of posts as well as the distribution of staff in the WTO.
Additional information and explanations were provided, inter alia , with regard to staff costs, hospitality
provisions for Senior Management, as well as the overall costs for the Dispute Settlement Mechanism(see paragraph 7 above).  Several members of the Committee reiterated the positions of their
governments with regard to increases in the budgets of international organizations.  While some
delegations were of the opinion that the resources provided to an organization had to be commensurate
with the workload foreseen and tasks required, others focused on national policies which went in the
direction of zero real growth or zero nominal growth.
21. One Member, in particular, indicated that the proposed WTO budget for the year 2000 did not
take account the serious financing problems of the Member States.  The budget proposal was not in line
either with many international organizations, especially those of the United Nations system, which are
able to function with nominally constant budget volumes over the 2000-2001 budgetary period.  Heindicated that his country could accept the budget proposal for the year 2000 only in view of the
unanimous request by all other Member States.  Acceptance furthermore was possible only with the
proviso that the initial stage of the new WTO had now come to an end and that, like the other international
organizations where the areas of activity were equally important, the organization should from now on be
in a position to carry out the functions it has discharged until now in accordance with the principle ofnominal zero growth.
22. In referring to the expenses arising from end-of-service indemnities for staff who did not take up
WTO contracts and which were to be accommodated from the 1998 Surplus, he indicated that his
Government took cognisance that those expenses were of a non-recurrent nature without any bearing on
the preparation of future budgets of the WTO.  Fu rthermore, his Government's position was that with
regard to expenses for the Appellate Body:  (i) they should be funded out of the regular budget, (ii) there
should not be any budget increase stemming from this, and (iii) there should therefore be reallocationsplanned in good time with a view to the budget for the year of 2001.
23. Taking into account the various points raised by Members of the Committee, the Secretariat
presented revised proposals for the 2000 budget.  Reductions were proposed with regard to:  (i) the
number of new posts proposed (from nine to six);  (ii) the number of proposed regradings from a total of30 to a total of 25;  (iii) absorbing the effects of in flation;  (iv) staff cost recalculation using the most
recent information available;  (v) applying a projected refund from the International Trade Centre
UNCTAD/WTO;  (vi) reducing the amount for Trade Poli cy Training Courses study tours (as at least part
of the costs is normally covered by the host government);  (vii) various capital expenditures;  (viii) the
amount available to divisions for vacant posts;  and (ix) amounts foreseen for permanent equipment,expendable equipment and reproduction under the permanent costs for the Appellate Body.
24. After detailed discussions, the Committee agreed to recommend a budget for the WTO
Secretariat for 2000 amounting to CHF 125,386,460 and fo r the permanent costs of the Appellate Body
and its Secretariat amounting to CHF 2,310,550.  The revised estimates of expenditure for the financialyear 2000 are contained in Schedule I-A and Schedul e I-B respectively of document WT/BFA/44.  (For
the contribution to the ITC, see Chapter III)
25. See Recommendation IV of document WT/BFA/44.WT/BFA/45
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III. UTILISATION OF THE 1998 SURPLUS
26. A member of the Secretariat recalled that, in its examination of the report on the Final Position of
the 1998 Budget (WT/BFA/W/33, paragraphs 45 and 46), the Committee noted that the Director-General
would submit a proposal on the use of the credit balance amounting to CHF 6,485,316 in the 1998Surplus Account.
27. In his proposals for the 2000 budget (WT/BFA/ SPEC/37), the Director-General proposed to
allocate the Surplus to:  (i) th e termination indemnities paid in  accordance with United Nations
Regulations to those staff who did not accept a WTO contract when the ICITO (Interim Committee forthe International Trade Organization) was dissolved at the end of 1998, and (ii) the financing of the
Appellate Body Oper ating Fund (ABOF).
28. Since the matter had been initially outlined in the budget proposal document
(WT/BFA/SPEC/37), several former ICITO staff members had submitted proof for payment of specificentitlements (e.g. repatriation grant).  The Director-General's proposal thus takes into account all former
staff members who, upon presentation of proof, are eligible for entitlements.
29. See Recommendation II of document WT/BFA/44.
IV. INTERNATIONAL TRADE CENTRE UNCTAD/WTO:  PERFORMANCE AGAINST
BUDGET AS AT 31 AUGUST 1998 AND PROPOSED REGULAR BUDGET OF THE ITC
FOR 2000
30. On behalf of the Executive Director of the International Trade Centre UNCTAD/WTO (ITC), the
Deputy Executive Director provided a general introduction to the item regarding the ITC.  ITC's BudgetProposals for the year 2000 (ITC/BUD/28) were presented by a member of the ITC Secretariat, who
highlighted that the 2000 budget estimates amounted to CHF 29,516,000,  representing a 1.4 per cent real
growth over the 1999 level.  Taking into account estimated miscellaneous income of CHF 405,000, the
share of each parent organiza tion would amount to CHF 14,555,500.
31. Further to questions raised by Members of the Committee, the representatives of the ITC
indicated that staffing for the Administrative Un it for the Integrated Framework for Least Developed
Countries was provided on the regular budget for one P-3, proposed for reclassification to the P-4 level,
and one post for secretarial assistance.  In addition, two Professional staff have been loaned to the Unit,
one from WTO and one from UNCTAD.  As to the high percentage of posts in administration in ITC's
regular budget, this needed to be seen in the context of ITC's total resources and total number of
positions, including 14 programme posts financed by the Global Trust Fund and other trust fund donorsto perform regular programme functions.
32. In response to a question from a Member of the Committee, it was indicated that extra-budgetary
resources were allocated according to the decisions of the donors.
33. With regard to the new budget review and approval process, Members were informed that the
initial outline had been presented first to the WTO and then to the United Nations in June, and that both
had taken note of the estimates herein.  As to the el aborated budget proposals, the progression of review
in the UN begins with the ACABQ, and subsequently the Fifth Committee.  A procedure to be followed
in case of disagreement between the parent bodies over the budget had not been elaborated.
34. In comparing ITC's standard cost with that of the WTO, it was noted that ITC's standard cost of
CHF 158,200:  included (i) the share of the Joint Medical  Service;  (ii) contributions to insurance for
service-related accidents;  and (iii) other miscellaneous charges such as the cost of advertisements for
post vacancies and costs relating to issuing laissez-passez  and passports.WT/BFA/45
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35. A representative of the ITC informed the Committee that the UN Secretariat, while in agreement
with the ITC budget proposal in general, did not support the inclusion of reclassifications.  This was due
to concern regarding the overall grade structure of the UN Secretariat.  Amongst the Members there was
support and no general opposition to the new posts and reclassifications, but it was decided to reconveneon the subject to consider the UN Secretariat’s position, as well as new information available in a CRP on
the evolution of staff costs.
36. A member from the ITC Secretariat presented the report on Performance Against Budget as at
31 July (document ITC/BUD/29).  Implementation was estimated at CHF 28,820,379 against a budget of
CHF 28,820,400, representing an implementation rate of nearly 100 per cent.  Over-expenditures were
expected in (i) common staff costs due to a significant change in the level of staff turnover and an
increase in the cost of education grants and the effe ct of the exchange rate, (ii) permanent equipment due
to the installation of a smoke detection and automatic fire extinction system in the EDP control room, and
(iii) contractual services due to the establishment of a system for safeguarding ITC’s network and data.Savings were expected in (i) telecommunications, and (ii) publications.
37. With regard to the report on the Performance Against Budget, a Member of the Committee noted
that expenditure seemed quite high in comparison with the expected situation at the end of the year.  The
ITC Secretariat explained that expenditure information reflected the accounting of both disbursementsand known commitments, or obligations;  as such, unde r rent, for example, the entire commitment for the
year would appear as expenditure, although only half would have been paid at the date of the report.
38. The Committee took note of the Performa nce Against Budget as at 31 July 1999.
39. In a subsequent session of the Committee, a representative of the ITC recalled the position of the
UN Secretariat on the reclassifications.  In response, a member of the Committee reiterated his position
that the counterpart to the WTO Committee on Budget , Finance and Administration in the United Nations
was the Fifth Committee, not the UN Secretariat.  As such, it was the role of the governing bodies to
decide on budget proposals, including staffing table changes.
40. In addition, the Committee accepted the proposed budget of the ITC for 2000 amounting to
CHF 29,516,000.  The WTO share amounts to CHF 14,555,500, taking into account the total
miscellaneous income estimated at CHF 405,000.  This amount does not take into account the savings of
CHF 355,600 pertaining to year 1998.  At the request of two Members, the Committee stipulated,
however, that the three proposed reclassifications w ould not be implemented before the Committee could
further study the matter in early 2000.
V. OTHER ITEMS
A. A
DMINISTRATIVE UP -DATES AND PROGRESS REPORTS
41. The Committee heard the reports presented by the Secretariat on the cash situation, the statement
of outstanding contributions as at 31 August 1999, the progress report of instalments for countries inarrears, the contributions of Observer countries towards the cost of services provided by the Secretariat,
and report on the scheme to facilitate the payment of pre-1988 arrears.  As of 31 August 1999, the total
contributions received amounted to CHF 92,511,736, and the Working Capital Fund stood at
CHF 7,570,931.  It was noted that Argentina had liquidated all its outstanding payments and was no
longer listed under the Administrative Measures.  Since 31 August 1999, the date of the report onoutstanding contributions, Greece, Trinidad and Tobago, and Jamaica had made payments.  As of
31 August 1999, the outstanding contributions of Observers to the WTO towards the cost of services
provided by the Secretariat stood at CHF 441,682.  With regard to the seven WTO Members which had
benefitted from the scheme since 1995, all but one were up to date with their contribution payments.
42. The Committee took note of the reports.WT/BFA/45
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B. USE OF BALANCE UNDER THE 1998 EXTRA -BUDGETARY FUND TO FACILITATE THE
PARTICIPATION OF LDC S IN GENEVA MINISTERIAL CONFERENCE .
43. A member of the Secretariat recalled that a Trust Fund was created to finance the participation of
Least Developed Countries (LDCs) in the 3rd Ministerial Conference in Seattle.  In addition to
accommodation costs for two LDC representatives paid by the host country, an estimated amount of
CHF 695,000 would be required to finance the partic ipation of two persons per LDC delegation, and
some CHF 986,000 for three persons.
44. Out of the balance of CHF 137,000 under the 1998 extra-budgetary fund to facilitate the
participation of LDCs in the Geneva Ministerial Conference, some CHF 77,000 had already beentransferred to the new fund with the agreement of the donors concerned.  The Secretariat was awaiting
response from the other donors.  In addition, the Secretariat proposed that the pro-rata balance
(CHF 52,507.95) of the 1998 fund remaining from the contribution from the 1996 Surplus also be
transferred to the current fund.
45. A member of the Committee, making reference to a recent UNCTAD-financed meeting,
indicated that it would be useful if delegates following WTO matters in Geneva could attend the
Ministerial Conference.  While some members of the Committee indicated support for the idea, it was
noted that the final decision on participation in the Conference rested with the national authorities.
46. The Committee took note of the situation regarding the extra-budgetary fund for Seattle and was
of the opinion that the balance of CHF 52,507.95 should be transferred to that fund.
C. WTO 
DOCUMENTATION DISTRIBUTION SYSTEM
47. A member recalled a previous discussion on this  question at the meeting of the Committee in
June 1999.  At that time, the Secretariat indicated its intention to write to delegations with a view to (i)
verify the current mailing list and (ii) to provide in formation on the availability of documentation and
other information concerning the WTO on the Organization's Web-site.
48. The Documents Reproduction and Distribution Secti on, was in the process of establishing a new
data base as the facility in the ICC, where the addresses were currently stored, had become obsolete and
could not respond effectively to present needs.  In th e interests of both obtaining effective results and
avoiding duplication of effort, it was decided to combine this exercise with the exercise discussed in the
Budget Committee.  This combined exercise will take place between November 1999 and February 2000.
The verification exercise would also include other international organizations, non-governmental
orgainzations, universities, journalists and depository libraries.
49. The Committee took note of the report and requested the Secretariat to keep the Committee
informed of the progress.
D. PUBLICATIONS
50. A member of the Secretariat presented docum ent CRP(99)23 which provided the comments
received from the some Members, responding to a letter from the Secretariat, with regard to the numberof free copies of publication to be distributed.  Further, he explained that about 80 per cent of the
publications in electronic form were on the Web-site, and that the WTO received 200 free copies for each
publication in electronic form.  Of these, two free copies were provided to each LDC, some were retained
for the Technical Co-operation Division and some for use in missions undertaken by the WTO staff.
51. The Committee agreed that, upon request, developing countries could also receive one copy of
publications in electronic form and that flexibility w ould be shown to the special needs of these countries.
Efforts should be made to put all publications in electronic forms on the Web-site.  This same flexibilityWT/BFA/45
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would be shown to developing countries with regard to hard copies of publications.  The matter should be
reviewed in a year’s time to evaluate the costs involved.
E. WORKPLAN FOR 2000
52. The Chairperson referred to document CRP(99)24 th at provided a tentative schedule of meetings
of the Committee for the year 2000.  It was noted that the schedule might have to be adjusted once the
dates of the meetings of the General Council for 2000 were known.
F. PARKING FACILITIES
53. A member of the Committee referred to the diff iculties, which were expressed in the previous
meeting of the Committee, of finding parking in the WTO in time of meetings, especially for his
ambassador.
54. At the request of the Members, the Secretariat distributed the document CRP(99)37 providing
information of the parking space in the Centre Wi lliam Rappard (CWR).  There were some 190 parking
places around the CWR, of which some 146 were reserved for delegates, seven for the WTO Secretariat
official cars, 27 for Deputy Director Generals and Directors and some ten for handicapped staff members.
In addition, a provisional parking area with 400 places at the “Chemin des Mines” was available for the
delegates and the WTO staff.  The site of the definite covered parking will be decided upon in the near
future by the Swiss authorities.
55. The Committee took note of the document provided and the comments expressed.
G. ASSESSMENT OF ADDITIONAL CONTRIBUTION TO THE 1999 BUDGET AND ADVANCE TO THE
WORKING CAPITAL FUND :  ACCESSION OF ESTONIA TO THE WTO
56. See Recommendation III of  document WT/BFA/44.
H. ASSESSMENTS ON  OBSERVERS
57. The Committee recalled that, in its earlier discussions with regard to revising the minimum
contribution to the WTO budget, it was noted that contributions of observers to the WTO had been set at
one-half of the minimum contribution.
58. See Recommendation V of document WT/BFA/44.
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