RESTRICTEDWORLD TRADE
ORGANIZATIONWT/BFA/53
20 June 2001
(01-3070)
Committee on Budget, Finance and Administration
REPORT OF THE MEETING HELD ON 14 MAY 2001
1. The WTO Committee on Budget, Finance and Administration met on 14 May 2001 under the
chairmanship of Mr. H. Akil of Turkey.  The terms of reference and composition of the Committee
are set out in document WT/L/44/Rev.1.  The agenda contained in documents WTO/AIR/1515 and
WTO/AIR/1515/Add.1 were adopted wi th four additional points under item “Other Business”: (i)
proposal from the United Kingdom and the Netherlands;  (ii) communication from Qatar;  (iii)
appointment of an expert on human resources, and (iv) “Geneva Week” for non-resident delegations.
I. ADMINISTRATIVE UP-DATES AND PROGRESS REPORTS AS AT 30 APRIL 2001
CASH SITUATION AND STATEMENT OF OUTSTANDING CONTRIBUTIONS (CRP(01)01 AND
WTO/BFA/SPEC/59)
INSTALMENT PAYMENTS FOR COUNTRIES IN ARREARS (CONTRIBUTIONS FROM 1987 AND EARLIER
YEARS ) (CRP(01)02)
CONTRIBUTIONS OF OBSERVER COUNTRIES TOWARDS THE COST OF SERVICES PROVIDED BY THE
SECRETARIAT (CRP(01)03)
HUMAN RESOURCES QUESTIONS (CRP(01)06)
2. The Secretariat presented reports on the cash situation and statement of outstanding
contributions as at 30 April 2001, the instalment payments for countries in arrears, and the
contributions of Observers countries towards the cost of services provided by the Secretariat.  The
total contributions received from Members amounted to CHF 79,706,275 while contributions received
from Observers amounted to CHF 346,393.  The Working Capital Fund stood at CHF 8,106,085.
Since 30 April 2001, Kenya had made payment.  As of 30 April 2001, there were three Members in
Category I and six in Category II, while in Category III there were two and in Category IV, eighteen.
3. A member of the Secretariat provided a progress report in the field of human resources.  Of
the total of 13 new posts created in the 2001 budget,  ten had so far been advertised and a candidate
for one post had been selected.  The ability of the WTO to attract qualified staff varied depending on
the field of specialisation.  There were more diffic ulties in recruitment when competing with private
firms in the legal field.  An organization-wide training programme on the performance award system
had been launched to familiarize staff on the matter.  With regard to the WTO Pension Plan, theManagement Board was focussing its attention on the establishment of a subsidiary investment
committee which would be responsible for overseeing the performance of the three investment
managers, monitoring the overall investment strategy and recommending adjustments where required.
4. As requested by Members, the Secretariat would provide a breakdown of the staff by gender
in the support and professional categories as well as a list of nationalities of the staff in a futureprogress report.
5. The Committee took note of the reports.WT/BFA/53
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II. EXTERNAL AUDITOR: FORMATION OF WORKING GROUP
6. The Chairman recalled that the Secretariat sent out calls for tenders on 22 February 2001 for
the appointment of the WTO External Auditor.  The Secretariat received five tenders, namely (i) theAustrian Court of Audit;  (ii) the Comptroller and Auditor General of India;  (iii) the Auditor General
of Pakistan;  (iv) the Swedish National Audit Office;  and (v) the UK National Audit Office.  A
Working Group, open to all Members, would be established to study the offers and to formulate a
recommendation on the selection of the External Auditor to the Committee.  As the Working Group
would be studying the offers in detail, and for practical reasons, it was recommended that a constant
participation would be required.  Further, the Chairm an suggested that, for reasons of “fair-play” the
Members whose Auditor-General had submitted an of fer should abstain from participating in the
Working Group.
7. The representatives of the Members who woul d like to participate in the Working Group
should inform the Secretariat in writing at the latest by 25 May 2001.
III. PROPOSAL TO CREATE A TRUST FUND TO FINANCE THE TRAVEL
EXPENSES OF THE DELEGATES OF THE LEAST DEVELOPED COUNTRIES TO THEDOHA MINISTERIAL CONFERENCE
8. The Secretariat recalled the past practice of establishing a trust fund in order to facilitate the
participation (travel costs) of Least Developed Countries (LDC) in the Ministerial Conferences, whilst
the Host Countries covered the accommodation costs of LDC delegations.  As for the SeattleMinisterial Conference, the LDCs’ delegations would comprise of one Minister and two high
officials.  It was estimated that the travel cost s for the Doha Ministerial Conference would amount to
approximately CHF 700,000.  The amount was based on a full tariff airticket (business class for the
Minister and economy class for the accompanying officials).
9. Further, the Secretariat urged Members to make their voluntary contributions as soon as
possible so that the proper arrangement could be made.
10. The Committee took note that a trust fund would be established to facilitate the participation
of Least Developed Countries’ representatives to the Doha Ministerial Conference.  The Committee
recommends to the General Council that it urges interested donors to indicate to the Secretariat
as soon as possible the level of financial support they are prepared to provide.
IV. CONSIDERATION OF A PROPOSED CONTRIBUTION FROM A NON-
GOVERNMENTAL DONOR
11. A member of the Secretariat recalled that, upon the recommendation of the Committee, the
General Council adopted on 15 December 2000, guidelines governing the process of acceptance of
voluntary contributions, gifts or donations from non-Governmental donors (document WT/L/386).  In
compliance with these guidelines and in particular to paragraph 4 of WT/L/386, the Secretariatsubmitted document WT/BFA/W/56 which described the proposed donation from Friedrich-Ebert-
Stiftung (FES), a German-based non-profit foundation, to the Committee for its approval.
12. In reply to the queries of the Members, the Secretariat indicated that the proposed WTO
Training Courses for Journalists was part of the WTO programme of activities for the Information and
Media Relations Division which had been presented to Members in the context of examining thebudget proposals for 2001.  The proposed FES donation would make the participation of journalists
from developing countries possible, as there were no provisions in the budget to cover these costs.
Information contained in the document WT/BFA/W/56 with regard to the FES originated from the
latter.WT/BFA/53
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13. The Committee decided that the Director-General could therefore accept the donation in kind
from the Friedrich-Ebert-Stiftung (FES) estima ted at CHF 115,000 in order to facilitate the
participation of developing countries journalists in a series of 2 1/2 day seminars designed to
familiarize these journalists with current WTO issues and build their capacity to write on WTO topics
as described in document WT/BFA/W/56.
V. ITC 2002 BUDGET OUTLINE
14. The Deputy Executive Director provided detailed information on the present goals and
activities of the ITC.  He indicated that the outline provided in document ITC/BUD/39 was the same
as the one presented in January 2001, and the main increases for 2002 were:  (i) Executive Forum on
National Export Strategies;  (ii) electronic trade;  (iii) the United Nations’ Integrated Management
Information System (IMIS);  (iv) other information technology;  (v) improved building security, and(vi) regradings.  The Advisory Committee on Administrative and Budgetary Questions (ACABQ) had
recommended to the Fifth Committee of the United Nations General Assembly (UNGA) approval of
the budget outline.  The ITC would provide detail ed 2002 budget estimates in October for review and
approval.
15. In reply to queries, the representative of the ITC informed the Committee that the difference
in increase in percentage mentioned in the documents ITC/BUD/39 and the Report of the United
Nations’ Secretary-General on the ITC outline, A/55/797 (“Outline of the proposed programme
budget for the biennium 2002-2003 for the International Trade Centre UNCTAD/WTO”) was due to
the different methodologies of calculation used.  The underlying figures were the same.  He further
provided additional information on the Executive Forum.  A copy of his intervention is heretoattached as Annex.
16. The Committee took note of the report.
VI. OTHER BUSINESS
PROPOSAL FROM THE UNITED KINGDOM AND THE NETHERLANDS
17. A representative from the United Kingdom (UK) referred to the proposal made in the “Non-
Paper” prepared by the Netherlands and the UK on result-based budgeting, which was discussed at the
meeting of the Committee last year.  It was proposed that prior to the submission of the budget
estimates for the next year, a report from the external auditor, relating to the efficiency of the
organization and the capacity of the organization in relation to its workload, be provided to the
Members and be discussed at the Committee’s meeting.  The discussion would help to see where
resources are over or under applied, and the expertise of the expert on human resources could bedrawn on.
18. The Secretariat took note of the proposal that was widely supported and informed the
Committee that it would apply the sequences of the cyclical process of a result-based budgeting and
that the auditors were aware of it.
COMMUNICATION FROM QATAR19. A representative of Qatar informed the Committee that his Government would provide free
accommodation and subsistence allowance to all representatives of the LDCs attending the WTO
Ministerial Conference in Doha.  He indicated the importance of the creation of Trust Fund for the
travel expenses of representatives of the LDCs which would indicate the number of LDCs and the
number of representatives of the LDCs participa ting the Conference, the budget, and the mechanism
for its implementation.  He then urged the Members to  contribute to the Trust Fund well in advance so
that proper arrangement could be made.WT/BFA/53
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APPOINTMENT OF AN EXPERT ON HUMAN RESOURCES
20. The Secretariat recalled the suggestion made at the last meeting of the Committee in 2000 to
recruit an expert on human resources.  He informed the Committee that a candidate who had wide
experience on human resources in international organizations had been identified.  The expert would
assume his function in June/July.  The expert’s report would be communicated to the Committee priorto the approval of the budget estimates for next year.
“GENEVA WEEK” FOR NON-RESIDENT DELEGATIONS
21. The Secretariat presented the document CRP(01)06 and drew the attention of the Committee
to the funding difficulties encountered for the financing of the “Geneva Week” for non-resident
delegations.
22. A Member suggested that the item be discussed at the forthcoming joint informal meeting of
the Committee on Trade and Development and the Committee on Budget, Finance andAdministration.
VII. ELECTION OF CHAIRPERSON
23. The Chairperson recalled that the Chairman of the General Council had carried out informal
consultations on the appointment of Chairpersons to the different WTO standing bodies in accordancewith the established guidelines for the appointment of such officers.  On the basis of the
understanding reached, Mr. Akil proposed that the Committee on Budget, Finance and Administration
formally elect Ambassador M. Supperamaniam of Malaysia as Chairperson by acclamation.  The
Committee so agreed.
24. The elected Chairman, Ambassador M. Supperamaniam thanked the Committee for its
confidence.  He informed the Members that he intended to undertake consultations with the Members
to identify a Chairman for the Working Group on the appointment of the External Auditor.  He also
informed the Committee that he was in the process of identifying a suitable date, which might be
around 21 June 2001, for the joint informal meeting of the Committee and the Committee on Trade
and Development.
POINT FOR DECISION: Paragraph 10
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ANNEX
WTO Committee on Budget, Finance and Administration, 14 May 2001
Introduction to ITC’s Outline for 20 02 with Preliminary Estimates for 2003
Introductory statement by Mr. J. Smadja, Deputy Executive Director
It is my pleasure to introduce to you today IT C’s new Director of Ad ministration, Gian Piero
Roz, who comes to us from United Nations headquarters.  Gian Piero has had a very distinguishedcareer heading the UN’s in formation technology division. We are very fortunate to have him on our
team since he is the grandfather of IMIS, the UN’ s Integrated Management Information System which
we will be implementing fully next year.  Also wi th us today are K.C. Tan, Chief of our Financial
Management Section, and Lydia Kr use Tietz, our Budget Officer.
ITC is in the business of supporting its client countries in their efforts to compete in the
international marketplace. We are committed to prov iding first-class assistance initiatives with an
impact on both trade performance and overall development. We do recognize that the development
challenge demands broad-based support and comprehensive approaches beyond our very focused
mandate. This is why we are also in the business of partnership building with other agencies andnational institutions.
The views expressed by developing countries delegations in Seattle in late 99 at the WTO
Ministerial Conference, served to confirm the full relevance of the five goals with which we entered
the year 2000, namely 1. to facilitate the integration of developing and transition economy enterprisesinto the MTS, 2. to support national efforts to design and implement trade development strategies, 3.
to strengthen key trade support services, both public and private, 4. to improve export performance in
sectors of critical importance and opportunity and 5. to foster the international competitiveness within
the business community, as a whole,  and the SME sector in particular.
An account of our activities in 2000 was revi ewed two weeks ago at our annual Joint
Advisory Group meeting.  Its report will be presented to the General Council shortly.  Copies of thefinal version in English are at the entrance to the room, and it will be available in other languages
soon.  From ITC’s perspective, the meeting was one of the most successful ever.  Both donor and
beneficiary partner countries expressed their satisfaction with the activities undertaken in 2000.  The
confidence of the donor community was further demonstrated by several multi-year trust fund
pledges, intended to enable better planning and implementation of ITC’s technical cooperationprogramme.
In response to demand clearly expressed and reiterated, and to further support the five goals,
ITC has begun to address electronic trade issues in a development context and to incorporate the
Internet into the delivery of ITC’s own programme.  These new directions have been greeted withparticular enthusiasm at the JAG.  An informal session was held on the topic, which allowed us to
present to all our stakeholders the various elements of our E-trade strategy. Representatives of the
private sector from developing countries attested to the relevance of our approach by describing their
own related experience and achievements.
To achieve our goals, as endorsed by all our stakeholders, of course, takes resources.  It is
clear that the demand for ITC’s services is far greater than what current funding allows.WT/BFA/53
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Over the last decade, ITC’s regular budget has remained virtually unchanged in real terms.
Especially in the last six years, ITC has tried to do more with existing resources by setting priorities,
redesigning approaches to maximize outreach and impact, ensuring that all posts serve a strategic
purpose, streamlining administrative processes, and undertaking an organizational change initiative to
build a stronger team.
During JAG, the reform process at ITC was proclaimed a success in speech after speech by
both our donors and our beneficiary partners.  But this is not enough.  To respond to proven areas of
real demand, we need real growth.  For 2002-2003 we  are requesting growth for two main areas: to
sustain a key element in the delivery of goal 2, supporting national efforts to design and implement
trade development strategies; and to implement our e-facilitated trade development strategy.
The Executive Forum on National Export Strategies has been designed to address what ITC
considers to be the singly most important aspect, and in many developing countries, the weakest
aspect, of the national effort to maintain sustained export growth, that is the existence of a realistic
and implementable national export strategy. The Executive Forum involves a twelve-month cycle.
The cycle begins with the identification of a key i ssue influencing the effectiveness of national export
strategy. It is followed by an extensive phase of applied research and case study preparation. The
process culminates with the conduct of a consultation on "best practice" with key public sector
strategy-makers and business leaders from developing and transition economies, and the preparation
of a "best practice" guide for global dissemination., We have completed the cycle in 1999 and 2000
through extra-budgetary funding. The success has been enormous in terms of technical outputs, of theresponsiveness from our partners in developing countries, and of its contribution to "needs
assessment" and the development of our own national and regional technical cooperation programme.
Based on this track record we intend to mainstream the Executive Forum into our overall programme
of work. We have exceptionally strong support for this from our partners. But to do so, regular budget
resources are required on a confirmed and on-going basis.
The Executive Forum takes a new theme each year based on interest expressed by our target
clients. Research is carried out for several months by ITC staff as well as international and national
consultants in order to develop business cases on the theme as well as define best practice in the area.
The issues, research agenda and Executive Forum programme are refined by specialists in a
brainstorming session partway through the initial research stage.  The Executive Forum event is held
in Montreux, bringing together 20 to 25 teams from developing and transition economies composed ofone senior strategy-maker from the public sector and one leading representative of the business
community.  Over 3 days the teams review best practice scenarios and develop follow-up action plans
to address the issues in their own national context.  The goal is to provide a platform for focused and
facilitated consultation and networking among senior members of the public and business.  After the
event, a publication is prepared for global dissemination and as a support in the implementation ofnational action plans.  So far the themes of the Executive Forum have been “Redefining Trade
Promotion – the Need for a Strategic Response” in 1999, “Export Development in the Digital
Economy” in 2000, and for this September’s event, “I s Your Trade Support Network Working?”.  The
Executive Forum has been recognized as a new, cost-effective means to achieve one of ITC’s central
goals, to support national efforts to design and implement trade development strategies.  However, ithas done this for three years now using extrabudgetary funding.
It is in this context that we request regular funding for the Executive Forum from 2002 to
complement extrabudgetary resources.
The other main area of proposed real growth concerns the strengthening of ITC in-house
capacity to backstop efforts in developing countries  to acquire e-trade competence. E-trade capability
is becoming a sine qua non of international competitiveness. Based on extensive analysis of evolving
commercial practices in the international market place and consultations with trade support
institutions and the business community in both developing and developed countries, ITC developedWT/BFA/53
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its proposed technical assistance response to the ne w challenge of e-trade. Our programme of action is
called the E-Trade Bridge for SMEs in developing and transition economies. It has the objective of
assisting export-oriented SME become e-competent and acquire e-trade capability. Our approach is to
work with local trade support institutions in the delivery of such support. ITC has proposed an
additional P-5 post, and one GS assistant.   In addition, ITC proposes another General Service post toextend trained professional security coverage over the full period that the building is open, with costs
partially offset through a reduction in general temporary assistance.
Looking briefly at other areas where real growth is needed, ITC will be implementing the
United Nations’ IMIS in 2002, as the current accounting and payroll systems are being phased out by
UNOG which is handling our accounts.  Most of the additional resources requested would be limited
to 2002 and 2003, to get us through the implementation and adaptation phases.  A part, though, isrecurrent, to cover additional requirements forecast by UNOG to service the special Swiss franc
module developed specifically for ITC.
A marginal increase is foreseen for informat ion technology, a key element in ITC’s strategy
to increase efficiency and expand both reach and impact.  The amounts relate mainly to consultancyinputs for system design and development.
Finally, six post regradings are also proposed, and background on the very exceptional nature
of these requests has been added to the budget outline text before you.  ITC will continue to use
utmost discretion before requesting any future regradings, and will maintain its regular policy ofupgrading regular posts only when this can be accommodated internally through a downgrading of
another.   In fact, before the last budget cycle, ITC had not requested post regradings since 1986.
Without going into a lot of detail here, let me just  summarize in saying that for 2002, ITC would like
to convert all of its top-level G7 posts for junior-l evel Professional posts, because of changing needs.
The top-level GS post in UN terms is equivalent to a grade 7 in WTO terms.  Three of the junior-levelProfessional posts we are requesting are also equivalent to grade 7 in WTO terms, because the UN
General Service and Professional scales overlap, and would not even require regrading in a WTO
context.  However, we would also require two P-3 posts following reclassified job descriptions, the
WTO equivalent of grade 8. In addition, we are proposing the regrading of one P-4 post to P-5,
equivalent to a change from grade 9 to grade 10 in the WTO scale.
The amount estimated in the outline before you is unchanged from the draft version presented
to this Committee in January.  Naturally, when the document is prepared in detail for the fall review,
the parameters under inflation, statutory and exchange rate changes will be updated to reflect the
latest information available.
Some two weeks ago, we had a videoconf erence with the UN’s ACABQ (Advisory
Committee on Administrative and Budgetary Questi ons) which reviewed ITC’s outline document,
following United Nations’ presentation format but based on the same underlying figures before you
today.  This is also available in three languages at the entrance.  Their report has been issued in
English so far and is also available at the back.
For those of you who have already picked up a copy, I am sure you are wondering why the
UN was considering a 3.7% increase, when you are considering a 0.98% increase.  The underlying
figures are exactly the same, but the difference is in the way the UN calculates growth.  The UN
calculates growth before considering cost changes ne eded to maintain the same level of inputs in the
previously approved budget, be they due to changes in exchange rate, forecast inflation, or other staff
costing factors.  If you look at your version of the outline, they add together only the amounts under
1d), staff increases, 1.85%, and 1e) other increases, 1.9%.  Since the UN does not take recosting into
account in calculating growth -- the amounts under 1a) to 1c) -- the rate in their presentation format
appears considerably higher.WT/BFA/53
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I am pleased to be able to report to you today that the ACABQ has recommended to the Fifth
Committee of the UNGA approval of our budget outline.  Of course, it will make further comments or
recommendations when it considers the full budget proposal in the autumn.  ITC is also to provide
information for the October review on how the revi sed administrative arrangements are working, and
we will come back to you on the issue later in the year as well.
__________